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<SEC-DOCUMENT>0001171520-04-000315.txt : 20040902
<SEC-HEADER>0001171520-04-000315.hdr.sgml : 20040902
<ACCEPTANCE-DATETIME>20040901200223
ACCESSION NUMBER:		0001171520-04-000315
CONFORMED SUBMISSION TYPE:	S-4
PUBLIC DOCUMENT COUNT:		18
FILED AS OF DATE:		20040902
DATE AS OF CHANGE:		20040901

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			FRANKLIN STREET PROPERTIES CORP /MA/
		CENTRAL INDEX KEY:			0001031316
		STANDARD INDUSTRIAL CLASSIFICATION:	REAL ESTATE INVESTMENT TRUSTS [6798]
		IRS NUMBER:				042724223
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		S-4
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-118748
		FILM NUMBER:		041012180

	BUSINESS ADDRESS:	
		STREET 1:		401 EDGEWATER PL
		STREET 2:		STE 200
		CITY:			WAKEFIELD
		STATE:			MA
		ZIP:			01880
		BUSINESS PHONE:		7815571300

	MAIL ADDRESS:	
		STREET 1:		401 EDGEWATER PLACE
		STREET 2:		STE 200
		CITY:			WAKEFIELD
		STATE:			MA
		ZIP:			01880

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	FRANKLIN STREET PARTNERS LP
		DATE OF NAME CHANGE:	20010301
</SEC-HEADER>
<DOCUMENT>
<TYPE>S-4
<SEQUENCE>1
<FILENAME>eps1515.txt
<DESCRIPTION>FRANKLIN STREET PROPERTIES CORP.
<TEXT>

    As filed with the Securities and Exchange Commission on September 1, 2004
                                                    Registration No. 333-
================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                             ----------------------
                                    FORM S-4
                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933
                             ----------------------
                        FRANKLIN STREET PROPERTIES CORP.
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                      <C>                               <C>
            Maryland                                 6798                       04-3578653
  (State or other jurisdiction           (Primary Standard Industrial        (I.R.S. Employer
of incorporation or organization)        Classification Code Number)       Identification No.)
</TABLE>
                         401 Edgewater Place, Suite 200
                         Wakefield, Massachusetts 01880
                                 (781) 557-1300
               (Address, including zip code, and telephone number,
        including area code, of registrant's principal executive offices)
                             ----------------------
                                George J. Carter
                      President and Chief Executive Officer
                        Franklin Street Properties Corp.
                         401 Edgewater Place, Suite 200
                         Wakefield, Massachusetts 01880
                                 (781) 557-1300
            (Name, address, including zip code, and telephone number,
                   including area code, of agent for service)
                             ----------------------
                                   Copies to:
                             Kenneth A. Hoxsie, Esq.
                           Jeffrey A. Hermanson, Esq.
                              Maria D. Stahl, Esq.
                    Wilmer Cutler Pickering Hale and Dorr LLP
                                 60 State Street
                           Boston, Massachusetts 02109
                                 (617) 526-6000
                             ----------------------
      Approximate date of commencement of proposed sale to the public: As soon
as practicable after the effectiveness of this registration statement and the
satisfaction of all other conditions under the merger agreement described
herein.
      If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. |_|
      If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_|_________
      If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|

<TABLE>
<CAPTION>
==========================================================================================================================
                                                                  Proposed Maximum   Proposed Maximum      Amount of
   Title of Each Class of Securities to be       Amount to be      Offering Price   Aggregate Offering    Registration
                  Registered                     Registered(1)       per Share           Price(2)            Fee(3)
- --------------------------------------------------------------------------------------------------------------------------
<S>                                            <C>                      <C>            <C>                  <C>
Common stock, $0.0001 par value per share..... 10,894,994 shares        N/A            $153,077,000         $19,395
==========================================================================================================================
</TABLE>

(1)   This number represents the maximum number of shares to be issued by the
      Registrant as merger consideration.
(2)   Estimated solely for the purpose of calculating the registration fee
      required by Section 6(b) of the Securities Act of 1933, and calculated in
      accordance with Rule 457(f)(2) under the Securities Act of 1933.
(3)   Estimated solely for purposes of calculating the registration fee pursuant
      to Rule 457(f)(2) under the Securities Act, based on the aggregate book
      value of the preferred stock of the targets computed as of August 25,
      2004.

      The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.

================================================================================
<PAGE>

                            FSP ADDISON CIRCLE CORP.
                           FSP COLLINS CROSSING CORP.
                       FSP MONTAGUE BUSINESS CENTER CORP.
                              FSP ROYAL RIDGE CORP.


                              Consent Solicitation
                  _____________________________________________

                        FRANKLIN STREET PROPERTIES CORP.
                                   Prospectus
                         401 Edgewater Place, Suite 200
                         Wakefield, Massachusetts 01880
                                 (781) 557-1300

                                                              September __, 2004
Dear Stockholders:

      You are the holders of preferred stock in one or more of the following
four real estate investment trusts: FSP Addison Circle Corp., FSP Collins
Crossing Corp., FSP Montague Business Center Corp. and FSP Royal Ridge Corp.,
each of which is referred to as a target REIT. The board of directors of each
target REIT has approved and adopted an agreement and plan of merger with
Franklin Street Properties Corp., which we call FSP Corp., and four wholly-owned
subsidiaries of FSP Corp., providing for the acquisition of the target REITs by
FSP Corp. by merging each target REIT with and into an acquisition subsidiary.

      The adoption of the merger agreement and the approval of the mergers by
the stockholders of the target REITs is necessary to effect the mergers. If the
merger agreement is adopted and approved:

      o     Each target REIT will merge with and into an acquisition subsidiary
            created for the sole purpose of effectuating the merger with that
            target REIT, and

      o     FSP Corp. will issue an aggregate of approximately 10,894,994 shares
            of common stock, $0.0001 par value per share, or the FSP common
            stock, to you, the holders of preferred stock, or target stock, of
            the target REITs.

      After careful consideration, each target board unanimously approved and
adopted the merger agreement and concluded that the merger agreement is in the
best interests of its target REIT and its target REIT stockholders. Your board
of directors unanimously recommends that you vote "FOR" adoption of the merger
agreement and approval of the mergers contemplated thereby.

      Please carefully consider all of the information in the accompanying
Consent Solicitation/Prospectus for additional information regarding the target
REITs, FSP Corp., the acquisition subsidiaries and the mergers, including in
particular the discussion in the section called "Risk Factors" starting on page
25.

                                          Very truly yours,


                                          /s/ George J. Carter

                                          George J. Carter
                                          President

- --------------------------------------------------------------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
Consent Solicitation/Prospectus is truthful or complete. Any representation to
the contrary is a criminal offense.
- --------------------------------------------------------------------------------
<PAGE>

                            FSP ADDISON CIRCLE CORP.
                           FSP COLLINS CROSSING CORP.
                       FSP MONTAGUE BUSINESS CENTER CORP.
                              FSP ROYAL RIDGE CORP.


                              Consent Solicitation
                  _____________________________________________

                        FRANKLIN STREET PROPERTIES CORP.

                                   Prospectus

      We are furnishing this Consent Solicitation/Prospectus to holders of
preferred stock of the target REITs in connection with the solicitation of votes
to adopt that certain Agreement and Plan of Merger, dated August 13, 2004, by
and among FSP Corp., the acquisition subsidiaries and the target REITs and
approve the mergers contemplated thereby.

      The merger agreement provides for the acquisition by merger of four real
estate investment trusts, each referred to as a target REIT and, collectively,
the target REITs, by individual wholly-owned acquisition subsidiaries of FSP
Corp. The target REITs are FSP Addison Circle Corp., FSP Collins Crossing Corp.,
FSP Montague Business Center Corp. and FSP Royal Ridge Corp., each a Delaware
corporation. The acquisition subsidiaries are Addison Circle Acquisition Corp.,
Collins Crossing Acquisition Corp., Montague Acquisition Corp. and Royal Ridge
Acquisition Corp., each a Delaware corporation. The merger agreement also
provides that upon consummation of the mergers, each share of target stock in
the target REITs will be converted into that number of shares of FSP common
stock set forth below opposite the applicable target REIT.

                                            Shares of FSP      Total Shares of
                                            Common Stock             FSP
                                             Issuable in        Common Stock
                       Total Number of        Exchange       Issuable to Target
                      Shares of Target    for Each Share of         REIT
    Target REIT       Stock Outstanding     Target Stock     Stockholders (1)(2)
- -------------------   -----------------     -------------    -------------------

Addison Circle                636               5,948.67          3,783,354

Collins Crossing              555               6,167.63          3,423,035

Montague                      334               5,649.72          1,887,007

Royal Ridge                   297.5             6,055.79          1,801,598

           Total                                                 10,894,994

      (1)   Rounded to the nearest whole share.
<PAGE>

      (2)   This number of shares of FSP common stock is slightly higher than
            the actual number of shares of FSP common stock anticipated to be
            issued upon the consummation of the mergers due to the fact that FSP
            Corp. will pay cash in lieu of issuing fractional shares of FSP
            common stock.

      FSP Corp. will not issue fractional shares of FSP common stock as merger
consideration. Instead, each holder of target stock who would otherwise have
been entitled to receive a fraction of a share of FSP common stock will be
entitled to receive cash (without interest) in an amount, rounded up to the
nearest whole cent, equal to the product of such fractional part of a share of
FSP common stock multiplied by $17.70, the fair market value of one share of FSP
common stock on August 13, 2004, as determined through negotiations between the
parties to the mergers. Moreover, FSP Corp. will not receive any consideration
for the one share of common stock it holds in each target REIT.

      We sometimes refer to you as target REIT stockholders and to your shares
of preferred stock as target stock. We refer to the boards of directors of the
target REITs collectively as the target boards, the board of directors of FSP
Corp. as the FSP board and the holders of FSP common stock as the FSP
stockholders. We sometimes refer to FSP Corp., its subsidiaries and the target
REITs, after giving effect to the consummation of the mergers, as the combined
company.

      Consummation of the mergers is subject to a number of conditions and will
not occur unless, among other things, holders of a majority of the shares of
target stock of each target REIT vote to adopt the merger agreement and approve
the mergers contemplated thereby.

      The stockholders of each target REIT are being asked to adopt the merger
agreement and approve the mergers contemplated thereby, as described in this
Consent Solicitation/Prospectus.

      THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 25 FOR CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY
TARGET REIT STOCKHOLDERS IN EVALUATING THE MATTERS DESCRIBED HEREIN, INCLUDING
AMONG OTHERS:

      o     As a result of the mergers, the nature of each target REIT
            stockholder's investment will change from an interest in a
            corporation owning a specified property for a finite period in which
            such target REIT stockholder will receive a distribution upon
            liquidation based upon the net proceeds from the sale of the
            entity's assets, to an investment in an ongoing fully-integrated
            real estate company, which has a portfolio of properties that may be
            changed from time to time and conducts real estate investment
            banking operations, in which the equity owners are expected to
            recover their investment from the sale of their FSP common stock,
            which is currently illiquid, and not from liquidating distributions.

      o     As a result of the mergers, based on historical quarterly,
            non-special dividends received by stockholders of FSP Corp. and the
            target REIT stockholders, a majority of the target REIT stockholders
            could expect to receive a lower level of dividends from the combined
            company than such stockholders have historically received from their
            target REITs.
<PAGE>

      o     The properties of the target REITs may appreciate in value and might
            be able to be liquidated at a later date for a price which would
            yield target REIT stockholders more consideration than they would
            receive in the mergers.

      o     The terms of the mergers, including the merger consideration, were
            determined by negotiations between the parties to the mergers.
            However, R. Scott MacPhee and William W. Gribbell, the two members
            of the special committees of each target board, also serve as
            executive vice presidents of FSP Corp. and own shares of FSP common
            stock. In addition, while the special committees considered
            independent appraisals of the target REIT properties, the target
            REITs did not seek acquisition bids from any unaffiliated parties.

      o     FSP Corp. intends to file an application to list the FSP common
            stock on the American Stock Exchange, or AMEX. There can be no
            assurance that FSP Corp. will file such application or, in the event
            it does, that AMEX will accept the application, or that a meaningful
            trading market will develop even if AMEX approves the application.

      o     Assuming the FSP common stock does become publicly traded, the
            future price per share of the FSP common stock may be lower than the
            price per share negotiated between the special committees of the
            target boards and FSP Corp. for the purpose of determining the
            merger consideration to be received by you.

      NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
CONSENT SOLICITATION/PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.

      This Consent Solicitation/Prospectus is first being mailed on or about
September ____, 2004 to target REIT stockholders of record at the close of
business on the date of this Consent Solicitation/Prospectus.

                            -------------------------

    The date of this Consent Solicitation/Prospectus is September ____, 2004.
<PAGE>

                                TABLE OF CONTENTS


                                                                            PAGE

QUESTIONS AND ANSWERS ABOUT THE MERGERS......................................1

SUMMARY......................................................................4

RISK FACTORS................................................................25

TARGET REIT CONSENT SOLICITATION............................................36

SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION..........................38

BACKGROUND ON FSP CORP. AND ITS GROWTH STRATEGY.............................39

THE MERGERS.................................................................43

BENEFITS, BACKGROUND AND REASONS FOR THE MERGERS............................56

FAIRNESS OF THE MERGERS.....................................................72

ADVICE OF FINANCIAL ADVISORS AND APPRAISALS.................................77

MANAGEMENT..................................................................87

SELECTED FINANCIAL INFORMATION OF FSP CORP..................................91

SELECTED PRO FORMA CONSOLIDATED FINANCIAL DATA..............................92

NOTES TO CONSOLIDATED PRO FORMA FINANCIAL STATEMENTS........................98

COMPARATIVE PER SHARE DATA.................................................104

COMPARISON OF THE TARGET REITS AND FSP CORP................................107

CONFLICTS OF INTEREST......................................................109

FIDUCIARY RESPONSIBILITY...................................................111

COMPARISON OF STOCKHOLDER RIGHTS...........................................112

BUSINESS AND PROPERTIES OF THE TARGET REITs................................133

SELECTED FINANCIAL INFORMATION OF ADDISON CIRCLE...........................139
<PAGE>

SELECTED FINANCIAL INFORMATION OF COLLINS CROSSING.........................141

SELECTED FINANCIAL INFORMATION OF MONTAGUE.................................143

SELECTED FINANCIAL INFORMATION OF ROYAL RIDGE..............................145

MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS...................156

LEGAL MATTERS..............................................................171

EXPERTS....................................................................171

WHERE YOU CAN FIND MORE INFORMATION........................................171

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............................171

INDEX TO FINANCIAL STATEMENTS..............................................F-1

INFORMATION NOT REQUIRED IN PROSPECTUS....................................II-1


APPENDICES

Appendix A              Merger Agreement

Appendix B              Glossary of Terms

Appendix C-1 to C-4     Fairness Opinion for each Target REIT

Appendix D              Section 262 of Delaware General Corporation Law

Appendix E              Articles of Incorporation of FSP Corp.



      This Consent Solicitation/Prospectus incorporates important business and
financial information about Franklin Street Properties Corp. that has been filed
with the Securities and Exchange Commission that is neither included in nor
delivered with this Consent Solicitation/Prospectus. FSP Corp. will provide you
with copies of this information, without charge, upon written or oral request
to:

                        Franklin Street Properties Corp.
                         401 Edgewater Place, Suite 200
                         Wakefield, Massachusetts 01880
                                 (781) 557-1300
                            Attn: Corporate Secretary

      In order to obtain delivery of this information prior to the closing of
the mergers, you should request such information no later than ________ ___,
2004.
<PAGE>

                     QUESTIONS AND ANSWERS ABOUT THE MERGERS

Q:    What is FSP Corp.?

A:    FSP Corp. is a real estate investment trust that has been a reporting
company under the Securities Exchange Act of 1934 since 2001. As of December 31,
2003, FSP Corp. had approximately $528.5 million in assets, approximately $83.8
million in annual revenue and approximately $516.9 million in stockholders'
equity. As of August 20, 2004, FSP Corp. had 49,629,762 shares of common stock
outstanding and approximately 1,420 stockholders of record.

Q:    What is the proposed transaction?

A:    FSP Corp. proposes acquiring the target REITs by merging each target REIT
with and into an individual wholly-owned acquisition subsidiary of FSP Corp.
Upon consummation of the mergers, each share of target stock in the target REITs
will be converted into a certain number of shares of FSP common stock as
described elsewhere in this Consent Solicitation/Prospectus.

Q:    Will the directors and officers of FSP Corp., the target REITs or their
affiliates receive any fees, commissions or other compensation in connection
with the merger agreement or the mergers?

A:    No, unless they also own shares of target stock. For example, Barry
Silverstein and Dennis J. McGillicuddy, each a director of FSP Corp., own an
aggregate of 173 and 14 shares of target stock, respectively. Mr. Silverstein
owns 102.5 shares in Addison Circle, 23.25 shares in Collins Crossing, 42 shares
in Montague and 5.25 shares in Royal Ridge. Mr. McGillicuddy owns 1 share in
each of Addison Circle and Royal Ridge, 2 shares in Collins Crossing and 10
shares in Montague. Messrs. Silverstein and McGillicuddy each purchased their
shares in the original offerings of target stock and on the same terms as other
stockholders of such target REITs. These shares of target stock held by Messrs.
Silverstein and McGillicuddy will convert into approximately 1,022,217 and
approximately 80,836 shares of FSP common stock, respectively, upon consummation
of the mergers.

Q:    What will I receive in the mergers?

A:    Upon consummation of the mergers, each share of target stock in the target
REITs will be converted into a certain number of shares of FSP common stock as
described elsewhere in this Consent Solicitation/Prospectus.

Q:    Are there any risks for me in this proposed transaction?

A:    Yes, there is a high degree of risk. You should carefully read the section
of this Consent Solicitation/Prospectus titled "Risk Factors" on page 25.


                                       1
<PAGE>

Q:    How do I know if the price paid for the target stock is fair to me?

A:    You should carefully read the information you have received in this
Consent Solicitation/Prospectus and make your own determination. Your board of
directors believes the mergers are fair to you and recommends you vote in favor
of them. R. Scott MacPhee and William W. Gribbell, the two members of the
special committees of each target board, also serve as executive vice presidents
of FSP Corp. and own shares of FSP common stock. The special committees of the
target boards engaged A.G. Edwards & Sons, Inc., on behalf of the target REITs,
to advise them in evaluating and negotiating the terms of the mergers, including
the merger consideration, and to deliver a fairness opinion to each target
board.

Q:    In addition to this consent solicitation/prospectus, I received a
supplement. What is the difference between the consent solicitation and the
supplement?

A:    The purpose of this consent solicitation/prospectus is to describe the
mergers generally and to provide you with a summary of the investment
considerations generic to all of the target REITs. The purpose of the supplement
is to describe the investment considerations particular to your target REIT.
After you read this Consent Solicitation/Prospectus, we urge you to read the
supplement. The supplement contains information unique to your target REIT. This
information is material in your decision whether to vote "For" or "Against" the
mergers.

Q:    When do you expect to complete the mergers?

A:    We expect to complete the mergers on or about December 31, 2004, or at an
earlier date if the conditions to the merger agreement have been satisfied prior
to December 31, 2004 or a later date if the conditions have not been satisfied
by December 31, 2004.

Q:    Who must adopt the merger agreement and approve the mergers contemplated
thereby?

A:    In addition to the approvals of the board of directors of FSP Corp. and
the boards of directors of the target REITs, which have already been obtained,
the target REIT stockholders must adopt the merger agreement and approve the
mergers contemplated thereby. If one or more of the target REITs does not obtain
the vote required for the consummation of the merger, FSP Corp. will not proceed
with the mergers of any other target REIT.

Q:    What rights do I have if I think the merger consideration is too low?

A:    Under the Delaware general corporation law, which governs the merger, you
have the right to seek a judicial determination of the value of your target
stock. This is called an appraisal. For more information on what this means, you
should read "Appraisal Rights of Dissenting Stockholders of Target REITs" on
page 48.

Q:    What do I need to do now?

A:    We urge you to carefully read this Consent Solicitation/Prospectus,
including its appendices, and to consider how the merger will affect you.



                                       2
<PAGE>

Q:    Where may I find additional information relating to FSP Corp.?

A:    You may find additional information relating to FSP Corp. in the section
entitled "Where You Can Find More Information" on page 171 and "Incorporation of
Certain Documents by Reference" on page 172.

Q:    Whom may I contact with any additional questions?

A:    You may call your investment executive at FSP Investments at (800)
      950-6288.


                                       3
<PAGE>

- --------------------------------------------------------------------------------

                                     SUMMARY

      This Summary highlights selected information from this document and may
not contain all of the information that is important to you. To understand the
proposal presented in this Consent Solicitation/Prospectus with respect to the
adoption of the merger agreement and the approval of the mergers, providing for
the issuance of FSP common stock, you should read carefully the entire document,
including the appendices, the accompanying supplement relating to your target
REIT and the other documents to which we have referred you, including documents
incorporated by reference under "Incorporation of Certain Documents By
Reference" on page 172. For your convenience, a glossary of terms is included
in Appendix B to this Consent Solicitation/Prospectus. We have included page
references parenthetically to direct you to a more complete description of the
topics of the summary.

FSP Corp. (Pages 39 to 42)

      FSP Corp. is a Maryland corporation that operates in a manner intended to
qualify as a real estate investment trust for federal income tax purposes.

      FSP Corp. operates in two business segments and has two principal sources
of revenue:

      o     Real estate operations, including real estate leasing, interim
            acquisition financing and asset/property management, which generate
            rental income, loan origination fees and management fees,
            respectively; and

      o     Investment banking/investment services, which generate brokerage
            commissions and other fees related to the organization of
            single-purpose entities that own real estate and the private
            placement of equity in those entities.

      On June 1, 2003, FSP Corp. acquired 13 real estate investment trusts by
merger. In these mergers, FSP Corp. issued 25,000,091 shares of FSP common stock
to holders of preferred stock in the acquired REITs. As a result of these
mergers, FSP Corp. now holds all of the assets previously held by these acquired
REITs. As part of its growth strategy, FSP Corp. may make similar acquisitions
in the future. The proposed acquisition of the target REITs is part of that
strategy.

      FSP Corp.'s principal executive offices are located at 401 Edgewater
Place, Suite 200, Wakefield, Massachusetts 01880. The telephone number of its
principal executive office is (781) 557-1300. FSP Corp. does not maintain a
website.

The Target REITs (Pages 133 to 138)

      FSP Corp. sponsored the syndication of stock in the target REITs. Each
target REIT is a privately-held real estate investment trust formed as a
corporation under the laws of the State of Delaware for the purpose of acquiring
and operating a single real property. Montague owns an office/research and
development project in San Jose, California; Addison Circle owns an office
building in Addison, Texas; Royal Ridge owns an office building in Alpharetta,
Georgia; and Collins Crossing owns an office building in Richardson, Texas. Set
forth below for the properties owned by the respective target REITs are the date
the property was originally acquired by the target REIT, the number of square
feet in the property, the percentage of rentable square feet leased as of June
30, 2004 and the weighted average base rent per net rentable square foot for the
six months ended June 30, 2004 annualized:


                                       4
- --------------------------------------------------------------------------------
<PAGE>

- --------------------------------------------------------------------------------

                       Date of    Percentage of                     Weighted
                      Property      Rentable                        Average
                     Acquisition   Square Feet                       Base Rent
                       by the        Leased        Rentable      Annualized/Net
                       Target        as of          Square      Rentable Square
                        REIT        6/30/04          Feet             Foot
                     ----------   -------------   ----------    ---------------

Addison Circle          9/02           100%         293,787        $25.56/sf

Collins Crossing        3/03           100%         298,766        $22.47/sf

Montague                8/02           100%         145,951        $26.84/sf

Royal Ridge             1/03           100%         161,366        $13.60/sf

      The target REITs' principal executive offices are located at 401 Edgewater
Place, Suite 200, Wakefield, Massachusetts 01880. The telephone number of their
principal executive offices is (781) 557-1300. No target REIT maintains a
website.

Votes Required (Pages 44 to 45)

      The affirmative vote of the holders of a majority of the target stock in
each of the target REITs is required to adopt the merger agreement and approve
the respective mergers. If one or more target REITs does not obtain the vote
required for the consummation of the merger with such target REIT, FSP Corp.
will not proceed with the mergers of any other target REIT. The consent being
solicited hereby seeks the adoption of the merger agreement and the approval of
the merger agreement and the transactions contemplated thereby. The affirmative
vote of a majority of the common stock in each target REIT is also required to
effectuate the respective merger. FSP Corp. is the sole stockholder of the
common stock of each target REIT, and has agreed to vote those shares in favor
of the respective merger. FSP Corp. will not receive any consideration for the
one share of common stock it holds in each target REIT.

      Target REIT stockholders as of August 13, 2004 are entitled to receive
this Consent Solicitation/Prospectus and are entitled to execute a consent in
connection with the adoption of the merger agreement and the approval of the
mergers and the transactions contemplated thereby.

      As of the date of this Consent Solicitation/Prospectus there were 334
shares of target stock in Montague held by 331 holders of record; 636 shares of
target stock in Addison Circle held by 380 holders of record; 297.5 shares of
target stock in Royal Ridge held by 246 holders of record; and 555 shares of
target stock in Collins Crossing held by 449 holders of record.


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      The executive officers and directors of the target REITs do not
beneficially hold any shares of target stock in any of the target REITs. Barry
Silverstein and Dennis J. McGillicuddy, each a director of FSP Corp., own an
aggregate of 173 and 14 shares of target stock, respectively. Mr. Silverstein
owns 102.5 shares in Addison Circle, 23.25 shares in Collins Crossing, 42 shares
in Montague and 5.25 shares in Royal Ridge. Mr. McGillicuddy owns 1 share in
each of Addison Circle and Royal Ridge, 2 shares in Collins Crossing and 10
shares in Montague. Messrs. Silverstein and McGillicuddy each purchased their
shares in the original offerings of target stock and on the same terms as other
stockholders of such target REITs. These shares of target stock held by Messrs.
Silverstein and McGillicuddy will convert into approximately 1,022,217 and
approximately 80,836 shares of FSP common stock, respectively, upon consummation
of the mergers. Messrs. Silverstein and McGillicuddy have indicated that they
intend to vote their respective shares of target stock in favor of the adoption
of the merger agreement and the approval of the mergers.

The Mergers (Pages 43 to 55)

      Overview. As a result of inquiries from members of the FSP board, the
management of FSP in late June 2004 instructed its outside legal counsel, Wilmer
Cutler Pickering Hale and Dorr LLP, to explore the feasibility of the
acquisition of the target REITs. In early July 2004, management of FSP Corp.
approached the target boards regarding the possibility of acquiring the target
REITs. Each target board then established a special committee consisting of
Messrs. MacPhee and Gribbell, the only members of the target boards who were not
also members of the FSP board, to, among other things, evaluate and negotiate a
potential acquisition by FSP Corp. and recommend that the board of each target
REIT accept or reject the FSP Corp. acquisition. The special committees engaged
A.G. Edwards & Sons, Inc., referred to as A.G. Edwards, to advise them in
evaluating and negotiating the terms of the mergers, including the merger
consideration, and to deliver a fairness opinion to each target board. The
target REITs also engaged third party appraisers to appraise the real estate
held by each target REIT and engaged outside legal counsel to represent the
target REITs. After receiving the real estate appraisals, after reaching
agreement on the amount of merger consideration to be paid and the terms of the
mergers, after receiving a unanimous recommendation to vote to adopt the merger
agreement and approve the mergers from its special committee and receiving the
fairness opinions delivered by A.G. Edwards, each target board unanimously voted
to adopt the merger agreement and approve the mergers contemplated thereby and
recommend to its stockholders to vote to adopt the merger agreement and approve
the mergers contemplated thereby. On August 13, 2004, based upon the reasons set
forth in "Fairness of the Mergers", the target REITs and FSP Corp. executed and
delivered the merger agreement.

      The Mergers. Following the satisfaction or waiver of the conditions to
closing relating to a target REIT, on the effective date of the mergers, which
is expected to be on or about December 31, 2004, FSP Corp. will acquire that
target REIT by merger of the target REIT with and into a wholly-owned
acquisition subsidiary of FSP Corp. Each share of target stock of that target
REIT will be converted into a specified number of shares of FSP common stock.
The shares of FSP common stock to be issued in connection with the mergers are
referred to as the merger consideration.

      The following chart sets forth the number of shares of FSP common stock to
be received as merger consideration by the target REIT stockholders for each
share of target stock of the respective target REIT. FSP Corp. will not issue
fractional shares of FSP common stock as merger consideration. Instead, each
holder of target stock who would otherwise have been entitled to receive a
fraction of a share of FSP common stock will be entitled to receive cash


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(without interest) in an amount, rounded up to the nearest whole cent, equal to
the product of such fractional part of FSP common stock multiplied by $17.70,
the fair market value of one share of FSP common stock on August 13, 2004, as
determined through negotiations between the special committees and FSP Corp.

                                            Shares of FSP
                                            Common Stock       Total Shares of
                                             Issuable in      FSP Common Stock
                       Total Number of        Exchange       Issuable to Target
                      Shares of Target    for Each Share of         REIT
   Target REIT        Stock Outstanding     Target Stock     Stockholders (1)(2)
- -----------------     -----------------     -------------    -------------------

Addison Circle               636              5,948.67            3,783,354

Collins Crossing             555              6,167.63            3,423,035

Montague                     334              5,649.72            1,887,007

Royal Ridge                 297.5             6,055.79            1,801,598

       Total                                                     10,894,994

(1)   Rounded to the nearest whole share.

(2)   This number of shares of FSP common stock is slightly higher than the
      actual number of shares of FSP common stock anticipated to be issued upon
      the consummation of the mergers due to the fact that FSP Corp. will pay
      cash in lieu of issuing fractional shares of FSP common stock.

      None of the shares of FSP common stock to be issued as merger
consideration to the target REIT stockholders will be placed into escrow or
otherwise withheld as a source of potential compensation to FSP Corp. should FSP
Corp. discover, after the consummation of the mergers, that any of the target
REITs incurred any undisclosed liabilities prior to the consummation of the
mergers or that any representations and warranties of the target REITs were
inaccurate. Moreover, FSP Corp. will not receive any consideration for the one
share of common stock it holds in each target REIT.

      Consummation of the mergers is subject to a number of conditions and will
not occur unless, among other things, holders of a majority of the shares of
target stock of each target REIT vote to adopt the merger agreement and approve
the mergers contemplated thereby.

      The following table sets forth: (i) the value ascribed to each target REIT
for purposes of the merger consideration, (ii) the appraised value of the
property held by each target REIT, (iii) the estimated adjusted cash reserve
balances as of June 30, 2004 and (iv) the percentage (the premium) over
appraised value plus adjusted cash reserves that has been ascribed to each


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target REIT for purposes of the merger consideration. The premium is based on an
FSP common stock per share price of $17.70. Should the FSP common stock trade on
the AMEX, the trading price of the FSP common stock could be significantly lower
than $17.70 per share, causing the premium received by target REIT stockholders
as a result of the consummation of the mergers to decrease significantly or
disappear altogether.

                   Value Ascribed to                   Adjusted Cash
   Target REIT        Target REIT     Appraised Value     Reserves      Premium
   -----------        -----------     ---------------     --------      -------

Addison Circle       $66,965,414       $54,500,000       $1,676,697       19.2%

Collins Crossing     $60,587,756       $48,500,000       $1,984,695       20.0%

Montague             $33,400,000       $20,000,000       $2,034,787       51.6%

Royal Ridge          $31,888,293       $26,075,000         $967,500       17.9%

Total               $192,841,463      $149,075,000       $6,663,679       23.8%

      The value ascribed to a target REIT was determined through negotiations
between the special committees and FSP Corp. These aggregate negotiated values
exceed the aggregate appraised values of the target REITs by approximately
$37,102,784. See "Fairness of the Mergers - Fairness of the Merger Consideration
to Target REIT Stockholders - Allocation of Merger Consideration" for a
discussion of how the premiums were determined by the special committees and FSP
Corp.

Conditions Precedent to the Mergers (Pages 51 to 52)

      The respective obligations of each party to effect the mergers are subject
to the fulfillment on or before the effective date of certain conditions,
including the following:

      o     the adoption of the merger agreement and the approval of the mergers
            by the stockholders of each of the target REITs;

      o     the receipt of all necessary consents, waivers, approvals,
            authorizations or orders and the making of all required filings; and

      o     that the representations of FSP Corp. and the target REITs set forth
            in the merger agreement are true and complete in all material
            respects as of the closing date.

Recommendation of the Special Committees and the Target Boards
(Pages 45 to 47)

      The target board of each target REIT recommends that target REIT
stockholders of that target REIT vote for adoption of the merger agreement and
approval of the mergers and the transactions contemplated thereby.

      This recommendation to the target REIT stockholders is based upon the
recommendation by the special committees to the target boards and each target
board's belief that:


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      o     the value of the FSP common stock to be distributed as merger
            consideration to its target REIT stockholders represented greater
            value, or a premium, than the sum of the value of the real estate
            (as determined by an appraisal) and cash held by its target REIT;

      o     the value of the FSP common stock to be distributed as merger
            consideration to its target REIT stockholders was greater than was
            likely to be realized upon the continuation of the respective target
            REIT; and

      o     based upon A.G. Edwards' opinion, delivered orally to each special
            committee and board of each target REIT and subsequently confirmed
            in writing, as to the fairness from a financial point of view of the
            merger consideration to the stockholders of each target REIT, the
            merger consideration is fair from a financial point of view to such
            stockholders.

The material negative factors, which each special committee viewed as
insufficient to outweigh the positive factors, were:

      o     that, following the mergers, the target REIT stockholders will cease
            to participate in the future earnings growth, if any, of their
            respective target REIT or benefit from the increase, if any, in the
            future liquidation value of the respective target REIT, other than
            indirectly through their FSP stock ownership;

      o     the possibility that the shares of FSP common stock may in the
            future trade at a price lower than $17.70 per share;

      o     the fact that, based on historical quarterly, non-special dividends
            received by stockholders of FSP Corp. and the target REIT
            stockholders, a majority of the target REIT stockholders could
            expect to receive a lower level of dividends from the combined
            company than such stockholders have historically received from their
            target REITs;

      o     the possibility that the shares in the target REIT would have
            appreciated in value more rapidly or at a greater rate than any
            appreciation in value in the FSP Corp. shares;

      o     that the target REITs did not seek third party bids for the
            acquisition of the target REITs or their respective properties; and

      o     the potential conflicts of interests of officers and directors of
            each target REIT in connection with the mergers.

Expected Benefits from the Mergers (Page 63)

      The following highlights some of the primary benefits the mergers are
expected to generate:


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      o     The combined company's real estate portfolio will be substantially
            larger and more diverse geographically, by property type and by
            tenant business, than the portfolio of the target REITs, reducing
            the dependence of target REIT stockholders on the performance of any
            one real property; and

      o     The combined company's business will generate revenues from real
            estate investment banking/brokerage and property management
            activities and from rentals of 32 real properties, constituting a
            more diverse income stream than that currently received by any of
            the target REITs.

These benefits may not be realized. There are also potential detriments to the
mergers. See "Risk Factors" beginning on page 25.

Alternatives to the Mergers for the Target REITs (Pages 63 to 64)

      The following is a brief discussion of alternatives to the mergers that
were considered by the target boards.

      Continuation of each Target REIT. An alternative to the mergers would be
to continue each of the target REITs as a separate legal entity in accordance
with its original investment strategy. Target REIT stockholders would likely
continue to receive regular quarterly distributions and would receive a
distribution on the sale of the property owned by its respective target REIT,
which is expected to occur in a five to ten year time period following
syndication of the target REIT. Continuation of the target REITs would avoid
those disadvantages which might be inherent in the mergers. See "Risk Factors -
Risks Relating to the Mergers." The primary disadvantage with continuing the
target REITs is the failure to secure the benefits that the target boards expect
to result from the mergers. See "Benefits, Background and Reasons for the
Mergers -- Expected Benefits From the Mergers."

      Liquidation. Another alternative to the mergers would be liquidating the
assets of the target REITs and distributing the net liquidation proceeds to the
target REIT stockholders. Liquidating the target REITs would result in
concluding the investors' investment in the target REITs earlier than the
anticipated liquidation timeframes for the target REITs. The liquidations would
result in the marketplace establishing the fair market value of the target
REITs' assets.

      Support of Secondary Market. Another alternative would be the creation or
support of a secondary market for the target stock through limited cash tender
offers or repurchase programs sponsored by the target REITs.

Fairness of the Mergers  (Pages 72 to 76)

      Each of the target boards believes that the terms of the merger agreement,
when considered as a whole, are fair to the stockholders of each target REIT and
the merger consideration offered in exchange for the target stock in each target
REIT constitutes fair consideration for the interests of the target REIT
stockholders. The following provides a summary of the factors upon which the
target boards based their respective conclusions as to the fairness of the
mergers and the merger consideration to be paid by FSP Corp. The target boards
did not find it practicable to, and did not attempt to, quantify or otherwise
assign relative weight to these factors in reaching their respective
determinations.


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      o     The target boards compared the potential benefits and detriments of
            the mergers with the potential benefits and detriments of several
            alternatives to the mergers, including continuation of the target
            REITs, liquidation of the target REITs and support of secondary
            markets for the target stock. Based on these comparisons, the target
            boards believe the mergers are more attractive than other
            alternatives.

      o     The special committees of the target boards, consisting of Messrs.
            MacPhee and Gribbell, each a director of the target REITs and an
            executive vice president of FSP Corp., engaged A.G. Edwards to
            deliver a fairness opinion to each target board. On August 11, 2004,
            A.G. Edwards delivered a written opinion to each target board to the
            effect that the merger consideration was fair, from a financial
            point of view, to the target REIT stockholders of that target REIT.
            These fairness opinions are attached hereto as Appendix C.

      o     Each target board determined that the value of the FSP common stock
            to be distributed as merger consideration to its target REIT
            stockholders represented greater value, or a premium, than the sum
            of the value of the real estate (as determined by an appraisal) and
            cash held by such target REIT. After consultation with A.G. Edwards,
            the special committees of the target boards determined that, based
            on the analyses of other selected public companies, the discounted
            cash flow of FSP Corp. and selected precedent mergers, a reasonable
            range of value for the FSP common stock was between $16.67 per share
            and $18.50 per share. The estimated range of values included a
            discount for the lack of liquidity of FSP common stock. The value
            ascribed to FSP common stock in connection with the mergers of
            $17.70 per share is within that range. The target boards determined
            that even if the actual value of FSP common stock were at the bottom
            of the range, or $16.67 per share, such value would still constitute
            a premium to the appraised value of the real estate plus adjusted
            cash held by each target REIT.

      o     Each target board determined that the value of the FSP common stock
            to be distributed as merger consideration to its target REIT
            stockholders was greater than the value that was likely to be
            realized upon the continuation of such target REIT.

      o     The target boards obtained independent third-party appraisals of the
            real property owned by the target REITs, and considered these
            appraisals in negotiating the merger consideration.

      o     The target REITs will have the right to declare dividends consistent
            with past practice in respect of the quarters or partial quarters
            preceding the effective date. The combined company will have the
            obligation to pay any such dividends that have been declared but not
            paid as of the effective date.


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      o     The members of the target boards have conflicts of interest in
            connection with the mergers. Each target board established a special
            committee consisting of Messrs. MacPhee and Gribbell, the only
            members of the target boards who are not also members of the FSP
            board. Messrs. MacPhee and Gribbell serve as executive vice
            presidents of FSP Corp. The special committees engaged A.G. Edwards
            to advise them in evaluating and negotiating the terms of the
            mergers, including the merger consideration, and to deliver a
            fairness opinion to each target board. No fees or other compensation
            will be payable to the members of the target boards (or the special
            committees) or to FSP Corp. or any of its affiliates in connection
            with the mergers.

      For a complete list of factors considered by the target boards, see
"Fairness of the Mergers - Conclusions of the Target Boards."

Conflicts of Interest  (Pages to 109 to 110)

      A number of conflicts of interest are inherent in the relationships among
the target REITs, the target boards, FSP Corp., the FSP board and their
respective affiliates. These conflicts of interest include the fact that FSP
Investments, a subsidiary of FSP Corp., syndicated each target REIT and, among
others:

      o     George J. Carter, the President and a director of each target REIT,
            is President, Chief Executive Officer and a director of FSP Corp.
            and owns an aggregate of 775,531 shares of FSP common stock;

      o     R. Scott MacPhee, an Executive Vice President and a director of each
            target REIT and a member of each special committee, is also an
            Executive Vice President of FSP Corp. and owns an aggregate of
            372,451 shares of FSP common stock;

      o     Richard R. Norris, an Executive Vice President and a director of
            each target REIT, is also a director and an Executive Vice President
            of FSP Corp. and owns an aggregate of 258,087 shares of FSP common
            stock;

      o     William W. Gribbell, an Executive Vice President and a director of
            each target REIT and a member of each special committee, is also an
            Executive Vice President of FSP Corp. and owns an aggregate of
            129,761 shares of FSP common stock;

      o     Barbara J. Fournier, Vice President, Chief Operating Officer,
            Treasurer, Secretary and a director of each target REIT, is also
            Vice President, Chief Operating Officer, Treasurer, Secretary and a
            director of FSP Corp. and owns an aggregate of 27,934 shares of FSP
            common stock;

      o     Janet P. Notopoulos, Vice President of each target REIT, is also a
            Vice President and director of FSP Corp. and owns an aggregate of
            14,985 shares of FSP common stock; and


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      o     the target REIT's properties are managed by FSP Property Management,
            a subsidiary of FSP Corp. pursuant to management services agreements
            under which FSP Corp. receives certain fees from each target REIT
            for its management services.

      Each target board established a special committee consisting of Messrs.
MacPhee and Gribbell, the only members of the target boards who are not also
members of the FSP board. Messrs. MacPhee and Gribbell serve as executive vice
presidents of FSP Corp. The special committees engaged A.G. Edwards to advise
them in evaluating and negotiating the terms of the mergers, including the
merger consideration.

      Each target board considered increasing its board size to include an
independent director to perform the function of the special committees. However,
each target board concluded that, given the potential liability of a director
voting on the mergers, it would be difficult to retain someone with the
knowledge and credentials necessary to fulfill the role of an independent
director of a REIT who would be willing to take on the role of independent
director of any of the target REITs without being substantially compensated and
without being covered by director liability insurance. None of the target REITs
currently has director and officer liability insurance. Each target board
determined that the cost of compensating an independent director and obtaining
director and officer liability insurance would be substantial and not in the
best interests of its target REIT stockholders. For this reason, none of the
target boards appointed an independent director to perform the functions of the
special committees.

      Messrs. MacPhee and Gribbell, the members of the special committees, both
served as directors on boards of other sponsored entities which engaged in
similar transactions with FSP Corp., including the 13 sponsored REITs acquired
by FSP Corp. in June 2003. The sponsored REITs involved in those transactions
did not appoint independent directors to serve as special committees and, in
fact, did not designate any of their members to serve on a special committee.
Moreover, no stockholder of any of the 13 sponsored REITs acquired by FSP Corp.
in June 2003 availed themselves of appraisal rights. Based on their experience
in voting on prior transactions, Messrs. MacPhee and Gribbell believed that they
could and did faithfully execute their duties to the target REIT stockholders.
Morever, George J. Carter, the chief executive officer of FSP Corp., instructed
Messrs. MacPhee and Gribbell to execute their duties on behalf of the target
REITs and their stockholders vigorously and assured Messrs. MacPhee and Gribbell
that there would be no adverse consequences to their employment by FSP Corp. as
a result of their vigorously executing their duties.

      If each target REIT had a separate board of directors with executive
officers who did not serve in similar capacities for FSP Corp. and directors who
did not own FSP common stock, these persons would have had an independent
perspective which might have led them to advocate positions during the
negotiation and structuring of the merger agreement and the determination of the
merger consideration more favorable to the target REIT stockholders than those
taken by the target boards.

      Barry Silverstein, Dennis J. McGillicuddy and John N. Burke are the only
directors of FSP Corp. who are not also officers or directors of any target
REIT. The remainder of the officers and directors of FSP Corp. serve as a
director and/or officer, in the positions listed above, of each target REIT.


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Upon completion of the mergers, Mr. Silverstein's percentage ownership interest
of FSP Corp. will decrease from 9.67% to 9.62%, Mr. McGillicuddy's percentage
ownership interest of FSP Corp. will decrease from 7.24% to 6.07%, and the
percentage ownership of the current directors and executive officers of FSP
Corp. as a group will decrease from 19.07% to 17.46%. Mr. Burke does not own any
shares of FSP common stock or any shares of target stock.

Determination of Merger Consideration (Page 74)

      The merger consideration payable to the stockholders of each target REIT
was determined through negotiations between the special committees of the target
boards and FSP Corp. The special committees relied on advice from their
financial advisor, A.G. Edwards, in their negotiations with FSP Corp. In
analyzing the fairness of the $17.70 per share negotiated price, the target
boards reviewed the analyses presented by A.G. Edwards, financial advisor to the
special committees, the target boards and the target REITs, to estimate the
value of FSP common stock. The special committees also considered the
independent third party appraisals of the target REIT properties, assets and
liabilities of their respective target REIT and FSP Corp., the expected cash
available for distribution of their respective target REIT, the multiples of
cash available for distribution commonly used in valuing REITs and the limited
liquidity of FSP common stock. The special committees were also made aware that
FSP Corp. intends to file an application to list the FSP common stock with AMEX.
There can be no assurance that FSP Corp. will file such application or, in the
event it does, that AMEX will accept the application or that a meaningful
trading market will develop even if AMEX approves the application. The merger
consideration was determined separately for each target REIT.

Third Party Reports (Pages 77 to 86)

      Fairness Opinions. On July 22, 2004, the special committees of the target
boards retained A.G. Edwards to act as their financial advisor in connection
with the mergers and to render to the target REIT boards A.G. Edwards' opinion
as to the fairness, from a financial point of view, of the merger consideration
to the target REIT stockholders of each target REIT. On August 11, 2004, A.G.
Edwards rendered its oral opinions to each target board, subsequently confirmed
in writing, to the effect that based upon and subject to the various
considerations described in each opinion, the merger consideration (as described
elsewhere in this Consent Solicitation/Prospectus) was fair, from a financial
point of view, to the stockholders of each target REIT.

      The full text of A.G. Edwards' opinions, each dated August 11, 2004, which
describe the assumptions made, general procedures followed, matters considered
and limitations on the scope of review undertaken by A.G. Edwards in rendering
its opinions, are attached as Appendices C-1, C-2, C-3 and C-4 to this Consent
Solicitation/Prospectus and are incorporated into this summary by reference.
A.G. Edwards' opinions are directed only to the fairness, as of the date of the
respective opinions, from a financial point of view, of the merger consideration
to the stockholders of the target REIT to which each opinion is addressed and
does not constitute a recommendation to you as to how you should vote with


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respect to the merger agreement and the mergers. The summary of A.G. Edwards'
opinions set forth below is qualified in its entirety by reference to the full
text of the opinions attached as Appendices C-1, C-2, C-3 and C-4 to this
Consent Solicitation/Prospectus. You are urged to read the opinions carefully in
their entirety.

      In conducting its investigation and analysis and in arriving at its
opinions, A.G. Edwards reviewed information, made certain assumptions and took
into account financial and economic factors it deemed relevant under the
circumstances. A.G. Edwards held discussions with the executive officers of the
target REITs and FSP Corp. concerning the respective target REIT's and FSP
Corp.'s historical and current financial condition and operating results, as
well as the prospects of the target REITs and FSP Corp., respectively. A.G.
Edwards also considered other information, financial studies, analyses and
investigations and financial, economic and market data that A.G. Edwards deemed
relevant for the preparation of its opinions. A.G. Edwards assumed the value of
each target REIT to equal the sum of the appraised value of such target REIT's
real property plus its adjusted cash reserves. A.G. Edwards was not asked to,
and did not, solicit third-party indications of interest in acquiring all or any
part of the target REITs. The special committees of the target boards and FSP
Corp. determined the merger consideration through negotiations. The target
boards did not place any limitation upon A.G. Edwards with respect to the
procedures followed or factors considered by A.G. Edwards in rendering its
opinions.

      The Appraisals. The respective target boards retained independent third
party appraisers to appraise the fair market value of each target REIT's real
estate as of a date no earlier than July 7, 2004.

      In preparing the appraisals, the appraisers collected from the target
REITs information regarding the operating history of the properties, conducted
site inspections of the properties and interviewed and relied on representations
of certain representatives of the target REITs. The appraisers' conclusions are
based upon conditions they observed at the properties during their inspection
and assumptions, qualifications and limitations deemed reasonable at the time
concerning, among other things, legal title, the absence of physical defects,
future percentage of leased rentable square feet, income and competition with
respect to each property. The appraisals reflect the appraisers' valuation of
the real estate of the target REITs as of their respective dates, in the context
of the information available on that date. Events occurring subsequent to the
dates of the respective appraisals could affect the properties or the
assumptions used in preparing the appraisals. The target boards imposed no
limitations on the scope of the appraisers' appraisals. The special committees
took the appraisals into consideration in negotiating the merger consideration.
The target REITs also made the appraisals available to FSP Corp. and have
allowed the FSP board to rely on the appraisals.

Organizational Chart Showing Relationship Among FSP Corp., Target REITs, FSP
Board, Target Boards and their Respective Affiliates

      [Organizational chart prior to the mergers: Box at the top showing
"Franklin Street Properties Corp." with a line to the left showing that it owns
100% of the common stock of 12 sponsored REITs, including the 4 target REITs and
8.2% of the preferred stock of FSP Blue Lagoon Drive Corp., a sponsored REIT


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that is not a target REIT. From the same box labeled "Franklin Street Properties
Corp." there is a line showing the wholly owned subsidiaries of FSP Corp., which
are "FSP Property Management LLC," "FSP Investments LLC (a taxable REIT
subsidiary)," "28 properties held either directly or through wholly owned
subsidiaries," "Royal Ridge Acquisition Corp.," "Montague Acquisition Corp.,"
"Collins Crossing Acquisition Corp." and "Addison Circle Acquisition Corp."]

      [Organizational chart after the mergers: Box at the top showing "Franklin
Street Properties Corp." with a line to the left showing that it owns 100% of
the common stock of 8 sponsored REITs and 8.2% of the preferred stock of FSP
Blue Lagoon Drive Corp., a sponsored REIT that is not a target REIT. From the
same box labeled "Franklin Street Properties Corp." there is a line showing the
wholly owned subsidiaries of FSP Corp., which are "FSP Property Management LLC,"
"FSP Investments LLC (a taxable REIT subsidiary)," "28 properties held either
directly or through wholly owned subsidiaries," "Royal Ridge Acquisition Corp.,"
"Montague Acquisition Corp.," "Collins Crossing Acquisition Corp." and "Addison
Circle Acquisition Corp." Royal Ridge Acquisition Corp. now holds the assets of
FSP Royal Ridge Corp., which was merged with and into it. Montague Acquisition
Corp. now holds the assets of FSP Montague Business Center Corp., which was
merged with and into it. Collins Crossing Acquisition Corp. now holds the assets
of FSP Collins Crossing Corp., which was merged with and into it. Addison Circle
Acquisition Corp. now holds the assets of FSP Addison Circle Corp., which was
merged with and into it.]

      George J. Carter, the President and a director of each sponsored REIT,
including the target REITs, is President, Chief Executive Officer and a director
of FSP Corp. and President and a director of each acquisition subsidiary. Mr.
Carter is also Vice President and President, respectively, of FSP Property
Management and FSP Investments, each a wholly owned subsidiary of FSP Corp.

      R. Scott MacPhee, an Executive Vice President and a director of each
sponsored REIT, including the target REITs, and a member of each special
committee, is also an Executive Vice President of FSP Corp. Mr. MacPhee is also
an Executive Vice President of FSP Investments, a wholly owned subsidiary of FSP
Corp.

      Richard R. Norris, an Executive Vice President and a director of each
sponsored REIT, including the target REITs, is also a director and an Executive
Vice President of FSP Corp. Mr. Norris is also an Executive Vice President of
FSP Investments, a wholly owned subsidiary of FSP Corp.

      William W. Gribbell, an Executive Vice President and a director of each
sponsored REIT, including the target REITs and a member of each special
committee, is also an Executive Vice President of FSP Corp. Mr. Gribbell is also
an Executive Vice President of FSP Investments, a wholly owned subsidiary of FSP
Corp.

      Barbara J. Fournier, Vice President, Chief Operating Officer, Treasurer,
Secretary and a director of each sponsored REIT, including the target REITs, is
also Vice President, Chief Operating Officer, Treasurer, Secretary and a
director of FSP Corp. and Vice President, Treasurer and Secretary and a director
of each acquisition subsidiary. Ms. Fournier is also Chief Operating Officer of
each of FSP Property Management and FSP Investments, each a wholly owned
subsidiary of FSP Corp.


                                       16
- --------------------------------------------------------------------------------
<PAGE>

- --------------------------------------------------------------------------------

      Janet P. Notopoulos, Vice President of each sponsored REIT, including the
target REITs, is also a Vice President and director of FSP Corp. and Vice
President and a director of each acquisition subsidiary. Ms. Notopoulos is also
President of FSP Property Management, a wholly owned subsidiary of FSP Corp.

Comparison of the Target REITs and FSP Corp. (Pages 107 to 108)

      The summary information below highlights a number of significant
differences between the target REITs and FSP Corp.

      Form of Organization. The target REITs and FSP Corp. are each vehicles
appropriate for holding real estate investments and afford passive investors,
such as target REIT stockholders, certain benefits, including limited liability
and the avoidance of double-level taxation. The target REITs are under the
control of their respective target boards, while FSP Corp. is governed by the
FSP board.

      Length of Investment. Target REIT stockholders in each of the target REITs
expect liquidation of their investments when the assets of the target REITs are
liquidated within a five to ten year period following the syndication of a
target REIT. In contrast, FSP Corp. does not expect to dispose of any of its
particular assets within any prescribed periods.

      Properties and Diversification. The real estate portfolio of each target
REIT is limited to the assets acquired with its initial equity offering. FSP
Corp. holds a real estate portfolio that is substantially larger and more
diversified than the portfolio of any of the target REITs. An investment in FSP
Corp. should not be viewed as an investment in a specific pool of assets, but
instead as an investment in an ongoing real estate investment business, subject
to the risks normally attendant to ongoing real estate ownership, to the risks
related to the real estate investment banking/brokerage business and to the
risks related to acquisitions of additional properties.

      Additional Equity. As the target REITs are not authorized to issue
additional shares of target stock or other equity interests without the approval
of their respective target REIT stockholders, the target stock is not subject to
dilution. In contrast, FSP Corp. will have substantial flexibility to raise
equity capital to finance its businesses and affairs through the issuance of
equity securities, which may result in dilution to then existing FSP
stockholders.

      Percentage Ownership. As a result of the significantly higher number of
issued shares in FSP Corp. as compared to the target REITs, the target REIT
stockholders will own a much smaller percentage of FSP Corp. relative to their
ownership interest in the target REITs and, accordingly, will have less power to
control the outcome of matters submitted to a vote of the stockholders and will
receive a lesser percentage of any dividends or other distributions.


                                       17
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<PAGE>

- --------------------------------------------------------------------------------

Dissenters' Rights of Target REIT Stockholders (Pages 48 to 51)

      If you, as a target REIT stockholder, object to the merger, the Delaware
general corporation law permits you to seek relief as a dissenting stockholder
and have the "fair value" of your target stock determined by a court and paid to
you in cash.

      The relevant provisions of the Delaware general corporation law are
technical in nature and complex. If you, as a target REIT stockholder, wish to
exercise appraisal rights and obtain an appraisal of the fair value of your
target stock, you may wish to consult with your legal counsel because the
failure to comply strictly with these provisions may result in you waiving or
forfeiting your appraisal rights.

      A copy of the relevant section of the Delaware general corporation law
governing this process is attached as Appendix D to this Consent
Solicitation/Prospectus.

Material United States Federal Income Tax Considerations (Pages 156 to 170)

      Since the mergers are intended to qualify as reorganizations within the
meaning of Section 368(a) of the tax code, a target REIT stockholder will
generally:

      o     recognize no gain or loss upon the receipt of FSP common stock in
            exchange for target stock in a merger;

      o     have an aggregate tax basis for the FSP common stock received equal
            to the aggregate basis of the target stock surrendered (other than
            stock for which cash was received in lieu of a fractional share of
            FSP common stock); and

      o     have a holding period for the FSP common stock received that
            includes the holding period for the target stock surrendered.

      Following the mergers, FSP Corp. expects to continue to qualify as a "real
estate investment trust" under the tax code. Provided FSP Corp. can maintain
such qualification, it generally should be able to avoid entity-level federal
income tax to the extent it distributes its taxable income.

      Tax matters are very complicated, and the tax consequences of the mergers
to each target REIT stockholder will depend on the facts of its own situation.
Each target REIT stockholder is urged to consult its tax advisor for a full
understanding of the tax consequences of the merger.

Accounting Treatment

      Each of the mergers will be accounted for as a purchase under generally
accepted accounting principles, or GAAP.

Dividends in Respect of the Third and Fourth Quarters of 2004

      Each target REIT expects to declare in the third and fourth quarters of
2004 and pay to its target REIT stockholders thereafter a dividend with respect
to its third and fourth quarters of 2004 operations. Pursuant to the merger
agreement, such dividends will be paid out in an amount consistent with past


                                       18
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<PAGE>

- --------------------------------------------------------------------------------

practice and custom of the relevant target REIT. The cash paid out in these
dividends will reduce the amount of cash held by each target REIT and acquired
by FSP Corp. upon consummation of the mergers. Pursuant to the merger agreement,
FSP Corp. has assumed the obligation to pay any such dividends that have been
declared but not paid prior to the effective date. In addition, FSP Corp.
expects to declare in the fourth quarter of 2004 and pay to FSP stockholders in
the fourth quarter of 2004 dividends in respect of third quarter 2004
operations. Such dividends will be payable to holders of FSP common stock as of
a record date prior to the effective date and, therefore, target REIT
stockholders will only receive such dividends to the extent they are also FSP
stockholders on the record date and only to the extent of their holdings of FSP
common stock. The cash available for this dividend and possibly for future
dividends to the FSP stockholders will be reduced by the amount of expenses
related to the mergers paid by FSP Corp.

Expenses of the Mergers (Page 55)

      The expenses payable by FSP Corp. in connection with the mergers are
estimated to be $500,000. The expenses payable by the target REITs in connection
with the mergers are estimated to be $420,500 and consist of the appraisals,
accounting costs, A.G. Edwards' fee for financial advice to the special
committees and delivery of a fairness opinion to each target board and the fees
of independent legal counsel.


                                       19
- --------------------------------------------------------------------------------
<PAGE>

- --------------------------------------------------------------------------------

                    Selected Financial Information of the Target REITs

      The following tables summarize the selected financial information of the
target REITs for the periods presented.

Addison Circle

<TABLE>
<CAPTION>
                                                         For the                                  For the
                                                     Six Months Ended                            Year Ended
                                                         June 30,                               December 31,
                                                   --------------------   ----------------------------------------------------
(In thousands, except share and per share data)       2004       2003       2003         2002         2001      2000      1999

<S>                                                <C>         <C>        <C>          <C>            <C>        <C>      <C>
Operating Data:
Total revenue                                      $  4,720    $  4,333   $  8,554     $  2,102        --         --        --
Net income (loss)                                     2,514       2,136      4,005       (2,869)       --         --        --
Net income (loss) attributable to
  preferred shareholders                              2,514       2,136      4,005       (3,182)       --         --        --

Balance Sheet Data
Cash and cash equivalents                             5,592       5,363      5,966        5,402        --         --        --

Total assets                                         55,915      56,650     56,667       57,228        --         --        --

Total liabilities                                     1,377       1,374      3,355        2,784        --         --        --
Total stockholders' equity                           54,538      55,276     53,312       54,444        --         --        --

Per Share Data:
Weighted average preferred shares
  outstanding                                           636         636        636          636        --         --        --

Net income (loss) per preferred share              $  3,953    $  3,358   $  6,297     $ (5,003)       --         --        --
Book value per preferred share                       85,752      86,912     83,824       85,604        --         --        --
</TABLE>


                                       20
- --------------------------------------------------------------------------------
<PAGE>

- --------------------------------------------------------------------------------

Collins Crossing

<TABLE>
<CAPTION>
                                                         For the                                  For the
                                                     Six Months Ended                            Year Ended
                                                         June 30,                               December 31,
                                                   --------------------   -----------------------------------------------------
(In thousands, except share and per share data)       2004       2003       2003         2002         2001       2000      1999

<S>                                                <C>         <C>          <C>          <C>           <C>        <C>      <C>
Operating Data:
Total revenue                                      $  3,449    $  2,569     $  5,672      --           --          --        --
Net income (loss)                                     1,452      (2,343)        (976)     --           --          --        --
Net income (loss) attributable to
  preferred shareholders                              1,452      (2,496)      (1,349)

Balance Sheet Data
Cash and cash equivalents                             4,622       3,967        5,066      --           --          --        --

Total assets                                         47,932      49,292       49,314      --           --          --        --

Total liabilities                                     1,313         743        2,913      --           --          --        --
Total stockholders' equity                           46,619      48,549       46,401      --           --          --        --

Per Share Data:
Weighted average preferred shares
  outstanding                                           555         555          555      --           --          --        --

Net income (loss) per preferred share              $  2,616    $ (4,497)    $ (2,431)     --           --          --        --
Book value per preferred share                       83,998      87,476       83,605      --           --          --        --
</TABLE>


                                       21
- --------------------------------------------------------------------------------
<PAGE>

- --------------------------------------------------------------------------------

Montague

<TABLE>
<CAPTION>
                                                         For the                                  For the
                                                     Six Months Ended                            Year Ended
                                                         June 30,                               December 31,
                                                   --------------------   -----------------------------------------------------
(In thousands, except share and per share data)       2004       2003       2003         2002         2001       2000      1999

<S>                                                <C>         <C>          <C>         <C>            <C>        <C>      <C>
Operating Data:
Total revenue                                      $  1,715    $  1,848     $  3,645    $  1,008         --        --        --
Net income (loss)                                     1,286       1,336        2,669      (1,249)        --        --        --
Net income (loss) attributable to
  preferred shareholders                              1,286       1,336        2,669      (1,281)        --        --        --

Balance Sheet Data
Cash and cash equivalents                             3,612       3,417        3,594       3,330         --        --        --

Total assets                                         27,784      29,187       28,450      29,111         --        --        --

Total liabilities                                       401           2        1,371         930         --        --        --
Total stockholders' equity                           27,383      29,185       27,079      28,181         --        --        --

Per Share Data:
Weighted average preferred shares
  outstanding                                           334         334          334         334         --        --        --

Net income (loss) per preferred share              $  3,850    $  4,000     $  7,991    $ (3,835)        --        --        --
Book value per preferred share                       81,985      87,380       81,075      84,374         --        --        --
</TABLE>


                                       22
- --------------------------------------------------------------------------------
<PAGE>

- --------------------------------------------------------------------------------

Royal Ridge

<TABLE>
<CAPTION>
                                                         For the                                  For the
                                                     Six Months Ended                            Year Ended
                                                         June 30,                               December 31,
                                                   --------------------   -----------------------------------------------------
(In thousands, except share and per share data)       2004       2003       2003         2002         2001       2000      1999

<S>                                                <C>         <C>          <C>          <C>          <C>        <C>       <C>
Operating Data:
Total revenue                                      $  1,517    $    590     $  2,264      --           --         --        --
Net income (loss)                                       679      (1,945)        (958)     --           --         --        --
Net income (loss) attributable to                        --
  preferred shareholders                                679      (1,959)        (972)                  --         --        --

Balance Sheet Data
Cash and cash equivalents                             2,301       2,452        2,251      --           --         --        --

Total assets                                         24,768      25,432       25,170      --           --         --        --

Total liabilities                                       231         433          776      --           --         --        --
Total stockholders' equity                           24,537      24,999       24,394      --           --         --        --

Per Share Data:
Weighted average preferred shares
  outstanding                                        297.50      297.50       297.50      --           --         --        --

Net income (loss) per preferred share              $  2,282    $ (6,585)    $ (3,267)     --           --         --        --
Book value per preferred share                       82,477      84,030       81,997      --           --         --        --
</TABLE>


                                       23
- --------------------------------------------------------------------------------
<PAGE>

- --------------------------------------------------------------------------------

                           Comparative Per Share Date

                       As of and for the six months ended
                                  June 30, 2004
                                   (unaudited)

                                                       Pro forma     Pro forma
                                        Historical    Consolidated   Equivalent
                                       -----------------------------------------
Net income per share
  basic and diluted
    FSP Corp.                           $    0.54      $   0.54      $      --

    Montague                                3,850            --          3,051
    Addison Circle                          3,953            --          3,212
    Royal Ridge                             2,282            --          3,270
    Collins Crossing                        2,616            --          3,331

Book value per share
    FSP Corp.                           $   10.34      $  11.05      $      --

    Montague                               81,985            --         62,429
    Addison Circle                         85,752            --         65,733
    Royal Ridge                            82,477            --         66,916
    Collins Crossing                       83,998            --         68,152

Dividends declared per share
    FSP Corp.                           $    0.62      $   0.58      $      --

    Montague                                2,934            --          3,277
    Addison Circle                          2,024            --          3,450
    Royal Ridge                             1,798                        3,512
    Collins Crossing                        2,223            --          3,577


                                       24
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<PAGE>

                                  RISK FACTORS

      In evaluating the mergers and FSP Corp., you should carefully consider the
following factors, in addition to other matters set forth elsewhere in this
Consent Solicitation/Prospectus.

Risks Relating to the Mergers

The nature of the target REIT stockholders' investment in their respective
target REITs will change upon consummation of the mergers.

      As a result of the mergers, the nature of each target REIT stockholder's
investment will change from an interest in a corporation owning a specified
property for a finite period in which such target REIT stockholder will receive
a distribution upon liquidation based upon the net proceeds from the sale of the
entity's assets, to an investment in an ongoing fully-integrated real estate
company, which has a portfolio of properties that may be changed from time to
time and conducts real estate investment banking operations, and in which the
equity owners are expected to recover their investment from the sale of their
FSP common stock, which is currently illiquid, and not from liquidating
distributions.

The mergers may affect the level of dividends paid to target REIT stockholders.

      Based on historical quarterly, non-special dividends received by
stockholders of FSP Corp. and the target REIT stockholders, the mergers are
expected tol reduce the level of dividends paid to target REIT stockholders who
become stockholders in the combined company. Regardless of the initial level of
the combined company's dividends, such dividends could decline in the future.

There may be differences between the merger consideration received by the target
REIT stockholders and the realizable value of their target REIT.

      The merger consideration was determined through negotiations between the
special committees of the target boards and FSP Corp. The special committees
relied on advice from their financial advisor, A.G. Edwards, in their
negotiations with FSP Corp. The special committees also considered the
appraisals received from an independent third-party appraiser, the assets and
liabilities of each target REIT and FSP Corp., the expected cash available for
distribution of each target REIT, the multiples of cash available for
distribution commonly used in valuing REITs and the limited liquidity of FSP
common stock. This negotiated price is subject to certain assumptions and may
not represent the true worth or realizable value of the target REITs in a sale
transaction for cash. The target REITs did not solicit bids from third parties
for the sale of the target REITs or their respective properties. Moreover, the
properties of the target REITs may appreciate in value and might be able to be
liquidated at a later date for a price which would yield target REIT
stockholders more consideration than they would receive in the mergers.

Target REIT stockholders will be foregoing the potential appreciation in the
real property owned by their respective target REIT.

      The potential appreciation in the real property owned by each target REIT
may be greater than the merger consideration being offered by FSP Corp. in
connection with the mergers, with the potential effect that some target REIT
stockholders may receive less for their investment now than if they were to hold
on to their investment in the target REIT and wait for it to be liquidated
within a five to ten year period following the syndication of the target REIT in
accordance with the original investment strategy of the respective target REIT.


                                       25
<PAGE>

The future price of FSP common stock may be lower than the price per share
negotiated for purposes of the merger consideration.

      The future price per share of the FSP common stock may be lower than the
price per share negotiated between the special committees of the target boards
and FSP Corp. for the purpose of determining the merger consideration to be
received by you.

The mergers will require the target REIT stockholders to forgo alternatives to
the mergers.

      The target boards considered alternatives to the mergers, such as the
continuation of the target REITs as currently structured, the liquidation of the
target REITs through sales of their properties, or the creation of a secondary
market for the target stock through limited cash tender offers or repurchase
programs sponsored by the target REITs. The benefits of these alternatives are
avoiding the risks associated with the mergers as set forth in this section.
Moreover, retaining the finite-life feature of the target REITs would allow
target REIT stockholders eventually to receive liquidation proceeds from the
sale of the properties of the target REITs, and a target REIT stockholder may
receive more consideration through such sale than the consideration received in
the mergers. Target REIT stockholders will forgo all benefits to the
alternatives to the mergers in the event the mergers are consummated.

Target REIT stockholders will experience a loss of relative voting power.

      Target REIT stockholders have one vote per one share of target stock. FSP
stockholders have one vote per one share of FSP common stock. Immediately
following the consummation of the mergers, target REIT stockholders will have
one vote per one share of FSP common stock. If the mergers are consummated, the
target REIT stockholders will have a smaller ownership percentage of FSP Corp.
than their respective target REITs, and each target REIT stockholder will thus
lose relative voting power.

The target REIT stockholders will experience greater risks relating to
diversification of portfolios following the mergers.

      The assets and liabilities of the target REITs and of FSP Corp. will be
combined in the mergers. None of the target REITs currently has any debt
obligations but the target REIT stockholders may become exposed to debt
obligations FSP Corp. may incur in the future. As a result of the mergers, the
geographic diversity of the properties in which the target REIT stockholders
will own an interest will change. However, because the market for real estate
may vary widely from one region of the country to another, the change in
geographic diversity may expose the target REIT stockholders to different and
greater risks than those to which they are currently exposed.

The officers and directors of the target REITs have conflicts of interest that
may have influenced them to support or adopt the merger agreement.

      A number of conflicts of interest are inherent in the relationships among
the target REITs, the target Boards, FSP Corp., the FSP board and their
respective affiliates. These conflicts of interest include the fact that FSP
Investments, a subsidiary of FSP Corp., syndicated each target REIT and, among
others:

      o     George J. Carter, the President and a director of each target REIT,
            is President, Chief Executive Officer and a director of FSP Corp.
            and owns an aggregate of 775,531 shares of FSP common stock;


                                       26
<PAGE>

      o     R. Scott MacPhee, an Executive Vice President and a director of each
            target REIT and a member of each special committee, is also an
            Executive Vice President of FSP Corp. and owns an aggregate of
            372,451 shares of FSP common stock;

      o     Richard R. Norris, an Executive Vice President and a director of
            each target REIT, is also a director and an Executive Vice President
            of FSP Corp. and owns an aggregate of 258,087 shares of FSP common
            stock;

      o     William W. Gribbell, an Executive Vice President and a director of
            each target REIT and a member of each special committee, is also an
            Executive Vice President of FSP Corp. and owns an aggregate of
            129,761 shares of FSP common stock;

      o     Barbara J. Fournier, Vice President, Chief Operating Officer,
            Treasurer, Secretary and a director of each target REIT, is also
            Vice President, Chief Operating Officer, Treasurer, Secretary and a
            director of FSP Corp. and owns an aggregate of 27,934 shares of FSP
            common stock;

      o     Janet P. Notopoulos, Vice President of each target REIT, is also a
            Vice President and director of FSP Corp. and owns an aggregate of
            14,985 shares of FSP common stock; and

      o     The target REITs' properties are managed by FSP Property Management,
            a subsidiary of FSP Corp., pursuant to management services
            agreements under which FSP Corp. receives certain fees from each
            target REIT for its management services.

      Each target board established a special committee consisting of Messrs.
MacPhee and Gribbell, the only members of the target boards who are not also
members of the FSP board. Messrs. MacPhee and Gribbell serve as executive vice
presidents of FSP Corp. Under the Delaware general corporation law, the target
boards cannot delegate to a third party their fiduciary duties relating to the
determination of whether the transactions contemplated by the mergers were or
were not fair to the target REIT stockholders.

      If each target REIT had a separate board of directors with executive
officers who did not serve in similar capacities for FSP Corp. and directors who
did not own FSP common stock, these persons would have had an independent
perspective which might have led them to advocate positions during the
negotiation and structuring of the merger agreement and the determination of the
merger consideration more favorable to the target REIT stockholders than those
taken by the target boards.

      The officers and directors of the target REITs who are officers or
directors of FSP Corp. have fiduciary duties to manage the target REITs in a
manner beneficial to the target REIT stockholders. Similarly, FSP Corp.'s
directors and officers, including Mr. Carter, have fiduciary duties to manage
FSP Corp. in a manner beneficial to FSP Corp. and FSP stockholders. In some
circumstances, including the negotiation of the merger agreement, Mr. Carter's
and the other directors' and officers' duties to FSP Corp. and the FSP Corp.
stockholders and their ownership of FSP common stock may conflict with their
duties, as directors and officers of the target REITs, to the target REITs and
target REIT stockholders. A potential conflict between such fiduciary duties may
not be resolved, or if resolved, may be resolved in a manner less favorable to
the target REITs and target REIT stockholders than would otherwise have been the
case if the target REITs were dealing with unaffiliated parties. Specifically,
these conflicts may have resulted in the target REIT stockholders receiving an
aggregate merger consideration that is less than what they may have received had
the merger consideration been negotiated between unaffiliated parties.


                                       27
<PAGE>

The combined company may be liable for contingent or undisclosed liabilities of
the target REITs.

      Each of the target REITs has delivered to FSP Corp. its financial
statements disclosing all known material liabilities and reserves, if any, set
aside for contingent liabilities. Each target REIT has represented and warranted
that the financial statements fairly present the financial position of each
target REIT, and each target REIT will be required to deliver on the effective
date an officer's certificate stating that that there have been no material
adverse changes in its financial condition between the date of the financial
statements and the effective date of the mergers. The accuracy and completeness
of these representations are conditions to the consummation of the mergers and
if, on or prior to the effective date, these representations and warranties are
known to be inaccurate, FSP Corp. may elect not to consummate the merger with
the target REIT that failed to fully and accurately disclose its financial
position. As these representations do not survive the effective date, after the
effective date the combined company will have no recourse against any target
REIT or the respective target REIT stockholders for any contingent or
undisclosed liabilities which first became known after the effective date. If
any contingent or undisclosed liabilities are discovered after the effective
date, the combined company's balance sheet may be adversely affected, causing
the value of the target REIT stockholders' interests in the combined company to
decrease.

The shares of FSP common stock received by the target REIT stockholders are not
tradable on a national stock market or other exchange.

      There is no public or other market for the shares of FSP common stock, and
although the combined company will have the goal in the future of creating a
public market for its securities, there is no certainty that the combined
company will be successful or that such a market will develop. FSP Corp. intends
to file an application to list the FSP common stock on AMEX. FSP Corp. may not
file such application, or in the event it does, AMEX may reject the application
or a meaningful trading market may not develop, even if AMEX approves the
application. Consequently, the target REIT stockholders may be unable to
liquidate their shares of FSP common stock in the event of an emergency or for
any other reason.

The target REIT stockholders may experience dilution of their respective
holdings in FSP Corp.

      The combined company will have substantial flexibility to raise equity
capital. The combined company will also have the ability to issue shares of FSP
common stock as incentive compensation to employees of the combined company or
its subsidiaries. The issuance of additional shares of FSP common stock by the
combined company does not require any approval by the target REIT stockholders
except in special circumstances. Any and all additional issuances of FSP common
stock will dilute the interests of the target REIT stockholders following the
consummation of the mergers.

A majority vote of the target REIT stockholders of a target REIT will bind all
the target REIT stockholders of that Target REIT.

      In accordance with the charters of the target REITs and the Delaware
general corporation law, if the target REIT stockholders holding a majority of
the outstanding shares of preferred stock in a target REIT, and a majority of
the outstanding shares of common stock and preferred stock in a target REIT
voting together as a class, adopt the merger agreement and approve the mergers
contemplated thereby, the merger of that target REIT will be consummated and all
target REIT stockholders of that target REIT will participate in the mergers,
regardless of whether or not such target REIT stockholders voted to approve the
mergers, unless a target REIT stockholder exercises his, her or its appraisal
rights under the Delaware general corporation law.


                                       28
<PAGE>

Following the consummation of the mergers, the combined company may no longer
qualify as a REIT.

      As a result of the combination of FSP Corp. with the target REITs pursuant
to the mergers, FSP Corp. might no longer qualify as a real estate investment
trust under Section 856 of the tax code. FSP Corp. could lose its ability to so
qualify for a variety of reasons relating to the nature of the assets acquired
from the target REITs, the identity of the shareholders of the target REITs who
become shareholders of FSP Corp. or the failure of one or more of the target
REITs to have previously qualified as a real estate investment trust. If the
combined company fails to qualify as a REIT, the combined company could be
disqualified from treatment as a REIT in the year in which such failure occurred
and for the next four taxable years and, consequently, would be taxed as a
regular corporation during such years.

Real Estate and Business Risks of FSP Corp.

If FSP Corp. is not able to collect sufficient rents from each of its owned real
properties, FSP Corp. may suffer significant operating losses or a reduction in
cash available for future dividends.

      A substantial portion of FSP Corp.'s revenues are generated by the rental
income of its real properties. If its properties do not provide FSP Corp. with a
steady rental income, FSP Corp.'s revenues will decrease and may cause it to
incur operating losses in the future or incur a reduction in cash available for
future dividends.

FSP Corp. faces risks in continuing to attract investors for sponsored REITs.

      FSP Corp.'s investment banking/investment services business continues to
depend upon its ability to attract purchasers of equity interests in sponsored
REITs. FSP Corp.'s success in this area will depend on the propensity and
ability of investors who have previously invested in sponsored REITs to continue
to invest in future sponsored REITs and on FSP Corp.'s ability to expand the
investor pool for the sponsored REITs by identifying new potential investors.
Moreover, FSP Corp.'s investment banking/investment services business may be
affected to the extent existing sponsored REITs incur losses or have operating
results that fail to meet investors' expectations.

If FSP Corp. is unable to fully syndicate a sponsored REIT, it may be required
to keep a balance outstanding on its line of credit or use its cash balance to
repay the line of credit, which may reduce cash available for distribution to
FSP stockholders.

      FSP Corp. typically draws on its line of credit to make an interim
mortgage loan to a sponsored REIT, so that the sponsored REIT can acquire real
property prior to the consummation of the offering of its equity interests; this
interim loan is secured by a first mortgage of the real property acquired by the
sponsored REIT. Once the offering has been completed, the sponsored REIT repays
the loan from FSP Corp. out of the offering proceeds. If FSP Corp. is unable to
fully syndicate a sponsored REIT, the sponsored REIT could be unable to fully
repay the loan, and FSP Corp. would have to satisfy its obligation under its
line of credit through other means. If FSP Corp. is required to use cash for
this purpose, FSP Corp. would have less cash available for distribution to the
FSP stockholders.

FSP Corp. may not be able to find properties that meet its criteria for
purchase.

      Growth in FSP Corp.'s investment banking/investment services business and
its portfolio of real estate is dependent on the ability of FSP Corp.'s
acquisition executives to find properties for sale which meet FSP Corp.'s
investment criteria. To the extent they fail to find such properties, FSP Corp.
will be unable to syndicate offerings of sponsored REITs to investors or enlarge
its portfolio, and its business could have lower revenue, which would reduce the
cash available for distribution to the FSP stockholders.


                                       29
<PAGE>

FSP Corp. is dependent on key personnel.

      FSP Corp. depends on the efforts of George J. Carter, its Chief Executive
Officer, and its other executive officers. If any of them were to resign, FSP
Corp.'s operations could be adversely affected. FSP Corp. does not have
employment agreements with Mr. Carter or any other of its executive officers.

FSP Corp.'s level of dividends may fluctuate.

      Because FSP Corp.'s investment banking/investment services business is
transactional in nature and real estate occupancy levels and rental rates can
fluctuate, FSP Corp. cannot predict its level of revenue from such activities.
As a result of this, the amount of cash available for distribution may
fluctuate, which may result in FSP Corp. not being able to maintain or grow
dividend levels in the future.

The real properties held by FSP Corp. may significantly decrease in value.

      As of August 27, 2004, FSP Corp. owned 28 properties. Some or all of these
properties may decline in value. To the extent FSP Corp.'s real properties
decline in value, the target REIT stockholders receiving FSP common stock could
lose some or all the value of their investments.

New acquisitions may fail to perform as expected.

      FSP Corp. may acquire new properties, whether by cash purchase, by
acquisition of sponsored REITs or by investment in a sponsored REIT. Newly
acquired properties may fail to perform as expected, in which case, FSP Corp.'s
results of operations could be adversely affected.

FSP Corp. faces risks in owning and operating real property.

      An investment in FSP Corp. is subject to the risks incident to the
ownership and operation of real estate-related assets. These risks include the
fact that real estate investments are generally illiquid, which may impact FSP
Corp.'s ability to vary its portfolio in response to changes in economic and
other conditions, as well as the risks normally associated with:

      o     changes in general and local economic conditions;

      o     the supply or demand for particular types of properties in
            particular markets;

      o     changes in market rental rates;

      o     the impact of environmental protection laws; and

      o     changes in tax, real estate and zoning laws.

      Certain significant costs, such as real estate taxes, utilities, insurance
and maintenance costs, generally are not reduced even when a property's rental
income is reduced. In addition, environmental and tax laws, interest rate
levels, the availability of financing and other factors may affect real estate
values and property income. Furthermore, the supply of commercial and
multi-family residential space fluctuates with market conditions.


                                       30
<PAGE>

FSP Corp. faces risks from tenant defaults or bankruptcies.

      If any of FSP Corp.'s tenants defaults on its lease, FSP Corp. may
experience delays in enforcing its rights as a landlord and may incur
substantial costs in protecting its investment. In addition, at any time, a
tenant of one of FSP Corp.'s properties may seek the protection of bankruptcy
laws, which could result in the rejection and termination of such tenant's lease
and thereby cause a reduction in cash available for distribution to the FSP
stockholders.

FSP Corp. may encounter significant delays in reletting vacant space, resulting
in losses of income.

      When leases expire, FSP Corp. will incur expenses and may not be able to
re-lease the space on the same terms. Certain leases provide tenants the right
to terminate early if they pay a fee. If FSP Corp. is unable to re-lease space
promptly, if the terms of the replacement leases are significantly less
favorable than anticipated or if the costs are higher, FSP Corp. may have to
reduce distributions to the FSP stockholders.

FSP Corp. faces risks from geographic concentration.

      The properties in the FSP Corp. portfolio, by aggregate square footage,
are distributed geographically as follows: Southwest - 26%, Northeast - 31%,
Midwest - 19%, West - 16% and Southeast 8%. However, within certain of those
segments, FSP Corp. holds a larger concentration of its properties in Houston,
Texas - 18% and Washington, DC - 13%. FSP Corp. is likely to face risks to the
extent that any of these areas in which it holds a larger concentration of its
properties suffers deteriorating economic conditions.

FSP Corp. competes with national, regional and local real estate operators and
developers, which could adversely affect its cash flow.

      Competition exists in every market in which FSP Corp.'s properties are
located and in every market in which FSP Corp.'s properties will be located. FSP
Corp. competes with, among others, national, regional and numerous local real
estate operators and developers. Such competition may adversely affect the
percentage of leased space and the rental revenues of its properties, which
could adversely affect FSP Corp.'s cash flow from operations and its ability to
make expected distributions to the FSP stockholders. Some of FSP Corp.'s
competitors may have more resources than FSP Corp. does or other competitive
advantages. Competition may be accelerated by any increase in availability of
funds for investment in real estate. For example, decreases in interest rates
tend to increase the availability of funds and therefore can increase
competition. To the extent that FSP Corp.'s properties continue to operate
profitably, this will likely stimulate new development of competing properties.
The extent to which FSP Corp. is affected by competition will depend in
significant part on local market conditions.

There is limited potential for an increase in leased space gains in FSP Corp.'s
properties.

      FSP Corp. anticipates that future increases in revenue from its properties
will be primarily the result of scheduled rental rate increases or rental rate
increases as leases expire. Properties with higher rates of vacancy are
generally located in soft economic markets so that it may be difficult to
realize increases in revenue when vacant space is re-leased.

FSP Corp. is subject to possible liability relating to environmental matters,
and FSP Corp. cannot assure you that it has identified all possible liabilities.

      Under various federal, state and local laws, ordinances and regulations,
an owner or operator of real property may become liable for the costs of removal
or remediation of certain hazardous substances released on or in its property.
Such laws may impose liability without regard to whether the owner or operator
knew of, or caused, the release of such hazardous substances. The presence of


                                       31
<PAGE>

hazardous substances on a property may adversely affect the owner's ability to
sell such property or to borrow using such property as collateral, and it may
cause the owner of the property to incur substantial remediation costs. In
addition to claims for cleanup costs, the presence of hazardous substances on a
property could result in the owner incurring substantial liabilities as a result
of a claim by a private party for personal injury or a claim by an adjacent
property owner for property damage.

      In addition:

      o     future laws, ordinances or regulations could impose material
            environmental liability;

      o     the current environmental conditions of FSP Corp.'s properties could
            be affected by the condition of properties in the vicinity of such
            properties (such as the presence of leaking underground storage
            tanks) or by third parties unrelated to FSP Corp.;

      o     tenants could violate their leases by introducing hazardous or toxic
            substances into FSP Corp.'s properties that could expose FSP Corp.
            to liability under federal or state environmental laws; or

      o     environmental conditions, such as the growth of bacteria and toxic
            mold in heating and ventilation systems or on walls, could occur at
            FSP Corp.'s properties and pose a threat to human health.

FSP Corp. is subject to compliance with the Americans With Disabilities Act and
fire and safety regulations which could require FSP Corp. to make significant
capital expenditures.

      All of FSP Corp.'s properties are required to comply with the Americans
With Disabilities Act, or ADA, and the regulations, rules and orders that may be
issued thereunder. The ADA has separate compliance requirements for "public
accommodations" and "commercial facilities," but generally requires that
buildings be made accessible to persons with disabilities. Compliance with ADA
requirements might require, among other things, removal of access barriers and
noncompliance could result in the imposition of fines by the U.S. government, or
an award of damages to private litigants.

      In addition, FSP Corp. is required to operate its properties in compliance
with fire and safety regulations, building codes and other land use regulations,
as they may be adopted by governmental agencies and bodies and become applicable
to FSP Corp.'s properties. Compliance with such requirements may require FSP
Corp. to make substantial capital expenditures, which expenditures would reduce
cash otherwise available for distribution to the FSP stockholders.

There are significant conditions to FSP Corp.'s obligation to redeem shares of
its common stock, and any such redemption will result in the stockholders
tendering shares receiving less than their fair market value.

      Under FSP Corp.'s redemption plan, FSP Corp. is only obligated to use its
best efforts to redeem shares of FSP common stock from stockholders wishing to
have them redeemed. There are significant conditions to FSP Corp.'s obligation
to redeem shares of FSP common stock including:

      o     FSP Corp. cannot be insolvent or be rendered insolvent by the
            redemption;

      o     the redemption cannot impair FSP Corp.'s capital or operations;


                                       32
<PAGE>

      o     the redemption cannot contravene any provision of federal or state
            securities laws;

      o     the redemption cannot result in FSP Corp. failing to qualify as a
            REIT; and

      o     FSP Corp.'s management must determine that the redemption is in FSP
            Corp.'s best interests.

      Any redemption effected by FSP Corp. under this plan would result in those
stockholders tendering shares of FSP common stock receiving 90% of the fair
market value of such shares, as determined by the FSP board in its sole and
absolute discretion, and not their full fair market value. If FSP common stock
becomes listed for trading on AMEX or any other national securities exchange or
the NASDAQ National Market, FSP Corp. will no longer be obligated to effect any
redemption.

FSP Corp. may lose capital investment or anticipated profits if an uninsured
event occurs.

      FSP Corp. carries or its tenants are obligated to carry comprehensive
liability, fire and extended coverage with respect to each of FSP Corp.'s
properties, with policy specification and insured limits customarily carried for
similar properties. There are, however, certain types of losses, such as from
wars, terrorist events, pollution or earthquakes, that may be either uninsurable
or not economically insurable (although the properties located in California all
have earthquake insurance). Should an uninsured material loss occur, FSP Corp.
could lose both capital invested in the property and anticipated profits.

Contingent or unknown liabilities acquired in mergers or similar transactions
could require FSP Corp. to make substantial payments.

      The properties which FSP Corp. acquired in mergers were acquired subject
to liabilities and without any recourse with respect to liabilities, whether
known or unknown. As a result, if liabilities were asserted against FSP Corp.
based upon any of these properties, FSP Corp. might have to pay substantial sums
to settle them, which could adversely affect its results of operations and
financial condition and its cash flow and ability to make distributions to the
FSP stockholders. Unknown liabilities with respect to properties acquired might
include:

      o     liabilities for clean-up or remediation of environmental conditions;

      o     claims of tenants, vendors or other persons dealing with the former
            owners of the properties; and

      o     liabilities incurred in the ordinary course of business.

FSP Corp. would incur adverse tax consequences if FSP Corp. failed to qualify as
a REIT.

      If in any taxable year FSP Corp. does not qualify as a real estate
investment trust, FSP Corp. would be taxed as a corporation and distributions to
the FSP stockholders would not be deductible by FSP Corp. in computing its
taxable income. In addition, if FSP Corp. were to fail to qualify as a real
estate investment trust, FSP Corp. could be disqualified from treatment as a
real estate investment trust in the year in which such failure occurred and for
the next four taxable years and, consequently, FSP Corp. would be taxed as a
regular corporation during such years. Failure to qualify for even one taxable
year could result in a significant reduction of FSP Corp.'s cash available for
distribution to the FSP stockholders or could require FSP Corp. to incur
indebtedness or liquidate investments in order to generate sufficient funds to
pay the resulting federal income tax liabilities. The provisions of the tax code
governing the taxation of real estate investment trusts are very technical and
complex, and although FSP Corp. expects that it will be organized and will
operate in a manner that will enable it to meet such requirements, no assurance


                                       33
<PAGE>

can be given that FSP Corp. will always succeed in doing so. In addition, you
should note that if one or more of the REITs FSP Corp. acquired in June 2003 or
any of the target REITs did not or does not qualify as a real estate investment
trust immediately prior to the consummation of its acquisition, FSP Corp. would
be disqualified as a REIT as a result of such acquisition.

Provisions in FSP Corp.'s organizational documents may prevent changes in
control.

      FSP Corp.'s Articles of Incorporation and Bylaws contain provisions,
described below, which may have the effect of discouraging a third party from
making an acquisition proposal for FSP Corp. and may thereby inhibit a change of
control under circumstances that could otherwise give the holders of FSP common
stock the opportunity to realize a premium over the then-prevailing market
prices.

      Ownership Limits. In order for FSP Corp. to maintain its qualification as
a real estate investment trust, the holders of FSP common stock are limited to
owning, either directly or under applicable attribution rules of the tax code,
no more than 9.8% of the lesser of the value or the number of equity shares of
FSP Corp., and no holder of common stock may acquire or transfer shares that
would result in shares of FSP common stock being beneficially owned by fewer
than 100 persons. Such ownership limit may have the effect of preventing an
acquisition of control of FSP Corp. without the approval of the FSP board.
Moreover, FSP Corp. will have the right to redeem any shares of FSP common stock
that are acquired or transferred in violation of these provisions at the market
price, which is determined by the FSP board. This right of redemption will no
longer be effective should FSP Corp. list the FSP common stock on the AMEX or
any other national securities exchange or the NASDAQ National Market. In
addition, FSP Corp.'s Articles of Incorporation give the FSP board the right to
refuse to give effect to the acquisition or transfer of shares by a stockholder
in violation of these provisions.

      Staggered Board. The FSP board is divided into three classes. The terms of
these classes will expire in 2005, 2006 and 2007, respectively. Directors of
each class are elected for a three-year term upon the expiration of the initial
term of each class. The staggered terms for directors may affect FSP
stockholders' ability to effect a change in control even if a change in control
were in the FSP stockholders' best interests.

      Preferred Stock. FSP Corp.'s Articles of Incorporation authorize the FSP
board to issue up to 20,000,000 shares of preferred stock, par value $.0001 per
share, and to establish the preferences and rights of any such shares issued.
The issuance of preferred stock could have the effect of delaying or preventing
a change in control even if a change in control were in the best interests of
the FSP stockholders.

      Increase of Authorized Stock. The FSP board, without any vote or consent
of the FSP stockholders, may increase the number of authorized shares of any
class or series of stock or the aggregate number of authorized shares FSP Corp.
has authority to issue. The ability to increase the number of authorized shares
and issue such shares could have the effect of delaying or preventing a change
in control even if a change in control were in the best interests of the FSP
stockholders.

      Amendment of Bylaws. The FSP board has the sole power to amend FSP Corp.'s
Bylaws. This power could have the effect of delaying or preventing a change in
control even if a change in control were in the best interests of the FSP
stockholders.

      Stockholder Meetings. FSP Corp.'s Bylaws require advance notice for
stockholder proposals to be considered at annual meetings of stockholders and
for stockholder nominations for election of directors at special meetings of
stockholders. FSP Corp.'s Bylaws also provide that stockholders entitled to cast
more than 50% of all the votes entitled to be cast at a meeting must join in a
request by stockholders to call a special meeting of stockholders. These
provisions could have the effect of delaying or preventing a change in control
even if a change in control were in the best interests of the FSP stockholders.


                                       34
<PAGE>

      Supermajority Votes Required. FSP Corp.'s Articles of Incorporation
require the affirmative vote of the holders of no less than 80% of the shares of
capital stock outstanding and entitled to vote in order (i) to amend the
provisions of the Articles of Incorporation relating to the classification of
directors, removal of directors, limitation of liability of officers and
directors or indemnification of officers and directors or (ii) to amend the
Articles of Incorporation to impose cumulative voting in the election of
directors. These provisions could have the effect of delaying or preventing a
change in control even if a change in control were in the best interests of the
FSP stockholders.

The trading price of FSP common stock following listing on the American Stock
Exchange or another national securities exchange is uncertain. The FSP common
stock could trade at a lower price than anticipated.

      The market prices for the FSP common stock may fluctuate with changes in
market and economic conditions, the financial condition of FSP Corp. securities,
including the market perception of REITs in general. Such fluctuations may
depress the market price of FSP common stock independent of the financial
performance of FSP Corp. The market conditions for REIT stocks generally could
affect the market price of the FSP common stock.


                                       35
<PAGE>

                        TARGET REIT CONSENT SOLICITATION

      The votes of the target REIT stockholders with respect to the mergers are
being solicited by the target boards. Such votes will be tabulated as consents
are received. The mergers are being submitted for approval to those persons
holding common stock and preferred stock of each target REIT as of August 13,
2004, also known as the record date. As of August 13, 2004, the following number
of shares of target stock were held of record by the number of target REIT
stockholders indicated below:

                                                              Number of Shares
                                                               of Target Stock
                                           Total Number of        Required
                      Number of Target    Shares of Target     for Approval of
    Target REIT       REIT Stockholders   Stock Outstanding      the Mergers

Montague                     331                 334               167.25

Addison Circle               380                 636               318.25

Royal Ridge                  246                297.5                149

Collins Crossing             449                 555               277.75

      Each target REIT stockholder is entitled to one vote for each share of
target stock held. Accordingly, the number of shares of target stock entitled to
vote with respect to the mergers is equivalent to the number of shares of target
stock held of record as of August 13, 2004. FSP Corp. will not receive any
consideration for the one share of common stock it holds in each target REIT.

      This Consent Solicitation/Prospectus and the form of consent constitute
the target boards' notice of the mergers. Each target REIT stockholder has until
the later of the approval date, as described below, or 5:00 p.m., Eastern Time,
on [_____], 2004, unless extended by the target boards in their sole discretion,
to inform the target boards whether such target REIT stockholder wishes to
approve or disapprove of his, her or its target REIT's participation in the
mergers. The target boards ask that each target REIT stockholder vote by
completing and returning the consent accompanying this Consent
Solicitation/Prospectus in the manner described below.

      Target REIT stockholders who wish to vote "YES" for adoption of the merger
agreement and approval of the mergers and the transactions contemplated thereby
should complete, sign and return the consent or consents relating to their
target stock which accompanies this Consent Solicitation/Prospectus. One consent
has been prepared for each target REIT stockholder regardless of which target
REIT you are a shareholder. Consequently, a target REIT stockholder who holds,
for example, target stock in each of the four target REITs will receive only one
consent, which must be completed, signed and returned in order to vote "YES" for
the mergers relating to each of the four target REITs. Consents must be
delivered by mail or other delivery service to:

                           Franklin Street Properties
                               401 Edgewater Place
                                    Suite 200
                         Wakefield, Massachusetts 01880


                                       36
<PAGE>

      Approval of the mergers by a target REIT requires the vote of target REIT
stockholders holding a majority of the outstanding shares of preferred stock of
the target REIT, and a majority of the outstanding shares of common stock and
preferred stock of the target REIT voting together as a class, as of the record
date. If one or more target REITs does not obtain the vote required for the
consummation of the merger with such target REIT, FSP Corp. will not proceed
with the mergers of any other target REIT. The number of shares of target stock
that must be voted in favor of the mergers for it to be approved by the
respective target REIT is shown in the table above. The failure to return a
consent will have the effect of a vote against the mergers. A target REIT
stockholder who signs and returns the consent without indicating a vote will be
deemed to have voted "YES" in favor of adoption of the merger agreement and
approval of the mergers and the transactions contemplated thereby. The date on
which consents are received from target REIT stockholders owning a majority of
the shares of target stock of a particular target REIT approving the mergers is
referred to as the "approval date" for that entity.

      All questions as to the form of all documents and the validity (including
time of receipt) of all approvals and elections will be determined by the target
boards, and such determination shall be final and binding. The target boards
reserve the absolute right to waive any defects or irregularities in any
approval of the mergers or preparation of the form of consent. The target
boards' interpretation of the terms and conditions of the mergers will be final
and binding. The target boards shall be under no duty to give notification of
any defects or irregularities in any approval of the mergers or preparation of
the form of consent and shall not bear any liability for failure to give such
notification.

      Target REIT stockholders may withhold or revoke their consent at any time
prior to the approval date for the entity with respect to which consent is to be
withheld or revoked. To be effective, a written, telegraphic or telex notice of
revocation or withdrawal of the consent must be received by the applicable
target boards no later than the approval date addressed as set forth above. A
notice of revocation or withdrawal must specify the target REIT stockholder's
name and the name of the target REIT or target REITs to which such revocation or
withdrawal relates.

      Votes of target REIT stockholders may be solicited by FSP Investments on
behalf of the target boards through the mail or by other means of solicitation.
Costs of solicitation will be borne by FSP Corp. No person will receive any
compensation contingent upon solicitation of a favorable vote. You have the
right to inspect a list of all holders of target stock of record for your target
REIT. For a discussion relating to your appraisal rights, see "The Mergers -
Appraisal Rights of Dissenting Stockholders of Target REITs."


                                       37
<PAGE>

               SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION

      This Consent Solicitation/Prospectus includes forward-looking statements.
All statements, other than statements of historical facts, included in this
Consent Solicitation/Prospectus regarding the strategy, future operations,
financial position, future revenues, projected costs, prospects, plans and
objectives of management of FSP Corp. and each target REIT are forward-looking
statements. The words "anticipates," "believes," "estimates," "expects,"
"intends," "may," "plans," "projects," "will," "would" and similar expressions
are intended to identify forward-looking statements, although not all
forward-looking statements contain these identifying words. FSP Corp. and each
target REIT cannot guarantee that it actually will achieve the plans, intentions
or expectations disclosed in its forward-looking statements and you should not
place undue reliance on these forward-looking statements. Actual results or
events could differ materially from the plans, intentions and expectations
disclosed in the forward-looking statements. FSP Corp. has included important
factors in the cautionary statements included or incorporated in this Consent
Solicitation/Prospectus, particularly under the heading "Risk Factors", that FSP
Corp. believes could cause actual results or events to differ materially from
the forward-looking statements that it makes. These forward-looking statements
do not reflect the potential impact of any future acquisitions, mergers,
dispositions, joint ventures or investments FSP Corp. may make. Neither FSP
Corp. nor any target REIT assumes any obligation to update any forward-looking
statements.


                                       38
<PAGE>

                 BACKGROUND ON FSP CORP. AND ITS GROWTH STRATEGY

      FSP Corp. is the successor to Franklin Street Partners Limited
Partnership, or the FSP Partnership, which was originally formed as a
Massachusetts general partnership in January 1997 as the successor to a
Massachusetts general partnership that was formed in 1981. On January 1, 2002,
the FSP Partnership converted into FSP Corp. As a result of this conversion, the
FSP Partnership ceased to exist and FSP Corp. succeeded to the business of the
FSP Partnership. In the conversion, each unit of both general and limited
partnership interests in the FSP Partnership was converted into one share of FSP
common stock. As a result of the conversion, FSP Corp. holds 100% of the
interest in three former subsidiaries of the FSP Partnership: FSP Investments
LLC, FSP Property Management LLC, and FSP Holdings LLC.

      FSP Corp. operates in two business segments and has two principal sources
of revenue:

      o     Real estate operations, including real estate leasing, interim
            acquisition financing and asset/property management, which generate
            rental income, loan origination fees and management fees,
            respectively.

      o     Investment banking/investment services, which generate brokerage
            commissions and other fees related to the organization of
            single-purpose entities that own real estate and the private
            placement of equity in those entities. These entities are called
            sponsored entities.

      The predecessor to FSP Corp. organized the sponsored entities as
partnerships, but in 2001 FSP Corp. began to organize them as corporations
operated in a manner intended to qualify as real estate investment trusts, or
sponsored REITs. The sponsored entities have historically been single asset
investment vehicles with an expected five to ten year life cycle, after which
time the properties held by the sponsored entity were to be sold. The proceeds
of the sale would then be distributed to the investors in the respective
sponsored entity.

      FSP Corp.'s investment objective is to increase the cash available for
distribution in the form of dividends to its stockholders by increasing revenue
from rental income, any net gains from sales of properties and investment
banking services. FSP Corp. expects that, through FSP Investments, it will
continue to organize and cause the offering of sponsored REITs in the future and
that FSP Corp. will continue to derive investment banking/investment services
income, including loan origination fees and interest, from such activities.

      A significant part of FSP Corp.'s growth strategy is the acquisition of
additional real properties by cash purchase or by acquisition of sponsored
REITs. Acquisition of additional real estate by acquiring sponsored REITs is an
attractive method of acquisition for FSP Corp. because the familiarity with the
real property FSP Corp. gains from acting as asset manager allows FSP Corp.
better to evaluate the risks of owning the property than is possible in the
normal due diligence performed in typical acquisitions. Accordingly, FSP Corp.
has previously engaged in transactions similar to the mergers contemplated by
the merger agreement. On June 1, 2003, FSP Corp. acquired 13 sponsored REITs by
merger. Prior to the conversion, FSP Corp.'s predecessor, FSP Partnership
acquired 17 sponsored partnerships by merger. FSP Corp. subsequently sold two of
these properties. In fact, all of the 28 properties FSP Corp. currently owns
were acquisitions of sponsored partnerships or sponsored REITs. Although there
can be no assurance that FSP Corp. will continue to acquire sponsored REITs in
the future, such acquisitions are a part of FSP Corp.'s growth strategy.

      The table below sets forth the amount paid by FSP Corp. (or its
predecessor, FSP Partnership) for each of the sponsored entities it has
acquired, the date of the acquisition, the fair market value of the FSP common
stock (or partnership units, in the case of acquisitions prior to January 1,
2001) as determined by the FSP board (or the general partner of the FSP
Partnership, in the case of the partnership units) issued as merger


                                       39
<PAGE>

consideration, the value per share or unit ascribed to the merger consideration
received by investors, the gross proceeds contributed by investors in the
original syndication of such sponsored entity, the estimated amount of fees FSP
Investments earned upon the original syndication and the estimated amount of
fees FSP Property Management earned after the original syndication but prior to
the acquisition. Following the mergers the investors in the sponsored entities
indirectly incurred their pro rata share of FSP Corp.'s general and
administrative expenses.

<TABLE>
<CAPTION>
                                                          Per Share or Per
                                                            Unit Value of                                            Estimated
                                              Merger         FSP Common                             Estimated      Aggregate Fees
                                          Consideration       Stock or       Gross Proceeds      Aggregate Fees    Earned by FSP
                            Date of        Received by       Partnership         of the          Earned by FSP        Property
   Sponsored Entity       Acquisition       Investors           Unit          Syndication         Investments        Management
   ----------------       -----------       ---------        -----------      -----------         -----------        ----------

<S>                        <C>             <C>                 <C>            <C>                 <C>                <C>
Essex                       1/1/99         $13,931,760         $10.00         $12,300,000                 N/A        $ 27,789

Reata(1)                    1/1/99          15,592,920          10.00          13,000,000                 N/A          31,144

One Technology Drive        1/1/99          14,730,480          10.00          10,925,000                 N/A          60,000

North Andover               1/1/99          12,187,080          10.00          10,000,000                 N/A         125,557

Weslayan Oaks(2)            1/1/99           7,077,120          10.00           5,400,000         $   648,000          13,186

Park Seneca                 1/1/99          12,441,480          10.00           9,000,000           1,099,500          22,548

Santa Clara                 1/1/99           9,753,120          10.00           8,700,000           1,301,204          15,625

Piedmont Center             1/1/99          15,278,400          10.00          13,500,000           1,134,000          14,850

Silverside Plantation       1/1/00          23,150,000          10.00          21,800,000           1,199,000          28,117

Hillview Center             1/1/00           6,450,000          10.00           6,100,000             733,327           3,580

Telecom Business Center     1/1/00          20,400,000          10.00          18,450,000           2,710,480           9,662

Southfield Center          10/1/00          18,998,120          11.50          18,500,000           2,436,292          23,026

Blue Ravine                10/1/00           7,402,000          11.50           7,000,000             908,919          11,855

Bollman Place              10/1/00           7,041,030          11.50           7,000,000             841,243          14,371

Austin, N.W.               10/1/00          13,027,210          11.50          12,300,000           1,707,063          10,765

Gateway Crossing           10/1/00          24,369,185          11.50          24,000,000           3,794,365          18,716

Lyberty Way                10/1/00          12,027,455          11.50          11,125,000           1,519,218           5,016

Forest Park                 6/1/03           8,398,178          14.75           7,800,000             937,192          27,275

The Gael                    6/1/03          21,864,115          14.75          21,250,000           3,058,410          74,000
</TABLE>


                                       40
<PAGE>

<TABLE>
<CAPTION>
                                                          Per Share or Per
                                                            Unit Value of                                            Estimated
                                              Merger         FSP Common                             Estimated      Aggregate Fees
                                          Consideration       Stock or       Gross Proceeds      Aggregate Fees    Earned by FSP
                            Date of        Received by       Partnership         of the          Earned by FSP        Property
   Sponsored Entity       Acquisition       Investors           Unit          Syndication         Investments        Management
   ----------------       -----------       ---------        -----------      -----------         -----------        ----------

<S>                        <C>             <C>                 <C>            <C>                 <C>                <C>
Goldentop                   6/1/03          24,935,572          14.75          23,150,000           3,322,974          53,000

Centennial                  6/1/03          16,093,408          14.75          15,800,000           2,317,600          51,328

Meadow Point                6/1/03          26,523,256          14.75          25,750,000           3,743,256          71,000

Timberlake                  6/1/03          51,556,660          14.75          51,500,000           7,512,233         120,000

Federal Way                 6/1/03          19,999,997          14.75          20,000,000           2,831,000          29,000

Fair Lakes                  6/1/03          48,181,949          14.75          48,000,000           7,171,517         104,000

Northwest Point             6/1/03          37,249,994          14.75          37,250,000           5,352,931          73,400

Timberlake East             6/1/03          25,188,759          14.75          25,000,000           3,604,372          35,000

Merrywood                   6/1/03          20,827,429          14.75          20,600,000           2,984,148          29,000

Plaza Ridge I               6/1/03          40,249,977          14.75          40,000,000           6,053,859          52,000

Park Ten                    6/1/03          27,682,040          14.75          27,500,000           4,260,087          33,000
</TABLE>

      (1)   Property sold on September 2, 2003
      (2)   Property sold on February 7, 2003.

      Of the 380 stockholders in Addison Circle, 244 are also stockholders in
FSP Corp. with 236 of these 244 stockholders becoming stockholders in FSP Corp.
following FSP Corp.'s acquisition of prior sponsored entities. Of the 449
stockholders in Collins Crossing, 249 are also stockholders in FSP Corp. with
240 of these 249 stockholders becoming stockholders in FSP Corp. following FSP
Corp.'s acquisition of prior sponsored entities. Of the 331 stockholders in
Montague, 263 are also stockholders in FSP Corp.with 248 of these 263
stockholders becoming stockholders in FSP Corp. following FSP Corp.'s
acquisition of prior sponsored entities. Of the 246 stockholders in Royal Ridge,
149 are also stockholders in FSP Corp.with 140 of these 149 stockholders
becoming stockholders in FSP Corp. following FSP Corp.'s acquisition of prior
sponsored entities.

      As part of its growth strategy FSP Corp. periodically considers acquiring
properties, including REITs sponsored by FSP Investments. In June 2004, members
of FSP Corp. management met to consider the possibility and feasibility of the
acquisition of additional properties by FSP Corp. At that time, members of
management identified several acquisition candidates, including the target
REITs. After some discussion amongst management over the next several weeks, Mr.
George Carter, the Chief Executive Officer of FSP Corp., determined that
acquiring the target REITs at this time was the most attractive current
acquisition alternative available to FSP Corp. and that the possibility of
acquiring the target REITs should be discussed with the FSP board. At a meeting
of the FSP board on June 25, 2004, FSP management discussed with its board the
possibility of acquiring the target REITs. No formal vote was taken, but the
directors supported the decision to begin discussions with the target REITs. On
or about July 2, 2004, Mr. Carter, as a representative of FSP Corp., contacted
Messrs. Gribbell and MacPhee, as representatives of the target REITs, to discuss
a possible business combination among FSP Corp. and the target REITs.


                                       41
<PAGE>

      In identifying the target REITs as possible acquisition candidates, FSP
Corp. considered the fact that although the target REITs had not been stand
alone entities for a prolonged period of time FSP Property Management managed
each property from the time FSP Corp. acquired the property to the time FSP
Investments completed the syndication of such properties. FSP Investments
completed the syndication of Addison Circle in December 2002, Collins Crossing
in June 2003, Royal Ridge in March 2003 and Montague in September 2002. However,
FSP Corp. has historically paid an amount in stock that was greater than, or a
premium over, the appraised value of the real estate and cash held by each
sponsored partnership or sponsored REIT it has acquired. Members of FSP Corp.
management believed FSP Corp. could pay as merger consideration for each target
REIT an amount in FSP common stock that was greater than, or a premium over, the
appraised value and cash held by such target REIT as it had in similar prior
transactions. FSP Corp. also considered the future cash flows from the current
lease arrangements between the target REITs and their respective tenants. FSP
Corp. believed that target REIT stockholders would view the proposed mergers as
an opportunity to exchange their single asset real property investment for an
investment in a larger and more diversified portfolio of properties and
associated FSP Corp. business at a meaningful premium to the appraised values of
their real properties. FSP Corp. believed that investors in syndicated entities
would view this opportunity as a way to reduce the risks associated with a
single asset real property investment that, by its nature, is likely to be
subject to greater potential fluctuations in the local real estate markets and
subject to possible loss of rental income in the absence of lease renewals. FSP
Corp. also believed that the target REIT stockholders, particularly those who
are also FSP Corp. stockholders, were familiar with FSP Corp.'s acquisition
history of other sponsored REITs, including the acquisition of 13 sponsored
REITs in 2003 in a similar transaction, and would therefore be able to evaluate
the potential benefits and potential detriments to the proposed mergers.

      FSP Corp. is a reporting company under federal securities laws by virtue
of the number of stockholders owning FSP common stock. However, there is no
public market for FSP common stock. FSP Corp. intends to file an application to
list the FSP common stock on the American Stock Exchange, or AMEX. There can be
no assurance that FSP Corp. will file such application or, in the event it does,
that AMEX will accept the application, that a meaningful trading market will
develop even if AMEX approves the application or that FSP common stock will
trade at prices equal to or above the $17.70 value ascribed to it in connection
with the mergers. While there has been no public market for FSP common stock,
FSP Corp. does have a redemption plan in its current charter which allows
stockholders of FSP Corp. to have their shares redeemed. Under FSP Corp.'s
redemption plan, FSP Corp. is only obligated to use its best efforts to redeem
shares of FSP common stock from stockholders wishing to have them redeemed.
There are significant conditions to FSP Corp.'s obligation to redeem shares of
FSP common stock including:

      o     FSP Corp. cannot be insolvent or be rendered insolvent by the
            redemption;

      o     the redemption cannot impair FSP Corp.'s capital or operations;

      o     the redemption cannot contravene any provision of federal or state
            securities laws;

      o     the redemption cannot result in FSP Corp. failing to qualify as a
            REIT; and

      o     FSP Corp.'s management must determine that the redemption is in FSP
            Corp.'s best interests.

      Any redemption effected by FSP Corp. under this plan would result in those
stockholders tendering shares of FSP common stock receiving 90% of the fair
market value of such shares, as determined by the FSP board in its sole and
absolute discretion, and not their full fair market value. If FSP common stock
becomes listed for trading on AMEX or any other national securities exchange or
the NASDAQ National Market, FSP Corp. will no longer be obligated to effect any
redemption.


                                       42
<PAGE>

                                   THE MERGERS

      We urge you to read the merger agreement by and among FSP Corp., the
acquisition subsidiaries and the target REITs, a copy of which is set forth as
Appendix A hereto and incorporated herein by reference.

Overview

      FSP Corp. entered into the merger agreement, dated August 13, 2004, among
FSP Corp., four wholly-owned acquisition subsidiaries of FSP Corp. and the
target REITs. The merger agreement provides for the merger of each target REIT
with and into an acquisition subsidiary, with the acquisition subsidiary being
the surviving corporation.

      The merger agreement provides that the mergers will be effected at the
time of the filing of the certificates of merger with the secretary of state of
the state of Delaware or at another date as may be specified in the certificates
of merger. On the effective date, each acquisition subsidiary will acquire by
merger a target REIT. The target REIT stockholders will be issued shares of FSP
common stock registered with the SEC pursuant to the registration statement of
which this Consent Solicitation/Prospectus is a part. FSP Corp. and the target
boards expect that the effective date will be on or about December 31, 2004 or
as soon as practicable after the conditions to the mergers are satisfied. The
mergers will not require any federal or state regulatory approvals.

      Adoption of the merger agreement and approval of the mergers by a majority
of the outstanding shares of common stock and preferred stock of the target REIT
voting together as a class constitutes consent to the mergers of the target REIT
with and into the respective acquisition subsidiary and the issuance of FSP
common stock to the target REIT stockholders, all pursuant to the terms of the
merger agreement.

The Parties

      FSP Corp. FSP Corp. is a Maryland corporation that operates in a manner
intended to qualify as a real estate investment trust for federal income tax
purposes.

      FSP Corp. operates in two business segments and has two principal sources
of revenue:

      o     Real estate operations, including real estate leasing, interim
            acquisition financing and asset/property management, which generate
            rental income, loan origination fees and management fees,
            respectively; and

      o     Investment banking/investment services, which generate brokerage
            commissions and other fees related to the organization of
            single-purpose entities that own real estate and the private
            placement of equity in those entities.

      On June 1, 2003, FSP Corp. acquired 13 real estate investment trusts by
merger. In these mergers, FSP Corp. issued 25,000,091 shares of FSP common stock
to holders of preferred stock in the acquired REITs. As a result of these
mergers, FSP Corp. now holds all of the assets previously held by these acquired
REITs. As part of its growth strategy, FSP Corp. may make similar acquisitions
in the future. The proposed acquisition of the target REITs is part of that
strategy.

      The principal executive offices of FSP Corp. are located at 401 Edgewater
Place, Suite 200, Wakefield, Massachusetts 01880, and FSP Corp.'s telephone
number is (781) 557-1300. FSP Corp. leases its executive offices.


                                       43
<PAGE>

      The Target REITs. Each Target REIT is a privately-held real estate
investment trust formed as a corporation under the laws of the state of Delaware
for the purpose of acquiring, developing and operating a single real property.

      Addison Circle          Addison Circle owns an office building in Addison,
                              Texas

      Collins Crossing        Collins Crossing owns an office building in
                              Richardson, Texas

      Montague                Montague owns an office/research and development
                              complex in San Jose,California

      Royal Ridge             Royal Ridge owns an office building in Alpharetta,
                              Georgia

      The principal executive offices of the target REITs are located at 401
Edgewater Place, Suite 200, Wakefield, Massachusetts 01880, and the telephone
number is (781) 557-1300.

      The Acquisition Subsidiaries. Each acquisition subsidiary is a
wholly-owned subsidiary of FSP Corp. formed as a corporation under the laws of
the State of Delaware for the sole purpose of acquiring a target REIT.

      Addison Circle          - formed for the sole purpose of acquiring
      Acquisition Corp.         Addison Circle

      Collins Crossing        - formed for the sole purpose of acquiring
      Acquisition Corp.         Collins Crossing

      Montague Acquisition    - formed for the sole purpose of acquiring
      Corp.                     Montague

      Royal Ridge             - formed for the sole purpose of acquiring
      Acquisition Corp.         Royal Ridge

      The principal executive offices of the acquisition subsidiaries are
located at 401 Edgewater Place, Suite 200, Wakefield, Massachusetts 01880, and
the telephone number is (781) 557-1300.

Votes Required

      The affirmative vote of the holders of a majority of the preferred stock
in each of the target REITs, and a majority of the preferred stock and common
stock in each of the target REITs voting together as a class, is required to
effectuate the applicable mergers. If one or more target REITs does not obtain
the vote required for the consummation of the merger with such target REIT, FSP
Corp. will not proceed with the mergers of any other target REIT. Each target
REIT will solicit the vote of its target REIT stockholders separately. FSP Corp.
is the sole stockholder of the common stock of each target REIT, and has agreed
to vote those shares in favor of the respective mergers.

      Barry Silverstein and Dennis J. McGillicuddy, each a director of FSP
Corp., own an aggregate of 173 and 14 shares of target stock, respectively. Mr.
Silverstein owns 102.5 shares in Addison Circle, 23.25 shares in Collins
Crossing, 42 shares in Montague and 5.25 shares in Royal Ridge. Mr. McGillicuddy
owns 1 share in each of Addison Circle and Royal Ridge, 2 shares in Collins
Crossing and 10 shares in Montague. Messrs. Silverstein and McGillicuddy each
purchased their shares in the original offerings of target stock and on the same
terms as other stockholders of such target REITs. These shares of target stock
held by Messrs. Silverstein and McGillicuddy will convert


                                       44
<PAGE>

into approximately 1,022,217 and approximately 80,836 shares of FSP common
stock, respectively, upon consummation of the mergers. Messrs. Silverstein and
McGillicuddy have indicated that they intend to vote their respective shares of
target stock in favor of the adoption of the merger agreement and the approval
of the mergers. The executive officers and directors of the target REITs do not
beneficially hold any shares of target stock in any of the target REITs.

Recommendation of the Special Committees and the Target Boards

      At a joint meeting held on August 11, 2004, each special committee
unanimously determined (i) that the terms of the merger agreement and mergers
are fair to, and in the best interests of, its target REIT and its target REIT
stockholders, and (ii) to recommend to its target board that such target board
approve the merger with its target REIT and adopt the merger agreement. At a
joint meeting of the target boards held on August 11, 2004, the directors
unanimously:

      o     determined that the terms of the merger agreement and mergers with
            its target REIT are fair to, and in the best interests of, that
            target REIT and its target REIT stockholders;

      o     authorized the officers of that target REIT to solicit consents from
            the target REIT stockholders for purposes of approving the merger
            relating to the respective target REIT and adopting the merger
            agreement;

      o     determined to recommend to the respective target REIT stockholders
            that they vote to adopt the merger agreement and approve the merger
            relating to the respective target REIT; and

      o     authorized the President of the respective target REIT to execute
            the merger agreement and related documents.

      See "Benefits, Background and Reasons for the Mergers - Background of the
Mergers."

The Special Committees. In determining to recommend that its target board
approve the merger relating to its respective target REIT and adopt the merger
agreement, and in determining that the merger relating to its target REIT was
fair to, and in the best interests of, such target REIT stockholders, each
special committee considered both potential positive and negative factors. The
special committees believe that the mergers represent an opportunity for the
target REIT stockholders to realize a premium over the current appraised value
of the real estate and adjusted cash held by the respective target REITs. Among
the positive factors considered were the following factors, each of which, in
such special committee's view, supported that special committee's determination
to recommend the respective merger:

      o     the determination of such special committee that the value of the
            FSP common stock to be distributed as merger consideration to its
            target REIT stockholders represented greater value, or a premium,
            than the sum of the value of the real estate (as determined by an
            appraisal) and cash held by such target REIT;

      o     the determination of such special committee that the value of the
            FSP common stock to be distributed as merger consideration to its
            target REIT stockholders was greater than the value that was likely
            to be realized upon the continuation of the such target REIT;


                                       45
<PAGE>

      o     the receipt from A.G. Edwards of an opinion, delivered orally to
            each special committee and board of each target REIT and
            subsequently confirmed in writing, as to the fairness from a
            financial point of view of the merger consideration to the
            stockholders of each target REIT;

      o     the independent third-party appraisals of the real property owned by
            each target REIT;

      o     the analysis presented to such special committee by A.G. Edwards
            (see "Fairness of the Mergers - Fairness of the Merger Consideration
            to Target REIT Stockholders - Fairness Opinions");

      o     the substantial likelihood of the consummation of the mergers
            because of the limited number and nature of the conditions to FSP
            Corp.'s and the acquisition subsidiaries' obligations to close;

      o     that target REIT stockholders who do not vote in favor of the
            mergers will have statutory appraisal rights;

      o     that each target REIT can pay its customary dividends in respect of
            the third and fourth quarters of 2004; and

      o     the representations and warranties of the merger agreement relating
            to the target REITs do not survive the closing.

      For a complete list of the factors considered by the target REITs, see
"Fairness of the Mergers - Conclusions of the Target Boards."

      The material negative factors, which each special committee viewed as
insufficient to outweigh the positive factors, were:

      o     that, following the mergers, the target REIT stockholders will cease
            to participate in the future earnings growth, if any, of their
            respective target REIT or benefit from the increase, if any, in the
            future liquidation value of the respective target REIT, other than
            indirectly through their FSP stock ownership;

      o     the possibility that the shares of FSP common stock may in the
            future trade at a price lower than $17.70 per share;

      o     the fact that, based on historical quarterly, non-special dividends
            received by stockholders of FSP Corp. and the target REIT
            stockholders, a majority of the target REIT stockholders could
            expect to receive a lower level of dividends from the combined
            company than such stockholders have historically received from their
            target REITs;

      o     the possibility that the shares in the target REIT would have
            appreciated in value more rapidly or at a greater rate than any
            appreciation in value in the FSP Corp. shares;

      o     that the target REITs did not seek third party bids for the
            acquisition of the target REITs or their respective properties; and

      o     the potential conflicts of interests of officers and directors of
            each target REIT in connection with the mergers.


                                       46
<PAGE>

      Each special committee consulted with A.G. Edwards during the course of
the negotiation processes. Although A.G. Edwards provided advice and analyses to
the special committees and each special committee accepted the opinion of A.G.
Edwards as to the fairness, from a financial point of view, of the consideration
to be received in the mergers by the target REIT stockholders, the decision to
recommend to the target boards entering into the merger agreement and accepting
the consideration to be received in the mergers was solely that of each special
committee.

      The special committees believe that the mergers are procedurally fair
because:

      o     each special committee was appointed to represent the interests of,
            and to negotiate with, FSP Corp. on behalf of the target REIT
            stockholders;

      o     the special committees retained and were advised by independent
            legal counsel;

      o     each special committee retained and received a report from an
            independent appraisal firm as to the value of the target REIT's
            property;

      o     the special committees retained and were advised by A.G. Edwards,
            its independent financial advisor; and

      o     the merger consideration and the other terms and conditions of the
            merger agreement resulted from negotiations between the special
            committees and FSP Corp.

      Each target board considered increasing its board size to include an
independent director to perform the function of the special committees. However,
each target board concluded that, given the potential liability of a director
voting on the mergers, it would be difficult to retain someone with the
knowledge and credentials necessary to fulfill the role of an independent
director of a REIT who would be willing to take on the role of independent
director of any of the target REITs without being substantially compensated and
without being covered by director liability insurance. None of the target REITs
currently has director and officer liability insurance. Each target board
determined that the cost of compensating an independent director and obtaining
director and officer liability insurance would be substantial and not in the
best interests of its target REIT stockholders. For this reason, none of the
target boards appointed an independent director to perform the functions of the
special committees.

      The Board of Directors. The target boards, at a joint meeting held on
August 11, 2004, considered the unanimous recommendation of each of the special
committees, the opinions of the financial advisor as to the fairness of the
merger consideration from a financial point of view to each target REIT, as well
as the other factors (enumerated above) considered by each special committee,
and determined that the mergers are fair to, and in the best interests of, the
target REIT stockholders, adopted the merger agreement and approved the mergers
and recommended that the target REIT stockholders vote to adopt the merger
agreement and approve the mergers. Each target board considered the
recommendation of its special committee but made its own evaluation, based on
the factors enumerated above, of the substantive and procedural fairness of the
mergers and the merger agreement.

      The foregoing discussion of the information and factors considered by the
special committees and the target boards is not intended to be exhaustive but
includes all material factors considered by them in making their respective
decisions. In view of the variety of factors considered in connection with their
evaluation of the mergers, the special committees and the target boards did not
find it practicable to, and did not, quantify or otherwise attempt to assign
relative weights to the specific factors considered in reaching their respective
determinations. In addition, individual members of the special committees or of
the target boards may have given different weight to different factors.


                                       47
<PAGE>

Appraisal Rights of Dissenting Stockholders of Target REITs

      If the mergers are consummated, a target REIT stockholder who does not
consent in writing to the mergers and who is the holder of record of target
stock on the date of making a demand for appraisal, as described below, will be
entitled to have those shares appraised by the Delaware Court of Chancery, or
the Delaware Court, under Section 262 of the Delaware general corporation law
statute and to receive payment for the "fair value" of those shares instead of
the consideration provided for in the merger agreement. In order to be eligible
to receive this payment, however, a target REIT stockholder must:

      o     continue to hold his, her or its target stock through the time of
            the mergers, and

      o     strictly comply with the procedures discussed under Section 262.

      The statutory right of appraisal granted by Section 262 requires strict
compliance with the procedures in Section 262. Failure to follow any of these
procedures may result in a termination or waiver of appraisal rights under
Section 262. The following is a summary of the principal provisions of Section
262. The following summary is not a complete statement of Section 262 of the
Delaware general corporation law statute, and is qualified in its entirety by
reference to Section 262, which is incorporated herein by reference, together
with any amendments to the laws that may be adopted after the date of this
Consent Solicitation/Prospectus. A copy of Section 262 is attached as Appendix D
to this Consent Solicitation/Prospectus.

      Notice Requirements. Under Section 262, each target REIT before the
effective date or acquisition subsidiary within ten days after the effective
date, as the surviving corporation, must send a notice of availability appraisal
rights, or the appraisal rights notice, as required under Section 262(d)(2) of
the Delaware general corporation law, and a copy of Section 262 to each target
REIT stockholder of the respective target REIT, or if sent after the effective
date, to each stockholder who has not consented in writing to adoption of the
merger agreement, approval of the mergers and the transactions contemplated by
the merger agreement and who is eligible for appraisal rights. This Consent
Solicitation/Prospectus constitutes such notice. Any target REIT stockholder
entitled to appraisal rights may, within twenty days after the date of mailing
of this Consent Solicitation/Prospectus, demand in writing from the respective
target REIT or acquisition subsidiary, as the surviving corporation, an
appraisal of his, her or its shares of target stock. Such demand will be
sufficient if it reasonably informs the respective target REIT or acquisition
subsidiary of the identity of the target REIT stockholder and that the target
REIT stockholder intends to demand an appraisal of the fair value of his, her or
its shares of target stock. Failure to make such demand on or before the
expiration of such twenty day period will foreclose a target REIT stockholder's
rights to appraisal. A target REIT stockholder should not expect to receive any
additional notice with respect to the deadline for demanding appraisal rights.

      Demand for Appraisal. Only a target REIT stockholder who does not consent
in writing to the mergers will be entitled to seek appraisal. Only a record
holder of target stock on the date of making a written demand for appraisal who
continuously holds those shares through the time of the mergers is entitled to
seek appraisal. Demand for appraisal must be executed by or for the holder of
record, fully and correctly, as that holder's name appears on the holder's stock
certificates representing shares of the target stock or other evidence of
ownership of target stock. If the target stock is owned of record in a fiduciary
capacity by a trustee, guardian or custodian, the demand should be made in that
capacity. If the target stock is owned of record by more than one person, as in
a joint tenancy or tenancy in common, the demand should be made by or for all
owners of record.


                                       48
<PAGE>

      An authorized agent, including an agent for one or more joint owners, may
execute the demand for appraisal for a holder of record; that agent, however,
must identify the record owner or owners and expressly disclose in the demand
that the agent is acting as agent for the record owner or owners of the shares.

      A record holder such as a broker, fiduciary, depository or other nominee
who holds shares of the target stock as a nominee for more than one beneficial
owner, some of whom desire to demand appraisal, may exercise appraisal rights on
behalf of those beneficial owners with respect to the shares of target stock
held for those beneficial owners. In that case, the written demand for appraisal
should state the number of shares of the target stock covered by it. Unless a
demand for appraisal specifies a number of shares, the demand will be presumed
to cover all shares of the target stock held in the name of the record owner.

      Failure to make a demand for appraisal on or before _________, 2004 will
foreclose a target REIT stockholder's rights to appraisal. All demands should be
delivered to the attention of the respective acquisition subsidiary at 401
Edgewater Place, Wakefield, Massachusetts 01880, Attention: Barbara J. Fournier.

      Beneficial owners who are not record owners and who intend to exercise
appraisal rights should instruct the record owner to comply with the statutory
requirements with respect to the exercise of appraisal rights within twenty days
of the date of mailing of the appraisal rights notice.

      Filing of Petition. Within 120 days after the effective date of the
mergers, any target REIT stockholder who has complied with the applicable
provisions of Section 262 will be entitled, upon written request, to receive
from the respective acquisition subsidiary a statement setting forth the
aggregate number of shares of preferred stock of his, her or its target REIT not
voting in favor of the mergers and with respect to which demands for appraisal
were received by the respective acquisition subsidiary for his, her or its
target REIT and the number of holders of such shares. Each respective
acquisition subsidiary must mail this statement within ten days after it
receives the written request or within ten days after the expiration of the
period for the delivery of demands as described above, whichever is later.

      Within 120 days after the effective date of the mergers, each respective
acquisition subsidiary, as the surviving corporation, or any target REIT
stockholder who has complied with the requirements of Section 262 and who is
otherwise entitled to appraisal rights may file a petition in the Delaware Court
demanding a determination of the fair value of the shares of target REIT stock
held by all target REIT stockholders of a specific target REIT seeking
appraisal. A dissenting target REIT stockholder must serve a copy of the
petition on the respective acquisition subsidiary. If no petition is filed by
either the respective acquisition subsidiary or any dissenting target REIT
stockholder within the 120-day period, the rights of all dissenting target REIT
stockholders to appraisal will cease, and the stockholders will be entitled to
receive the merger consideration that they would have received had they not
exercised appraisal rights.

      Target REIT stockholders seeking to exercise appraisal rights should not
assume that the respective acquisition subsidiary, as the surviving corporation,
will file a petition with respect to the appraisal of the fair value of their
target stock or that the respective acquisition subsidiary will initiate any
negotiations with respect to the fair value of those shares. The acquisition
subsidiaries are under no obligation to, and have no present intention to, take
any action in this regard. Accordingly, target REIT stockholders who wish to
seek appraisal of their shares should initiate all necessary action with respect
to the perfection of their appraisal rights within the time periods and in the
manner prescribed in Section 262. Failure to file the petition on a timely basis
will cause the target REIT stockholder's right to an appraisal to cease.


                                       49
<PAGE>

      Notice of and Hearing in Chancery Court. Upon the filing of a petition by
a target REIT stockholder seeking appraisal, the Delaware Court may order a
hearing and deliver notice of the time and place fixed for the hearing on the
petition to the respective acquisition subsidiary and all of the dissenting
target REIT stockholders. Notice will also be published at least one week before
the day of the hearing in a newspaper of general circulation published in the
City of Wilmington, Delaware or in another publication deemed advisable by the
Delaware Court. The costs relating to those notices will be borne by the
respective acquisition subsidiary. If a petition for an appraisal is filed in a
timely manner, at the hearing on the petition, the Delaware Court will determine
which target REIT stockholders are entitled to appraisal rights and will
appraise the shares of target stock owned by those target REIT stockholders. The
Delaware Court may require the target REIT stockholders who have demanded an
appraisal for their shares and who hold stock represented by certificates to
submit their certificates of target stock to the Register in Chancery for
notation thereon of the pendency of the appraisal proceedings; and if any target
REIT stockholder fails to comply with such direction, the Delaware Court may
dismiss the proceedings as to such target REIT stockholder. The court will
determine the fair value of those shares, exclusive of any element of value
arising from the consummation or expectation of the mergers, together with a
fair rate of interest, to be paid, if any, upon the fair value. The Court of
Chancery may determine the cost of the appraisal proceeding and assess it
against the parties as the Court deems equitable.

      Although each target board believes that the consideration to be received
by its respective target REIT stockholders for their shares of preferred stock
is fair, no representation is made as to the outcome of the appraisal of fair
value as determined by the court, and target REIT stockholders should recognize
that such an appraisal could result in a determination of a value that is higher
or lower than, or the same as, the merger consideration. Moreover, FSP Corp.
does not anticipate offering more than the merger consideration to any target
REIT stockholder exercising appraisal rights and reserves the right to assert,
in any appraisal proceeding, that, for purposes of Section 262, the "fair value"
of a share of target stock is less than the merger consideration.

      Determination of Fair Value. In determining "fair value," the Delaware
Court is required to take into account all relevant factors. In Weinberger v.
UOP, Inc., the Delaware Supreme Court discussed the factors that could be
considered in determining fair value in an appraisal proceeding, stating that
"proof of value by any techniques or methods which are generally considered
acceptable in the financial community and otherwise admissible in court" should
be considered and the "[f]air price obviously requires consideration of all
relevant factors involving the value of a company." The Delaware Supreme Court
has stated that in making this determination of fair value the court must
consider market value, asset value, dividends, earnings prospects, the nature of
the enterprise and any other facts which could be ascertained as of the date of
the merger which throw any light on the prospects of the merged corporation.

      Section 262 provides that fair value is to be "exclusive of any element of
value arising from the accomplishment or expectation of the merger." In Cede &
Co. v. Technicolor, Inc., the Delaware Supreme Court stated that such exclusion
is a "narrow exclusion [that] does not encompass known elements of value," but
which rather applies only to the speculative elements of value arising from such
accomplishment or expectation. In Weinberger, the Delaware Supreme Court
construed Section 262 to mean that "elements of future value, including the
nature of the enterprise, which are known or susceptible of proof as of the date
of the merger and not the product of speculation, may be considered."

      Expenses. Each dissenting target REIT stockholder is responsible for his,
her or its attorneys' and expert witness expenses, although upon application of
a dissenting target REIT stockholder, the Court may order that all or a portion
of the expenses incurred by any dissenting target REIT stockholder in connection
with the appraisal proceeding (including, without limitation, reasonable
attorneys' fees and the fees and expenses of experts) be charged pro rata
against the value of all shares of target stock entitled to appraisal. In the
absence of a court determination or assessment, each party bears its own
expenses.


                                       50
<PAGE>

      No Right to Vote or Receive Dividends. Any target REIT stockholder who has
demanded appraisal in compliance with Section 262 will not, after the mergers,
be entitled to vote such stock for any purpose or receive payment of dividends
or other distributions, if any, on the target stock, except for dividends or
distributions, if any, payable to stockholders of record at a date prior to the
mergers.

      Withdrawal. A target REIT stockholder may withdraw a demand for appraisal
and accept the FSP common stock at any time within 60 days after the effective
date of the mergers, or thereafter may withdraw a demand for appraisal with the
written approval of the respective acquisition subsidiary. Notwithstanding the
foregoing, if an appraisal proceeding is properly instituted, it may not be
dismissed as to any target REIT stockholder without the approval of the Delaware
Court, and any such approval may be conditioned on the Delaware Court deeming
the terms to be just. If, after the mergers, a holder of target stock who had
demanded appraisal for his, her or its target stock fails to perfect or loses
his, her or its right to appraisal, those shares of target stock will be treated
as if they were converted into FSP common stock at the time of the mergers.

      In view of the complexity of these provisions of the Delaware corporate
law, any target REIT stockholder who is considering exercising appraisal rights
should consult a legal advisor.

Conditions Precedent to the Mergers

      The respective obligations of each party to effect the mergers are subject
to the fulfillment or waiver on or before the effective date of the following
conditions:

      o     the adoption of the merger agreement and the approval of the mergers
            by the affirmative vote of the holders of a majority of the shares
            of target stock of each target REIT;

      o     the parties must receive all necessary consents, waivers, approvals,
            authorizations or orders required to be obtained and the making of
            all filings required to be made by any of the parties for the
            authorization, execution and delivery of the merger agreement and
            the consummation of the transactions contemplated thereby on or
            before (and remaining in effect at) the effective date;

      o     FSP Corp. and each of the target REITs shall have received an
            opinion from Wilmer Cutler Pickering Hale and Dorr LLP or another
            nationally recognized law firm to the effect that each merger will
            be treated for federal income tax purposes as a reorganization
            within the meaning of Section 368(a) of the Code and confirming
            that, to the extent the matters discussed under the heading
            "Material United States Federal Income Tax Considerations" in this
            Consent Solicitation/Prospectus constitute matters of law, they are
            accurate in all material respects;

      o     delivery by the President and Chief Executive Officer of FSP Corp.
            and the President of each of the target REITs of certificates to the
            effect that there have been no material adverse changes in the
            financial condition of such entity prior to the consummation of the
            mergers;

      o     there having been no statute, rule, order, or regulation enacted or
            issued by the United States or any State thereof, or by a court,
            which prohibits the consummation of the mergers; and

      o     the representations of each of FSP Corp. and the target REITs set
            forth in the merger agreement shall be true and complete in all
            material respects as of the closing date (provided that the party
            whose representation was not correct shall have no right not to
            proceed with the closing as a result thereof).


                                       51
<PAGE>

      The conditions described in the second bulleted paragraph above may be
waived by the FSP board in whole or in part if, in the opinion of the FSP board,
such waiver does not materially affect the terms of the transaction, which
waiver shall not be unreasonably withheld. Certain of the conditions to the
consummation of the mergers are beyond the control of FSP Corp., the target
REITs and the target boards. There can be no assurance that the mergers will
occur.

Legal Proceedings

      FSP Corp., one or more of the target REITs and the target boards may be
involved in litigation incidental to their business, but no material litigation
is currently pending or threatened against FSP Corp. or any of the target REITs,
their respective properties or the target boards.

Solicitation of Consents By FSP Investments

      FSP Investments, as the soliciting agent, will use its best efforts to
solicit the consents of target REIT stockholders to approve the mergers. FSP
Investments will not receive any commissions with respect to the mergers;
however, all out-of-pocket expenses (including telephone, mailing and other
expenses) incurred by FSP Investments will be treated as solicitation expenses
and will be reimbursed to FSP Investments as set forth below in "Expenses of the
Mergers." FSP Investments is a wholly-owned subsidiary of FSP Corp.

Interests of Certain Persons in the Mergers

      A number of conflicts of interest are inherent in the relationships among
the target REITs, the target boards, FSP Corp., the FSP board and their
respective affiliates. These conflicts of interest include the fact that FSP
Investments, a subsidiary of FSP Corp., syndicated each target REIT and, among
others:

      o     George J. Carter, the President and a director of each target REIT,
            is President, Chief Executive Officer and a director of FSP Corp.
            and owns an aggregate of 775,531 shares of FSP common stock;

      o     R. Scott MacPhee, an Executive Vice President and a director of each
            target REIT and a member of each special committee, is also an
            Executive Vice President of FSP Corp. and owns an aggregate of
            372,451 shares of FSP common stock;

      o     Richard R. Norris, an Executive Vice President and a director of
            each target REIT, is also a director and an Executive Vice President
            of FSP Corp. and owns an aggregate of 258,087 shares of FSP common
            stock;

      o     William W. Gribbell, an Executive Vice President and a director of
            each target REIT and a member of each special committee, is also an
            Executive Vice President of FSP Corp. and owns an aggregate of
            129,761 shares of FSP common stock;

      o     Barbara J. Fournier, Vice President, Chief Operating Officer,
            Treasurer, Secretary and a director of each target REIT, is also
            Vice President, Chief Operating Officer, Treasurer, Secretary and a
            director of FSP Corp. and owns an aggregate of 27,934 shares of FSP
            common stock;

      o     Janet P. Notopoulos, Vice President of each target REIT, is also a
            Vice President and director of FSP Corp. and owns an aggregate of
            14,985 shares of FSP common stock; and


                                       52
<PAGE>

      o     the target REITs' properties are managed by FSP Property Management,
            a subsidiary of FSP Corp. pursuant to management services agreements
            under which FSP Corp. receives certain fees from each target REIT
            for its management services.

      Each target board established a special committee consisting of Messrs.
MacPhee and Gribbell, the only members of the target boards who are not also
members of the FSP board. Messrs. MacPhee and Gribbell serve as executive vice
presidents of FSP Corp. Under the Delaware general corporation law, the target
boards cannot delegate to a third party their fiduciary duties relating to the
determination of whether the transactions contemplated by the mergers were or
were not fair to the target REIT stockholders. For this reason, no unaffiliated
person(s) was or were retained by any target board to represent the interests of
the target REIT stockholders, whether or not such stockholders are or were
affiliated with FSP Corp. Each target board considered increasing its board size
to include an independent director to perform the function of the special
committees. However, each target board concluded that, given the potential
liability of a director voting on the mergers, it would be difficult to retain
someone with the knowledge and credentials necessary to fulfill the role of an
independent director of a REIT who would be willing to take on the role of
independent director of any of the target REITs without being substantially
compensated and without being covered by director liability insurance. None of
the target REITs currently has director and officer liability insurance. Each
target board determined that the cost of compensating an independent director
and obtaining director and officer liability insurance would be substantial and
not in the best interests of its target REIT stockholders. For this reason, none
of the target boards appointed an independent director to perform the functions
of the special committees.

      If each target REIT had a separate board of directors with executive
officers who did not serve in similar capacities for FSP Corp. and directors who
did not own FSP common stock, these persons would have had an independent
perspective which might have led them to advocate positions during the
negotiation and structuring of the merger agreement and the determination of the
merger consideration more favorable to the target REIT stockholders than those
taken by the target boards.

      The executive officers and directors of the target REITs do not
beneficially hold any shares of target stock in any of the target REITs. Barry
Silverstein and Dennis J. McGillicuddy, each a director of FSP Corp., own an
aggregate of 173 and 14 shares of target stock, respectively. Mr. Silverstein
owns 102.5 shares in Addison Circle, 23.25 shares in Collins Crossing, 42 shares
in Montague and 5.25 shares in Royal Ridge. Mr. McGillicuddy owns 1 share in
each of Addison Circle and Royal Ridge, 2 shares in Collins Crossing and 10
shares in Montague. Messrs. Silverstein and McGillicuddy each purchased their
shares in the original offerings of target stock and on the same terms as other
stockholders of such target REITs. These shares of target stock held by Messrs.
Silverstein and McGillicuddy will convert into approximately 1,022,217 and
approximately 80,836 shares of FSP common stock, respectively, upon consummation
of the mergers. Messrs. Silverstein and McGillicuddy have indicated that they
intend to vote their respective shares of target stock in favor of the adoption
of the merger agreement and the approval of the mergers.

      Barry Silverstein, Dennis J. McGillicuddy and John N. Burke are the only
directors of FSP Corp. who are not also officers or directors of any target
REIT. The remainder of the officers and directors of FSP Corp. serve as a
director and/or officer, in the positions listed above, of each target REIT.

      Upon completion of the mergers, Mr. Silverstein's percentage ownership
interest of FSP Corp. will decrease from 9.67% to 9.62%, Mr. McGillicuddy's
percentage ownership interest of FSP Corp. will decrease from 7.24% to 6.07%,
and the percentage ownership of the current directors and executive officers of
FSP Corp. as a group will decrease from 19.07% to 17.46%. Mr. Burke does not own
any shares of FSP common stock or any shares of target stock.


                                       53
<PAGE>

Material United States Federal Income Tax Considerations

      The mergers are intended to qualify as reorganizations within the meaning
of Section 368(a) of the tax code. It is a condition to the closing of the
mergers that FSP Corp. and each target REIT shall have received an opinion from
Wilmer Cutler Pickering Hale and Dorr LLP or another nationally recognized law
firm to the effect that the mergers will be treated for United States federal
income tax purposes as reorganizations within the meaning of Section 368(a) of
the tax code and confirming in all material respects that, to the extent the
matters discussed under the heading "Material United States Federal Income Tax
Considerations" in the Consent Solicitation/Prospectus constitute matters of
law, they are accurate in all material respects.

Accounting Treatment

      Each of the mergers will be accounted for as a purchase under GAAP.

Timing and Effectiveness of the Mergers

      The effective date of the mergers is expected to occur on or about
December 31, 2004 or such other time as the conditions to the mergers are
satisfied.

Market Information

      There is no established public trading market for FSP common stock. FSP
Corp. intends to file an application to list its common stock on AMEX. There can
be no assurance that FSP Corp. will file such application or, in the event it
does, that AMEX will accept the application or that a meaningful trading market
will develop even if AMEX approves the application. The fair market value of FSP
common stock of $17.70 per share was determined through negotiations between the
special committees of the target boards and FSP Corp. of the merger
consideration to be received by the target REIT stockholders.

      As of August 20, 2004, there were approximately 1,420 holders of record of
FSP common stock. This computation is based upon the number of record holders
reflected in the corporate records of FSP Corp.

      FSP Corp. has declared a dividend of $0.31 per share of FSP common stock
payable to stockholders of record as of July 30, 2004. Set forth below are the
dividends per share of FSP common stock that FSP Corp. made in each quarter
since the quarter ended June 30, 2002.

                                          Distribution Amount Per Share
                      Quarter Ended           of FSP Common Stock

                         6/30/02                     $0.31

                         9/30/02                     $0.31

                        12/31/02                     $0.31

                         3/31/03                     $0.31

                         6/30/03                     $0.31

                         9/30/03                     $0.31

                        12/31/03                     $0.31

                         3/31/04                     $0.31

                         6/30/04                     $0.31

      Moreover, for the quarter ended September 30, 2003, FSP Corp. declared a
special dividend of $0.12 per share of FSP common stock. While not guaranteed,
FSP Corp. expects that cash dividends on FSP common stock comparable to FSP
Corp.'s most recent quarterly dividend will continue to be paid in the future.


                                       54
<PAGE>

Expenses of the Mergers

      The expenses payable by FSP Corp. and the target REITs in connection with
the mergers are estimated to be as follows:

                                                   By FSP Corp.  By Target REITs
                                                   ------------  ---------------

      Appraisals (including fees and expenses)       $     --       $ 20,500

      Fairness Opinions (including fees and
         expenses)                                         --        380,000

      Legal (including fees and expenses)             300,000         35,000

      Accounting                                       75,000

      Printing and Postage                             80,000

      Soliciting Agent (Out-of-Pocket Expenses)         5,000

      Contingency                                      40,000

                                                      $500,000       $435,500

      The target REITs are only responsible for payment of A.G. Edwards'
engagement, including the fairness opinions, the appraisals and the fees of its
outside legal counsel and independent accountants. All other fees and expenses
will be paid by FSP Corp.


                                       55
<PAGE>

                BENEFITS, BACKGROUND AND REASONS FOR THE MERGERS

History of FSP Corp. and the Target REITs

      FSP Corp. FSP Corp. is a Maryland corporation that operates in a manner
intended to qualify as a real estate investment trust for federal income tax
purposes.

      FSP Corp. operates in two business segments and has two principal sources
of revenue:

      o     Real estate operations, including real estate leasing, interim
            acquisition financing and asset/property management, which generate
            rental income, loan origination fees and management fees,
            respectively.

      o     Investment banking/investment services, which generate brokerage
            commissions and other fees related to the organization of
            single-purpose entities that own real estate and the private
            placement of equity in those entities.

      On June 1, 2003, FSP Corp. acquired 13 real estate investment trusts by
merger. In these mergers, FSP Corp. issued 25,000,091 shares of FSP common stock
to holders of preferred stock in the acquired REITs. As a result of these
mergers, FSP Corp. now holds all of the assets previously held by these acquired
REITs. As part of its growth strategy, FSP Corp. may make similar acquisitions
in the future. The proposed acquisition of the target REITs is part of that
strategy.

      For more detailed information regarding FSP Corp. and its growth strategy
and prior acquisitions see "Background of FSP Corp. and its Growth Strategy."
FSP Investments completed the syndication of Addison Circle in December 2002,
Collins Crossing in June 2003, Royal Ridge in March 2003 and Montague in
September 2002. The following table sets forth the amount to be paid by FSP
Corp. for each of the target REITs as negotiated in connection with the mergers,
the fair market value of the FSP common stock as negotiated in connection with
the mergers to be issued as merger consideration, the value per share or unit
ascribed to the merger consideration received by investors, the gross proceeds
contributed by investors in the original syndication of such sponsored entity,
the estimated amount of fees FSP Corp. (including FSP Investments) earned upon
the original syndication and the estimated amount of fees FSP Property
Management earned after the original syndication but prior to the acquisition.
Following the mergers the target REIT stockholders will indirectly incur thier
pro rata share of FSP Corp.'s general and administrative expenses.

<TABLE>
<CAPTION>
                                                                                                        Estimated
                               Merger                                 Gross          Estimated        Aggregate Fees
                        Consideration to be    Per Share Value     Proceeds of     Aggregate Fees     Earned by FSP
                        Received by Target         of FSP              the         Earned by FSP        Property
     Target REIT         REIT Stockholders      Common Stock       Syndication         Corp.            Management
     -----------         -----------------      ------------       -----------         -----            ----------

<S>                          <C>                   <C>             <C>               <C>                 <C>
Addison Circle               $66,965,414           $17.70          $63,600,000       $9,818,870          $138,207

Collins Crossing              60,587,756            17.70           55,500,000        8,706,270            99,551

Montague                      33,400,000            17.70           33,400,000        5,009,680            82,652

Royal Ridge                   31,888,293            17.70           29,750,000        4,384,860            34,611
</TABLE>


                                       56
<PAGE>

Background of the Mergers

      In accordance with FSP Corp.'s strategy of periodically reviewing the
possibility of acquiring sponsored REITS, at a meeting of the FSP board on June
25, 2004, FSP management discussed with its board the possibility of acquiring
the target REITs. No formal vote was taken, but the directors supported the
decision to begin discussions with the target REITs.

      On June 29, 2004, members of FSP Corp. management met with Wilmer Cutler
Pickering Hale and Dorr LLP, FSP Corp.'s legal counsel, and Ernst & Young LLP,
FSP Corp.'s independent auditors, to discuss the possibility of the mergers and
FSP Corp.'s intent to apply to list the FSP common stock on AMEX.

      On or about July 2, 2004, Mr. Carter, as a representative of FSP Corp.,
contacted Messrs. Gribbell and MacPhee, as representatives of the target REITs,
to discuss a possible business combination among FSP Corp. and the target REITs.

      On or about July 5, 2004, the target boards held a telephonic meeting to
discuss the possibility of a business combination with FSP Corp. On July 12,
2004, each target board established a special committee to consider the proposed
mergers with FSP Corp. Each special committee is comprised of Messrs. MacPhee
and Gribbell, the members of the target REIT boards who were not also members of
the FSP board.

      On July 13, 2004, the special committees held a telephonic meeting with
representatives of A.G. Edwards to discuss the potential engagement of A.G.
Edwards.

      On or about July 19, 2004, the special committees engaged Gehrke, Gish &
Umana LLP, or GGU, to act as independent legal counsel to the target REITs and
on or about July 22, 2004 engaged A.G. Edwards to advise the special committees
in evaluating and negotiating the terms of the mergers, including the merger
consideration, and to deliver a fairness opinion to each target board.

      On July 19, 2004, the special committees held a telephonic meeting at
which the special committees, representatives of GGU and representatives of A.G.
Edwards began reviewing certain financial, strategic and legal considerations
relating to a potential acquisition of the target REITs by FSP Corp.

      On July 20, 2004, a draft of the merger agreement was distributed by
counsel for FSP Corp. for review by FSP Corp., the special committees, GGU and
A.G. Edwards. From this date through August 10, 2004, FSP Corp., together with
its outside counsel, and the special committees of the target REITs, together
with the target REITs' outside counsel, negotiated the various terms of the
merger agreement and related documents.

      On July 13, 2004, the special committee received the appraisal for Royal
Ridge from CB Richard Ellis, legally known as CBRE- Valuation and Advisory
Services. On July 14, 2004, the special committee received the appraisal for
Montague from Cushman & Wakefield of California, Inc. On July 23, 2004, the
special committee received the appraisal for Addison Circle and Collins Crossing
from Bryan E. Humphries and Associates.


                                       57
<PAGE>

      On July 26, 2004, the special committees held a telephonic meeting in
which the special committees and representatives of A.G. Edwards began reviewing
potential valuations and analyses relating to the proposed acquisition of the
target REITs by FSP Corp. The special committees then determined, after
consultation with A.G. Edwards, to propose an initial range for the value of the
FSP common stock. The low end of the range was $16.67 per share and the high end
was $18.50.

      On July 26, 2004, the special committees held a second telephonic meeting
at which a representative of GGU discussed the fiduciary duties of the special
committees and the boards of the target REITs in connection with an acquisition
of the target REITs by FSP Corp. The special committees and a representative of
GGU also discussed the terms of the merger agreement prepared by FSP Corp.'s
counsel, and the special committees authorized GGU to continue negotiations
concerning the merger agreement with FSP Corp.'s counsel.

      Between July 26, 2004 and July 27, 2004, members of FSP Corp.'s management
and the special committees discussed an appropriate price per share of FSP
common stock in connection with the potential mergers of the target REITs and
the wholly-owned acquisition subsidiaries of FSP Corp. After several
discussions, as detailed below, with FSP Corp. relating to the proposed range
and the basis for the range, the target boards presented FSP Corp. with a
proposed per share price of $17.70 for the FSP common stock. After additional
discussions, also detailed below, FSP Corp. accepted the proposed per share
price.

      On July 27, 2004, the special committees held a telephonic meeting at
which the special committees and representatives of A.G. Edwards discussed the
proposed price per share of FSP common stock that FSP Corp. would issue in the
proposed mergers.

      On July 27, 2004, after discussions with the FSP board, Mr. Carter and Ms.
Notopoulos discussed with the special committees and representatives of A.G.
Edwards the proposed price per share of FSP common stock that FSP Corp. would
issue in the proposed mergers.

      On July 27, 2004, the special committees held a second telephonic meeting
at which they discussed with representatives of A.G. Edwards FSP Corp.'s
proposed price per share of FSP common stock. The special committees determined
that they would continue negotiations with FSP Corp. regarding the FSP Corp.
stock price.

      On July 27, 2004, Mr. Carter and Ms. Notopoulos, on behalf of FSP Corp.,
and the members of the special committees and representatives of A.G. Edwards,
on behalf of the target REITs, further discussed the proposed price per share of
FSP common stock that FSP Corp. would issue in the proposed mergers. No formal
vote was taken, but the members of the special committees supported the outcome
of the discussions.

      Between July 26, 2004 and August 3, 2004, representatives of A.G. Edwards
engaged in discussions with members of FSP Corp.'s management, on behalf of the
target REITs, regarding potential valuations, financial models, business and
legal due diligence and other issues relating to a business combination among
the target REITs and FSP Corp.

      On July 28, 2004, the special committees held a telephonic meeting at
which the special committees and representatives of A.G. Edwards discussed the
appraisal of each target REIT and the proposed number of shares of FSP common
stock that would be issued to the stockholders of each target REIT in the
mergers.

      On July 28, 2004, after discussions with certain members of the FSP board,
Mr. Carter informed the special committee and representatives of A.G. Edwards of
the number of shares of FSP common stock that FSP Corp. was considering offering
as merger consideration.


                                       58
<PAGE>

      On July 29, 2004, representatives of A.G. Edwards discussed with the
special committees the proposed number of shares of FSP common stock being
offered by FSP Corp as merger consideration. No formal vote was taken, but the
members of the special committees supported the outcome of the discussions.

      On August 3, 2004, the special committees held a telephonic meeting at
which the special committees and a representative of GGU discussed the terms of
the revised merger agreement prepared by FSP Corp.'s counsel, and the special
committees authorized GGU to continue negotiations concerning the merger
agreement with FSP Corp.'s counsel.

      Negotiations among management of FSP Corp., the special committees,
counsel for the target REITs and counsel for FSP Corp. continued until August
10, 2004. During this period, final agreement on the terms of the merger
agreement and other issues was reached over the course of several discussions
between management of and counsel for FSP Corp. and members of the special
committees and counsel for the target REITs. The negotiations between the
parties resulted in agreement on merger consideration for Addison Circle,
Collins Crossing and Royal Ridge that produced a premium, based on a value of
$17.70 per share of FSP common stock, to the sum of the appraised value of real
estate and adjusted cash balances that ranged from 17.9% to 20.0%. With respect
to Montague, FSP Corp. noted that Montague's property is leased to a single
tenant through December 31, 2006 at a rate that is currently significantly above
market. FSP Corp. further noted that the appraised value of Montague's real
estate was $20,000,000. Montague's special committee noted that Montague's
stockholders were receiving significant current cash yields as a result of the
above-mentioned lease and that, in the absence of a significant premium to
appraised value, those stockholders might not be inclined to approve a merger.
These negotiations resulted in merger consideration for Montague that produced a
premium, based on the value of $17.70 per share of FSP common stock, of 51.6%.

      On August 10, 2004, the parties completed their due diligence reviews and
finalized the terms of the merger agreement and related agreements.

      On August 10, 2004, the special committees held a meeting, and on August
11, 2004 the target boards held a meeting, to review the final terms of the
merger agreement and related documents and to consider the approval of the
merger agreement. The members of the special committees and target boards also
considered and discussed the various strategic alternatives available to each
target REIT, including the possibility of remaining independent. At each
meeting, representatives of A.G. Edwards presented an analysis of the financial
terms of each merger, including a discussion of financial data and analyses used
in evaluating the possible acquisition of such target REIT by FSP Corp. After
its presentation at the board meeting, A.G. Edwards provided to each target
board an oral opinion, later confirmed in writing, to the effect that, as of
August 11, 2004 and based upon and subject to the various considerations set
forth in its respective opinions, the merger consideration was fair from a
financial point of view to the holders of preferred stock of each target REIT.

      Additionally, at each of these meetings, a representative of GGU, outside
counsel to the target REITs, made a presentation regarding the significant terms
of the merger agreement and reviewed with the special committees and target
boards their fiduciary duties in connection with the proposed transactions. Each
special committee, after considering the terms of the merger agreement and other
related documents and the various presentations, unanimously approved the merger
agreement and the mergers and recommended that its respective full target board
also approve the transactions. Each target board, after considering the terms of
the merger agreement and other related documents, the various presentations and
its special committee's recommendation, unanimously approved the merger
agreement and the mergers, concluding that the consideration to be paid to the
target REIT stockholders in the mergers was fair to and in the best interests of
that target REIT and its stockholders. The target REIT boards then authorized
Mr. Carter to execute the merger agreement and related documents on behalf of
the target REITs.


                                       59
<PAGE>

      On August 13, 2004, the FSP board held a special meeting to review the
final terms of the merger agreement and related documents and to consider the
approval of the merger agreement. Members of FSP Corp.'s management reviewed
with the FSP board the terms of the merger and the merger agreement. At the
meeting, representatives of Wilmer Cutler Pickering Hale and Dorr LLP, FSP
Corp.'s outside counsel, made a presentation regarding the significant terms of
the merger agreement and reviewed with the board its fiduciary duties in
connection with the proposed transactions. Mr. John Burke, the only
disinterested member of the FSP board, after considering the terms of the merger
agreement and other related documents and the various presentations, approved
the merger agreement and the related documentation and recommended that the full
FSP board also approve the transaction. The other members of the FSP board,
after considering the terms of the merger agreement and other related documents,
the various presentations and Mr. Burke's recommendation, unanimously approved
the merger agreement and the related documentation. The FSP board then
authorized Mr. Carter to execute the merger agreement and related agreements.

      On August 13, 2004, FSP Corp., the target REITs and the acquisition
subsidiaries executed the merger agreement.

Reasons for the Mergers

      The Target REITs. Each target board unanimously concluded that the merger
agreement, providing for the mergers and the issuance of the merger
consideration, is fair to, and in the best interests of, its target REIT and
target REIT stockholders. Each target board recommends a vote FOR adoption of
the merger agreement and approval of the mergers contemplated thereby.

      The special committees believe that the mergers represent an opportunity
for the target REIT stockholders to realize a premium over the current appraised
value of the real estate (as determined by the appraisal) and adjusted cash held
by the respective target REITs. The decision to adopt the merger agreement and
approve the mergers contemplated thereby is also based upon:

      o     the determination of such special committee that the value of the
            FSP common stock to be distributed as merger consideration to its
            target REIT stockholders was greater than the value that was likely
            to be realized upon the continuation of the such target REIT;

      o     the receipt from A.G. Edwards of an opinion, delivered orally to
            each special committee and board of each target REIT and
            subsequently confirmed in writing, as to the fairness from a
            financial point of view of the merger consideration to the
            stockholders of each target REIT;

      o     the independent third-party appraisals of the real property owned by
            each target REIT;

      o     the analysis presented to such special committee by A.G. Edwards
            (see "Fairness of the Mergers - Fairness of the Merger Consideration
            to Target REIT Stockholders - Fairness Opinions");

      o     the substantial likelihood of the consummation of the mergers
            because of the limited number and nature of the conditions to FSP
            Corp.'s and the acquisition subsidiaries' obligations to close;

      o     that target REIT stockholders who do not vote in favor of the
            mergers will have statutory appraisal rights;

      o     that each target REIT can pay its customary dividends in respect of
            the third and fourth quarters of 2004; and


                                       60
<PAGE>

      o     the representations and warranties of the merger agreement relating
            to the target REITs do not survive the closing.

      For a complete list of the factors considered by the target REITs, see
"Fairness of the Mergers - Conclusions of the Target Boards."

      The decision of the individual target boards to adopt the merger agreement
and approve the mergers contemplated thereby resulted from each target board's
careful consideration of a range of strategic alternatives, including the
continuation of its target REIT, the liquidation of its target REIT and the
creation or support of a secondary market for the target stock of its target
REIT through limited cash tender offers or repurchase programs sponsored by such
target REIT. The target boards considered a number of factors in evaluating the
mergers, including the following:

      o     the fairness opinions delivered by A.G. Edwards;

      o     the appraisals obtained by each target REIT;

      o     the identification of a strategic alternative that would provide the
            greatest value to target REIT stockholders;

      o     the potential for a future market for FSP common stock;

      o     the relative likelihood of completing the mergers;

      o     the relative risks to the respective target REIT's business if the
            mergers were not completed; and

      o     a review of the current and prospective business environment for
            REITs.

      Each target board also considered a number of potentially negative factors
in its deliberations concerning the mergers, including the fact that the premium
to be received by the target REIT stockholders is based on an FSP common stock
per share price of $17.70. Should the FSP common stock trade on the AMEX, the
trading price of the FSP common stock could be significantly lower than $17.70
per share, however, causing the premium received by target REIT stockholders as
a result of the consummation of the mergers to decrease significantly or
disappear altogether. Each target board also considered the following additional
potentially negative factors:

      o     the fact that, based on historical quarterly, non-special dividends
            received by stockholders of FSP Corp. and the target REIT
            stockholders, a majority of the target REIT stockholders could
            expect to receive a lower level of dividends from the combined
            company than such stockholders have historically received from their
            target REITs;

      o     conflicts of interest inherent between the directors and officers of
            FSP Corp. and the directors and officers of the target REITs;

      o     the risk that the mergers might not be consummated;

      o     the change upon consummation of the mergers to the nature of the
            target REIT stockholders' investment in their respective target
            REITs;


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<PAGE>

      o     the possibility that FSP Corp. may not file its listing application
            with AMEX, or in the event FSP Corp. does file such application, the
            possibility that AMEX may reject the application or that a
            meaningful trading market may not develop even if AMEX approves the
            application;

      o     the increased risk to the value of the target REIT stockholders'
            investment given that the combined company's revenues would be
            derived from a greater number of real properties; and

      o     the risk that the benefits sought to be achieved by the mergers
            would not be realized.

      Each target board concluded, however, that, on balance, the potential
benefits of the mergers to its target REIT and its target REIT stockholders
outweighed the associated risks. In view of the variety of factors considered in
connection with its evaluation of the merger agreement and the merger
consideration, the target boards did not find it practicable to, and did not,
quantify or otherwise assign relative weight to the specific factors considered
in reaching their respective determinations.

      FSP Corp. The FSP board unanimously determined that the merger agreement,
providing for the mergers and the issuance of FSP common stock in exchange for
target stock, is fair to, and in the best interests of, FSP Corp. and the FSP
stockholders. No director affiliated with the target REITs abstained from
voting. FSP Corp. determined that merging the target REITs with and into four
wholly-owned acquisition subsidiaries of FSP Corp. would provide the parties to
the transaction with favorable tax treatment.

      The FSP board reviewed a number of factors in evaluating the merger
agreement, providing for the mergers and the issuance of the merger
consideration, including, but not limited to, the following:

      o     FSP Corp.'s management's views of the financial condition, results
            of operations and business of FSP Corp. and each of the target REITs
            before and after giving effect to the mergers;

      o     the differences and similarities between the business and operating
            strategies of FSP Corp. and each of the target REITs;

      o     historical financial information concerning the real properties
            owned by FSP Corp. and each of the target REITs;

      o     current conditions in the REIT market generally;

      o     the consideration the target REIT stockholders would receive in the
            mergers;

      o     the belief that the terms of the merger agreement are reasonable;

      o     the impact of the mergers on the FSP stockholders, potential
            investors and employees; and

      o     the appraisals obtained by each target REIT.

      The FSP board also identified and considered a number of potentially
negative factors in its deliberations concerning the merger agreement, providing
for the mergers and the issuance of the merger consideration, including the
following:

      o     conflicts of interest inherent between the directors and officers of
            FSP Corp. and the directors and officers of the target REITs;


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<PAGE>

      o     the fact that the representations and warranties of the target REITs
            do not survive closing;

      o     the risks that the benefits sought to be achieved by the mergers may
            not be realized;

      o     the immediate dilution by approximately 20% to the percentage
            ownership and voting power of the FSP stockholders; and

      o     the possibility that the real estate holdings of the target REITs
            would decline in value.

      The FSP board concluded, however, that, on balance, the potential benefits
of the mergers to FSP Corp. and the FSP stockholders outweighed the associated
risks. In view of the variety of factors considered in connection with its
evaluation of the merger agreement, providing for the mergers and the issuance
of the merger consideration, the FSP board did not find it practicable to, and
did not quantify or otherwise assign relative weight to, the specific factors
considered in reaching its determination.

      The FSP board on an on-going basis evaluates strategic alternatives
available to FSP Corp. In seeking to achieve the benefits that the FSP board
expects will result from the mergers, the FSP board did not consider any
specific alternatives to the mergers.

Expected Benefits of the Mergers to the Target REIT Stockholders

      The following highlights the primary benefits each of the target boards
believe the mergers are expected to generate for its target REIT and its target
REIT stockholders:

      o     The combined company's real estate portfolio will be substantially
            larger and more diverse geographically, by property type and by
            tenant business, than the portfolio of its target REIT, reducing the
            dependence of its target REIT stockholders on the performance of any
            one real property; and

      o     The combined company's business will generate revenues from real
            estate investment banking/brokerage and property management
            activities and from rentals of 32 real properties, constituting a
            more diverse income stream than that currently received by its
            target REIT.

Alternatives Considered

      Before deciding to recommend the mergers, the target boards considered
alternatives to the mergers in an effort to achieve maximum benefits for target
REIT stockholders. These alternatives are set forth below.

      Continuation of each Target REIT. An alternative to the mergers would be
to continue each of the target REITs as a separate legal entity in accordance
with its original investment strategy. Target REIT stockholders would likely
continue to receive regular quarterly distributions and would receive a
distribution on the sale of the property owned by its respective target REIT,
which is expected to occur within a five to ten year time period following
syndication of the target REIT. Continuation of the target REITs would avoid
those disadvantages which might be inherent in the mergers. See "Risk Factors -
Risks Relating to the Mergers." The primary disadvantage with continuing the
target REITs is the failure to secure the benefits that the target boards expect
to result from the mergers. The merger consideration payable to the stockholders
of each target REIT represents a premium to the appraised value of each target
REIT's real estate. See "Fairness of the Mergers - Conclusions of the Target
Boards." Because the appraisals include a valuation based on the discounted cash
flow of each real property's income stream, the target boards believe that the
appraised values of the real estate represent the accurate value of each target


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<PAGE>

REIT on a going concern basis. Because the real property owned by each target
REIT is 100% leased, appreciation in the value of each property will be
dependent upon general changes in the real estate market. Because such changes
could also cause the value of the real property to decline, the target boards
concluded that there were substantial risks that continuation of the target
REITs might not result in realizing an amount equal to or in excess of the
premium obtained in the mergers. If each target REIT continues its separate
existence, the target REIT stockholders may not have an opportunity for
liquidity in the near future and there can be no assurance, given that the
merger consideration for each target REIT exceeds the appraised value of the
real property owned by such target REIT, that any target REIT will be able to
sell its assets for consideration as attractive as the merger consideration.

      Liquidation. Another alternative to the mergers would be to liquidate the
assets of the target REITs and distribute the net liquidation proceeds to the
target REIT stockholders. Liquidating the target REITs would result in
concluding the investors' investment in the target REITs earlier than the
anticipated liquidation timeframes for the target REITs. The liquidations would
result in the marketplace establishing the fair market value of the target
REITs' assets. The target boards believe that the mergers are a more attractive
alternative than liquidation because the merger consideration for each target
REIT exceeds the appraised value of that target REIT's assets. In addition, the
target boards believe that the mergers permit target REIT stockholders to
participate in the combined company's substantially larger, more diversified
investment portfolio and to benefit from the potential for FSP Corp. eventually
to provide liquidity for target REIT stockholders. The target boards believe
that over time target REIT stockholders will benefit from the combined company's
growth opportunities.

      Support of Secondary Market. Another alternative would be the creation or
support of the secondary market for the target stock through limited cash tender
offers or repurchase programs sponsored by the target REITs. While the target
boards believe that this alternative might provide liquidity for some target
REIT stockholders, the target boards believe that the benefits of this
alternative are not sufficiently broad-based to provide an overall solution to
the liquidity problem. In addition, the use of the target REITs' cash for this
purpose would reduce cash available for distribution to target REIT
stockholders. While this alternative was considered by the target boards, no
detailed financial analysis was done that would allow the target boards to
predict with any degree of certainty the possible impact of this alternative on
the value of the target stock.

Consequences if Mergers Not Completed

      If the mergers are not completed, FSP Corp. and the target REITs will
continue to operate as separate legal entities with their own assets and
liabilities. There will be no change in their investment objectives, policies
and restrictions.


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<PAGE>

                              THE MERGER AGREEMENT

      The following is a summary of certain provisions of the merger agreement,
a copy of which is set forth as Appendix A to this Consent
Solicitation/Prospectus and is incorporated herein by reference.

The Mergers

      Subject to the terms and conditions of the merger agreement, on the
effective date FSP Corp. will acquire by merger each target REIT. The target
boards expect that the effective date will be on or about December 31, 2004.

      The following chart sets forth the number of shares of FSP common stock to
be received as merger consideration by the target REIT stockholders for each
share of target stock of the respective target REIT. FSP Corp. will not issue
fractional shares of FSP common stock as merger consideration. Instead, each
holder of target stock who would otherwise have been entitled to receive a
fraction of a share of FSP common stock will be entitled to receive cash
(without interest) in an amount, rounded up to the nearest whole cent, equal to
the product of such fractional part of FSP common stock multiplied by $17.70,
the fair market value of one share of FSP common stock on August 13, 2004, as
determined through negotiations between the special committees and FSP Corp.

                                           Shares of FSP     Total Shares of FSP
                                           Common Stock         Common Stock
                    Total Number of    Issuable in Exchange  Issuable to Target
                   Shares of Target      for Each Share of          REIT
  Target REIT      Stock Outstanding       Target Stock      Stockholders(1)(2)
- ----------------   -----------------       ------------      ------------------

Addison Circle             636                5,948.67             3,783,354

Collins Crossing           555                6,167.63             3,423,035

Montague                   334                5,649.72             1,887,007

Royal Ridge               297.5               6,055.79             1,801,598

(1)   Rounded to the nearest whole share.

(2)   This number of shares of FSP common stock is slightly higher than the
      actual number of shares of FSP common stock to be issued upon the
      consummation of the mergers due to the fact that FSP Corp. will pay cash
      in lieu of issuing fractional shares of FSP common stock.

      None of the shares of FSP common stock to be issued as merger
consideration to the target REIT stockholders will be placed into escrow or
otherwise withheld as a source of potential compensation to FSP Corp. should the
combined company discover, after the consummation of the mergers, that any of
the target REITs incurred any undisclosed liabilities prior to the consummation
of the mergers or that any representations and warranties of the target REITs
were inaccurate. Moreover, FSP Corp. will not receive any consideration for the
one share of common stock it holds in each target REIT.

      Consummation of the mergers is subject to a number of conditions and will
not occur unless, among other things, holders of a majority of the shares of
target stock of each target REIT vote to adopt the merger agreement and approve
the mergers.


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<PAGE>

      The following table sets forth: (i) the value ascribed to each target REIT
for purposes of the merger consideration, (ii) the appraised value of the
property held by each target REIT, (iii) the estimated adjusted cash reserve
balances as of June 30, 2004, and (iv) the percentage (the premium) over
appraised value plus adjusted cash reserves that has been ascribed to each
target REIT for purposes of the merger consideration. The premium is based on an
FSP common stock per share price of $17.70. Should the FSP common stock trade on
the AMEX, the trading price of the FSP common stock could be significantly lower
than $17.70 per share, causing the premium received by target REIT stockholders
as a result of the consummation of the mergers to decrease significantly or
disappear altogether.

                    Value Ascribed to                    Adjusted Cash
  Target REIT          Target REIT     Appraised Value      Reserves     Premium
  -----------          -----------     ---------------      --------     -------

Addison Circle         $66,965,414       $54,500,000      $1,676,697       19.2%

Collins Crossing       $60,587,756       $48,500,000      $1,984,695       20.0%

Montague               $33,400,000       $20,000,000      $2,034,787       51.6%

Royal Ridge            $31,888,293       $26,075,000        $967,500       17.9%

      Total           $192,841,463      $149,075,000      $6,663,679       23.8%

      The value ascribed to a target REIT was determined through negotiations
between the special committees and FSP Corp. These aggregate negotiated values
exceed the aggregate appraised values of the target REITs and the adjusted cash
reserves by approximately $37,102,784. See "Fairness of the Mergers - Fairness
of the Merger Consideration to Target REIT Stockholders - Allocation of Merger
Consideration" for a discussion of how the premiums were determined by the
special committees and FSP Corp.

Representations and Warranties

      In the Merger Agreement, FSP Corp. and the acquisition subsidiaries have
made various representations and warranties to each target REIT, including
representations and warranties relating to:

      o     the due organization of FSP Corp. and each acquisition subsidiary
            and their respective authority to enter into the merger agreement,

      o     the absence of the need (except as specified) for third-party or
            governmental consents to the mergers,

      o     the mergers' nonviolation of laws and material agreements,

      o     FSP Corp.'s capitalization,

      o     the due authorization of the FSP common stock to be issued in the
            mergers,

      o     financial statements,

      o     required filings with the SEC,

      o     taxes,


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<PAGE>

      o     full disclosure, and

      o     the absence of material litigation.

      In addition, each target REIT has made various representations and
warranties to FSP Corp., including:

      o     the due organization of the target REIT,

      o     its authority to enter into the merger agreement,

      o     the absence of the need (except as specified) for third-party or
            governmental consents to its merger and its merger's nonviolation of
            laws and material agreements,

      o     the mergers' nonviolation of laws and material agreements,

      o     financial statements,

      o     full disclosure,

      o     the absence of defaults under material agreements,

      o     the absence of material litigation,

      o     title to assets and properties,

      o     the absence of material environmental liabilities,

      o     the absence of existing acquisition discussions with third parties,

      o     taxes, and

      o     the leases of its real property.

      None of the representations and warranties of any party shall survive the
closing.

Covenants

      Each of the parties has agreed not to omit to take any action that will
result in a breach of any representations, warranties, or covenants or a failure
to satisfy any closing conditions.

      Each target REIT has agreed:

      o     that its board of directors will recommend that its target REIT
            stockholders vote in favor of the merger agreement and the merger,

      o     that it will not solicit or facilitate, or participate in
            discussions or negotiations or furnish any person any information
            with respect to, any third party acquisition proposals, and


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<PAGE>

      o     that its board of directors will not withdraw or modify its
            recommendation to vote in favor of the merger agreement and merger,
            cause or permit its target REIT to enter into any letter of intent
            or agreement relating to any third party acquisition proposal, or
            approve or recommend any third party acquisition proposal.

      However, in the event of an unsolicited third party acquisition proposal
that is more favorable to the target REIT than the terms of the merger agreement
with FSP Corp., the target REIT may furnish information to and enter into
acquisition discussions with the third party, and the target REIT board may
withdraw or modify its recommendation to stockholders as to the merger agreement
and the merger with FSP Corp., in each case to the extent that the target REIT
board determines in good faith that its fiduciary obligations require it to do
so. Prior to taking any such action, the target REIT must furnish information to
FSP Corp. regarding the possible third party acquisition and allow FSP Corp.
five business days to make a counterproposal.

Conduct of Business Prior to the Effective Date

      Each target REIT and FSP Corp. has agreed that, prior to the effective
date or the earlier termination of the merger agreement, it will carry on its
business in the ordinary course in substantially the same manner as previously
conducted, will use its reasonable efforts to preserve intact its present
business organization and goodwill, maintain permits, licenses and
authorizations and preserve its relationship with third parties, and take all
actions necessary to continue to qualify as a REIT. The merger agreement permits
each target REIT and FSP Corp. to declare prior to the effective date,
consistent with past custom and practice, dividends to the pre-merger target
REIT stockholders or pre-merger FSP stockholders, as the case may be, in respect
of each entity's operating results for periods prior to the effective date. FSP
Corp. has assumed the obligation to pay any dividends consistent with past
practice declared but not paid by the target REITs prior to the consummation of
the mergers.

Conditions Precedent to the Mergers

      The respective obligations of each party to effect the mergers are subject
to the fulfillment or waiver on or before the effective date of the following
conditions:

      o     the adoption of the merger agreement and the approval of the mergers
            by the affirmative vote of the holders of a majority of the shares
            of target stock of each target REIT;

      o     the parties must receive all necessary consents, waivers, approvals,
            authorizations or orders required to be obtained and the making of
            all filings required to be made by any of the parties for the
            authorization, execution and delivery of the merger agreement and
            the consummation of the transactions contemplated thereby on or
            before (and remaining in effect at) the effective date;

      o     FSP Corp. and each of the target REITs shall have received an
            opinion from Wilmer Cutler Pickering Hale and Dorr LLP or another
            nationally recognized law firm to the effect that each merger will
            be treated for federal income tax purposes as a reorganization
            within the meaning of Section 368(a) of the Code and confirming
            that, to the extent the matters discussed under the heading
            "Material United States Federal Income Tax Considerations" in this
            Consent Solicitation/Prospectus constitute matters of law, they are
            accurate in all material respects;

      o     delivery by the President and Chief Executive Officer of FSP Corp.
            and the President of each of the target REITs of certificates to the
            effect that there have been no material adverse changes in the
            financial condition of such entity prior to the consummation of the
            mergers;


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<PAGE>

      o     there having been no statute, rule, order, or regulation enacted or
            issued by the United States or any State thereof, or by a court,
            which prohibits the consummation of the mergers; and

      o     the representations of each of FSP Corp. and the target REITs set
            forth in the merger agreement shall be true and complete in all
            material respects as of the closing date (provided that the party
            whose representation was not correct shall have no right not to
            proceed with the closing as a result thereof).

      The conditions described in the second bulleted paragraph above may be
waived by the FSP board in whole or in part if, in the opinion of the FSP board,
such waiver does not materially affect the terms of the transaction, which
waiver shall not be unreasonably withheld. Certain of the conditions to the
consummation of the mergers are beyond the control of FSP Corp., the target
REITs and the target boards. There can be no assurance that the mergers will
occur.

Termination

      The merger agreement may be terminated, and the mergers may be abandoned,
at any time before the effective date, notwithstanding approval of the merger
agreement by the target REIT stockholders:

      o     by the mutual written consent of FSP Corp. and each target REIT;

      o     by either FSP Corp. or any target REIT if the mergers have not been
            consummated by March 30, 2005 (which date may be extended by mutual
            agreement of the parties);

      o     by either FSP Corp. or any target REIT if the conditions to the
            mergers set forth in the merger agreement are not satisfied or
            waived (provided that if the condition to closing that is not
            satisfied is a breach of a representation or warranty, the party in
            breach shall not have the right to terminate the merger agreement as
            a result thereof); or

      o     by FSP Corp. or a target REIT if the target REIT has received a
            superior third party acquisition proposal, the board of directors of
            the target REIT has withdrawn or modified its approval or
            recommendation with respect to the adoption of the merger agreement
            and the approval of the mergers, and the target REIT stockholders
            fail to approve the merger agreement and the mergers within 75 days
            of mailing this Consent Solicitation/Prospectus.

      In addition, the FSP board has the right to terminate the merger agreement
with respect to a particular target REIT and consummate the mergers with the
other target REITs if:

      o     a target REIT incurs material casualty damage to its property, the
            target REIT is unable to cure the damage after using commercially
            reasonably efforts and the parties are unable to agree to an
            appropriate purchase price reduction;

      o     a target REIT board recommends to the stockholders a third party
            acquisition proposal; or

      o     a target REIT board receives a third party acquisition proposal and
            fails within five business days of the request of FSP Corp. to
            reconfirm its recommendation of the merger agreement and merger.


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Effect of Termination

      If the merger agreement is terminated, there will be no liability or
obligation on the part of any party thereto or its respective affiliates,
partners, directors or officers, except for payment of expenses each party is
liable for and to the extent that such termination results from the willful
breach of a party thereto of any of its representations, warranties, covenants
or agreements made in or pursuant to the merger agreement.

Material United States Federal Income Tax Considerations

      Each of the mergers is expected to be a "reorganization" as defined in the
tax code. As a result, a target REIT stockholder generally will:

      o     recognize no gain or loss upon the receipt of FSP common stock in
            exchange for target stock in the merger;

      o     have an aggregate tax basis for the FSP common stock received equal
            to the aggregate basis of the target stock surrendered (other than
            stock for which cash was received in lieu of a fractional share of
            FSP common stock); and

      o     have a holding period for the FSP common stock received that
            includes the holding period for the target stock surrendered.

Timing and Effectiveness of the Mergers

      The effective date of the mergers is expected to occur on or about
December 31, 2004, or at such other time as the conditions to the mergers have
been satisfied.

Comparison of the Target REITs and FSP Corp. The summary information below
highlights a number of significant differences between the target REITs and FSP
Corp.

      Form of Organization. The target REITs and FSP Corp. are each vehicles
appropriate for holding real estate investments and afford passive investors,
such as target REIT stockholders, certain benefits, including limited liability
and the avoidance of double-level taxation. The target REITs are under the
control of their respective target boards, while FSP Corp. will continue to be
governed by the FSP board.

      Length of Investment. Target REIT stockholders in each of the target REITs
expect liquidation of their investments when the assets of the target REITs are
liquidated within a five to ten year period following the syndication of a
target REIT. In contrast, FSP Corp. does not expect to dispose of its assets
within any prescribed periods.

      Properties and Diversification. The real estate portfolio of each target
REIT is limited to the assets acquired with its initial equity offering. FSP
Corp. holds a real estate portfolio that is substantially larger and more
diversified than the portfolio of any of the target REITs. An investment in FSP
Corp. should not be viewed as an investment in a specific pool of assets, but
instead as an investment in an ongoing real estate investment business, subject
to the risks normally attendant to ongoing real estate ownership, to the risks
related to the real estate investment banking/brokerage business and to the
risks related to acquisitions of additional properties.

      Additional Equity. As the target REITs are not authorized to issue
additional shares of target stock or other equity interests without the approval
of their respective target REIT stockholders, the target stock is not subject to
dilution. In contrast, FSP Corp. will have substantial flexibility to raise
equity capital to finance its businesses and affairs through the issuance of
equity securities.


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<PAGE>

      Percentage Ownership. As a result of the significantly higher number of
issued shares in FSP Corp. as compared to the target REITs, the target REIT
stockholders will own a much smaller percentage of FSP Corp. relative to their
ownership interest in the target REITs and, accordingly, will have less power to
control the outcome of matters submitted to a vote of the stockholders and will
receive a lesser percentage of any dividends or other distributions.


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                             FAIRNESS OF THE MERGERS

Conclusions of the Target Boards

      The target boards believe that the terms of the merger agreement, when
considered as a whole, are fair to the target REIT stockholders and the merger
consideration offered in exchange for the target stock in the target REITs
constitutes fair consideration for the interests of the target REIT
stockholders. The target boards believe that the mergers represent an
opportunity for the target REIT stockholders to realize a premium over the
current appraised value of the real estate (as determined by the appraisal) and
adjusted cash held by the respective target REITs. The target boards also
considered the fact that the premium to be received by the target REIT
stockholders is based on an FSP common stock per share price of $17.70. Should
the FSP common stock trade on the AMEX, the trading price of the FSP common
stock could be significantly lower than $17.70 per share, however, causing the
premium received by target REIT stockholders as a result of the consummation of
the mergers to decrease significantly or disappear altogether. The following
provides a summary of the additional factors upon which the target boards based
their respective conclusions as to the fairness of the mergers and the merger
consideration to be paid by FSP Corp. The target boards did not find it
practicable to, and did not attempt to, quantify or otherwise assign relative
weight to these factors in reaching their respective determination.

      o     The target boards compared the potential benefits and detriments of
            the mergers with the potential benefits and detriments of several
            alternatives to the mergers, including continuation of the target
            REITs, liquidation of the target REITs and support of secondary
            markets for the target stock. Based on these comparisons, the target
            boards believe the mergers are more attractive than the other
            alternatives.

      o     The special committees of the target boards, consisting of Messrs.
            MacPhee and Gribbell, each a director of the target REITs and an
            executive vice president of FSP Corp., engaged A.G. Edwards to
            deliver a fairness opinion to each target board. On August 11, 2004,
            A.G. Edwards delivered a written opinion to each target board to the
            effect that the merger consideration was fair, from a financial
            point of view, to the target REIT stockholders of that target REIT.
            These fairness opinions are attached hereto as Appendix C.

      o     Each target board determined that the value of the FSP common stock
            to be distributed as merger consideration to its target REIT
            stockholders represented greater value, or a premium, than the sum
            of the value of the real estate (as determined by an appraisal) and
            cash held by such target REIT. After consultation with A.G. Edwards,
            the special committees of the target boards determined that, based
            on the analyses of other selected public companies, the discounted
            cash flow of FSP Corp. and selected precedent mergers, a reasonable
            range of value for the FSP common stock was between $16.67 per share
            and $18.50 per share. The estimated range of values included a
            discount for the lack of liquidity of FSP common stock. The value
            ascribed to FSP common stock in connection with the mergers of
            $17.70 per share is within that range. The target boards determined
            that even if the actual value of FSP common stock were at the bottom
            of the range, or $16.67 per share, such value would still constitute
            a premium to the appraised value of the real estate plus adjusted
            cash held by each target REIT.

      o     Each target board determined that the value of the FSP common stock
            to be distributed as merger consideration to its target REIT
            stockholders was greater than the value that was likely to be
            realized upon the continuation of such target REIT.


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<PAGE>

      o     The target boards obtained independent third-party appraisals of the
            real property owned by the target REITs, and considered these
            appraisals in negotiating the merger consideration.

      o     The target boards considered historical financial information
            concerning the real properties owned by FSP Corp. and the target
            REITs and the amount of cash held by FSP Corp. and each of the
            target REITs.

      o     The target REITs will have the right to declare dividends consistent
            with past practice in respect of the quarters or partial quarters
            preceding the effective date. The combined company will have the
            obligation to pay any such dividends that have been declared but not
            paid as of the effective date.

      o     Certain merger expenses are considered individual expenses to be
            paid by the party incurring the expenses. The costs of A.G. Edwards'
            engagement and the fees of the target REITs' outside legal counsel
            and independent accountants will be apportioned among the target
            REITs based on the relative net proceeds of the original syndication
            of each target REIT and each appraisal will be paid by the target
            REIT owning the property that is the subject of the appraisal. All
            other expenses, including consulting, legal, accounting and
            administrative, will be paid by FSP Corp.

      o     Stockholders of the target REITs that do not vote in favor of the
            merger and that comply with required procedures will have appraisal
            rights under the Delaware general corporation law entitling them to
            receive fair value for their shares.

      o     The likelihood that the mergers would be completed in the light of
            the terms of the merger agreement and the experience and reputation
            of FSP Corp.

      o     The terms of the merger agreement provide that the representations
            and warranties of the target REITs terminate at closing and that no
            portion of the purchase price is withheld from the target REIT
            stockholders in an escrow account or otherwise.

      o     The terms of the merger agreement permit the target REIT boards, in
            the event of an unsolicited third party offer to purchase any of the
            target REITs prior to the merger, to provide information to and
            engage in discussions with the third party, to withdraw or modify
            their recommendation to the target REIT stockholders to vote in
            favor of the FSP Corp. mergers and to terminate the merger agreement
            if the stockholders of a target REIT fail to vote in favor of the
            merger agreement.

      o     The members of the target boards have conflicts of interest in
            connection with the mergers. Each target board established a special
            committee consisting of Messrs. MacPhee and Gribbell, the only
            members of the target boards who are not also members of the FSP
            board. Messrs. MacPhee and Gribbell serve as executive vice
            presidents of FSP Corp. The special committees engaged A.G. Edwards
            to advise them in evaluating and negotiating the terms of the
            mergers, including the merger consideration, and to deliver a
            fairness opinion to each target board. No fees or other compensation
            will be payable to the members of the target boards (or the special
            committees) in connection with the mergers.


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<PAGE>

Determination of Merger Consideration

      The merger consideration was determined through negotiations among the
special committees of the target boards and FSP Corp. The special committees
relied on advice from its financial advisor, A.G. Edwards, in it negotiations
with FSP Corp. In analyzing the fairness of the $17.70 per share negotiated
price, the target boards reviewed the analyses presented by A.G. Edwards,
financial advisor to the special committees, the target boards and the target
REITs, including the analysis of CAD multiples and discounted cash flows to
estimate the value of FSP common stock. The special committees also considered
the assets and liabilities of each target REIT and FSP Corp., the expected cash
available for distribution of each target REIT, the multiples of cash available
for distribution commonly used in valuing REITs and the limited liquidity of FSP
common stock. The special committees were also made aware that FSP Corp. intends
to file an application to list the FSP common stock with AMEX. There can be no
assurance that FSP Corp. will file such application or, in the event it does,
that AMEX will accept the application or that a meaningful trading market will
develop even if AMEX approves the application. After considering the foregoing
factors, the special committees determined, after consultation with A.G.
Edwards, to propose an initial range for the value of the FSP common stock. The
low end of the range was $16.67 per share and the high end was $18.50. After
several discussions with FSP Corp. relating to the basis for the range, the
target boards presented FSP Corp. with a proposed per share price of $17.70 for
the FSP common stock. After additional discussions, FSP Corp. accepted the
proposed per share price. In concluding that the merger consideration is fair,
the target boards relied in part on the fairness opinion delivered by A.G.
Edwards for its respective target REIT and the appraisal received by each target
board for its respective target REIT.

Fairness of the Merger Consideration to Target REIT Stockholders

      Fairness Opinions. On July 22, 2004, the special committees of the target
boards retained A.G. Edwards to act as their financial advisor in connection
with the mergers and to render A.G. Edwards' opinion as to the fairness, from a
financial point of view, of the merger consideration to the target REIT
stockholders of each target REIT. On August 11, 2004, A.G. Edwards rendered its
opinion to each target board to the effect that, based upon and subject to the
various considerations described in each opinion, the merger consideration (as
described elsewhere in this Consent Solicitation/Prospectus) was fair, from a
financial point of view, to the stockholders of that target REIT.

      The full text of A.G. Edwards' opinions, each dated August 11, 2004, which
describes the assumptions made, general procedures followed, matters considered
and limitations on the scope of review undertaken by A.G. Edwards in rendering
its opinions, are attached as Appendices C-1, C-2, C-3 and C-4 to this Consent
Solicitation/Prospectus and are incorporated into this summary by reference.
A.G. Edwards' opinions are directed only to the fairness, as of the date of the
opinion and from a financial point of view, of the merger consideration to the
stockholders of the target REIT to which each opinion is addressed and does not
constitute a recommendation to you as to how you should vote with respect to the
merger agreement and the mergers. The summary of A.G. Edwards' opinions set
forth below are qualified in their respective entirety by reference to the full
text of the opinions attached as Appendices C-1, C-2, C-3 and C-4 to this
Consent Solicitation/Prospectus. You are urged to read the opinions carefully in
their entirety.

      See "Advice of Financial Advisors and Appraisals - Fairness Opinions."

      The Appraisals. The respective target boards retained independent third
party appraisers to appraise the fair market value of each target REIT's real
estate as of a date no earlier than July 7, 2004.


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<PAGE>

      In preparing the appraisals, the appraisers collected from the target
REITs information regarding the operating history of the properties, conducted
site inspections of the properties to be appraised in July 2004 and interviewed
and relied on representations of certain representatives of the target REITs.
The appraisers' conclusions are based upon conditions they observed at the
properties during their inspection and assumptions, qualifications and
limitations deemed reasonable at the time concerning, among other things, legal
title, the absence of physical defects, future percentage of leased rentable
square feet, income and competition with respect to each property. The
appraisals reflect the appraisers' valuation of the real estate of the target
REITs as of their respective dates, in the context of the information available
on that date. Events occurring subsequent to the dates of the respective
appraisals could affect the properties or assumptions used in preparing the
appraisals. The target boards imposed no limitations on the scope of the
appraisers' appraisals. The target boards took the appraisals into consideration
in negotiating the merger consideration. The target REITs also made the
appraisals available to FSP Corp. and have allowed the FSP board to rely on the
appraisals.

      Comparison of Certain Benefits and Detriments of Alternatives to The
Mergers. Prior to concluding that the mergers should be recommended to the
target REIT stockholders, the target boards considered several alternatives to
the mergers, including continuation of the target REITs, liquidation of the
target REITs and support of the secondary market. See "Benefits, Background and
Reasons for the Mergers -- Alternatives Considered." To determine whether the
mergers or one of their alternatives would be more attractive to the target REIT
stockholders, the target boards compared certain potential benefits and
detriments of the mergers with certain potential benefits and detriments of the
alternatives. Based upon this comparison, the target boards believe the mergers
are more attractive than the alternatives.

      Fairness in View of Conflicts of Interest. The members of the target
boards have significant conflicts of interest in connection with the mergers.
Each target board established a special committee consisting of Messrs. MacPhee
and Gribbell, the only members of the target boards who are not also members of
the FSP board. Messrs. MacPhee and Gribbell serve as executive vice presidents
of FSP Corp. The special committees engaged A.G. Edwards to advise them in
evaluating and negotiating the terms of the mergers, including the merger
consideration, and to deliver a fairness opinion to each target board. No fees
or other compensation will be payable to the members of the target boards (or
the special committees) in connection with the mergers.

      Allocation of Merger Consideration. In allocating the approximately
$192,841,463 of merger consideration among the target REITs, FSP Corp.'s
management considered the appraised values of each target REIT, the cash flow
projected for each target REIT, the cash reserves held by each target REIT, and
the current market conditions for real estate acquisitions in the various
locations of the target REITs. The special committees management of FSP Corp.,
and A.G. Edwards held a telephonic meeting on July 29, 2004 to discuss the
allocation of the merger consideration, including the allocation of the premiums
to be paid by FSP Corp. for each target REIT. During that call, after
reaffirming with all the parties that the stock price of $17.70 per share was
the negotiated price per share to be paid as merger consideration, FSP Corp.
stated that it was willing to make an offer to each of the target REITs based,
in part, on FSP Corp.'s specific knowledge of the target REITs' properties which
it had gained from the operation of such properties by FSP Property Management,
a wholly owned subsidiary of the FSP Corp. prior to and following the
syndication of the target REITs. FSP Corp. then suggested a separate value for
each target REIT based on its knowledge of the real properties held by each
target REIT, including among other things, the tenants, the operating costs,
current market conditions, FSP Corp.'s view of future market rents, the
likelihood of lease renewals, the costs of turnover, and FSP Corp.'s experience
with acquisitions for similar properties in the same or similar markets. The


                                       75
<PAGE>

negotiations between the parties resulted in agreement on merger consideration
for Addison Circle, Collins Crossing and Royal Ridge that produced a premium,
based on a value of $17.70 per share of FSP common stock, to the sum of the
appraised value of real estate and adjusted cash balances that ranged from 17.9%
to 20.0%. With respect to Montague, FSP Corp. noted that Montague's property is
leased to a single tenant through December 31, 2006 at a rate that is currently
significantly above market. FSP Corp. further noted that the appraised value of
Montague's real estate was $20,000,000. Montague's special committee noted that
Montague's stockholders were receiving significant current cash yields as a
result of the above-mentioned lease and that, in the absence of a significant
premium to appraised value, those stockholders might not be inclined to approve
a merger. These negotiations resulted in merger consideration for Montague that
produced a premium, based on the value of $17.70 per share of FSP common stock,
of 51.6%.


                                       76
<PAGE>

                   ADVICE OF FINANCIAL ADVISORS AND APPRAISALS

Fairness Opinions

      On July 22, 2004, the special committees of the target boards retained
A.G. Edwards to act as their financial advisor in connection with the mergers
and to render A.G. Edwards' opinion as to the fairness, from a financial point
of view, of the merger consideration to the target REIT stockholders of each
target REIT. On August 11, 2004, the target boards met to review the proposed
mergers. During this meeting, A.G. Edwards presented certain financial analyses
as described below. At the meeting A.G. Edwards rendered its oral opinions,
subsequently confirmed by delivery of its written opinions, to each target board
to the effect that, based upon and subject to the various considerations
described in each opinion, the merger consideration (as described elsewhere in
this Consent Solicitation/Prospectus) was fair, from a financial point of view,
to the stockholders of that target REIT.

      The full text of A.G. Edwards' opinions, each dated August 11, 2004, which
describes the assumptions made, general procedures followed, matters considered
and limitations on the scope of review undertaken by A.G. Edwards in rendering
its opinions, are attached as Appendices C-1, C-2, C-3 and C-4 to this Consent
Solicitation/Prospectus and are incorporated into this summary by reference.
A.G. Edwards' opinions are directed only to the fairness, as of the date of the
opinion and from a financial point of view, of the merger consideration to the
stockholders of the target REIT to which each opinion is addressed and does not
constitute a recommendation to you as to how you should vote with respect to the
merger agreement and the mergers. The summary of A.G. Edwards' opinions set
forth below are qualified in their respective entirety by reference to the full
text of the opinions attached as Appendices C-1, C-2, C-3 and C-4 to this
Consent Solicitation/Prospectus. You are urged to read the opinions carefully in
their entirety.

      In conducting its investigation and analysis and in arriving at its
opinions, A.G. Edwards reviewed information and took into account financial and
economic factors it deemed relevant under the circumstances. In rendering its
opinions, A.G. Edwards, among other things:

      o     reviewed certain internal information, prepared by the management of
            each target REIT, primarily financial in nature, including
            projections, concerning the business and operations of each target
            REIT furnished to A.G. Edwards for purposes of its analysis;

      o     reviewed certain internal information, primarily financial in
            nature, including forecasts prepared by FSP Corp.'s management
            concerning the business and operations of FSP Corp. furnished to
            A.G. Edwards for its analysis, as well as publicly available
            information including but not limited to FSP Corp.'s recent filings
            with the Securities and Exchange Commission;

      o     reviewed an appraisal of the property of each target REIT prepared
            by a professional real estate valuation firm, which A.G. Edwards was
            advised by the target REIT has real estate valuation expertise in
            the local market for such property, which appraisals included, among
            other things, analyses that valued each target REIT's business
            prospects based on a study of the current marketplace and business
            fundamentals; and A.G. Edwards also held discussions with each such
            professional real estate valuation firm;


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<PAGE>

      o     reviewed a draft of the merger agreement and held discussions about
            the merger agreement and the mergers with the management of each
            target REIT and legal counsel to the target REITs and their boards;

      o     reviewed market data for equity securities of public companies in
            the same or similar lines of business as those of FSP Corp.;

      o     compared the proposed financial terms of the mergers with the
            financial terms of certain other business combinations A.G. Edwards
            deemed relevant for analytical purposes; and

      o     reviewed the implied valuation range of FSP Corp.'s business based
            on the discounted present values of its projected cash flows (as
            estimated by FSP Corp.'s management).

      A.G. Edwards held discussions with the executive officers of the target
REITs and FSP Corp. concerning the target REITs' and FSP Corp.'s respective
historical and current financial condition and operating results, as well as the
prospects of the target REITs and FSP Corp. including the potential impact of
the mergers. A.G. Edwards also considered other information, financial studies,
analyses and investigations and financial, economic and market data which A.G.
Edwards deemed relevant for the preparation of its opinions, including, but not
limited to, the current market environment as well as information relating to
the industries and the segments in which the target REITs and FSP Corp. operate.

      A.G. Edwards was not engaged to consider, nor did it express any opinion
with respect to, any alternative transaction or strategic alternatives that
might be available to the target REITs or their stockholders. Further, A.G.
Edwards was not engaged to and did not solicit third-party indications of
interest in acquiring all or any part of the target REITs. The special
committees of the target boards and FSP Corp. determined the merger
consideration through negotiations and A.G. Edwards did not express any opinion
as to what the value of the target REITs' preferred stock has been or will be
nor did it express any opinion as to what the value of FSP Corp.'s common stock
will be when issued to target REIT stockholders pursuant to the mergers or the
prices at which FSP Corp.'s common stock will trade at any time. The target
boards did not place any limitation upon A.G. Edwards with respect to the
procedures followed or factors considered by A.G. Edwards in rendering its
opinions.

      In arriving at its opinions, A.G. Edwards assumed and relied upon, without
independent verification, the accuracy and completeness of all of the financial
and other information that was publicly available, provided to or otherwise
discussed with A.G. Edwards including financial statements and financial
projections, as provided by or on behalf of the target REITs and FSP Corp. A.G.
Edwards was not engaged to, and therefore did not, independently verify any of
this information nor did it express any opinion with respect to such
information. A.G. Edwards assumed, with the target REITs' consent, that:

      o     the representations and warranties of each party contained in the
            merger agreement would be true and correct, that each party would
            perform all of its covenants and agreements pursuant to the merger
            agreement and that all conditions to the mergers will be satisfied
            without modification or waiver;

      o     all governmental, regulatory and other necessary consents and
            approvals would be obtained and that such consents would not impose
            restrictions or waivers that would have an adverse effect on the
            mergers; and


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<PAGE>

      o     the mergers will be accounted for in accordance with U.S. GAAP.

      A.G. Edwards also assumed and was advised by the management of FSP Corp.
and each target REIT that the financial projections and other information
provided to or otherwise discussed with A.G. Edwards were reasonably prepared on
bases reflecting the best available estimates and good faith judgments as to the
expected future performance of FSP Corp. and each target REIT, respectively, on
a stand-alone basis and after giving effect to the mergers. In conducting its
review, A.G. Edwards assumed the accuracy and completeness of the appraisals of
each target REIT and did not perform any independent audit of assets or
liabilities nor did it conduct any independent appraisal of any of the assets or
liabilities, contingent or otherwise, of the target REITs or FSP Corp. A.G.
Edwards also did not independently attempt to assess or value any of the
intangible assets of FSP Corp. or the target REITs (including goodwill) nor did
it make any independent assumptions with respect to the application of
intangible assets in the mergers. A.G. Edwards' opinions were necessarily based
upon economic, financial and other conditions as they existed and could be
evaluated on the date of its opinions, and did not predict or take into account
any changes that may occur, or information that may become available, after the
date of each opinion. The analyses performed by A.G. Edwards are not necessarily
indicative of actual values or actual future results, which may be significantly
more or less favorable than suggested by such analyses. Subsequent developments
may affect the opinions, and A.G. Edwards does not have any obligation to
update, revise or reaffirm any of its opinions.

      With the consent of each target board, A.G. Edwards did not attempt to
value each target REIT and, instead, has assumed that the value of each target
REIT is equal to the sum of the value of the target REIT's property, as
reflected in the appraisal provided to A.G. Edwards, plus such target REIT's
cash reserves. A.G. Edwards made this assumption and did not make an independent
valuation of the target REITs because the value of an entity with one asset
consisting of real property at a single location, such as each target REIT, is
not determined by standard financial models used to value businesses in general
but, instead, is determined by the value of the property owned by the entity.
The value of that property is, in turn, determined by local real estate,
economic and governmental factors such as commercial lease rates in the area of
the property, the values of nearby commercial properties, economic prosperity in
the area and applicable zoning laws, all of which are more appropriately
assessed by a professional real estate appraiser who is an expert in assessing
these local factors.

      The following is a brief summary of the material financial analyses
performed by A.G. Edwards and reviewed with each target board in connection with
the opinions of A.G. Edwards relating to the mergers and is not a complete
description of all analyses performed and factors considered. The preparation of
a fairness opinion and related financial analyses are complex analytical
processes involving various determinations as to the most appropriate and
relevant methods of financial analysis and the application of those methods to
the particular circumstances and, therefore, a fairness opinion and related
financial analyses are not readily susceptible to summary description. THE
FINANCIAL ANALYSES SUMMARIZED BELOW INCLUDE INFORMATION PRESENTED IN TABULAR
FORMAT. IN ORDER TO FULLY UNDERSTAND A.G. EDWARDS' FINANCIAL ANALYSES, THE
TABLES MUST BE READ TOGETHER WITH THE TEXT OF EACH SUMMARY AND A.G. EDWARDS'
FINANCIAL ANALYSIS MUST BE CONSIDERED AS A WHOLE. THE TABLES ALONE DO NOT
CONSTITUTE A COMPLETE DESCRIPTION OF THE FINANCIAL ANALYSES. CONSIDERING THE
DATA BELOW WITHOUT CONSIDERING THE FULL NARRATIVE DESCRIPTION OF THE FINANCIAL
ANALYSES, INCLUDING THE METHODOLOGIES AND ASSUMPTIONS UNDERLYING THE ANALYSES,
OR SELECTING FOR CONSIDERATION SELECTED PORTIONS OR FACTORS OF THE ANALYSIS
COULD CREATE A MISLEADING OR INCOMPLETE VIEW OF A.G. EDWARDS' FINANCIAL
ANALYSES.


                                       79
<PAGE>

      Valuation Approach. A.G. Edwards was asked to provide its opinion as to
the fairness, from a financial point of view, of the consideration the
stockholders of each target REIT (other than FSP Corp. which is not entitled to
any merger consideration) are to receive in the mergers. Stockholders in each of
the target REITs will receive the number of shares of FSP common stock for each
share of preferred stock in their target REIT as described below.

<TABLE>
<CAPTION>
                                               Addison Circle    Collins Crossing    Montague    Royal Ridge
                                               --------------    ----------------    --------    -----------

<S>                                                 <C>                <C>             <C>          <C>
      Shares of FSP common stock to be              5,949              6,168           5,650        6,056
      received for each share of preferred
      stock in the target REIT
</TABLE>

      Each target REIT owns one or two real property assets, and thus standard
financial models used to value businesses in general are not the most
appropriate method to determine their respective values. Instead, the value of
each target REIT is derived from the value of the property owned by the entity,
and the value of that property is determined primarily by local real estate,
economic and governmental factors, all of which are assessed by professional
real estate appraisers. Each target REIT had its property appraised in the month
of July 2004. Accordingly, A.G. Edwards assumed that the fair market value of
each target REIT is equal to the sum of the appraised value of the target REITs'
individual property plus its existing cash reserves. The consideration to be
received by the stockholders of each target REIT is the number of shares of FSP
common stock to be issued to them in the mergers plus cash to be paid by FSP
Corp. in lieu of fractional shares. The following table presents the assumed
fair market values of each target REIT as well as the cash and number of shares
of FSP common stock to be delivered to the stockholders of each target REIT in
the mergers:

<TABLE>
<CAPTION>
                                            Addison Circle    Collins Crossing     Montague     Royal Ridge
                                            --------------    ----------------     --------     -----------

<S>                                           <C>                <C>              <C>           <C>
      Fair market value of target REIT        $56,176,697        $50,484,695      $22,034,787   $27,042,500

      Total cash payable to target
      REIT stockholders in lieu of
      fractional shares                         $2,668             $5,895           $3,799        $3,708

      Shares of FSP common
      stock issuable to target REIT
      stockholders                             3,783,206          3,422,704        1,886,791     1,801,389
</TABLE>

      The acquisition by the target REIT stockholders of FSP common stock in the
mergers in exchange for their shares of preferred stock of the target REITs can
be viewed as a purchase of shares of FSP common stock. Netting the cash to be
paid to target REIT stockholders in lieu of fractional shares against the fair
market value of each target REIT, the following table describes the effective
cost per share to each target REIT's stockholders to acquire the FSP common
stock in the mergers:

<TABLE>
<CAPTION>
                                            Addison Circle    Collins Crossing   Montague     Royal Ridge
                                            --------------    ----------------   --------     -----------

<S>                                           <C>                <C>              <C>           <C>
      Effective cost per share of FSP
      common stock to be issued               $14.85             $14.75           $11.68        $15.01
</TABLE>


                                       80
<PAGE>

A.G. Edwards' analysis attempted to determine whether the value of a share of
FSP common stock to be received by the target REIT stockholders in the mergers
equaled or exceeded this effective cost per share.

      Analysis Of Selected Public Companies. A.G. Edwards compared selected
financial information and operating statistics for FSP Corp. with corresponding
financial information and operating statistics of four groups of selected
publicly held companies. While none of the companies in these groups has an
asset mix that is exactly comparable to that of FSP Corp., the combined
comparables are, in the judgment of A.G. Edwards, sufficiently comparable to FSP
Corp. to warrant comparative analysis. The Apartment REITs consist of REITs
whose primary business model is based upon the ownership and rental of
geographically diversified multi-family apartment facilities. The Office REITs
consist of REITs whose primary business model is based upon the ownership and
rental of geographically diversified class "A" office buildings. The Industrial
REITs consist of REITs whose primary business model is based upon the ownership
and rental of geographically diversified industrial facilities such as
manufacturing or distribution facilities. The Office/Industrial REITs consist of
REITs whose primary business model is based upon the ownership and rental of
geographically diversified office and industrial properties.

<TABLE>
<CAPTION>
       Apartment REITs                  Office REITs          Industrial REITs    Office/Industrial REITs
       ---------------                  ------------          ----------------    -----------------------

<C>                               <C>                           <C>                <C>
    Archstone-Smith Trust             Boston Properties         AMB Property         Duke Realty Corp.
    AvalonBay Communities         CarrAmerica Realty Corp.        ProLogis         Liberty Property Trust
Equity Residential Properties     Equity Office Properties                           PS Business Parks
</TABLE>

      A.G. Edwards reviewed enterprise values, calculated as the sum of equity
market capitalization plus debt, less cash and cash equivalents, as multiples of
the following: (i) actual historical and estimated future net operating income,
or NOI, for the last twelve month (LTM) period ended June 30, 2004, and for
calendar years 2004 and 2005, and (ii) actual historical and estimated future
earnings before interest, taxes, depreciation and amortization (EBITDA) for
calendar years 2003, 2004 and 2005. A.G. Edwards also reviewed stock prices as a
multiple of the (i) actual historical and estimated future funds from
operations, or FFO, which typically consists of GAAP Net Income (excluding gains
or losses related to the sale of real estate assets) plus depreciation, for the
LTM period ended June 30, 2004, and for calendar years 2004 and 2005, and (ii)
actual historical and estimated future cash available for distribution (CAD) to
stockholders for calendar years 2004 and 2005. In view of the fact that the
comparison companies all carried some level of indebtedness while FSP Corp. does
not and FSP Corp. derives significant cash flow from its investment banking
business, A.G. Edwards concluded that the comparison multiples for NOI, EBITDA
and FFO would tend to undervalue FSP Corp. and that CAD multiples would be the
most accurate comparison measure.

      Multiples for the selected companies also were based on closing stock
prices on August 5, 2004. Financial data for the selected companies and FSP
Corp. were based on public filings, company reports, publicly available research
analyst estimates and research analyst estimates as reported in the
Institutional Brokers' Estimate System. The CAD multiple analyses indicated the
following implied mean multiples in each sector and weighted average mean
multiples, with weighting based upon FSP Corp.'s mix of revenues from the
various real estate sectors in which FSP Corp. operates:


                                       81
<PAGE>

<TABLE>
<CAPTION>
                                                                           Office/                 Weighted
                                 Apartment      Office     Industrial    Industrial    Overall     Average
                                    Mean         Mean         Mean          Mean         Mean        Mean
                                    ----         ----         ----          ----         ----        ----

<S>                                 <C>          <C>          <C>           <C>          <C>         <C>
Stock Price/2004E CAD               18.6x        16.0x        18.8x         15.7x        17.1x       16.2x
Stock Price/2005E CAD               17.4x        15.3x        16.8x         14.7x        16.0x       15.3x
</TABLE>

      A.G. Edwards then applied the weighted average multiple from these real
estate sectors to FSP Corp.'s projected CAD for 2004 and 2005, resulting in the
implied values shown in the table below. A.G. Edwards then applied discounts to
these values ranging from 10% to 20% in recognition of the market illiquidity of
FSP Corp.'s common stock.

                                                                 2005
                                                 2004          Weighted
                                               Weighted        Average
                                             Average Mean        Mean
                                               Multiple        Multiple
                                                (16.2x)        (15.3x)
                                             ------------      --------

      Before Marketability Discount             $20.71          $19.77

      10% Marketability Discount                $18.63          $17.79

      15% Marketability Discount                $17.60          $16.80

      20% Marketability Discount                $16.57          $15.81

      This analysis results in an implied range of values per share of FSP
common stock of $15.81 to $18.63. The effective cost per share to each target
REIT's stockholders of FSP common stock in the mergers is below or within this
range. Accordingly, A.G. Edwards believes that this comparable company analysis
supports its conclusion that the consideration to each target REIT's
stockholders is fair, from a financial point of view, to that target REIT's
stockholders.

      Discounted Cash Flow Analysis. A.G. Edwards also performed a discounted
cash flow analysis to estimate the value of FSP common stock. The discounted
cash flow is calculated by taking the sum of the present value of FSP Corp.'s
free cash flows (before financing costs) over the forecast period and the
present value of the terminal value of FSP Corp. at the end of the forecast
period. A.G. Edwards applied this methodology to the projected cash flows of FSP
Corp. for the fiscal years ending December 31, 2004 through December 31, 2009.
FSP Corp. provided projections through December 31, 2005 and guidance on a
projected long-term perpetual growth rate as well as the long-term relationship
between depreciation expense and capital expenditures. Based upon FSP Corp.'s
projections and guidance, A.G. Edwards utilized a range of discount rates (7.4%
to 8.4%), terminal multiples (11.9x to 13.5x) applied to estimated CAD for the
fiscal year ending December 31, 2009 and perpetual growth rate for FSP Corp.'s
projected CAD beginning in 2005 (1% to 3%) to calculate a range of implied
equity values and prices per share for FSP common stock. A.G. Edwards then
applied discounts to these values ranging from 10% to 20% in recognition of the
market illiquidity of FSP common stock.

      The discounted cash flow analysis yielded an implied equity value range of
$12.16 to $22.29 per share. The effective cost per share to each target REIT's
stockholders of FSP common stock in the mergers is below or within this range.
Accordingly, A.G. Edwards believes that this discounted cash flow analysis
supports its conclusion that the consideration to each target REIT's
stockholders is fair, from a financial point of view, to that target REIT's
stockholders.


                                       82
<PAGE>

      Analysis Of Selected Precedent Mergers. While A.G. Edwards compared
selected financial information and operating statistics for FSP Corp. as related
to the consideration with corresponding financial information and operating
statistics of eleven selected precedent transactions, A.G. Edwards advised the
target boards that the precedent transactions offer limited insight into the
value of FSP common stock due to the limited number of transactions in a
relevant timeframe and/or the unique circumstance surrounding each transaction.
Using publicly available information, A.G. Edwards considered the mean LTM NOI
and FFO multiples of the three most recent transactions relative to the mean LTM
NOI and FFO multiples of the eleven transactions that occurred over the past
five years in order to determine the recent trend in transaction multiples. Each
of the transactions reviewed involved an entity that operated in one of the real
estate sectors within which FSP Corp. operates. In order to compare the
transaction multiples to a non-controlling share of FSP common stock, A.G.
Edwards adjusted the transaction multiples by the median control premium of 13%.
These transactions included the following:

Selected Precedent Mergers

      Keystone Property Trust acquired by ProLogis
      Great Lakes REIT acquired by Transwestern Investment Company LLC
      MerryLand Properties acquired by Cornerstone Realty Income Trust
      Cabot Industrial Trust acquired by CalWest Industrial Properties LLC
      Charles E. Smith Residential Realty Inc. acquired by Archstone Communities
        Trust
      Spieker Properties Inc. acquired by Equity Office Properties Trust
      Grove Property Trust acquired by Equity Residential Properties Trust
      Cornerstone Properties Inc. acquired by Equity Office Properties Trust
      Berkshire Realty Company Inc. acquired by Berkshire Realty Holdings LP
      Weeks Corp acquired by Duke Realty Investments Inc.
      Meridian Industrial Trust Inc. acquired by ProLogis Trust

      A.G. Edwards calculated the implied enterprise value of the selected
transactions (based on their acquisition prices) as multiples of LTM NOI and
FFO. The range of multiples for the three most recent transactions was 9.5x to
18.0x LTM NOI and 7.5x to 18.0x LTM FFO, which resulted in mean multiples of
14.4x LTM NOI and 14.2x LTM FFO, compared to the five year mean multiples of
11.6x LTM NOI and 11.1x LTM FFO. The range values were viewed in the context of
marketability discounts ranging from 10% to 20%. Multiples for the selected
transactions were based on publicly available information at the time of
announcement of the transactions.

      The precedent transaction analysis yielded an implied equity value range
of $11.70 to $28.17 per share of FSP common stock. The effective cost per share
to each target REIT's stockholders of FSP common stock in the mergers is below
or within this range. Accordingly, although A.G. Edwards did not place
significant reliance on this methodology, it believes that this analysis also
supports its conclusion that the consideration to each target REIT's
stockholders is fair, from a financial point of view, to that target REIT's
stockholders.

      Miscellaneous. A.G. Edwards is acting as financial advisor to the special
committees of the target boards with respect to the mergers and will receive
customary fees for its services pursuant to these engagements as well as
reimbursement for its reasonable expenses. The target REITs have also agreed to
indemnify A.G. Edwards for certain liabilities that may arise out of the
rendering of the opinions and any related activities as financial advisor to the
special committees of the target boards, including liabilities under the federal
securities laws.


                                       83
<PAGE>

      The target REITs selected A.G. Edwards to provide opinions in connection
with the mergers because A.G. Edwards is a nationally recognized
investment-banking firm with substantial experience in similar transactions and
is familiar with the target REITs, FSP Corp. and their businesses. A.G. Edwards,
as part of its investment banking business, is regularly engaged in the
valuation of businesses and their securities in connection with mergers and
acquisitions, negotiated underwritings, competitive biddings, secondary
distributions of listed and unlisted securities, private placements and
valuations for estate, corporate or other purposes. In the ordinary course of
business, A.G. Edwards may from time to time trade in securities, including the
securities of direct competitors of the target REITs or FSP Corp., for its own
account and for accounts of its customers and, accordingly, may at any time hold
a long or short position in these securities.

      A.G. Edwards has in the past provided services to FSP Corp. unrelated to
the mergers, and may do so in the future. Such past services have included
investment banking services and valuations of FSP Corp.'s common stock. A.G.
Edwards receives customary fees in connection with such services.

      The foregoing is only a summary of the analyses performed by A.G. Edwards
and does not purport to be a complete description of its presentation to the
target boards. The preparation of a fairness opinion is a complex process and is
not necessarily susceptible to partial analyses or summary description. A.G.
Edwards believes that its analyses and the summary set forth above must be
considered as a whole and that selecting portions of those analyses and of the
factors considered by A.G. Edwards, without considering all analyses and
factors, would create an incomplete view of the processes underlying the
respective opinions. A.G. Edwards did not attempt to assign specific weights to
particular analyses. Any estimates contained in A.G. Edwards' analyses are not
necessarily indicative of actual values, which may be significantly more or less
favorable than as set forth in A.G. Edwards' analyses. Estimates of values of
companies do not purport to be appraisals or necessarily to reflect the prices
at which companies may actually be sold. Because these estimates are inherently
subject to uncertainty, A.G. Edwards does not assume responsibility for their
accuracy.

      Pursuant to engagement letter agreements dated July 22, 2004 between the
special committee of each target REIT and A.G. Edwards, the target boards each
agreed to pay A.G. Edwards an aggregate transaction fee of $350,000 comprised
of: (1) $122,140 by Addison Circle, (2) $106,584 by Collins Crossing, (3)
$57,133 by Montague and (4) $64,143 by Royal Ridge. Each fee is payable to A.G.
Edwards regardless of the conclusions reached by A.G. Edwards in its opinions
and whether or not the mergers consummated. In the engagement letters, which
were negotiated between the special committees and A.G. Edwards, the target
REITs also agreed to reimburse A.G. Edwards for its reasonable out-of-pocket
expenses.

Appraisals of the Target REITs' Properties

      Each of the target boards engaged a third-party independent appraiser set
forth in the table below to appraise the real estate owned by its target REIT.
Each of the appraisers has delivered a written summary of its analysis, based
upon the review, analysis, scope and limitations described therein, as to the
fair market value of a particular target REIT's property as of the date set
forth in the table below. Each appraiser has a national reputation for providing
businesses with appraisals of real properties of the size and type of the
property it appraised. The target boards selected the appraisers to provide the
appraisals because of their experience and reputation in connection with real
estate assets. In addition, the target boards desired to take advantage of the
cost efficiencies associated with having the same party provide the appraisal
that provided the appraisal obtained by each target REIT in connection with its
acquisition of the property. The target boards imposed no limitations on the
scope of the appraisers' appraisals. The target REITs have made the appraisals
available to FSP Corp. and have allowed the FSP board to rely on the appraisals.


                                       84
<PAGE>

      Set forth below is certain information regarding the appraisals. Copies of
the appraisals are filed as exhibits to the registration statement of which this
Consent Solicitation/Prospectus is a part. These appraised values are for the
property owned by the respective target REIT as of the date of the appraisal.

<TABLE>
<CAPTION>
                                                           Sum of Fair Market
                                                           Value set forth in
                                                         Appraisal and Estimated
                                                         Cash Reserve Balances
  Target REIT                       Appraiser              as of June 30, 2004        Date of Appraisal
  -----------                       ---------              -------------------        -----------------

<S>                           <C>                               <C>                     <C>
Addison Circle                Bryan E. Humphries and            $56,176,697             July 23, 2004
                              Associates

Collins Crossing              Bryan E. Humphries and            $50,484,695             July 23, 2004
                              Associates

Montague                      Cushman & Wakefield of            $22,034,787             July 14, 2004
                              California, Inc.

Royal Ridge                   CBRE-Valuation and                $27,042,500             July 13, 2004
                              Advisory Services
</TABLE>

      The material assumptions, qualifications and limitations to the appraisals
are described below.

      Summary of Methodology. At the request of the target boards, the
appraisers updated their original appraisals for the purchase of the properties
held by the respective target REIT and, where appropriate, revised their
assumptions to reflect the changed conditions in the market or property.
Appraisers typically use three approaches in valuing real property: the cost
approach, the income approach and the sales comparison approach. The type and
age of a property, market conditions and the quantity and quality of data affect
the applicability of each approach in a specific appraisal situation. The value
estimated by the cost approach incorporates separate estimates of the value of
the unimproved site and the value of improvements, less observed physical wear
and tear and functional or economic obsolescence. The income approach estimates
a property's capacity to produce income through an analysis of the rental
market, operating expenses and net income. Net income may then be processed into
a value through either direct capitalization or discounted cash flow analysis,
or a combination of these two methods. The sales comparison approach involves a
comparative analysis of the subject property with other similar properties that
have sold recently or that are currently offered for sale in the market. The
appraisers considered or used all three of the approaches to value in their
original appraisals.

      The appraisers analyzed the individual properties of each target REIT. The
appraisers' analysis included:

      o     reviewing each property's historical operating statements,

      o     reviewing and relying on specific information regarding prospective
            changes in rents and expenses for each property provided by the
            applicable target REIT,


                                       85
<PAGE>

      o     developing information from a variety of sources about market
            conditions for each individual property, and

      o     considering the projected cash flow for each property.

      Representatives of the appraisers performed site inspections on all
properties during July 2004. In the course of these site visits, the appraisers
inspected the physical facilities, obtained current rental and percentage of
leased space information, gathered information on competing properties and the
local market, visited primary competing properties and interviewed each local
property manager or assistant manager concerning performance of the subject
property and other factors.

      The appraisers reviewed historical operating statements and 2004 operating
budgets for the subject properties.

      In conducting the appraisals, the appraisers also interviewed and relied
upon members of the target boards, executive management and property management
personnel to:

      o     obtain information relating to the condition of each property,
            including any deferred maintenance, capital budgets, status of
            ongoing or newly planned property additions, reconfigurations,
            improvements and other factors affecting the physical condition of
            the property improvements; and

      o     discuss competitive conditions, area economic and development trends
            affecting the properties, historical and budgeted operating revenues
            and expenses and occupancies.

      To define the percentage of leased space, rental rate and expense
escalators to be used in developing property operating projections, the
appraisers reviewed the acquisition criteria and projection parameters in use in
the marketplace by major investors, owners and operators of the applicable
property types. Further, the appraisers interviewed various sources in local
markets to identify recent sales of similar properties and derive certain
valuation indicators. Sources for data concerning such transactions included
local appraisers, property owners, real estate brokers, tax assessors and real
estate research firms.

      Conclusions as to Value

      Assumptions, Limitations and Qualifications of Property Appraisals. The
appraisers utilized certain assumptions to determine the appraised value of the
properties under the income approach and the sales comparison approach. The
appraisals reflect the appraisers' valuation of the real estate of the target
REITs as of their respective dates, in the context of the information available
on such date. Events occurring after the date of an appraisal and before the
closing of the mergers could affect the properties or assumptions used in
preparing the real estate appraisals. The appraisers have no obligation to
update the appraisals on the basis of subsequent events.

      Compensation and Material Relationships. The appraisers have been paid
fees in the aggregate amount of $20,500 to prepare the appraisals. The fees for
the appraisals were negotiated between the target boards and the appraisers and
payment thereof are not dependent upon completion of the mergers. The respective
appraisers were previously engaged to appraise the properties of the target
REITs prior to their acquisition. During the past three years, the appraisers
received an aggregate of $32,000 for appraisals obtained by each target REIT in
connection with the initial acquisition of such target REIT's property.


                                       86
<PAGE>

                                   MANAGEMENT

      George J. Carter, President and a director of each target REIT, age 55, is
responsible for all aspects of the business of FSP Corp., the target REITs and
their respective affiliates, with special emphasis on the evaluation,
acquisition and structuring of real estate investments. Prior to the conversion,
he was President of the general partner of the FSP Partnership, the predecessor
to FSP Corp., and was responsible for all aspects of the business of the FSP
Partnership and its affiliates. From 1992 through 1996 he was President of
Boston Financial Securities, Inc. Prior to joining Boston Financial, Mr. Carter
was owner and developer of Gloucester Dry Dock, a commercial shipyard in
Gloucester, Massachusetts. From 1979 to 1988, Mr. Carter served as Managing
Director in charge of marketing of First Winthrop Corporation, a national real
estate and investment banking firm headquartered in Boston, Massachusetts. Prior
to that, he held a number of positions in the brokerage industry including
positions with Merrill Lynch & Co. and Loeb Rhodes & Co. Mr. Carter is a
graduate of the University of Miami (B.S.). Mr. Carter is a NASD General
Securities Principal (Series 24) and holds a NASD Series 7 general securities
license.

      R. Scott MacPhee, Executive Vice President and director of each target
REIT, age 47, has as his primary responsibility the direct equity placement of
the sponsored entities. Prior to the conversion, Mr. MacPhee was an Executive
Vice President of the general partner of the FSP Partnership. From 1993 through
1996 he was an executive officer of Boston Financial Services, Inc. From 1985 to
1993 Mr. MacPhee worked at Winthrop Financial Associates. Mr. MacPhee attended
American International College. Mr. MacPhee holds a NASD Series 7 general
securities license.

      Richard R. Norris, Executive Vice President and director of each target
REIT, age 61, has as his primary responsibility the direct equity placement of
the sponsored entities. Prior to the conversion, Mr. Norris was an Executive
Vice President of the general partner of the FSP Partnership. From 1993 through
1996 he was an executive officer of Boston Financial Services, Inc. From 1983 to
1993 Mr. Norris worked at Winthrop Financial Associates. Prior to that, he
worked at Arthur Young & Company (subsequently named Ernst & Young through a
merger). Mr. Norris is a graduate of Bowdoin College (B.A.) and Northeastern
University (M.S.). Mr. Norris holds a NASD Series 7 general securities license.

      William W. Gribbell, Executive Vice President and director of each target
REIT, age 44, has as his primary responsibility the direct equity placement of
the sponsored entities. Prior to the conversion, Mr. Gribbell was an Executive
Vice President of the general partner of FSP Partnership. From 1993 through 1996
he was an executive officer of Boston Financial. From 1989 to 1993 Mr. Gribbell
worked at Winthrop Financial Associates. Mr. Gribbell is a graduate of Boston
University (B.A.). Mr. Gribbell holds a NASD Series 7 general securities
license.

      Barbara J. Fournier, Vice President, Chief Operating Officer, Treasurer
and a director of each target REIT, age 48, has as her primary responsibility,
together with Mr. Carter, the management of all operating business affairs of
FSP Corp., the target REITs and their respective affiliates. Ms. Fournier is
also responsible for FSP Corp.'s accounting and financial reporting functions.
Prior to the conversion, Ms. Fournier was the Vice President, Chief Operating
Officer, Treasurer and Secretary of the general partner of the FSP Partnership.
From 1993 through 1996, she was Director of Operations for the private placement
division of Boston Financial. Prior to joining Boston Financial, Ms. Fournier
served as Director of Operations for Schuparra Securities Corp. and as the Sales
Administrator for Weston Financial Group. From 1979 through 1986, Ms. Fournier
worked at First Winthrop Corporation in administrative and management
capacities; including Office Manager, Securities Operations and Partnership
Administration. Ms. Fournier attended Northeastern University and the New York
Institute of Finance. Ms. Fournier is a NASD General Securities Principal
(Series 24). She also holds other NASD supervisory licenses including Series 4
and Series 53, and a NASD Series 7 general securities license.


                                       87
<PAGE>

      Janet Prier Notopoulos, Vice President of each target REIT, age 57, has as
her primary responsibility the oversight of the management of the real estate
assets of FSP Corp., the target REITs and their respective affiliates. Prior to
the conversion, Ms. Notopoulos was a Vice President of the general partner of
the FSP Partnership. Prior to joining FSP Corp. in 1997, Ms. Notopoulos was a
real estate and marketing consultant for various clients. From 1975 to 1983, she
was Vice President of North Coast Properties, Inc., a Boston real estate
investment company. Between 1969 and 1973, she was a real estate paralegal at
Goodwin, Procter & Hoar. Ms. Notopoulos is a graduate of Wellesley College
(B.A.) and the Harvard School of Business Administration (M.B.A.).

Management Compensation

      The following summary compensation table sets forth certain information
concerning the compensation for each of (1) the President of the target REITs
and (2) the other executive officers of the target REITs. These amounts are paid
by FSP Corp. for services performed by such persons for FSP Corp.

<TABLE>
<CAPTION>
                                                              Annual Compensation(1)
                                                   ------------------------------------------
                                          Fiscal                               Other Annual        All Other
Name and Principal Position                Year     Salary        Bonus       Compensation(2)    Compensation(3)
- ---------------------------                ----     ------        -----       ---------------    ---------------

<S>                                        <C>     <C>         <C>               <C>               <C>
George J. Carter ......................    2003    $225,000    $  400,000(4)             --        $ 12,865(5)
President                                  2002    $120,000    $  255,000(6)             --        $ 16,585(7)
                                           2001    $120,000    $  759,652(8)             --        $815,585(9)

R. Scott MacPhee ......................    2003          --            --        $1,750,850        $  8,000(10)
Executive Vice President                   2002          --    $   13,640        $1,632,250        $611,100(11)
                                           2001          --    $   11,023        $2,202,483        $232,196(12)

Richard R. Norris .....................    2003          --            --        $1,077,453        $  9,000(10)
Executive Vice President                   2002          --            --        $2,062,432        $  7,500(10)
                                           2001          --    $   21,428        $2,298,737        $448,436(13)

William W. Gribbell ...................    2003          --            --        $2,192,258        $  8,000(10)
Executive Vice President                   2002          --            --        $1,331,975        $  7,000(10)
                                           2001          --    $    7,021        $  898,993        $152,274(14)

Barbara J. Fournier ...................    2003    $175,000    $  190,000(4)             --        $  8,000(10)
Vice President, Chief Operating Officer    2002    $ 75,000    $  285,000(6)             --        $  7,000(10)
and Treasurer                              2001    $ 60,000    $  287,974(15)            --        $ 66,500(16)

Janet Prier Notopoulos ................    2003    $150,000    $  180,000(4)             --        $  9,000(10)
Vice President                             2002    $ 75,000    $  250,000(6)             --        $  7,500(10)
                                           2001    $ 60,000    $  172,726(15)            --        $ 61,500(17)
</TABLE>

(1)   Amounts reported represent annual compensation paid to the executive
      officers by the FSP Partnership, FSP Corp.'s predecessor, for the fiscal
      year 2001.


                                       88
<PAGE>

(2)   Consists of brokerage commissions paid by FSP Investments in respect of
      the sale of securities of sponsored REITs and sponsored partnerships.

(3)   The FSP Partnership issued units of partnership interest, or FSP units, to
      all executive officers in July 2001, valued at $11.50 per FSP unit, as
      part of their annual compensation. The valuations of $11.50 per FSP unit
      was determined in good faith by the general partner of the FSP
      Partnership. The value of $11.50 per FSP unit was determined by the
      general partner based on the value ascribed to each FSP unit in connection
      with certain mergers that were effective October 1, 2000 in which the FSP
      Partnership acquired several of the limited partnerships whose offerings
      FSP Investments had previously sponsored, and no material changes in the
      financial condition or results of the FSP Partnership had occurred between
      that date and July 1, 2001.

(4)   Represents a bonus accrued in 2003 and paid in 2004.

(5)   Includes a $9,000 contribution to a Simple IRA Plan and $3,865 of life
      insurance.

(6)   Represents a bonus accrued in 2002 and paid in 2003.

(7)   Includes a $7,500 contribution to a Simple IRA Plan and $9,085 of life
      insurance.

(8)   Includes a bonus of $720,000 accrued in 2001 and paid in 2002.

(9)   Includes $800,000 in FSP units, a $6,500 FSP Partnership contribution to a
      Simple IRA plan and $9,085 of life insurance.

(10)  Represents a contribution to a Simple IRA Plan.

(11)  Consists of $604,100 in FSP common stock and a $7,000 contribution to a
      Simple IRA plan.

(12)  Includes $222,400 in FSP units, a $6,500 FSP Partnership contribution to a
      Simple IRA plan and $3,296 of life insurance.

(13)  Includes $423,320 in FSP units, a $6,500 FSP Partnership contribution to a
      Simple IRA plan and $9,616 of life insurance.

(14)  Includes $145,280 in FSP units, a $6,500 FSP Partnership contribution to a
      Simple IRA plan and $494 of life insurance.

(15)  Represents a bonus accrued in 2001 and paid in 2002.

(16)  Includes $60,000 in FSP units and a $6,500 FSP Partnership contribution to
      a Simple IRA plan.

(17)  Includes $55,000 in FSP units and a $6,500 FSP Partnership contribution to
      a Simple IRA plan.

      No options or stock appreciation rights were granted to any of the
executive officers during the fiscal years 2001, 2002 or 2003. FSP Corp. does
not have any outstanding stock options or stock appreciation rights, and
therefore, there were no stock options or stock appreciation rights exercised by
any of the executive officers during 2003.


                                       89
<PAGE>

      No executive officer of any of the target REITs is a party to an
employment agreement with the target REITs or with FSP Corp.

      The executive officers and directors of the target REITs receive no
compensation from the target REITs. All compensation for such persons is
received from FSP Corp. and is solely for services such persons perform for and
on behalf of FSP Corp.


                                       90
<PAGE>

                   SELECTED FINANCIAL INFORMATION OF FSP CORP.

      The following selected financial information is derived from the
historical consolidated financial statements of the FSP Corp. and it
predecessor, the FSP Partnership. This information should be read in conjunction
with "Management's Discussion and Analysis of Financial Condition and Results of
Operations" as incorporated by reference from FSP Corp.'s Annual Report on Form
10-K, as amended, filed with the SEC and with FSP Corp.'s consolidated financial
statements and related notes thereto.

<TABLE>
<CAPTION>
                                                       For the                                For the
                                                   Six Months Ended                         Year Ended
                                                       June 30,                            December 31,
                                                 -------------------   ----------------------------------------------------
(In thousands, except per share or unit data)      2004       2003       2003       2002       2001       2000       1999
                                                   ----       ----       ----       ----       ----       -----      ----

<S>                                              <C>        <C>        <C>        <C>        <C>        <C>        <C>
Operating Data:
Total revenue                                    $ 55,333   $ 27,190   $ 83,768   $ 53,950   $ 51,955   $ 32,793   $ 15,534
Income from:
  Continuing operations                            26,895     12,506     39,823     26,741     24,621      8,171        406
  Discontinued operations                              --        144        195        571        747        743        733
  Gain on sale of properties, net of tax               --      1,421      6,362         --         --         --         --
                                                 --------   --------   --------   --------   --------   --------   --------
  Net income                                     $ 26,895   $ 14,071   $ 46,380   $ 27,312   $ 25,368   $  8,914   $  1,139
                                                 ========   ========   ========   ========   ========   ========   ========

Basic and diluted income per share and per
limited and general partnership unit from:
  Continuing operations                          $   0.54   $   0.43   $   1.02   $   1.09   $   1.00   $   0.43   $   0.03
  Discontinued operations                              --       0.01         --       0.02       0.03       0.04       0.06
  Gain on sale of properties, net of tax               --       0.05       0.16         --         --         --         --
                                                 --------   --------   --------   --------   --------   --------   --------
  Total                                          $   0.54   $   0.49   $   1.18   $   1.11   $   1.03   $   0.47   $   0.09
                                                 ========   ========   ========   ========   ========   ========   ========

Distributions declared per unit/share
outstanding from:
  Operations                                     $   0.62   $   0.62   $   1.24   $   1.24   $   1.18   $   1.02   $   0.86
  Sale of properties                                   --         --       0.12         --         --         --         --
                                                 --------   --------   --------   --------   --------   --------   --------
  Total                                          $   0.62   $   0.62   $   1.36   $   1.24   $   1.18   $   1.02   $   0.86
                                                 ========   ========   ========   ========   ========   ========   ========

<CAPTION>
                                                  As of                              As of
                                                 June 30,                         December 31,
                                                ----------    ----------------------------------------------------
                                                   2004         2003       2002       2001       2000       1999
                                                   ----         ----       ----       ----       ----       -----
<S>                                              <C>          <C>        <C>        <C>        <C>        <C>
Balance Sheet Data (at period end):
Cash and cash equivalents                        $ 59,000     $ 58,793   $ 22,316   $ 24,357   $ 13,718   $ 18,519
Total assets                                      523,826      528,529    201,936    204,117    219,923    190,486
Long term liabilities                                  --           --         --         --         --         --
Total liabilities                                  10,827       11,674      4,771      4,354     19,280     28,821
Minority interests in consolidated entities            --           --         --         --         63     78,090
Total shareholders'/partners' capital             512,999      516,855    197,165    199,763    200,580     83,575
</TABLE>


                                       91
<PAGE>

                 SELECTED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL DATA

      The following unaudited pro forma financial information has been prepared
based upon certain pro forma adjustments to the historical consolidated
financial statements of FSP Corp. The pro forma consolidated balance sheets have
been presented as if the mergers occurred as of June 30, 2004. The pro forma
consolidated statements of income for the six months ended June 30, 2004 and for
the year ended December 31, 2003 and the consolidated pro forma statements of
cash flow for the six months ended June 30, 2004 and December 31, 2003 are
presented as if the mergers occurred at the beginning of the period presented.

      The unaudited pro forma consolidated financial statement data are not
necessarily indicative of what the combined company's actual financial position
or results of operations would have been as of the date or for the period
indicated, nor do they purport to represent the combined company's financial
position or results of operations as of or for any future period. The unaudited
pro forma consolidated financial statement data should be read in conjunction
with all financial statements and pro forma financial statements included
elsewhere herein or incorporated herein by reference.


                                       92
<PAGE>

                        Franklin Street Properties Corp.
                 Condensed Consolidated Pro Forma Balance Sheets
                                  June 30, 2004
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                   Historical      Purchase of
(in thousands)                                    (FSP Corp.)     Target REITs     Adjustments        Pro Forma
===============================================================================================================

<S>                                                <C>             <C>              <C>               <C>
Assets:
Real estate assets, net                            $ 444,508       $135,185(d)      $ 500(c)(d)       $ 580,193
Acquired  favorable leases, net                           --          9,571(d)         --                 9,571
Acquired lease origination costs, net                  6,898          4,319(d)         --                11,217
Cash and cash equivalents                             59,000          6,664(d)       (500)(c)            65,164
Restricted cash                                        1,028             --            --                 1,028
Tenant rents receivable, net                             630             --            --                   630
Straight line rents receivable, net                    4,941             --            --                 4,941
Prepaid expenses                                       1,007             --            --                 1,007
Investment in non-consolidated REITs                   4,301             --            --                 4,301
Deferred leasing commissions, net                      1,082             --            --                 1,082
Office computers and equipment, net                      431             --            --                   431
===============================================================================================================

       Total assets                                $ 523,826       $155,739         $  --             $ 679,565
- ---------------------------------------------------------------------------------------------------------------
Liabilities and Stockholders' Equity
Liabilities:
Accounts payable and accrued expenses              $   7,982       $     --         $  --             $   7,982
Accrued compensation                                   1,817             --            --                 1,817
Tenant security deposits                               1,028             --            --                 1,028
===============================================================================================================

       Total liabilities                           $  10,827       $     --         $  --             $  10,827
- ---------------------------------------------------------------------------------------------------------------
Stockholders' equity
   Preferred Stock                                        --             --            --                    --
   Common Stock                                            5           1(i)            --                     6
   Additional paid - in capital                      512,813        155,738(i)         --               668,551
   Retained earnings (distributions in excess
      of earnings)                                      (225)            --            --                  (225)
   Accumulated undistributed net realized
      gain on sale of properties                         406             --            --                   406
- ---------------------------------------------------------------------------------------------------------------

Total stockholders' equity                           512,999        155,739            --               668,738
===============================================================================================================

Total liabilities and stockholders' equity         $ 523,826       $155,739         $  --             $ 679,565
===============================================================================================================
</TABLE>

See accompanying notes to condensed consolidated pro forma financial statements


                                       93
<PAGE>

                        Franklin Street Properties Corp.
              Condensed Consolidated Pro Forma Statements of Income
                            For the six months ended
                                  June 30, 2004
                                   (Unaudited)

<TABLE>
<CAPTION>
                                               Historical
(in thousands, except per share amounts)      (FSP Corp.)    Target REITs (l)     Adjustments       Pro Forma
=============================================================================================================

<S>                                             <C>              <C>               <C>              <C>
Revenue:
     Rental income                              $ 35,067         $12,690           $(1,080)(d)      $ 46,677
     Syndication fees                              8,448              --                --             8,448
     Transaction fees                              8,742              --                --             8,742
     Sponsored REIT income                         2,334              --                --             2,334
     Other                                           742              --              (118)(e)           624
- ------------------------------------------------------------------------------------------------------------

   Total revenue                                  55,333          12,690            (1,198)           66,825
- ------------------------------------------------------------------------------------------------------------

Expenses:
     Real estate operating expenses                6,771           2,252              (118)(e)         8,905
     Real estate taxes and insurance               4,567           1,465                --             6,032
     Depreciation and amortization                 6,697              --             1,500(e)          8,662
                                                                                       465(e)
     Sponsored REIT expenses                       1,678              --                --             1,678
     Selling, general and administrative           3,132              --               420(b)          3,552
     Commissions                                   4,287              --                --             4,287
     Shares issued as compensation                   162              --                --               162
     Interest                                        517              --                --               517
- ------------------------------------------------------------------------------------------------------------

   Total expenses                                 27,811           3,717             2,267            33,795
- ------------------------------------------------------------------------------------------------------------

Income (loss) before interest, taxes and
   discontinued operations,                       27,522           8,973            (3,465)           33,030
     Interest income                                 349              --                --               349
     Taxes on income(a)(b)                          (976)             --                --              (976)
- ------------------------------------------------------------------------------------------------------------

Net income                                      $ 26,895         $ 8,973           $(3,465)         $ 32,403
============================================================================================================

Weighted average shares outstanding,
      basic and diluted                           49,627              --           10,895 (i)         60,522
============================================================================================================

Net income per share basic and diluted          $   0.54         $    --           $    --          $   0.54
============================================================================================================
</TABLE>

See accompanying notes to condensed consolidated pro forma financial statements


                                       94
<PAGE>

                        Franklin Street Properties Corp.
              Condensed Consolidated Pro Forma Statements of Income
                               For the year ended
                                December 31, 2003
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                 2003 Merger
                                                 Historical     Purchase of      (Pro Forma)
(in thousands, except per share amounts)        (FSP Corp.)   Target REITs(m)   Adjustment(j)     Adjustments       Pro Forma
=============================================================================================================================

<S>                                               <C>             <C>              <C>            <C>               <C>
Revenue:
     Rental income                                $49,789         $23,890          $15,204        $ (2,160)(d)      $  86,723
     Syndication fees                              14,631              --               --          (5,403)(g)          9,228
     Transaction fees                              14,745              --               --          (5,558)(g)          9,187
     Sponsored REIT income                          3,452              --               --          (1,468)(h)          1,984
     Other                                          1,151              --               --            (204)(e)            674
                                                                                                      (273)(f)
- -----------------------------------------------------------------------------------------------------------------------------

   Total revenue                                   83,768          23,890           15,204         (15,066)           107,796
=============================================================================================================================

Expenses:
     Real estate operating expenses                10,425           4,635            3,997            (204)(e)         18,853
     Real estate taxes and insurance                6,264           2,883            2,667              --             11,814
     Depreciation and amortization                  9,265              --            3,298           3,930(d)          16,493
     Sponsored REIT expenses                        2,620              --               --          (1,208)(h)          1,412
     Selling, general and administrative            5,711              --               --             420(b)           6,131
     Commissions                                    7,291              --               --              --              7,291
     Interest                                       1,036              --               --            (264)(g))           772
- -----------------------------------------------------------------------------------------------------------------------------

   Total expenses                                  42,612           7,518            9,962           2,674             62,766
=============================================================================================================================

Income (loss) before interest, taxes,
   discontinued operations and gain
   on sales of properties                          41,156          16,372            5,242         (17,740)            45,030
       Interest income                                367              --              117              --                484
       Taxes on income(a)(b)                        1,700              --               --              --              1,700
       Income from discontinued operations            195              --               --              --                195
       Gain on sale of properties,
          net of tax                                6,362              --               --              --              6,362
- -----------------------------------------------------------------------------------------------------------------------------

Net income                                        $46,380         $16,372          $ 5,359        $(17,740)         $  50,371
=============================================================================================================================

Weighted average shares outstanding,
      basic and diluted                            39,214              --           10,416(j)       10,895(i)          60,525
=============================================================================================================================

Basic and diluted net income per share            $  1.18         $    --          $    --(j)     $     --          $    0.83
=============================================================================================================================
</TABLE>


See accompanying notes to condensed consolidated pro forma financial statements

                                       95
<PAGE>

                        Franklin Street Properties Corp.
            Condensed Consolidated Pro Forma Statements of Cash Flow
                            For the six months ended
                                  June 30, 2004
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                          Historical
(in thousands)                                                           (FSP Corp.)   Target REITs   Adjustments        Pro forma
==================================================================================================================================

<S>                                                                       <C>            <C>           <C>               <C>
Cash flows from operating activities:
   Net income                                                             $  26,895      $   8,973     $  (3,465)        $  32,403
   Adjustments to reconcile net income to net cash provided by
     operating activities:
      Depreciation and amortization expense                                   6,697             --         1,965(d)          8,662
      Amortization of above market lease                                        118             --         1,080(d)          1,198
      Equity in earnings from non-consolidated REITs                           (112)            --            --              (112)
      Distributions from non-consolidated REITs                                  59             --            --                59
      Shares issued as compensation                                             162             --            --               162
  Changes in operating assets and liabilities:
     Restricted cash                                                            (46)            --            --               (46)
     Tenant rent receivables, net                                               251             --            --               251
     Straight-line rents, net                                                  (854)            --            --              (854)
     Prepaid expenses and other assets, net                                    (201)            --            --              (201)
     Accounts payable and accrued expenses                                    2,952             --            --             2,952
     Accrued compensation                                                       272             --            --               272
     Tenant security deposits                                                    46             --            --                46
     Payment of deferred leasing commissions                                   (252)            --            --              (252)
- ----------------------------------------------------------------------------------------------------------------------------------

        Net cash provided by operating activities                            35,987          8,973          (420)           44,540
- ----------------------------------------------------------------------------------------------------------------------------------

Cash flows from investing activities:
      Cash acquired through issuance of common stock in merger
         transaction                                                             --             --         6,664(d)          6,664
      Purchase of real estate assets, office computers and furniture,
         capitalized merger costs                                              (619)            --          (500)(c)        (1,119)
      Investment in non-consolidated REITs                                   (4,248)            --            --            (4,248)
      Sale of assets held for syndication                                     4,117             --            --             4,117
- ----------------------------------------------------------------------------------------------------------------------------------

      Net cash provided by (used for) investing activities                     (750)            --         6,164             5,414
- ----------------------------------------------------------------------------------------------------------------------------------

Cash flows from financing activities:
      Distributions to stockholders                                         (30,767)            --            --           (30,767)
      Payments of bank note payable, net                                     (4,117)            --            --            (4,117)
      Purchase of treasury stock                                               (146)            --            --              (146)
- ----------------------------------------------------------------------------------------------------------------------------------

      Net cash used for financing activities                                (35,030)            --            --           (35,030)
- ----------------------------------------------------------------------------------------------------------------------------------

Net increase in cash and cash equivalents                                       207          8,973         5,744            14,924

Cash and cash equivalents, beginning of period                               58,793             --            --            58,793
- ----------------------------------------------------------------------------------------------------------------------------------

Cash and cash equivalents, end of period                                  $  59,000      $   8,973     $   5,744         $  73,717
==================================================================================================================================

Supplemental disclosure of cash flow information:
    Cash paid for:
      Interest                                                            $     517      $      --     $      --         $     517
      Income taxes                                                        $   1,020      $      --     $      --         $   1,020
    Non-cash investing and financing activities:
      Assets acquired through issuance of common stock in merger
        transaction, net                                                  $      --      $      --     $ 149,075         $ 149,075
</TABLE>

See accompanying notes to condensed consolidated pro forma financial statements


                                       96
<PAGE>

                        Franklin Street Properties Corp.
            Condensed Consolidated Pro Forma Statements of Cash Flow
                               For the year ended
                                December 31, 2003
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                                     2003 Merger
                                                          Historical                 (Pro Forma)
(in thousands)                                            FSP Corp.   Target REITs    Adjustment    Adjustment       Pro forma
- ------------------------------------------------------------------------------------------------------------------------------

<S>                                                       <C>           <C>           <C>           <C>              <C>
Cash flows from operating activities:
   Net income                                             $  46,380     $  16,372     $   5,359     $ (17,740)       $  50,371
   Adjustments to reconcile net income to net cash
     provided by operating activities:
      Depreciation and amortization expense                   9,668            --         3,298         3,930(d)        16,896
      Amortization of above market lease                         --            --            --         2,160(d)         2,160
      Gain on sale of real estate assets                     (6,362)           --            --            --           (6,362)
  Changes in operating assets and liabilities:
     Restricted cash                                             (1)           --            --            --               (1)
     Tenant rent receivables, net                              (302)           --            --            --             (302)
     Straight-line rents, net                                (1,030)           --            --            --           (1,030)
     Prepaid expenses and other assets, net                     305            --            --            --              305
     Accounts payable and accrued expenses                   (9,053)           --            --            --           (9,053)
     Accrued compensation                                       258            --            --            --              258
     Tenant security deposits                                     1            --            --            --                1
  Payment of deferred leasing commissions                      (487)           --            --            --             (487)
- ------------------------------------------------------------------------------------------------------------------------------

        Net cash provided by operating activities            39,377        16,372         8,657       (11,650)          52,756
- ------------------------------------------------------------------------------------------------------------------------------

Cash flows from investing activities:
      Cash acquired through issuance of common stock
         in merger transaction                               23,524            --            --         6,664(d)        30,188
      Purchase of real estate assets, office computers
         and furniture, capitalized merger costs             (2,388)           --            --          (500)(c)       (2,888)
      Change in deposits on real estate assets                  841            --            --            --              841
      Sale of assets held for syndication                    (4,117)           --            --            --           (4,117)
      Proceeds received on sales of real estate assets       21,870            --            --            --           21,870
- ------------------------------------------------------------------------------------------------------------------------------

      Net cash provided by  investing activities             39,730            --            --         6,164           45,894
- ------------------------------------------------------------------------------------------------------------------------------

Cash flows from financing activities:
      Distributions to stockholders                         (46,747)           --            --            --          (46,747)
      Proceeds from  bank note payable, net                   4,117            --            --            --            4,117
- ------------------------------------------------------------------------------------------------------------------------------

      Net cash  used for financing activities               (42,630)           --            --            --          (42,630)
- ------------------------------------------------------------------------------------------------------------------------------

Net increase (decrease) in cash and cash equivalents         36,477        16,372         8,657        (5,486)          56,020
Cash and cash equivalents, beginning of year                 22,316            --            --            --           22,316
- ------------------------------------------------------------------------------------------------------------------------------

Cash and cash equivalents, end of year                    $  58,793     $  16,372     $   8,657     $  (5,486)       $  78,336
- ------------------------------------------------------------------------------------------------------------------------------

Supplemental disclosure of cash flow information:
    Cash paid for:
      Interest                                            $   1,036     $      --     $      --     $      --        $   1,036
      Income taxes                                            1,963            --            --            --            1,963
    Non-cash investing and financing activities:
      Dividends declared but not paid                     $      --     $   4,092     $      --     $      --        $   4,092
      Assets acquired through issuance of common
        stock in merger transaction, net                  $ 297,468     $      --     $      --     $ 149,075        $ 446,543
</TABLE>

See accompanying notes to condensed consolidated pro forma financial statements


                                       97
<PAGE>

                        Franklin Street Properties Corp.
         NOTES TO CONDENSED CONSOLIDATED PRO FORMA FINANCIAL STATEMENTS

                                   (Unaudited)

Basis of Presentation

      The following unaudited pro forma condensed consolidated financial
statement presentation has been prepared based upon certain pro forma
adjustments to the historical consolidated financial statements of FSP Corp. The
pro forma balance sheets are presented as if the mergers occurred as of June 30,
2004. The pro forma statements of income and the pro forma statements of cash
flow are presented as if the mergers occurred as of the beginning of the period.

      The mergers will be treated as a purchase of assets and each target REIT's
assets and liabilities will be recorded on FSP Corp.'s books at their fair value
as of the effective date of the mergers.


                                       98
<PAGE>

                        Franklin Street Properties Corp.
         NOTES TO CONDENSED CONSOLIDATED PRO FORMA FINANCIAL STATEMENTS

                                   (Unaudited)

                              PRO FORMA ADJUSTMENTS

      Certain assumptions regarding the operations of FSP Corp. have been made
in connection with the preparation of the pro forma condensed consolidated
financial information. These assumptions are as follows:

      (a)   FSP Corp. and each of the target REITs have elected to be, and are
            qualified as, a real estate investment trust for federal income tax
            purposes. Each entity has met the various required tests; therefore,
            no provision for federal or state income taxes has been reflected on
            real estate operations.

      (b)   FSP Corp. has subsidiaries which are not in the business of real
            estate operations. Those subsidiaries are taxable as real estate
            investment trust subsidiaries, or TRS, and are subject to income
            taxes at regular tax rates. The taxes on income shown in the pro
            forma statements of operations are the taxes on income incurred by
            the TRS. There are no material items that would cause a deferred tax
            asset or a deferred tax liability.

      (c)   The costs of the mergers to FSP Corp. are estimated at $500,000 and
            are reflected as paid as of June 30, 2004 and are capitalized to the
            assets acquired.

      (d)   The cost of the property held by each target REIT (including
            capitalized merger costs of $500,000) has been allocated to real
            estate investments, acquired lease origination costs and acquired
            favorable leases. Acquired lease origination costs represent the
            value associated with acquiring an in-place lease (i.e. the market
            cost to execute a similar lease, including leasing commission,
            legal, vacancy and other related costs). Acquired favorable leases
            represents the value associated with a lease which has a rental
            stream with above market rates. The value assigned to buildings,
            land and leases approximates their fair value.

            The following schedule shows the allocation of the aggregate cost of
            the properties based upon appraised values. Depreciation and
            amortization for the target REITs is based on a preliminary
            allocation of the purchase price to real estate investments and to
            the leases acquired. The allocation is subject to change as
            additional information is obtained. An increase in the allocation to
            lease origination costs will result in an increase in amortization
            expense. For each $1,000,000 increase in lease origination costs,
            the related pro forma amortization expense will increase by
            approximately $200,000 per year.

<TABLE>
<CAPTION>
                                                                    Depreciation and Amortization
                                                                    for the               for the
(in thousands)                                         Life    Six months ended          Year Ended
       Asset Category                  Amount        (years)     June 30, 2004       December 31, 2003
- -------------------------------------------------------------------------------------------------------

<S>                                   <C>             <C>            <C>                 <C>
Land                                  $  18,707        N/A           $    --             $    --
Buildings and improvements              116,978        39              1,500               3,000
                                      ---------                      -------             -------
   Real estate investments              135,685                        1,500               3,000
                                      ---------                      -------             -------

Acquired lease origination costs          4,319       3 - 6              465                 930
Acquired favorable leases                 9,571       3 - 6            1,080               2,160
                                      ---------                      -------             -------
   Total lease costs                     13,890                        1,545               3,090
                                      ---------                      -------             -------
      Total                           $ 149,575                      $ 3,045             $ 6,090
                                      =========                      =======             =======
</TABLE>


                                       99
<PAGE>

                        Franklin Street Properties Corp.
         NOTES TO CONDENSED CONSOLIDATED PRO FORMA FINANCIAL STATEMENTS

                                   (Unaudited)

      In addition to real estate assets, FSP Corp. is also acquiring
approximately $6,664,000 in cash from the target REITs. Other assets and
liabilities, net, are expected to be immaterial at the effective date of the
mergers.

      (e)   Management fees charged by FSP Corp. to the target REITs have been
            eliminated from revenue and expenses as follows.

                      Six Months Ended                 Year Ended
                       June 30, 2004                December 31, 2003
               -------------------------------------------------------------
                         $ 118,000                      $ 204,000

      (f)   Interest of $273,000 charged by FSP Corp. on loans to the two target
            REITs syndicated in 2003 has been eliminated from revenue and
            expenses. See footnote (g) for additional interest expense incurred
            during syndications.

      (g)   Income and expenses directly related to the syndication of two
            target REITs in 2003 have been eliminated. A summary of these items
            is as follows:

            Revenue directly related to the syndication of two target REITs in
            2003 that is included in FSP Corp.'s financial statements as
            follows:

            Loan origination fees                $ 4,902,000
            Other organization costs                 656,000
                                                 ------------
                  Total transaction fees                          $ 5,558,000

            Syndication fees, gross              $ 6,820,000
            Syndication fees, rebates             (1,417,000)
                                                 ------------
                  Total syndication fees, net                       5,403,000

            Total revenue adjustment                             $ 10,961,000
                                                                 =============

            The two target REITs have accounted for these fees in their
      financial statements as follows:


             Interest expense                               $ 4,902,000

             Real estate acquisition costs                      656,000
                                                            -----------

                                                            $ 5,558,000
                                                            ===========

             Gross syndication fees recorded as an
                offset to additional paid-in capital        $ 6,820,000
                                                            ===========

            In connection with the syndication of the two target REITs in 2003,
            FSP Corp. incurred direct expenses of $264,000 relating to interest
            expense that is eliminated in the pro forma statement of income.

      (h)   Represents the elimination of FSP Corp.'s proportionate share of
            sponsored REIT revenue and expenses while the target REITs were
            being syndicated.


                                      100
<PAGE>

                        Franklin Street Properties Corp.
         NOTES TO CONDENSED CONSOLIDATED PRO FORMA FINANCIAL STATEMENTS

                                   (Unaudited)


                                       Six Months Ended       Year Ended
            (in thousands)               June 30, 2004     December 31, 2003
            ----------------------------------------------------------------
            Sponsored REIT revenue        $       --         $   1,468
            Sponsored REIT expenses               --             1,208
                                          ----------         ---------
                                          $       --         $     260
                                          ==========         =========

      (i)   Approximately 10,894,994 shares of FSP common stock will be issued
            in exchange for the 1,822.5 outstanding shares of target REIT
            preferred stock in connection with the mergers.

      (j)   Represents the revenue and expenses of the 13 sponsored REITs
            acquired by FSP Corp. from January 1, 2003 to May 31, 2003.

                                                               For the period
            (unadudited)                                       January 1, 2003
            (in thousands)                                     to May 31, 2003
                                                               ---------------

            Revenue                                                $  15,204
            Real estate operating expenses                            (3,997)
            Real estate taxes and insurance                           (2,667)
            Deprciation and amortization                              (3,298)
            Interest income                                              117
                                                                   ---------
            Net income                                             $   5,359
                                                                   =========

            Weighted average shares outstanding are adjusted by approximately
            10,416,000 shares which is the impact of the shares assumed to be
            issued on January 1, 2003.


                                      101
<PAGE>

                        Franklin Street Properties Corp.
         NOTES TO CONDENSED CONSOLIDATED PRO FORMA FINANCIAL STATEMENTS

                                   (Unaudited)

      (k)   The following table summarizes the assets acquired from the target
            REITs as of June 30, 2004.

<TABLE>
<CAPTION>
(in thousands)
                                     Montague  Addison Circle  Royal Ridge  Collins Crossing   Total
                                     --------  --------------  -----------  ----------------   -----

<S>                                  <C>          <C>            <C>             <C>          <C>
Assets:
Real estate, cost(1)                 $ 20,000     $ 54,500       $ 26,075        $ 48,500     $149,075
Cash                                    2,035        1,677            967           1,985        6,664
Other assets and liabilities, net          --           --             --              --           --
                                     --------     --------       --------        --------     --------
      Total assets acquired          $ 22,035     $ 56,177       $ 27,042        $ 50,485     $155,739
                                     ========     ========       ========        ========     ========

(1)   Cost of property at appraised value including land, buildings and acquired leases.
</TABLE>

      (l)   The following information represents the historical revenue and
            certain operating expenses for the target REITs for the six months
            ended June 30, 2004.

<TABLE>
<CAPTION>
(in thousands)
                                    Montague  Addison Circle  Royal Ridge  Collins Crossing   Total
                                    --------  --------------  -----------  ----------------   -----

<S>                                 <C>           <C>           <C>            <C>           <C>
Revenue:
Rental                              $  2,296      $  4,720      $  1,750       $  3,924      $ 12,690
                                    --------      --------      --------       --------      --------
Total Revenue                          2,296         4,720         1,750          3,924        12,690
                                    --------      --------      --------       --------      --------

Expenses:
Rental operating expenses                131           805           407            909         2,252
Real estate taxes and insurance          140           683           164            478         1,465
                                    --------      --------      --------       --------      --------
Total expenses                           271         1,488           571          1,387         3,717
                                    --------      --------      --------       --------      --------

Net income                          $  2,025      $  3,232      $  1,179       $  2,537      $  8,973
                                    ========      ========      ========       ========      ========
</TABLE>


                                      102
<PAGE>

                        Franklin Street Properties Corp.
         NOTES TO CONDENSED CONSOLIDATED PRO FORMA FINANCIAL STATEMENTS

                                   (Unaudited)

      (m)   The following information represents the historical revenue and
            expenses for the target REITs for the year ended December 12, 2003.

<TABLE>
<CAPTION>
(in thousands)
                                     Montague  Addison Circle  Royal Ridge  Collins Crossing    Total
                                     --------  --------------  -----------  ----------------    -----

<S>                                  <C>           <C>           <C>            <C>            <C>
Revenue:
Rental                               $  4,807      $  8,579      $  2,693       $  7,811       $ 23,890
                                     --------      --------      --------       --------       --------
Total Revenue                           4,807         8,579         2,693          7,811         23,890
                                     --------      --------      --------       --------       --------

Expenses:
Rental operating expenses                 314         1,783           831          1,707          4,635
Real estate taxes and insurance           339         1,354           274            916          2,883
                                     --------      --------      --------       --------       --------
Total expenses                            653         3,137         1,105          2,623          7,518
                                     --------      --------      --------       --------       --------

Net income                           $  4,154      $  5,442      $  1,588       $  5,188       $ 16,372
                                     ========      ========      ========       ========       ========
</TABLE>


                                      103
<PAGE>

                           COMPARATIVE PER SHARE DATA

      The following tables present on a per share basis:

      (a) Basic and diluted net income book value, and dividends declared for
FSP Corp. and each of the target REITs on a historical basis.

      (b) Consolidated pro forma basic and diluted net income per share, book
value per share and dividends per share for FSP Corp. This table shows the
effect of the mergers from the perspective of an owner of one share of FSP
common stock.

      (c) Equivalent pro forma basic and diluted net income per share,
equivalent pro forma book value per share and equivalent pro forma dividends per
share for each of the target REITs. This table shows the effect of the mergers
from the perspective of an owner of one share of stock of a target REIT. The
consolidated pro forma data are multiplied by the number of shares of FSP common
stock issuable in exchange for each share of target stock, also known as the
exchange ratio, as shown in the following table:

                 Target REIT                            Exchange Ratio
                 -----------                            --------------
                 Addison                                   5,948.67
                 Collins Crossing                          6,167.63
                 Montague                                  5,649.72
                 Royal Ridge                               6,055.79

      The pro forma financial data and equivalent pro forma data are unaudited
and are not necessarily indicative of the operating results that would have been
achieved had the mergers occurred as of the beginning of the period and should
not be construed as representative of future operations.

      FSP Corp. calculates historical book value per share by dividing
stockholders' equity by the number of shares of common stock (or preferred
stock, in the case of the target REITs) outstanding at the end of each period.

      FSP Corp. calculates consolidated pro forma net income per share data for
FSP Corp. as if the mergers occurred on January 1, 2003 and 2004 and resulted in
weighted average shares of 60,522,000 and 60,525,000 for the six months ended
June 30, 2004 and for the year ended December 31, 2003, respectively.

      FSP Corp. calculates consolidated pro forma book value per share data for
FSP Corp. as if the mergers occurred on June 30, 2004 and resulted in an ending
number of shares of 60,525,000.

      FSP Corp. calculates consolidated pro forma dividends per share by adding
the total dividends declared by FSP Corp. plus dividends declared by the target
REITs and dividing this sum by 60,525,000 shares.

      FSP Corp. calculates equivalent pro forma net income per share for each
target REIT by multiplying the consolidated pro forma net income per share by
the exchange ratio.

      FSP Corp. calculates equivalent pro forma book value per share for each
target REIT by multiplying the consolidated pro forma book value per share by
the exchange ratio.

      FSP Corp. calculates equivalent pro forma dividends per share for each
target REIT by multiplying the consolidated pro forma dividends per share by the
exchange ratio.

      For the purposes of the consolidated pro forma net income per share and
book value per share data, FSP Corp.'s historical financial data have been
consolidated with the target REITs' financial data.

                                      104
<PAGE>

                        Franklin Street Properties Corp.
                           Comparative Per Share Data
                       As of and for the six months ended
                                  June 30, 2004
                                   (unaudited)

                                                         Pro forma    Pro forma
                                          Historical   Consolidated   Equivalent
                                          -------------------------------------
Net income per share
  basic and diluted
    FSP Corp.                              $   0.54      $   0.54      $     --

    Montague                                  3,850            --         3,051
    Addison Circle                            3,953            --         3,212
    Royal Ridge                               2,282            --         3,270
    Collins Crossing                          2,616            --         3,331

Book value per share
    FSP Corp.                              $  10.34      $  11.05      $     --

    Montague                                 81,985            --        62,429
    Addison Circle                           85,752            --        65,733
    Royal Ridge                              82,477            --        66,916
    Collins Crossing                         83,998            --        68,152

Dividends declared per share
    FSP Corp.                              $   0.62      $   0.58      $     --

    Montague                                  2,934            --         3,277
    Addison Circle                            2,024            --         3,450
    Royal Ridge                               1,798                       3,512
    Collins Crossing                          2,223            --         3,577


                                      105
<PAGE>

                        Franklin Street Properties Corp.
                           Comparative Per Share Data
                          As of and for the year ended
                                December 31, 2003
                                   (unaudited)

                                                         Pro forma    Pro forma
                                          Historical   Consolidated   Equivalent
                                          -------------------------------------
Net income (loss) per share
  basic and diluted
    FSP Corp.                              $   1.18       $   0.83      $     --

    Montague                                  7,991             --         4,689
    Addison Circle                            6,297             --         4,937
    Royal Ridge                              (3,267)            --         5,026
    Collins Crossing                         (2,431)            --         5,119

Book value per share
    FSP Corp.                              $  10.41       $     --      $     --

    Montague                                 81,075             --            --
    Addison Circle                           83,824             --            --
    Royal Ridge                              81,997             --            --
    Collins Crossing                         83,605                           --

Dividends declared per share
    FSP Corp.                              $   1.24       $   1.01      $     --

    Montague                                 11,120             --         5,706
    Addison Circle                            7,423             --         6,008
    Royal Ridge                               4,669             --         6,116
    Collins Crossing                          4,310             --         6,229


                                      106
<PAGE>

                  COMPARISON OF THE TARGET REITS AND FSP CORP.

      The information below highlights a number of the significant differences
among the target REITs and FSP Corp. relating to, among other things, forms of
organization, investment objectives, asset diversification and capitalization.
These comparisons are intended to assist target REIT stockholders in
understanding how their investments will be changed as a result of the mergers.

      Form of Organization. The target REITs and FSP Corp. are each vehicles
appropriate for holding real estate investments and afford passive investors,
such as target REIT stockholders, certain benefits, including limited liability
and the avoidance of double-level taxation. The target REITs are under the
control of their respective target boards, while FSP Corp. will continue to be
governed by the FSP board. The target REITs are organized as Delaware
corporations, and FSP Corp. is a Maryland corporation.

      Length of Investment. Target REIT stockholders in each of the target REITs
expect liquidation of their investments when the assets of the target REITs are
liquidated within a five to ten year period following the syndication of a
target REIT. In contrast, FSP Corp. does not expect to dispose of its assets
within any prescribed periods.

      Properties and Diversification. The real estate portfolio of each target
REIT is limited to the assets acquired with its initial equity offering. FSP
Corp. will hold a real estate portfolio that is substantially larger and more
diversified than the portfolio of any of the target REITs. An investment in FSP
Corp. should not be viewed as an investment in a specific pool of assets, but
instead as an investment in an ongoing real estate investment business, subject
to the risks normally attendant to ongoing real estate ownership, to the risks
related to the real estate investment banking/brokerage business and to the
risks related to acquisitions of additional properties.

      Additional Equity. As the target REITs are not authorized to issue
additional shares of target stock or other equity interests without the approval
of their respective target REIT stockholders, the target stock is not subject to
dilution. In contrast, FSP Corp. has substantial flexibility to raise equity
capital to finance its businesses and affairs through the issuance of equity
securities.

      Voting Rights. Target REIT stockholders have one vote in respect of each
share of target stock held on matters to which the target REIT stockholders have
the right to vote. These matters generally consist of:

      o     any amendment to or repeal of any provision of the Certificate of
            Incorporation of the respective target REIT;

      o     any merger or consolidation by the respective target REIT into or
            with any other corporation or other entity or any sale of all or
            substantially all of the respective target REIT's assets; and


                                      107
<PAGE>

      o     any authorization or issuance of a new class or series of capital
            stock or an increase of the number of authorized shares of any
            existing class or classes or series of capital stock.

      A stockholder in FSP Corp. will have one vote in respect of each share of
FSP common stock of record on all matters to be voted upon by the stockholders.
Matters submitted to the stockholders generally require the affirmative vote of
stockholders holding a majority of the then outstanding capital stock present in
person or by proxy entitled to vote thereon at a duly convened meeting of
stockholders, except for the election of a director, which requires a plurality
of all the votes cast at such a meeting. The Articles allow the FSP board to
increase or decrease the number of shares of stock of any class that FSP Corp.
has authority to issue without submitting the matter to the stockholders.
Certain amendments to the Articles require the approval of a specified
super-majority (80%) of the shares of capital stock of FSP Corp. issued and
outstanding and entitled to vote on the matter.

      Compensation to FSP Corp. FSP Corp. will receive no fees or other
compensation in connection with the mergers. FSP Property Management, a wholly
owned subsidiary of FSP Corp., currently receives asset management fees from the
target REITs ranging from $34,000 to $81,000 per annum. As a result of the
mergers, fee income received by FSP Property Management from the four target
REITs will be eliminated on the consolidated financial statements of the
combined company for accounting purposes. The executive officers and directors
of the target REITs receive no compensation from the target REITs. Such persons
will, however, continue to receive compensation from FSP Corp. See "Management -
Management Compensation".

      Percentage Ownership. As a result of the significantly higher number of
issued shares in FSP Corp. as compared to the target REITs, the target REIT
stockholders will own a much smaller percentage of FSP Corp. relative to their
ownership interest in the target REITs and, accordingly, will have less power to
control the outcome of matters submitted to a vote of the stockholders and will
receive a lesser percentage of any dividends or other distributions.


                                      108
<PAGE>

                              CONFLICTS OF INTEREST

      A number of conflicts of interest are inherent in the relationships among
the target REITs, the target boards, FSP Corp. and the FSP board. Certain of
these conflicts of interest are summarized below.

      FSP Investments, a subsidiary of FSP Corp., syndicated each target REIT.
Moreover, each executive officer and/or director of each target REIT are
directors and executive officers of FSP Corp. Each target board and the FSP
board have independent obligations to ensure that such target REIT's or FSP
Corp.'s participation, respectively, in the merger agreement and the
determination of the merger consideration is fair and equitable, without regard
to whether the merger agreement and the determination of the merger
consideration are fair and equitable to the other participants (including the
other target REITs). The FSP board and each target board have sought to
discharge faithfully their respective obligations to FSP Corp. and the
applicable target REIT; however, target REIT stockholders should consider that
the executive officers and directors of each target REIT serve in a similar
capacity with respect to FSP Corp. The special committees of the target boards,
consisting of Messrs. MacPhee and Gribbell, each a director of the target REITs
and an executive vice president of FSP Corp., engaged in negotiations of the
terms of the merger agreement and the amount of the merger consideration, but
each special committee member was subject to a conflict of interest. If each
target REIT had a separate board of directors with executive officers who did
not serve in similar capacities for FSP Corp. and directors who did not own FSP
common stock, these persons would have had an independent perspective which
might have led them to advocate positions during the negotiation and structuring
of the merger agreement and the determination of the merger consideration more
favorable to the target REIT stockholders than those taken by the target boards.

      The conflicts of interest inherent in the relationships among the target
REITs, the target boards, FSP Corp., the FSP board and their respective
affiliates are as follows:

      o     George J. Carter, the President and a director of each target REIT,
            is President, Chief Executive Officer and a director of FSP Corp.
            and owns an aggregate of 775,531 shares of FSP common stock;

      o     R. Scott MacPhee, an Executive Vice President and a director of each
            target REIT and a member of each special committee, is also an
            Executive Vice President of FSP Corp. and owns an aggregate of
            372,451 shares of FSP common stock;

      o     Richard R. Norris, an Executive Vice President and a director of
            each target REIT, is also a director and an Executive Vice President
            of FSP Corp. and owns an aggregate of 258,087 shares of FSP common
            stock;

      o     William W. Gribbell, an Executive Vice President and a director of
            each target REIT and a member of each special committee, is also an
            Executive Vice President of FSP Corp. and owns an aggregate of
            129,761 shares of FSP common stock;


                                      109
<PAGE>

      o     Barbara J. Fournier, Vice President, Chief Operating Officer,
            Treasurer, Secretary and a director of each target REIT, is also
            Vice President, Chief Operating Officer, Treasurer, Secretary and a
            director of FSP Corp. and owns an aggregate of 27,934 shares of FSP
            common stock; and

      o     Janet P. Notopoulos, Vice President of each target REIT, is also a
            Vice President and director of FSP Corp. and owns an aggregate of
            14,985 shares of FSP common stock.

      Each target board established a special committee consisting of Messrs.
MacPhee and Gribbell, the only members of the target boards who are not also
members of the FSP board. Messrs. MacPhee and Gribbell serve as executive vice
presidents of FSP Corp. Under the Delaware general corporation law, the target
boards cannot delegate to a third party their fiduciary duties relating to the
determination of whether the transactions contemplated by the mergers were or
were not fair to the target REIT stockholders.

      Each target board considered increasing its board size to include an
independent director to perform the function of the special committees. However,
each target board concluded that, given the potential liability of a director
voting on the mergers, it would be difficult to retain someone with the
knowledge and credentials necessary to fulfill the role of an independent
director of a REIT who would be willing to take on the role of independent
director of any of the target REITs without being substantially compensated and
without being covered by director liability insurance. None of the target REITs
currently has director and officer liability insurance. Each target board
determined that the cost of compensating an independent director and obtaining
director and officer liability insurance would be substantial and not in the
best interests of its target REIT stockholders. For this reason, none of the
target boards appointed an independent director to perform the functions of the
special committees.

      Messrs. MacPhee and Gribbell, the members of the special committees, both
served as directors on boards of other sponsored entities which engaged in
similar transactions with FSP Corp., including the 13 sponsored REITs acquired
by FSP Corp. in June 2003. The sponsored REITs involved in those transactions
did not appoint independent directors to serve as special committees and, in
fact, did not designate any of their members to serve on a special committee.
Moreover, no stockholder of any of the 13 sponsored REITs acquired by FSP Corp.
in June 2003 availed himself of appraisal rights. Based on their experience in
voting on prior transactions, Messrs. MacPhee and Gribbell believed that they
could and did faithfully execute their duties to the target REIT stockholders.
Morever, George J. Carter, the chief executive officer of FSP Corp., instructed
Messrs. MacPhee and Gribbell to execute their duties on behalf of the target
REITs and their stockholders vigorously and assured Messrs. MacPhee and Gribbell
that there would be no adverse consequences to their employment by FSP Corp. as
a result of their vigorously executing their duties.

      Barry Silverstein, Dennis J. McGillicuddy and John N. Burke are the only
directors of FSP Corp. who are not also officers or directors of any target
REIT. The remainder of the officers and directors of FSP Corp. serve as a
director and/or officer, in the positions listed above, of each target REIT.
Upon completion of the mergers, Mr. Silverstein's percentage ownership interest
of FSP Corp. will decrease from 9.67% to 9.62%, Mr. McGillicuddy's percentage
ownership interest of FSP Corp. will decrease from 7.24% to 6.07%, and the
percentage ownership of the current directors and executive officers of FSP
Corp. as a group will decrease from 19.07% to 17.46%. Mr. Burke does not own any
shares of FSP common stock or any shares of target stock.


                                      110
<PAGE>

                            FIDUCIARY RESPONSIBILITY

      The standard of conduct for directors of a Maryland corporation is
governed by Section 2-405.1 of the Maryland General Corporation Law, which
requires that a director of a Maryland corporation perform his duties (i) in
good faith, (ii) in a manner he reasonably believes to be in the best interests
of the corporation, and (iii) with the care an ordinarily prudent person in a
like position would use under similar circumstances.

      The Delaware general corporation law is silent as to the nature of the
duties of directors of a Delaware corporation. The standard of conduct for
directors has instead developed through written opinions of the Delaware courts
in cases decided by those courts. A director of a Delaware corporation is
subject to both a duty of loyalty and a duty of care. The duty of loyalty
requires a director to refrain from self-dealing, and to act in good faith and
in what he believes to be the best interests of the corporation and its
stockholders. When the interests of a director with respect to a transaction
conflict with those of the corporation, the transaction must be fair to the
corporation. The duty of care requires a director to exercise an informed
business judgment, meaning that he must inform himself of all material
information reasonably available. Having become so informed, a director then
must use that amount of care which an ordinarily careful and prudent person
would use in similar circumstances.


                                      111
<PAGE>

                        COMPARISON OF STOCKHOLDER RIGHTS

      The rights of stockholders in each target REIT are governed by the charter
and bylaws of that REIT and by the laws of the State of Delaware. The rights of
FSP stockholders are governed by FSP Corp.'s charter and bylaws, each as
amended, and by the laws of the State of Maryland. As a result of the mergers,
the target REIT stockholders will become FSP stockholders and their rights will
thereafter be governed by FSP Corp.'s charter and bylaws and by the laws of the
State of Maryland.

      The following summary outlines the material differences between the
Delaware general corporation law and the Maryland general corporation law,
between the charter of each target REIT and the FSP Corp. charter, and between
the bylaws of each target REIT and the FSP Corp. bylaws. Each target REIT
stockholder is encouraged to review the full text of each of the charter and
bylaws of each target REIT in which said stockholder owns stock, the FSP Corp.
charter, the FSP Corp. bylaws, the Delaware General Corporation Law, the
Maryland General Corporation Law and other corporation-related laws of Delaware
and Maryland insofar as they relate to corporations organized in such states.
The FSP Corp. charter and the FSP Corp. bylaws have been filed as exhibits to
the material filed by FSP Corp. with the Securities and Exchange Commission. For
information as to how these documents may be obtained, see "Where You Can Find
More Information."

                      Target REIT (Delaware)        FSP Corp. (Maryland)

Authorized and        Each target REIT is           FSP Corp. is authorized to
outstanding common    authorized to issue 1 share   issue 180,000,000 shares of
stock                 of common stock.  On August   common stock.  On August 20,
                      13, 2004, 1 share of common   2004, 49,629,762 shares of
                      stock was issued and          common stock were issued and
                      outstanding in each target    outstanding in FSP Corp.
                      REIT and held by FSP Corp.

Description of        The holders of common stock   FSP stockholders are
common stock          in each target REIT are       entitled to one vote for
                      entitled to one vote for      each share held of record on
                      each share held at all        all matters submitted to a
                      meetings of stockholders      vote of stockholders.
                      (and written actions in lieu  Shares of FSP common stock
                      of meetings).  The voting,    have equal dividend,
                      dividend and liquidation      distribution, and
                      rights of the holders of the  liquidation rights and have
                      common stock are subject to   no preference or exchange
                      and qualified by the rights   rights.  In addition, shares
                      of the holders of the         of FSP common stock have no
                      preferred stock.              conversion, sinking fund, or
                                                    preemptive rights.

Authorized and        FSP Addison Circle Corp. is   FSP Corp. is authorized to
outstanding           authorized to issue 636       issue 20,000,000 shares of
preferred stock       shares of preferred stock.    preferred stock in one or
                      On August 13, 2004, 636       more separately designated
                      shares of preferred stock     classes.  On August 13,
                      were issued and outstanding.  2004, no shares of preferred
                                                    stock were outstanding.


                                      112
<PAGE>

                      Target REIT (Delaware)        FSP Corp. (Maryland)

                      FSP Collins Crossing Corp.
                      is authorized to issue 555
                      shares of preferred stock.
                      On August 13, 2004, 555
                      shares of preferred stock
                      were issued and outstanding.

                      FSP Montague Business Center
                      Corp. is authorized to issue
                      334 shares of preferred
                      stock. On August 13, 2004,
                      334 shares of preferred
                      stock were issued and
                      outstanding.

                      FSP Royal Ridge Corp. is
                      authorized to issue 297.5
                      shares of preferred stock.
                      On August 13, 2004, 297.5
                      shares of preferred stock
                      were issued and outstanding.

Description of        Under the bylaws of each      Under FSP Corp.'s charter,
preferred stock       target REIT, each target      the FSP board has the
                      board has the authority,      authority, without further
                      subject to the provisions of  action by the FSP
                      the charter or a vote by the  stockholders, to issue up to
                      target REIT stockholders, to  20,000,000 shares of
                      issue, sell, transfer, or     preferred stock in one or
                      otherwise dispose of the      more separately designated
                      whole or any part of any      classes.  The FSP board may
                      unissued balance of the       authorize the issuance of
                      authorized capital stock,     shares of preferred stock
                      including preferred stock,    with terms and conditions
                      of the target REIT for such   which could have the effect
                      lawful consideration and on   of discouraging a takeover
                      such terms as such target     or other transaction in
                      board may determine.  Any     which holders of some, or a
                      issuance of any new class or  majority of, shares of FSP
                      classes or series of capital  common stock might receive a
                      stock or any increase in the  premium for their shares of
                      number of authorized shares   FSP common stock over the
                      of any existing class or      then-prevailing market price
                      classes or series of capital  of those shares of FSP
                      stock requires the            common stock.
                      affirmative vote or written
                      consent of the holders of
                      not less than 66.67% of the
                      then outstanding shares of
                      preferred stock.


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                      Target REIT (Delaware)        FSP Corp. (Maryland)

                      Except as provided by law,
                      the holders of preferred
                      stock have no voting rights
                      on any matter presented to
                      the target REIT stockholders
                      for their action or
                      consideration at any meeting
                      (or by written action of
                      stockholders in lieu of a
                      meeting), with the exception
                      of (1) any amendment of or
                      the repeal or addition of
                      any provision to the target
                      REIT's charter, (2) any
                      merger or consolidation into
                      or with any other
                      corporation or other entity
                      or sale of all of
                      substantially all of the
                      target REIT's assets, (3)
                      the removal of one or more
                      members of the target REIT
                      board pursuant to a class
                      vote provision contained in
                      the charter (see "Removal of
                      directors," below), and (4)
                      the election of directors to
                      fill a vacancy created by
                      any such removal.

Ownership limits      The charter of each target    FSP Corp.'s charter provides
related to status as  REIT provides that any        that an FSP stockholder may
a real estate         purported transfer or         be limited to owning, either
investment trust      acquisition of preferred      directly or under applicable
                      stock that would result in    attribution rules of the tax
                      the disqualification of the   code, no more than 9.8% of
                      corporation as a real estate  the lesser of the value or
                      investment trust is void.     the number of equity shares
                                                    of FSP Corp., which we call
                                                    the ownership limit.  No FSP
                                                    stockholder may acquire or
                                                    transfer shares that would
                                                    result in shares of FSP
                                                    common stock being
                                                    beneficially owned by fewer
                                                    than 100 persons.  Any
                                                    transfer that would cause a
                                                    stockholder to beneficially
                                                    or constructively own shares
                                                    of FSP Corp. in excess of
                                                    the ownership limit, result
                                                    in shares of FSP Corp. being
                                                    beneficially owned by fewer


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                      Target REIT (Delaware)        FSP Corp. (Maryland)

                                                    than 100 persons, result in
                                                    FSP Corp. being "closely
                                                    held" as defined in the
                                                    applicable section of the
                                                    tax code, or otherwise cause
                                                    FSP Corp. to fail to qualify
                                                    as a real estate investment
                                                    trust is void.  Prior to the
                                                    listing of FSP common stock
                                                    on the AMEX or other
                                                    national securities exchange
                                                    or the NASDAQ National
                                                    Market, FSP Corp. has the
                                                    right to redeem any shares
                                                    of FSP common stock that are
                                                    acquired or transferred in
                                                    violation of these
                                                    provisions at the market
                                                    price, which is determined
                                                    by the FSP board.  The FSP
                                                    board has the right to
                                                    refuse to give effect to the
                                                    acquisition or transfer of
                                                    shares by an FSP stockholder
                                                    in violation of these
                                                    provisions.

Rights of             The target REIT stockholders  FSP Corp.'s charter provides
stockholders to       have no redemption rights     that on an annual basis FSP
redeem shares         for the target stock.         Corp. will use its best
                                                    efforts to redeem any shares
                                                    of FSP common stock from FSP
                                                    stockholders desiring to
                                                    sell shares.  Any FSP
                                                    stockholder wishing to take
                                                    advantage of this
                                                    opportunity must so request
                                                    no later than July 1 of any
                                                    year for a redemption that
                                                    would be effective the
                                                    following January 1.  The
                                                    purchase price paid by FSP
                                                    Corp. will be 90% of the
                                                    fair market value of the
                                                    shares purchased, as
                                                    determined by the FSP board
                                                    in its sole and absolute
                                                    discretion after
                                                    consultation with an adviser
                                                    selected by the FSP board.

                                                    FSP Corp. will not redeem
                                                    any shares of FSP common
                                                    stock pursuant to this
                                                    provision if: FSP Corp. is
                                                    insolvent or the redemption


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                      Target REIT (Delaware)        FSP Corp. (Maryland)

                                                    would render FSP Corp.
                                                    insolvent; the redemption
                                                    would impair the capital or
                                                    operations of FSP Corp.; the
                                                    redemption would contravene
                                                    any provision of federal or
                                                    state securities laws; the
                                                    redemption would result in
                                                    FSP Corp.'s failing to
                                                    qualify as a real estate
                                                    investment trust; or the FSP
                                                    board determines that the
                                                    redemption would otherwise
                                                    not be in the best interests
                                                    of FSP Corp.

                                                    If FSP Corp. is unable to
                                                    purchase any shares of FSP
                                                    common stock offered for
                                                    redemption, FSP Corp. will
                                                    use its best efforts to
                                                    arrange for a purchase by a
                                                    third party or parties, each
                                                    of whom must be an
                                                    accredited investor within
                                                    the meaning of Regulation D
                                                    and must have a pre-existing
                                                    relationship with FSP Corp.
                                                    In addition, FSP Corp. will
                                                    have the right to satisfy
                                                    its obligation to effect
                                                    redemption by arranging for
                                                    a purchase by such a third
                                                    party or parties at the
                                                    redemption price.

                                                    FSP Corp. has no obligations
                                                    to redeem shares of FSP
                                                    common stock during any
                                                    period that the FSP common
                                                    stock is listed for trading
                                                    on a national securities
                                                    exchange, such as the AMEX,
                                                    or the NASDAQ National
                                                    Market System.

Special meetings of   Under the Delaware general    Under Maryland law, a
stockholders          corporation law, a special    special meeting of
                      meeting of stockholders may   stockholders may be called
                      be called by the board of     by the president, the board
                      directors or by any persons   of directors, or any other
                      as may be authorized by a     person as may be authorized
                      corporation's charter or      by a corporation's charter
                      bylaws.                       or bylaws.  A special
                                                    meeting of stockholders may


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                      Target REIT (Delaware)        FSP Corp. (Maryland)

                      The bylaws of each target     also be called by the
                      REIT provide that the         written request of
                      President, the Chairman of    stockholders entitled to
                      the Board (for Addison        cast at least 25 percent of
                      Circle and Royal Ridge        all the votes entitled to be
                      only), or the target REIT     cast at the meeting, subject
                      board may call a special      to certain statutory
                      meeting of the stockholders   provisions.
                      at any time.
                                                    FSP Corp.'s bylaws provide
                                                    that the President, Chief
                                                    Executive Officer or a
                                                    majority of the FSP board
                                                    may call a special meeting
                                                    of the stockholders.
                                                    Special meetings shall also
                                                    be called by the Secretary
                                                    of FSP Corp. upon the
                                                    written request of the
                                                    holders of shares entitled
                                                    to cast more than 50% of the
                                                    votes entitled to be cast at
                                                    such a meeting.

Action by written     Under the Delaware general    Under Maryland law, any
consent in lieu of a  corporation law, any action   action required or permitted
stockholder meeting   required or permitted to be   to be taken at a meeting of
                      taken at a meeting of the     the FSP stockholders may be
                      stockholders may be taken     taken without a meeting if a
                      without a meeting by written  unanimous consent which sets
                      consent of the holders of     forth the action is given in
                      outstanding shares having     writing or by electronic
                      not less than the minimum     transmission by each
                      number of votes that would    stockholder entitled to vote
                      be necessary to authorize or  on the matter, and filed in
                      take such action at a         paper or electronic form
                      meeting at which all shares   with the records of meetings
                      entitled to vote thereon      of stockholders.  In actions
                      were present and voted.       concerning the election of
                                                    directors, unless the
                      The bylaws of each target     charter requires otherwise,
                      REIT provide that the target  the holders of any class of
                      REIT stockholders may take    stock other than common
                      action by written consent     stock entitled to vote
                      without a meeting and         generally in the election of
                      without prior notice,         directors may take action or
                      provided that a consent in    consent to any action by
                      writing, setting forth the    delivering a consent in
                      action so taken, is signed    writing or by electronic
                      by the holders of             transmission of the
                      outstanding shares having     stockholders entitled to
                      not less than the minimum     cast not less than the


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                      Target REIT (Delaware)        FSP Corp. (Maryland)

                      number of votes that would    minimum number of votes that
                      be necessary to authorize or  would be necessary to
                      take such action at a         authorize or take the action
                      meeting at which all shares   at a meeting of stockholders
                      entitled to vote on such      if the corporation gives
                      action were present and       notice of the action to each
                      voted.                        stockholder not later than
                                                    ten days after the effective
                                                    time of the action.

                                                    FSP Corp.'s bylaws provide
                                                    that any action required or
                                                    permitted to be taken at a
                                                    meeting of stockholders may
                                                    be taken without such a
                                                    meeting by unanimous written
                                                    consent of the stockholders
                                                    entitled to vote on the
                                                    matter provided that any
                                                    stockholder entitled to
                                                    receive notice (but not
                                                    vote) has provided a written
                                                    waiver of any right to
                                                    dissent from such action.

Record date           Under the Delaware general    Under Maryland law, the
                      corporation law, the board    board of directors has the
                      of directors may fix a        sole power to fix the record
                      record date for determining   date for determining
                      the stockholders entitled to  stockholders entitled to
                      vote at any meeting of the    request a special meeting of
                      stockholders, provided that   the stockholders and the
                      the record date does not      record date for determining
                      precede the date of the       stockholders entitled to
                      resolution fixing the record  notice of and to vote at the
                      date nor fall more than 60    special meeting.
                      nor less than ten days
                      before the date of such       FSP Corp.'s bylaws provide
                      meeting.  If no record date   that the FSP board may set a
                      is fixed by the board of      record date for the
                      directors, the record date    determination of the
                      will be the close of          stockholders entitled to
                      business on the day next      notice of or to vote at any
                      preceding the day on which    meeting of stockholders, or
                      notice is given, or if        stockholders entitled to
                      notice is waived, at the      receive payment of any
                      close of business on the day  dividend or the allotment of
                      next preceding the day on     any other rights, or in
                      which the meeting is held.    order to make determination
                                                    of stockholders for any
                      The bylaws of each target     other proper purpose;
                      REIT provide that such        provided that the date is
                      target REIT board may fix a   not more than 90 days and,


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                      Target REIT (Delaware)        FSP Corp. (Maryland)

                      date as a record date for     in the case of a meeting of
                      the determination of the      stockholders, not less than
                      stockholders entitled to      ten days, before the date on
                      notice of or to vote at any   which the meeting or
                      meeting of stockholders, or   particular action requiring
                      to express consent or         such determination of
                      dissent to action in writing  stockholders is to be held
                      without a meeting, or         or taken.  If no record date
                      entitled to receive payment   is fixed, the record date
                      of any dividend or other      for the determination of
                      distribution or allotment of  stockholders entitled to
                      any rights, or for the        notice of or to vote at a
                      purpose of any other lawful   meeting of stockholders
                      action; provided that that    shall be at the close of
                      date is not more than 60      business on the day on which
                      days nor less than ten days   the notice of meeting is
                      before the date of such       mailed or the 30th date
                      meeting, nor more than ten    before the meeting,
                      days after the date of        whichever is the closer date
                      adoption of a record date     to the meeting; and the
                      for a written consent         record date for the
                      without a meeting, nor more   determination of
                      than 60 days prior to any     stockholders entitled to
                      other action to which such    receive payment of a
                      record date relates.  If no   dividend or an allotment of
                      record date is fixed, the     any other rights shall be
                      record date for determining   the close of business on the
                      stockholders entitled to      day on which the resolution
                      notice of or to vote at a     of the directors declaring
                      meeting of stockholders       the dividend or allotment of
                      shall be the close of         rights is adopted, but the
                      business on the day before    payment or allotment may not
                      the meeting.  The record      be made more than 60 days
                      date for determining          following the date on which
                      stockholders entitled to      such resolution is adopted.
                      express written consent
                      without a meeting shall be
                      the day on which the first
                      written consent is properly
                      delivered to the
                      corporation.  The record
                      date for any other purpose
                      shall be the close of the
                      business day on which the
                      target REIT board adopts the
                      resolution relating to such
                      purpose.

Notice requirement    Under the Delaware general    Under Maryland law, written
for stockholder       corporation law, written      or electronic notice of any
meetings              notice of any meeting of the  meeting of the stockholders
                      stockholders must be given    must be given not less than
                      not less than ten nor more    ten nor more than 90 days
                      than 60 days before the date  before the date of the
                      of the meeting to each        meeting to each stockholder
                      stockholder entitled to vote  entitled to vote at such


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                      Target REIT (Delaware)        FSP Corp. (Maryland)

                      at such meeting.              meeting or otherwise
                                                    entitled to notice of such
                      The bylaws of each target     meeting.
                      REIT provide that except as
                      otherwise provided by law,    FSP Corp.'s bylaws provide
                      written notice of any         that not less than ten nor
                      meeting of the stockholders   more than 90 days before
                      shall be given not less than  each meeting of
                      ten nor more than 60 days     stockholders, the secretary
                      before the date of the        shall give to each
                      meeting to each stockholder   stockholder entitled to vote
                      entitled to vote at such      at such meeting and to each
                      meeting.                      stockholder not entitled to
                                                    vote, who is nevertheless
                                                    entitled to notice of the
                                                    meeting, written or printed
                                                    notice stating the time and
                                                    place of the meeting and, in
                                                    the case of a special
                                                    meeting or as otherwise may
                                                    be required by statute, the
                                                    purpose for which the
                                                    meeting is called.

Advance notice        The Delaware general          Under Maryland law, the
provisions for board  corporation law does not      charter or bylaws of a
nomination and other  contain any specific advance  corporation may require any
stockholder           notice provisions for notice  stockholder proposing a
business--annual      of stockholder nominations    nominee for election as a
meetings              of directors or stockholder   director or any other matter
                      proposals of business.        for consideration at a
                                                    meeting of the stockholders
                      The charters and bylaws of    to provide advance notice of
                      the target REITs do not       the nomination or proposal
                      contain any specific advance  to the corporation of (1)
                      notice provisions for notice  not more than 90 days before
                      of stockholder nominations    the date of the meeting; or,
                      of directors or stockholder   (2) in the case of an annual
                      proposals of business for an  meeting, 90 days before
                      annual meeting.               either (a) the first
                                                    anniversary of the mailing
                                                    date of the notice of the
                                                    preceding year's annual
                                                    meeting or (b) the preceding
                                                    year's annual meeting;
                                                    or (3) another time
                                                    specified in the charter or
                                                    bylaws.

                                                    FSP Corp.'s bylaws provide
                                                    that nominations of
                                                    directors or stockholder
                                                    proposals of business may be
                                                    made at an annual meeting by
                                                    any stockholder entitled to
                                                    vote at that meeting if (1)


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                      Target REIT (Delaware)        FSP Corp. (Maryland)

                                                    that stockholder has
                                                    delivered notice of such
                                                    nominations or other
                                                    business to the Secretary of
                                                    FSP Corp. not less than 90
                                                    days nor more than 120 days
                                                    prior to the first
                                                    anniversary of the mailing
                                                    date of the notice of the
                                                    preceding year's annual
                                                    meeting, and (2) such
                                                    stockholder was a
                                                    stockholder of record at the
                                                    time of giving notice.

Advance notice        The Delaware general          Under Maryland law, the
provisions for board  corporation law does not      charter or bylaws of a
nomination and other  contain any specific advance  corporation may require any
stockholder           notice provisions for notice  stockholder proposing a
business--special     of stockholder nominations    nominee for election as a
meetings              of directors or stockholder   director or any other matter
                      proposals of business.        for consideration at a
                                                    meeting of the stockholders
                      The target REITs' bylaws      to provide advance notice of
                      provide that business         the nomination or proposal
                      transacted at any special     to the corporation of not
                      meeting of stockholders       more than 90 days before the
                      shall be limited to matters   date of the meeting or
                      relating to the purpose or    another time that may be
                      purposes stated in the        specified in the
                      notice of the meeting.        corporation's charter or
                                                    bylaws.
                      The charters and bylaws of
                      the target REITs do not       FSP Corp.'s bylaws provide
                      contain any specific advance  that business shall be
                      notice provisions for notice  conducted at a special
                      of stockholder nominations    meeting of stockholders and
                      of directors or stockholder   shall be limited to matters
                      proposals of business for     relating to the purpose or
                      special meetings.             purposes stated in the
                                                    notice of the meeting.

                                                    Stockholder nominations of
                                                    directors may be made at a
                                                    special meeting at which
                                                    directors are to be elected,
                                                    by any stockholder entitled
                                                    to vote at that meeting if
                                                    (1) that stockholder has
                                                    delivered notice of such
                                                    nominations to the Secretary
                                                    of FSP Corp. not earlier
                                                    than the 120th day prior to
                                                    such special meeting and not
                                                    later than the close of
                                                    business on the later of the
                                                    90th day prior to such


                                      121
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                      Target REIT (Delaware)        FSP Corp. (Maryland)

                                                    special meeting or the tenth
                                                    day following the day on
                                                    which public announcement is
                                                    first made of the date of
                                                    the special meeting and of
                                                    the nominees proposed by the
                                                    FSP board, and (2) such
                                                    stockholder was a
                                                    stockholder of record at the
                                                    time of giving notice.

Number of directors   The Delaware general          Maryland law requires that
                      corporation law requires      there be a board of
                      that there be a board of      directors of the corporation
                      directors of the corporation  with at least one director.
                      with at least one director.
                                                    FSP Corp.'s charter and
                      The bylaws of each target     bylaws provide that the
                      REIT provide that the number  number of directors never be
                      of directors be determined    reduced to less than the
                      by resolution of the          minimum number required by
                      stockholders or the target    Maryland law.  The number of
                      REIT board, but in no event   directors may be increased
                      shall it be less than one.    or decreased by the vote of
                      The number of directors may   a majority of the entire
                      be decreased by the           Board of Directors at any
                      stockholders or by a          regular meeting or any
                      majority of the directors in  special meeting called for
                      office, but only to           that purpose, provided that
                      eliminate vacancies existing  the tenure of office of a
                      by reason of the death,       director cannot be affected
                      resignation, removal or       by any decrease in the
                      expiration of the term of     number of directors.
                      one or more directors.  The
                      number of directors may be    FSP Corp.'s board of
                      increased at any time by the  directors currently consists
                      stockholders or by a          of seven directors.
                      majority of the directors
                      then in office.

                      Addison Circle's board of
                      directors currently consists
                      of six directors.

                      Collins Crossing's board of
                      directors currently consists
                      of six directors.

                      Montague's board of
                      directors currently consists
                      of six directors.


                                      122
<PAGE>

                      Target REIT (Delaware)        FSP Corp. (Maryland)

                      Royal Ridge's board of
                      directors currently consists
                      of six directors.

Election of directors Directors are elected by a    Directors are elected by a
                      plurality of the votes cast   plurality of the votes cast
                      on the election by            at a meeting of stockholders
                      stockholders entitled to      at which a quorum is
                      vote on such election.        present.  Stockholders do
                      Stockholders do not have      not have cumulative voting
                      cumulative voting rights in   rights in the election of
                      the election of directors.    directors.

Classified board of   The Delaware general          Maryland law provides that a
directors             corporation law provides      corporation may divide its
                      that a corporation's board    board into classes with
                      of directors may be divided   terms of office provided by
                      into one, two or three        the bylaws so long as (1) no
                      classes with staggered terms  term of office is longer
                      of office.                    than five years, (2) no term
                                                    of office is shorter than
                      Each of the Target REITs'     the period between annual
                      directors currently holds     meetings, and (3) the term
                      office until the next annual  of office of at least one
                      meeting of stockholders.      class expires each year.

                                                    FSP Corp. directors are
                                                    divided into three classes
                                                    and are elected to a term of
                                                    three years and hold office
                                                    until the third annual
                                                    stockholder meeting after
                                                    their election.

Removal of directors  Under the Delaware general    Under Maryland law, unless
                      corporation law, a director   otherwise provided by a
                      may be removed from office,   corporation's charter, a
                      with or without cause, by     director may be removed from
                      the affirmative vote of a     office, with or without
                      majority of the shares then   cause, by the affirmative
                      entitled to vote at an        vote of a majority of the
                      election of directors,        shares then entitled to vote
                      except (1) unless a           at an election of directors,
                      corporation's charter         except (1) a director
                      provides otherwise, a         sitting on a classified
                      director sitting on a         board of directors may only
                      classified board may only be  be removed for cause, (2) if
                      removed for cause, (2) if a   a corporation has cumulative
                      corporation has cumulative    voting and less than the
                      voting and less than the      entire board is to be
                      entire board is to be         removed, a director cannot
                      removed a director cannot be  be removed without cause if
                      removed without cause if the  the votes cast against his
                      votes cast against his        removal would be sufficient
                      removal would be sufficient   to elect him if then
                      to elect him if then          cumulatively voted at an


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                      Target REIT (Delaware)        FSP Corp. (Maryland)

                      cumulatively voted at an      election of the entire board
                      election of the entire board  of directors, and (3) if the
                      of directors, and (3) if the  stockholders of any class or
                      stockholders of any class or  series are entitled
                      series are entitled           separately to elect one or
                      separately to elect one or    more directors, a director
                      more directors, a director    elected by a class or series
                      elected by a class or series  may not be removed without
                      may not be removed without    cause except by the
                      cause except by the           affirmative vote of a
                      affirmative vote of a         majority of all the votes of
                      majority of all the votes of  that class or series.
                      that class or series.
                                                    FSP Corp.'s charter provides
                      The target REITs' charters    that a director may be
                      and bylaws provide that       removed from office only for
                      except as otherwise provided  cause based on a material
                      by the General Corporation    breach of his duties or
                      Law of Delaware, any          obligations to FSP Corp.,
                      director may be removed,      and then only by the
                      with or without cause, by     affirmative vote of the
                      the holders of a majority of  holders of at least
                      the shares then entitled to   two-thirds of the votes
                      vote at an election of        entitled to be cast in the
                      directors, except that the    election of directors.
                      directors elected by the
                      holders of a particular
                      class or series of stock may
                      be removed without cause
                      only by vote of the holders
                      of a majority of the
                      outstanding shares of such
                      class or series.  A meeting
                      for the purpose of removing
                      one or more directors may be
                      called by the holders of 35%
                      or more of the outstanding
                      shares of preferred stock
                      and at such a meeting any
                      director may be removed with
                      or without cause by a vote
                      of greater than 50% of the
                      outstanding shares of
                      preferred stock.

Board of director     Under the Delaware general    Under Maryland law, the
vacancies             corporation law, any vacancy  stockholders may elect a
                      is to be filled as the        successor to fill a vacancy
                      bylaws of the corporation     on the board of directors
                      provide.                      which results from the
                                                    removal of a director,
                      The target REITs' bylaws      except that if the
                      provide that any vacancy,     stockholders of any class or
                      unless and until filled by    series are entitled
                      the stockholders, including   separately to elect one or


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                      Target REIT (Delaware)        FSP Corp. (Maryland)

                      a vacancy resulting from an   more directors, the
                      increase in the number of     stockholders of that class
                      directors, may be filled by   or series may elect a
                      vote of a majority of the     successor to fill a vacancy
                      directors then in office,     on the board of directors
                      although less than a quorum,  which results from the
                      or by a sole remaining        removal of a director
                      director.                     elected by that class or
                                                    series.  Also, unless
                                                    otherwise provided by the
                                                    corporation's charter, a
                                                    majority of the sitting
                                                    directors may fill a vacancy
                                                    on the board except that if
                                                    the stockholders of any
                                                    class or series are entitled
                                                    separately to elect one or
                                                    more directors, a majority
                                                    of the remaining directors
                                                    elected by that class or
                                                    series or the sole remaining
                                                    director elected by that
                                                    class or series may fill any
                                                    vacancy among the number of
                                                    directors elected by that
                                                    class or series.

                                                    FSP Corp.'s charter provides
                                                    that any vacancy, other than
                                                    that resulting from an
                                                    increase in the number of
                                                    authorized directors, shall
                                                    be filled by the vote of a
                                                    majority of the directors
                                                    then in office.  A vacancy
                                                    created by an increase in
                                                    the number of authorized
                                                    directors shall be filled by
                                                    the vote of a majority of
                                                    the entire Board of
                                                    Directors.

Special meetings of   The target REITs' bylaws      FSP Corp.'s bylaws provide
the board of          provide that special          that special meetings of the
directors             meetings of the Board of      board of directors may be
                      Directors may be held at any  called by the Chairman of
                      time and place designated in  the Board, the President, or
                      a call by the Chairman of     a majority of the directors
                      the Board (in the case of     then in office.
                      Royal Ridge and Addison
                      Circle alone), the
                      President, two or more
                      directors, or by one
                      director in the event that


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                      Target REIT (Delaware)        FSP Corp. (Maryland)

                      there is only a single
                      director in office.

Indemnification       Under the Delaware general    Under Maryland law, a
                      corporation law, a            corporation may indemnify
                      corporation has the power to  any director, officer,
                      indemnify any officer,        employee, or agent made a
                      director, employee or agent   party to any proceeding by
                      made a party to any           reason of service in that
                      proceeding by reason of       capacity unless it is
                      service in that capacity if   established that the act or
                      the party acted in good       omission of the party was
                      faith and in a manner the     material to the matter
                      party reasonably believed to  giving rise to the
                      be in or not opposed to the   proceeding, and (1) was
                      best interests of the         committed in bad faith; (2)
                      corporation, and, with        was the result of active and
                      respect to any criminal       deliberate dishonesty; (3)
                      action or proceeding, had no  the party actually received
                      reasonable cause to believe   an improper personal benefit
                      the conduct in question was   in money, property, or
                      unlawful.  However,           services; or (4) in the case
                      indemnification for           of any criminal proceeding,
                      liability to the corporation  the party had reasonable
                      itself may only be given if   cause to believe that the
                      the Court of Chancery or the  act or omission was
                      court in which such action    unlawful.
                      or suit was brought
                      determines that such person   Before indemnification can
                      is fairly and reasonably      be granted, there must be an
                      entitled to indemnity.        authorization by the board
                                                    of directors, special legal
                      Any such indemnification can  counsel appointed by the
                      only be made once authorized  board of directors, or the
                      by (1) a majority vote of     stockholders, that the
                      the directors who are not     conduct of the director,
                      parties to such action, suit  officer, employee or agent
                      or proceeding, even though    seeking indemnification
                      less than a quorum, (2) a     meets the standard given
                      committee of such directors   above.
                      designated by majority vote
                      of such directors, even       Unless limited by the
                      though less than a quorum,    corporation's charter, a
                      (3) if there are no such      director, officer, employee,
                      directors, or if such         or agent who has been
                      directors so direct, by       successful, on the merits or
                      independent legal counsel in  otherwise, in the defense of
                      a written opinion, or (4)     any proceeding referred to
                      the stockholders.             above shall be indemnified
                                                    against reasonable expenses
                      Notwithstanding any of the    incurred by that party in
                      provisions above, the         connection with the
                      Delaware general corporation  proceeding.
                      law dictates that to the
                      extent that a present or      Any indemnification of, or


                                      126
<PAGE>

                      Target REIT (Delaware)        FSP Corp. (Maryland)

                      former director or officer    advance of expenses to, a
                      of a corporation has been     director, officer, employee,
                      successful on the merits or   or agent must be reported in
                      otherwise in defense of any   writing to the stockholders
                      action arising out of his     with the notice of the next
                      service, that director or     stockholders' meeting or
                      officer shall be indemnified  prior to the meeting.
                      against expenses (including
                      attorneys' fees) actually     FSP Corp.'s charter and
                      and reasonably incurred in    bylaws provide that FSP
                      the defense.                  Corp. will indemnify its
                                                    directors and officers to
                      The target REITs' charters    the full extent permitted by
                      provide for indemnification   Maryland law, subject to the
                      of directors and officers of  conditions that (1) no
                      the corporation to the full   indemnification will be
                      extent permitted by the       given if the director or
                      Delaware general corporation  officer is held liable to
                      law, subject to the           the corporation itself and
                      conditions that (1) the       (2) the termination of any
                      target REIT shall not         proceeding by conviction, or
                      indemnify any party in        a plea of nolo contendere or
                      connection with a proceeding  an entry of probation prior
                      (or part thereof) initiated   to judgment each creates a
                      by that same party unless     rebuttable presumption that
                      the initiation was approved   the officer or director did
                      by the Board of Directors     not meet the requisite
                      and (2) the target REIT       standard of conduct for
                      shall not indemnify any       indemnification.  FSP Corp.
                      party to the extent such      will not indemnify in any
                      party is reimbursed from the  suit where the potential
                      proceeds of insurance.        indemnitee is found to be
                                                    liable for receiving
                                                    improper benefit and will
                                                    not indemnify any party to
                                                    the extent that such party
                                                    is reimbursed from the
                                                    proceeds of insurance.

                                                    Notwithstanding any of the
                                                    provisions above, FSP Corp.
                                                    will indemnify any director
                                                    or officer that is
                                                    successful in defense of any
                                                    action arising out of his
                                                    position with FSP Corp. or
                                                    his service at the request
                                                    of FSP Corp.

Charter amendment,    Under the Delaware general    Under Maryland law, any
merger, sale of       corporation law, any          charter amendment, merger,
assets, share         amendment to a corporation's  sale of assets, share
exchange and          charter requires the          exchange or consolidation
consolidation         affirmative vote of a         requires the affirmative


                                      127
<PAGE>

                      Target REIT (Delaware)        FSP Corp. (Maryland)

                      majority of the outstanding   vote of two-thirds of the
                      stock entitled to vote on     shares of stock entitled to
                      the matter, and a majority    vote on the matter, unless a
                      of the outstanding stock of   lesser percentage (but not
                      each class entitled to vote   less than a majority of all
                      on the matter as a class.     the votes to be cast on the
                      The holders of the            matter) is set forth in the
                      outstanding shares of a       corporation's charter.
                      class are entitled to vote
                      as a class if the amendment   FSP Corp.'s charter provides
                      would increase or decrease    that, in addition to a
                      the aggregate number of       majority of the shares of
                      authorized shares of such     outstanding capital stock,
                      class, increase or decrease   as required by law, the
                      the par value of the shares   affirmative vote of a
                      of such class, or alter or    majority of shares of
                      change the powers,            preferred stock is required
                      preferences, or special       to amend the charter, merge
                      rights of the shares of such  or consolidate into or with
                      class so as to affect them    any other corporation or
                      adversely.                    other entity, sell all or
                                                    substantially all of its
                      Under the Delaware general    assets, or engage in a share
                      corporation law, any merger,  exchange.
                      consolidation, or sale of
                      substantially all assets
                      requires the affirmative
                      vote of a majority of the
                      outstanding stock of the
                      corporation entitled to vote
                      on the matter.

                      The target REITs' charters
                      provide that, in addition to
                      a majority of the shares of
                      outstanding capital stock,
                      as required by law, the
                      affirmative vote of a
                      majority of shares of
                      preferred stock is required
                      to amend or repeal any
                      provision of, or add any
                      provision to the charter,
                      merge or consolidate into or
                      with any other corporation
                      or other entity, or sell all
                      or substantially all of its
                      assets.

Amendment of bylaws   Under the Delaware general    Under Maryland law, the
                      corporation law, the power    power to adopt, alter, and
                      to adopt, amend or repeal     repeal the bylaws of the
                      bylaws is vested in the       corporation is vested in the
                      stockholders. The fact that   stockholders except to the
                      such power may be conferred   extent that the charter or


                                      128
<PAGE>

                      Target REIT (Delaware)        FSP Corp. (Maryland)

                      upon the directors or         bylaws vest it in the board
                      governing body does not       of directors.
                      divest the stockholders of
                      their power to adopt, amend   FSP Corp.'s bylaws provide
                      or repeal bylaws.             that the Board of Directors
                                                    shall have the power to
                      The target REITs' bylaws      adopt, alter or repeal any
                      provide that the bylaws may   provision of the bylaws and
                      be amended or repealed by     to make new bylaws.
                      the affirmative vote of a
                      majority of the directors
                      present at any regular or
                      special meeting of the
                      target REIT board at which a
                      quorum is present.
                      Furthermore, the bylaws may
                      be amended or repealed by
                      the affirmative vote of the
                      holders of a majority of the
                      shares of the capital stock
                      of the corporation issued
                      and outstanding and entitled
                      to vote at any regular
                      meeting of stockholders, or
                      at any special meeting of
                      stockholders, provided
                      notice of such amendment or
                      repeal has been stated in
                      the notice of such special
                      meeting.

Anti-takeover         The target REITs' charters    Under Maryland law, a
statutes              provide that Delaware's       corporation may not engage
                      anti-takeover statute does    in any business combination
                      not apply to each target      with any stockholder who
                      REIT.                         owns, directly or
                                                    indirectly, 10% or more of
                                                    the outstanding voting stock
                                                    of the corporation (an
                                                    "interested stockholder") or
                                                    any affiliate of the
                                                    interested stockholder for a
                                                    period of 5 years following
                                                    the most recent date on
                                                    which the interested
                                                    stockholder became an
                                                    interested stockholder
                                                    unless the Board of
                                                    Directors of the corporation
                                                    approves and exempts the
                                                    business combination from
                                                    such requirement or there
                                                    are fewer than 100
                                                    beneficial owners of stock
                                                    in the corporation or
                                                    certain other conditions are
                                                    met.


                                      129
<PAGE>

                      Target REIT (Delaware)        FSP Corp. (Maryland)

Par value,            The Delaware general          Maryland law permits a
dividends, and        corporation law permits a     corporation to declare and
repurchases of shares corporation to declare and    pay dividends and make other
                      pay dividends out of its      distributions to
                      surplus (usually net assets   shareholders, unless after
                      minus aggregate par value of  giving effect to the
                      outstanding shares) or out    distribution (1) the
                      of its net profits for the    corporation would not be
                      fiscal year in which the      able to pay indebtedness of
                      dividend is declared and/or   the corporation as it
                      the preceding fiscal year.    becomes due in the usual
                      If the capital of the         course of business, or (2)
                      corporation is diminished by  the corporation's total
                      depreciation of losses to an  assets would be less than
                      amount less than the          the sum of its total
                      aggregate amount of the       liabilities plus, unless the
                      capital represented by the    charter permits otherwise,
                      issued and outstanding stock  the amount that would be
                      of all classes having a       needed if the corporation
                      preference upon the           were to be dissolved at the
                      distribution of assets, then  time of the distribution, to
                      the directors cannot declare  satisfy the preferential
                      and pay dividends out of net  rights upon dissolution of
                      profits until the deficiency  stockholders whose
                      of capital has been repaired. preferential rights on
                                                    dissolution are superior to
                      While Delaware grants no      those receiving the
                      explicit statutory authority  distribution.
                      to repurchase shares, there
                      is also no law supporting     In addition, Maryland law
                      the proposition that          provides that a corporation
                      directors of a company        may acquire its own shares
                      cannot approve efforts to     and that shares so acquired
                      repurchase shares for the     constitute authorized but
                      benefit of the company.       unissued shares.

Dissenters' or        Under the Delaware general    Under Maryland law, a
appraisal rights      corporation law, appraisal    stockholder of a Maryland
                      rights are generally          corporation has the right to
                      available for holders of any  demand and receive payment
                      class or series of stock of   of the fair value of his
                      a constituent corporation in  stock in the event of (1)
                      a merger or consolidation     any merger or consolidation
                      who do not vote in favor of   of the corporation, (2) any
                      or otherwise consent to the   transfer of assets requiring
                      merger or consolidation and   stockholder approval, (3)
                      who continue to hold stock    any charter amendment which
                      through the effective date    alters the contract rights,
                      of the merger or              as expressly set forth in


                                      130
<PAGE>

                      Target REIT (Delaware)        FSP Corp. (Maryland)

                      consolidation.  However, no   the charter, of any
                      appraisal rights are          outstanding stock and
                      available for the shares of   substantially adversely
                      any class or series of stock  affects the stockholder's
                      that, at the record date      rights, unless the right to
                      fixed to determine the        do so is reserved by the
                      stockholders entitled to      charter of the corporation,
                      receive notice of and to      or (4) any business
                      vote upon merger or           combination covered by the
                      consolidation, were either    Maryland Business
                      (1) listed on a national      Combination Act, unless (a)
                      securities exchange or        the stock received is listed
                      designated as a national      on a national securities
                      market system security on an  exchange or (b) the stock
                      interdealer quotation system  received is that of the
                      by the National Association   surviving corporation in a
                      of Securities Dealers, Inc.   merger that meets certain
                      or (2) held of record by      requirements including that
                      more than 2,000 holders; and  the survivor's charter does
                      no appraisal rights are       not alter the contract
                      available for any shares of   rights of the stockholders
                      stock of the constituent      or reserve the right to do
                      corporation surviving a       so.
                      merger if the merger did not
                      require for its approval the
                      vote of the stockholders of
                      the surviving corporation.

                      Notwithstanding the
                      provisions above, appraisal
                      rights are available under
                      the Delaware general
                      corporation law where the
                      consideration received in a
                      merger or consolidation is
                      anything other than (1)
                      shares of stock of the
                      surviving corporation, (2)
                      shares of stock of any other
                      corporation, which at the
                      effective date of the merger
                      or consolidation will be
                      either listed on a national
                      securities exchange or
                      designated as a national
                      market system security on an
                      interdealer quotation system
                      by the National Association
                      of Securities Dealers, Inc.
                      or held of record by more
                      than 2,000 holders, (3) cash
                      in lieu of fractional
                      shares, or (4) any
                      combination of the above.


                                      131
<PAGE>

                      Target REIT (Delaware)        FSP Corp. (Maryland)

                      Dissenters' rights of target
                      REIT stockholders are
                      discussed in greater detail
                      in the section of this
                      prospectus entitled "The
                      Mergers - Appraisal Rights
                      of Dissenting Stockholders
                      of Target REITs."

Inspection rights     Under the Delaware general    Under Maryland law, any
                      corporation law, any          stockholder may inspect and
                      stockholder has the right to  copy that corporation's
                      inspect for any proper        bylaws, the minutes of the
                      purpose and to make copies    proceedings of its
                      and extracts from the         stockholders, its annual
                      corporation's stock ledger,   statements of affairs and
                      a list of its stockholders,   voting trust agreements on
                      its other books and records   file at the corporation's
                      and a subsidiary's books and  principal office.  Any
                      records, to the extent that   stockholder may present to
                      the corporation has actual    any officer or resident
                      possession and control of     agent of the corporation a
                      such records of such          written request for a
                      subsidiary or the             statement showing all stock
                      corporation could obtain      and securities issued by the
                      such records through the      corporation during a
                      exercise of control over      specified period of not more
                      such subsidiary without       than 12 months before the
                      violating its contractual     date of the request.
                      obligations to the
                      subsidiary or the             Furthermore, one or more
                      subsidiary's legal rights.    persons who together are and
                                                    for at least six months have
                                                    been stockholders of record
                                                    of at least 5 percent of the
                                                    outstanding stock of any
                                                    class of a corporation may
                                                    inspect and copy during
                                                    usual business hours the
                                                    corporation's books of
                                                    account and its stock
                                                    ledger; present to any
                                                    officer or resident agent of
                                                    the corporation a written
                                                    request for a statement of
                                                    its affairs; and in the case
                                                    of any corporation which
                                                    does not maintain the
                                                    original or a duplicate
                                                    stock ledger at its
                                                    principal office, present to
                                                    any officer or resident
                                                    agent of the corporation a
                                                    written request for a list
                                                    of its stockholders.


                                      132
<PAGE>

                   BUSINESS AND PROPERTIES OF THE TARGET REITs

      Each target REIT was formed for the purpose of acquiring, developing and
operating its property. The principal investment objectives of the target REITs
are to provide their target REIT stockholders with regular quarterly cash
distributions; to obtain long-term appreciation in the value of their property;
and to preserve and protect their target REIT stockholders' capital. The target
REITs share executive offices with FSP Corp. Each target board believes the
property owned by its related target REIT is adequately covered by insurance.

      There is no established public trading market for the preferred stock of
any of the target REITs.

      The following table indicates the number of holders of record of preferred
stock in each of the target REITs as of August 13, 2004, based upon the number
of record holders reflected in the corporate records of that target REIT.

             Target REIT                  Number of Record Holders
             -----------                  ------------------------

           Addison Circle                           380

           Collins Crossing                         449

           Montague                                 331

           Royal Ridge                              246

      Set forth below are the distributions per share of preferred stock that
each target REIT has made in each quarter since the quarter ended June 30, 2002
or since such target REIT was syndicated, if such syndication occurred after
June 30, 2002.

            Dividends Distributed per Share of Preferred Stock (in $)

<TABLE>
<CAPTION>
Target REIT                                                     Quarter Ended
- -----------                                                     -------------

                    6/30/02     9/30/02     12/31/02     3/31/03     6/30/03      9/30/03     12/31/03     3/31/04     6/30/04
                    -------     -------     --------     -------     -------      -------     --------     -------     -------

<S>                 <C>         <C>         <C>         <C>         <C>          <C>         <C>          <C>         <C>
Addison Circle          N/A         N/A          N/A    1,189.22    2,050.00     2,031.00    2,008.00     1,989.00    2,050.00

Collins Crossing        N/A         N/A          N/A         N/A       97.78     1,471.64    2,067.00     2,399.00    2,223.00

Montague                N/A         N/A       537.20    2,702.00    2,737.00     2,817.00    2,863.00     2,873.00    2,934.50

Royal Ridge             N/A         N/A          N/A         N/A    1,073.50     1,783.00    1,766.00     1,802.00    1,799.00
</TABLE>


                                      133
<PAGE>

      Each target REIT expects to declare in the fourth quarter of 2004 and pay
to its target REIT stockholders thereafter a dividend with respect to its third
and fourth quarter 2004 operations. Pursuant to the merger agreement, such
dividends will be paid in an amount consistent with past practice and custom of
the relevant target REIT. The cash paid out in these dividends will reduce the
amount of cash held by each target REIT and acquired by FSP Corp. upon
consummation of the mergers. Because the target REITs have not yet declared
these cash dividends, FSP Corp. cannot estimate the aggregate amount of such
dividends. As the target REITs will cease to exist upon consummation of the
mergers, FSP Corp. does not expect that they will continue to pay quarterly
dividends after such consummation.

      The following table sets forth the percentage of leased space and weighted
annual average base rent per square foot for each property owned by the target
REITs for the years ended December 31, 2001, 2002 and 2003 (to the extent
applicable).

                                                        Weighted Annual Average
                                                        Base Rent/Net Rentable
        Target REIT         Percentage of Leased Space       Square Foot*
        -----------         --------------------------       ------------

      Addison Circle

December 31, 2002                     100%                      $22.74
December 31, 2003                     100%                      $23.08

     Collins Crossing

December 31, 2003                     100%                      $22.34

         Montague

December 31, 2002                     100%                      $24.99
December 31, 2003                     100%                      $25.96

       Royal Ridge**

December 31, 2003                     100%                      $13.32

      * All rents are base rent only without step rents or operating expense
recoveries. Montague and Royal Ridge are net leases and Addison Circle and
Collins Crossing are gross rent leases.

      ** Royal Ridge rents for 2003 included a credit from the seller of the
property for free rental periods.

      The following table sets forth for each property owned by the target
REITs, the number of tenants leasing 10% or more of the rentable square feet,
the principal nature of the business of such tenant and the principal
businesses, occupations and professions carried on in the property:


                                      134
<PAGE>

<TABLE>
<CAPTION>
                      Number of
                   Tenants Leasing
                   10% or More of                                            Principal Businesses Carried
                     Space as of         Principal Nature of                   on in the Property as of
Target REIT            6/30/04            Tenant's Business                            6/30/04
- -----------        ---------------        -----------------                  ----------------------------

<S>                    <C>             <C>                                  <C>
Addison Circle         Three           Provider of integrated               None; tenant has partially
                                       communications and                   subleased space to general office
                                       telecommunications services          tenants

                                       Real estate services company         General office use

                                       Software developer                   General office use

Collins Crossing       Two             Provider of communications           Business headquarters and general
                                       software solutions                   office use

                                       Software provider                    None; tenant has partially
                                                                            subleased space to general office
                                                                            tenants

Montague               One             Provider of sophisticated            General office use
                                       manufacturing systems used to
                                       create advanced integrated circuits

Royal Ridge            Three           Insurance company                    General office use

                                       Distributor of electrical materials  General office use

                                       Real estate developer                General office use
</TABLE>

      The following table sets forth, for each tenant leasing 10% or more of the
rentable square feet in the properties owned by the target REITs, the principal
provisions of their leases:


                                      135
<PAGE>

<TABLE>
<CAPTION>
                                                  Current Base Rent
                                                  as of 6/30/04
                                                  Annualized and
                                                  Percentage of
                                                  Square Feet Leased
Target REIT              Tenant                   as of 6/30/04         Expiration Date      Renewal Options
- -----------              ------                   -------------         ---------------      ---------------

<S>                      <C>                      <C>                   <C>                  <C>
Addison Circle           McLeod                   $2,312,952            March 31, 2007       Two 5-year options to renew at fair
                                                                                             market rent
                                                  31%
- ------------------------------------------------------------------------------------------------------------------------------------
                         Staubach                 $1,847,218            April 30, 2009       Two 5-year options to renew at fair
                                                                                             market rent
                                                  28%
- ------------------------------------------------------------------------------------------------------------------------------------
                         J.D. Edwards             $1,442,559            February 28, 2005    Tenant has exercised early termination
                                                                                             option.
                                                  20%
- ------------------------------------------------------------------------------------------------------------------------------------
Collins Crossing         Inet                     $5,367,284            June 30, 2010        Two 5-year options to renew at fair
                                                                                             market rent
                                                  80%
- ------------------------------------------------------------------------------------------------------------------------------------
                         Macromedia               $1,377,456            February 28, 2006    One 5-year option to renew at fair
                                                                                             market rent or last month's rent
                                                  18%
- ------------------------------------------------------------------------------------------------------------------------------------
Montague                 Novellus                 $4,045,755            December 31, 2006    None

                                                  100%
- ------------------------------------------------------------------------------------------------------------------------------------
Royal Ridge              Combined Specialty       $1,183,688            November 30, 2012    Two 3-year options to renew at 95% of
                         Insurance Company                                                   fair market rent
                                                  51%
- ------------------------------------------------------------------------------------------------------------------------------------
                         Hagemeyer North America  $778,193              October 31, 2012     Two 5-year options to renew at fair
                                                                                             market rent or last month's rent
                                                  38%
- ------------------------------------------------------------------------------------------------------------------------------------
                         CK Royal LLC             $232,444              January 29, 2005     None

                                                  11%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


                                      136
<PAGE>

      The following table sets forth for each property owned by the target REITs
a schedule of lease expirations for each of the ten years beginning with 2004,
the number of tenants whose leases will expire, the total area in square feet
covered by such leases, the annual rental represented by such leases and the
percentage of gross annual rental represented by such leases:

- --------------------------------------------------------------------------------
                                                  Total Annual
                    Number of                   Contract Rent as   Percentage of
                      Lease       Total Square     of 6/30/04      Annual Gross
  Target REIT      Expirations        Feet         annualized          Rent
- --------------------------------------------------------------------------------
 Addison Circle
- --------------------------------------------------------------------------------
      2004             One             9,139        $  182,780           3%

      2005             Two            64,076        $1,547,600          22%

      2006              --                --                --          --

      2007             Two           112,474        $2,849,446          41%

      2008             One             4,508        $   76,636           1%

      2009             Two            93,801        $2,029,252          29%

      2010             One             8,868        $  212,832           3%

      2011              --                --                --          --

      2012              --                --                --          --

      2013              --                --                --          --

      2014              --                --                --          --
- --------------------------------------------------------------------------------
Collins Crossing
- --------------------------------------------------------------------------------
      2004              --                --                --          --

      2005              --                --                --          --

      2006             One           55,394         $1,377,456         20%

      2007              --                --                --          --

      2008              --                --                --          --

      2009             One            2,000         $   16,800          0%

      2010             One           241,372        $5,367,284         79%

      2011              --                --                --          --

      2012              --                --                --          --

      2013              --                --                --          --

      2014              --                --                --          --
- --------------------------------------------------------------------------------

                                      137
<PAGE>

- --------------------------------------------------------------------------------
                                                  Total Annual
                    Number of                   Contract Rent as   Percentage of
                      Lease       Total Square     of 6/30/04      Annual Gross
  Target REIT      Expirations        Feet         annualized          Rent
- --------------------------------------------------------------------------------
    Montague
- --------------------------------------------------------------------------------
      2004              --                --                --          --

      2005              --                --                --          --

      2006             One           145,951        $4,045,755         100%

      2007              --                --                --          --

      2008              --                --                --          --

      2009              --                --                --          --

      2010              --                --                --          --

      2011              --                --                --          --

      2012              --                --                --          --

      2013              --                --                --          --

      2014              --                --                --          --
- --------------------------------------------------------------------------------
  Royal Ridge
- --------------------------------------------------------------------------------
      2004              --                --                --          --

      2005             One            18,142        $  232,444          11%

      2006              --                --                --          --

      2007              --                --                --          --

      2008              --                --                --          --

      2009              --                --                --          --

      2010              --                --                --          --

      2011              --                --                --          --

      2012              --                --                --          --

      2013              --                --                --          --

      2014             Two           143,224        $1,961,881          89%
- --------------------------------------------------------------------------------


                                      138
<PAGE>

                SELECTED FINANCIAL INFORMATION OF ADDISON CIRCLE

      The following selected financial information is derived from the
historical financial statements of Addison Circle. This information should be
read in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" on pages 147 to 155 of this Consent
Solicitation/Prospectus.

<TABLE>
<CAPTION>
                                                          For the                                For the
                                                      Six Months Ended                          Year Ended
                                                          June 30,                             December 31,
                                                   ---------------------     ---------------------------------------------
(In thousands, except share and per share data)       2004         2003         2003        2002      2001    2000    1999

<S>                                                <C>          <C>          <C>         <C>          <C>     <C>     <C>
Operating Data:
Total revenue                                      $  4,720     $  4,333     $  8,554    $  2,102       --      --      --
Net income (loss)                                     2,514        2,136        4,005      (2,869)      --      --      --
Net income (loss) attributable to
  preferred shareholders                              2,514        2,136        4,005      (3,182)      --      --      --

Ratio of earnings to fixed charges                      N/A          N/A          N/A         N/A       --      --      --
(Addison Circle has no permanent debt)

Net increase (decrease) in cash and
  cash equivalents                                     (374)         (39)         647       2,683       --      --      --

Net cash provided by (used for)
  operating activities                                1,074        1,265        5,393      (3,507)      --      --      --
Net cash used for distributions                       1,287        1,304        4,721         220       --      --      --

Balance Sheet Data
Cash and cash equivalents                             5,592        5,363        5,966       5,402       --      --      --

Total assets at book value                           55,915       56,650       56,667      57,228       --      --      --
Total assets at merger value                         56,117           --           --          --       --      --      --
Long term liabilities                                    --           --

Total liabilities                                     1,377        1,374        3,355       2,784       --      --      --
Total stockholders' equity                           54,538       55,276       53,312      54,444       --      --      --

Per Share Data:
Weighted average preferred shares
  outstanding                                           636          636          636         636       --      --      --

Net income (loss) per preferred share              $  3,953     $  3,358     $  6,297    $ (5,003)      --      --      --
Book value per preferred share                       85,752       86,912       83,824      85,604       --      --      --
Merger value per preferred share                     88,329           --           --          --       --      --      --
Distributions per preferred share                     2,024        2,050        7,423         346       --      --      --
Distributions per preferred share
  (return of capital)                                    --           --        1,154         346       --      --      --
</TABLE>


                                      139
<PAGE>

Selected unaudited quarterly financial data for Addison Circle

(in thousands, except shares and per share data)

                                                               2004
                                                       -------------------
                                                        First      Second
                                                       Quarter     Quarter
                                                       -------     -------

Revenue                                                $ 2,502     $ 2,218

Net income                                             $ 1,379     $ 1,135

Income to preferred shareholders                       $ 1,379     $ 1,135

Income per preferred share                             $ 2,168     $ 1,785

Shares                                                     636         636


                                                          2003
                                       -----------------------------------------
                                        First     Second      Third       Fourth
                                       Quarter    Quarter    Quarter     Quarter
                                       -------    -------    -------     -------

Revenue                                $ 2,107    $ 2,226    $ 2,098     $ 2,123

Net income                             $ 1,066    $ 1,070    $ 1,036     $   833

Income to preferred shareholders       $ 1,066    $ 1,070    $ 1,036     $   833

Income per preferred share             $ 1,676    $ 1,682    $ 1,629     $ 1,310

Shares                                     636        636        636         636


                                                        2002
                                      -----------------------------------------
                                       First     Second     Third       Fourth
                                      Quarter    Quarter    Quarter     Quarter
                                      -------    -------    -------     -------

Revenue                                 N/A        N/A        N/A       $ 2,102

Net income                              N/A        N/A        N/A       $(2,869)

Distributions to common shareholders    N/A        N/A        N/A       $   313

Loss to preferred shareholders          N/A        N/A        N/A       $(3,182)

Loss per preferred share                N/A        N/A        N/A       $(5,003)

Shares                                  N/A        N/A        N/A           636


                                      140
<PAGE>

               SELECTED FINANCIAL INFORMATION OF COLLINS CROSSING

      The following selected financial information is derived from the
historical financial statements of Collins Crossing. This information should be
read in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" on pages 147 to 155 of this Consent
Solicitation/Prospectus.

<TABLE>
<CAPTION>
                                                          For the                              For the
                                                      Six Months Ended                        Year Ended
                                                          June 30,                           December 31,
                                                   ---------------------     -----------------------------------------
(In thousands, except share and per share data)       2004         2003         2003     2002     2001    2000    1999

<S>                                                <C>          <C>          <C>         <C>      <C>     <C>     <C>
Operating Data:
Total revenue                                      $  3,449     $  2,569     $  5,672       --      --      --      --
Net income (loss)                                     1,452       (2,343)        (976)      --      --      --      --
Net income (loss) attributable to
  preferred shareholders                              1,452       (2,496)      (1,349)

Ratio of earnings to fixed charges                      N/A          N/A          N/A       --      --      --      --
(Collins Crossing has no permanent debt)

Net increase (decrease) in cash and
  cash equivalents                                     (444)       3,967        2,942       --      --      --      --

Net cash provided by (used for)
  operating activities                                  799       (1,546)        (109)      --      --      --      --
Net cash used for distributions                       1,234          209        2,392       --      --      --      --

Balance Sheet Data
Cash and cash equivalents                             4,622        3,967        5,066       --      --      --      --

Total assets at book value                           47,932       49,292       49,314       --      --      --      --
Total assets at merger value                         50,485           --           --       --      --      --      --
Long term liabilities                                    --           --           --       --      --      --      --

Total liabilities                                     1,313          743        2,913       --      --      --      --
Total stockholders' equity                           46,619       48,549       46,401       --      --      --      --

Per Share Data:
Weighted average preferred shares
  outstanding                                           555          555          555       --      --      --      --

Net income (loss) per preferred share              $  2,616     $ (4,497)    $ (2,431)      --      --      --      --
Book value per preferred share                       83,998       87,476       83,605       --      --      --      --
Merger value per share                               90,964           --           --       --      --      --      --
Distributions per preferred share                     2,223          377        4,310       --      --      --      --
Distributions per preferred share
  (return of capital)                                    --           --        3,796       --      --      --      --
</TABLE>


                                       141
<PAGE>

Selected unaudited quarterly financial data for Collins Crossing

(in thousands, except shares and per share data)

                                                                    2004
                                                             -------------------
                                                              First      Second
                                                             Quarter     Quarter
                                                             -------     -------

Revenue                                                      $ 1,702     $ 1,747

Income to preferred shareholders                             $   752     $   700

Income (loss) per preferred share                            $ 1,355     $ 1,261

Shares                                                           555         555


                                                            2003
                                           -------------------------------------
                                            First    Second     Third    Fourth
                                           Quarter   Quarter   Quarter   Quarter
                                           -------   -------   -------   -------

Revenue                                     $ 653    $ 1,916   $ 1,962   $ 1,141

Income (loss) to preferred shareholders     $ 242    $(2,738)  $   787   $   360

Income (loss) per preferred share           $ 436    $(4,933)  $ 1,418   $   649

Shares                                        555        555       555       555


                                      142
<PAGE>

                   SELECTED FINANCIAL INFORMATION OF MONTAGUE

      The following selected financial information is derived from the
historical financial statements of Montague. This information should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" on pages 147 to 155 of this Consent
Solicitation/Prospectus.

<TABLE>
<CAPTION>
                                                         For the                              For the
                                                     Six Months Ended                        Year Ended
                                                         June 30,                           December 31,
                                                   --------------------    --------------------------------------------
(In thousands, except share and per share data)        2004        2003        2003        2002     2001    2000    1999

<S>                                                <C>         <C>         <C>         <C>          <C>     <C>     <C>
Operating Data:
Total revenue                                      $  1,715    $  1,848    $  3,645    $  1,008       --      --      --
Net income (loss)                                     1,286       1,336       2,669      (1,249)      --      --      --
Net income (loss) attributable to
  preferred shareholders                              1,286       1,336       2,669      (1,281)      --      --      --

Ratio of earnings to fixed charges                      N/A         N/A         N/A         N/A       --      --      --
(Montague has no permanent debt)

Net increase in cash and
  cash equivalents                                       19          87         630         957       --      --      --

Net cash provided by (used for)
  operating activities                                  999       1,001       4,699      (3,034)      --      --      --
Net cash used for distributions                         980         914       3,714         320       --      --      --

Balance Sheet Data
Cash and cash equivalents                             3,612       3,417       3,594       3,330       --      --      --

Total assets at book value                           27,784      29,187      28,450      29,111       --      --      --
Total assets at merger value                         22,035          --          --          --       --      --      --
Long term liabilities                                    --          --          --          --       --      --      --

Total liabilities                                       401           2       1,371         930       --      --      --
Total stockholders' equity                           27,383      29,185      27,079      28,181       --      --      --

Per Share Data:
Weighted average preferred shares
  outstanding                                           334         334         334         334       --      --      --

Net income (loss) per preferred share              $  3,850    $  4,000    $  7,991    $ (3,835)      --      --      --
Book value per preferred share                       81,985      87,380      81,075      84,374       --      --      --
Merger value per share                               65,973          --          --          --       --      --      --
Distributions per preferred share                     2,934       2,737      11,120         958       --      --      --
Distributions per preferred share
  (return of capital)                                    --          --          --         958       --      --      --
</TABLE>


                                      143
<PAGE>

Selected unaudited quarterly financial data for Montague

(in thousands, except shares and per share data)

                                                                  2004
                                                          ---------------------
                                                           First         Second
                                                          Quarter       Quarter
                                                          -------       -------

Revenue                                                   $   866       $   849

Net income attributable to preferred shareholders         $   662       $   624

Income per preferred share                                $ 1,982       $ 1,868

Shares                                                        334           334


                                                         2003
                                    --------------------------------------------
                                     First        Second       Third      Fourth
                                    Quarter      Quarter      Quarter    Quarter
                                    -------      -------      -------    -------

Revenue                             $ 1,186      $   662      $  889     $   908

Net income                          $   915      $   421      $  656     $   677

Income per preferred share          $ 2,740      $ 1,260      $1,964     $ 2,027

Shares                                  334          334         334         334


                                                            2002
                                           -------------------------------------
                                            First     Second    Third     Fourth
                                           Quarter   Quarter   Quarter   Quarter
                                           -------   -------   -------   -------

Revenue                                      N/A       N/A     $   211    $ 797

Net income (loss)                            N/A       N/A     $(1,480)   $ 231

Distributions to common shareholder          N/A       N/A     $    --    $  32

Income (loss) to preferred shareholders      N/A       N/A     $(1,480)   $ 199

Income (loss) per preferred share            N/A       N/A     $(4,431)   $ 596

Shares                                       N/A       N/A         334      334


                                      144
<PAGE>

                  SELECTED FINANCIAL INFORMATION OF ROYAL RIDGE

      The following selected financial information is derived from the
historical financial statements of Royal Ridge. This information should be read
in conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" on pages 147 to 155 of this Consent
Solicitation/Prospectus.

<TABLE>
<CAPTION>
                                                         For the                             For the
                                                     Six Months Ended                       Year Ended
                                                         June 30,                          December 31,
                                                   --------------------     ---------------------------------------
(In thousands, except share and per share data)        2004        2003        2003    2002     2001    2000   1999

<S>                                                <C>         <C>          <C>         <C>     <C>     <C>    <C>
Operating Data:
Total revenue                                      $  1,517    $    590     $  2,264     --      --      --      --
Net income (loss)                                       679      (1,945)        (958)    --      --      --      --
Net income (loss) attributable to
  preferred shareholders                                679      (1,959)        (972)    --      --      --      --

Ratio of earnings to fixed charges                      N/A         N/A          N/A     --      --      --      --
(Royal Ridge has no permanent debt)

Net increase in cash and
  cash equivalents                                       50       2,452        1,214     --      --      --      --

Net cash provided by (used for)
  operating activities                                  585      (2,317)      (2,350)    --      --      --      --
Net cash used for distributions                         535         334        1,389     --      --      --      --

Balance Sheet Data
Cash and cash equivalents                             2,301       2,452        2,251     --      --      --      --

Total assets at book value                           24,768      25,432       25,170     --      --      --      --
Total assets at merger value                         27,042          --           --     --      --      --      --
Long term liabilities                                    --

Total liabilities                                       231         433          776     --      --      --      --
Total stockholders' equity                           24,537      24,999       24,394     --      --      --      --

Per Share Data:
Weighted average preferred shares
  outstanding                                        297.50      297.50       297.50     --      --      --      --

Net income (loss) per preferred share              $  2,282    $ (6,585)    $ (3,267)    --      --      --      --
Book value per preferred share                       82,477      84,030       81,997     --      --      --      --
Merger value per share                               90,897          --           --     --      --      --      --
Distributions per preferred share                     1,798       1,123        4,669     --      --      --      --
Distributions per preferred share
  (return of capital)                                    --          --        4,669     --      --      --      --
</TABLE>


                                      145
<PAGE>

Selected unaudited quarterly financial data for Royal Ridge

(in thousands, except shares and per share data)

                                                                   2004
                                                            --------------------
                                                             First        Second
                                                            Quarter      Quarter
                                                            -------      -------

Revenue                                                      $  762      $  755

Income to preferred shareholders                             $  346      $  333

Income per preferred share                                   $1,163      $1,119

Shares                                                        297.5       297.5


                                                            2003
                                           -------------------------------------
                                            First     Second    Third    Fourth
                                           Quarter   Quarter   Quarter   Quarter
                                           -------   -------   -------   -------

Revenue                                    $   238    $  352   $ 1,054   $   620

Net Income (loss)                          $(1,905)   $  (40)  $   654   $   333

Distributions to common shareholders       $    --    $   14   $    --   $    --

Income (loss) to preferred shareholders    $(1,905)   $  (54)  $   654   $   333

Income (loss) per preferred share          $(6,403)   $ (182)  $ 2,199   $ 1,119

Shares                                       297.5     297.5     297.5     297.5


                                      146
<PAGE>

         MANGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                    RESULTS OF OPERATIONS OF THE TARGET REITS

The following discussion should be read in conjunction with the Addison Circle,
Collins Crossing, Montague and Royal Ridge financial statements and notes
thereto appearing elsewhere in this Consent Solicitation/Prospectus. Historical
results and percentage relationships set forth in the respective target REIT
financial statements should not be taken as necessarily indicative of future
operations. The target REITs' financial statements have been prepared on the
accrual basis of accounting and have been prepared in accordance with Rule 3-14
of Regulation S-X of the SEC for real estate properties acquired or to be
acquired. Accordingly, these financial statements exclude certain historical
expenses not comparable to the proposed operations of the target REITs after
acquisition such as amortization, depreciation, interest, corporate expenses and
certain other costs not directly related to the future operations of the target
REITs.

Trends and Uncertainties

      Real Estate Operations

      It is difficult for management of the target REITs to predict what will
happen to occupancy or rents in 2004 and beyond because the need for space and
the price tenants are willing to pay are tied to both the local economy and to
the larger trends in the economy, such as job growth, interest rates, and
corporate earnings, which in turn are tied to even larger macroeconomic and
political factors, such as the risk of war and terrorism. In addition to the
difficulty of predicting macroeconomic factors, it is difficult to predict how
local markets, projects, or tenants will suffer or benefit from changes in the
larger economy. Because each property is in a single geographical market and
each property's tenants are in diverse industries, these macroeconomic trends
may have a different effect on a property and on its tenants.

Results of Operations of Addison Circle

      Addison Circle was organized in August 2002 as a corporation to purchase,
own and operate a commercial office building located in Addison, Texas. The
Addison Circle property consists of a ten-story Class "A" suburban office tower
that contains approximately 293,787 square feet of space situated on
approximately 3.61 acres of land. FSP Corp. acquired the property on September
30, 2002.

      The property is leased to three major tenants, McLeod USA
Telecommunications Services, Inc., The Staubach Company and Peoplesoft, formerly
J.D. Edwards World Solutions Company, U.S.A., Inc. that provide approximately
79% of the revenue. Bankruptcy or a material adverse change in financial
condition of any of these tenants may cause a material adverse affect to Addison
Circle. Peoplesoft has exercised its termination option and notified Addison
Circle of its intent to terminate its lease as of March 1, 2005.


                                      147
<PAGE>

Comparison of the six months ended June 30, 2004 to the six months ended
June 30, 2003

Revenue

      Total revenue increased $0.4 million, to $4.7 million for the six months
ended June 30, 2004, as compared to $4.3 million for the six months ended June
30, 2003. This increase is primarily due to the termination fee paid by
Peoplesoft when it exercised its termination option on its lease.

Expenses

      Total expenses were $1.5 million for the six months ended June 30, 2004,
and were consistent with the comparable period in 2003.

Comparison of the year ended December 31, 2003 to the year ended
December 31, 2002

Revenue

      Total revenue decreased $0.1 million, to $8.6 million for the year ended
December 31, 2003, as compared to $8.7 million for the year ended December 31,
2002.

      The decrease in rental income of $0.1 million, as compared to the year
ended December 31, 2002, is primarily attributable to vacancies as a result of
one tenant that went out of business and another tenant that "downsized" and
chose not to renew the space it leased on a month-to-month lease to expire.

Expenses

      Total expenses increased $0.2 million for the year ended December 31,
2003, as compared to the year ended December 31, 2002. The increase is primarily
attributable to:

      o     an increase of taxes and insurance of $0.1 million, as a result of a
            property tax assessment and insurance rate increases.

      o     an increase in operating expenses of $0.1 million as a result of
            slight increases in multiple expense categories.

Comparison of the year ended December 31, 2002 to the year ended
December 31, 2001

Revenue

      Total revenue increased $0.3 million, to $8.7 million for the year ended
December 31, 2002, as compared to $8.4 million for the year ended December 31,
2001.

      The increase in rental income of $0.3 million, as compared to the year
ended December 31, 2001, is attributable to two leases that were executed during
2002.

Expenses

      Total expenses increased $0.2 million for the year ended December 31,
2002, as compared to the year ended December 31, 2001. The increase is primarily
attributable to modest increases in multiple expense categories as a result of
the leases that were executed in 2002.


                                      148
<PAGE>

Liquidity and Capital Resources

      Cash and cash equivalents were $5.6 million and $6.0 million at June 30,
2004 and December 31, 2003, respectively. This decrease of $0.4 million is
attributable to $1.0 million provided by operating activities, offset by $0.2
million used for investing activities and $1.2 million used for financing
activities. Management believes that existing cash and cash anticipated to be
generated internally by operations will be sufficient to meet working capital
requirements and anticipated capital expenditures for at least the next 12
months.

      Operating Activities

      The cash provided by operating activities of $1.0 million is primarily
attributable to net income of $2.5 million plus the add-back of $0.7 million of
non-cash activity, principally depreciation and amortization. This was offset by
a decrease in operating assets of $2.2 million primarily related to accounts
payable and accrued expenses for the period ending December 31, 2003.

      Investing Activities

      Cash used for investing activities of $0.2 million is attributable to
tenant improvements and leasing commissions related to a new lease.

      Financing Activities

      Cash used by financing activities of $1.2 million is attributable to
distributions to shareholders.

Sources and Uses of Funds

      Addison Circle's principal demands for liquidity are cash for operations
and dividends to equity holders. As of June 30, 2004 Addison Circle had
approximately $1.4 million in liabilities and no long-term debt. In the near
term, liquidity is generated from funds from operations.

Results of Operations of Collins Crossing

      Collins Crossing was organized in January 2003 as a corporation to
purchase, own and operate a commercial office building located in Richardson,
Texas. Completed in 1999, the Collins Crossing property consists of an eleven
story Class "A" suburban office tower that contains approximately 298,766 square
feet of space situated on approximately ten acres of land (including an
undeveloped parcel containing approximately 3.5 acres). FSP Corp. acquired the
property on March 3, 2003. Collins Crossing began leasing its property in 2000.

      The major tenant at Collins Crossing provides approximately 80% of the
revenue and a second tenant provides approximately the remaining 20% of the
revenue. Bankruptcy or a material adverse change in financial condition of these
tenants may cause a material adverse affect to Collins Crossing.


                                      149
<PAGE>

Comparison of the six months ended June 30, 2004 to the six months ended
June 30, 2003

Revenue

      Total revenue increased $1.3 million, to $3.9 million for the six months
ended June 30, 2004, as compared to $2.6 million for the six months ended June
30, 2003. This increase is primarily due to a recalculation of straight-line
rents when the property was purchased in March 2003.

Expenses

      Total expenses increased $0.5 million to $1.4 million for the six months
ended June 30, 2004, as compared to $0.8 million at June 30, 2003. This is
primarily attributable to an increase in operating and maintenance expenses. A
substantial portion was recharged to tenants. In addition, real estate taxes and
insurance were higher in 2004 than 2003.

Comparison of the year ended December 31, 2003 to the year ended
December 31, 2002

Revenue

      Total revenue increased $0.1 million, to $7.8 million for the year ended
December 31, 2003, as compared to $7.7 million for the year ended December 31,
2002.

      The increase in rental income of $0.1 million, as compared to the year
ended December 31, 2002, is attributable to expenses which can be passed through
to tenants.

Expenses

      Total expenses increased $0.3 million for the year ended December 31,
2003, as compared to the year ended December 31, 2002. The increase is
attributable to:

      o     an increase in operating and maintenance expenses of $0.2 million,
            as compared to the year ended December 31, 2002, a substantial
            portion of which was recharged to tenants.

      o     an increase of $0.1 million as a result of increased management fees
            and related administrative expenses for the year ended December 31,
            2003, as compared to the year ended December 31, 2002 primarily as a
            result of a 1% management fee increase over the previous year.

Comparison of the year ended December 31, 2002 to the year ended
December 31, 2001

Revenue

      Total revenue increased $0.5 million, to $7.7 million for the year ended
December 31, 2002, as compared to $7.2 million for the year ended December 31,
2001.

      The increase in rental income of $0.5 million for the year ended December
31, 2002, is attributable to two large tenants taking space during various times
in 2002 and 2001.


                                      150
<PAGE>

Expenses

      Total expenses decreased $0.3 million for the year ended December 31,
2002, as compared to the year ended December 31, 2001. The decrease is primarily
attributable to:

o           a decrease in tax and insurance expenses of $0.2 million, as
            compared to the year ended December 31, 2001 as a result of a lower
            property assessment.

o           a decrease of $0.2 million in operating and maintenance expenses for
            the year ended December 31, 2002, as compared to the year ended
            December 31, 2001 as a result of reduced costs of primarily
            associated with property service contracts.

Liquidity and Capital Resources

      Cash and cash equivalents were $4.6 million and $5.1 million at June 30,
2004 and December 31, 2003, respectively. This decrease of $0.4 million is
attributable to $0.8 million provided by operating activities, offset by $1.2
million used for financing activities. Management believes that existing cash
and cash anticipated to be generated internally by operations will be sufficient
to meet working capital requirements and anticipated capital expenditures for at
least the next 12 months.

      Operating Activities

      The cash provided by operating activities of $0.8 million is primarily
attributable to net income of $1.5 million plus the add-back of $1.1 million of
non-cash activity. This was offset by a decrease in operating assets of $1.8
million, primarily related to approximately $1.6 million of accounts payable and
accrued expenses.

      Investing Activities

      No cash was provided by or used for investing activities.

      Financing Activities

      Cash used by financing activities of $1.2 million is attributable to
distributions to shareholders.

Sources and Uses of Funds

      Collins Crossing's principal demands for liquidity are cash for operations
and dividends to equity holders. As of June 30, 2004, Collins Crossing had
approximately $1.3 million in liabilities and no long-term debt. In the near
term, liquidity is generated from funds from operations.

Results of Operations of Montague

      Montague Business Center. was organized in July 2002 as a corporation to
purchase, own and operate two adjacent single-story research and
development/office buildings located in San Jose, California. The Montague
property contains approximately 145,951 square feet of space situated on
approximately 9.95 acres of land. FSP Corp. acquired the property on August 27,
2002.


                                      151
<PAGE>

      The property is leased to a single tenant and that tenant provides 100% of
the revenue. Bankruptcy or a material adverse change in financial condition of
this tenant may cause a material adverse affect to Montague. Moreover,
Montague's property is leased to a single tenant through December 31, 2006 at a
rate that is currently significantly above market. Following the termination of
this lease, the property may only be able to release the space at a rate that is
significantly lower than the current rate, possibly causing a material adverse
effect to Montague.

Comparison of the six months ended June 30, 2004 to the six months ended
June 30, 2003

Revenue

      Total revenue decreased $0.1 million, to $2.3 million for the six months
ended June 30, 2004, as compared to $2.4 million for the six months ended June
30, 2003. This decrease is primarily due to a slight reduction in operating
expenses, real estate taxes and insurance which resulted in lower billings to
the tenant.

Expenses

      Total expenses decreased less than $0.1 million, to $0.3 million for the
six months ended June 30, 2004, as compared to $0.3 million for the six months
ended June 30, 2003. This decrease is primarily due to a minor cost savings in
various operating expenses and a small decrease in real estate taxes as a result
of a lower tax assessment.

Comparison of the year ended December 31, 2003 to the year ended
December 31, 2002

Revenue

      Total revenue increased $0.4 million, to $4.8 million for the year ended
December 31, 2003, as compared to $4.4 million for the year ended December 31,
2002.

      The increase in rental income of $0.4 million, as compared to the year
ended December 31, 2002, is attributable to a tenant taking increased space in
mid-2002.

Expenses

      Total expenses increased $0.2 million for the year ended December 31,
2003, as compared to the year ended December 31, 2002. The increase is
attributable to:

      o     an increase in tax and insurance expenses of $0.1 million, as
            compared to the year ended December 31, 2002 as a result of property
            tax and insurance rate increases.

      o     a combined increase in management fee and operating and maintenance
            expenses of $0.1 million for the year ended December 31, 2003, as
            compared to the year ended December 31, 2002 as a result of a tenant
            taking increase space in mid-2002.


                                      152
<PAGE>

Comparison of the year ended December 31, 2002 to the year ended
December 31, 2001

Revenue

      Total revenue increased $0.6 million, to $4.4 million for the year ended
December 31, 2002, as compared to $3.8 million for the year ended December 31,
2001.

      The increase in rental income of $0.6 million, compared to the year ended
December 31, 2001, is attributable to a tenant taking increased space in
mid-2002.

Expenses

      Total expenses remained relatively consistent, totaling $0.4 million for
both the years ended December 31, 2002 and December 31, 2001. All expense
categories remained relatively consistent for the year ended December 31, 2002,
as compared to the year ended December 31, 2001.

Liquidity and Capital Resources

      Cash and cash equivalents were $3.6 million at June 30, 2004 and December
31, 2003. This is attributable to $0.9 million provided by operating activities,
offset by $0.9 million used for financing activities. Management believes that
existing cash and cash anticipated to be generated internally by operations will
be sufficient to meet working capital requirements and anticipated capital
expenditures for at least the next 12 months.

      Operating Activities

      The cash provided by operating activities of $0.9 million is primarily
attributable to net income of $1.2 million plus the add-back of $0.7 million of
non-cash activity, principally depreciation and amortization. This was offset by
a decrease in operating assets of $1.0 million primarily related to accounts
payable and accrued expenses.

      Investing Activities

      No cash was provided by or used for investing activities.

      Financing Activities

      Cash used by financing activities of $0.9 million is attributable to
distributions to shareholders.

Sources and Uses of Funds

      Montague's principal demands for liquidity are cash for operations and
dividends to equity holders. As of June 30, 2004 Montague had approximately $0.4
million in liabilities and no long-term debt. In the near term, liquidity is
generated from funds from operations.

Results of Operations of Royal Ridge

      Royal Ridge was organized in December 2002 as a corporation to purchase,
own and operate a six-story Class "A" suburban office building containing
approximately 161,366 rental square feet of space located on approximately 13.2
acres of land in Alpharetta, Georgia. FSP Corp. acquired the property on January
30, 2003.


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      The property is leased to two major tenants, Combined Speciality Insurance
Company and Hagenmeyer North America, Inc., that provide approximately 90% of
the revenue. Bankruptcy or a material adverse change in financial condition to
either of these tenants may cause a material adverse affect to Royal Ridge.

      On January 30, 2003, Royal Ridge purchased a building for which the
construction was completed in December 2001. As a result, historical results are
presented only beginning with the commencement of operations of this second
building. The two major tenants executed their respective leases between May and
June 2002.

Comparison of the six months ended June 30, 2004 to the six months ended
June 30, 2003

Revenue

      Total revenue was $1.7 million for the six months ended June 30, 2004, as
compared to $0.6 million for the six months ended June 30, 2003.

      The increase in rental income of $1.1 million is primarily attributable to
the recalculation of straight-line rents and billing of operating expenses.
Construction of the building was completed during 2001 and was not fully leased
until 2002. The tenants received free rent during 2002. Revenue related to
straight-line rents was initially recognized in 2002 and subsequently adjusted
as the property was designated as "held for sale".

Expenses

      Total expenses increased $0.2 million, to $0.6 million for the six months
ended June 30, 2004, as compared to $0.4 million for the six months ended June
30, 2003. This increase is primarily due to increased management fees as a
result of increased occupancy of the property.

Comparison of the year ended December 31, 2003 to the year ended
December 31, 2002

Revenue

      Total revenue was $2.7 million for the year ended December 31, 2003, as
compared to $[23.0] thousand for the year ended December 31, 2002.

      This occurred because construction of the building was not completed until
2001; no leases commenced until 2002 and the tenants received free rent during
2002. Revenue related to straight-line rents was not recognized as the property
was for sale and the straight-line rents receivable would not be collected. In
addition, approximately $0.6 million of reimbursable expenses resulted from
occupancy in 2003 that did not occur in 2002.

Expenses

      Total expenses increased $0.3 million for the year ended December 31,
2003, as compared to the year ended December 31, 2002. The increase is
attributable to:


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      o     an increase of tax and insurance expenses of $0.1 million, as
            compared to the year ended December 31, 2002 as a result of property
            tax and insurance rate increases.

      o     an increase of operating and maintenance expenses of $0.1 million,
            as compared to the year ended December 31, 2002 as a result of a
            increased occupancy.

      o     a combined increase of $0.1 million in management fee and
            administrative expenses for the year ended December 31, 2003, as
            compared to the year ended December 31, 2002 as a result of
            increased occupancy.

Liquidity and Capital Resources

      Cash and cash equivalents were $2.3 million at June 30, 2004 and December
31, 2003. This is attributable to $0.5 million provided by operating activities,
offset by $0.5 million used for financing activities. Management believes that
existing cash and cash anticipated to be generated internally by operations will
be sufficient to meet working capital requirements and anticipated capital
expenditures for at least the next 12 months.

      Operating Activities

      The cash provided by operating activities of $0.5 million is primarily
attributable to net income of $0.6 million plus the add-back of $0.5 million of
non-cash activity, principally depreciation and amortization. This was offset by
a decrease in operating assets of $0.6 million primarily related to accounts
payable and accrued expenses.

      Investing Activities

      No cash was provided by or used for investing activities.

      Financing Activities

      Cash used by financing activities of $0.5 million is attributable to
distributions to shareholders.

Sources and Uses of Funds

      Royal Ridge's principal demands for liquidity are cash for operations and
dividends to equity holders. As of June 30, 2004, Royal Ridge had approximately
$0.2 million in liabilities and no long-term debt. In the near term, liquidity
is generated from funds from operations.

Contractual Obligations and Off Balance Sheet Arrangements

      None of the target REITs has any long term contractual obligations or is a
party to any off balance sheet arrangements. Moreover, no target REIT has a
proposed program for the renovation, improvement or development of any of their
real properties other than normal tenant improvements or replacements of
equipment in the ordinary course of ongoing operations.


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            MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

      The following is a general summary of the material United States federal
income tax considerations associated with the mergers and with the acquisition,
ownership and disposition of FSP common stock pursuant to the mergers. The
following summary is not exhaustive of all possible tax considerations.
Moreover, the summary contained herein does not address all aspects of taxation
that may be relevant to particular target REIT stockholders in light of their
personal tax circumstances, or to certain types of stockholders subject to
special treatment under federal income tax laws, including insurance companies,
tax-exempt organizations (except to the extent discussed below under the heading
"Taxation of Tax-Exempt Shareholders"), financial institutions, broker-dealers,
and foreign corporations and persons who are not citizens or residents of the
United States (except to the extent discussed below under the heading "Taxation
of Non-U.S. Shareholders"). For purposes of this summary, references to the
"combined company" exclude any taxable REIT subsidiaries (as described below) of
FSP Corp.

      Assuming no material changes in the applicable federal income tax laws
prior to the effective date of the mergers, Wilmer Cutler Pickering Hale and
Dorr LLP will issue an opinion to FSP Corp. and each target REIT based upon
certain factual representations made by FSP Corp. and the target REITs that (i)
the mergers will constitute reorganizations within the meaning of Section 368(a)
of the Code, and (ii) to the extent that the matters discussed under this
heading "Material United States Federal Income Tax Considerations" constitute
matters of law, they are accurate in all material respects.

      The statements in this summary are, and the opinions of Wilmer Cutler
Pickering Hale and Dorr LLP will be, based on the provisions of the Internal
Revenue Code, or the tax code, applicable United States Treasury regulations
promulgated thereunder, and judicial and administrative decisions and rulings
all as in effect on the date rendered. Neither the statements below nor the
opinions is binding on the Internal Revenue Service or the courts, and there can
be no assurance that the Internal Revenue Service or the courts will not take a
contrary view. No ruling from the Internal Revenue Service has been or will be
sought. Future legislative, judicial or administrative changes or
interpretations could alter or modify the statements and conclusions set forth
herein, possibly adversely.

      EACH TARGET REIT STOCKHOLDER IS URGED TO CONSULT HIS, HER, OR ITS OWN TAX
ADVISOR REGARDING THE SPECIFIC TAX CONSEQUENCES TO THE TARGET REIT STOCKHOLDER
OF THE MERGERS AND OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF STOCK IN AN
ENTITY ELECTING TO BE TAXED AS A REAL ESTATE INVESTMENT TRUST, INCLUDING
FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES, AS WELL AS POTENTIAL
CHANGES IN THE APPLICABLE TAX LAWS.

Tax Consequences of the Mergers

      In the opinion of Wilmer Cutler Pickering Hale and Dorr LLP, each merger
will be treated as a "reorganization" within the meaning of Section 368(a) of
the tax code. Accordingly, subject to the limitations and qualifications
referred to herein, the following tax consequences will result:


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      o     No gain or loss will be recognized by the target REIT stockholders
            upon the receipt of FSP common stock in exchange for target stock in
            the merger, except with respect to any cash received in lieu of a
            fractional share of FSP common stock.

      o     The aggregate tax basis of the FSP common stock received by a target
            REIT stockholder in the merger will be the same as the aggregate
            basis of the target stock surrendered by the stockholder in the
            exchange, reduced by any the portion of such basis attributable to
            the shares of target stock exchanged for cash in lieu of a
            fractional share of FSP Corp. common stock.

      o     The holding period of the FSP common stock received by each target
            REIT stockholder in the merger will include the holding period for
            the target stock surrendered by the stockholder in the exchange.

      A successful Internal Revenue Service challenge to the "reorganization"
status of the merger would result in each target REIT stockholder recognizing
gain or loss with respect to each share of target stock surrendered in the
applicable merger equal to the difference between the stockholder's basis in his
target stock and the fair market value, as of the completion of the merger, of
the FSP common stock received in exchange therefor. In the event of a successful
challenge, the total tax basis in the FSP common stock so received would equal
its fair market value, as of the completion of the merger, and the holding
period for the FSP common stock would begin the day after the merger.

      Each target REIT stockholder who receives shares of FSP common stock in a
merger will be required to file a statement with his, her or its federal income
tax return setting forth the stockholder's basis in the shares of target stock
surrendered and the fair market value of FSP common stock received in the
merger. The target REIT stockholder will be required to retain permanent records
of these facts relating to the transaction.

Certain Tax Risks Relating to the Mergers

      The mergers entail certain tax risks which, if realized, may cause the
combined company to fail to qualify as a REIT in the year of the mergers or in
any subsequent year, or may result in substantial penalties (excise taxes) being
imposed upon the combined company. As a result of the mergers, for example:

      o     The combined company may, directly or indirectly, improperly own 10%
            or more of a tenant from which the combined company collects rent,
            causing the rent received from such tenant to fail to qualify as
            rents from real property, as described below under "Requirements for
            Taxation as a Real Estate Investment Trust - Income Tests".

      o     The combined company may improperly own (i) more than 10% of the
            outstanding voting securities of any issuer, or (ii) more than 10%
            of the value of the securities of any issuer, causing the combined
            company to fail to satisfy the asset tests, as described below under
            "Requirements for Taxation as a Real Estate Investment Trust - Asset
            Tests".


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      o     The combined company would be disqualified as a REIT if any of the
            target REITs did not qualify as a REIT and, as a result, had any
            undistributed "earnings and profits" at the time of the mergers.

      If the combined company fails to qualify as a REIT, the combined company
could be disqualified from treatment as a REIT in the year in which such failure
occurred and for the next four taxable years and, consequently, would be taxed
as a regular corporation during such years. Other tax costs that could result if
one or more of the mergers caused the combined company to acquire impermissible
assets or income are described below under "Tax Consequences of REIT Election -
Taxation of the combined company - General."

Tax Consequences of REIT Election

      Introduction. FSP Corp. has elected under Section 856 of the tax code to
be taxed as a real estate investment trust. Following the mergers, subject to
the risks described above, the combined company intends to continue to be taxed
as a REIT.

      Taxation of the combined company

      General. If the combined company continues to qualify as a real estate
investment trust, it generally will not be subject to federal corporate income
taxes on its net income to the extent that the income is currently distributed
to its shareholders. The benefit of this tax treatment is that it substantially
eliminates the "double taxation" resulting from the taxation at both the
corporate and shareholder levels that generally results from owning stock in a
corporation. Accordingly, income generated by the combined company generally
will be subject to taxation solely at the shareholder level upon a distribution
from the combined company. The combined company will, however, be required to
pay certain federal income taxes, including in the following circumstances:

      o     The combined company will be subject to federal income tax at
            regular corporate rates on taxable income, including net capital
            gain, that the combined company does not distribute to shareholders
            during, or within a specified time period after, the calendar year
            in which such income is earned.

      o     The combined company will be subject to the "alternative minimum
            tax" with respect to its undistributed alternative minimum taxable
            income.

      o     The combined company will be subject to a 100% tax on net income
            from certain sales or other dispositions of property that it holds
            primarily for sale to customers in the ordinary course of business,
            also known as "prohibited transactions".

      o     If the combined company fails to satisfy the 75% gross income test
            or the 95% gross income test, both described below, but nevertheless
            qualifies as a real estate investment trust, the combined company
            will be subject to a 100% tax on an amount equal to (i) the gross
            income attributable to the greater of the amount by which the
            combined company fails the 75% or 95% gross income test multiplied
            by (ii) a fraction intended to reflect the combined company's
            profitability.


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      o     If the combined company fails to distribute during the calendar year
            at least the sum of (i) 85% of its real estate investment trust
            ordinary income for such year, (ii) 95% of its real estate
            investment trust capital gain net income for such year, and (iii)
            any undistributed taxable income from prior periods, the combined
            company will pay a 4% excise tax on the excess of such required
            distribution over the amount actually distributed to its
            shareholders.

      o     The combined company may elect to retain and pay income tax on some
            or all of its long-term capital gain, as described below.

      o     The combined company may be subject to a 100% excise tax on
            transactions with any of its taxable REIT subsidiaries that are not
            conducted on an arm's-length basis.

Requirements for Qualification as a Real Estate Investment Trust

      Introduction. In order to qualify as a real estate investment trust for
federal income tax purposes a REIT must elect (or have elected, and have not
revoked its election) to be treated as a REIT and must satisfy certain statutory
tests relating to, among other things, (i) the sources of its income, (ii) the
nature of its assets, (iii) the amount of its distributions, and (iv) the
ownership of its stock. FSP Corp. has elected to be treated as a REIT and has
endeavored, and the combined company will endeavor, to satisfy the tests for
REIT qualification.

      A real estate investment trust may own a "qualified REIT subsidiary." A
qualified REIT subsidiary is a corporation, all of the capital stock of which is
owned by a real estate investment trust, and for which subsidiary no election
has been made to treat it as a "taxable REIT subsidiary" (as discussed below). A
corporation that is a qualified REIT subsidiary is not treated as a corporation
separate from its parent real estate investment trust for federal income tax
purposes. All assets, liabilities, and items of income, deduction, and credit of
a qualified REIT subsidiary are treated as the assets, liabilities, and items of
income, deduction and credit of the parent real estate investment trust. Thus,
in applying the requirements described herein, any qualified REIT subsidiary of
the combined company will be ignored, and all assets, liabilities and items of
income, deduction and credit of such subsidiary will be treated as the assets,
liabilities, and items of income deduction and credit of the combined company.

      In the event that the combined company becomes a partner in a partnership,
the combined company will be deemed to own its proportionate share (based upon
its share of the capital of the partnership) of the assets of the partnership
and will be deemed to be entitled to the income of the partnership attributable
to such share. In addition, the assets and income of the partnership so
attributed to the combined company will retain their same character as in the
hands of the partnership for purposes of determining whether the combined
company satisfies the income and asset tests described below.

      A real estate investment trust may own up to 100% of the stock of one or
more taxable REIT subsidiaries. A taxable REIT subsidiary may earn income that
would not be qualifying income, as described below, if earned directly by the
parent real estate investment trust. Both the subsidiary and the parent real
estate investment trust must jointly elect to treat the subsidiary as a taxable


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REIT subsidiary. Overall, not more than 20% of the value of a REIT's assets may
consist of securities of one or more taxable REIT subsidiaries. A taxable REIT
subsidiary will pay tax at regular corporate rates on any income that it earns.
There is a 100% excise tax imposed on certain transactions involving a taxable
REIT subsidiary and its parent real estate investment trust that are not
conducted on an arm's-length basis. An election has been made to treat FSP
Investments as a taxable REIT subsidiary. FSP Investments pays corporate income
tax on its taxable income and its after-tax net income will be available for
distribution to the combined company, generally as a dividend.

      Income Tests - General. The combined company must satisfy annually two
tests regarding the sources of its gross income in order to maintain its real
estate investment trust status. First, at least 75% of the combined company's
gross income, excluding gross income from certain "dealer" sales, for each
taxable year generally must consist of defined types of income that the combined
company derives, directly or indirectly, from investments relating to real
property or mortgages on real property or temporary investment income, also
known as the "75% gross income test". Qualifying income for purposes of the 75%
gross income test generally includes:

      o     "rents from real property" (as described below);

      o     interest from debt secured by mortgages on real property or on
            interests in real property;

      o     dividends or other distributions on, and gain from the sale of,
            shares in other real estate investment trusts;

      o     gain from the sale or other disposition of real property or
            mortgages on real property;

      o     amounts (other than amounts the determination of which depends in
            whole or in part on the income or profits of any person) received as
            consideration for entering into agreements to make loans secured by
            mortgages on real property or on interests in real property or
            agreements to purchase or lease real property; and

      o     certain investment income attributable to temporary investment of
            capital raised by the combined company.

      Second, at least 95% of the combined company's gross income, excluding
gross income from certain "dealer" sales, for each taxable year generally must
consist of income that is qualifying income for purposes of the 75% gross income
test, as well as dividends, other types of interest, and gain from the sale or
disposition of stock or securities, also known as the "95% gross income test".

      Income Tests - Rents from Real Property. Rent that the combined company
receives from real property that it owns and leases to tenants will qualify as
"rents from real property" if the following conditions are satisfied:

      o     First, the rent must not be based, in whole or in part, on the
            income or profits of any person. An amount will not fail to qualify
            as rent from real property solely by reason of its being based on a
            fixed percentage (or percentages) of sales or receipts.


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      o     Second, neither the combined company nor any direct or indirect
            owner of 10% or more of its stock may own, actually or
            constructively, 10% (by vote or value) or more of the tenant from
            which the combined company collects the rent.

      o     Third, all of the rent received under a lease will not qualify as
            rents from real property unless the rent attributable to the
            personal property leased in connection with the real property
            constitutes no more than 15% of the total rent received under the
            lease.

      o     Finally, the combined company generally must not operate or manage
            its real property or furnish or render services to its tenants,
            other than through an "independent contractor" who is adequately
            compensated and from whom the combined company does not derive
            revenue. The combined company may provide services directly,
            however, if the services are "usually or customarily rendered" in
            connection with the rental of space for occupancy only and are not
            otherwise considered rendered "primarily for the occupant's
            convenience." In addition, the combined company may render, other
            than through an independent contractor, a de minimis amount of
            "non-customary" services to the tenants of a property as long as the
            combined company's income from such services does not exceed 1% of
            its gross income from the property.

      Although no assurances can be given that either of the gross income tests
will be satisfied in any given year, the combined company anticipates that its
operations will allow it to meet each of the 75% gross income test and the 95%
gross income test. Such belief is premised in large part on the combined
company's expectation that substantially all of the amounts received by the
company with respect to its properties will qualify as "rents from real
property." Shareholders should be aware, however, that there are a variety of
circumstances, as described above, in which rent received from a tenant will not
be treated as rents from real property.

      Income Tests - Failure to Satisfy Gross Income Tests. If the combined
company fails to satisfy either or both of the 75% or 95% gross income tests for
any taxable year, the combined company may nevertheless qualify as a real estate
investment trust for that year if it is eligible for relief under certain
provisions of the federal income tax laws. Those relief provisions generally
will be available if:

      o     the combined company's failure to meet the gross income test was due
            to reasonable cause and not due to willful neglect;

      o     the combined company attaches a schedule of the sources of its
            income to its federal income tax return; and

      o     any incorrect information on the schedule is not due to fraud with
            intent to evade tax.

      It is not possible to state whether the combined company would be entitled
to the benefit of the above relief provisions in a particular circumstance that
might arise in the future. Furthermore, as discussed above under "Taxation of
the combined company - General," even if the relief provisions apply, the
combined company would incur a 100% tax on the gross income attributable to the
greater of the amounts by which it fails the 75% and 95% gross income tests,
multiplied by a fraction that reflects the combined company's profitability.


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      Asset Tests. The combined company also must satisfy the following four
tests relating to the nature of its assets at the close of each quarter of its
taxable year.

      o     First, at least 75% of the value of the combined company's total
            assets must consist of cash or cash items(including receivables),
            government securities, "real estate assets," or qualifying temporary
            investments, also known as the "75% asset test";

      o     Second, no more than 25% of the value of the combined company's
            total assets may be represented by securities other than those that
            are qualifying assets for purposes of the 75% asset test or of
            certain entities that qualify as taxable REIT subsidiaries, also
            known as the "25% asset test";

      o     Third, of the investments included in the 25% asset test, the value
            of any one issuer's securities that the combined company owns may
            not exceed 5% of the value of the combined company's total assets,
            and the combined company may not own 10% or more of the total
            combined voting power or 10% or more of the total value of the
            securities of any issuer, unless such issuer and the combined
            company make an election to treat the issuer as a taxable REIT
            subsidiary or the issuer is a "disregarded entity" for federal
            income tax purposes or is itself a REIT; and

      o     Fourth, while the combined company may own up to 100% of the stock
            of a corporation that elects to be treated as a taxable REIT
            subsidiary for federal income tax purposes, the total value of the
            combined company's stock ownership in one or more taxable REIT
            subsidiaries may not exceed 20% of the value of the combined
            company's gross assets.

      The combined company intends to operate so that it will not acquire any
assets that would cause it to violate any of the asset tests. If, however, the
combined company should fail to satisfy any of the asset tests at the end of a
calendar quarter, it would not lose its real estate investment trust status if
(i) the combined company satisfied the asset tests at the end of the close of
the preceding calendar quarter, and (ii) the discrepancy between the value of
the combined company's assets and the asset test requirements arose from changes
in the market values of the combined company's assets and was not wholly or
partly caused by the acquisition of one or more nonqualifying assets. If the
combined company did not satisfy the condition described in clause (ii) of the
preceding sentence, it could still avoid disqualification as a real estate
investment trust by eliminating any discrepancy within 30 days after the close
of the calendar quarter in which the discrepancy arose.

      Distribution Requirements. Each taxable year, the combined company must
distribute dividends to its shareholders in an amount at least equal to:

      o     90% of the combined company's "real estate investment trust taxable
            income," computed without regard to the dividends paid deduction and
            the combined company's net capital gain or loss; and

      o     certain items of noncash income.


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      The combined company must make such distributions in the taxable year to
which they relate, or in the following taxable year if the combined company
declares the distribution before it timely files its federal income tax return
for such year and pays the distribution on or before the first regular
distribution date after such declaration. Further, if the combined company fails
to meet the 90% distribution requirement as a result of an adjustment to its tax
returns by the Internal Revenue Service, the combined company may, if the
deficiency is not due to fraud with intent to evade tax or a willful failure to
file a timely tax return, and if certain other conditions are met, retroactively
cure the failure by paying a deficiency dividend (plus interest) to its
shareholders.

      The combined company will be subject to federal income tax on its taxable
income, including net capital gain that it does not distribute to its
shareholders. Furthermore, if the combined company fails to distribute during a
calendar year, or, in the case of distributions with declaration and record
dates falling within the last three months of the calendar year, by the end of
the January following such calendar year, at least the sum of:

      o     85% of the combined company's real estate investment trust ordinary
            income for such year;

      o     95% of the combined company's real estate investment trust capital
            gain income for such year; and

      o     any of the combined company's undistributed taxable income from
            prior periods,

the combined company will be subject to a 4% nondeductible excise tax on the
excess of such required distribution over the amount actually distributed. If
the combined company elects to retain and pay income tax on the net capital gain
that it receives in a taxable year, the combined company will be deemed to have
distributed any such amount for the purposes of the 4% excise tax described in
the preceding sentence.

      The combined company intends to make distributions to holders of FSP
common stock in a manner that will allow it to satisfy the distribution
requirements described above. It is possible that, from time to time, the
combined company's pre-distribution taxable income may exceed its cash flow and
that the combined company may have difficulty satisfying the distribution
requirements. The combined company intends to monitor closely the relationship
between its pre-distribution taxable income and its cash flow and intends to
borrow funds or liquidate assets in order to overcome any cash flow shortfalls
if necessary to satisfy the distribution requirements imposed by the tax code.
It is possible, although unlikely, that the combined company may decide to
terminate its real estate investment trust status as a result of any such cash
shortfall. Such a termination would have adverse tax consequences to the
combined company's stockholders. See "Taxation of the combined company -
General".

      Recordkeeping Requirements. The combined company must maintain records of
information specified in applicable Treasury Regulations in order to maintain
its qualification as a real estate investment trust. In addition, in order to
avoid monetary penalties, the combined company must request on an annual basis
certain information from its shareholders designed to disclose the actual
ownership of the combined company's outstanding stock. The combined company
intends to comply with these recordkeeping requirements.


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      Ownership Requirements. For the combined company to qualify as a real
estate investment trust, shares of the combined company must be held by a
minimum of 100 persons for at least 335 days in each taxable year. Further, at
no time during the second half of any taxable year may more than 50% of the
combined company's shares be owned, actually or constructively, by five or fewer
"individuals" (which term is defined for this purpose to include certain
tax-exempt entities including pension trusts). The FSP common stock will be held
by 100 or more persons. The combined company intends to continue to comply with
these ownership requirements. Also, the combined company's charter contains
ownership and transfer restrictions designed to prevent violation of these
requirements.

      Failure to Qualify. If the combined company failed to qualify as a real
estate investment trust in any taxable year, and no relief provisions applied,
the combined company would be subject to federal income tax, including any
applicable alternative minimum tax, on its taxable income at regular corporate
rates. In calculating the combined company's taxable income in a year in which
it did not qualify as a real estate investment trust, the combined company would
not be able to deduct amounts paid out to its shareholders. The combined company
would not be required to distribute any amounts to its shareholders in such
taxable year. In such event, to the extent of the combined company's current and
accumulated earnings and profits, all distributions to shareholders would be
characterized as dividends and would be taxable as ordinary income.
Non-corporate shareholders, however, could qualify for a lower maximum tax rate
on such dividends in most circumstances. Moreover, subject to certain
limitations under the tax code, corporate shareholders might be eligible for the
dividends received deduction. Unless the combined company qualified for relief
under specific statutory provisions, the combined company would be disqualified
from taxation as a real estate investment trust for the four taxable years
following the year in which it ceased to qualify as a real estate investment
trust. The combined company cannot predict whether it would qualify for such
statutory relief in a particular circumstance that might arise in the future.

Taxation of Taxable U.S. Shareholders

      As used herein, the term "taxable U.S. shareholder" means a shareholder
that, for United States federal income tax purposes, is:

      o     a citizen or resident of the United States;

      o     a corporation, partnership, or other entity created or organized in
            or under the laws of the United States or any state or political
            subdivision thereof;

      o     an estate the income of which is includible in gross income for
            United States federal income tax purposes regardless of such
            estate's connection with the conduct of a trade or business within
            the United States; or

      o     any trust with respect to which (i) a United States court is able to
            exercise primary supervision over the administration of such trust,
            and (ii) one or more United States persons have the authority to
            control all substantial decisions of the trust.

      For any taxable year in which the combined company qualifies as a real
estate investment trust, amounts distributed to taxable U.S. shareholders will
be taxed as follows.


                                      164
<PAGE>

      Distributions Generally. Distributions made to the combined company's
taxable U.S. shareholders out of current or accumulated earnings and profits
(and not designated as a capital gain dividend) will be taken into account by
such shareholder as ordinary income and will not, in the case of a corporate
taxable U.S. shareholder, be eligible for the dividends received deduction. In
addition, such dividends will not qualify for the lower maximum tax rate
applicable to dividends received by non-corporate taxpayers except to the extent
that they were attributable to income previously taxed to the combined company.
To the extent that the combined company makes a distribution with respect to the
FSP common stock that is in excess of its current or accumulated earnings and
profits, the distribution will be treated by a taxable U.S. shareholder first as
a tax-free return of capital, reducing the taxable U.S. shareholder's tax basis
in the FSP common stock, and any portion of the distribution in excess of the
shareholder's tax basis in the FSP common stock will then be treated as gain
from the sale of such stock. Dividends declared by the combined company in
October, November, or December of any year payable to a taxable U.S. shareholder
of record on a specified date in any such month shall be treated as both paid by
the combined company and received by shareholders on December 31 of such year,
provided that the dividend is actually paid by the combined company during
January of the following calendar year. Taxable U.S. shareholders may not
include on their federal income tax returns any of the combined company's tax
losses.

      Capital Gain Dividends. Dividends to taxable U.S. shareholders that
properly are designated by the combined company as capital gain dividends will
be treated by such shareholders as long-term capital gain, to the extent that
such dividends do not exceed the combined company's actual net capital gain,
without regard to the period for which the taxable U.S. shareholders have held
the FSP common stock. Taxable U.S. shareholders that are corporations may be
required, however, to treat up to 20% of particular capital gain dividends as
ordinary income. Capital gain dividends, like regular dividends from a real
estate investment trust, are not eligible for the dividends received deduction
for corporations.

      For taxable U.S. shareholders who are taxable at the rates applicable to
individuals, the combined company will classify portions of any capital gain
dividend as either (i) a "regular" capital gain dividend taxable to the taxable
U.S. shareholder at a maximum rate of 15% or (ii) an "unrecaptured Section 1250
gain" dividend taxable to the taxable U.S. shareholder at a maximum rate of 25%.

      Retained Capital Gains. The combined company may elect to retain, rather
than distribute, its net long-term capital gain received during the tax year. If
the combined company so elects, it will be required to pay tax on the retained
amounts. To the extent designated in a notice to the taxable U.S. shareholders,
the taxable U.S. shareholders will be required to include their proportionate
shares of the undistributed net long-term capital gain so designated in their
income for the tax year, but will be permitted a credit or refund, as the case
may be, for their respective shares of any tax paid on such gains by the
combined company. In addition, each taxable U.S. shareholder will be entitled to
increase the tax basis in his or her shares of FSP common stock by an amount
equal to the amount of net long-term capital gain the taxable U.S. shareholder
was required to include in income, reduced by the amount of any tax paid by the
combined company for which the taxable U.S. shareholder was entitled to receive
a credit or refund.


                                      165
<PAGE>

      Passive Activity Loss and Investment Interest Limitations. Distributions,
including deemed distributions of undistributed net long-term capital gain, from
the combined company and gain from the disposition of FSP common stock will not
be treated as passive activity income, and therefore taxable U.S. shareholders
will not be able to apply any passive activity losses against such income.
Distributions from the combined company, to the extent they do not constitute a
return of capital, generally will be treated as investment income for purposes
of the investment income limitation on deductibility of investment interest.
However, dividends attributable to income that was subject to tax at the
combined company level as well as net capital gain from the disposition of FSP
common stock or capital gain dividends, including deemed distributions of
undistributed net long-term capital gains, generally will be excluded from
investment income.

      Sale of FSP Common Stock. Upon the sale of FSP common stock, a taxable
U.S. shareholder generally will recognize gain or loss equal to the difference
between the amount realized on such sale and the holder's tax basis in the stock
sold. To the extent that the FSP common stock is held as a capital asset by the
taxable U.S. shareholder, the gain or loss will be a long-term capital gain or
loss if the stock has been held for more than a year, and will be a short-term
capital gain or loss if the stock has been held for a shorter period. In
general, however, any loss upon a sale of the FSP common stock by a taxable U.S.
shareholder who has held such stock for six months or less (after applying
certain holding period rules) will be treated as a long-term capital loss to the
extent that distributions from the combined company were required to be treated
as long-term capital gain by that holder.

Taxation of Tax-Exempt Shareholders

      Tax-exempt entities, including qualified employee pension and profit
sharing trusts and individual retirement accounts, collectively known as "exempt
organizations", generally are exempt from federal income taxation. Exempt
organizations are subject to tax, however, on their unrelated business taxable
income, or "UBTI". UBTI is defined as the gross income derived by an exempt
organization from an unrelated trade or business, less the deductions directly
connected with that trade or business, subject to certain exceptions. While many
investments in real estate generate UBTI, the Internal Revenue Service has
issued a ruling that dividend distributions from a real estate investment trust
to an exempt employee pension trust do not constitute UBTI, provided that the
shares of the real estate investment trust are not otherwise used in an
unrelated trade or business of the exempt employee pension trust. Based on that
ruling, amounts distributed to exempt organizations generally should not
constitute UBTI. However, if an exempt organization finances its acquisition of
FSP common stock with debt, a portion of its income from the combined company
will constitute UBTI pursuant to the "debt-financed property" rules.

      In addition, in certain circumstances, a pension trust that owns more than
10% of the stock of the combined company will be required to treat a percentage
of the dividends paid by the combined company as UBTI based upon the percentage
of the combined company's income that would constitute UBTI to the shareholder
if received directly by it. This rule applies to a pension trust holding more
than 10% (by value) of the FSP common stock only if (i) the percentage of the
income from the combined company that is UBTI (determined as if the combined
company were a pension trust) is at least 5% and (ii) the combined company is
treated as a "pension-held REIT." The combined company does not expect to
receive significant amounts of income that would be considered UBTI if received
directly by a pension trust and does not expect to qualify as a "pension-held
REIT."


                                      166
<PAGE>

Taxation of Non-U.S. Shareholders

      General. The rules governing United States federal income taxation of
nonresident alien individuals, foreign corporations, foreign partnerships,
foreign trusts and certain other foreign stockholders, collectively known as
"non-U.S. shareholders," are complex and no attempt is made herein to provide
more than a general summary of such rules. This discussion does not consider the
tax rules applicable to all non-U.S. shareholders and, in particular, does not
consider the special rules applicable to U.S. branches of foreign banks or
insurance companies or certain intermediaries. NON-U.S. SHAREHOLDERS SHOULD
CONSULT WITH THEIR OWN TAX ADVISORS TO DETERMINE THE IMPACT OF FEDERAL, STATE,
LOCAL AND FOREIGN TAX LAWS WITH REGARD TO THE MERGERS AND THE ACQUISITION,
OWNERSHIP AND DISPOSITION OF FSP COMMON STOCK, INCLUDING ANY REPORTING AND
WITHHOLDING REQUIREMENTS.

      Ordinary Dividends - General. Distributions to non-U.S. shareholders that
are not attributable to gain from sales or exchanges by the combined company of
United States real property interests and are not designated by the combined
company as capital gain dividends (or deemed distributions of retained capital
gains) will be treated as ordinary dividends to the extent that they are made
out of current or accumulated earnings and profits of the combined company. Any
portion of a distribution in excess of current and accumulated earnings and
profits of the combined company will not be taxable to a non-U.S. shareholder to
the extent that such distribution does not exceed the adjusted basis of the
shareholder in the FSP common stock, but rather will reduce the adjusted basis
of such stock. To the extent that the portion of the distribution in excess of
current and accumulated earnings and profits exceeds the adjusted basis of a
non-U.S. shareholder for the FSP common stock, such excess generally will be
treated as gain from the sale or disposition of the stock and will be taxed as
described below.

      Ordinary Dividends - Withholding. Dividends paid to non-U.S. shareholders
may be subject to U.S. withholding tax. If an income tax treaty does not apply
and the non-U.S. shareholder's investment in the FSP common stock is not
effectively connected with a trade or business conducted by the non-U.S.
shareholder in the United States (or if a tax treaty does apply and the
investment in the FSP common stock is not attributable to a United States
permanent establishment maintained by the non-U.S. shareholder), ordinary
dividends (i.e., distributions out of current and accumulated earnings and
profits) will be subject to a U.S. withholding tax at a 30% rate, or, if an
income tax treaty applies, at a lower treaty rate. Because the combined company
generally cannot determine at the time that a distribution is made whether or
not such a distribution will be in excess of earnings and profits, the combined
company intends to withhold on the gross amount of each distribution at the 30%
rate (or lower treaty rate) (other than distributions subject to the 35% FIRPTA
withholding rules described below). To receive a reduced treaty rate, a non-U.S.
shareholder must furnish the combined company or its paying agent with a duly
completed Form W-8BEN (or authorized substitute form) certifying such holder's
qualification for the reduced rate. Generally, a non-U.S. shareholder will be
entitled to a refund from the Internal Revenue Service to the extent the amount
withheld by the combined company from a distribution exceeds the amount of
United States tax owed by such shareholder.

      In the case of a non-U.S. shareholder that is a partnership or a trust,
the withholding rules for a distribution to such a partnership or trust will be
dependent on numerous factors, including (i) the classification of the type of


                                      167
<PAGE>

partnership or trust, (ii) the status of the partner or beneficiary, and (iii)
the activities of the partnership or trust. Non-U.S. shareholders that are
partnerships or trusts are urged to consult their tax advisors regarding the
withholding rules applicable to them based on their particular circumstances.

      If an income tax treaty does not apply, ordinary dividends that are
effectively connected with the conduct of a trade or business within the U.S. by
a non-U.S. shareholder (and, if a tax treaty applies, ordinary dividends that
are attributable to a United States permanent establishment maintained by the
non-U.S. shareholder) are exempt from U.S. withholding tax. In order to claim
such exemption, a non-U.S. shareholder must provide the combined company or its
paying agent with a duly completed Form 4224 or FormW-8ECI (or authorized
substitute form) certifying such holder's exemption. However, ordinary dividends
exempt from U.S. withholding tax because they are effectively connected or are
attributable to a United States permanent establishment maintained by the
non-U.S. shareholder generally are subject to U.S. federal income tax on a net
income basis at regular graduated rates. In the case of non-U.S. shareholders
that are corporations, any effectively connected ordinary dividends or ordinary
dividends attributable to a United States permanent establishment maintained by
the non-U.S. shareholder may, in certain circumstances, be subject to branch
profits tax at a 30% rate, or at such lower rate as may be provided in an
applicable income tax treaty.

      Capital Gain Dividends - General. For any year in which the combined
company qualifies as a real estate investment trust, distributions that are
attributable to gain from sales or exchanges by the combined company of United
States real property interests will be taxed to a non-U.S. shareholder under the
provisions of the Foreign Investment in Real Property Tax Act of 1980, also
known as "FIRPTA". Under FIRPTA, distributions attributable to gain from sales
of United States real property are taxed to a non-U.S. shareholder as if such
gain were effectively connected with a United States trade or business. Non-U.S.
shareholders thus would be taxed at the regular capital gain rates applicable to
taxable U.S. shareholders (subject to the applicable alternative minimum tax and
a special alternative minimum tax in the case of nonresident alien individuals).
Distributions subject to FIRPTA also may be subject to a 30% branch profits tax
in the hands of a corporate non-U.S. shareholder not otherwise entitled to
treaty relief or exemption.

      Capital Gain Dividends - Withholding. Under FIRPTA, the combined company
is required to withhold 35% of any distribution that is designated as a capital
gain dividend or which could be designated as a capital gain dividend. Moreover,
if the combined company designates previously made distributions as capital gain
dividends, subsequent distributions (up to the amount of the prior distributions
so designated) will be treated as capital gain dividends for purposes of FIRPTA
withholding.

      Sale of FSP Common Stock. A non-U.S shareholder generally will not be
subject to United States federal income tax under FIRPTA with respect to gain
recognized upon a sale of FSP common stock, provided that the combined company
is a "domestically-controlled REIT." A domestically-controlled REIT generally is
defined as a real estate investment trust in which at all times during a
specified testing period less than 50% in value of the stock was held directly
or indirectly by non-U.S. persons. Although currently it is anticipated that the
combined company will be a domestically-controlled REIT, and, therefore, that
the sale of FSP common stock will not be subject to taxation under FIRPTA, there
can be no assurance that the combined company will, at all relevant times, be a
domestically-controlled REIT. If the gain on the sale of FSP common stock were


                                      168
<PAGE>

subject to taxation under FIRPTA, a non-U.S. shareholder would be subject to the
same treatment as taxable U.S. shareholders with respect to such gain (subject
to the applicable alternative minimum tax and a special alternative minimum tax
in the case of nonresident alien individuals). In addition, a purchaser of FSP
common stock from a non U.S. shareholder subject to taxation under FIRPTA
generally would be required to deduct and withhold a tax equal to 10% of the
amount realized by a non-U.S. shareholder on the disposition. Any amount
withheld would be creditable against the non-U.S. shareholder's FIRPTA tax
liability.

      Even if gain recognized by a non-U.S. shareholder upon the sale of FSP
common stock is not subject to FIRPTA, such gain generally will subject such
shareholder to U.S. tax if:

      o     an income tax treaty does not apply and the gain is effectively
            connected with a trade or business conducted by the non-U.S.
            shareholder in the United States (or, if an income tax treaty
            applies and the gain is attributable to a United States permanent
            establishment maintained by the non-U.S. shareholder), in which
            case, unless an applicable treaty provides otherwise, a non-U.S.
            shareholder will be taxed on his or her net gain from the sale at
            regular graduated U.S. federal income tax rates. In the case of a
            non-U.S. shareholder that is a corporation, such shareholder may be
            subject to a branch profits tax at a 30% rate, unless an applicable
            income tax treaty provides for a lower rate and the shareholder
            demonstrates its qualification for such rate; or

      o     the non-U.S. shareholder is a nonresident alien individual who holds
            the FSP common stock as a capital asset and was present in the
            United States for 183 days or more during the taxable year (as
            determined under the tax code) and certain other conditions apply,
            in which case the non-U.S. shareholder will be subject to a 30% tax
            on capital gains.

      Estate Tax Considerations. The value of FSP common stock owned, or treated
as owned, by a non-U.S. shareholder who is a nonresident alien individual at the
time of his or her death will be included in the individual's gross estate for
United States federal estate tax purposes, unless otherwise provided in an
applicable estate tax treaty.

Information Reporting and Backup Withholding

      The combined company is required to report to its shareholders and to the
Internal Revenue Service the amount of distributions paid during each tax year,
and the amount of tax withheld, if any. These requirements apply even if
withholding was not required with respect to payments made to a shareholder. In
the case of non-U.S. shareholders, the information reported may also be made
available to the tax authorities of the non-U.S. shareholder's country of
residence, if an applicable income tax treaty so provides.

      Backup withholding generally may be imposed on certain payments to a
shareholder unless the shareholder (i) furnishes certain information, or (ii) is
otherwise exempt from backup withholding.

      A shareholder who does not provide the combined company with his or her
correct taxpayer identification number also may be subject to penalties imposed
by the Internal Revenue Service. In addition, the combined company may be
required to withhold a portion of capital gain distributions to any shareholders
who fail to certify their non-foreign status to the combined company.


                                      169
<PAGE>

      Shareholders should consult their own tax advisors regarding their
qualification for an exemption from backup withholding and the procedure for
obtaining an exemption. Backup withholding is not an additional tax. Rather, the
amount of any backup withholding with respect to a distribution to a shareholder
will be allowed as a credit against such holder's United States federal income
tax liability and may entitle the shareholder to a refund, provided that the
required information is furnished to the Internal Revenue Service.

      In general, backup withholding and information reporting will not apply to
a payment of the proceeds of the sale of FSP common stock by a non-U.S.
shareholder by or through a foreign office of a foreign broker effected outside
of the United States; provided, however, that foreign brokers having certain
connections with the United States may be obligated to comply with the backup
withholding and information reporting rules. Information reporting (but not
backup withholding) will apply, however, to a payment of the proceeds of a sale
of FSP common stock by foreign offices of certain brokers, including foreign
offices of a broker that:

      o     is a United States person;

      o     derives 50% or more of its gross income for certain periods from the
            conduct of a trade or business in the United States; or

      o     is a "controlled foreign corporation" for United States tax
            purposes.

      Information reporting will not apply in the above cases if the broker has
documentary evidence in its records that the holder is a non-U.S. shareholder
and certain conditions are met, or the non-U.S. shareholder otherwise
establishes an exemption.

      Payment to or through a United States office of a broker of the proceeds
of a sale of FSP common stock is subject to both backup withholding and
information reporting unless the shareholder certifies in the manner required
that he or she is a non-U.S. shareholder and satisfies certain other
qualifications under penalties of perjury or otherwise establishes an exemption.

State and Local Tax

      The discussion herein concerns only the United States federal income tax
treatment likely to be accorded to the combined company and its shareholders. No
consideration has been given to the state and local tax treatment of such
parties. The state and local tax treatment may not conform to the federal
treatment described above. As a result, a shareholder should consult his or her
own tax advisor regarding the specific state and local tax consequences of the
mergers and acquisition, ownership, and disposition of FSP common stock in the
combined company.


                                      170
<PAGE>

                                  LEGAL MATTERS

      Wilmer Cutler Pickering Hale and Dorr LLP, Boston, Massachusetts, will
deliver opinions to the effect that (i) upon consummation of the mergers, the
shares of FSP common stock in the combined company offered pursuant to the
merger agreement will be validly issued, fully paid and nonassessable and (ii)
the mergers will be treated for federal income tax purposes as tax-free
transactions and the discussion under "Material United States Federal Income Tax
Considerations," to the extent it involves matters of law, is accurate in all
material respects. Certain partners of Wilmer Cutler Pickering Hale and Dorr LLP
own an aggregate of 725,162 shares of FSP common stock.

                                     EXPERTS

      Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements and schedule included in our Annual report on Form 10-K for
the year ended December 31, 2003, as set forth in their report, which is
incorporated by reference in this Prospectus and elsewhere in the registration
statement. Our financial statements and schedule are incorporated by reference
in reliance on Ernst & Young LLP's report, given on their authority as experts
in accounting and auditing.

      The financial statements incorporated in this prospectus by reference to
the Annual Report on Form 10-K of Franklin Street Properties Corp. as of
December 31, 2002 and for each of the two years in the period ended December 31,
2002 have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm, given
on the authority of said firm as experts in auditing and accounting.


      The financial statements of Montague, Addison Circle, Royal Ridge and
Collins Crossing for the years ended December 31, 2003, December 31, 2002,
December 31, 2001 (as applicable) included herein have been examined and
reported on by Braver and Company, P.C., independent auditors, and have been
included in reliance upon their authority as experts in accounting and auditing.

                       WHERE YOU CAN FIND MORE INFORMATION

      FSP Corp. files reports, proxy statements and other documents with the
SEC. You may read and copy any document FSP Corp. files at the SEC's public
reference room at Judiciary Plaza Building, 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549. You should call 1-800-SEC-0330 for more information on
the public reference room. FSP Corp.'s SEC filings are also available to you on
the SEC's Internet site at http://www.sec.gov.

      This Consent Solicitation/Prospectus is part of a registration statement
that FSP Corp. filed with the SEC. The registration statement contains more
information than this Consent Solicitation/Prospectus regarding FSP Corp. and
the FSP common stock, including certain exhibits and schedules. You can obtain a
copy of the registration statement from the SEC at the address listed above or
from the SEC's Internet site.




                                      171
<PAGE>

                 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

      FSP Corp. is incorporating by reference certain documents it files with
the SEC, which means that FSP Corp. can disclose important information to you by
referring you to those documents. The information in the documents incorporated
by reference is considered to be part of this prospectus. Information in
documents that FSP Corp. files with the SEC after the date of this prospectus
will automatically update and supersede information in this Consent
Solicitation/Prospectus. FSP Corp. incorporates by reference the documents
listed below and any future filings it may make with the SEC under Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 prior to the
later of the approval date or 5:00 p.m., Eastern Time, on ____________, 2004.

      o     FSP Corp.'s Annual Report on Form 10-K for the fiscal year ended
            December 31, 2003, filed with the SEC on March 15, 2004, as amended
            by a Form 10-K/A filed with the SEC on April 1, 2004;

      o     FSP Corp.'s Quarterly Report on Form 10-Q for the quarterly period
            ended March 31, 2004, filed with the SEC on May 6, 2004, as amended
            by a Form 10-Q/A filed with the SEC on July 29, 2004;

      o     FSP Corp.'s Quarterly Report on Form 10-Q for the quarterly period
            ended June 30, 2004, filed with the SEC on July 30, 2004;

      o     FSP Corp.'s Current Report on Form 8-K filed with the SEC on August
            3, 2004;

      o     FSP Corp.'s Current Report on Form 8-K filed with the SEC on August
            13, 2004;

      o     FSP Corp.'s Current Report on Form 8-K filed with the SEC on August
            31, 2004; and

      o     All of FSP Corp.'s filings pursuant to the Exchange Act after the
            date of the initial filing of the registration statement of which
            this prospectus is a part and prior to its effectiveness.

      A statement contained in a document incorporated by reference in this
prospectus shall be deemed to be modified or superseded for purposes of this
Consent Solicitation/Prospectus to the extent that a statement contained in this
Consent Solicitation/Prospectus, any subsequently filed document which is also
incorporated in this Consent Solicitation/Prospectus modifies or replaces such
statement. Any statements so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Consent
Solicitation/Prospectus.

      You may request a free copy of any of the documents incorporated by
reference in this Consent Solicitation/Prospectus by writing or telephoning FSP
Corp. at the following address:

                        Franklin Street Properties Corp.
                         401 Edgewater Place, Suite 200
                               Wakefield, MA 01880
                                 (781) 557-1300
                          Attention: Investor Relations


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<PAGE>

                          INDEX TO FINANCIAL STATEMENTS


Financial Statements Under Rule 3-14 of Regulation S-X


FSP Addison Circle Corp.

Index to Statements of revenue over certain operating expenses
for the six months ended June 30, 2004 and 2003 (unaudited)                  F-2

Index to Statements of revenue over certain operating expenses
for the three years ended December 31, 2003                                  F-5


FSP Collins Crossing Corp.

Index to Statements of revenue over certain operating expenses
for the six months ended June 30, 2004 and 2003 (unaudited)                 F-11

Index to Statements of revenue over certain operating expenses
for the three years ended December 31, 2003                                 F-14


FSP Montague Business Center Corp.

Index to Statements of revenue over certain operating expenses
for the six months ended June 30, 2004 and 2003 (unaudited)                 F-20

Index to Statements of revenue over certain operating expenses
for the three years ended December 31, 2003                                 F-23


FSP Royal Ridge Corp.

Index to Statements of revenue over certain operating expenses
for the six months ended June 30, 2004 and 2003 (unaudited)                 F-29

Index to Statements of revenue over certain operating expenses
for the two years ended December 31, 2003                                   F-32


                                       F-1
<PAGE>

                             FSP ADDISON CIRCLE CORP
                             JUNE 30, 2004 AND 2003


                                    CONTENTS
                                                                            PAGE

Statements of revenue over certain operating expenses                        F-3

Notes accompanying the statements of revenue over certain
    operating expenses                                                       F-4


                                       F-2
<PAGE>

                            FSP ADDISON CIRCLE CORP.
              STATEMENTS OF REVENUE OVER CERTAIN OPERATING EXPENSES
                     SIX MONTHS ENDED JUNE 30, 2004 AND 2003
                                   (unaudited)


                                                            2004         2003
                                                         ----------   ----------

Revenue

  Rental income                                          $4,720,305   $4,332,624
                                                         ----------   ----------

                                                          4,720,305    4,332,624
                                                         ----------   ----------

Certain operating expenses

  Taxes and insurance                                       682,882      626,066
  Management fees                                           110,572      109,520
  Administrative                                             24,829       50,793
  Operating and maintenance                                 669,470      708,688
                                                         ----------   ----------

                                                          1,487,753    1,495,067
                                                         ----------   ----------

Excess of revenue over certain operating expenses        $3,232,552   $2,837,557
                                                         ==========   ==========


    The accompanying notes are an integral part of these financial statements


                                       F-3
<PAGE>

                            FSP ADDISON CIRCLE CORP.
  NOTES ACCOMPANYING THE STATEMENTS OF REVENUE OVER CERTAIN OPERATING EXPENSES
                                   (unaudited)


1.    DESCRIPTION OF THE PROPERTY:

      The accompanying statements of revenue over certain operating expenses
      (the "Statements") include the operations of a recently constructed
      ten-story Class "A" suburban office tower containing approximately 293,787
      rentable square feet located on approximately 3.62 acres of land in
      Addison, Dallas County, Texas (the "Property"). The subject property was
      purchased by Champion Addison One, LP as a vacant tract of land on
      November 11, 1997. On September 30, 2002, Champion Addison One, LP sold
      the property to FSP Addison Circle Corp. (the "Company").

2.    BASIS OF ACCOUNTING:

      The accompanying Statements have been prepared on the accrual basis of
      accounting. The Statements have been prepared in accordance with Rule 3-14
      of Regulation S-X of the Securities and Exchange Commission for real
      estate properties acquired or to be acquired. Accordingly, these
      Statements exclude certain historical expenses not comparable to the
      operations of the Property after acquisition such as amortization,
      depreciation, interest, corporate expenses and certain other costs not
      directly related to the future operations of the Property.

3.    USE OF ESTIMATES:

      The preparation of the Statements in conformity with the basis of
      accounting described in Note 2 requires management to make estimates and
      assumptions that affect the reported amounts of revenue and expenses
      during the reporting period. Actual results could differ from those
      estimates.

4.    CONCENTRATIONS OF RISKS:

      For the six months ended June 30, 2004 and 2003, rental income was
      received from various lessees. As such, future receipts are dependent upon
      the financial strength of the lessees and their ability to perform under
      the lease agreements.

5.    LEASES:

      The Company, as lessor, has minimum future rentals due under a
      noncancellable operating leases as follows:

                     Year Ending
                     December 31,         Amount
                     ------------      ------------

                         2004          $  3,342,000
                         2005             6,636,000
                         2006             5,698,000
                         2007             3,101,000
                         2008             2,369,000
                      Thereafter            943,000
                                       ------------

                                       $ 22,089,000
                                       ============

      In addition, the lessees are liable for real estate taxes and operating
      expenses as direct expenses to the lessees.


                                       F-4
<PAGE>

                            FSP ADDISON CIRCLE CORP.
                        DECEMBER 31, 2003, 2002, AND 2001


                                 CONTENTS

                                                                            PAGE

Independent auditors' report                                                 F-6

Statements of revenue over certain operating expenses                        F-7

Notes accompanying the statements of revenue over certain
   operating expenses                                                        F-8


                                       F-5
<PAGE>

                    [LETTERHEAD OF BRAVER AND COMPANY, P.C.]


                          INDEPENDENT AUDITORS' REPORT


To the Stockholders
FSP Addison Circle Corp.


We have audited the accompanying statements of revenue over certain operating
expenses (the "Statements") of FSP Addison Circle Corp. for the years ended
December 31, 2003, 2002, and 2001. These Statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
Statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the Statements
are free of material misstatements. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the Statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall Statements'
presentation. We believe that our audits provide a reasonable basis for our
opinion.

The accompanying Statements were prepared to comply with the requirements of
Rule 3-14 of Regulation S-X of the Securities and Exchange Commission, and
exclude certain expenses described in Note 2, and therefore, are not intended to
be a complete presentation of the Property's revenue and expenses.

In our opinion, these Statements referred to above presents fairly, in all
material respects, the revenue over certain operating expenses (as described in
Note 2), of FSP Addison Circle Corp. for the years ended December 31, 2003,
2002, and 2001, in conformity with the basis of accounting described in Note 2.


/s/ Braver and Company, P.C
Newton, Massachusetts
February 28, 2004


                                       F-6
<PAGE>

                            FSP ADDISON CIRCLE CORP.
              STATEMENTS OF REVENUE OVER CERTAIN OPERATING EXPENSES
                  YEARS ENDED DECEMBER 31, 2003, 2002, AND 2001


                                               2003         2002         2001
                                            ----------   ----------   ----------
                                                (3)          (2)          (1)

REVENUE

  Rental income                             $8,579,509   $8,679,187   $8,353,790
                                            ----------   ----------   ----------

CERTAIN OPERATING EXPENSES (Note 2):

  Taxes and insurance                        1,354,203    1,257,727    1,195,547
  Management fees                              216,292      158,765      135,923
  Administrative                               339,180      592,811      446,024
  Operating and maintenance                  1,227,418      880,036      905,373
                                            ----------   ----------   ----------

                                             3,137,093    2,889,339    2,682,867
                                            ----------   ----------   ----------

Excess of revenue over certain
  operating expenses                        $5,442,416   $5,789,848   $5,670,923
                                            ==========   ==========   ==========

Property Owner:
3 - FSP Addison Circle Corp
2 - January 1, 2002 to September 29, 2002 - Champion Addison One, LP
    September 30, 2002 to December 31, 2002 - FSP Addison Circle Corp.
1 - Champion Addison One, LP


    The accompanying notes are an integral part of these financial statements


                                       F-7
<PAGE>

                            FSP ADDISON CIRCLE CORP.
  NOTES ACCOMPANYING THE STATEMENTS OF REVENUE OVER CERTAIN OPERATING EXPENSES


1.    DESCRIPTION OF THE PROPERTY:

      The accompanying statements of revenue over certain operating expenses
      (the "Statements") include the operations of a recently constructed
      ten-story Class "A" suburban office tower containing approximately 293,787
      rentable square feet located on approximately 3.62 acres of land in
      Addison, Dallas County, Texas (the "Property"). The subject property was
      purchased by Champion Addison One, LP as a vacant tract of land on
      November 11, 1997. On September 30, 2002, Champion Addison One, LP sold
      the property to FSP Addison Circle Corp. (the "Company").

2.    BASIS OF ACCOUNTING:

      The accompanying Statements have been prepared on the accrual basis of
      accounting. The Statements have been prepared in accordance with Rule 3-14
      of Regulation S-X of the Securities and Exchange Commission for real
      estate properties acquired or to be acquired. Accordingly, these
      Statements exclude certain historical expenses not comparable to the
      operations of the Property after acquisition such as amortization,
      depreciation, interest, corporate expenses and certain other costs not
      directly related to the future operations of the Property.

3.    REVENUE RECOGNITION:

      Rental revenue includes income from leases, certain reimbursable expenses,
      straight-line rent adjustments and other income associated with renting
      the property. A summary of rental revenue is shown in the following table:

                                                  Year Ended December 31,
                                             2003          2002          2001
                                          ----------    ----------    ----------

      Income from leases                  $7,152,563    $7,230,163    $7,168,574
      Straight-line rent adjustment          321,385       358,091       293,420
      Reimbursable expenses                1,080,115     1,092,574       887,543
      Other income                            25,446         1,359         4,253
                                          ----------    ----------    ----------

         Total                            $8,579,509    $8,682,187    $8,353,790
                                          ==========    ==========    ==========


      The Company has retained substantially all of the risks and benefits of
      the property and accounts for its leases as operating leases. Rental
      income from leases, which include rent concessions (including free rent
      and tenant improvement allowances) and scheduled increases in rental rates
      during the lease term, is recognized on a straight-line basis. The Company
      does not have any percentage rent arrangements with its tenants.
      Reimbursable costs are included in rental income in the period earned.

4.    USE OF ESTIMATES:

      The preparation of the Statements in conformity with the basis of
      accounting described in Note 2 requires management to make estimates and
      assumptions that affect the reported amounts of revenue and expenses
      during the reporting period. Actual results could differ from those
      estimates.

5.    CONCENTRATIONS OF RISKS:

      For the years ended December 31, 2003, 2002, and 2001, rental income was
      received from various lessees. As such, future receipts are dependent upon
      the financial strength of the lessees and their ability to perform under
      the lease agreements.


                                       F-8
<PAGE>

                            FSP ADDISON CIRCLE CORP.
  NOTES ACCOMPANYING THE STATEMENTS OF REVENUE OVER CERTAIN OPERATING EXPENSES


6.    LEASES:

      The Company, as lessor, has minimum future rentals due under a
      noncancellable operating leases as follows:

                     Year Ending
                     December 31,           Amount
                     ------------       -------------

                         2004           $   6,684,000
                         2005               6,636,000
                         2006               5,698,000
                         2007               3,101,000
                         2008               2,369,000
                      Thereafter              943,000
                                        -------------

                                        $  25,431,000
                                        =============

      In addition, the lessees are liable for real estate taxes and operating
      expenses as direct expenses to the lessees.

7.    ALLOCATION:

      Allocation of the statements of revenue over certain operating expenses by
      property owner, is as follows:

<TABLE>
<CAPTION>
                                   For the period        For the period
                                 January 1, 2002 to   September 30, 2002 to    Total
                                 September 29, 2002     December 31, 2002       2002
                                 ------------------     -----------------    ----------
<S>                                  <C>                    <C>              <C>
Revenue

  Rental income                      $6,577,352             $2,101,835       $8,679,187
                                     ----------             ----------       ----------

                                      6,577,352              2,101,835        8,679,187
                                     ----------             ----------       ----------

Certain operating expenses

  Taxes and insurance                   930,968                326,759        1,257,727
  Management fees                       105,094                 53,671          158,765
  Administrative                        512,993                 79,818          592,811
  Operating and maintenance             649,685                230,351          880,036
                                     ----------             ----------       ----------

                                      2,198,740                690,599        2,889,339
                                     ----------             ----------       ----------

Excess of revenue over certain
  operating expenses                 $4,378,612             $1,411,236       $5,789,848
                                     ==========             ==========       ==========
</TABLE>


                                       F-9
<PAGE>

                            FSP ADDISON CIRCLE CORP.
  NOTES ACCOMPANYING THE STATEMENTS OF REVENUE OVER CERTAIN OPERATING EXPENSES


8.    CASH DISTRIBUTION:

      The Company declared and paid dividends as follows:

                                 Taxable Income   Return of Capital
Years          Cash Dividends      / per share      / per share
- -----          --------------      -----------      -----------

2003            $  4,628,950       $  6,145         $  1,133
2002               N/A                N/A              N/A
2001               N/A                N/A              N/A


                                      F-10
<PAGE>

                           FSP COLLINS CROSSING CORP.
                             JUNE 30, 2004 AND 2003


                                    CONTENTS
                                                                            PAGE

Statements of revenue over certain operating expenses                       F-12

Notes accompanying the statements of revenue over certain
  operating expenses                                                        F-13


                                      F-11
<PAGE>

                           FSP COLLINS CROSSING CORP.
              STATEMENTS OF REVENUE OVER CERTAIN OPERATING EXPENSES
                     SIX MONTHS ENDED JUNE 30, 2004 AND 2003
                                   (unaudited)


                                                           2004          2003
                                                        ----------    ----------
                                                                          (1)
Revenue

  Rental income                                         $3,923,538    $2,568,934
                                                        ----------    ----------

                                                         3,923,538     2,568,934
                                                        ----------    ----------

Certain operating expenses

  Taxes and insurance                                      477,650       340,783
  Management fees                                          112,653        74,103
  Administrative                                            11,754         9,648
  Operating and maintenance                                784,669       410,658
                                                        ----------    ----------

                                                         1,386,726       835,192
                                                        ----------    ----------

Excess of revenue over certain operating expenses       $2,536,812    $1,733,742
                                                        ==========    ==========

Property owner:
1 - March 3, 2003 to December 31, 2003 - FSP Collins Crossing Corp.
1 - January 1, 2003 to March 2, 2003 - Collins Crossing Limited Partnership


    The accompanying notes are an integral part of these financial statements


                                      F-12
<PAGE>

                           FSP COLLINS CROSSING CORP.
  NOTES ACCOMPANYING THE STATEMENTS OF REVENUE OVER CERTAIN OPERATING EXPENSES
                                   (unaudited)


1.    DESCRIPTION OF THE PROPERTY:

      The accompanying statements of revenue over certain operating expenses
      (the "Statements") include the operations of a commercial building located
      in Dallas County, Texas (the "Property"). The Property is an eleven-story
      Class "A" institutional quality suburban office tower containing
      approximately 298,766 square feet of rentable space. The Property was
      owned by Collins Crossing Limited Partnership and sold to FSP Collins
      Crossing Corp. (the "Company") on March 3, 2003.

2.    BASIS OF ACCOUNTING:

      The accompanying Statement have been prepared on the accrual basis of
      accounting. The Statements have been prepared in accordance with Rule 3-14
      of Regulation S-X of the Securities and Exchange Commission for real
      estate properties acquired or to be acquired. Accordingly, these
      Statements exclude certain historical expenses not comparable to the
      operations of the Property after acquisition such as amortization,
      depreciation, interest, corporate expenses and certain other costs not
      directly related to future operations of the Property.

3.    USE OF ESTIMATES:

      The preparation of the Statements in conformity with the basis of
      accounting described in Note 2 requires management to make estimates and
      assumptions that affect the reported amounts of revenue and expenses
      during the reporting period. Actual results could differ from those
      estimates.

4.    CONCENTRATIONS OF RISKS:

      For the six months ended June 30, 2004 and 2003, rental income was from
      three lessees. As such, future receipts are dependent upon the financial
      strength of these lessees and their ability to perform under the lease
      agreements.

5.    LEASES:

      The Company, as lessor, has minimum future rentals due under
      noncancellable operating leases as follows:

                     Year Ending
                     December 31,          Amount
                     ------------       ------------

                         2004           $  3,351,000
                         2005              6,947,000
                         2006              6,036,000
                         2007              5,811,000
                         2008              5,811,000
                      Thereafter           8,688,000
                                        ------------

                                        $ 36,644,000
                                        ============

      In addition, the lessees are liable for real estate taxes and operating
      expenses as direct expenses to the lessees.


                                      F-13
<PAGE>

                           FSP COLLINS CROSSING CORP.
                        DECEMBER 31, 2003, 2002 AND 2001


                                    CONTENTS
                                                                            PAGE

Independent auditors' report                                                F-15

Statements of revenue over certain operating expenses                       F-16

Notes accompanying the statements of revenue over certain
   operating expenses                                                       F-17


                                      F-14
<PAGE>

                    [LETTERHEAD OF BRAVER AND COMPANY, P.C.]


                          INDEPENDENT AUDITORS' REPORT


To the Stockholders
FSP Collins Crossing Corp.


We have audited the accompanying statements of revenue over certain operating
expenses (the "Statements") of FSP Collins Crossing Corp. for the years ended
December 31, 2003, 2002 and 2001. These Statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
Statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the Statements
are free of material misstatements. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the Statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall Statements'
presentation. We believe that our audits provide a reasonable basis for our
opinion.

The accompanying Statements were prepared to comply with the requirements of
Rule 3-14 of Regulation S-X of the Securities and Exchange Commission, and
exclude certain expenses described in Note 2 and, therefore, are not intended to
be a complete presentation of the Property's revenue and expenses.

In our opinion, these Statements referred to above present fairly, in all
material respects, the revenue over certain operating expenses (as described in
Note 2), of FSP Collins Crossing Corp. for the years ended December 31, 2003,
2002 and 2001, in conformity with the basis of accounting described in Note 2.


/s/ Braver and Company, P.C.
Newton, Massachusetts
February 28, 2004


                                      F-15
<PAGE>

                           FSP COLLINS CROSSING CORP.
              STATEMENTS OF REVENUE OVER CERTAIN OPERATING EXPENSES
                  YEARS ENDED DECEMBER 31, 2003, 2002, AND 2001


                                           2003           2002           2001
                                        ----------     ----------     ----------
                                            (3)            (2)            (1)
Revenue

  Rental income                         $7,810,887     $7,719,461     $7,231,817
                                        ----------     ----------     ----------

                                         7,810,887      7,719,461      7,231,817
                                        ----------     ----------     ----------

Certain operating expenses

  Taxes and insurance                      916,353        906,803      1,080,465
  Management fees                          211,726        148,990        136,467
  Administrative                           102,130         64,208         59,948
  Operating and maintenance              1,392,632      1,165,129      1,320,489
                                        ----------     ----------     ----------

                                         2,622,841      2,285,130      2,597,369
                                        ----------     ----------     ----------

Excess of revenue over certain
  operating expenses                    $5,188,046     $5,434,331     $4,634,447
                                        ==========     ==========     ==========

Property Owner:
   3 - March 3, 2003 to December 31, 2003 - FSP Collins Crossing Corp.
   3 - January 1, 2003 to March 2, 2003 - Collins Crossing Limited Partnership
   2 - Collins Crossing Limited Partnership
   1 - Collins Crossing Limited Partnership


    The accompanying notes are an integral part of these financial statements


                                      F-16
<PAGE>

                           FSP COLLINS CROSSING CORP.
  NOTES ACCOMPANYING THE STATEMENTS OF REVENUE OVER CERTAIN OPERATING EXPENSES


1.    DESCRIPTION OF THE PROPERTY:

      The accompanying statements of revenue over certain operating expenses
      (the "Statements") include the operations of a commercial building located
      in Dallas County, Texas (the "Property"). The Property is an eleven-story
      Class "A" institutional quality suburban office tower containing
      approximately 298,766 square feet of rentable space. The Property was
      owned by Collins Crossing Limited Partnership and sold to FSP Collins
      Crossing Corp. (the "Company") on March 3, 2003.

2.    BASIS OF ACCOUNTING:

      The Statements have been prepared on the accrual basis of accounting. The
      Statements have been prepared in accordance with Rule 3-14 of Regulation
      S-X of the Securities and Exchange Commission for real estate properties
      acquired or to be acquired. Accordingly, these Statements exclude certain
      historical expenses not comparable to the operations of the Property after
      acquisition such as amortization, depreciation, interest, corporate
      expenses and certain other costs not directly related to future operations
      of the Property.

3.    REVENUE RECOGNITION:

      Rental revenue includes income from leases, certain reimbursable expenses,
      and straight-line rent adjustments associated with renting the property.

                                                   Year Ended December 31,
                                               2003         2002         2001
                                            ----------   ----------   ----------

      Income from leases                    $6,822,916   $6,747,319   $6,415,650
      Straight-line rent adjustment            332,181      294,140      252,620
      Reimbursable expenses                    655,790      678,002      563,547
                                            ----------   ----------   ----------

         Total                              $7,810,887   $7,719,461   $7,231,817
                                            ==========   ==========   ==========

      The Company has retained substantially all of the risks and benefits of
      the Property and accounts for its leases as operating leases. Rental
      income from leases, which includes rent concessions (including free rent
      and tenant improvement allowances) and scheduled increases in rental rates
      during the lease term, is recognized on a straight-line basis. The Company
      does not have any percentage rent arrangements with its tenants.
      Reimbursable costs are included in rental income in the period earned.

4.    USE OF ESTIMATES:

      The preparation of the Statements in conformity with the basis of
      accounting described in Note 2 requires management to make estimates and
      assumptions that affect the reported amounts of revenue and expenses
      during the reporting period. Actual results could differ from those
      estimates.

5.    CONCENTRATIONS OF RISKS:

      For the years ended December 31, 2003, 2002, and 2001, rental income was
      from three lessees. As such, future receipts are dependent upon the
      financial strength of these lessees and their ability to perform under the
      lease agreements.


                                      F-17
<PAGE>

                           FSP COLLINS CROSSING CORP.
  NOTES ACCOMPANYING THE STATEMENTS OF REVENUE OVER CERTAIN OPERATING EXPENSES


6.    LEASES:

      The Company, as lessor, has minimum future rentals due under
      noncancellable operating leases as follows:

                         Year Ending
                         December 31,            Amount
                         ------------        ------------

                             2004            $  6,701,000
                             2005               6,947,000
                             2006               6,036,000
                             2007               5,811,000
                             2008               5,811,000
                          Thereafter            8,688,000
                                             ------------

                                             $ 39,994,000
                                             ============


      In addition, the lessees are liable for real estate taxes and operating
      expenses as direct expenses to the lessees.

7.    ALLOCATION:

      Allocation of the statements of revenue over certain operating expenses by
      Property owner, is as follows:

<TABLE>
<CAPTION>
                                  For the period      For the period
                                January 1, 2003 to   March 3, 2003 to      Total
                                   March 2, 2003     December 31, 2003      2003
                                   -------------     -----------------   ----------

<S>                                   <C>                 <C>            <C>
Revenue
  Rental income                       $1,347,445          $6,463,442     $7,810,887
                                      ----------          ----------     ----------

                                       1,347,445           6,463,442      7,810,887
                                      ----------          ----------     ----------

Certain operating expenses
  Taxes and insurance                    156,372             759,981        916,353
  Management fees                         24,885             186,841        211,726
  Administrative                          18,688              83,442        102,130
  Operating and maintenance              275,996           1,116,636      1,392,632
                                      ----------          ----------     ----------

                                         475,941           2,146,900      2,622,841
                                      ----------          ----------     ----------

Excess of revenue over certain
  operating expenses                  $  871,504          $4,316,542     $5,188,046
                                      ==========          ==========     ==========
</TABLE>


                                      F-18
<PAGE>

                           FSP COLLINS CROSSING CORP.
  NOTES ACCOMPANYING THE STATEMENTS OF REVENUE OVER CERTAIN OPERATING EXPENSES


8.    CASH DISTRIBUTION:

      The Company declared and paid dividends as follows:

                                   Taxable Income    Return of Capital
      Years      Cash Dividends     / per share        / per share
      -----      --------------     -----------        -----------

      2003       $  2,018,218         $                  $ 3,636
      2002          N/A                  N/A               N/A
      2001          N/A                  N/A               N/A


                                      F-19
<PAGE>

                       FSP MONTAGUE BUSINESS CENTER CORP.
                             JUNE 30, 2004 AND 2003


                                    CONTENTS
                                                                            PAGE

Statements of revenue over certain operating expenses                       F-21

Notes accompanying the statements of revenue over certain
   operating expenses                                                       F-22


                                      F-20
<PAGE>

                       FSP MONTAGUE BUSINESS CENTER CORP.
              STATEMENTS OF REVENUE OVER CERTAIN OPERATING EXPENSES
                     SIX MONTHS ENDED JUNE 30, 2004 AND 2003
                                   (unaudited)


                                                           2004          2003
                                                        ----------    ----------

Revenue

  Rental income                                         $2,295,842    $2,429,337
                                                        ----------    ----------

                                                         2,295,842     2,429,337
                                                        ----------    ----------

Certain operating expenses

  Taxes and insurance                                      139,807       172,551
  Management fees                                           68,104        67,955
  Administrative                                             6,827        20,708
  Operating and maintenance                                 55,920        85,432
                                                        ----------    ----------

                                                           270,658       346,646
                                                        ----------    ----------

Excess of revenue over certain operating expenses       $2,025,184    $2,082,691
                                                        ==========    ==========


    The accompanying notes are an integral part of these financial statements


                                      F-21
<PAGE>

                       FSP MONTAGUE BUSINESS CENTER CORP.
  NOTES ACCOMPANYING THE STATEMENTS OF REVENUE OVER CERTAIN OPERATING EXPENSES
                                   (unaudited)


1.    DESCRIPTION OF THE PROPERTY:

      The accompanying statements of revenue over certain operating expenses
      (the "Statements") include the operations of a commercial building located
      in San Jose, California (the "Property"). The Property consists of two
      adjacent single-story Class "A" suburban office buildings containing
      145,951 square feet located on 9.95 acres of land. The Property was owned
      by Teacher's Insurance and Annuity Association of America and TlAA Realty,
      Inc. and sold to FSP Montague Business Center Corp (the "Company") on
      August 27, 2002.

2.    BASIS OF ACCOUNTING:

      The accompanying statements have been prepared on the accrual basis of
      accounting. The Statements have been prepared in accordance with Rule 3-14
      of Regulation S-X of the Securities and Exchange Commission for real
      estate properties acquired or to be acquired. Accordingly, these
      Statements exclude certain historical expenses not comparable to the
      operations of the Property after acquisition such as amortization,
      depreciation, interest, corporate expenses and certain other costs not
      directly related to future operations of the Property.

3.    USE OF ESTIMATES:

      The preparation of the Statements in conformity with the basis of
      accounting described in Note 2 requires management to make estimates and
      assumptions that affect the reported amounts of revenue and expenses
      during the reporting period. Actual results could differ from those
      estimates.

4.    CONCENTRATIONS OF RISKS:

      For the six months ended June 30, 2004, and 2003, rental income was from
      various lessees. As such, future receipts are dependent upon the financial
      strength of the lessees and their ability to perform under the lease
      agreements.

5.    LEASES:

      The Company, as lessor, has minimum future rentals due under
      noncancellable operating leases as follows:

                       Year Ending
                       December 31,          Amount
                       ------------       ------------

                           2004           $  1,991,000
                           2005              4,174,000
                           2006              4,390,000
                                          ------------

                                          $ 10,555,000
                                          ============

      In addition, the lessees are liable for real estate taxes and operating
      expenses as direct expenses to the lessees.


                                      F-22
<PAGE>

                              FSP MONTAGUE BUSINESS
                                  CENTER CORP.
                        DECEMBER 31, 2003, 2002 AND 2001


                                    CONTENTS
                                                                            PAGE

Independent auditors' report                                                F-24

Statements of revenue over certain operating expenses                       F-25

Notes accompanying the statements of revenue over certain
   operating expenses                                                       F-26


                                      F-23
<PAGE>

                    [LETTERHEAD OF BRAVER AND COMPANY, P.C.]


                          INDEPENDENT AUDITORS' REPORT


To the Stockholders
FSP Montague Business Center Corp.


We have audited the accompanying statements of revenue over certain operating
expenses (the "Statement") of FSP Montague Business Center Corp. for the years
ended December 31, 2003, 2002 and 2001. These Statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these Statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the Statements
are free of material misstatements. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the Statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall Statements'
presentation. We believe that our audits provide a reasonable basis for our
opinion.

The accompanying Statements were prepared to comply with the requirements of
Rule 3-14 of Regulation S-X of the Securities and Exchange Commission, and
exclude certain expenses described in Note 2 and, therefore, are not intended to
be a complete presentation of the Property's revenue and expenses.

In our opinion, these Statements referred to above present fairly, in all
material respects, the revenue over certain operating expenses (as described in
Note 2) of FSP Montague Business Center Corp. for the years ended December 31,
2003, 2002 and 2001, in conformity with the basis of accounting described in
Note 2.


/s/ Braver and Company, P.C.
Newton, Massachusetts
February 28, 2004


                                      F-24
<PAGE>

                       FSP MONTAGUE BUSINESS CENTER CORP.
              STATEMENTS OF REVENUE OVER CERTAIN OPERATING EXPENSES
                  YEARS ENDED DECEMBER 31, 2003, 2002, AND 2001


<TABLE>
<CAPTION>
                                                        2003          2002          2001
                                                     ----------    ----------    ----------
                                                         (3)           (2)           (1)

<S>                                                  <C>           <C>           <C>
Revenue:

  Rental income                                      $4,807,583    $4,362,159    $3,822,325
                                                     ----------    ----------    ----------

                                                      4,807,583     4,362,159     3,822,325
                                                     ----------    ----------    ----------

Certain operating expenses (Note 2):

  Taxes and insurance                                   338,516       200,690       223,859
  Management fees                                       136,176        85,731        81,426
  Administrative                                         34,697        35,803         4,169
  Operating and maintenance                             143,863        90,070       115,926
                                                     ----------    ----------    ----------

                                                        653,252       412,294       425,380
                                                     ----------    ----------    ----------

Excess of revenue over certain operating expenses    $4,154,331    $3,949,865    $3,396,945
                                                     ==========    ==========    ==========
</TABLE>

Property Owner:
   3 - FSP Montague Business Center Corp.
   2 - January 1, 2002 to August 26, 2002 - Teachers Insurance and Annuity
       Association of America August 27, 2002 to December 31, 2002 - FSP
       Montague Business Center Corp.
   1 - Teachers Insurance and Annuity Association of America


    The accompanying notes are an integral part of these financial statements


                                      F-25
<PAGE>

                       FSP MONTAGUE BUSINESS CENTER CORP.
  NOTES ACCOMPANYING THE STATEMENTS OF REVENUE OVER CERTAIN OPERATING EXPENSES


1.    DESCRIPTION OF THE PROPERTY:

      The accompanying statements of revenue over certain operating expenses
      (the "Statements") include the operations of a commercial building located
      in San Jose, California (the "Property"). The Property consists of two
      adjacent single-story Class "A" suburban office buildings containing
      145,951 square feet located on 9.95 acres of land. The Property was owned
      by Teacher's Insurance and Annuity Association of America and TIAA Realty,
      Inc. and sold to FSP Montague Business Center Corp (the "Company") on
      August 27, 2002.

2.    BASIS OF ACCOUNTING:

      The accompanying statements have been prepared on the accrual basis of
      accounting. The Statements have been prepared in accordance with Rule 3-14
      of Regulation S-X of the Securities and Exchange Commission for real
      estate properties acquired or to be acquired. Accordingly, these
      Statements exclude certain historical expenses not comparable to the
      operations of the Property after acquisition such as amortization,
      depreciation, interest, corporate expenses and certain other costs not
      directly related to future operations of the Property.

3.    REVENUE RECOGNITION:

      Rental revenue includes income from leases, certain reimbursable expenses,
      straight-line rent adjustments and other income associated with renting
      the property. A summary of rental revenue is shown in the following table:

                                                   Year Ended December 31,
                                               2003         2002         2001
                                            ----------   ----------   ----------

      Income from leases                    $3,788,888   $3,472,106   $2,731,934
      Straight-line rent adjustment            262,263      375,540      679,196
      Reimbursable expenses                    745,269      503,350      411,195
      Other income                              11,163       11,163           --
                                            ----------   ----------   ----------
          Total                             $4,807,583   $4,362,159   $3,822,325
                                            ==========   ==========   ==========

      The Company has retained substantially all of the risks and benefits of
      the Property and accounts for its leases as operating leases. Rental
      income from leases, which includes rent concessions (including free rent
      and tenant improvement allowances) and scheduled increases in rental rates
      during the lease term, is recognized on a straight-line basis. The Company
      does not have any percentage rent arrangements with its tenants.
      Reimbursable costs are included in rental income in the period earned.

4.    USE OF ESTIMATES:

      The preparation of the Statements in conformity with the basis of
      accounting described in Note 2 requires management to make estimates and
      assumptions that affect the reported amounts of revenue and expenses
      during the reporting period. Actual results could differ from those
      estimates.

5.    CONCENTRATIONS OF RISKS:

      For the years ended December 31, 2003, 2002, and 2001, rental income was
      from various lessees. As such, future receipts are dependent upon the
      financial strength of the lessees and their ability to perform under the
      lease agreements.


                                      F-26
<PAGE>

                       FSP MONTAGUE BUSINESS CENTER CORP.
  NOTES ACCOMPANYING THE STATEMENTS OF REVENUE OVER CERTAIN OPERATING EXPENSES


6.    LEASES:

      The Company, as lessor, has minimum future rentals due under
      noncancellable operating leases as follows:

                     Year Ending
                     December 31,        Amount
                     ------------     ------------

                         2004         $  3,982,000
                         2005            4,174,000
                         2006            4,390,000
                                      ------------

                                      $ 12,546,000
                                      ============

      In addition, the lessees are liable for real estate taxes and operating
      expenses as direct expenses to the lessees.

7.    ALLOCATION:

      Allocation of the statements of revenue over certain operating expenses by
      Property owner, is as follows:

<TABLE>
<CAPTION>
                                  For the period      For the period
                                January 1, 2002 to   August 27, 2002 to     Total
                                  August 26, 2002    December 31, 2002       2002
                                  ---------------    -----------------    ----------

<S>                                   <C>               <C>               <C>
Revenue
  Rental income                       $2,772,694        $1,589,465        $4,362,159
                                      ----------        ----------        ----------

                                       2,772,694         1,589,465         4,362,159
                                      ----------        ----------        ----------

Certain operating expenses
  Taxes and insurance                    117,594            83,096           200,690
  Management fees                         44,055            41,676            85,731
  Administrative                          11,095            24,708            35,803
  Operating and maintenance               60,751            29,319            90,070
                                      ----------        ----------        ----------

                                         233,495           178,799           412,294
                                      ----------        ----------        ----------

Excess of revenue over certain
  operating expenses                  $2,539,199        $1,410,666        $3,949,865
                                      ==========        ==========        ==========
</TABLE>


                                      F-27
<PAGE>

                       FSP MONTAGUE BUSINESS CENTER CORP.
  NOTES ACCOMPANYING THE STATEMENTS OF REVENUE OVER CERTAIN OPERATING EXPENSES


8.    CASH DISTRIBUTION:

      The Company declared and paid dividends as follows:

                                  Taxable Income      Return of Capital
Years         Cash Dividends       / per share           / per share
- -----         --------------       -----------           -----------

2003           $ 3,713,746           $ 11,119             $    --
2002               287,490                                    861
2001             N/A                   N/A                    N/A


                                      F-28
<PAGE>

                              FSP ROYAL RIDGE CORP.
                             JUNE 30, 2004 AND 2003


                                    CONTENTS
                                                                            PAGE

Statements of revenue over certain operating expenses                       F-30

Notes accompanying the statements of revenue over certain
   operating expenses                                                       F-31


                                      F-29
<PAGE>

                              FSP ROYAL RIDGE CORP.
              STATEMENTS OF REVENUE OVER CERTAIN OPERATING EXPENSES
                     SIX MONTHS ENDED JUNE 30, 2004 AND 2003
                                   (unaudited)


                                                           2004           2003
                                                        ----------      --------
                                                                           (1)
Revenue

  Rental income                                         $1,749,600      $590,491
                                                        ----------      --------

                                                         1,749,600       590,491
                                                        ----------      --------

Certain operating expenses

  Taxes and insurance                                      163,900       147,830
  Management fees                                           68,027         5,509
  Administrative                                             9,361         2,035
  Operating and maintenance                                329,538       265,656
                                                        ----------      --------

                                                           570,826       421,030
                                                        ----------      --------

Excess of revenue over certain operating expenses       $1,178,774      $169,461
                                                        ==========      ========

Property Owner:
 1 - January 1, 2003, to January 29, 2003 - CK Royal 400, LLC
 1 - January 30, 2003, to December 31, 2003 - FSP Royal Ridge Corp.


    The accompanying notes are an integral part of these financial statements


                                      F-30
<PAGE>

                              FSP ROYAL RIDGE CORP.
  NOTES ACCOMPANYING THE STATEMENTS OF REVENUE OVER CERTAIN OPERATING EXPENSES
                                   (unaudited)


1.    DESCRIPTION OF THE PROPERTY:

      The accompanying statements of revenue over certain operating expenses
      (the "Statements") include the operations of a commercial building located
      in Alpharetta, Georgia (the "Property"). The Property is a recently
      constructed six-story Class "A" institutional quality suburban office
      tower containing approximately 161,366 square feet of rentable space
      completed in December 2001. The Property was owned by CK Royal 400, LLC
      and sold to FSP Royal Ridge Corp. (the "Company") on January 30, 2003.

2.    BASIS OF ACCOUNTING:

      The accompanying Statement have been prepared on the accrual basis of
      accounting. The Statements have been prepared in accordance with Rule 3-14
      of Regulation S-X of the Securities and Exchange Commission for real
      estate properties acquired or to be acquired. Accordingly, these
      Statements exclude certain historical expenses not comparable to the
      operations of the Property after acquisition such as amortization,
      depreciation, interest, corporate expenses and certain other costs not
      directly related to future operations of the Property.

3.    USE OF ESTIMATES:

      The preparation of the Statements in conformity with the basis of
      accounting described in Note 2 requires management to make estimates and
      assumptions that affect the reported amounts of revenue and expenses
      during the reporting period. Actual results could differ from those
      estimates.

4.    CONCENTRATIONS OF RISKS:

      For the six months ended June 30, 2004, and 2003, rental income was
      received from three lessees. As such, future receipts are dependent upon
      the financial strength of these lessees and their ability to perform under
      the lease agreements.

5.    LEASES:

      The Company, as lessor, has minimum future rentals due under
      noncancellable operating leases as follows:

                     Year Ending
                     December 31,         Amount
                     ------------     ------------

                         2004         $  1,012,000
                         2005            2,040,000
                         2006            2,071,000
                         2007            2,123,000
                         2008            2,176,000
                      Thereafter         6,750,000
                                      ------------

                                      $ 16,172,000
                                      ============

      In addition, the lessees are liable for real estate taxes and operating
      expenses as direct expenses to the lessees.


                                      F-31
<PAGE>

                              FSP ROYAL RIDGE CORP.
                           DECEMBER 31, 2003 AND 2002


                                    CONTENTS
                                                                            PAGE

Independent auditors' report                                                F-33

Statements of revenue over certain operating expenses                       F-34

Notes accompanying the statements of revenue over certain
   operating expenses                                                       F-35


                                      F-32
<PAGE>

                    [LETTERHEAD OF BRAVER AND COMPANY, P.C.]


                          INDEPENDENT AUDITORS' REPORT


To the Stockholders
FSP Royal Ridge Corp.


We have audited the accompanying statements of revenue over certain operating
expenses (the "Statements") of FSP Royal Ridge Corp. for the years ended
December 31, 2003 and 2002. These Statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
Statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the Statements
are free of material misstatements. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the Statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall Statements'
presentation. We believe that our audits provide a reasonable basis for our
opinion.

The accompanying Statements were prepared to comply with the requirements of
Rule 3-14 of Regulation S-X of the Securities and Exchange Commission, and
exclude certain expenses described in Note 2 and, therefore, are not intended to
be a complete presentation of the Property's revenue and expenses.

In our opinion, these Statements referred to above present fairly, in all
material respects, the revenue over certain operating expenses (as described in
Note 2) of FSP Royal Ridge Corp. for the years ended December 31, 2003 and 2002,
in conformity with the basis of accounting described in Note 2.


/s/ Braver and Company, P.C.
Newton, Massachusetts
February 28, 2004


                                      F-33
<PAGE>

                              FSP ROYAL RIDGE CORP.
              STATEMENTS OF REVENUE OVER CERTAIN OPERATING EXPENSES
                     YEARS ENDED DECEMBER 31, 2003 AND 2002


                                                          2003           2002
                                                       ----------     ---------
                                                           (2)           (1)
Revenue

  Rental income                                        $2,693,318     $   3,084
                                                       ----------     ---------

                                                        2,693,318         3,084
                                                       ----------     ---------

Certain operating expenses

  Taxes and insurance                                     273,948       184,096
  Management fees                                          73,071        33,212
  Administrative                                          108,814        62,264
  Operating and maintenance                               649,604       526,358
                                                       ----------     ---------

                                                        1,105,437       805,930
                                                       ----------     ---------

Excess of revenue (deficit) over certain
  operating expenses                                   $1,587,881     $(802,846)
                                                       ==========     =========

 Property Owner:
 2 - January 1, 2003, to January 29, 2003 - CK Royal 400, LLC
 2 - January 30, 2003, to December 31, 2003 - FSP Royal Ridge Corp.
 1 - CK Royal 400, LLC


    The accompanying notes are an integral part of these financial statements


                                      F-34
<PAGE>

                              FSP ROYAL RIDGE CORP.
  NOTES ACCOMPANYING THE STATEMENTS OF REVENUE OVER CERTAIN OPERATING EXPENSES

1.    DESCRIPTION OF THE PROPERTY:

      The accompanying statements of revenue over certain operating expenses
      (the "Statements") include the operations of a commercial building located
      in Alpharetta, Georgia (the "Property"). The Property is a recently
      constructed six-story Class "A" institutional quality suburban office
      tower containing approximately 161,366 square feet of rentable space
      completed in December 2001. The Property was owned by CK Royal 400, LLC
      and sold to FSP Royal Ridge Corp. (the "Company") on January 30, 2003.

2.    BASIS OF ACCOUNTING:

      The accompanying Statement have been prepared on the accrual basis of
      accounting. The Statements have been prepared in accordance with Rule 3-14
      of Regulation S-X of the Securities and Exchange Commission for real
      estate properties acquired or to be acquired. Accordingly, these
      Statements exclude certain historical expenses not comparable to the
      operations of the Property after acquisition such as amortization,
      depreciation, interest, corporate expenses and certain other costs not
      directly related to future operations of the Property.

3.    REVENUE RECOGNITION:

      Rental revenue includes income from leases, certain reimbursable expenses,
      and straight-line rent adjustments associated with renting the property. A
      summary of rental revenue is shown in the following table:

                                           Year Ended December 31,
                                            2003            2002
                                         ----------      ----------
      Income from leases                 $1,152,591      $       --
      Straight-line rent adjustment         954,172              --
      Reimbursable expenses                 586,555           3,084
                                         ----------      ----------

        Total                            $2,693,318      $    3,084
                                         ==========      ==========

      The Company has retained substantially all of the risks and benefits of
      the Property and accounts for its leases as operating leases. Rental
      income from leases, which includes rent concessions (including free rent
      and tenant improvement allowances) and scheduled increases in rental rates
      during the lease term, is recognized on a straight-line basis. The Company
      does not have any percentage rent arrangements with its tenants.
      Reimbursable costs are included in rental income in the period earned.

4.    USE OF ESTIMATES:

      The preparation of the Statements in conformity with the basis of
      accounting described in Note 2 requires management to make estimates and
      assumptions that affect the reported amounts of revenue and expenses
      during the reporting period. Actual results could differ from those
      estimates.

5.    CONCENTRATIONS OF RISKS:

      For the years ended December 31, 2003, and 2002, rental income was
      received from three lessees. As such, future receipts are dependent upon
      the financial strength of these lessees and their ability to perform under
      the lease agreements.


                                      F-35
<PAGE>

                              FSP ROYAL RIDGE CORP.
  NOTES ACCOMPANYING THE STATEMENTS OF REVENUE OVER CERTAIN OPERATING EXPENSES

6.    LEASES:

      The Company, as lessor, has minimum future rentals due under
      noncancellable operating leases as follows:

                     Year Ending
                     December 31,           Amount
                     ------------       ------------

                         2004           $  2,198,000
                         2005              2,040,000
                         2006              2,071,000
                         2007              2,123,000
                         2008              2,176,000
                      Thereafter           6,750,000
                                        ------------

                                        $ 17,358,000
                                        ============

      In addition, the lessees are liable for real estate taxes and operating
      expenses as direct expenses to the lessees.

7.    ALLOCATION:

      Allocation of the statements of revenue over certain operating expenses by
      Property owner, is as follows:

<TABLE>
<CAPTION>
                                     For the period       For the period
                                   January 1, 2003 to   January 30, 2003 to       Total
                                    January 29, 2003     December 31, 2003         2003
                                    ----------------     -----------------     -----------

<S>                                     <C>                 <C>                <C>
Revenue
  Rental income                         $     1,195         $ 2,692,123        $ 2,693,318
                                        -----------         -----------        -----------

                                              1,195           2,692,123          2,693,318
                                        -----------         -----------        -----------

Certain operating expenses
  Taxes and insurance                        19,046             254,902            273,948
  Management fees                             2,652              70,419             73,071
  Administrative                              4,736             104,078            108,814
  Operating and maintenance                  87,616             561,988            649,604
                                        -----------         -----------        -----------

                                            114,050             991,387          1,105,437
                                        -----------         -----------        -----------

(Deficit) excess of revenue over
  certain operating expenses            $  (112,855)        $ 1,700,736        $ 1,587,881
                                        ===========         ===========        ===========
</TABLE>


                                      F-36
<PAGE>

                              FSP ROYAL RIDGE CORP.
  NOTES ACCOMPANYING THE STATEMENTS OF REVENUE OVER CERTAIN OPERATING EXPENSES


8.    CASH DISTRIBUTION:

      The Company declared and paid dividends as follows:

                                Taxable Income    Return of Capital
Years          Cash Dividends     / per share       / per share
- -----          --------------     -----------       -----------

2003            $ 1,375,196        $                 $ 4,623
2002              N/A                 N/A              N/A


                                      F-37
<PAGE>

                                                                      Appendix A

                          AGREEMENT AND PLAN OF MERGER

                                  BY AND AMONG

                        FRANKLIN STREET PROPERTIES CORP.,

                           MONTAGUE ACQUISITION CORP.,

                        ADDISON CIRCLE ACQUISITION CORP.,

                         ROYAL RIDGE ACQUISITION CORP.,

                       COLLINS CROSSING ACQUISITION CORP.,

                       FSP MONTAGUE BUSINESS CENTER CORP.,

                            FSP ADDISON CIRCLE CORP.,

                             FSP ROYAL RIDGE CORP.,

                                       AND

                           FSP COLLINS CROSSING CORP.


                                 August 13, 2004
<PAGE>

                        TABLE OF CONTENTS (to be updated)

ARTICLE 1 THE MERGERS..........................................................1
1.1   The Mergers..............................................................1
1.2   The Closing..............................................................2
1.3   Effective Time...........................................................2
1.4   Additional Action........................................................2
1.5   Dissenting Shares........................................................2
1.6   No Further Rights........................................................3
1.7   Withholding Rights.......................................................3

ARTICLE 2 MERGER CONSIDERATION.................................................3
2.1   Cancellation of Target Stock.............................................3
2.2   Merger Consideration.....................................................4

ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
          ACQUISITION SUBSIDIARIES.............................................5
3.1   Due Organization; Authority..............................................5
3.2   Authorization; Validity; Effect of Agreement.............................5
3.3   Capitalization...........................................................6
3.4   No Violation.............................................................6
3.5   FSP Investments LLC; Due Organization....................................7
3.6   Financial Statements.....................................................7
3.7   SEC Documents............................................................8
3.8   Litigation...............................................................8
3.9   Taxes....................................................................8
3.10  Full Disclosure..........................................................9

ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE TARGET REITS...................9
4.1   Due Organization; Authority.............................................10
4.2   Authorization; Validity; Effect of Agreement............................10
4.3   Financial Statements....................................................10
4.4   Contracts and Commitments...............................................11
4.5   No Violation............................................................11
4.6   Litigation..............................................................12
4.7   Title to Assets.........................................................12
4.8   Real Property...........................................................12
4.9   Real Property Leases....................................................14
4.10  Compliance with Laws; Permits; Environmental Matters....................14
4.11  Taxes...................................................................16
4.12  No Existing Discussions.................................................17
4.13  Full Disclosure.........................................................17

ARTICLE 5 COVENANTS AND ADDITIONAL AGREEMENTS.................................17
5.1   Conduct of Business.....................................................17
5.2   Other Actions...........................................................17
5.3   Approval of Target REIT Stockholders....................................17
5.4   Consents and Approvals..................................................18
<PAGE>

5.5   No Solicitation.........................................................18

ARTICLE 6 CONDITIONS TO EACH PARTY'S OBLIGATIONS TO EFFECT THE MERGERS........21

ARTICLE 7 TERMINATION AND WAIVER..............................................22
7.1   Termination.............................................................22
7.2   Effect of Termination...................................................23
7.3   Extension; Waiver.......................................................23
7.4   No Survival of Representations and Warranties...........................23

ARTICLE 8 MISCELLANEOUS.......................................................24
8.1   Assignment..............................................................24
8.2   Risk of Loss............................................................24
8.3   Fees and Expenses.......................................................24
8.4   Entire Agreement; Modifications; Amendments.............................25
8.5   Notices.................................................................25
8.6   Interpretation..........................................................26
8.7   Captions................................................................26
8.8   Counterparts............................................................26
8.9   Binding Effect..........................................................26
8.10  Attorneys' Fees.........................................................27
8.11  No Waiver; Severability.................................................27
8.12  No Joint and Several Liability..........................................27
8.13  Applicable Law..........................................................27

Exhibit A--List of Properties
Exhibit B--Merger Consideration
Exhibit C--Tax Representations
<PAGE>

                          AGREEMENT AND PLAN OF MERGER

            This AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and
entered into as of August 13, 2004 by and among Franklin Street Properties Corp.
(the "Company"), a Maryland corporation, the wholly-owned acquisition
subsidiaries of the Company, each a Delaware corporation (each an "Acquisition
Subsidiary" and, collectively, the "Acquisition Subsidiaries"), listed on the
signature pages hereto and the other corporations, each a Delaware corporation
(each, a "Target REIT" and, collectively, the "Target REITs"), also listed on
the signature pages hereto.

                                    RECITALS

            WHEREAS, the Target REITs are the owners of certain real properties
listed on Exhibit A hereto (each such property, including any buildings,
structures or other improvements situated thereon, a "Property" and,
collectively, the "Properties");

            WHEREAS, the board of directors of the Company (the "Company
Board"), boards of directors of each of the Acquisition Subsidiaries (such
boards of directors, collectively, the "Acquisition Boards of Directors") and
the boards of the directors of each of the Target REITs (such boards of
directors, collectively, the "Target Boards of Directors") believe that it is in
the best interests of the Company, each of the Acquisition Subsidiaries and each
of the Target REITs, respectively, and their respective stockholders, to
consummate, and have approved, the business combination transaction provided for
herein, pursuant to which each Target REIT will be merged with and into an
Acquisition Subsidiary, with the respective Acquisition Subsidiary continuing as
the surviving entity (each such transaction, a "Merger" and, collectively, the
"Mergers");

            WHEREAS, the Company Board, the Acquisition Boards of Directors and
the Target Boards of Directors have agreed to effect the transactions provided
for herein upon the terms and subject to the conditions set forth herein;

            WHEREAS, the Company, the Acquisition Subsidiaries and the Target
REITs desire to make certain representations, warranties and agreements in
connection with the Mergers.

            NOW, THEREFORE, in consideration of the foregoing and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto hereby agree as follows:

ARTICLE 1 THE MERGERS

      1.1 The Mergers. Subject to the terms and conditions of this Agreement, at
the Effective Time (as hereinafter defined), each Target REIT will be merged
with and into an Acquisition Subsidiary in accordance with the applicable


                                       A-1
<PAGE>

provisions of the Delaware General Corporation Law ("DGCL"), and the separate
existence of each Target REIT shall thereupon cease. Each Acquisition Subsidiary
shall continue as the surviving entity of the Mergers (each a "Surviving
Corporation" and collectively, the "Surviving Corporations"). The parties hereby
agree that FSP Montague Business Center Corp. will merge with and into Montague
Acquisition Corp.; FSP Addison Circle Corp. will merge with and into Addison
Circle Acquisition Corp; FSP Royal Ridge Corp. will merge with and into Royal
Ridge Acquisition Corp.; and FSP Collins Crossing Corp. will merge with and into
Collins Crossing Acquisition Corp.

      1.2 The Closing. Subject to the terms and conditions of this Agreement,
the closing of the Mergers (the "Closing") shall take place at the offices of
Wilmer Cutler Pickering Hale and Dorr LLP, 60 State Street, Boston,
Massachusetts at 9:00 a.m., local time, on December 30, 2004 or at such other
time and date following the day on which the last of the conditions set forth in
Article 6 shall be fulfilled or waived in accordance herewith. The holders of
preferred stock in the Target REITs ("Target Stock") are hereinafter referred to
as the "Target REIT Stockholders." The holders of common stock of the Company,
$0.0001 par value per share ("Common Stock"), are hereinafter referred to as the
"Company Stockholders." The date on which the Closing occurs is hereinafter
referred to as the "Closing Date." After giving effect to the Mergers, the
Company and Acquisition Subsidiaries are hereinafter referred to as the
"Combined Company."

      1.3 Effective Time. If all of the conditions to a particular Merger set
forth in Article 6 shall have been fulfilled or waived in accordance herewith
with respect to the Company and the applicable Target REIT and this Agreement
shall not have been terminated as provided in Article 7 or Section 8.2(b), the
parties hereto shall promptly cause to be properly executed, verified and
delivered for filing on the Closing Date a certificate of merger satisfying the
requirements of the DGCL for such Merger (a "Certificate of Merger"). A Merger
shall become effective upon the acceptance for record of its Certificate of
Merger by the Secretary of State of the State of Delaware in accordance with the
DGCL or at such later time upon which the parties hereto shall have agreed and
designated in such filing in accordance with applicable law as the effective
time of the Mergers (the "Effective Time").

      1.4 Additional Action. The Surviving Corporations may, at any time from
and after the Effective Time, take any action, including executing and
delivering any document, in the name and on behalf of either the respective
Target REIT or the respective Acquisition Subsidiary, in order to consummate and
give effect to the transactions contemplated by this Agreement.

      1.5 Dissenting Shares.

            (a) For purposes of this Agreement, "dissenting shares" means Target
Stock held as of the Effective Time by a Target REIT Stockholder who has not
voted such Target Stock in favor of the adoption of this Agreement and the
Merger with respect to such Target REIT and with respect to which appraisal
shall have been duly demanded and perfected in accordance with Section 262 of
the DGCL and not effectively withdrawn or forfeited prior to the Effective Time.


                                       A-2
<PAGE>

Dissenting shares shall not be converted into or represent the right to receive
the Merger Consideration (as defined below) unless the Target REIT Stockholder
holding such dissenting shares shall have forfeited his or her right to
appraisal under the DGCL or properly withdrawn his or her demand for appraisal.
If such Target REIT Stockholder has so forfeited or withdrawn his or her right
to appraisal of dissenting shares, then (i) as of the occurrence of such event,
such holder's dissenting shares shall cease to be dissenting shares and shall be
converted into and represent the right to receive the Merger Consideration
payable in respect of such Target Stock pursuant to Section 2.2 hereof, and (ii)
promptly following the occurrence of such event, the Company or the Surviving
Corporation shall deliver to such Target REIT Stockholder shares of Common Stock
and any cash in lieu of fractional shares of Target Stock, if applicable, to
which such holder is entitled pursuant to Section 2.2 hereof.

            (b) Each Target REIT shall give the Company (i) prompt notice of any
written demands for appraisal of any Target Stock, withdrawals of such demands,
and any other instruments that relate to such demands received by the respective
Target REIT and (ii) the opportunity to direct all negotiations and proceedings
with respect to demands for appraisal under the DGCL. No Target REIT shall,
except with the prior written consent of the Company, make any payment with
respect to any demands for appraisal of Target Stock or offer to settle or
settle any such demands.

      1.6 No Further Rights. From and after the Effective Time, no Target Stock
shall be deemed to be outstanding, and holders of certificates formerly
representing Target Stock shall cease to have any rights with respect thereto
except as provided herein or by law.

      1.7 Withholding Rights. Notwithstanding any provision of this Agreement,
each of the Company and any Acquisition Subsidiary shall be entitled to deduct
and withhold from the payments to be made pursuant to this Agreement, as
applicable, such amounts as it reasonably determines that it is required to
deduct and withhold with respect to the making of such payments under the Code
or any other applicable provision of law and to collect Forms W-8 or W-9, as
applicable, or similar information from the Target REIT Stockholders and any
other recipients of payments hereunder. To the extent the amounts are so
withheld by either the Company or any Acquisition Subsidiary, such withheld
amounts shall be treated for all purposes of this Agreement as having been paid
to the holder of the Target REIT shares in respect of which such deduction and
withholding was made by the Company or the Acquisition Subsidiary.

ARTICLE 2 MERGER CONSIDERATION

      2.1 Cancellation of Target Stock. As a result of the Mergers and without
any action on the part of the Target REIT Stockholders, all Target Stock in each
Target REIT with respect to which a Merger has become effective shall cease to
be outstanding, shall be canceled and retired and shall cease to exist and each
Target REIT Stockholder shall thereafter cease to have any rights with respect
to such Target Stock (other than with respect to any dissenting shares).


                                       A-3
<PAGE>

      2.2 Merger Consideration.

            (a) At the Effective Time, by virtue of the Mergers and without any
further action by the Company, any Acquisition Subsidiary or any Target REIT,
each Target REIT Stockholder in each Target REIT with respect to which a Merger
has become effective shall receive for each share (or fraction thereof) of
Target Stock of such Target REIT that such Target REIT Stockholder holds of
record, that number of shares of Common Stock in the Combined Company set forth
on Exhibit B attached hereto opposite the name of the applicable Target REIT
(the "Merger Consideration"). At the Effective Time, by virtue of the Mergers
and without any further action by any party, each share of common stock, $.0001
par value per share, of each Target REIT held by the Company shall be cancelled
and shall cease to exist and no stock of the Company or other consideration
shall be delivered in exchange therefor, and the Company hereby waives any right
that it may have under the certificate of incorporation of each Target REIT or
otherwise to receive any consideration in the Mergers in respect of such shares
of Target REIT common stock.

            (b) No certificate or scrip representing fractional shares of Common
Stock shall be issued upon the surrender of Target Stock, and such fractional
share interests shall not entitle the owner thereof to vote or to any other
rights of a stockholder of the Company. Notwithstanding any other provision of
this Agreement, each holder of shares of Target Stock converted pursuant to the
Mergers who would otherwise have been entitled to receive a fraction of a share
of Common Stock (after taking into account all Target Stock certificates
registered in the name of or delivered by such holder) shall receive, in lieu
thereof, cash (without interest) in an amount equal to such fractional part of a
share of Common Stock multiplied by $17.70, such amount to be rounded up to the
nearest whole cent.

            (c) The Company shall issue certificates representing shares of
Common Stock upon the surrender of Target Stock as soon as practicable after the
Effective Time.

            (d) The directors and officers of each Acquisition Subsidiary
immediately prior to the Effective Time shall be the initial directors and
officers of the respective Surviving Corporations, each to hold office in
accordance with the Certificate of Incorporation and Bylaws of such Surviving
Corporation. The certificate of incorporation and by-laws of each Acquisition
Subsidiary immediately prior to the Effective Time shall be the initial
certificate of incorporation and by-laws of the respective Surviving
Corporation, except that the name of each Surviving Corporation shall be amended
to be the name of the respective Target REIT immediately prior to the Effective
Time.

            (e) The Merger Consideration, including any cash in lieu of
fractional shares, shall be adjusted to reflect any reclassification, stock
split, reverse split, stock dividend, reorganization, recapitalization or other
like change with respect to Common Stock or Target Stock occurring (or for which
a record date is established) after the date hereof and prior to the Effective
Time.


                                       A-4
<PAGE>

ARTICLE 3   REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE ACQUISITION
            SUBSIDIARIES

            Each of the Company and the Acquisition Subsidiaries, jointly and
severally, represents and warrants to the Target REITs that the statements
contained in this Article 3 are true and correct, except as set forth in the
disclosure schedule delivered at or prior to the execution hereof to each of the
Target REITs (the "Company Disclosure Schedule"). The Company Disclosure
Schedule shall be arranged in paragraphs corresponding to the numbered and
letter paragraphs contained in this Article 3, and the disclosures in any
paragraph of the Company Disclosure Schedule shall also be deemed to qualify all
other paragraphs in this Article 3.

      3.1 Due Organization; Authority.

            (a) Each of the Company and the Acquisition Subsidiaries is a
corporation duly organized and validly existing under the laws of the state of
its incorporation. The Company (i) has the authority to conduct its business as
currently conducted and to own and operate the properties that it now owns and
operates, and (ii) is duly licensed or qualified to do business in, and is in
good standing under the laws of, all jurisdictions in which the transaction of
its business makes such qualification necessary, except where the failure to be
so licensed or qualified would not reasonably be expected to have a material
adverse effect on the business, assets, prospects, results of operations or
financial condition of the Company (a "Company Material Adverse Effect").

            (b) Each of the Company and the Acquisition Subsidiaries has
provided each Target REIT with a true and complete copy of its articles or
certificate of incorporation and bylaws, each as amended to date.

            (c) Each Acquisition Subsidiary was formed solely for the purpose of
engaging in the transactions contemplated hereby, has engaged in no other
business activities or operations and owns no assets.

      3.2 Authorization; Validity; Effect of Agreement. Each of the Company and
the Acquisition Subsidiaries has all requisite power, authority and legal right
to enter into this Agreement and to perform its obligations hereunder. The
execution and delivery of this Agreement by the Company and the Acquisition
Subsidiaries and the consummation by the Company and the Acquisition
Subsidiaries of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of the Company and the Acquisition
Subsidiaries, respectively, and this Agreement is a legal, valid and binding
obligation of the Company and the Acquisition Subsidiaries, enforceable against
them in accordance with its terms.


                                       A-5
<PAGE>

      3.3 Capitalization. The authorized capital stock of the Company consists
of 180,000,000 shares of Common Stock of which approximately 49,629,762 shares
are issued and outstanding as of the date hereof and 20,000,000 shares of
preferred stock, $0.0001 par value per share, of which no shares are issued and
outstanding as of the date hereof. Immediately following the consummation of the
Mergers, approximately 60,524,756 shares of Common Stock will be issued and
outstanding and no shares of preferred stock will be issued and outstanding. The
rights and privileges of each class of the Company's capital stock are as set
forth in the Company's certificate of incorporation, as amended to date. All
shares of the Company's Common Stock issuable pursuant to this Agreement, when
issued on the terms and conditions set forth in this Agreement, will be duly
authorized, validly issued, fully paid and nonassessable and not subject to or
issued in violation of any purchase option, call option, right of first refusal,
preemptive right, subscription right or any similar right under any provision of
the DGCL or the Company's certificate of incorporation or by-laws.

      3.4 No Violation.

            (a) Neither the execution and delivery by the Company or the
Acquisition Subsidiaries of this Agreement, nor the consummation by the Company
or the Acquisition Subsidiaries of the transactions contemplated hereby and
compliance by the Company or the Acquisition Subsidiary with the provisions
hereof, will: (i) conflict with or violate any provision of the articles or
certificates of incorporation or bylaws, each as amended to date of the Company
or the Acquisition Subsidiaries; (ii) require on the part of the Company or the
Acquisition Subsidiaries or any Subsidiary (as defined below) of the Company any
consent, approval or authorization of, or declaration, filing or registration
with, any governmental or regulatory authority, except (x) the filing of a
registration statement on Form S-4 with the Securities and Exchange Commission
(the "SEC"), (y) the filing of the Certificates of Merger in accordance with the
DGCL or (z) where the failure to obtain any such consent, approval or
authorization of, or declaration, filing or registration with, any governmental
or regulatory authority would not reasonably be expected to have a Company
Material Adverse Effect and would not adversely affect the consummation of the
transactions contemplated hereby; (iii) conflict with, result in a breach of,
constitute (with or without due notice or lapse of time or both) a default
under, result in the acceleration of obligations under, create in any party the
right to terminate, modify or cancel, or require any notice, consent or waiver
under, any contract or instrument to which the Company or any Subsidiary of the
Company is a party or by which the Company or any Subsidiary of the Company is
bound or to which any of their assets is subject, except for (A) any conflict,
breach, default, acceleration, termination, modification or cancellation which
would not have a Company Material Adverse Effect and would not adversely affect
the consummation of the transactions contemplated hereby or (B) any notice,
consent or waiver the absence of which would not have a Company Material Adverse
Effect and would not adversely affect the consummation of the transactions
contemplated hereby; (iv) result in the imposition of any mortgage, pledge,
security interest, encumbrance, charge or other lien (whether arising by
contract or by operation of law) upon any property or assets of the Company or
any Subsidiary of the Company; or (v) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to the Company, the Acquisition


                                       A-6
<PAGE>

Subsidiaries or any Subsidiary of the Company or any of their properties or
assets. For purposes of this Agreement, "Subsidiary" shall mean any corporation,
partnership, trust, limited liability company or other non-corporate business
enterprise in which the Company holds stock or other ownership interests
representing more than 50% of the voting power of all outstanding stock or
ownership interests of such entity.

            (b) Except as expressly contemplated by this Agreement, no other
action is required to be taken by the Company or the Acquisition Subsidiaries to
permit the execution, delivery and performance of (i) this Agreement, (ii) all
other documents and certificates expressly contemplated hereby, and (iii) the
transactions contemplated hereby, and no consent or approval of any third party
or governmental authority is or was required or appropriate in connection with
the execution of this Agreement, or to consummate the transactions expressly
contemplated hereunder, except such as have been obtained or will be obtained
prior to the Closing.

      3.5 FSP Investments LLC; Due Organization. FSP Investments LLC ("FSP
Investments"), a wholly-owned subsidiary of the Company, is a limited liability
company duly organized and validly existing under the laws of the Commonwealth
of Massachusetts. FSP Investments is duly registered with the SEC as a
broker/dealer pursuant to Section 15 of the Securities Exchange Act of 1934, as
amended.

      3.6 Financial Statements.

            (a) The Company has previously delivered or made available to each
of the Target REITs the following financial statements (collectively, the
"Company Financial Statements"): (i) consolidated statements of income for the
twelve months ended December 31, 2003 (audited), (ii) consolidated statements of
cash flows for the twelve months ended December 31, 2003 (audited), (iii)
consolidated balance sheet as of December 31, 2003 (audited), (iv) consolidated
statements of income for the six months ended June 30, 2004 (unaudited), (v)
consolidated statements of cash flows for the six months ended June 30, 2004
(unaudited) and (vi) the consolidated balance sheet as of June 30, 2004
(unaudited) (the "Company Balance Sheet"). The Company Financial Statements have
been prepared in accordance with generally accepted auditing principles
("GAAP"), applied on a basis consistent with prior periods (except as otherwise
noted therein), and present fairly the financial position and results of
operations of the Company as of their respective dates and for the periods
presented therein (subject, in the case of unaudited interim financial
statements, to normal year-end adjustments).

            (b) The Company has no liability of any nature, whether known or
unknown, accrued or unaccrued, absolute or contingent, asserted or unasserted,
except liabilities (i) stated or adequately reserved against on the Company
Balance Sheet or the notes thereto, (ii) incurred in the ordinary course of
business and not required under GAAP to be reflected on the Company Balance
Sheet, (iii) incurred after the date of the Company Balance Sheet in the
ordinary course of business consistent with the terms of this Agreement or (iv)
which would not reasonably be expected to have a Company Material Adverse
Effect.


                                       A-7
<PAGE>

      3.7 SEC Documents. The Company has filed or will file all SEC Documents
(as defined below) on a timely basis. All of the SEC Documents (other than
preliminary materials), as of their respective filing dates, complied or will
comply in all material respects with all applicable requirements of the
Securities Act of 1933, as amended and the Securities Exchange Act of 1934, as
amended and, in each case, the rules and regulations promulgated thereunder
applicable to such SEC Documents. None of the SEC Documents, at the time of
filing contained or will contain any untrue statements of a material fact or
omitted to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading, except to the extent such statements have been
modified or superseded by later SEC Documents filed and publicly available. As
used herein, "SEC Documents" shall mean all reports, schedules, forms,
statements and other documents required to be filed by the Company with the SEC
on or after January 1, 2003 and prior to the Closing Date. No Subsidiary is
subject to the reporting requirements of Sections 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended.

      3.8 Litigation. There are (i) no continuing orders, injunctions or decrees
of any court, arbitrator or governmental authority to which the Company is a
party or by which it is bound or, to the knowledge of the Company, to which any
of its directors, officers, employees or agents, in such capacity, is a party
or, to the knowledge of the Company, by which any of them is bound, and (ii) no
actions, suits, investigations or proceedings pending against the Company, or,
to the knowledge of the Company, against any of its directors, officers,
employees or agents, in such capacity, or, to the knowledge of the Company,
threatened against the Company or any of its directors, officers, employees or
agents, in such capacity, at law or in equity, or before or by any federal,
state or local commission, board, bureau, agency or instrumentality that would,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect. For purposes of this Section 3.8 and Section 3.9 below,
any reference to the "Company" shall be deemed to include the Subsidiaries.

      3.9 Taxes.

            (a) The Company has paid, caused to be paid or accrued all federal,
state, local, foreign and other taxes, including without limitation, income
taxes, estimated taxes, alternative minimum taxes, excise taxes, sales taxes,
use taxes, value-added taxes, gross receipt taxes, franchise taxes, capital
stock taxes, employment and payroll-related taxes, withholding taxes, stamp
taxes, transfer taxes, windfall profit taxes, property taxes and environmental
taxes, whether or not measured in whole or in part by net income, and all
deficiencies, or other additions to tax, interest, fines and penalties
(collectively, "Taxes"), required to be paid or accrued by it through the date
hereof;

            (b) The Company has timely filed or requested an extension of the
time to file all federal, state, local and foreign Tax returns required to be
filed by it through the date hereof, and all such returns completely and
accurately set forth the amount of any Taxes relating to the applicable period;


                                       A-8
<PAGE>

            (c) The Company has withheld and paid all Taxes required to have
been withheld and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, stockholder or other party;

            (d) For all periods from its inception, the Company has qualified to
be treated as a "real estate investment trust" (a "REIT") within the meaning of
Sections 856-860 of the Internal Revenue Code of 1986, as amended (the "Code").
For the periods described in the preceding sentence, the Company has met all
requirements necessary to be treated as a REIT for purposes of the income Tax
provisions of those states in which the Company is subject to income Tax and
which provide for the taxation of a REIT in a manner similar to the treatment of
REITs under Sections 856-860 of the Code.

            (e) Neither the Internal Revenue Service (the "IRS") nor any other
governmental authority is now asserting by written notice to the Company or, to
the knowledge of the Company, threatening to assert against the Company any
deficiency or claim for additional Taxes. There is no dispute or claim
concerning any Tax liability of the Company either claimed or raised in writing
by the IRS. There is no dispute or claim of a material nature concerning any Tax
liability of the Company either claimed or raised in writing by any governmental
authority other than the IRS, or, to the knowledge of the Company, which may be
claimed or raised by any federal or state governmental authority. No written
claim has ever been made by a Taxing authority in a jurisdiction where the
Company does not file reports and returns asserting that the Company is or may
be subject to Taxation by that jurisdiction.

      3.10 Full Disclosure. The representations of the Company contained in this
Agreement do not contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements made herein not
misleading, and none of the information supplied or to be supplied by the
Company for inclusion in the Consent Solicitation/Prospectus to be distributed
to Target REIT Stockholders, pursuant to Section 5.3 hereof (the "Consent
Solicitation/Prospectus") contains any untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading. If at any time prior to the Closing Date any
event relating to the Company should occur that is required to be described in
an amendment of or supplement to the Consent Solicitation/Prospectus, the
Company shall, together with the Target REITS, prepare, file and disseminate
such amendment or supplement. To the Company's knowledge, all of the
representations and warranties of each of the Target REITs set forth in this
Agreement are true and correct as of the date hereof.

ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE TARGET REITS

            Each of the Target REITs individually represents and warrants to the
Company that the statements contained in this Article 4 are true and correct as
to itself, except as set forth in the disclosure schedules delivered at or prior
to the execution hereof by each of the Target REITs to the Company (each, a
"Target REIT Disclosure Schedule" and, collectively, the "Target REITs
Disclosure Schedules"). Each Target REIT Disclosure Schedule shall be arranged


                                       A-9
<PAGE>

in paragraphs corresponding to the numbered and letter paragraphs contained in
this Article 4, and the disclosures in any paragraph of any Target REIT
Disclosure Schedule shall also be deemed to qualify all other paragraphs in this
Article 4 with respect to that Target REIT. In the event that at the time of the
execution of this Agreement the Company has knowledge that any of the
representations or warranties of any Target REIT contained herein are not true
and correct, such Target REIT shall not be deemed to be in breach of this
Agreement in respect thereof, including without limitation for purposes of
Sections 6(f) and 7.1(c) below.

      4.1 Due Organization; Authority.

            (a) The Target REIT is a corporation duly organized and validly
existing under the laws of the State of Delaware. The Target REIT (i) has the
authority to conduct its business as currently conducted and to own and operate
the properties that it now owns and operates, and (ii) is duly licensed or
qualified to do business in, and is in good standing under the laws of, all
jurisdictions in which the transaction of its business makes such qualification
necessary, except where the failure to be so licensed or qualified would not
reasonably be expected to have a material adverse effect on the business,
assets, prospects, results of operations or financial condition of the Target
REIT (a "Target REIT Material Adverse Effect").

            (b) The Target REIT has provided the Company and each other Target
REIT with a true and complete copy of its certificate of incorporation and
bylaws, each as amended to date.

      4.2 Authorization; Validity; Effect of Agreement.

            (a) The Target REIT has all requisite power, authority and legal
right to enter into this Agreement and to consummate the Mergers. The execution
and delivery of this Agreement by the Target REIT and, subject to the approval
of this Agreement by its Target REIT Stockholders, the consummation by the
Target REIT of its Merger have been duly authorized by all necessary corporate
action on the part of the Target REIT, and this Agreement is a legal, valid and
binding obligation of the Target REIT, enforceable against the Target REIT in
accordance with its terms.

      4.3 Financial Statements.

            (a) The Target REIT has previously delivered or made available to
the Company the following financial statements (collectively, the "Target REIT
Financial Statements"): (i) statement of income from date of inception through
December 31, 2003 (audited); (ii) statement of cash flows from date of inception
through December 31, 2003 (audited), (iii) a statement of income for the six
months ended June 30, 2004 (unaudited), (iv) a statement of cash flows for the
six months ended June 30, 2004 and (v) a balance sheet as of June 30, 2004
(unaudited) (the "Target REIT Balance Sheet"). The Target REIT Financial
Statements have been prepared in accordance with GAAP, applied on a basis
consistent with prior periods (except as otherwise noted therein), and present
fairly the financial position and results of operations of the Target REIT as of


                                      A-10
<PAGE>

their respective dates and for the periods presented therein (subject, in the
case of unaudited interim financial statements, to normal year-end adjustments).

            (b) The Target REIT has no liability of any nature, whether known or
unknown, accrued or unaccrued, absolute or contingent, asserted or unasserted,
except liabilities (i) stated or adequately reserved against on the Target REIT
Balance Sheet or the notes thereto, (ii) incurred in the ordinary course of
business and not required under GAAP to be reflected on the Target REIT Balance
Sheet, (iii) incurred after the date of the Target REIT Balance Sheet in the
ordinary course of business consistent with the terms of this Agreement or (iv)
which would not reasonably be expected to have a Target REIT Material Adverse
Effect.

      4.4 Contracts and Commitments. The Target REIT has delivered or made
available to the Company a correct and complete copy of each contract to which
the Target REIT is a party that is material to the Target REIT (each a "Target
REIT Material Contract"). Each Target REIT Material Contract is in full force
and effect and neither the Target REIT nor, to the knowledge of the Target REIT,
the other party thereto is in breach or default thereunder, other than breaches
or defaults which would not, individually or in the aggregate, reasonably be
expected to have a Target REIT Material Adverse Effect.

      4.5 No Violation.

            (a) Neither the execution and delivery by the Target REIT of this
Agreement, nor the consummation by the Target REIT of its Merger and compliance
by the Target REIT with the provisions hereof, will: (i) conflict with or
violate any provision of its certificate of incorporation or bylaws; (ii)
require on the part of the Target REIT any consent, approval or authorization
of, or declaration, filing or registration with, any governmental or regulatory
authority, except (x) the filing of the Certificates of Merger or (y) where the
failure to obtain any such consent, approval or authorization of, or
declaration, filing or registration with, any governmental or regulatory
authority would not reasonably be expected to have a Target REIT Material
Adverse Effect and would not adversely affect the consummation of the
transactions contemplated hereby; (iii) conflict with, result in a breach of,
constitute (with or without due notice or lapse of time or both) a default
under, result in the acceleration of obligations under, create in any party the
right to terminate, modify or cancel, or require any notice, consent or waiver
under, any contract or instrument to which the Target REIT is a party or by
which the Target REIT is bound or to which any of its assets is subject, except
for (A) any conflict, breach, default, acceleration, termination, modification
or cancellation which would not have a Target REIT Material Adverse Effect and
would not adversely affect the consummation of the transactions contemplated
hereby or (B) any notice, consent or waiver the absence of which would not have
a Target REIT Material Adverse Effect and would not adversely affect the
consummation of the transactions contemplated hereby; (iv) result in the
imposition of any mortgage, pledge, security interest, encumbrance, charge or
other lien (whether arising by contract or by operation of law) upon any
property or assets of the Target REIT; or (v) violate any order, writ,


                                      A-11
<PAGE>

injunction, decree, statute, rule or regulation applicable to the Target REIT or
any of its properties or assets.

            (b) Except as expressly contemplated by this Agreement, no other
action is required to be taken by the Target REIT to permit the execution,
delivery and performance of (i) this Agreement, (ii) all other documents and
certificates expressly contemplated hereby, and (iii) the Mergers, and no
consent or approval of any third party or governmental authority is or was
required or appropriate in connection with the execution of this Agreement, or
to consummate the transactions expressly contemplated hereunder, except such as
have been obtained or will be obtained prior to the Closing.

      4.6 Litigation. There are (i) no continuing orders, injunctions or decrees
of any court, arbitrator or governmental authority to which the Target REIT is a
party or by which it is bound or, to the knowledge of the Target REIT, to which
any of its directors, officers, employees or agents, in such capacity, is a
party or, to the knowledge of the Target REIT, by which any of them is bound,
and (ii) no actions, suits, investigations or proceedings pending against the
Target REIT, or, to the knowledge of the Target REIT, against any of its
directors, officers, employees or agents, in such capacity, or, to the knowledge
of the Target REIT, threatened against the Target REIT or any of its directors,
officers, employees or agents, in such capacity, at law or in equity, or before
or by any federal, state or local commission, board, bureau, agency or
instrumentality that would, individually or in the aggregate, reasonably be
expected to have a Target REIT Material Adverse Effect.

      4.7 Title to Assets. The Target REIT has good and marketable title to the
assets reflected in the most recent Target REIT Balance Sheet and will hold good
and marketable title to such assets, and any assets acquired by the Target REIT
prior to the Effective Time, except for assets disposed of in the ordinary
course of business (which assets do not include its Property) and except as the
failure of the Target REIT to have such good and marketable title is not, in the
aggregate, material to the Target REIT. The assets reflected on the Target REIT
Balance Sheet include its Property. Except as otherwise disclosed in the Target
REIT Balance Sheet or related notes accompanying it, all the assets referred to
in the first sentence of this Section 4.7 are owned free and clear of any and
all material adverse claims, security interests, charges or other encumbrances
or restrictions of every nature, except liens for current taxes not yet due and
payable or landlords' liens as provided for in the relevant leases, or by
applicable law.

      4.8 Real Property.

            With respect to each parcel of Property owned by the Target REIT:

            (a) the Target REIT has good and clear record and marketable title
to such parcel, insurable by a recognized national title insurance company at
standard rates, free and clear of any security interest, easement, covenant or
other restriction, except for recorded easements, covenants and other
restrictions which do not impair the uses, occupancy or value of such parcel for


                                      A-12
<PAGE>

its existing use as an office building or warehouse/distribution center, as the
case may be (the "Intended Uses");

            (b) there are no (i) pending or, to the knowledge of the Target
REIT, threatened condemnation proceedings relating to such parcel, (ii) pending
or, to the knowledge of the Target REIT, threatened litigation or administrative
actions relating to such parcel, or (iii) other matters affecting adversely the
Intended Uses or, occupancy or value thereof;

            (c) the legal description for such parcel contained in the deed
thereof describes such parcel fully and adequately; the buildings and
improvements for the Intended Uses is permitted under applicable zoning and land
use laws, and such buildings and improvements are located within the boundary
lines of the described parcels of land, are not in violation of setback
requirements applicable to them, zoning laws and ordinances and do not encroach
on any easement which may burden the land; the land does not serve any adjoining
property for any purpose inconsistent with the use of the land; and such parcel
is not located within any flood plain or subject to any similar type restriction
for which any permits or licenses necessary to the use thereof have not been
obtained;

            (d) there are no leases, subleases, licenses or agreements, written
or oral, granting to any party or parties (other than the Target REIT and those
tenants under leases described in Section 4.9) the right of use or occupancy of
any portion of such parcel, except for leases, subleases, licenses or agreements
which do not impair the Intended Uses;

            (e) there are no outstanding options or rights of first refusal to
purchase such parcel, or any portion thereof or interest therein;

            (f) all facilities located on such parcel are supplied with
utilities and other services necessary for the operation of such facilities,
including gas, electricity, water, telephone, sanitary sewer and storm sewer,
all of which services are adequate for the Intended Uses and in accordance with
all applicable laws, ordinances, rules and regulations and are provided via
public roads or via permanent, irrevocable, appurtenant easements benefiting
such parcel;

            (g) such parcel abuts on and has direct vehicular access to a public
road or access to a public road via a permanent, irrevocable, appurtenant
easement benefiting such parcel;

            (h) the Target REIT has received no notice of any, and, to the
knowledge of the Target REIT, there is no, proposed or pending proceeding to
change or redefine the zoning classification of all or any portion of the
parcels;

            (i) the improvements constructed on the parcels are in good
condition and proper order, free of material roof leaks, untreated material
insect infestation, and material construction defects, and all mechanical and
utility systems servicing such improvements are in good condition and proper
working order, free of material defects; and


                                      A-13
<PAGE>

            (j) each parcel is an independent unit which does not rely on any
facilities (other than the facilities of public utility and water companies or
facilities as to which a permanent, irrevocable appurtenant easement exists
benefiting such parcel granting the use of such facilities) located on any other
property (i) to fulfill any zoning, building code or other municipal or
governmental requirement, (ii) for structural support or the furnishing of any
essential building systems or utilities, including, but not limited to electric,
plumbing, mechanical, heating, ventilating, and air conditioning systems, or
(iii) to fulfill the requirements of any lease. No building or other improvement
not included in the parcels relies on any part of the parcels to fulfill any
zoning, building code or other municipal or governmental requirement or for
structural support or the furnishing of any essential building systems or
utilities except with respect to utility or storm water facilities pursuant to
recorded easement agreements or declarations of common easements the use of
which do not impair the Intended Uses. Each of the parcels is assessed by local
property assessors as a tax parcel or parcels separate from all other tax
parcels.

      4.9 Real Property Leases. The Target REIT has delivered or made available
to the Company complete and accurate copies of the leases and subleases (as
amended to date) of its Property. With respect to each such lease and sublease:

            (a) the lease or sublease is legal, valid, binding, enforceable and
in full force and effect;

            (b) the lease or sublease will continue to be legal, valid, binding,
enforceable and in full force and effect immediately following the Effective
Time in accordance with the terms thereof as in effect immediately prior to the
Effective Time;

            (c) neither the Target REIT nor, to the knowledge of the Target
REIT, any other party, is in breach or violation of, or default under, any such
lease or sublease, and no event has occurred, is pending or, to the knowledge of
the Target REIT, is threatened, which, after the giving of notice, with lapse of
time, or otherwise, would constitute a breach or default by the Target REIT or,
to the knowledge of the Target REIT, any other party under such lease or
sublease;

            (d) the Target REIT has not assigned, transferred, conveyed,
mortgaged, deeded in trust or encumbered any interest in the leasehold or
sublease-hold that have not been discharged; and

            (e) the Target REIT is not aware of any Security Interest, easement,
covenant or other restriction applicable to the real property subject to such
lease, except for recorded easements, covenants and other restrictions which do
not materially impair the current uses or the occupancy by the Target REIT of
the property subject thereto.

      4.10 Compliance with Laws; Permits; Environmental Matters.


                                      A-14
<PAGE>

            (a) The Target REIT has complied with all applicable Environmental
Laws (as defined below), except for violations of Environmental Laws that do not
and will not, individually or in the aggregate, have a Target REIT Material
Adverse Effect. There is no pending or, to the knowledge of the Target REIT,
threatened civil or criminal litigation, written notice of violation, formal
administrative proceeding, or investigation, inquiry or information request by
any court, arbitrational tribunal, administrative agency or commission or other
governmental or regulatory authority or agency (a "Governmental Entity"),
relating to any Environmental Law involving the Target REIT, except for
litigation, notices of violations, formal administrative proceedings or
investigations, inquiries or information requests that will not, individually or
in the aggregate, have a Target REIT Material Adverse Effect. For purposes of
this Agreement, "Environmental Law" means any federal, state or local law,
statute, rule or regulation or the common law relating to the environment or
occupational health and safety, including without limitation any statute,
regulation, administrative decision or order pertaining to (i) treatment,
storage, disposal, generation and transportation of industrial, toxic or
hazardous materials or substances or solid or hazardous waste; (ii) air, water
and noise pollution; (iii) groundwater and soil contamination; (iv) the release
or threatened release into the environment of industrial, toxic or hazardous
materials or substances, or solid or hazardous waste, including without
limitation emissions, discharges, injections, spills, escapes or dumping of
pollutants, contaminants or chemicals; (v) the protection of wild life, marine
life and wetlands, including without limitation all endangered and threatened
species; (vi) storage tanks, vessels, containers, abandoned or discarded
barrels, and other closed receptacles; (vii) health and safety of employees and
other persons; and (viii) manufacturing, processing, using, distributing,
treating, storing, disposing, transporting or handling of materials regulated
under any law as pollutants, contaminants, toxic or hazardous materials or
substances or oil or petroleum products or solid or hazardous waste. As used
above, the terms "release" and "environment" shall have the meaning set forth in
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended ("CERCLA").

            (b) There have been no releases in violation of Environmental Laws
of any Materials of Environmental Concern (as defined below) into the
environment at any parcel of real property or any facility formerly or currently
owned, operated or controlled by the Target REIT. With respect to any such
releases of Materials of Environmental Concern, the Target REIT has given all
required notices to Governmental Entities (copies of which have been provided to
the Company). The Target REIT is not aware of any releases of Materials of
Environmental Concern at parcels of real property or facilities other than those
owned, operated or controlled by the Target REIT that could reasonably be
expected to have an impact on the real property or facilities owned, operated or
controlled by the Target REIT. For purposes of this Agreement, "Materials of
Environmental Concern" means any chemicals, pollutants or contaminants,
hazardous substances (as such term is defined under CERCLA), solid wastes and
hazardous wastes (as such terms are defined under the Resource Conservation and
Recovery Act), toxic materials, oil or petroleum and petroleum products or any
other material subject to regulation under any Environmental Law.


                                      A-15
<PAGE>

            (c) A complete and accurate copy of all documents (whether in hard
copy or electronic form) that contain any environmental reports, investigations
and audits relating to premises currently or previously owned or operated by the
Target REIT (whether conducted by or on behalf of the Target REIT or a third
party, and whether done at the initiative of the Target REIT or directed by a
Governmental Entity or other third party) which were issued or conducted during
the past five years and which the Target REIT has possession of or access to has
been provided or made available to the Company.

            (d) The Target REIT is not aware of any material environmental
liability of any solid or hazardous waste transporter or treatment, storage or
disposal facility that has been used by the Target REIT.

      4.11 Taxes.

            (a) The Target REIT has paid, caused to be paid or accrued all
federal, state, local, foreign and other Taxes, required to be paid or accrued
by it through the date hereof;

            (b) The Target REIT has timely filed or requested an extension of
the time to file all federal, state, local and foreign Tax returns required to
be filed by it through the date hereof, and all such returns completely and
accurately set forth the amount of any Taxes relating to the applicable period;

            (c) The Target REIT has withheld and paid all Taxes required to have
been withheld and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, stockholder or other party;

            (d) For all periods since its inception, the Target REIT has
qualified to be treated as a REIT within the meaning of Sections 856-860 of the
Code. For the periods described in the preceding sentence, the Target REIT has
met all requirements necessary to be treated as a REIT for purposes of the
income Tax provisions of those states in which the Target REIT is subject to
income Tax and which provide for the taxation of a REIT in a manner similar to
the treatment of REITs under Sections 856-860 of the Code.

            (e) Neither the IRS nor any other governmental authority is now
asserting by written notice to the Target REIT or, to the knowledge of the
Target REIT, threatening to assert against the Target REIT any deficiency or
claim for additional Taxes. There is no dispute or claim concerning any Tax
liability of the Target REIT either claimed or raised in writing by the IRS.
There is no dispute or claim of a material nature concerning any Tax liability
of the Target REIT either claimed or raised in writing by any governmental
authority other than the IRS, or, to the knowledge of the Target REIT, which may
be claimed or raised by any federal or state governmental authority. No written
claim has ever been made by a Taxing authority in a jurisdiction where the
Target REIT does not file reports and returns asserting that the Target REIT is
or may be subject to Taxation by that jurisdiction.


                                      A-16
<PAGE>

            (f) Each of the representations set forth in Exhibit C is true,
accurate and complete.

      4.12 No Existing Discussions. As of the date of this Agreement, no Target
REIT is engaged, directly or indirectly, in any discussions or negotiations with
any other party with respect to an Acquisition Proposal (as defined in Section
5.5(b).

      4.13 Full Disclosure. The representations of the Target REIT contained in
this Agreement do not contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements made herein not
misleading, and none of the information supplied or to be supplied by the Target
REIT for inclusion in the Consent Solicitation/Prospectus contains any untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. If at any time
prior to the Closing Date any event relating to the Target REIT should occur
that is required to be described in an amendment of or supplement to the Consent
Solicitation/Prospectus, the Target REIT promptly shall inform the Company and
assist in the preparation, filing, dissemination of such amendment or
supplement.

ARTICLE 5 COVENANTS AND ADDITIONAL AGREEMENTS

      5.1 Conduct of Business. Prior to the Effective Time, or the earlier
termination of this Agreement, the Company and each Target REIT shall (i) carry
on its business in the ordinary course in substantially the same manner as
previously conducted, (ii) use its reasonable efforts to preserve intact its
present business organization and goodwill, (iii) maintain permits, licenses and
authorizations, (iv) preserve its relationships with third parties and (v) take
all actions necessary to continue to qualify as a REIT, including, without
limitations, the payment of dividends.

      5.2 Other Actions. Neither the Company, any Acquisition Subsidiary nor any
Target REIT shall take or omit to take any action that would result in any of
the representations and warranties of the Company, such Acquisition Subsidiary
or such Target REIT, respectively, made in or pursuant to this Agreement
becoming untrue or incomplete, in any of the covenants and agreements of the
Company, such Acquisition Subsidiary or such Target REIT, respectively, being
breached, or in any of the conditions to the Closing not being satisfied;
provided, however, that nothing in this Agreement shall be construed to prohibit
or restrict the ability of the Company or any Target REIT to declare and/or pay,
consistent with past practice and custom, to the Company Stockholders or the
Target REIT Stockholders, as the case may be, dividends in respect of operations
(collectively, the "Dividends") through the Closing Date, each in accordance
with the terms of the distributing entity's organizational documents, each as
amended to date; provided, further, that upon the Effective Date, the Company
shall assume the obligation to pay any dividend declared but not paid by a
Target REIT prior to the Effective Date.

      5.3 Approval of Target REIT Stockholders. Promptly following the execution
of this Agreement, the Company, together with the Target REITs, shall prepare
and the Company shall file a Consent Solicitation/Prospectus with the SEC, and


                                      A-17
<PAGE>

the Target REITs shall as promptly as practicable following the effectiveness of
the Company's registration statement on Form S-4 distribute the Consent
Solicitation/Prospectus to the Target REIT Stockholders, asking the Target REIT
Stockholders to vote upon the adoption of this Agreement and the Mergers. Except
as permitted by Section 5.5 below, (a) the Consent Solicitation/Prospectus shall
contain the recommendation of the Target Boards of Directors that the Target
REIT Stockholders approve the adoption of this Agreement and the Mergers and (b)
each of the Target REITs, subject to and in accordance with applicable law,
shall use its respective reasonable best efforts to obtain such approval
described in this Section 5.3, including without limitation, by timely mailing
the Consent Solicitation/Prospectus to the Target REIT Stockholders of its
respective corporation. . The Company agrees (i) to vote or cause to be voted
any shares of Target REIT capital stock owned by the Company, including without
limitation any shares of Target REIT capital stock owned by a Subsidiary of the
Company, in favor of Mergers and the adoption of this Agreement and the Mergers
and (ii) to not transfer or cause or allow to be transferred any such shares
from the date hereof until following the earlier of the Effective Time or the
termination of this Agreement.

      5.4 Consents and Approvals. The Company and the Target REITs shall each
use all reasonable efforts to take, or cause to be taken, all actions and to do,
or cause to be done, all other things necessary, proper or advisable to
consummate and make effective as promptly as practicable the transactions
contemplated by this Agreement, to obtain in a timely manner all necessary
consents, waivers, approvals, authorizations and orders and to make all
necessary registrations and filings, and otherwise to satisfy or cause to be
satisfied all conditions precedent to its obligations under this Agreement.

      5.5 No Solicitation.

            (a) Except as set forth in this Section 5.5, no Target REIT shall,
nor shall any of them authorize or permit any of their respective directors,
officers, employees, investment bankers, attorneys, accountants or other
advisors or representatives (such directors, officers, employees, investment
bankers, attorneys, accountants, other advisors and representatives,
collectively, "Representatives") to, directly or indirectly:

                  (i) solicit, initiate, encourage or take any other action to
facilitate any inquiries or the making of any proposal or offer that
constitutes, or could reasonably be expected to lead to, any Acquisition
Proposal, including without limitation (A) approving any transaction under
Section 203 of the DGCL that would require such approval in the absence of
Article TENTH of such Target REIT's charter, (B) approving any person becoming
an "interested stockholder" under Section 203 of the DGCL that would require
such approval in the absence of Article TENTH of such Target REIT's charter and
(C) amending or granting any waiver or release under any standstill or similar
agreement with respect to any Target Stock; or


                                      A-18
<PAGE>

                  (ii) enter into, continue or otherwise participate in any
discussions or negotiations regarding, furnish to any person any information
with respect to, assist or participate in any effort or attempt by any person
with respect to, or otherwise cooperate in any way with, any Acquisition
Proposal.

Notwithstanding the foregoing, prior to the adoption of this Agreement by the
respective Target REIT Stockholders (the "Specified Time"), the Target REITs
may, to the extent necessary to act in a manner consistent with the respective
fiduciary obligations of the Target Board of Directors, as determined in good
faith by such respective Target Board of Directors, after consultation with
outside counsel, in response to a Superior Proposal that did not result from a
breach by the respective Target REIT of this Section 5.5, and subject to
compliance with Section 5.5(c), (x) furnish information with respect to such
Target REIT to the person making such Superior Proposal and its Representatives
pursuant to a customary confidentiality agreement and (y) participate in
discussions or negotiations with such person and its Representatives regarding
any Superior Proposal. Without limiting the foregoing, it is agreed that any
violation of the restrictions set forth in this Section 5.5(a) by any
Representative of any Target REIT, whether or not such person is purporting to
act on behalf of a Target REIT or otherwise, shall be deemed to be a breach of
this Section 5.5(a) by the respective Target REIT.

            (b) No Target REIT Board of Directors nor any committee thereof
shall:

                  (i) except as set forth in this Section 5.5, withdraw or
modify, or publicly (or in a manner designed to become public) propose to
withdraw or modify, in a manner adverse to the Company or any other Target REIT,
its approval or recommendation with respect to the adoption of this Agreement
and approval of the Mergers contemplated hereby;

                  (ii) cause or permit its Target REIT to enter into any letter
of intent, memorandum of understanding, agreement in principle, acquisition
agreement, merger agreement or similar agreement constituting or relating to any
Acquisition Proposal (other than a confidentiality agreement referred to in
Section 5.5(a) entered into in the circumstances referred to in Section 5.5(a));
or

                  (iii) adopt, approve or recommend, or publicly propose to
adopt, approve or recommend, any Acquisition Proposal.

Notwithstanding the foregoing, a Target REIT Board of Directors may, in response
to a Superior Proposal that did not result from a breach by such Target REIT of
this Section 5.5, withdraw or modify its recommendation with respect to the
adoption of this Agreement and approval of the Mergers contemplated hereby if
such Target REIT Board of Directors determines in good faith (after consultation
with outside counsel) that its fiduciary obligations require it to do so, but
only at a time that is prior to the Specified Time and is after the fifth
business day following receipt by the Company of written notice advising it that
such Target Board of Directors desires to withdraw or modify the recommendation


                                      A-19
<PAGE>

due to the existence of a Superior Proposal, specifying the material terms and
conditions of such Superior Proposal and identifying the person making such
Superior Proposal. Nothing in this Section 5.5 shall be deemed to (A) permit any
Target REIT to take any action described in clauses (ii) or (iii) of the first
sentence of this Section 5.5(b), (B) affect any obligation of the Company or the
Target REITs under this Agreement or (C) limit a Target REITs' respective
obligation to solicit consents from its Target REIT Stockholders, regardless of
whether such Target REIT Board of Directors has withdrawn or modified its
recommendation.

            (c) Each Target REIT shall immediately advise the Company and the
other Target REITs orally, with written confirmation to follow promptly (and in
any event within 24 hours), of any Acquisition Proposal or any request for
nonpublic information in connection with any Acquisition Proposal, or of any
inquiry with respect to, or that could reasonably be expected to lead to, any
Acquisition Proposal, the material terms and conditions of any such Acquisition
Proposal or inquiry and the identity of the person making any such Acquisition
Proposal or inquiry. No Target REIT shall provide any information to or
participate in discussions or negotiations with the person or entity making any
Superior Proposal until five business days after such Target REIT has first
notified the Company and the other Target REITs of such Acquisition Proposal as
required by the preceding sentence. The Target REIT receiving an Acquisition
Proposal shall (i) keep the Company and the other Target REITs fully informed,
on a reasonably current basis, of the status and details (including any change
to the terms) of any such Acquisition Proposal or inquiry, (ii) provide to the
Company and the other Target REITs as soon as practicable after receipt or
delivery thereof copies of all correspondence and other written material sent or
provided to the Target REIT receiving an Acquisition Proposal from any third
party in connection with any Acquisition Proposal or sent or provided by such
Target REIT to any third party in connection with any Superior Proposal, and
(iii) if the Company shall make a counterproposal, consider and cause its
financial and legal advisors to negotiate on its behalf in good faith with
respect to the terms of such counterproposal. Contemporaneously with providing
any information to a third party in connection with any such Superior Proposal
or inquiry, the Target REIT receiving a Superior Proposal shall furnish a copy
of such information to the Company and the other Target REITs.

            (d) Each Target REIT shall, and shall cause its Representatives to,
cease immediately all discussions and negotiations regarding any proposal that
constitutes, or could reasonably be expected to lead to, an Acquisition
Proposal. Each Target REIT shall use commercially reasonable efforts to have all
copies of all nonpublic information it and its Representatives have distributed
on or prior to the date of this Agreement to other potential purchasers returned
to such Target REIT as soon as possible.

            (e) For purposes of this Agreement:

                  "Acquisition Proposal" means, with respect to any Target REIT,
(i) any inquiry, proposal or offer for a merger, consolidation, dissolution,
sale of substantial assets, tender offer, recapitalization, share exchange or
other business combination involving such Target REIT, (ii) any proposal for the


                                      A-20
<PAGE>

issuance by such Target REIT of over 10% of its equity securities or (iii) any
proposal or offer to acquire in any manner, directly or indirectly, over 10% of
the equity securities or consolidated total assets of such Target REIT, in each
case other than the Mergers contemplated by this Agreement.

                  "Superior Proposal" means, with respect to any Target REIT,
any unsolicited, bona fide written proposal made by a third party to acquire
substantially all of the equity securities or assets of such Target REIT,
pursuant to a tender or exchange offer, a merger, a consolidation or a sale of
its assets, (i) on terms which such Target REIT's Board of Directors determines
in its good faith judgment to be more favorable from a financial point of view
to the stockholders of such Target REIT than the transactions contemplated by
this Agreement (after taking into account the written opinion with respect
thereto of a nationally recognized independent financial advisor), taking into
account all the terms and conditions of such proposal and this Agreement
(including any proposal by either the Company or such the Target REIT to amend
the terms of this Agreement) and (ii) that in the good faith judgment of the
Target REIT Board of Directors is reasonably capable of being completed on the
terms proposed, taking into account all financial, regulatory, legal and other
aspects of such proposal; provided, however, that no Acquisition Proposal shall
be deemed to be a Superior Proposal if any financing required to consummate the
Acquisition Proposal is not committed.

ARTICLE 6 CONDITIONS TO EACH PARTY'S OBLIGATIONS TO EFFECT THE MERGERS.

            The respective obligations of the parties hereto to consummate the
Mergers pursuant to the terms of this Agreement are subject to satisfaction of
the following conditions precedent on or prior to the Closing Date. In the event
that one or more of these conditions are not satisfied on or prior to the
Closing Date, the party or parties whose obligations hereunder are subject to
the satisfaction of such condition or conditions may either elect to terminate
this Agreement or waive the satisfaction of such condition. The conditions are:

            (a) this Agreement and the Mergers shall have been approved by the
holders of a majority of the shares of Target Stock of each Target REIT other
than a Target REIT with respect to which this Agreement has been terminated in
accordance with Section 8.2(b);

            (b) all necessary consents, waivers, approvals, authorizations or
orders required to be obtained and the making of all filings required to be made
by any of the parties for the authorization, execution and delivery of this
Agreement and the consummation of the transactions contemplated thereby shall
have been obtained or made, as the case may be, on or prior to (and remaining in
effect at) the Closing Date;

            (c) FSP Corp. and each of the Target REITs shall have received, on
or prior to the Closing Date, an opinion from Wilmer Cutler Pickering Hale and
Dorr LLP to the effect that each Merger will be treated for federal income tax
purposes as a reorganization within the meaning of Section 368(a) of the Code


                                      A-21
<PAGE>

and confirming that, to the extent the matters discussed under the heading
"Material United States Federal Income Tax Considerations" in the Consent
Solicitation/Prospectus constitute matters of law, they are accurate in all
material respects (it being agreed that if Wilmer Cutler Pickering Hale and Dorr
LLP does not render such opinion, this condition shall nonetheless be satisfied
if another nationally recognized law firm renders such opinion, and that the
Company and the Target REITs shall use their respective reasonable best efforts
to obtain the opinion required by this subsection). Each of the Company and each
Target REIT agrees to provide customary representations to Wilmer Cutler
Pickering Hale and Dorr LLP (or such other law firm) in connection with the
issuance of such opinion;

            (d) either the President and Chief Executive Officer or the Vice
President and Chief Operating Officer of the Company shall have delivered to
each of the Target REITs a certificate on behalf of the Company, dated as of the
Closing Date, to the effect that there have been no material adverse changes in
the financial condition of the Company between the date of the most recent
Company Financial Statements and the Closing Date, and the President of each of
the Target REITs shall have delivered to the Company a certificate on behalf of
each Target REIT, each dated as of the Closing Date, to the effect that there
have been no material adverse changes in the financial condition of such Target
REIT between the date of the most recent Target REIT Financial Statements for
such Target REIT and the Closing Date;

            (e) there shall have been no statute, rule, order or regulation
enacted or issued by the United States or any State thereof, or by a court, that
prohibits the consummation of the Mergers; and

            (f) the representations set forth in Section 3 and Section 4 hereof
are true and complete in all material respects; provided, however, that the
party whose representation was not true and correct shall have no right to not
consummate the Closing as a result thereof.

      The conditions described in clause (b) above, may be waived by either the
Company or the Target REITs, as the case may be, in whole or in part if, in the
opinion of either the Company or the Target REITs, as the case may be, such
waiver does not materially affect the terms of the transaction, which waiver
shall not be unreasonably withheld.

ARTICLE 7 TERMINATION AND WAIVER

      7.1 Termination. This Agreement may be terminated, and the Mergers may be
abandoned, at any time before the Closing Date, notwithstanding approval of the
Mergers by the Target REIT Stockholders:

            (a) by the mutual written consent of the parties;

            (b) by the Company or any Target REIT if the Mergers have not been
consummated by March 30, 2005 (which date may be extended by mutual agreement of
the parties);


                                      A-22
<PAGE>

            (c) by the Company or any Target REIT if the conditions to the
Mergers set forth in Article 6 of this Agreement are not satisfied or waived on
the Closing Date; provided, however, that in the event of the failure of the
conditions set forth in clause (g) of Article 6, the party whose representation
was not true and correct shall have no right to terminate this Agreement as a
result thereof;

            (d) by the Company or any Target REIT, in the instance where the
Target REIT has received a Superior Proposal and the respective Target REIT
Board of Directors has withdrawn or modified its approval or recommendation with
respect to the adoption of this Agreement and approval of the Mergers
contemplated hereby, if at a meeting of Target REIT Stockholders (including any
adjournment or postponement thereof) or pursuant to a written consent in lieu of
a meeting, as contemplated by Section 5.3 above, the requisite vote of such
stockholders to adopt this Agreement and approve the Mergers contemplated hereby
shall not have been obtained within 75 days of mailing of the Consent
Solicitation/Prospectus.

      If a casualty occurs with respect to the Property owned by a particular
Target REIT, the Company Board has the right to terminate the Agreement with
respect to such Target REIT and to consummate the Mergers with the remaining
Target REITs as provided in Section 8.2(b) hereof. In addition, the Company
Board has the right to terminate this Agreement with respect to a Target REIT if
(i) after the receipt by any Target REIT of an Acquisition Proposal, if the
Company requests that such Target REIT Board of Directors reconfirm its
recommendation of this Agreement or the Merger with the respective Target REIT
and such Target REIT Board of Directors fails to do so within five business days
after its receipt of the Company's request or (ii) such Target REIT Board of
Directors (or any committee thereof) shall have approved or recommended to its
Target REIT Stockholders an Acquisition Proposal.

      7.2 Effect of Termination. In the event of termination of this Agreement
as provided in Section 7.1 hereof, this Agreement shall become void and there
shall be no liability or obligation on the part of any party hereto or its
respective affiliates, partners, directors or officers, except (i) with respect
to payment of expenses as described in Section 8.3 and (ii) to the extent that
such termination results from the willful breach of a party hereto of any of its
representations, warranties, covenants or agreements made in or pursuant to this
Agreement.

      7.3 Extension; Waiver. At any time prior to the Closing Date, the parties
hereto may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties of the other
parties hereto contained herein or made in connection herewith, and (iii) waive
compliance with any of the agreements of the other parties hereto contained
herein. Any agreement on the part of a party hereto to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party.

      7.4 No Survival of Representations and Warranties. None of the
representations and warranties contained in this Agreement shall survive the
Closing Date.


                                      A-23
<PAGE>

ARTICLE 8 MISCELLANEOUS

      8.1 Assignment. The Company may not assign its rights or obligations under
this Agreement without the consent of the applicable Target REIT. None of the
Target REITs may assign their rights or obligations under this Agreement.

      8.2 Risk of Loss.

            (a) Risk of loss or damage to the assets owned by each Target REIT
(the "Assets") by condemnation, eminent domain or similar proceedings (or deed
in lieu thereof), or by fire or any other casualty, from the date hereof through
the Closing Date, will be on the Target REIT owning such Assets, and thereafter
will be on the Combined Company.

            (b) In the event of loss or damage to the Assets that occurs prior
to the Closing Date, the applicable Target REIT shall use its commercially
reasonable efforts to effect a timely cure of such loss or damage prior to the
Closing Date. If the Target REIT is unable to effect such a timely cure, the
Target REIT shall so notify the Company, and thereafter, if such loss or damage
results in a Target REIT Material Adverse Effect, the Company and such Target
REIT shall use good faith efforts to amend this Agreement (without the need to
obtain the consent of any other Target REIT) to (A) reflect a decrease in the
amount of Merger Consideration to be issued with respect to the Target Stock of
such Target REIT based on such loss or damage and (B) extend the term of this
Agreement as reasonably necessary taking into account all financial, regulatory,
legal and other aspects of such amendment to this Agreement, including, but not
limited to, the need to resolicit the stockholders of such Target REIT with
respect to participation in the Mergers with the Merger Consideration adjusted
to reflect such loss or damage and consummate the Merger with such Target REIT
as soon as practicable thereafter; provided, however, that in the event the
Company and such Target REIT, after a good faith effort, cannot agree on a
decrease in the amount of Merger Consideration to be issued with respect to the
Target Stock of such Target REIT based on such loss or damage within a
reasonable period of time following notice of such loss or damage, the Company
shall have the unilateral right to amend this Agreement to terminate this
agreement with respect to such Target REIT and consummate the Mergers with the
other Target REITS.

      8.3 Fees and Expenses. The costs associated with each independent
third-party appraisal of the fair market value of each Target REIT's real estate
("Appraisal") obtained by the respective Target Boards of Directors shall be
paid by the Target REIT owning the real estate that is the subject of the
Appraisal. The costs associated with investment banking advice and each fairness
opinion of each Target REIT (the "Fairness Opinions") obtained by the respective
Target Boards of Directors shall be paid by the Target REIT receiving such
advice and Fairness Opinion. The fees and expenses of each Target REIT's legal
counsel shall be paid by the respective Target REIT. All other expenses related
to the Mergers and the transactions contemplated hereby, including, without


                                      A-24
<PAGE>

limitation, consulting, legal, accounting and administrative expenses, shall be
paid by the Company.

      8.4 Entire Agreement; Modifications; Amendments.

            (a) This Agreement embodies and constitutes the entire understanding
between the parties with respect to the transactions contemplated herein, and
all prior or contemporaneous agreements, understandings, representations and
statements, oral or written, are merged into this Agreement. Except as expressly
otherwise provided herein, neither this Agreement nor any provision hereof may
be waived, modified, amended, discharged or terminated except by an instrument
in writing signed by the party against which the enforcement of such waiver,
modification, amendment, discharge or termination is sought, and then only to
the extent set forth in such instrument.

            (b) Subject to applicable law, this Agreement may be amended by the
Company and the Target REITs at any time prior to the filing of the Certificates
of Merger with the Secretary of State of the State of Delaware; provided,
however, that after approval by Target REIT Stockholders as provided in Section
6 above, without further approval of the Target REIT Stockholders of such Target
REIT, no amendment may be made that alters or changes (i) the amount or kind of
Merger Consideration which the Target REIT Stockholders in such Target REIT
shall be entitled to receive, (ii) the certificate of incorporation or bylaws of
such Target REIT or (iii) the terms and conditions of this Agreement, if such
alteration or change would have a material adverse effect on such Target REIT
Stockholders.

      8.5 Notices. All notices, demands or other writings in this Agreement
provided to be given or made or sent, or which may be given or made or sent, by
either party hereto to the other may be given personally or may be delivered by
depositing the same in the U.S. mail, certified, return receipt requested,
postage prepaid or by delivering the same to an air courier service, postage
prepaid, properly addressed and sent to the address of such party as set forth
below, or such other address as either party may from time to time designate by
written notice to the other. Notice given by mail shall be considered effective
upon the expiration of five business days after deposit. Notice given in any
other manner shall be effective only if and when received by the addressee.

     If to the Company:

              Franklin Street Properties Corp.
              401 Edgewater Place, Suite 200
              Wakefield, Massachusetts 01880
              Attention: George J. Carter
              President and Chief Executive Officer
              Fax: (800) 950-6288


                                      A-25
<PAGE>

     with a copy to:

              Wilmer Cutler Pickering Hale and Dorr LLP
              60 State Street
              Boston, Massachusetts 02109
              Attention: Kenneth A. Hoxsie, Esq.
              Fax: (617) 526-5000

     If to a Target REIT:

              c/o Franklin Street Properties Corp.
              401 Edgewater Place, Suite 200
              Wakefield, Massachusetts 01880
              Attention: William W. Gribbell and R. Scott
              MacPhee, Members of the Special Committee
              of the Board of Directors
              Fax: (800) 950-6288

     with a copy to:

              Gehrke, Gish & Umana LLP
              Two Faneuil Hall Marketplace
              South Market Building, 4th Floor
              Boston, Massachusetts 02109
              Attention: William S. Gehrke, Esq.
              Fax: (617) 507-8177

      8.6 Interpretation. Words of any gender used in this Agreement shall be
held and construed to include any other gender, and words of a singular number
shall be held to include the plural and vice versa, unless the context requires
otherwise.

      8.7 Captions. The captions used in this Agreement are for convenience only
and shall not be deemed to construe or to limit the meaning of the language of
this Agreement.

      8.8 Counterparts. This Agreement may be executed in any number of
identical counterparts. If so executed, each of such counterparts is to be
deemed an original for all purposes, and all such counterparts shall
collectively constitute one agreement, but in making proof of this Agreement it
shall not be necessary to produce or account for more than one such counterpart.

      8.9 Binding Effect. Subject to the restrictions on assignment contained in
Section 8.1 hereof, this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, legal representatives,
successors and assigns.


                                      A-26
<PAGE>

      8.10 Attorneys' Fees. Subject to the requirements of Section 8.12 hereof,
should any party hereto employ an attorney or attorneys to enforce any of the
provisions hereof or to protect its interest in any manner arising under this
Agreement, or to recover damages for the breach hereof, the nonprevailing party
or parties in any action pursued in courts of competent jurisdiction (the
finality of which action is not legally contested) agrees to pay to the
prevailing party or parties all reasonable costs, damages and expenses,
including attorneys' fees, expended or incurred in connection therewith;
provided, however, that if more than one item is disputed and the final decision
is against each party as to one or more of the disputed items, then such costs,
expenses and attorneys' fees shall be apportioned in accordance with the
monetary values of the items decided against each party.

      8.11 No Waiver; Severability. The failure of any party hereto to enforce
at any time any of the provisions of this Agreement shall in no way be construed
to be a waiver of any such provision, and shall in no way affect the validity of
this Agreement or any part hereof or the right of any party thereafter to
enforce each and every such provision. No waiver of any breach of this Agreement
shall be held to be a waiver of any other or subsequent breach. If any provision
of this Agreement, or the application thereof to any person or circumstances
shall, for any reason and to any extent, be invalid or unenforceable, but the
extent of the invalidity or unenforceability does not destroy the basis of the
bargain between the parties as contained herein, the remainder of this Agreement
and the application of such provision to other persons or circumstances shall
not be affected thereby but rather shall be enforced to the greatest extent
permitted by law.

      8.12 No Joint and Several Liability. If one of the Target REITs defaults
under, or is in breach of, any of its representations, warranties or covenants
contained in this Agreement, such Target REIT shall be accountable to the
Company and shall be liable for the damages caused by such default or breach to
the extent provided in Section 7.2 hereof. Each Target REIT hereunder has
undertaken obligations and made representations, warranties, disclosures and
covenants herein and in and pursuant to the exhibits hereto solely with respect
to itself and the Property owned by it. Nothing contained herein, however, is
intended to make any of the Target REITs jointly and severally liable for the
default or breach by any of the other Target REITs, and with respect to any such
default and breach such shall be solely the obligation and responsibility of the
Target REIT responsible for the default or breach, and no Target REIT shall be
liable to any other Target REIT hereunder.

      8.13 Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.

                  [Remainder of Page Intentionally Left Blank]


                                      A-27
<PAGE>

IN WITNESS WHEREOF, this Agreement has been executed by each of the parties as
of the date first set forth above.

                                COMPANY:

                                FRANKLIN STREET PROPERTIES CORP.

                                By: /s/ George J. Carter
                                    ------------------------
                                    Name: George J. Carter
                                    Title: President and Chief Executive Officer


                                ACQUISITION SUBSIDIARIES:


                                MONTAGUE ACQUISITON CORP.


                                By: /s/ George J. Carter
                                    ------------------------
                                    Name: George J. Carter
                                    Title: President


                                ADDISON CIRCLE ACQUISITION CORP.

                                By: /s/ George J. Carter
                                    ------------------------
                                    Name: George J. Carter
                                    Title: President


                                ROYAL RIDGE ACQUISITION CORP.

                                By: /s/ George J. Carter
                                    ------------------------
                                    Name: George J. Carter
                                    Title: President


                                COLLINS CROSSING ACQUISITION CORP.

                                By: /s/ George J. Carter
                                    ------------------------
                                    Name: George J. Carter
                                    Title: President


                                      A-28
<PAGE>

                                TARGET REITS:

                                FSP MONTAGUE BUSINESS CENTER CORP.

                                By: /s/ George J. Carter
                                    -------------------------
                                    Name: George J. Carter
                                    Title: President


                                FSP ADDISON CIRCLE CORP.

                                By: /s/ George J. Carter
                                    -------------------------
                                    Name: George J. Carter
                                    Title: President


                                FSP ROYAL RIDGE CORP.

                                By: /s/ George J. Carter
                                    -------------------------
                                    Name: George J. Carter
                                    Title: President


                                FSP COLLINS CROSSING CORP.

                                By: /s/ George J. Carter
                                    -------------------------
                                    Name: George J. Carter
                                    Title: President


                                      A-29
<PAGE>

                                    Exhibit A

Name and Address                       Property
- ----------------                       --------

FSP MONTAGUE BUSINESS CENTER CORP.     Office/R&D Building in San Jose, CA
2730-2760 Junction Ave
404-410 East Plumeria Drive
San Jose, CA 95134

FSP ADDISON CIRCLE CORP.               Office Building in Addison, TX
15601 N. Dallas Parkway
Dallas, Tx 75001

FSP ROYAL RIDGE CORP.                  Office Building in Alpharetta, GA
11690 Great Oaks Way
Alpharetta, Ga. 30022

FSP COLLINS CROSSING CORP.             Office Building in Richardson, TX
1500 & 1600 Greenville Ave
Richardson, Tx 75080


                                      A-30
<PAGE>

                                    Exhibit B

                                        Shares of Common Stock for
Name                                    each Share of Target Stock
- ----                                    --------------------------

FSP MONTAGUE BUSINESS CENTER CORP.                    5,649.72
FSP ADDISON CIRCLE CORP.                              5,948.67
FSP ROYAL RIDGE CORP.                                 6,055.79
FSP COLLINS CROSSING CORP.                            6,167.63


                                      A-31
<PAGE>

                                    Exhibit C

Each Target REIT hereby makes the representations set forth below, which such
Target REIT understands will be relied upon by Wilmer Cutler Pickering Hale and
Dorr LLP in rendering a legal opinion with respect to the discussion set forth
under "Material United States Federal Income Tax Considerations" in the Consent
Solicitation/Prospectus. Notwithstanding anything to the contrary that may be
expressed or implied herein, each Target REIT makes no representations regarding
any matter for any periods commencing on or after the Effective Time (as defined
in the Agreement). Each Target REIT has made or has caused to be made such
investigations as are necessary to certify the accuracy of the information set
forth herein. To the extent the representations and statements in this letter
involve matters of law, each Target REIT acknowledges that Gehrke, Gish & Umana
LLP and Wilmer Cutler Pickering Hale and Dorr LLP has reviewed such matters with
it.

1.    The Target REIT has operated in accordance with (a) the Certificate of
      Incorporation of the Target REIT, as amended through the date hereof (the
      "Certificate of Incorporation"), (b) the By-Laws of the Target REIT as
      amended through the date hereof, (c) the applicable state law under which
      the Target REIT is organized, and (d) the representations in this Exhibit.

2.    The Target REIT is not a bank (within the meaning of Section 581 of the
      Internal Revenue Code of 1986, as amended (the "Code")), financial
      institution (described in Section 591 of the Code), small business
      investment company operating under the Small Business Act of 1958,
      business development corporation (within the meaning of Section
      582(c)(2)(B) of the Code) or insurance company (subject to Subchapter L of
      Subtitle A, Chapter 1 of the Code).

3.    The Target REIT's taxable year for federal income tax purposes is the
      calendar year. The Target REIT made the election specified in Section
      856(c) of the Code to be a real estate investment trust ("REIT") under the
      Code, effective for its first taxable year. The Target REIT's election to
      be taxed as a REIT has not been revoked or terminated.

4.    For each taxable year after its first taxable year, (A) the beneficial
      ownership of the Target REIT has been held by 100 or more persons for at
      least 335 days for a taxable year of 12 months (or during a proportionate
      part of a taxable year of less than 12 months), and (B) at no time during
      the last half of such taxable year has more than 50% in value of the
      Target REIT's outstanding stock been owned, directly or indirectly (taking
      into account the constructive ownership rules applicable under Section 542
      of the Code as modified by Section 856(h) of the Code) by or for five or
      fewer individuals. Compliance with the 100 person test set forth in (A)
      above shall be determined in accordance with the Investment Company Act of
      1940 by disregarding the ownership of shares by any person who (i)
      acquired such shares as a gift or bequest pursuant to a legal separation
      or divorce; (ii) is the estate of any person making such transfer to the


                                      A-32
<PAGE>

      estate; or (iii) is a company established exclusively for the benefit of
      (or wholly owned by) either the person making such transfer or a person
      described in (i) or (ii).

5.    The Target REIT at all times has been managed by one or more trustees or
      directors, and the beneficial ownership in the Target REIT has been
      evidenced by transferable shares.

6.    With the exception of the restrictions imposed on the transfers of the
      Target REIT capital stock under the Certificate of Incorporation, there
      are no restrictions on the transfer of the Target REIT's capital stock,
      other than restrictions imposed by applicable securities law.

7.    At least 75% of the gross income of the Target REIT for each of its
      taxable years consisted of amounts from the following sources:

            (A) Rents from real property.

                  (i) Rents from real property shall include the following:

                        (a) Rents from interests in real property;

                        (b) Rent attributable to personal property leased under,
      or in connection with, a lease of real property, but only if the rent
      attributable to such personal property for the taxable year does not
      exceed 15% of the total rent received for the real and personal property
      under the lease (determined by the ratio of the average of the "adjusted
      bases" of the personal property subject to the lease at the beginning and
      end of the year to the average of the total "adjusted bases" of all
      property subject to the lease at the beginning and end of the year); and

                        (c) Charges for services customarily furnished or
      rendered in connection with the rental of real property, whether or not
      separately stated.

                  (ii) Rents from real property shall exclude the following:

                        (a) Amounts received or accrued for, or in connection
      with, the use of real property (or deemed to be for use of real property
      under Code Section 856(d)), the determination of which depends in whole or
      in part on the income or profits derived by any person from such property
      (except such amounts as may be based on a fixed percentage or percentages
      of receipts or sales if such rental provisions conform with normal
      business practice and are not used as a means to allow the Target REIT to
      receive rents that depend in whole or in part on the income or profits
      derived by any person from the property);

                        (b) Amounts received or accrued from any person in which
      the Target REIT owns (A) in the case of a corporation, 10% or more of the


                                      A-33
<PAGE>

      combined voting power of all classes of stock entitled to vote (and for
      taxable years beginning after December 31, 2000, 10% or more of the total
      value of shares of all classes of stock), or (B) in the case of an entity
      other than a corporation, an interest of 10% or more in the assets or net
      profits of such entity. For purposes of this paragraph, ownership will be
      determined by taking into account the attribution rules of Code Section
      318 (as modified by Code Section 856(d)(5));

                        (c) Any "impermissible tenant service income." For this
      purpose, "impermissible tenant service income" generally shall include all
      income received from a tenant if the Target REIT (directly or indirectly)
      provides services to the tenant that (i) are not customarily rendered in
      connection with the rental of space for occupancy only and (ii) are
      rendered primarily for the convenience of the tenant; provided, however,
      that if the greater of (X) the income derived from all such services to
      the tenant or (Y) 150% of the cost of providing such services to the
      tenant is less than 1% of the income received by the Target REIT with
      respect to the property in which the tenant leased space, only such
      greater amount shall be treated as impermissible tenant service income;
      and provided further, however, that no income from the tenant shall be
      treated as impermissible tenant service income if the impermissible
      services are performed by an "independent contractor" within the meaning
      of Section 856(d)(3) of the Code from whom the Target REIT derives no
      income.

            (B) Interest received or accrued that is attributable to obligations
      held by the Target REIT that are secured by mortgages on real property or
      on interests in real property;

            (C) Gain realized upon the sale of real property (other than assets
      or portions thereof considered to be stock in trade, included in inventory
      or held for sale to customers in the ordinary course of a trade or
      business ("Dealer Property"));

            (D) Dividends and gain from the sale or other disposition of
      transferable interests in other real estate investment trusts other than
      interests that were Dealer Property;

            (E) Abatements and refunds of real property taxes;

            (F) Income and gain derived from "foreclosure property" (as defined
      in Section 856(e) of the Code);

            (G) Amounts (other than amounts the determination of which depends
      in whole or in part on the income or profits of any other person) received
      or accrued as consideration for entering into agreements (X) to make loans
      secured by mortgages on real property or on interests in real property or
      (Y) to purchase or lease real property;


                                      A-34
<PAGE>

            (H) Gain from the sale or other disposition of real estate assets
      that are Dealer Properties but which dispositions are excluded from
      "prohibited transactions" as a result of Section 857(b)(6) (exempting
      certain sales of real estate assets if held for at least four years); and

            (I) "Qualified temporary investment income" as defined in Section
      856(c)(5)(D) of the Code.

8.    At least 95% of the gross income of the Target REIT for each of its
      taxable years consisted of amounts from the following sources:

            (A) Income specified in Sections 7(A) through (I) hereof;

            (B) Dividends;

            (C) Interest; and

            (D) Gain from the sale or other disposition of stock and securities
      other than Dealer Property.

9.    The Target REIT was incorporated in a taxable year beginning after August
      5, 1997.

10.   During each of the Target REIT's taxable years, at least 75% of the total
      value of the assets of the Target REIT has consisted of the following
      types of assets:

            (A) Land;

            (B) Buildings, including wiring, plumbing systems, elevators,
      escalators, and other structural components thereof, but not including any
      personal property associated with such real property (such as furnishings,
      appliances, draperies, equipment, machinery, etc.);

            (C) Loans (including accrued interest thereon) directly secured by a
      mortgage on real property of the type described in paragraphs (A) or (B)
      above;

            (D) Cash and cash items, including cash on hand, time and demand
      deposits with financial institutions, and receivables arising in the
      ordinary course of the Target REIT's operations (other than those
      purchased from another person) but excluding bankers' acceptances,
      repurchase agreements, and other similar instruments;

            (E) Securities (including accrued interest thereon) issued or
      guaranteed by the United States or by a person controlled or supervised by
      and acting as an instrumentality of the United States, pursuant to any
      authority granted by Congress, or any certificates of deposit for any of
      the foregoing; and


                                      A-35
<PAGE>

            (F) Equity interests in corporations which have made qualifying
      elections to be taxed as real estate investment trusts under Sections 856
      through 860 of the Code and continue to satisfy the requirements for such
      treatment.

11.   The Target REIT has not owned and will not own securities in any issuer
      (other than a REIT or a "qualified REIT subsidiary" within the meaning of
      Section 856(i) of the Code) that either (A) represent in excess of 10% of
      the (i) voting power of the outstanding securities, or (ii) value of the
      outstanding securities, of such issuer or (B) have an aggregate value in
      excess of 5% of the value of the total assets of the Target REIT.

12.   For each of its taxable years, the Target REIT distributed to its
      shareholders at such times and in such manner as required by Code Sections
      858, 561 and 563 at least 90% of its ordinary REIT taxable income (as
      defined in Section 857(b) of the Code, excluding any net capital gain) for
      such taxable year.

13.   The Target REIT does not have and has not had at the close of any taxable
      year any undistributed "C corporation" earnings and profits.

14.   The Target REIT has not made any distributions to its shareholders with
      respect to its capital stock unless such distribution was pro-rata, with
      no preference to any stock of a particular class as compared with other
      stock of the same class, and it has not made any distributions that gave a
      preference to one class of stock as compared with another class except to
      the extent that the former is entitled (without reference to waivers of
      their rights by shareholders) to such preference.

15.   Except as set forth on Schedule 1 attached hereto, the Target REIT has
      never owned any interest in any subsidiary, corporation, partnership,
      limited liability company or other entity.

16.   To the best of the Target REIT's knowledge, as a result of the Merger the
      Company will not directly or indirectly own 10% or more of any tenant from
      which the Target REIT collects rent.

17.   To the best of the Target REIT's knowledge, as a result of the Merger the
      Company will not own (i) more than 10% of the voting power of the
      outstanding securities of any issuer, or (ii) more than 10% of the value
      of the outstanding securities of any issuer.

18.   To the best of the Target REIT's knowledge, any person who performs
      services for tenants on behalf of the Target REIT and who is an
      "independent contractor" within the meaning of Section 856(d)(3) of the
      Code with respect to the Target REIT will be an "independent contractor"
      with respect to the Company following the Merger.

19.   Attached hereto as Schedule 2 is a list of all of the shareholders of the
      Target REIT.


                                      A-36
<PAGE>

20.   Attached hereto as Schedule 3 is a list of all securities held by the
      Target REIT.

21.   The Target REIT is not involved in, nor is it aware of, any proceeding,
      dispute, audit or other undertaking, the outcome of which could cause any
      of the foregoing representations to be incorrect in whole or in part,
      either retroactively or prospectively.


                                      A-37
<PAGE>

                                                                      Appendix B
                                GLOSSARY OF TERMS

      Certain terms used in this Consent Solicitation/Prospectus have the
following meanings unless the context otherwise requires:

      "Addison Circle" - FSP Addison Circle Corp., a real estate investment
trust and Delaware corporation.

      "A.G. Edwards" - A. G. Edwards & Sons, Inc., the financial advisor to the
special committees, the target REITs and the target boards.

      "AMEX" - The American Stock Exchange.

      "appraisals" - the appraisals by third-party independent appraisers of the
real estate owned by each target REIT.

      "appraisers" - BRE-Valuation and Advisory Services, Bryan E. Humphries and
Associates and Cushman & Wakefield of California, Inc.

      "acquisition subsidiaries" - Montague Acquisition Corp., Addison Circle
Acquisition Corp., Royal Ridge Acquisition Corp. and Collins Crossing
Acquisition Corp., each a Delaware corporation.

      "closing date" - the closing date of the mergers.

      "Collins Crossing" - FSP Collins Crossing Corp., a real estate investment
trust and Delaware corporation.

      "combined company" - FSP Corp., its subsidiaries and the acquisition
subsidiaries, after giving effect to the consummation of the mergers.

      "Commission" - the Securities and Exchange Commission.

      "effective date" - the effective date of the mergers, which is expected to
be on or about December 31, 2004 or as soon as practicable after the conditions
to the mergers are satisfied.

      "equity securities" - FSP common stock and preferred stock.

      "Exchange Act" - Securities Exchange Act of 1934, as amended.

      "exchange ratio" - the number of shares of FSP common stock issuable in
exchange for each share of target stock.

      "FASB" - the Financial Accounting Standards Board.

      "FSP board" - the Board of Directors of FSP Corp.


                                       B-1
<PAGE>

      "FSP common stock" - the common stock of FSP Corp., $0.0001 par value per
share.

      "FSP Corp." - Franklin Street Properties Corp., a Maryland corporation.

      "FSP Corp.'s properties" - the real properties owned by FSP Corp.,
directly and through its wholly owned subsidiaries.

      "FSP Holdings" - FSP Holdings LLC, a Delaware limited liability company.

      "FSP Investments" - FSP Investments LLC, a Massachusetts limited liability
company.

      "FSP Property Management" - FSP Property Management LLC, a Massachusetts
limited liability company.

      "GAAP" - generally accepted accounting principles.

      "merger agreement" - the Agreement and Plan of Merger, dated August 13,
2004, among FSP Corp., the acquisition subsidiaries and the target REITs.

      "merger consideration" - the approximately 10,894,994 shares of FSP common
stock to be issued in connection with the mergers.

      "mergers" - the acquisition, by merger, of each target REIT by the related
wholly-owned acquisition subsidiary of FSP Corp.

      "Montague" - FSP Montague Business Center Corp., a real estate investment
trust and Delaware corporation.

      "record date" - September ___, 2004

      "Royal Ridge" - FSP Royal Ridge Corp., a real estate investment trust and
Delaware corporation.

      "Securities Act" - Securities Act of 1933, as amended.

      "SFAS" - Statement of Financial Accounting Standards.

      "special committees" - committees of each target board consisting of
Messrs. MacPhee and Gribbell, the only members of the target boards who were not
also members of the FSP board, which were established by each target board to,
among other things, evaluate and negotiate a potential acquisition by FSP Corp.
and recommend that the board of each target REIT accept or reject the FSP Corp.
acquisition.

      "sponsored entities" - investment vehicles organized by FSP Investments,
which are typically syndicated through private placements exempt from
registration under the Securities Act.


                                       B-2
<PAGE>

      "sponsored partnerships" - sponsored entities organized as limited
partnerships.

      "sponsored REITs" - sponsored entities organized as corporations intended
to qualify for federal income tax purposes as real estate investment trusts,
including the target REITs.

      "target boards" - the boards of directors of the Target REITs,
collectively.

      "target REITs" - four real estate investment trusts, consisting of
Montague, Addison Circle, Royal Ridge and Collins Crossing.

      "target REIT stockholders" - the holders of the target stock.

      "target stock"- preferred stock of the target REITs.


                                      B-3

<PAGE>

                                                                    Appendix C-1

                                                  August 11, 2004

Board of Directors
FSP Montague Business Center Corp.
401 Edgewater Place
Suite 200
Wakefield, MA 01880

Gentlemen:

You have requested our opinion as to the fairness, from a financial point of
view, to the preferred stockholders (the "Target Stockholders") of FSP Montague
Business Center Corp. (the "Target REIT") of the aggregate consideration the
Target Stockholders are to receive from Franklin Street Properties Corp. ("FSP")
in exchange for FSP's acquisition of the Target REIT (the "Transaction"). We
understand that, pursuant to a Merger Agreement (the "Agreement") to be entered
into by and among Franklin Street Properties Corp., Addison Circle Acquisition
Corp., Collins Crossing Acquisition Corp., Montague Acquisition Corp., Royal
Ridge Acquisition Corp., FSP Addison Circle Corp., FSP Collins Crossing Corp.,
FSP Montague Business Center Corp. and FSP Royal Ridge Corp., the Transaction
will be effected by the merger of Target REIT into a subsidiary of FSP, as a
result of which the outstanding shares of preferred stock of the Target REIT
held by Target Stockholders will be converted into the right to receive
1,886,791 shares of common stock of FSP and $3,799.30 in cash (the
"Consideration").

A.G. Edwards & Sons, Inc. ("A.G. Edwards"), as part of its investment banking
business, is regularly engaged in the valuation of businesses and their
securities in connection with mergers and acquisitions, negotiated
underwritings, competitive biddings, secondary distributions of listed and
unlisted securities, private placements and valuations for estate, corporate or
other purposes. Additionally, from time to time, A.G. Edwards has provided
services to FSP, including valuation and investment banking services. A.G.
Edwards may in the future provide valuation, investment banking and financial
advisory services to FSP and its affiliates for which we would expect to receive
compensation. A.G. Edwards is a full-service securities firm engaged, either
directly or through its affiliates, in securities trading, investment
management, financial planning and benefits counseling, financing and brokerage
activities for both companies and individuals. In the ordinary course of
business, A.G. Edwards and its affiliates may actively trade the securities of
FSP for their own account or for the accounts of their customers and,
accordingly, may at any time hold long or short positions of such securities.
However, A.G. Edwards is not aware of any present or contemplated relationship
between A.G. Edwards and FSP or any of FSP's affiliates, directors, officers or
stockholders or between A.G. Edwards and the Target REIT, its affiliates,
directors, officers or stockholders, that in our opinion would affect our
ability to render a fair and independent opinion in this matter.


                                     C-1-1
<PAGE>

Board of Directors
August 11, 2004
Page 2


A.G. Edwards acted as a financial advisor to the Special Committee of the Board
of Directors of the Target REIT (the "Special Committee") with respect to the
Transaction and has or will receive a fee from the Target REIT for its services,
including the delivery of this fairness opinion, pursuant to the terms of its
engagement letter with Target REIT dated July 22, 2004. The Target REIT has
agreed to indemnify A.G. Edwards for certain liabilities that may arise out of
the rendering of this opinion and any related activities as financial advisor to
the Target REIT and members of the Target REIT Board of Directors.

In connection with this opinion, A.G. Edwards has reviewed and considered such
financial and other matters as we have deemed relevant, including, among other
things:

      i.)    a review of the draft of the Agreement, dated August 9, 2004 and
             discussions about the Agreement with the Target REIT's management
             and Gehrke, Gish & Umana LLP ("Gehrke, Gish & Umana"), legal
             counsel to the Target REIT and the Target REIT's Board of
             Directors;

      ii.)   discussions with the Target REIT's and FSP's managements regarding
             the past and current business operations, financial condition and
             future prospects of the Target REITs and FSP, including the impact
             of the Transaction (if any), as well as information relating to the
             industries in which the Target REITs and FSP operate;

      iii.)  a review of certain audited and unaudited historical and interim
             financial and operating statements and certain financial analyses
             and forecasts for FSP prepared by FSP's management and reviewed
             with the Special Committee, the views of FSP's management regarding
             the past, current and future business operations of FSP, the
             historical results thereof and the financial condition and future
             prospects related to FSP, including the impact of the Transaction
             (if any);

      iv.)   an appraisal of the property of the Target REIT dated July 14, 2004
             prepared by a professional real estate valuation firm, which you
             have advised us has real estate valuation expertise in the local
             market for such property, which appraisal included, among other
             things, analyses that valued the Target REIT's business prospects
             based on a study of the current marketplace and business
             fundamentals (the "Appraisal") and our discussions with such
             professional real estate valuation firm;

      v.)    a review of certain other data, materials and reports pertaining to
             FSP provided to us in our due diligence process;

      vi.)   a review of certain audited historical financial statements for the
             Target REIT prepared by the Target REIT's management;

      vii.)  a general review of the current market environment as well as
             information relating to the industries and the segments in which
             the Target REIT and FSP operate;


                                     C-1-2
<PAGE>

Board of Directors
August 11, 2004
Page 3


      viii.) a review of market data for equity securities of public companies
             in the same or similar lines of business as those of FSP;

      ix.)   a review of the financial terms of certain acquisitions that A.G.
             Edwards deems relevant for analytical purposes;

      x.)    a review of the implied valuation range of FSP's business based on
             the discounted present values of its projected cash flows both
             including and excluding expected synergies (as estimated by the
             FSP's management);

      xi.)   conversations with the Special Committee, selected members of the
             Target REIT's management and attorneys from Gehrke, Gish & Umana
             regarding the nature and development of the terms of the
             Transaction;

      xii.)  discussions with FSP's management regarding the expected financing
             structure of the Transaction and FSP's target capital structure;
             and

      xiii.) a review of such other information, financial studies, analyses,
             investigations and financial, economic and market criteria that
             A.G. Edwards considers necessary or advisable.

In preparing its opinion, A.G. Edwards has assumed and relied upon, without
independent verification, the accuracy and completeness of all financial and
other information publicly available, furnished to, or otherwise discussed with
A.G. Edwards including financial statements and financial projections, as
provided by the management and/or representatives of FSP and the Target REIT.
With respect to financial information, financial projections and other
information provided to or otherwise discussed with A.G. Edwards, A.G. Edwards
has assumed and was advised by the management of the FSP and the Target REIT,
that such financial information, projections and other information were
reasonably prepared on a basis that reflects the best currently available
estimates and judgments of the management of FSP and the Target REIT, as to the
historical financial performance and the expected future financial performance
of FSP and the Target REIT, respectively, on a stand-alone basis and after
giving effect to the Transaction. A.G. Edwards was not engaged to, and therefore
did not, independently verify the accuracy or completeness of any of such
information, nor does it express any opinion with respect thereto. A.G. Edwards
has relied upon the assurances of the management of FSP and the Target REIT that
they are not aware of any facts that would make such information materially
inaccurate or misleading. A.G. Edwards performed no audit of assets or
liabilities and no appraisal of assets or liabilities of FSP or the Target REIT,
and has assumed the accuracy and completeness of the Appraisal. A.G. Edwards
also did not independently attempt to assess or value any of the intangible
assets of FSP or the Target REIT (including goodwill) nor did it make any
independent assumptions with respect to the application of intangible assets in
the Transaction. A.G. Edwards is not expressing any opinion as to what the value
of FSP common stock will be when issued to Target Stockholders pursuant to the


                                     C-1-3
<PAGE>

Board of Directors
August 11, 2004
Page 4


Transaction or the prices at which shares of FSP common stock will trade at any
time. A.G. Edwards has assumed that no legal or regulatory changes that occur
after the date hereof will have a material impact on the respective operations,
financial condition or future prospects of FSP or the Target REIT.

With your permission, A.G. Edwards has not attempted to value the Target REIT
and, instead, has assumed that the value of the Target REIT is equal to the sum
of the value of the Target REIT's property, as reflected in the Appraisal, plus
the Target REIT's cash reserves. We have made this assumption and not made an
independent valuation of the Target REIT because the value of an entity with one
asset consisting of real property at a single location, such as the Target REIT,
is not determined by standard financial models used to value businesses in
general but, instead, determined by the value of the property owned by the
entity. The value of that property is, in turn, determined by local real estate,
economic and governmental factors such as commercial lease rates in the area of
the property, the values of nearby commercial properties, economic prosperity in
the area and applicable zoning laws, all of which are more appropriately
assessed by a professional real estate appraiser who is an expert in assessing
these local factors.

In performing its analyses, A.G. Edwards made numerous assumptions with respect
to the real estate industry and general business and economic conditions that
are beyond the control of those managing and operating FSP or the Target REIT.
The analyses performed by A.G. Edwards are not necessarily indicative of actual
values or actual future results, which may be significantly more or less
favorable than suggested by such analyses.

For the purposes of rendering its opinion, A.G. Edwards has assumed in all
respects material to its analyses that the representations and warranties of
each party to be contained in the Agreement will be true and correct, that each
party will perform all of the covenants and agreements required to be performed
by it under the Agreement and that all conditions to the consummation of the
Transaction will be satisfied without any modification or waiver thereof. A.G.
Edwards has also assumed that all governmental, regulatory and other consents
and approvals contemplated by the Agreement will be obtained and that in the
course of obtaining any of those consents, no restrictions will be imposed or
waivers made that would have an adverse effect on the contemplated Transaction.
Additionally, A.G. Edwards assumed that the Transaction will be accounted for in
acordance with U.S. Generally Accepted Accounting Principles.

A.G. Edwards was not engaged to and did not review, nor is it expressing any
opinion with respect to, any alternative transaction or strategic alternatives
that may be available to the Target REITs or the Target Stockholders. A.G.
Edwards is not expressing any opinion as to what the value of the Target REIT's
preferred stock has been or will be. A.G. Edwards' opinion also does not address
the merits of the underlying decision by FSP or the Target REITs to engage in
the Transaction. Further, A.G. Edwards was not engaged to, and did not,
independently assess the tax and accounting implications to the Target REIT or
the Target Stockholders, and A.G. Edwards relied on management's assessment
thereof. A.G. Edwards understands that with respect to all legal matters


                                     C-1-4
<PAGE>

Board of Directors
August 11, 2004
Page 5


pertaining to the Target REIT and its Board of Directors and their review of the
Agreement, you have been advised by legal counsel.

A.G. Edwards' opinion is necessarily based on economic, market, financial and
other conditions and circumstances as in effect on, and the information made
available to it, as of the date hereof. A.G. Edwards' opinion as expressed
herein, in any event, is limited to the fairness, from a financial point of
view, as of the date hereof, to the Target Stockholders, of the Consideration
they are to receive from FSP pursuant to the Agreement. It should be understood
that subsequent developments may affect A.G. Edwards' opinion, and A.G. Edwards
does not have any obligation to update, revise or reaffirm its opinion and it
expressly disclaims any responsibility to do so.

It is understood that this letter is solely for the confidential use of the
Target REIT's Board of Directors and does not constitute a recommendation as to
how any director should vote with respect to the Transaction, and such opinion
does not represent a recommendation as to how any Target Stockholder should vote
with respect to the Transaction. This opinion may not be reproduced, summarized,
described, characterized, excerpted from, referred to or given to any other
person for any purpose without A.G. Edwards' prior written consent.

Based upon and subject to the foregoing, and based upon such other matters as we
consider relevant, it is A.G. Edwards' opinion that, as of the date hereof, the
Consideration to be received by the Target Stockholders from FSP pursuant to the
Agreement is fair, from a financial point of view, to the Target Stockholders.

                                 Very truly yours,
                                 A.G. EDWARDS & SONS, INC.


                                 By: /s/Brian N. Hansen
                                     -------------------
                                     Brian N. Hansen
                                     Director-Investment Banking


                                     C-1-5
<PAGE>

                                                                    Appendix C-2

                                                August 11, 2004

Board of Directors
FSP Addison Circle Corp.
401 Edgewater Place
Suite 200
Wakefield, MA 01880

Gentlemen:

You have requested our opinion as to the fairness, from a financial point of
view, to the preferred stockholders (the "Target Stockholders") of FSP Addison
Circle Corp. (the "Target REIT") of the aggregate consideration the Target
Stockholders are to receive from Franklin Street Properties Corp. ("FSP") in
exchange for FSP's acquisition of the Target REIT (the "Transaction"). We
understand that, pursuant to a Merger Agreement (the "Agreement") to be entered
into by and among Franklin Street Properties Corp., Addison Circle Acquisition
Corp., Collins Crossing Acquisition Corp., Montague Acquisition Corp., Royal
Ridge Acquisition Corp., FSP Addison Circle Corp., FSP Collins Crossing Corp.,
FSP Montague Business Center Corp. and FSP Royal Ridge Corp., the Transaction
will be effected by the merger of Target REIT into a subsidiary of FSP, as a
result of which the outstanding shares of preferred stock of the Target REIT
held by Target Stockholders will be converted into the right to receive
3,783,206 shares of common stock of FSP and $2,667.80 in cash (the
"Consideration").

A.G. Edwards & Sons, Inc. ("A.G. Edwards"), as part of its investment banking
business, is regularly engaged in the valuation of businesses and their
securities in connection with mergers and acquisitions, negotiated
underwritings, competitive biddings, secondary distributions of listed and
unlisted securities, private placements and valuations for estate, corporate or
other purposes. Additionally, from time to time, A.G. Edwards has provided
services to FSP, including valuation and investment banking services. A.G.
Edwards may in the future provide valuation, investment banking and financial
advisory services to FSP and its affiliates for which we would expect to receive
compensation. A.G. Edwards is a full-service securities firm engaged, either
directly or through its affiliates, in securities trading, investment
management, financial planning and benefits counseling, financing and brokerage
activities for both companies and individuals. In the ordinary course of
business, A.G. Edwards and its affiliates may actively trade the securities of
FSP for their own account or for the accounts of their customers and,
accordingly, may at any time hold long or short positions of such securities.
However, A.G. Edwards is not aware of any present or contemplated relationship
between A.G. Edwards and FSP or any of FSP's affiliates, directors, officers or
stockholders or between A.G. Edwards and the Target REIT, its affiliates,
directors, officers or stockholders, that in our opinion would affect our
ability to render a fair and independent opinion in this matter.


                                     C-2-1
<PAGE>

Board of Directors
August 11, 2004
Page 2


A.G. Edwards acted as a financial advisor to the Special Committee of the Board
of Directors of the Target REIT (the "Special Committee") with respect to the
Transaction and has or will receive a fee from the Target REIT for its services,
including the delivery of this fairness opinion, pursuant to the terms of its
engagement letter with Target REIT dated July 22, 2004. The Target REIT has
agreed to indemnify A.G. Edwards for certain liabilities that may arise out of
the rendering of this opinion and any related activities as financial advisor to
the Target REIT and members of the Target REIT Board of Directors.

In connection with this opinion, A.G. Edwards has reviewed and considered such
financial and other matters as we have deemed relevant, including, among other
things:

      i.)    a review of the draft of the Agreement, dated August 9, 2004 and
             discussions about the Agreement with the Target REIT's management
             and Gehrke, Gish & Umana LLP ("Gehrke, Gish & Umana"), legal
             counsel to the Target REIT and the Target REIT's Board of
             Directors;

      ii.)   discussions with the Target REIT's and FSP's managements regarding
             the past and current business operations, financial condition and
             future prospects of the Target REITs and FSP, including the impact
             of the Transaction (if any), as well as information relating to the
             industries in which the Target REITs and FSP operate;

      iii.)  a review of certain audited and unaudited historical and interim
             financial and operating statements and certain financial analyses
             and forecasts for FSP prepared by FSP's management and reviewed
             with the Special Committee, the views of FSP's management regarding
             the past, current and future business operations of FSP, the
             historical results thereof and the financial condition and future
             prospects related to FSP, including the impact of the Transaction
             (if any);

      iv.)   an appraisal of the property of the Target REIT dated July 23, 2004
             prepared by a professional real estate valuation firm, which you
             have advised us has real estate valuation expertise in the local
             market for such property, which appraisal included, among other
             things, analyses that valued the Target REIT's business prospects
             based on a study of the current marketplace and business
             fundamentals (the "Appraisal") and our discussions with such
             professional real estate valuation firm;

      v.)    a review of certain other data, materials and reports pertaining to
             FSP provided to us in our due diligence process;

      vi.)   a review of certain audited historical financial statements for the
             Target REIT prepared by the Target REIT's management;

      vii.)  a general review of the current market environment as well as
             information relating to the industries and the segments in which
             the Target REIT and FSP operate;


                                     C-2-2
<PAGE>

Board of Directors
August 11, 2004
Page 3


      viii.) a review of market data for equity securities of public companies
             in the same or similar lines of business as those of FSP;

      ix.)   a review of the financial terms of certain acquisitions that A.G.
             Edwards deems relevant for analytical purposes;

      x.)    a review of the implied valuation range of FSP's business based on
             the discounted present values of its projected cash flows both
             including and excluding expected synergies (as estimated by the
             FSP's management);

      xi.)   conversations with the Special Committee, selected members of the
             Target REIT's management and attorneys from Gehrke, Gish & Umana
             regarding the nature and development of the terms of the
             Transaction;

      xii.)  discussions with FSP's management regarding the expected financing
             structure of the Transaction and FSP's target capital structure;
             and

      xiii.) a review of such other information, financial studies, analyses,
             investigations and financial, economic and market criteria that
             A.G. Edwards considers necessary or advisable.

In preparing its opinion, A.G. Edwards has assumed and relied upon, without
independent verification, the accuracy and completeness of all financial and
other information publicly available, furnished to, or otherwise discussed with
A.G. Edwards including financial statements and financial projections, as
provided by the management and/or representatives of FSP and the Target REIT.
With respect to financial information, financial projections and other
information provided to or otherwise discussed with A.G. Edwards, A.G. Edwards
has assumed and was advised by the management of the FSP and the Target REIT,
that such financial information, projections and other information were
reasonably prepared on a basis that reflects the best currently available
estimates and judgments of the management of FSP and the Target REIT, as to the
historical financial performance and the expected future financial performance
of FSP and the Target REIT, respectively, on a stand-alone basis and after
giving effect to the Transaction. A.G. Edwards was not engaged to, and therefore
did not, independently verify the accuracy or completeness of any of such
information, nor does it express any opinion with respect thereto. A.G. Edwards
has relied upon the assurances of the management of FSP and the Target REIT that
they are not aware of any facts that would make such information materially
inaccurate or misleading. A.G. Edwards performed no audit of assets or
liabilities and no appraisal of assets or liabilities of FSP or the Target REIT,
and has assumed the accuracy and completeness of the Appraisal. A.G. Edwards
also did not independently attempt to assess or value any of the intangible
assets of FSP or the Target REIT (including goodwill) nor did it make any
independent assumptions with respect to the application of intangible assets in
the Transaction. A.G. Edwards is not expressing any opinion as to what the value
of FSP common stock will be when issued to Target Stockholders pursuant to the


                                     C-2-3
<PAGE>

Board of Directors
August 11, 2004
Page 4


Transaction or the prices at which shares of FSP common stock will trade at any
time. A.G. Edwards has assumed that no legal or regulatory changes that occur
after the date hereof will have a material impact on the respective operations,
financial condition or future prospects of FSP or the Target REIT.

With your permission, A.G. Edwards has not attempted to value the Target REIT
and, instead, has assumed that the value of the Target REIT is equal to the sum
of the value of the Target REIT's property, as reflected in the Appraisal, plus
the Target REIT's cash reserves. We have made this assumption and not made an
independent valuation of the Target REIT because the value of an entity with one
asset consisting of real property at a single location, such as the Target REIT,
is not determined by standard financial models used to value businesses in
general but, instead, determined by the value of the property owned by the
entity. The value of that property is, in turn, determined by local real estate,
economic and governmental factors such as commercial lease rates in the area of
the property, the values of nearby commercial properties, economic prosperity in
the area and applicable zoning laws, all of which are more appropriately
assessed by a professional real estate appraiser who is an expert in assessing
these local factors.

In performing its analyses, A.G. Edwards made numerous assumptions with respect
to the real estate industry and general business and economic conditions that
are beyond the control of those managing and operating FSP or the Target REIT.
The analyses performed by A.G. Edwards are not necessarily indicative of actual
values or actual future results, which may be significantly more or less
favorable than suggested by such analyses.

For the purposes of rendering its opinion, A.G. Edwards has assumed in all
respects material to its analyses that the representations and warranties of
each party to be contained in the Agreement will be true and correct, that each
party will perform all of the covenants and agreements required to be performed
by it under the Agreement and that all conditions to the consummation of the
Transaction will be satisfied without any modification or waiver thereof. A.G.
Edwards has also assumed that all governmental, regulatory and other consents
and approvals contemplated by the Agreement will be obtained and that in the
course of obtaining any of those consents, no restrictions will be imposed or
waivers made that would have an adverse effect on the contemplated Transaction.
Additionally, A.G. Edwards assumed that the Transaction will be accounted for in
acordance with U.S. Generally Accepted Accounting Principles.

A.G. Edwards was not engaged to and did not review, nor is it expressing any
opinion with respect to, any alternative transaction or strategic alternatives
that may be available to the Target REITs or the Target Stockholders. A.G.
Edwards is not expressing any opinion as to what the value of the Target REIT's
preferred stock has been or will be. A.G. Edwards' opinion also does not address
the merits of the underlying decision by FSP or the Target REITs to engage in
the Transaction. Further, A.G. Edwards was not engaged to, and did not,
independently assess the tax and accounting implications to the Target REIT or
the Target Stockholders, and A.G. Edwards relied on management's assessment
thereof. A.G. Edwards understands that with respect to all legal matters


                                     C-2-4
<PAGE>

Board of Directors
August 11, 2004
Page 5


pertaining to the Target REIT and its Board of Directors and their review of the
Agreement, you have been advised by legal counsel.

A.G. Edwards' opinion is necessarily based on economic, market, financial and
other conditions and circumstances as in effect on, and the information made
available to it, as of the date hereof. A.G. Edwards' opinion as expressed
herein, in any event, is limited to the fairness, from a financial point of
view, as of the date hereof, to the Target Stockholders, of the Consideration
they are to receive from FSP pursuant to the Agreement. It should be understood
that subsequent developments may affect A.G. Edwards' opinion, and A.G. Edwards
does not have any obligation to update, revise or reaffirm its opinion and it
expressly disclaims any responsibility to do so.

It is understood that this letter is solely for the confidential use of the
Target REIT's Board of Directors and does not constitute a recommendation as to
how any director should vote with respect to the Transaction, and such opinion
does not represent a recommendation as to how any Target Stockholder should vote
with respect to the Transaction. This opinion may not be reproduced, summarized,
described, characterized, excerpted from, referred to or given to any other
person for any purpose without A.G. Edwards' prior written consent.

Based upon and subject to the foregoing, and based upon such other matters as we
consider relevant, it is A.G. Edwards' opinion that, as of the date hereof, the
Consideration to be received by the Target Stockholders from FSP pursuant to the
Agreement is fair, from a financial point of view, to the Target Stockholders.


                                 Very truly yours,
                                 A.G. EDWARDS & SONS, INC.


                                 By: /s/Brian N. Hansen
                                     ------------------
                                     Brian N. Hansen
                                     Director-Investment Banking


                                     C-2-5
<PAGE>

                                                                    Appendix C-3

                                                    August 11, 2004

Board of Directors
FSP Royal Ridge Corp.
401 Edgewater Place
Suite 200
Wakefield, MA 01880

Gentlemen:

You have requested our opinion as to the fairness, from a financial point of
view, to the preferred stockholders (the "Target Stockholders") of FSP Royal
Ridge Corp. (the "Target REIT") of the aggregate consideration the Target
Stockholders are to receive from Franklin Street Properties Corp. ("FSP") in
exchange for FSP's acquisition of the Target REIT (the "Transaction"). We
understand that, pursuant to a Merger Agreement (the "Agreement") to be entered
into by and among Franklin Street Properties Corp., Addison Circle Acquisition
Corp., Collins Crossing Acquisition Corp., Montague Business Center Corp., Royal
Ridge Acquisition Corp., FSP Addison Circle Corp., FSP Collins Crossing Corp.,
FSP Montague Acquisition Corp. and FSP Royal Ridge Corp., the Transaction will
be effected by the merger of Target REIT into a subsidiary of FSP, as a result
of which the outstanding shares of preferred stock of the Target REIT held by
Target Stockholders will be converted into the right to receive 1,801,389 shares
of common stock of FSP and $3,707.70 in cash (the "Consideration").

A.G. Edwards & Sons, Inc. ("A.G. Edwards"), as part of its investment banking
business, is regularly engaged in the valuation of businesses and their
securities in connection with mergers and acquisitions, negotiated
underwritings, competitive biddings, secondary distributions of listed and
unlisted securities, private placements and valuations for estate, corporate or
other purposes. Additionally, from time to time, A.G. Edwards has provided
services to FSP, including valuation and investment banking services. A.G.
Edwards may in the future provide valuation, investment banking and financial
advisory services to FSP and its affiliates for which we would expect to receive
compensation. A.G. Edwards is a full-service securities firm engaged, either
directly or through its affiliates, in securities trading, investment
management, financial planning and benefits counseling, financing and brokerage
activities for both companies and individuals. In the ordinary course of
business, A.G. Edwards and its affiliates may actively trade the securities of
FSP for their own account or for the accounts of their customers and,
accordingly, may at any time hold long or short positions of such securities.
However, A.G. Edwards is not aware of any present or contemplated relationship
between A.G. Edwards and FSP or any of FSP's affiliates, directors, officers or
stockholders or between A.G. Edwards and the Target REIT, its affiliates,
directors, officers or stockholders, that in our opinion would affect our
ability to render a fair and independent opinion in this matter.


                                     C-3-1
<PAGE>

Board of Directors
August 11, 2004
Page 2


A.G. Edwards acted as a financial advisor to the Special Committee of the Board
of Directors of the Target REIT (the "Special Committee") with respect to the
Transaction and has or will receive a fee from the Target REIT for its services,
including the delivery of this fairness opinion, pursuant to the terms of its
engagement letter with Target REIT dated July 22, 2004. The Target REIT has
agreed to indemnify A.G. Edwards for certain liabilities that may arise out of
the rendering of this opinion and any related activities as financial advisor to
the Target REIT and members of the Target REIT Board of Directors.

In connection with this opinion, A.G. Edwards has reviewed and considered such
financial and other matters as we have deemed relevant, including, among other
things:

      i.)     a review of the draft of the Agreement, dated August 9, 2004 and
              discussions about the Agreement with the Target REIT's management
              and Gehrke, Gish & Umana LLP ("Gehrke, Gish & Umana"), legal
              counsel to the Target REIT and the Target REIT's Board of
              Directors;

      ii.)    discussions with the Target REIT's and FSP's managements regarding
              the past and current business operations, financial condition and
              future prospects of the Target REITs and FSP, including the impact
              of the Transaction (if any), as well as information relating to
              the industries in which the Target REITs and FSP operate;

      iii.)   a review of certain audited and unaudited historical and interim
              financial and operating statements and certain financial analyses
              and forecasts for FSP prepared by FSP's management and reviewed
              with the Special Committee, the views of FSP's management
              regarding the past, current and future business operations of FSP,
              the historical results thereof and the financial condition and
              future prospects related to FSP, including the impact of the
              Transaction (if any);

      iv.)    an appraisal of the property of the Target REIT dated July 13,
              2004 prepared by a professional real estate valuation firm, which
              you have advised us has real estate valuation expertise in the
              local market for such property, which appraisal included, among
              other things, analyses that valued the Target REIT's business
              prospects based on a study of the current marketplace and business
              fundamentals (the "Appraisal") and our discussions with such
              professional real estate valuation firm;

      v.)     a review of certain other data, materials and reports pertaining
              to FSP provided to us in our due diligence process;

      vi.)    a review of certain audited historical financial statements for
              the Target REIT prepared by the Target REIT's management;

      vii.)   a general review of the current market environment as well as
              information relating to the industries and the segments in which
              the Target REIT and FSP operate;


                                     C-3-2
<PAGE>

Board of Directors
August 11, 2004
Page 3


      viii.)  a review of market data for equity securities of public companies
              in the same or similar lines of business as those of FSP;

      ix.)    a review of the financial terms of certain acquisitions that A.G.
              Edwards deems relevant for analytical purposes;

      x.)     a review of the implied valuation range of FSP's business based on
              the discounted present values of its projected cash flows both
              including and excluding expected synergies (as estimated by the
              FSP's management);

      xi.)    conversations with the Special Committee, selected members of the
              Target REIT's management and attorneys from Gehrke, Gish & Umana
              regarding the nature and development of the terms of the
              Transaction;

      xii.)   discussions with FSP's management regarding the expected financing
              structure of the Transaction and FSP's target capital structure;
              and

      xiii.)  a review of such other information, financial studies, analyses,
              investigations and financial, economic and market criteria that
              A.G. Edwards considers necessary or advisable.

In preparing its opinion, A.G. Edwards has assumed and relied upon, without
independent verification, the accuracy and completeness of all financial and
other information publicly available, furnished to, or otherwise discussed with
A.G. Edwards including financial statements and financial projections, as
provided by the management and/or representatives of FSP and the Target REIT.
With respect to financial information, financial projections and other
information provided to or otherwise discussed with A.G. Edwards, A.G. Edwards
has assumed and was advised by the management of the FSP and the Target REIT,
that such financial information, projections and other information were
reasonably prepared on a basis that reflects the best currently available
estimates and judgments of the management of FSP and the Target REIT, as to the
historical financial performance and the expected future financial performance
of FSP and the Target REIT, respectively, on a stand-alone basis and after
giving effect to the Transaction. A.G. Edwards was not engaged to, and therefore
did not, independently verify the accuracy or completeness of any of such
information, nor does it express any opinion with respect thereto. A.G. Edwards
has relied upon the assurances of the management of FSP and the Target REIT that
they are not aware of any facts that would make such information materially
inaccurate or misleading. A.G. Edwards performed no audit of assets or
liabilities and no appraisal of assets or liabilities of FSP or the Target REIT,
and has assumed the accuracy and completeness of the Appraisal. A.G. Edwards
also did not independently attempt to assess or value any of the intangible
assets of FSP or the Target REIT (including goodwill) nor did it make any
independent assumptions with respect to the application of intangible assets in
the Transaction. A.G. Edwards is not expressing any opinion as to what the value
of FSP common stock will be when issued to Target Stockholders pursuant to the


                                     C-3-3
<PAGE>

Board of Directors
August 11, 2004
Page 4


Transaction or the prices at which shares of FSP common stock will trade at any
time. A.G. Edwards has assumed that no legal or regulatory changes that occur
after the date hereof will have a material impact on the respective operations,
financial condition or future prospects of FSP or the Target REIT.

With your permission, A.G. Edwards has not attempted to value the Target REIT
and, instead, has assumed that the value of the Target REIT is equal to the sum
of the value of the Target REIT's property, as reflected in the Appraisal, plus
the Target REIT's cash reserves. We have made this assumption and not made an
independent valuation of the Target REIT because the value of an entity with one
asset consisting of real property at a single location, such as the Target REIT,
is not determined by standard financial models used to value businesses in
general but, instead, determined by the value of the property owned by the
entity. The value of that property is, in turn, determined by local real estate,
economic and governmental factors such as commercial lease rates in the area of
the property, the values of nearby commercial properties, economic prosperity in
the area and applicable zoning laws, all of which are more appropriately
assessed by a professional real estate appraiser who is an expert in assessing
these local factors.

In performing its analyses, A.G. Edwards made numerous assumptions with respect
to the real estate industry and general business and economic conditions that
are beyond the control of those managing and operating FSP or the Target REIT.
The analyses performed by A.G. Edwards are not necessarily indicative of actual
values or actual future results, which may be significantly more or less
favorable than suggested by such analyses.

For the purposes of rendering its opinion, A.G. Edwards has assumed in all
respects material to its analyses that the representations and warranties of
each party to be contained in the Agreement will be true and correct, that each
party will perform all of the covenants and agreements required to be performed
by it under the Agreement and that all conditions to the consummation of the
Transaction will be satisfied without any modification or waiver thereof. A.G.
Edwards has also assumed that all governmental, regulatory and other consents
and approvals contemplated by the Agreement will be obtained and that in the
course of obtaining any of those consents, no restrictions will be imposed or
waivers made that would have an adverse effect on the contemplated Transaction.
Additionally, A.G. Edwards assumed that the Transaction will be accounted for in
acordance with U.S. Generally Accepted Accounting Principles.

A.G. Edwards was not engaged to and did not review, nor is it expressing any
opinion with respect to, any alternative transaction or strategic alternatives
that may be available to the Target REITs or the Target Stockholders. A.G.
Edwards is not expressing any opinion as to what the value of the Target REIT's
preferred stock has been or will be. A.G. Edwards' opinion also does not address
the merits of the underlying decision by FSP or the Target REITs to engage in
the Transaction. Further, A.G. Edwards was not engaged to, and did not,
independently assess the tax and accounting implications to the Target REIT or
the Target Stockholders, and A.G. Edwards relied on management's assessment
thereof. A.G. Edwards understands that with respect to all legal matters


                                     C-3-4
<PAGE>

Board of Directors
August 11, 2004
Page 5


pertaining to the Target REIT and its Board of Directors and their review of the
Agreement, you have been advised by legal counsel.

A.G. Edwards' opinion is necessarily based on economic, market, financial and
other conditions and circumstances as in effect on, and the information made
available to it, as of the date hereof. A.G. Edwards' opinion as expressed
herein, in any event, is limited to the fairness, from a financial point of
view, as of the date hereof, to the Target Stockholders, of the Consideration
they are to receive from FSP pursuant to the Agreement. It should be understood
that subsequent developments may affect A.G. Edwards' opinion, and A.G. Edwards
does not have any obligation to update, revise or reaffirm its opinion and it
expressly disclaims any responsibility to do so.

It is understood that this letter is solely for the confidential use of the
Target REIT's Board of Directors and does not constitute a recommendation as to
how any director should vote with respect to the Transaction, and such opinion
does not represent a recommendation as to how any Target Stockholder should vote
with respect to the Transaction. This opinion may not be reproduced, summarized,
described, characterized, excerpted from, referred to or given to any other
person for any purpose without A.G. Edwards' prior written consent.

Based upon and subject to the foregoing, and based upon such other matters as we
consider relevant, it is A.G. Edwards' opinion that, as of the date hereof, the
Consideration to be received by the Target Stockholders from FSP pursuant to the
Agreement is fair, from a financial point of view, to the Target Stockholders.

                                 Very truly yours,
                                 A.G. EDWARDS & SONS, INC.


                                 By: /s/Brian N. Hansen
                                     ----------------------
                                     Brian N. Hansen
                                     Director-Investment Banking


                                     C-3-5
<PAGE>

                                                                    Appendix C-4

                                                  August 11, 2004

Board of Directors
FSP Collins Crossing Corp.
401 Edgewater Place
Suite 200
Wakefield, MA 01880

Gentlemen:

You have requested our opinion as to the fairness, from a financial point of
view, to the preferred stockholders (the "Target Stockholders") of FSP Collins
Crossing Corp. (the "Target REIT") of the aggregate consideration the Target
Stockholders are to receive from Franklin Street Properties Corp. ("FSP") in
exchange for FSP's acquisition of the Target REIT (the "Transaction"). We
understand that, pursuant to a Merger Agreement (the "Agreement") to be entered
into by and among Franklin Street Properties Corp., Addison Circle Acquisition
Corp., Collins Crossing Acquisition Corp., Montague Business Center Corp., Royal
Ridge Acquisition Corp., FSP Addison Circle Corp., FSP Collins Crossing Corp.,
FSP Montague Acquisition Corp. and FSP Royal Ridge Corp., the Transaction will
be effected by the merger of Target REIT into a subsidiary of FSP, as a result
of which the outstanding shares of preferred stock of the Target REIT held by
Target Stockholders will be converted into the right to receive 3,422,704 shares
of common stock of FSP and $5,895.20 in cash (the "Consideration").

A.G. Edwards & Sons, Inc. ("A.G. Edwards"), as part of its investment banking
business, is regularly engaged in the valuation of businesses and their
securities in connection with mergers and acquisitions, negotiated
underwritings, competitive biddings, secondary distributions of listed and
unlisted securities, private placements and valuations for estate, corporate or
other purposes. Additionally, from time to time, A.G. Edwards has provided
services to FSP, including valuation and investment banking services. A.G.
Edwards may in the future provide valuation, investment banking and financial
advisory services to FSP and its affiliates for which we would expect to receive
compensation. A.G. Edwards is a full-service securities firm engaged, either
directly or through its affiliates, in securities trading, investment
management, financial planning and benefits counseling, financing and brokerage
activities for both companies and individuals. In the ordinary course of
business, A.G. Edwards and its affiliates may actively trade the securities of
FSP for their own account or for the accounts of their customers and,
accordingly, may at any time hold long or short positions of such securities.
However, A.G. Edwards is not aware of any present or contemplated relationship
between A.G. Edwards and FSP or any of FSP's affiliates, directors, officers or
stockholders or between A.G. Edwards and the Target REIT, its affiliates,
directors, officers or stockholders, that in our opinion would affect our
ability to render a fair and independent opinion in this matter.


                                     C-4-1
<PAGE>

Board of Directors
August 11, 2004
Page 2


A.G. Edwards acted as a financial advisor to the Special Committee of the Board
of Directors of the Target REIT (the "Special Committee") with respect to the
Transaction and has or will receive a fee from the Target REIT for its services,
including the delivery of this fairness opinion, pursuant to the terms of its
engagement letter with Target REIT dated July 22, 2004. The Target REIT has
agreed to indemnify A.G. Edwards for certain liabilities that may arise out of
the rendering of this opinion and any related activities as financial advisor to
the Target REIT and members of the Target REIT Board of Directors.

In connection with this opinion, A.G. Edwards has reviewed and considered such
financial and other matters as we have deemed relevant, including, among other
things:

      i.)     a review of the draft of the Agreement, dated August 9, 2004 and
              discussions about the Agreement with the Target REIT's management
              and Gehrke, Gish & Umana LLP ("Gehrke, Gish & Umana"), legal
              counsel to the Target REIT and the Target REIT's Board of
              Directors;

      ii.)    discussions with the Target REIT's and FSP's managements regarding
              the past and current business operations, financial condition and
              future prospects of the Target REITs and FSP, including the impact
              of the Transaction (if any), as well as information relating to
              the industries in which the Target REITs and FSP operate;

      iii.)   a review of certain audited and unaudited historical and interim
              financial and operating statements and certain financial analyses
              and forecasts for FSP prepared by FSP's management and reviewed
              with the Special Committee, the views of FSP's management
              regarding the past, current and future business operations of FSP,
              the historical results thereof and the financial condition and
              future prospects related to FSP, including the impact of the
              Transaction (if any);

      iv.)    an appraisal of the property of the Target REIT dated July 23,
              2004 prepared by a professional real estate valuation firm, which
              you have advised us has real estate valuation expertise in the
              local market for such property, which appraisal included, among
              other things, analyses that valued the Target REIT's business
              prospects based on a study of the current marketplace and business
              fundamentals (the "Appraisal") and our discussions with such
              professional real estate valuation firm;

      v.)     a review of certain other data, materials and reports pertaining
              to FSP provided to us in our due diligence process;

      vi.)    a review of certain audited historical financial statements for
              the Target REIT prepared by the Target REIT's management;

      vii.)   a general review of the current market environment as well as
              information relating to the industries and the segments in which
              the Target REIT and FSP operate;


                                     C-4-2
<PAGE>

Board of Directors
August 11, 2004
Page 3


      viii.)  a review of market data for equity securities of public companies
              in the same or similar lines of business as those of FSP;

      ix.)    a review of the financial terms of certain acquisitions that A.G.
              Edwards deems relevant for analytical purposes;

      x.)     a review of the implied valuation range of FSP's business based on
              the discounted present values of its projected cash flows both
              including and excluding expected synergies (as estimated by the
              FSP's management);

      xi.)    conversations with the Special Committee, selected members of the
              Target REIT's management and attorneys from Gehrke, Gish & Umana
              regarding the nature and development of the terms of the
              Transaction;

      xii.)   discussions with FSP's management regarding the expected financing
              structure of the Transaction and FSP's target capital structure;
              and

      xiii.)  a review of such other information, financial studies, analyses,
              investigations and financial, economic and market criteria that
              A.G. Edwards considers necessary or advisable.

In preparing its opinion, A.G. Edwards has assumed and relied upon, without
independent verification, the accuracy and completeness of all financial and
other information publicly available, furnished to, or otherwise discussed with
A.G. Edwards including financial statements and financial projections, as
provided by the management and/or representatives of FSP and the Target REIT.
With respect to financial information, financial projections and other
information provided to or otherwise discussed with A.G. Edwards, A.G. Edwards
has assumed and was advised by the management of the FSP and the Target REIT,
that such financial information, projections and other information were
reasonably prepared on a basis that reflects the best currently available
estimates and judgments of the management of FSP and the Target REIT, as to the
historical financial performance and the expected future financial performance
of FSP and the Target REIT, respectively, on a stand-alone basis and after
giving effect to the Transaction. A.G. Edwards was not engaged to, and therefore
did not, independently verify the accuracy or completeness of any of such
information, nor does it express any opinion with respect thereto. A.G. Edwards
has relied upon the assurances of the management of FSP and the Target REIT that
they are not aware of any facts that would make such information materially
inaccurate or misleading. A.G. Edwards performed no audit of assets or
liabilities and no appraisal of assets or liabilities of FSP or the Target REIT,
and has assumed the accuracy and completeness of the Appraisal. A.G. Edwards
also did not independently attempt to assess or value any of the intangible
assets of FSP or the Target REIT (including goodwill) nor did it make any
independent assumptions with respect to the application of intangible assets in
the Transaction. A.G. Edwards is not expressing any opinion as to what the value
of FSP common stock will be when issued to Target Stockholders pursuant to the


                                     C-4-3
<PAGE>

Board of Directors
August 11, 2004
Page 4


Transaction or the prices at which shares of FSP common stock will trade at any
time. A.G. Edwards has assumed that no legal or regulatory changes that occur
after the date hereof will have a material impact on the respective operations,
financial condition or future prospects of FSP or the Target REIT.

With your permission, A.G. Edwards has not attempted to value the Target REIT
and, instead, has assumed that the value of the Target REIT is equal to the sum
of the value of the Target REIT's property, as reflected in the Appraisal, plus
the Target REIT's cash reserves. We have made this assumption and not made an
independent valuation of the Target REIT because the value of an entity with one
asset consisting of real property at a single location, such as the Target REIT,
is not determined by standard financial models used to value businesses in
general but, instead, determined by the value of the property owned by the
entity. The value of that property is, in turn, determined by local real estate,
economic and governmental factors such as commercial lease rates in the area of
the property, the values of nearby commercial properties, economic prosperity in
the area and applicable zoning laws, all of which are more appropriately
assessed by a professional real estate appraiser who is an expert in assessing
these local factors.

In performing its analyses, A.G. Edwards made numerous assumptions with respect
to the real estate industry and general business and economic conditions that
are beyond the control of those managing and operating FSP or the Target REIT.
The analyses performed by A.G. Edwards are not necessarily indicative of actual
values or actual future results, which may be significantly more or less
favorable than suggested by such analyses.

For the purposes of rendering its opinion, A.G. Edwards has assumed in all
respects material to its analyses that the representations and warranties of
each party to be contained in the Agreement will be true and correct, that each
party will perform all of the covenants and agreements required to be performed
by it under the Agreement and that all conditions to the consummation of the
Transaction will be satisfied without any modification or waiver thereof. A.G.
Edwards has also assumed that all governmental, regulatory and other consents
and approvals contemplated by the Agreement will be obtained and that in the
course of obtaining any of those consents, no restrictions will be imposed or
waivers made that would have an adverse effect on the contemplated Transaction.
Additionally, A.G. Edwards assumed that the Transaction will be accounted for in
acordance with U.S. Generally Accepted Accounting Principles.

A.G. Edwards was not engaged to and did not review, nor is it expressing any
opinion with respect to, any alternative transaction or strategic alternatives
that may be available to the Target REITs or the Target Stockholders. A.G.
Edwards is not expressing any opinion as to what the value of the Target REIT's
preferred stock has been or will be. A.G. Edwards' opinion also does not address
the merits of the underlying decision by FSP or the Target REITs to engage in
the Transaction. Further, A.G. Edwards was not engaged to, and did not,
independently assess the tax and accounting implications to the Target REIT or
the Target Stockholders, and A.G. Edwards relied on management's assessment
thereof. A.G. Edwards understands that with respect to all legal matters


                                     C-4-4
<PAGE>

Board of Directors
August 11, 2004
Page 5


pertaining to the Target REIT and its Board of Directors and their review of the
Agreement, you have been advised by legal counsel.

A.G. Edwards' opinion is necessarily based on economic, market, financial and
other conditions and circumstances as in effect on, and the information made
available to it, as of the date hereof. A.G. Edwards' opinion as expressed
herein, in any event, is limited to the fairness, from a financial point of
view, as of the date hereof, to the Target Stockholders, of the Consideration
they are to receive from FSP pursuant to the Agreement. It should be understood
that subsequent developments may affect A.G. Edwards' opinion, and A.G. Edwards
does not have any obligation to update, revise or reaffirm its opinion and it
expressly disclaims any responsibility to do so.

It is understood that this letter is solely for the confidential use of the
Target REIT's Board of Directors and does not constitute a recommendation as to
how any director should vote with respect to the Transaction, and such opinion
does not represent a recommendation as to how any Target Stockholder should vote
with respect to the Transaction. This opinion may not be reproduced, summarized,
described, characterized, excerpted from, referred to or given to any other
person for any purpose without A.G. Edwards' prior written consent.

Based upon and subject to the foregoing, and based upon such other matters as we
consider relevant, it is A.G. Edwards' opinion that, as of the date hereof, the
Consideration to be received by the Target Stockholders from FSP pursuant to the
Agreement is fair, from a financial point of view, to the Target Stockholders.

                                 Very truly yours,
                                 A.G. EDWARDS & SONS, INC.


                                 By: /s/Brian N. Hansen
                                     -------------------
                                     Brian N. Hansen
                                     Director-Investment Banking


                                     C-4-5
<PAGE>

                                                                      Appendix D

               Section 262 of the Delaware General Corporation Law

ss.262. Appraisal rights.

(a)   Any stockholder of a corporation of this State who holds shares of stock
      on the date of the making of a demand pursuant to subsection (d) of this
      section with respect to such shares, who continuously holds such shares
      through the effective date of the merger or consolidation, who has
      otherwise complied with subsection (d) of this section and who has neither
      voted in favor of the merger or consolidation nor consented thereto in
      writing pursuant toss.228 of this title shall be entitled to an appraisal
      by the Court of Chancery of the fair value of the stockholder's shares of
      stock under the circumstances described in subsections (b) and (c) of this
      section. As used in this section, the word "stockholder" means a holder of
      record of stock in a stock corporation and also a member of record of a
      nonstock corporation; the words "stock" and "share" mean and include what
      is ordinarily meant by those words and also membership or membership
      interest of a member of a nonstock corporation; and the words "depository
      receipt" mean a receipt or other instrument issued by a depository
      representing an interest in one or more shares, or fractions thereof,
      solely of stock of a corporation, which stock is deposited with the
      depository.

(b)   Appraisal rights shall be available for the shares of any class or series
      of stock of a constituent corporation in a merger or consolidation to be
      effected pursuant to ss. 251 (other than a merger effected pursuant to ss.
      251(g) of this title), ss. 252, ss. 254, ss. 257, ss. 258, ss. 263 or ss.
      264 of this title:

      (1)   Provided, however, that no appraisal rights under this section shall
            be available for the shares of any class or series of stock, which
            stock, or depository receipts in respect thereof, at the record date
            fixed to determine the stockholders entitled to receive notice of
            and to vote at the meeting of stockholders to act upon the agreement
            of merger or consolidation, were either (i) listed on a national
            securities exchange or designated as a national market system
            security on an interdealer quotation system by the National
            Association of Securities Dealers, Inc. or (ii) held of record by
            more than 2,000 holders; and further provided that no appraisal
            rights shall be available for any shares of stock of the constituent
            corporation surviving a merger if the merger did not require for its
            approval the vote of the stockholders of the surviving corporation
            as provided in subsection (f) of ss. 251 of this title.

      (2)   Notwithstanding paragraph (1) of this subsection, appraisal rights
            under this section shall be available for the shares of any class or
            series of stock of a constituent corporation if the holders thereof
            are required by the terms of an agreement of merger or consolidation
            pursuant to ss.ss. 251, 252, 254, 257, 258, 263 and 264 of this
            title to accept for such stock anything except:


                                      D-1
<PAGE>

            a.    Shares of stock of the corporation surviving or resulting from
                  such merger or consolidation, or depository receipts in
                  respect thereof;

            b.    Shares of stock of any other corporation, or depository
                  receipts in respect thereof, which shares of stock (or
                  depository receipts in respect thereof) or depository receipts
                  at the effective date of the merger or consolidation will be
                  either listed on a national securities exchange or designated
                  as a national market system security on an interdealer
                  quotation system by the National Association of Securities
                  Dealers, Inc. or held of record by more than 2,000 holders;

            c.    Cash in lieu of fractional shares or fractional depository
                  receipts described in the foregoing subparagraphs a. and b. of
                  this paragraph; or

            d.    Any combination of the shares of stock, depository receipts
                  and cash in lieu of fractional shares or fractional depository
                  receipts described in the foregoing subparagraphs a., b. and
                  c. of this paragraph.

      (3)   In the event all of the stock of a subsidiary Delaware corporation
            party to a merger effected under ss. 253 of this title is not owned
            by the parent corporation immediately prior to the merger, appraisal
            rights shall be available for the shares of the subsidiary Delaware
            corporation.

(c)   Any corporation may provide in its certificate of incorporation that
      appraisal rights under this section shall be available for the shares of
      any class or series of its stock as a result of an amendment to its
      certificate of incorporation, any merger or consolidation in which the
      corporation is a constituent corporation or the sale of all or
      substantially all of the assets of the corporation. If the certificate of
      incorporation contains such a provision, the procedures of this section,
      including those set forth in subsections (d) and (e) of this section,
      shall apply as nearly as is practicable.

(d)   Appraisal rights shall be perfected as follows:

      (1)   If a proposed merger or consolidation for which appraisal rights are
            provided under this section is to be submitted for approval at a
            meeting of stockholders, the corporation, not less than 20 days
            prior to the meeting, shall notify each of its stockholders who was
            such on the record date for such meeting with respect to shares for
            which appraisal rights are available pursuant to subsection (b) or
            (c) hereof that appraisal rights are available for any or all of the
            shares of the constituent corporations, and shall include in such
            notice a copy of this section. Each stockholder electing to demand
            the appraisal of such stockholder's shares shall deliver to the
            corporation, before the taking of the vote on the merger or
            consolidation, a written demand for appraisal of such stockholder's
            shares. Such demand will be sufficient if it reasonably informs the
            corporation of the identity of the stockholder and that the
            stockholder intends thereby to demand the appraisal of such
            stockholder's shares. A proxy or vote against the merger or


                                      D-2
<PAGE>

            consolidation shall not constitute such a demand. A stockholder
            electing to take such action must do so by a separate written demand
            as herein provided. Within 10 days after the effective date of such
            merger or consolidation, the surviving or resulting corporation
            shall notify each stockholder of each constituent corporation who
            has complied with this subsection and has not voted in favor of or
            consented to the merger or consolidation of the date that the merger
            or consolidation has become effective; or

      (2)   If the merger or consolidation was approved pursuant to ss. 228 or
            ss. 253 of this title, then either a constituent corporation before
            the effective date of the merger or consolidation or the surviving
            or resulting corporation within 10 days thereafter shall notify each
            of the holders of any class or series of stock of such constituent
            corporation who are entitled to appraisal rights of the approval of
            the merger or consolidation and that appraisal rights are available
            for any or all shares of such class or series of stock of such
            constituent corporation, and shall include in such notice a copy of
            this section. Such notice may, and, if given on or after the
            effective date of the merger or consolidation, shall, also notify
            such stockholders of the effective date of the merger or
            consolidation. Any stockholder entitled to appraisal rights may,
            within 20 days after the date of mailing of such notice, demand in
            writing from the surviving or resulting corporation the appraisal of
            such holder's shares. Such demand will be sufficient if it
            reasonably informs the corporation of the identity of the
            stockholder and that the stockholder intends thereby to demand the
            appraisal of such holder's shares. If such notice did not notify
            stockholders of the effective date of the merger or consolidation,
            either (i) each such constituent corporation shall send a second
            notice before the effective date of the merger or consolidation
            notifying each of the holders of any class or series of stock of
            such constituent corporation that are entitled to appraisal rights
            of the effective date of the merger or consolidation or (ii) the
            surviving or resulting corporation shall send such a second notice
            to all such holders on or within 10 days after such effective date;
            provided, however, that if such second notice is sent more than 20
            days following the sending of the first notice, such second notice
            need only be sent to each stockholder who is entitled to appraisal
            rights and who has demanded appraisal of such holder's shares in
            accordance with this subsection. An affidavit of the secretary or
            assistant secretary or of the transfer agent of the corporation that
            is required to give either notice that such notice has been given
            shall, in the absence of fraud, be prima facie evidence of the facts
            stated therein. For purposes of determining the stockholders
            entitled to receive either notice, each constituent corporation may
            fix, in advance, a record date that shall be not more than 10 days
            prior to the date the notice is given, provided, that if the notice
            is given on or after the effective date of the merger or
            consolidation, the record date shall be such effective date. If no
            record date is fixed and the notice is given prior to the effective
            date, the record date shall be the close of business on the day next
            preceding the day on which the notice is given.

(e)   Within 120 days after the effective date of the merger or consolidation,
      the surviving or resulting corporation or any stockholder who has complied
      with subsections (a) and (d) hereof and who is otherwise entitled to


                                      D-3
<PAGE>

      appraisal rights, may file a petition in the Court of Chancery demanding a
      determination of the value of the stock of all such stockholders.
      Notwithstanding the foregoing, at any time within 60 days after the
      effective date of the merger or consolidation, any stockholder shall have
      the right to withdraw such stockholder's demand for appraisal and to
      accept the terms offered upon the merger or consolidation. Within 120 days
      after the effective date of the merger or consolidation, any stockholder
      who has complied with the requirements of subsections (a) and (d) hereof,
      upon written request, shall be entitled to receive from the corporation
      surviving the merger or resulting from the consolidation a statement
      setting forth the aggregate number of shares not voted in favor of the
      merger or consolidation and with respect to which demands for appraisal
      have been received and the aggregate number of holders of such shares.
      Such written statement shall be mailed to the stockholder within 10 days
      after such stockholder's written request for such a statement is received
      by the surviving or resulting corporation or within 10 days after
      expiration of the period for delivery of demands for appraisal under
      subsection (d) hereof, whichever is later.

(f)   Upon the filing of any such petition by a stockholder, service of a copy
      thereof shall be made upon the surviving or resulting corporation, which
      shall within 20 days after such service file in the office of the Register
      in Chancery in which the petition was filed a duly verified list
      containing the names and addresses of all stockholders who have demanded
      payment for their shares and with whom agreements as to the value of their
      shares have not been reached by the surviving or resulting corporation. If
      the petition shall be filed by the surviving or resulting corporation, the
      petition shall be accompanied by such a duly verified list. The Register
      in Chancery, if so ordered by the Court, shall give notice of the time and
      place fixed for the hearing of such petition by registered or certified
      mail to the surviving or resulting corporation and to the stockholders
      shown on the list at the addresses therein stated. Such notice shall also
      be given by 1 or more publications at least 1 week before the day of the
      hearing, in a newspaper of general circulation published in the City of
      Wilmington, Delaware or such publication as the Court deems advisable. The
      forms of the notices by mail and by publication shall be approved by the
      Court, and the costs thereof shall be borne by the surviving or resulting
      corporation.

(g)   At the hearing on such petition, the Court shall determine the
      stockholders who have complied with this section and who have become
      entitled to appraisal rights. The Court may require the stockholders who
      have demanded an appraisal for their shares and who hold stock represented
      by certificates to submit their certificates of stock to the Register in
      Chancery for notation thereon of the pendency of the appraisal
      proceedings; and if any stockholder fails to comply with such direction,
      the Court may dismiss the proceedings as to such stockholder.

(h)   After determining the stockholders entitled to an appraisal, the Court
      shall appraise the shares, determining their fair value exclusive of any
      element of value arising from the accomplishment or expectation of the
      merger or consolidation, together with a fair rate of interest, if any, to
      be paid upon the amount determined to be the fair value. In determining
      such fair value, the Court shall take into account all relevant factors.
      In determining the fair rate of interest, the Court may consider all
      relevant factors, including the rate of interest which the surviving or


                                      D-4
<PAGE>

      resulting corporation would have had to pay to borrow money during the
      pendency of the proceeding. Upon application by the surviving or resulting
      corporation or by any stockholder entitled to participate in the appraisal
      proceeding, the Court may, in its discretion, permit discovery or other
      pretrial proceedings and may proceed to trial upon the appraisal prior to
      the final determination of the stockholder entitled to an appraisal. Any
      stockholder whose name appears on the list filed by the surviving or
      resulting corporation pursuant to subsection (f) of this section and who
      has submitted such stockholder's certificates of stock to the Register in
      Chancery, if such is required, may participate fully in all proceedings
      until it is finally determined that such stockholder is not entitled to
      appraisal rights under this section.

(i)   The Court shall direct the payment of the fair value of the shares,
      together with interest, if any, by the surviving or resulting corporation
      to the stockholders entitled thereto. Interest may be simple or compound,
      as the Court may direct. Payment shall be so made to each such
      stockholder, in the case of holders of uncertificated stock forthwith, and
      the case of holders of shares represented by certificates upon the
      surrender to the corporation of the certificates representing such stock.
      The Court's decree may be enforced as other decrees in the Court of
      Chancery may be enforced, whether such surviving or resulting corporation
      be a corporation of this State or of any state.

(j)   The costs of the proceeding may be determined by the Court and taxed upon
      the parties as the Court deems equitable in the circumstances. Upon
      application of a stockholder, the Court may order all or a portion of the
      expenses incurred by any stockholder in connection with the appraisal
      proceeding, including, without limitation, reasonable attorney's fees and
      the fees and expenses of experts, to be charged pro rata against the value
      of all the shares entitled to an appraisal.

(k)   From and after the effective date of the merger or consolidation, no
      stockholder who has demanded appraisal rights as provided in subsection
      (d) of this section shall be entitled to vote such stock for any purpose
      or to receive payment of dividends or other distributions on the stock
      (except dividends or other distributions payable to stockholders of record
      at a date which is prior to the effective date of the merger or
      consolidation); provided, however, that if no petition for an appraisal
      shall be filed within the time provided in subsection (e) of this section,
      or if such stockholder shall deliver to the surviving or resulting
      corporation a written withdrawal of such stockholder's demand for an
      appraisal and an acceptance of the merger or consolidation, either within
      60 days after the effective date of the merger or consolidation as
      provided in subsection (e) of this section or thereafter with the written
      approval of the corporation, then the right of such stockholder to an
      appraisal shall cease. Notwithstanding the foregoing, no appraisal
      proceeding in the Court of Chancery shall be dismissed as to any
      stockholder without the approval of the Court, and such approval may be
      conditioned upon such terms as the Court deems just.

(l)   The shares of the surviving or resulting corporation to which the shares
      of such objecting stockholders would have been converted had they assented
      to the merger or consolidation shall have the status of authorized and
      unissued shares of the surviving or resulting corporation.


                                      D-5

<PAGE>

                                                                      Appendix E


                        FRANKLIN STREET PROPERTIES CORP.
                            ARTICLES OF INCORPORATION


                                   ARTICLE I
                                  INCORPORATOR

      The undersigned, Kenneth A. Hoxsie, whose address is c/o Hale and Dorr
LLP, 60 State Street, Boston, Massachusetts 02109, being at least eighteen years
of age, acting as incorporator, does hereby form a corporation under the General
Laws of the State of Maryland.

                                   ARTICLE II
                                      NAME

      The name of the corporation (hereinafter, the "Corporation") is


                        FRANKLIN STREET PROPERTIES CORP.

                                  ARTICLE III
                                    PURPOSES

      The purposes for which and any of which the Corporation is formed and the
business and objects to be carried on and promoted by it are:

      (1) To engage in business as a real estate investment trust, qualifying as
such under Sections 856 through 860 of the Internal Revenue Code of 1986, as
amended, or any successor statute (the "Code" and any references herein to
provisions of the Code shall include the successors to such provisions) and to
perform any and all activities and functions in connection therewith or related
thereto.

      (2) To engage in and perform any other activities or functions which may
awfully be performed by a business corporation organized under the General Laws
of the State of Maryland.

      The foregoing enumerated purposes and objects shall be in no way limited
or restricted by reference to, or inference from, the terms of any other clause
of this or any other Article of the Charter of the Corporation, and each shall
be regarded as independent; and they are intended to be and shall be construed
as powers as well as purposes and objects of the Corporation and shall be in
addition to and not in limitation of the general powers of corporations under
the General Laws of the State of Maryland.

                                   ARTICLE IV
                          PRINCIPAL OFFICE IN MARYLAND

      The present address of the principal office of the Corporation in the
State of Maryland is c/o The Corporation Trust Incorporated, 32 South Street,
Baltimore, Maryland 21202. The Corporation may have such other offices or places


                                      E-1
<PAGE>

of business within or without the State of Maryland as the Board of Directors of
the Corporation may determine.

                                    ARTICLE V
                                 RESIDENT AGENT

      The name and address of the resident agent of the Corporation is The
Corporation Trust Incorporated, 32 South Street, Baltimore, Maryland 21201. Said
resident agent is a Maryland corporation.

                                   ARTICLE VI
                             SHARES OF CAPITAL STOCK

Section 1. Authorized Shares of Capital Stock

            (a) Authorized Shares. The total number of shares of capital stock
of all classes that the Corporation has authority to issue is 200,000,000
shares, consisting of

                  (i) 20,000,000 shares of Preferred Stock, par value $.0001 per
share (the "Preferred Shares"), which may be issued in one or more classes as
described in Section 3 of this Article VI; and

                  (ii) 80,000,000 shares of Common Stock, par value $.0001 per
share (the "Common Shares").

      Each class of the Preferred Shares and the Common Shares shall each
constitute a separate class of capital stock of the Corporation.

            (b) Terminology and Aggregate Par Value. The Common Shares and the
Preferred Shares are collectively referred to herein as the "Equity Shares." The
aggregate par value of all of the Corporation's authorized shares having par
value is $20,000.

            (c) Increase or Decrease in Authorized Shares. The Board of
Directors of the Corporation may amend these Articles of Incorporation, without
any vote or consent of the stockholders, to increase or decrease the aggregate
number of Equity Shares or the number of Equity Shares of any class that the
Corporation has authority to issue.

Section 2. REIT-Related Restrictions and Limitations on the Equity Shares.

            (a) Definitions. As used in this Article VI, the following terms
shall have the indicated meanings:

                  "Acquire" shall mean the acquisition of Beneficial Ownership
or Constructive Ownership of Equity Shares by any means, including without
limitation a Transfer or the exercise of or right to exercise any rights under
any option, warrant, convertible security, pledge or other security interest or
similar right to acquire Equity Shares, but shall not include the acquisition of
any such rights unless, as a result, the acquiror would be considered a


                                      E-2
<PAGE>

Beneficial Owner or Constructive Owner, as defined below. The term "Acquisition"
shall have the correlative meaning.

                  "Beneficial Ownership" shall mean ownership of Equity Shares y
a Person who is or would be treated as an owner of such Equity Shares under
Section 542(a)(2) of the Code either actually or constructively through the
application of Section 544 of the Code, as modified by Section 856(h)(1)(B) of
the Code. The terms "Beneficially Own," "Beneficially Owned" and "Beneficial
Owner" shall have the correlative meanings.

                  "Board" shall mean the Board of Directors of the Corporation.

                  "Business Day" shall mean any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking institutions
in Boston, Massachusetts are authorized or required by law, regulation or
executive order to close.

                  "Charitable Beneficiary" shall mean one or more beneficiaries
of the Trust as determined pursuant to Section 2(e)(vi) of this Article VI.

                  "Constructive Ownership" shall mean ownership of Equity Shares
or any other interest in an entity by a Person who is or would be treated as an
owner thereof either actually or constructively through the application of
Section 318 of the Code, as modified by Section 856(d)(5) of the Code. The terms
"Constructively Own," "Constructively Owned" and "Constructive Owner" shall have
the correlative meanings.

                  "Market Price" shall mean the last reported sales price of the
Common Shares or Preferred Shares, as the case may be, on the trading day
immediately preceding the relevant date as reported on the principal exchange or
quotation system over or through which the Common Shares or Preferred Shares, as
the case may be, may be traded, or if not then traded over or through any
exchange or quotation system, then the fair market value of the Common Shares or
Preferred Shares, as the case may be, on the relevant date as determined in good
faith by the Board.

                  "Merger Date" shall mean the effective date of the merger of
Franklin Street Partners Limited Partnership with and into the Corporation.

                  "Ownership Limit" shall mean 9.8% of the number of shares or
value (whichever is more restrictive) of the outstanding Equity Shares. The
number and value of Equity Shares of the Corporation shall be determined by the
Board in good faith, which determination shall be conclusive for all purposes
hereof.

                  "Person" shall mean an individual, corporation, partnership,
limited liability company, association, estate, trust (including a trust
qualified under Section 401(a) or 501(c)(17) of the Code), a portion of a trust
permanently set aside for or to be used exclusively for the purposes described
in Section 642(c) of the Code, association, private foundation within the
meaning of Section 509(a) of the Code, joint stock company or other entity.

                  "Purported Beneficial Owner" shall mean, with respect to any
Acquisition or Transfer, the Person who would Beneficially Own or Constructively


                                      E-3
<PAGE>

Own Equity Shares but for the limitations set forth in Section 2(b)(i) of this
Article VI applicable to such Acquisition or Transfer. The Purported Beneficial
Owner and the Purported Record Owner may be the same Person.

                  "Purported Record Owner" shall mean, with respect to any
Acquisition or Transfer, the Person who would have been the record holder of the
Equity Shares if such Acquisition or Transfer had not violated the provisions of
Section 2(b)(i) of this Article VI. The Purported Beneficial Owner and the
Purported Record Owner may be the same Person.

                  "Restriction Termination Date" shall mean the effective date,
as specified in a resolution of the Board, that it is no longer in the best
interests of the Corporation to attempt to, or continue to, qualify as a REIT or
that the restrictions and limitations on Beneficial Ownership, Constructive
Ownership or Transfer of Equity Shares set forth in this Section 2 are no longer
required in order for the Corporation to qualify as a REIT. If no such effective
date is specified in such resolution, the Restriction Termination Date shall be
the date on which such resolution is adopted by the Board.

                  "Transfer" shall mean any issuance, sale, transfer, gift,
assignment, devise or other disposition of, or any other event that would cause
a Person to Acquire Equity Shares or the right to vote or receive dividends on
Equity Shares, including (i) the granting of any option or entering into any
agreement for the sale, transfer or other disposition of Equity Shares or the
right to vote or receive dividends on Equity Shares, or (ii) the sale, transfer,
assignment or other disposition of any securities or rights convertible into or
exchangeable for Equity Shares, in each case whether voluntary or involuntary,
whether of record or Beneficially Owned or Constructively Owned, and whether by
operation of law or otherwise. A Transfer also includes any transfer of
interests in other entities, any change in the capital structure of the
Corporation and any change in the relationship between two or more Persons, that
results in a change in Beneficial Ownership or Constructive Ownership of Equity
Shares, whether by operation of law or otherwise. The terms "Transfers" and
"Transferred" shall have the correlative meanings.

                  "Trust" shall mean the trust created pursuant to Section
2(e)(i) of this Article VI.

                  "Trustee" shall mean the Person that is appointed by the
Corporation pursuant to Section 2(e)(i) of this Article VI to serve as trustee
of the Trust, and any successor thereto.

            (b) Ownership Limitation and Transfer Restrictions with Respect to
Equity Shares.

                  (i) Merger Date and prior to the Restriction Termination Date:

                        (A) no Person shall Beneficially Own or Constructively
Own Equity Shares in excess of the Ownership Limit;

                        (B) no Person shall Acquire or Transfer Equity Shares to
the extent that such Acquisition or Transfer, if effective, would result in the


                                      E-4
<PAGE>

outstanding Equity Shares being beneficially owned by fewer than 100 Persons
(determined without reference to any rules of attribution); and

                        (C) no Person shall Acquire or Beneficially Own or
constructively Own Equity Shares to the extent such Acquisition, Beneficial
Ownership or Constructive Ownership, if effective, would result in the
Corporation being "closely held" within the meaning of Section 856(h) of the
Code (without regard to whether the ownership interest is held during the last
half of a taxable year), or would otherwise result in the Corporation failing to
quality as a REIT (including without limitation Constructive Ownership that
would result in the Corporation owning, actually or constructively, an interest
in a tenant that is described in Section 856(d)(2)(B) of the Code if the income
derived by the Corporation from such tenant would cause the Corporation to fail
to satisfy any of the gross income requirements of Section 856(c) of the Code,
but not including beneficial ownership of Equity Shares by fewer than 100
Persons, which shall be governed by Section 2(b)(i)(B) above).

                  (ii) If, after the Merger Date and prior to the Restriction
Termination Date:

                        (A) any Transfer or Acquisition (other than an event
described in Section 2(b)(ii)(B) of this Article VI) (whether or not such
Transfer or Acquisition is the result of a transaction entered into through the
facilities of any national securities exchange or automated inter-dealer
quotation system) occurs which, if effective, would result in any Person
Beneficially Owning or Constructively Owning Equity Shares in violation of
Sections 2(b)(i)(A) or 2(b)(i)(C) of this Article VI, then (1) that number of
Equity Shares being Transferred or Acquired that otherwise would cause such
Person to violate Sections 2(b)(i)(A) or 2(b)(i)(C) of this Article VI (rounded
up to the nearest whole share) shall be automatically transferred to a Trust for
the benefit of a Charitable Beneficiary, as described in Section 2(e)(i) of this
Article VI, effective as of the close of business on the Business Day prior to
the date of such Transfer or Acquisition, and the Purported Beneficial Owner and
Purported Record Owner of such Equity Shares shall acquire no rights in such
Equity Shares, or (2) if the transfer to the Trust described in clause (1) of
this sentence would not be effective for any reason to prevent such Person from
Beneficially Owning or Constructively Owning Equity Shares in violation of
Sections 2(b)(i)(A) or 2(b)(i)(C) of this Article VI, then the Acquisition or
Transfer of that number of Equity Shares that otherwise would cause such Person
to violate Sections 2(b)(i)(A) or 2(b)(i)(C) of this Article VI (rounded up to
the nearest whole share) shall be void ab initio and the Purported Beneficial
Owner and Purported Record Owner shall acquire no rights in such Equity Shares.
The transfer of Equity Shares to the Trust pursuant to clause (1) of the
preceding sentence shall occur automatically and without further action of the
Corporation, the Trustee or any other Person; or

                        (B) any Transfer or Acquisition (whether or not such
Transfer or Acquisition is the result of a transaction entered into through the
facilities of any national securities exchange or automated inter-dealer
quotation system) occurs which, if effective, would result in any Person
beneficially owning Equity Shares in violation of Section 2(b)(i)(B) of this
Article VI, then such Transfer or Acquisition shall be void ab initio, and the
Purported Beneficial Owner and the Purported Record Owner of the Equity Shares
purportedly subject to such Acquisition or Transfer shall acquire no rights in
such Equity Shares.


                                      E-5
<PAGE>

            (c) The Corporation's Right to Redeem Shares. Except with respect to
Equity Shares whose transfer to a Trust has been effected in accordance with
Section 2(b)(ii)(A) of this Article VI (which Equity Shares shall be subject to
Section 2(e) of this Article VI following such transfer), the Corporation shall
have the right, but not the obligation, to redeem any Equity Shares that are
Acquired or Transferred, or are attempted to be Acquired or Transferred, in
violation of Section 2(b) of this Article VI, at a price per share equal to the
lesser of (i) the Market Price per share of the class of Equity Shares that
created such violation or attempted violation on the date of such violation or
attempted violation (or, in the case of a devise or gift, the Market Price at
the time of such devise or gift) and (ii) the Market Price per share of the
class of Equity Shares to which such Equity Shares relate on the date the
Corporation, or its designee, gives notice of such redemption. The Corporation
shall have the right to redeem any Equity Shares described in this Section 2(c)
for a period of 90 days after the later of (i) the date of the Acquisition or
Transfer or attempted Acquisition or Transfer and (ii) the date the Board
determines in good faith that an Acquisition or Transfer or attempted
Acquisition or Transfer has occurred, if the Corporation does not receive a
notice of such Transfer pursuant to Section 2(d) of this Article VI.

            (d) Notice Requirements and General Authority of the Board of
Directors to Implement REIT-Related Restrictions and Limitations.

                  (i) Notice Requirements. After the Merger Date and prior to
theRestriction Termination Date:

                        (A) Any Person who Acquires or Transfers, or attempts or
intends to Acquire or Transfer, Equity Shares in violation of Section 2(b)(i) of
this Article VI, and any Person who is a Purported Record Owner or a Purported
Beneficial Owner of Equity Shares, shall immediately give written notice or, in
the event of a proposed, intended or attempted Acquisition or Transfer or other
event that would give rise to Beneficial Ownership or Constructive Ownership in
violation of Section 2(b)(i) of this Article VI, give at least 15 days' prior
written notice to the Corporation of such event, and shall provide to the
Corporation such other information as the Corporation may request in order to
determine the effect, if any, of such Acquisition or Transfer on the
Corporation's status as a REIT;

                        (B) Every Beneficial Owner or Constructive Owner of
Equity Shares and each Person (including the stockholder of record) who is
holding Equity Shares for a Beneficial Owner or Constructive Owner shall, on
demand, provide the Corporation in writing the information regarding their
ownership of such Equity Shares that the Corporation may be required to obtain
pursuant to regulations (as in effect from time to time) issued by the United
States Department of the Treasury under the Code. Each Beneficial Owner or
Constructive Owner of Equity Shares and each Person (including the stockholder
of record) who is holding Equity Shares for a Beneficial Owner or Constructive
Owner shall provide to the Corporation such additional information that the
Corporation may request in order to determine the effect, if any, of such
Beneficial Ownership or Constructive Ownership on the Corporation's status as a
REIT, including compliance with the Ownership Limit; and

                        (C) Each Person who is a Beneficial Owner or
Constructive Owner of Equity Shares and each Person (including the shareholder
of record) who is holding Equity Shares for a Beneficial Owner or Constructive


                                      E-6
<PAGE>

Owner shall, on demand, provide the Corporation in writing such information that
the Corporation may request in order to determine the Corporation's status as a
REIT, to comply with the requirements of any taxing authority or governmental
agency, or to determine any such compliance.

                  (ii) Board Authority to Prevent Violation of Section 2(b)(i).
If the Board or any duly authorized committee thereof shall at any time
determine in good faith that a Transfer or other event has taken place that
results in a violation of Section 2(b)(i) of this Article VI or that a Person
intends to Acquire, has attempted to Acquire or may Acquire Beneficial Ownership
or Constructive Ownership of any Equity Shares in violation of Section 2(b)(i)
of this Article VI (whether or not such violation is intended), the Board or a
committee thereof shall take such action as it deems advisable to refuse to give
effect to or to prevent such Acquisition, Transfer or other event, including,
but not limited to, causing the Corporation to redeem Equity Shares, refusing to
give effect to such Acquisition, Transfer or other event on the books of the
Corporation, or instituting proceedings to enjoin such Acquisition, Transfer or
other event; provided, however, that any Transfers or attempted Transfers (or,
in the case of an event other than a Transfer, Beneficial Ownership or
Constructive Ownership) in violation of Section 2(b)(i) of this Article VI shall
automatically result in the transfer to the Trust described above where the
conditions to such transfer have been satisfied, and, where applicable, such
Transfer (or other event) shall be void ab initio as provided above in Sections
2(b)(ii)(A) and 2(b)(ii)(B) irrespective of any action (or nonaction) by the
Board or a committee thereof.

                  (iii) Each certificate for Equity Shares shall bear
substantially the following legends:

                  "The Corporation is authorized to issue capital stock of more
      than one class, consisting of Common Shares and one or more classes of
      Preferred Shares. The Board of Directors is authorized to determine the
      preferences, limitations and relative rights of any class of Preferred
      Shares before the issuance of any such Preferred Shares, or any class
      thereof. The Corporation will furnish, without charge, to any shareholder
      making a written request therefor, a written statement of the
      designations, relative rights, preferences, conversion and other rights,
      voting powers, restrictions, limitations as to dividends, qualifications
      and terms and conditions of redemption applicable to each class of shares.
      Requests for such written statement may be directed to the Secretary of
      the Corporation at the principal office of the Corporation."

                  "The shares represented by this certificate are subject to
      restrictions on Beneficial Ownership, Constructive Ownership and Transfer
      for the purpose of the Corporation's maintenance of its status as a "real
      estate investment trust" (a "REIT") under the Internal Revenue Code of
      1986, as amended, or any successor statute (the "Code"). Subject to
      certain further restrictions, and except as expressly provided in the
      Corporation's Charter, (i) no Person may Beneficially Own or
      Constructively Own shares of the Corporation's Common Shares or Preferred
      Shares in excess of 9.8% in value or number of shares (whichever is more
      restrictive) of the outstanding Common Shares or Preferred Shares,
      respectively, of the Corporation, (ii) no Person may Transfer or Acquire
      Equity Shares if such Transfer or Acquisition would result in the
      Corporation being owned by fewer than 100 Persons and (iii) no Person may
      Beneficially Own or Constructively Own Equity Shares that would result in


                                      E-7
<PAGE>

      the Corporation being "closely held" under Section 856(h) of the Code or
      otherwise cause the Corporation to fail to qualify as a REIT. Any Person
      who Beneficially Owns or Constructively Owns or attempts to Beneficially
      or Constructively Own Equity Shares which causes or will cause a Person to
      Beneficially Own or Constructively Own Equity Shares in violation of the
      above restrictions must immediately notify the Corporation. If some or all
      of the restrictions on transfer or ownership set forth in clauses (i) or
      (iii) are violated by a purported Transfer of the Equity Shares
      represented hereby, the Equity Shares represented hereby will be
      automatically transferred to a Trustee of a Trust for the benefit of one
      or more Charitable Beneficiaries. In addition, the Corporation may redeem
      Equity Shares represented hereby if a purported Transfer violates the
      restrictions described above. Furthermore, attempted Transfers in
      violation of the restrictions described above may be void ab initio. A
      Person who attempts to Beneficially or Constructively Own Equity Shares in
      violation of the restrictions described above shall have no claim, cause
      of action or any recourse whatsoever against a transferor of such Equity
      Shares. All capitalized terms in this legend have the meanings defined in
      the Charter of the Corporation, as the same may be amended from time to
      time, a copy of which, including the restrictions on transfer and
      ownership, will be furnished, without charge, to each holder of Equity
      Shares who directs a request to the Secretary of the Corporation at the
      principal office of the Corporation."

                  (iv) Absent a decision to the contrary by the Board (which the
Board may make in its sole and absolute discretion), the Equity Shares to be
affected by the remedies set forth in Sections 2(b)(ii) and 2(c) shall be as
follows: (1) if a Purported Beneficial Owner would have (but for the remedies
set forth in Sections 2(b)(ii) or 2(c), as applicable) Beneficially Owned or
Constructively Owned Equity Shares in violation of Section 2(b)(i) as a result
of an Acquisition of Equity Shares by such Purported Beneficial Owner, such
remedies (as applicable) shall apply first to the Equity Shares that, but for
such remedies, would have caused such violation and would have been directly
owned by such Purported Beneficial Owner, second to Equity Shares that, but for
such remedies, would have caused such violation but which would not have been
directly owned by such Purported Beneficial Owner, pro rata among the Persons
who actually attempted to Acquire such Equity Shares based upon the relative
value of what would have been the Purported Beneficial Owner's Beneficial
Ownership or Constructive Ownership interest in the Equity Shares such Person
attempted to acquire, third to other Equity Shares that are directly owned by
such Purported Beneficial Owner, and fourth to other Equity Shares that are
actually owned by such other Persons whose ownership of shares is attributed to
the Purported Beneficial Owner, pro rata among such Persons based upon the
relative value of the Purported Beneficial Owner's Beneficial Ownership or
Constructive Ownership interest in the Equity Shares so owned; and (2) if a
Purported Beneficial Owner would be in violation of Section 2(b)(i) as a result
of an event other than an Acquisition of Equity Shares by such Purported
Beneficial Owner, the remedies set forth in Sections 2(b)(ii) and 2(c) (as
applicable) shall apply first to Equity Shares that are directly owned by such
Purported Beneficial Owner and second to Equity Shares that are Beneficially or
Constructively Owned (but not directly owned) by such Person, pro rata among the
Persons who actually own such Equity Shares based upon the relative value of the
Purported Beneficial Owner's Beneficial Ownership or Constructive Ownership
interest in the Equity Shares so owned.


                                      E-8
<PAGE>

                  (v) Subject to subparagraph f(iii) below, nothing contained in
this Article VI shall limit the authority of the Board to take such other action
as it deems necessary or advisable to protect the Corporation and the interests
of its stockholders by preserving the Corporation's status as a RETT.

            (e) Transfers of Equity Shares in Trust

                  (i) Ownership in Trust. Upon any purported Transfer or
Acquisition described in Section 2(b)(ii) of this Article VI that causes Equity
Shares to be transferred to a Trust, such Equity Shares shall be deemed to have
been transferred to the Trustee in his or her capacity as trustee of a Trust for
the exclusive benefit of one or more Charitable Beneficiaries. Such transfer to
the Trustee shall be deemed to be effective as of the close of business on the
Business Day prior to the purported Transfer or Acquisition that results in a
transfer to the Trust pursuant to Section 2(b)(ii) of this Article VI. The
Trustee shall be appointed by the Corporation, and shall be a Person
unaffiliated with the Corporation, any Purported Beneficial Owner or any
Purported Record Owner. Each Charitable Beneficiary shall be designated by the
Corporation as provided in Section 2(e)(vi) of this Article VI. The Corporation
shall notify the Trustee of a transfer of Equity Shares to the Trust as soon as
practicable following discovery by the Corporation of such transfer.

                  (ii) Status of Equity Shares Held by the Trustee. Equity
Shares held by the Trustee shall be issued and outstanding shares of capital
stock of the Corporation. The Purported Beneficial Owner and Purported Record
Owner shall have no rights in the Equity Shares held by the Trustee. The
Purported Beneficial Owner and Purported Record Owner shall not benefit
economically from ownership of any Equity Shares held in trust by the Trust,
shall have no rights to dividends or other distributions and shall not possess
any rights to vote or other rights attributable to the Equity Shares held in the
Trust. The Purported Record Owner and the Purported Beneficial Owner shall
surrender to the Trustee any and all certificates representing Equity Shares
that have been transferred to the Trust, duly endorsed for transfer to the
Trustee.

                  (iii) Dividend and Voting Rights. The Trustee shall have all
voting rights and rights to dividends with respect to Equity Shares held in the
Trust, which rights shall be exercised for the exclusive benefit of the
Charitable Beneficiary. Any dividend or distribution with respect to such Equity
Shares paid to a Purported Beneficial Owner or Purported Record Owner prior to
the discovery by the Corporation that the Equity Shares have been transferred to
the Trustee shall be deemed to be held by the recipient thereof as agent for the
Trustee, and shall be paid to the Trustee upon demand, and any dividend or
distribution declared after the date of transfer to the Trustee but unpaid shall
be paid when due to the Trustee. Any dividends or distributions so paid to the
Trustee shall be held in trust for the Charitable Beneficiary. The Purported
Record Owner and Purported Beneficial Owner shall have no voting rights with
respect to Equity Shares held in the Trust and, subject to Maryland law,
effective as of the date the Equity Shares have been transferred to the Trustee,
the Trustee shall have the authority (at the Trustee's sole discretion) (1) to
rescind as void any vote cast by a Purported Record Owner or Purported
Beneficial Owner with respect to such Equity Shares prior to the discovery by
the Corporation that the Equity Shares have been transferred to the Trustee and
(2) to recast such vote in accordance with the desires of the Trustee acting for
the benefit of the Charitable Beneficiary; provided, however, that if the
Corporation has already taken irreversible corporate action, then the Trustee


                                      E-9
<PAGE>

shall not have the authority to rescind and recast such vote. Notwithstanding
the provisions of this Article VI, until the Corporation has received
notification that Equity Shares have been transferred into a Trust, the
Corporation shall be entitled to rely on its share transfer and other
stockholder records for purposes of preparing lists of stockholders entitled to
vote at meetings, determining the validity and authority of proxies and
otherwise conducting votes of stockholders.

                  (iv) Sale of Shares by Trustee. Within 20 days of receiving
notice from the Corporation that Equity Shares have been transferred to the
Trust, the Trustee of the Trust shall use best efforts to sell the Equity Shares
held in the Trust to a person, designated by the Trustee, whose ownership of the
Equity Shares will not violate the ownership limitations set forth in Section
2(b)(i) of this Article VI. Upon such sale, the interest of the Charitable
Beneficiary in the Equity Shares sold shall terminate and the Trustee shall
distribute the net proceeds of the sale to the Purported Record Owner and to the
Charitable Beneficiary as provided in this Section 2(e)(iv). The Purported
Record Owner shall receive the lesser of (1) the price paid by the Purported
Record Owner for the Equity Shares or, if the Purported Record Owner did not
give value for the Equity Shares (through a gift, devise or other transaction),
the Market Price of the Equity Shares on the day of the event causing the Equity
Shares to be held in the Trust and (2) the price per share received by the
Trustee from the sale or other disposition of the Equity Shares held in the
Trust (net of any commissions and other expenses of sale). Any net sales
proceeds in excess of the amount payable to the Purported Record Owner shall be
immediately paid to the Charitable Beneficiary, together with any dividends or
other distributions thereon. If, prior to the discovery by the Corporation that
Equity Shares have been transferred to the Trustee, such Equity Shares are sold
by a Purported Record Owner then (X) such Equity Shares shall be deemed to have
been sold on behalf of the Trust, (Y) the proceeds of such sale shall be deemed
to be held by such Purported Record Owner or Purported Beneficial Owner as a
agent for the Trustee and (Z) to the extent that the Purported Record Owner
received an amount for such Equity Shares that exceeds the amount that such
Purported Record Owner was entitled to receive pursuant to this Section
2(e)(iv), such excess shall be paid to the Trustee upon demand.

                  (v) Purchase Right in Stock Transferred to the Trustee. Equity
Shares transferred to the Trustee shall be deemed to have been offered for sale
to the Corporation, or its designee, at a price per share equal to the lesser of
(1) the price paid by the Purported Record Owner for the Equity Shares in the
transaction that resulted in such transfer to the Trust (or, if the event which
resulted in the transfer to the Trust did not involve a purchase of such Equity
Shares, the Market Price of such Equity Shares on the day of the event which
resulted in the transfer of such Equity Shares to the Trust) and (2) the Market
Price on the date the Corporation, or its designee, accepts such offer. The
Corporation shall have the right to accept such offer until the Trustee has sold
the Equity Shares held in the Trust pursuant to Section 2(e)(iv) of this Article
VI. Upon such a sale to the Corporation, the interest of the Charitable
Beneficiary in the Equity Shares sold shall terminate and the Trustee shall
distribute the net proceeds of the sale to the Purported Record Owner (minus any
dividend or distribution paid to the Purported Record Owner that the Purported
Record Owner was obligated to pay to the Trustee but has not paid to the Trustee
at the time of the distribution of the proceeds) and any dividends or other
distributions held by the Trustee with respect to such Equity Shares, together
with any amounts described in the preceding parenthetical of this sentence, to
the Charitable Beneficiary.


                                      E-10
<PAGE>

                  (vi) Designation of Charitable Beneficiaries. By written
notice to the Trustee, the Corporation shall designate one or more nonprofit
organizations to be the Charitable Beneficiary(ies) of the interest in the Trust
such that (1) the Equity Shares held in the Trust would not violate the
restrictions set forth in Section 2(b)(i) of this Article VI in the hands of
such Charitable Beneficiary and (2) each Charitable Beneficiary is an
organization described in Sections 170(b)(1)(A), 170(c)(2) and 501(c)(3) of the
Code.

            (f) Exemptions.

                  (i) The Board, in its sole and absolute discretion, may exempt
a Person from the limit set forth in Section 2(b)(i)(A) (but not from Sections
2(b)(i)(B) or (C)) of this Article VI, if the Board obtains such representations
and undertakings from such Person and any other Person as the Board may deem
appropriate; and such Person agrees in writing that any violation or attempted
violation of such representations or undertakings (or other action which is
contrary to the restrictions contained in Section 2(b) of this Article VI) will
result in the application of the remedies set forth in Sections 2(b)(ii) and
2(c) of this Article VI, to the extent necessary to prevent or cure such
violation or action, to the Equity Shares Beneficially or Constructively Owned
by such Person.

                  (ii) Nothing in Section 2(f)(i) of this Article VI shall be
deemed to require the Board to consider a request for exemption from the
restrictions in Section 2(b)(i)(A) of this Article VI. Prior to granting any
exemption pursuant to Section 2(f)(i) of this Article VI, the Board may require
a ruling from the Internal Revenue Service, an opinion of counsel, or both, in
any case in form and substance satisfactory to the Board in its sole and
absolute discretion, as it may deem necessary or advisable in order to determine
or ensure the Corporation's status as a REIT. Notwithstanding the receipt of any
ruling or opinion, the Board may impose such conditions or restrictions as it
deems appropriate in connection with granting such exemption. If a member of the
Board requests that the Board grant an exemption pursuant to Section 2(f)(i) of
this Article VI with respect to such member or to any other Person if such Board
member would be considered to be the Beneficial or Constructive Owner of Equity
Shares owned by such Person, such member of the Board shall not participate in
the decision of the Board as to whether to grant such exemption.

                  (iii) Nothing in this Article VI shall preclude the settlement
of a transaction entered into through the facilities of any stock exchange on
which Equity Shares are listed for trading. The fact that the settlement of any
transaction is permitted shall not negate the effect of any other provision of
this Article VI, and any transferee in such a transaction shall be subject to
all of the provisions and limitations set forth in this Article VI.

                  (iv) Section 2(b)(i)(A) of this Article VI shall not apply to
the Acquisition of Equity Shares or rights, options or warrants for, or
securities convertible into, Equity Shares by an underwriter in a public
offering, provided that such underwriter makes a timely distribution of such
Equity Shares or rights, options or warrants for, or securities convertible
into, Equity Shares.


                                      E-11
<PAGE>

Section 3. Preferred Shares.

            (a) Authority to Designate and Fix Rights and Restrictions of
Preferred Shares. The Board of Directors may authorize the issuance from time to
time of the Preferred Shares in one or more separately designated classes
(hereinafter a "class"). Prior to issuance of any shares of a class of Preferred
Shares, by resolution the Board of Directors shall

                  (i) designate such class in order to distinguish it from all
other then outstanding classes of Preferred Shares;

                  (ii) set the number of Preferred Shares to be included in such
class; and

                  (iii) subject to the provisions of Sections 2 and 5 of this
Article VI, and to the express limitations, if any, of any other classes of
which shares are outstanding at the time, set the preferences, conversion or
other rights, voting powers, restrictions, limitations as to dividends or other
distributions, qualifications and terms and conditions of the redemption of the
shares of such class, provided that all shares of any class shall be alike in
every particular, except that shares of such class issued at different times may
accumulate dividends from different dates.

            (b) Amendment of Terms. Subject to the provisions of Sections 2 and
5 of this Article VI and to the express limitations, if any, of any class of
Preferred Shares of which shares are outstanding at the time, by resolution the
Board of Directors may (i) increase or decrease (but not below the number of
Preferred Shares of such class then outstanding) the number of Preferred Shares
of any class; and (ii) alter the designation of, or classify or reclassify, any
unissued Preferred Shares of any class from time to time by setting or changing
the preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends or other distributions, qualifications or terms or
conditions of redemption of such class.

Section 4. Common Shares.

      Subject to the provisions of Sections 2 and 5 of this Article VI, the
Common Shares shall have the following preferences, rights, powers,
restrictions, limitations and qualifications and such others as may be afforded
by law:

            (a) Voting Rights. Except as may otherwise by required by law, and
subject to action, if any, by the Board of Directors, pursuant to Section 3 of
this Article VI, granting to the holders of one or more classes of Preferred
Shares exclusive voting powers with respect to specified matters, each holder of
Common Shares shall have one vote in respect of each Common Share held of record
on all matters to be voted upon by the stockholders.

            (b) Dividend Rights. After provision(s) with respect to preferential
dividends on any then outstanding classes of Preferred Shares, if any, fixed by
the Board of Directors pursuant to Section 3 of this Article VI, shall have been
satisfied, and after satisfaction of any other requirements, if any, including
with respect to redemption rights and preferences, in any such classes of
Preferred Shares, then and thereafter the holders of Common Shares shall be
entitled to receive, ratably in proportion to the number of Common Shares held
by them, such dividends as may be declared from time to time by the Board of


                                      E-12
<PAGE>

Directors out of funds legally available therefor. All distributions paid with
respect to the Common Shares shall be paid pro rata, with no preference to any
Common Share as compared with other Common Shares.

            (c) Liquidation Rights. In the event of the voluntary or involuntary
liquidation, dissolution or winding-up of the Corporation, after distribution in
full of the preferential amounts, if any, fixed pursuant to Section 3 of this
Article VI, to be distributed to the holders of any then outstanding Preferred
Shares, and subject to the right, if any, of the holders of any outstanding
Preferred Shares to participate further in any liquidating distributions, all of
the assets of the Corporation, if any, remaining, of whatever kind available for
distribution to stockholders after the foregoing distributions have been made
shall be distributed to the holders of the Common Shares, ratably in proportion
to the number of Common Shares held by them.

            (d) Purchase of Interests of Common Shares.

                  (i) The Corporation shall use its best efforts to redeem
Common Shares on an annual basis from holders of Common Shares desiring to have
such Common Shares redeemed upon the terms and conditions set forth below.

                  (ii) A holder of Common Shares wishing to have some or all of
his or her Common Shares redeemed by the Corporation must mail or deliver a
written request to the Corporation indicating his or her desire to have such
Common Shares redeemed for cash. Any such request must be received by the
Corporation on or before July 1 immediately preceding the January 1 date on
which the redemption is to be effective. The Corporation shall send the purchase
price for any Common Shares redeemed to the holder thereof no later than two
Business Days following such effective date. Any such request to have Common
Shares redeemed shall constitute an offer by the holder thereof to sell such
Common Shares and shall be irrevocable. If the Corporation does not have
sufficient funds to purchase all of the Common Shares so offered or is otherwise
prohibited from purchasing all of the Common Shares so offered, the Corporation
will redeem Common Shares in the order in which effective offers are received
from offerors to the extent that the Corporation has funds available therefor
and is not prohibited from redeeming Common Shares.

                  (iii) The purchase price for any Common Shares redeemed by the
Corporation will equal 90% of the Fair Market Value of the Common Shares. "Fair
Market Value" of a Common Share shall mean the fair market value as determined
by the Board of Directors in its sole and absolute discretion, after
consultation with an adviser selected by the Board of Directors. Any redemption
of Common Shares by the Corporation shall be effective as of January 1 of the
year following the year in which the corresponding offer was timely made
pursuant to Section 3(d)(ii). Any holder whose Common Shares are to be redeemed
shall execute and deliver such transfer and other documents and instruments as
the Corporation may reasonably request. Any Common Shares redeemed by the
Corporation shall be cancelled and shall be held in the treasury of the
Corporation.

                  (iv) In fulfilling the Corporation's obligation to use best
efforts to redeem Common Shares for which offers have been timely made pursuant
to Section 3(d)(ii), the Board of Directors shall be authorized to take such


                                      E-13
<PAGE>

steps as it deems appropriate, in its sole discretion, including without
limitation the disposition of assets of the Corporation and incurring
indebtedness on behalf of the Corporation.

                  (v) Notwithstanding anything herein to the contrary, no Common
Shares shall be redeemed by the Corporation pursuant to this Section 3(d) if:

                        (A) The Corporation is insolvent or such redemption
would render the Corporation insolvent;

                        (B) Such redemption would impair the capital or
operations of the Corporation;

                        (C) Such redemption would contravene any provision of
federal or state securities laws;

                        (D) Such redemption would result in the Corporation's
failing to qualify as a REIT; or

                        (E) The Board of Directors determines such redemption
would otherwise not be in the best interests of the Corporation.

                  (vi) If the Corporation is unable to redeem some or all of the
Common Shares offered for redemption, the Corporation shall use its best efforts
to arrange for a purchase of such Common Shares by a third party or parties,
each of whom shall be an "accredited investor" within the meaning of Rule 501(a)
of Regulation D promulgated under the Securities Act of 1933, as amended, and
shall have a pre-existing relationship with the Corporation (an "Accredited
Investor"); provided, however, that no such purchase shall be effected if it
would not be permitted under the terms of Section 3(d)(v). In addition, the
Corporation shall have the right to satisfy its obligations under Section
3(d)(i) by arranging for the purchase of Common Shares by any such Accredited
Investor or Investors for the price set forth in Section 3(d)(iii).

                  (vii) Any request for redemption of Common Shares by a holder
thereof pursuant to Section 3(d)(ii) shall be binding on such holder's
successors, heirs and assigns.

                  (viii) The Corporation shall not be obligated to effect any
redemptions pursuant to this Section 3(d) during any period that the Common
Shares are listed for trading on a national securities exchange or the NASDAQ
National Market System.

Section 5. General Provisions.

            (a) Interpretation and Ambiguities. In addition to the other powers
set forth in this Article VI, the Board shall have the power to interpret and to
construe the provisions of this Article VI, and in the case of an ambiguity in
the application of any of the provisions of this Article VI, including any
definition contained in Section 1, the Board shall have the power to determine
the application of the provisions of this Article VI with respect to any
situation based on the facts known to it, and any such interpretation,
construction and determination shall be final and binding on all interested
parties, including the stockholders.


                                      E-14
<PAGE>

            (b) Severability. If any provision of this Article VI or any
application of any such provision is determined to be void, invalid or
unenforceable by any court having jurisdiction over the issue, the validity and
enforceability of the remaining provisions shall not be affected and other
applications of such provision shall be affected only to the extent necessary to
comply with the determination of such court.

                                   ARTICLE VII
                               BOARD OF DIRECTORS

      The business and affairs of the Corporation shall be managed by a Board of
Directors which may exercise all of the powers of the Corporation except those
conferred on, or reserved to, the stockholders by law.

Section 1. Authorized Number and Initial Directors.

      The number of directors of the Corporation initially shall be six (6),
which number may be increased or decreased pursuant to the By-Laws of the
Corporation but in no event shall be less than the minimum number required by
the General Laws of the State of Maryland. Each director shall hold office until
the next annual meeting of the stockholders of the Corporation and until his or
her successor shall have been elected and qualified or until his or her earlier
death, resignation, retirement or removal. The names and the respective Classes
(as defined in Section 2 below) of the directors who will serve until the first
annual meeting of stockholders of the Corporation and until their successors are
elected and qualified are as follows:

      Janet P. Notopoulos     Class I
      R. Scott MacPhee        Class I
      Barbara J. Corinha      Class II
      William W. Gribbell     Class II
      George J. Carter        Class III
      Richard R. Norris       Class III

Section 2. Classified Board.

      The directors of the Corporation shall be and are hereby divided into
three Classes, designated "Class I," "Class II" and "Class III," respectively.
The number of directors in each Class shall be as nearly equal in number as
possible. Each director shall be elected by the stockholders and shall serve for
a term ending on the date of the third Annual Meeting of Stockholders following
the Annual Meeting at which such director was elected; provided, however, that
each initial director in Class I shall serve for a term ending on the date of
the Annual Meeting held in 2004; each initial director in Class II shall serve
for a term ending on the date of the Annual Meeting held in 2003; and each
initial director in Class III shall serve for a term ending on the date of the
Annual Meeting held in 2002.

Section 3. Effect of Increases and Decreases in the Authorized Number of
Directors.

      In the event of any increase or decrease in the authorized number of
directors:


                                      E-15
<PAGE>

            (a) Each director then serving shall nevertheless continue as a
director of the Class of which such director is a member until the expiration of
such director's term or such director's prior death, retirement, resignation or
removal; and

            (b) The newly created or eliminated directorships resulting from any
increase or decrease shall be apportioned by the Board of Directors among the
three Classes so as to keep the number of directors in each Class as nearly
equal as possible.

Section 4. Removal of Directors.

      A director may be removed from office only for cause based on a material
breach of his duties or obligations to the Corporation, and then only by the
affirmative vote of the holders of at least two-thirds of the votes entitled to
be cast in the election of directors.

Section 5. Filling Vacancies.

      Should a vacancy on the Board of Directors occur or be created (whether
arising through death, retirement, resignation or removal) other than through an
increase in the number of authorized directors, such vacancy shall be filled by
the affirmative vote of a majority of the remaining directors, even though less
than a quorum of the Board of Directors. A vacancy on the Board of Directors
resulting from an increase in the number of directors shall be filled by the
affirmative vote of a majority of the entire Board of Directors. A director so
elected to fill a vacancy shall serve for the remainder of the term of the Class
to which such director was elected.

                                  ARTICLE VIII
            PROVISIONS FOR DEFINING, LIMITING AND REGULATING CERTAIN
                      POWERS OF THE CORPORATION AND OF THE
                           SHAREHOLDERS AND DIRECTORS

      The following provisions are hereby adopted for the purposes of defining,
limiting and regulating the powers of the Corporation and of the directors and
stockholders:

Section 1. Powers of Board of Directors.

      The Board of Directors shall have the power from time to time and in its
sole discretion (a) to determine in accordance with sound accounting practice
what constitutes annual or other net profits, earnings, surplus or net assets in
excess of capital; (b) to fix and vary from time to time the amount to be
reserved as working capital, or determine that retained earnings or surplus
shall remain in the hands of the Corporation; (c) to set apart out of any funds
of the Corporation such reserve or reserves in such amount or amounts and for
such proper purposes as it shall determine and to abolish or redesignate any
such reserve or any part thereof; (d) to borrow or raise money upon any terms
for any corporate purposes; (e) to distribute and pay distributions or dividends
in stock, cash or other securities or property, out of surplus or any other
funds or amounts legally available therefor, at such times and to the
stockholders of record on such dates as it may, from time to time, determine;
and (f) to determine whether and to what extent and at what times and places and
under what conditions and regulations the books, accounts and documents of the
Corporation shall be open to the inspection of stockholders, except as otherwise
provided by statute or by the By-Laws of the Corporation, and, except as so


                                      E-16
<PAGE>

provided, no stockholder shall have the right to inspect any book, account or
document of the Corporation unless authorized so to do by resolution of the
Board of Directors.

Section 2. Limitation of Liability.

      The liability of the directors and officers of the Corporation to the
Corporation or its stockholders for money damages shall be limited to the
fullest extent permitted under the General Laws of the State of Maryland now or
hereafter in force, including, but not limited to, Section 5-349 of the Courts
and Judicial Proceedings Article of the Annotated Code of Maryland, or any
successor provision of law of similar import, and the directors and officers of
the Corporation shall have no liability whatsoever to the Corporation or its
stockholders for money damages except to the extent which such liability cannot
be limited or restricted under the General Laws of the State of Maryland now or
hereafter in force. Neither the amendment nor repeal of the foregoing sentence
of this Section 2 of Article VIII nor the adoption nor amendment of any other
provision of the Charter or By-Laws of the Corporation inconsistent with the
foregoing sentence shall apply to or affect in any manner the applicability of
the foregoing sentence with respect to any act or omission of any director or
officer occurring prior to any such amendment, repeal or adoption.

Section 3. Indemnification.

            (A) Actions, Suits and Proceedings. The Corporation shall indemnify
each person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative, investigative or otherwise, whether or not by or in
the right of the Corporation, by reason of the fact that he is or was, or has
agreed to become, a director or officer of the Corporation, or is or was
serving, or has agreed to serve, at the request of the Corporation, as a
director, officer, partner, trustee, employee or agent of, or in a similar
capacity with, another corporation, partnership, joint venture, trust or other
enterprise (including any employee benefit plan) (all such persons being
referred to hereafter as an "Indemnitee"), or by reason of any action alleged to
have been taken or omitted in such capacity, against all expenses (including
attorneys' fees), judgments, penalties, fines and amounts paid in settlement
actually and reasonably incurred by him or on his behalf in connection with such
action, suit or proceeding and any appeal therefrom, unless (I) (a) the act or
omission of the Indemnitee was material to the matter giving rise to the
proceeding and (b)(i) was committed in bad faith or (ii) was the result of
active and deliberate dishonesty or (II) the Indemnitee actually received an
improper personal benefit in money, property or services or (III) with respect
to any criminal proceeding, the Indemnitee had reasonable cause to believe that
the act or omission was unlawful; provided, however, that if the action, suit or
proceeding was one by or in the right of the Corporation, no indemnification
shall be made in respect of any such action, suit or proceeding in which the
Indemnitee shall have been adjudged liable to the Corporation. The termination
of any action, suit or proceeding by judgment, order or settlement shall not, of
itself, create a presumption that the person did not meet the requisite standard
of conduct set forth in this Subsection A. The termination of any proceeding by
conviction, or a plea of nolo contendere or its equivalent, or an entry of an
order of probation prior to judgment creates a rebuttable presumption that the
Indemnitee did not meet the requisite standard of conduct. Notwithstanding the
foregoing, the Corporation shall not indemnify an Indemnitee in respect of any
action, suit or proceeding charging improper personal benefit to the Indemnitee,


                                      E-17
<PAGE>

whether or not involving action in the Indemnitee's official capacity, in which
the Indemnitee was adjudged to be liable on the basis that personal benefit was
improperly received. Notwithstanding anything to the contrary in this Section,
except as set forth in Subsection F below, the Corporation shall not indemnify
an Indemnitee seeking indemnification in connection with a proceeding (or part
thereof) initiated by the Indemnitee unless the initiation thereof was approved
by the Board of Directors of the Corporation. Notwithstanding anything to the
contrary in this Section, the Corporation shall not indemnify an Indemnitee to
the extent such Indemnitee is reimbursed from the proceeds of insurance, and in
the event the Corporation makes any indemnification payments to an Indemnitee
and such Indemnitee is subsequently reimbursed from the proceeds of insurance,
such Indemnitee shall promptly refund such indemnification payments to the
Corporation to the extent of such insurance reimbursement.

            (B) Indemnification for Expenses of Successful Party.
Notwithstanding the other provisions of this Section, to the extent that an
Indemnitee has been successful, on the merits or otherwise, in defense of any
action, suit or proceeding referred to in Subsection A of this Section, or in
defense of any claim, issue or matter therein, or on appeal from any such
action, suit or proceeding, he shall be indemnified against all expenses
(including attorneys' fees) actually and reasonably incurred by him or on his
behalf in connection therewith. Without limiting the foregoing, if any action,
suit or proceeding is disposed of, on the merits or otherwise (including a
disposition without prejudice), without (i) the disposition being adverse to the
Indemnitee, (ii) an adjudication that the Indemnitee was liable to the
Corporation, (iii) a plea of guilty or nolo contendere by, or the entry of an
order of probation prior to judgment with respect to, the Indemnitee, (iv) an
adjudication that the Indemnitee acted in bad faith or that his action was the
result of active and deliberate dishonesty, an adjudication that the Indemnitee
received an improper personal benefit in money, property or services, and (vi)
with respect to any criminal proceeding, an adjudication that the Indemnitee had
reasonable cause to believe his conduct was unlawful, the Indemnitee shall be
considered for the purposes hereof to have been wholly successful with respect
thereto.

            (C) Notification and Defense of Claim. As a condition precedent to
his right to be indemnified, the Indemnitee must notify the Corporation in
writing as soon as practicable of any action, suit, proceeding or investigation
involving him for which indemnity will or could be sought. With respect to any
action, suit, proceeding or investigation of which the Corporation is so
notified, the Corporation will be entitled to participate therein at its own
expense and/or to assume the defense thereof at its own expense, with legal
counsel reasonably acceptable to the Indemnitee. After notice from the
Corporation to the Indemnitee of its election so to assume such defense, the
Corporation shall not be liable to the Indemnitee for any legal or other
expenses subsequently incurred by the Indemnitee in connection with such claim,
other than as provided below in this Subsection C. The Indemnitee shall have the
right to employ his own counsel in connection with such claim, but the fees and
expenses of such counsel incurred after notice from the Corporation of its
assumption of the defense thereof shall be at the expense of the Indemnitee
unless (i) the employment of counsel by the Indemnitee has been authorized by
the Corporation, (ii) counsel to the Indemnitee shall have reasonably concluded
that there may be a conflict of interest or position on any significant issue
between the Corporation and the Indemnitee in the conduct of the defense of such
action or (iii) the Corporation shall not in fact have employed counsel to
assume the defense of such action, in each of which cases the fees and expenses
of counsel for the Indemnitee shall be at the expense of the Corporation, except


                                      E-18
<PAGE>

as otherwise expressly provided by this Section 3. The Corporation shall not be
entitled, without the consent of the Indemnitee, to assume the defense of any
claim brought by or in the right of the Corporation or as to which counsel for
the Indemnitee shall have reasonably made the conclusion provided for in clause
(ii) above.

            (D) Advance of Expenses. Subject to the provisions of Subsection E
below, in the event that the Corporation does not assume the defense pursuant to
Subsection C of this Section of any action, suit, proceeding or investigation of
which the Corporation receives notice under this Section, any expenses
(including attorneys' fees) incurred by an Indemnitee in defending a civil or
criminal action, suit, proceeding or investigation or any appeal therefrom shall
be paid by the Corporation in advance of the final disposition of such matter;
provided, however, that the payment of such expenses incurred by an Indemnitee
in advance of the final disposition of such matter shall be made only upon
receipt of (i) a written affirmation by the Indemnitee of the Indemnitee's good
faith belief that the standard of conduct necessary for indemnification has been
met and (ii) an undertaking by or on behalf of the Indemnitee to repay all
amounts so advanced in the event that it shall ultimately be determined that the
Indemnitee is not entitled to be indemnified by the Corporation as authorized in
this Section. Such undertaking need not be secured and shall be accepted without
reference to the financial ability of the Indemnitee to make such repayment.

            (E) Procedure for Indemnification. In order to obtain
indemnification or advancement of expenses pursuant to Subsections A, B or D of
this Section, the Indemnitee shall submit to the Corporation a written request,
including in such request such documentation and information as is reasonably
available to the Indemnitee and is reasonably necessary to determine whether and
to what extent the Indemnitee is entitled to indemnification or advancement of
expenses. Any such indemnification or advancement of expenses shall be made
promptly, and in any event within 60 days after receipt by the Corporation of
the written request of the Indemnitee, unless with respect to requests under
Subsections A or D the Corporation determines within such 60-day period that the
Indemnitee did not meet the applicable standard of conduct set forth in
Subsection A. Such determination shall be made in each instance by (a) a
majority vote of a quorum of the Board of Directors of the Corporation,
consisting of directors, not, at the time, parties to the proceeding
("disinterested directors"), or, if such a quorum cannot be obtained, then by a
majority vote of a committee of the directors, consisting solely of two or more
disinterested directors, who are duly designated to act in the matter by a
majority vote of the full Board of Directors, in which the directors who are
parties may participate, (b) a majority vote of a quorum of the outstanding
shares of stock of all classes entitled to vote for directors, voting as a
single class, which quorum shall consist of stockholders who are not at that
time parties to the action, suit or proceeding in question, (c) special legal
counsel (who may, to the extent permitted by law, be regular legal counsel to
the Corporation) selected by a majority vote of a quorum of the directors
consisting of disinterested directors, or by a majority vote of a committee
consisting of two or more disinterested directors, who are duly designated to
act in the matter by a majority vote of the full Board of Directors, in which
the directors who are parties may participate, or, if the requisite quorum of
the full Board of Directors cannot be obtained therefor and the committee cannot
be established, by a majority vote of the full Board of Directors, in which
directors who are parties may participate, or (d) a court of competent
jurisdiction.


                                      E-19
<PAGE>

            (F) Remedies. The right to indemnification or advances as granted by
this Section shall be enforceable by the Indemnitee in any court of competent
jurisdiction if the Corporation denies such request, in whole or in part, or if
no disposition thereof is made within the 60-day period referred to above in
Subsection E. Unless otherwise required by law, the burden of proving that the
Indemnitee is not entitled to indemnification or advancement of expenses under
this Section shall be on the Corporation. Neither the failure of the Corporation
to have made a determination prior to the commencement of such action that
indemnification is proper in the circumstances because the Indemnitee has met
the applicable standard of conduct, nor an actual determination by the
Corporation pursuant to Subsection E that the Indemnitee has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that the Indemnitee has not met the applicable standard of conduct.
The Indemnitee's expenses (including attorneys' fees) incurred in connection
with successfully establishing his right to indemnification, in whole or in
part, in any such proceeding shall also be indemnified by the Corporation.

            (G) Subsequent Amendment. No amendment, termination or repeal of
this Section or of the relevant provisions of the General Corporation Law of
Maryland or any other applicable laws shall affect or diminish in any way the
rights of any Indemnitee to indemnification under the provisions hereof with
respect to any action, suit, proceeding or investigation arising out of or
relating to any actions, transactions or facts occurring prior to the final
adoption of such amendment, termination or repeal.

            (H) Other Rights. The indemnification and advancement of expenses
provided by this Section shall not be deemed exclusive of any other rights to
which an Indemnitee seeking indemnification or advancement of expenses may be
entitled under any law (common or statutory), agreement or vote of stockholders
or disinterested directors or otherwise, both as to action in his official
capacity and as to action in any other capacity while holding office for the
Corporation, and shall continue as to an Indemnitee who has ceased to be a
director or officer, and shall inure to the benefit of the estate, heirs,
executors and administrators of the Indemnitee. Nothing contained in this
Section shall be deemed to prohibit, and the Corporation is specifically
authorized to enter into, agreements with officers and directors providing
indemnification rights and procedures different from those set forth in this
Section. In addition, the Corporation may, to the extent authorized from time to
time by its Board of Directors, grant indemnification rights to other employees
or agents of the Corporation or other persons serving the Corporation and such
rights may be equivalent to, or greater or less than, those set forth in this
Section.

            (I) Partial Indemnification. If an Indemnitee is entitled under any
provision of this Section to indemnification by the Corporation for some or a
portion of the expenses (including attorneys' fees), judgments, fines or amounts
paid in settlement actually and reasonably incurred by him or on his behalf in
connection with any action, suit, proceeding or investigation and any
appealtherefrom but not, however, for the total amount thereof, the Corporation
shall nevertheless indemnify the Indemnitee for the portion of such expenses
(including attorneys' fees), judgments, fines or amounts paid in settlement to
which the Indemnitee is entitled.


                                      E-20
<PAGE>

            (J) Insurance. The Corporation may purchase and maintain insurance,
at its expense, to protect itself and any director, officer, employee or agent
of the Corporation or any such person who, while a director, officer, employee
or agent of the Corporation, is or was serving at the request of the Corporation
as a director, officer, partner, trustee, employee or agent of another foreign
or domestic corporation, partnership, joint venture, trust or other enterprise
(including any employee benefit plan) against any expense, liability or loss
asserted against and incurred by him in any such capacity, or arising out of his
status as such, whether or not the Corporation would have the power to indemnify
such person against such expense, liability or loss under the General
Corporation Law of Maryland.

            (K) Merger or Consolidation. If the Corporation is merged into or
consolidated with another corporation and the Corporation is not the surviving
corporation, the surviving corporation shall assume the obligations of the
Corporation under this Section with respect to any action, suit, proceeding or
investigation arising out of or relating to any actions, transactions or facts
occurring prior to the date of such merger or consolidation.

            (L) Savings Clause. If this Section or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify each Indemnitee as to any expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement in
connection with any action, suit, proceeding or investigation, whether civil,
criminal or administrative, including an action by or in the right of the
Corporation, to the fullest extent permitted by any applicable portion of this
Section that shall not have been invalidated and to the fullest extent permitted
by applicable law.

            (M) Definitions. Terms used herein and defined in Section 2-418(a)
of the General Corporation Law of Maryland shall have the respective meanings
assigned to such terms in such Section 2-418(a).

            (N) Subsequent Legislation. If the General Corporation Law of
Maryland is amended after adoption of this Section to expand further the
indemnification permitted to Indemnitees, then the Corporation shall indemnify
such persons to the fullest extent permitted by the General Corporation Law of
Maryland, as so amended.

Section 4. Board Authorization of Share Issuance.

      The Board of Directors of the Corporation shall have the power in its sole
discretion and without limitation, to authorize the issuance at any time and
from time to time of shares of stock of the Corporation, with or without par
value, of any class now or hereafter authorized and of securities convertible
into or exchangeable for shares of the stock of the Corporation, with or without
par value, of any class now or hereafter authorized, for such consideration
(irrespective of the value or amount of such consideration) and in such manner
and by such means as said Board of Directors may deem advisable.

Section 5. Classification or Reclassification of Shares.

      The Board of Directors shall have the power in its sole discretion and
without limitation to classify or reclassify, by articles supplementary, any
unissued shares of stock, whether now or hereafter authorized, by setting,
altering or eliminating in any one or more respects, from time to time before
the issuance of such shares, any feature of such shares, including but not
limited to the designation, preferences, conversion or other rights, voting
powers, qualifications and terms and conditions of redemption of, and
limitations as to dividends and any restrictions on, such shares.


                                      E-21
<PAGE>

Section 6. Voting Requirements.

      Notwithstanding any provision of law to the contrary, except as provided
in Article IX, the affirmative vote of the holders of a majority of the shares
of capital stock issued and outstanding and entitled to vote on any proposed
amendment of the Charter of the Corporation shall be sufficient, valid and
effective, after due authorization, approval and advice by the Board of
Directors, to approve and authorize such amendment. Notwithstanding any
provision of the law to the contrary, the affirmative vote of the holders of a
majority of the shares of capital stock issued and outstanding and entitled to
vote on any transaction for which approval of the stockholders is required by
Section 3-105 of the General Corporation Law of Maryland, or any successor
provision of law of similar import, in addition to any vote of the holders of
Preferred Shares required by the terms of then outstanding Preferred Shares,
shall be sufficient to give the approval required by Section 3-105 or such
successor provision.

Section 7. REIT Qualification.

      The Board of Directors shall use its reasonable best efforts to cause the
Corporation and its shareholders to qualify for U.S. federal income tax
treatment in accordance with the provisions of the Code applicable to a REIT. In
furtherance of the foregoing, the Board of Directors shall use its reasonable
best efforts to take such actions as are necessary, and may take such actions as
in its sole judgment and discretion are desirable, to preserve the status of the
Corporation as a REIT, provided, however, that if the Board of Directors
determines in its discretion that it is no longer in the best interests of the
Corporation to continue to have the Corporation qualify as a REIT, the Board of
Directors may revoke or otherwise terminate the Corporation's REIT election
pursuant to Section 856(g) of the Code.

      The enumeration and definition of particular powers of the Board of
Directors included in this Article VIII shall in no way be limited or restricted
by reference to or inference from the terms of any other clause of this or any
other Article of the Charter of the Corporation, or construed as or deemed by
inference or otherwise in any manner to exclude or limit any powers conferred
upon the Board of Directors under the General Laws of the State of Maryland now
or hereafter in force.

                                   ARTICLE IX
                                   AMENDMENTS

            (a) Right to Amend Articles. Subject to the provisions hereof, the
Corporation reserves the right at any time, and from time to time, to amend,
alter, repeal, or rescind any provision contained herein, including but not
limited to the provisions setting forth the contract and other rights of the
issued and outstanding stock of the Corporation of any class, in the manner now
or hereafter prescribed by law, and other provisions authorized by the laws of
the State of Maryland at the time in force may be added or inserted, in the
manner now or hereafter prescribed by law; and all contract or other rights,
preferences and privileges of whatsoever nature conferred upon shareholders,
directors, officers, employees or any other persons whomsoever by and pursuant
to these Articles of Incorporation, in its present form or as hereafter amended,
are granted subject to this reservation.


                                      E-22
<PAGE>

            (b) Certain Amendments Requiring Special Shareholder Vote. Any
provision of law, these Articles of Incorporation, including, without
limitation, Article VIII, Section 7, or the By-Laws of the Corporation to the
contrary notwithstanding:

                  (i) no term or provision of these Articles of Incorporation
may be added, amended or repealed in any respect that would, in the
determination of the Board of Directors, cause the Corporation not to qualify as
a REIT under the Code unless the Board of Directors shall have determined in
accordance with Section 8 of Article VIII that it is no longer in the best
interests of the Corporation to continue to have the Corporation qualify as a
REIT;

                  (ii) Article VII, Section 2 (classification of directors) and
Section 5 (removal of directors); Article VII, Section 2 (limitation of
liability of officers and directors) and Section 3 (indemnification of officers
and directors); and this Article IX shall not be amended or repealed nor shall
any provision be adopted which is inconsistent with any of the foregoing; and

                  (iii) no provisions imposing cumulative voting in the election
of directors may be added to these Articles of Incorporation; unless in each
such case, in addition to any vote of the holders of Preferred Shares required
by the terms of then outstanding Preferred Shares, such action is approved by
the affirmative vote of the holders of not less than eighty percent (80%) of the
shares of capital stock of the Corporation issued and outstanding and entitled
to vote on the matter.

      IN WITNESS WHEREOF, I have signed these Articles of Incorporation,
acknowledging the same to be my act on this 4th day of October, 2001.


                              /s/ Kenneth A. Hoxsie


                                      E-23

<PAGE>


                                     PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

Item 20. Indemnification of Directors and Officers

      Our Articles of Incorporation require us to indemnify our directors,
officers, employees, agents and other persons acting on behalf of or at our
request to the fullest extent permitted from time to time by Maryland law. The
General Corporation Law of the State of Maryland permits a corporation to
indemnify its directors, officers and certain other parties against judgments,
penalties, fines, settlements and reasonable expenses, including attorneys'
fees, actually incurred by them in connection with any proceeding to which they
may be made a party by reason of their services to or at the request of the
corporation, unless it is established that (i) the act or omission of the
indemnified party was material to the matter giving rise to the proceeding and
was committed in bad faith or was the result of active and deliberate
dishonesty, (ii) the indemnified party actually received an improper personal
benefit, or (iii) in the case of any criminal proceeding, the indemnified party
had reasonable cause to believe that the act or omission was unlawful.
Indemnification may be made against judgments, penalties, fines, settlements and
reasonable expenses actually incurred by the director or officer in connection
with the proceeding; provided, however, that if the proceeding is one by or in
the right of the corporation, indemnification may not be made with respect to
any proceeding in which the director or officer has been adjudged to be liable
to the corporation. In addition, a director or officer may not be indemnified
with respect to any proceeding charging improper personal benefit to the
director or officer in which the director or officer was adjudged to be liable
on the basis that personal benefit was improperly received.

      Our Articles of Incorporation contain a provision eliminating the personal
liability of a director or officer to us or our stockholders for monetary
damages to the fullest extent permitted by Maryland law. The General Corporation
Law of the State of Maryland permits the liability of directors and officers to
a corporation or its stockholders for money damages to be limited, except (i) to
the extent that a judgment or other final adjudication is entered adverse to the
director or officer in a proceeding based on a finding that the director's or
officer's action, or failure to act, was the result of active and deliberative
dishonesty and was material to the cause of action adjudicated in the proceeding
or (ii) to the extent it is proved that the director or officer actually
received an improper benefit or profit in money, property or services. This
provision of the General Corporation Law of the State of Maryland does not limit
our ability or our stockholders' ability to obtain other relief, such as an
injunction or rescission.

      We do not have directors and officers liability insurance for the benefit
of our directors and officers.


                                      II-1
<PAGE>

Item 21. Exhibits and Financial Statement Schedules

      (a)   Exhibits.

Exhibit No.   Exhibit
- -----------   -------

2.1(1)        Agreement and Plan of Merger, dated as of August 13, 2004, by
              and among the Registrant, Montague Acquisition Corp., Addison
              Circle Acquisition Corp., Royal Ridge Acquisition Corp., Collins
              Crossing Acquisition Corp., FSP Montague Business Center Corp.,
              FSP Addison Circle Corp., FSP Royal Ridge Corp. and FSP Collins
              Crossing Corp. (filed as Annex A to the consent
              solicitation/prospectus, constituting a part of this
              Registration Statement and incorporated herein by reference to
              Exhibit 2.1 to the Registrant's Current Report on Form 8-K,
              dated August 13, 2004, filed on August 13, 2004).

3.1           Articles of Incorporation of Registrant (filed as Annex E to the
              consent solicitation/prospectus, constituting a part of this
              Registration Statement and incorporated herein by reference to
              Appendix B of the Registrant's Definitive Proxy Statement on
              Schedule 14A, filed on December 18, 2001).

3.2           ByLaws of Registrant (incorporated by reference to Appendix C of
              the Registrant's Definitive Proxy Statement on Schedule 14A,
              filed on December 18, 2001).

4.1           Specimen of Common Stock Certificate of Registrant.*

5.1           Opinion of Wilmer Cutler Pickering Hale and Dorr LLP.*

8.1           Form of opinion of Wilmer Cutler Pickering Hale and Dorr LLP
              regarding tax matters.*

21.1          Subsidiaries of the Registrant.*

23.1          Consent of Wilmer Cutler Pickering Hale and Dorr LLP (included
              in Exhibit 5.1).*

23.2          Form of consent of Wilmer Cutler Pickering Hale and Dorr LLP
              (included in Exhibit 8.1).*

23.3          Consent of Ernst & Young LLP regarding the financial statements
              of the Registrant.*

23.4          Consent of PricewaterhouseCoopers LLP regarding the financial
              statements of the Registrant.*

23.5          Consent of Braver & Co. regarding the financial statements of
              FSP Montague Business Center Corp., FSP Addison Circle Corp.,
              FSP Royal Ridge Corp. and FSP Collins Crossing Corp.*

24.1          Power of Attorney (included in the Signature Pages of this
              Registration Statement).*


                                      II-2
<PAGE>

Exhibit No.   Exhibit
- -----------   -------

99.1          Appraisal of FSP Addison Circle Corp. prepared by Bryan E.
              Humphries and Associates.*

99.2          Appraisal of FSP Collins Crossing Corp. prepared by Bryan E.
              Humphries and Associates.*

99.3          Appraisal of FSP Montague Business Center Corp. prepared by
              Cushman & Wakefield of California, Inc.*

99.4          Appraisal of FSP Royal Ridge Corp. prepared by BRE- Valuation
              and Advisory Services.*

99.5          Form of Consent for Target REITs.*

99.6          Consent of A.G. Edwards & Sons, Inc.*

99.7          Fairness Opinion delivered to the Board of Directors of FSP
              Addison Circle Corp. and filed as Annex C-1 to the consent
              solicitation/prospectus, constituting a part of this
              Registration Statement and incorporated herein by reference)

99.8          Fairness Opinion delivered to the Board of Directors of FSP
              Collins Crossing Corp. and filed as Annex C-2 to the consent
              solicitation/prospectus, constituting a part of this
              Registration Statement and incorporated herein by reference).

99.9          Fairness Opinion delivered to the Board of Directors of FSP
              Montague Business Center Corp. and filed as Annex C-3 to the
              consent solicitation/prospectus, constituting a part of this
              Registration Statement and incorporated herein by reference).

99.10         Fairness Opinion delivered to the Board of Directors of FSP
              Royal Ridge Corp. and filed as Annex C-4 to the consent
              solicitation/prospectus, constituting a part of this
              Registration Statement and incorporated herein by reference).

99.11         Supplement for FSP Montague Business Center Corp.*

99.12         Supplement for FSP Addison Circle Corp.*

99.13         Supplement for FSP Royal Ridge Corp.*

99.14         Supplement for FSP Collins Crossing Corp.*

- ---------
(1)   The Registrant agrees to furnish supplementally a copy of any omitted
      schedules to this agreement to the Securities and Exchange Commission.

*     Filed herewith.

                                      II-3
<PAGE>

Item 22. Undertakings

      (a) The undersigned registrant hereby undertakes:

            (1) To file, during any period in which offers or sales are being
      made, a post-effective amendment to this registration statement:

                  (i)To include any prospectus required by Section 10(a)(3) of
            the Securities Act of 1933.

                  (ii) To reflect in the prospectus any facts or events arising
            after the effective date of the registration statement (or the most
            recent post-effective amendment thereof) which, individually or in
            the aggregate, represent a fundamental change in the information set
            forth in the registration statement. Notwithstanding the foregoing,
            any increase or decrease in volume of securities offered (if the
            total dollar amount of securities offered would not exceed that
            which was registered) and any deviation from the low or high end of
            the estimated maximum offering range may be reflected in the form of
            prospectus filed with the Commission pursuant to Rule 424(b) if, in
            the aggregate, the changes in volume and price represent no more
            than a 20 percent change in the maximum aggregate offering price set
            forth in the "Calculation of Registration Fee" table in the
            effective registration statement.

                  (iii) To include any material information with respect to the
            plan of distribution not previously disclosed in the registration
            statement or any material change to such information in the
            registration statement.

provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act that are incorporated
by reference in the registration statement.

            (2) That, for the purpose of determining any liability under the
      Securities Act of 1933, each such post-effective amendment shall be deemed
      to be a new registration statement relating to the securities offered
      therein, and the offering of such securities at that time shall be deemed
      to be the initial bona fide offering thereof.

            (3) To remove from registration by means of a post-effective
      amendment any of the securities being registered that remain unsold at the
      termination of the offering.

      (b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

      (c) The undersigned registrant hereby undertakes as follows:

            (1) That prior to any public reoffering of the securities registered
      hereunder through use of a prospectus which is a part of this registration
      statement, by any person or party who is deemed to be an underwriter
      within the meaning of Rule 145(c), the issuer undertakes that such


                                      II-4
<PAGE>

      reoffering prospectus will contain the information called for by the
      applicable registration form with respect to reofferings by persons who
      may be deemed underwriters, in addition to the information called for by
      the other items of the applicable form.

            (2) The registrant undertakes that every prospectus (i) that is
      filed pursuant to paragraph (c)(1) immediately preceding, or (ii) that
      purports to meet the requirements of Section 10(a)(3) of the Securities
      Act of 1933 and is used in connection with an offering of securities
      subject to Rule 415, will be filed as a part of an amendment to the
      registration statement and will not be used until such amendment is
      effective, and that, for purposes of determining any liability under the
      Securities Act of 1933, each such post-effective amendment shall be deemed
      to be a new registration statement relating to the securities offered
      therein, and the offering of such securities at that time shall be deemed
      to be the initial bona fide offering thereof.

      (d) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.

      (e) The undersigned registrant hereby undertakes to respond to requests
for information that is incorporated by reference into the prospectus pursuant
to Items 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of this registration statement through
the date of responding to the request.

      (f) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.


                                      II-5
<PAGE>

                                   SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the town of Wakefield, Commonwealth
of Massachusetts, on the 1st day of September, 2004.

                                     FRANKLIN STREET PROPERTIES CORP.


                                     By:  /s/ George J. Carter
                                          ---------------------
                                          George J. Carter
                                          President and Chief Executive Officer

                        POWER OF ATTORNEY AND SIGNATURES

      Each of the undersigned officers and directors of Franklin Street
Properties Corp., hereby severally constitutes and appoints George J. Carter and
Barbara J. Fournier, and each of them, his or her true and lawful
attorneys-in-fact and agents, with full powers of substitution and
resubstitution, for him or her and in his or her name, place and stead, in any
and all capacities, to sign any or all amendments to this registration statement
to which this Power of Attorney is attached, including post-effective
amendments, and any subsequent registration statement for the same offering
which may be filed under Rule 462(b) promulgated under the Securities Act of
1933, as amended, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents and
purposes as he or she might or could do in person, and hereby ratifies and
confirms all said attorneys-in-fact and agents, or either of them, or his or her
substitute or substitutes may lawfully do or cause to be done by virtue thereof.

      Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.


Signature                     Title                            Date
- ---------                     -----                            ----


/s/ George J. Carter         President, Chief Executive        September 1, 2004
- --------------------------   Officer and Director
George J. Carter             (Principal Executive Officer)


/s/ Barbara J. Fournier      Vice President, Chief Operating   September 1, 2004
- --------------------------   Officer, Secretary and Treasurer
Barbara J. Fournier          (Principal Financial Officer)


/s/ Lloyd S. Dow             Controller                        September 1, 2004
- --------------------------   (Principal Accounting Officer)
Lloyd S. Dow


                                     II-6
<PAGE>

/s/ John N. Burke            Director                          September 1, 2004
- --------------------------
John N. Burke


/s/ Dennis J. McGillicuddy   Director                          September 1, 2004
- --------------------------
Dennis J. McGillicuddy


/s/ Janet P. Notopoulos      Director                          September 1, 2004
- --------------------------
Janet P. Notopoulos


/s/ Richard R. Norris        Director                          September 1, 2004
- --------------------------
Richard R. Norris


/s/ Barry Silverstein        Director                          September 1, 2004
- --------------------------
Barry Silverstein


                                      II-7
<PAGE>

                                  EXHIBIT INDEX

Exhibit No.   Exhibit
- -----------   -------

2.1(1)        Agreement and Plan of Merger, dated as of August 13, 2004, by
              and among the Registrant, Montague Acquisition Corp., Addison
              Circle Acquisition Corp., Royal Ridge Acquisition Corp., Collins
              Crossing Acquisition Corp., FSP Montague Business Center Corp.,
              FSP Addison Circle Corp., FSP Royal Ridge Corp. and FSP Collins
              Crossing Corp. (filed as Annex A to the consent
              solicitation/prospectus, constituting a part of this
              Registration Statement and incorporated herein by reference to
              Exhibit 2.1 to the Registrant's Current Report on Form 8-K,
              dated August 13, 2004, filed on August 13, 2004).

3.1           Articles of Incorporation of Registrant (filed as Annex E to the
              consent solicitation/prospectus, constituting a part of this
              Registration Statement and incorporated herein by reference to
              Appendix B of the Registrant's Definitive Proxy Statement on
              Schedule 14A, filed on December 18, 2001).

3.2           ByLaws of Registrant (incorporated by reference to Appendix C of
              the Registrant's Definitive Proxy Statement on Schedule 14A,
              filed on December 18, 2001).

4.1           Specimen of Common Stock Certificate of Registrant.*

5.1           Opinion of Wilmer Cutler Pickering Hale and Dorr LLP.*

8.1           Form of opinion of Wilmer Cutler Pickering Hale and Dorr LLP
              regarding tax matters.*

21.1          Subsidiaries of the Registrant.*

23.1          Consent of Wilmer Cutler Pickering Hale and Dorr LLP (included
              in Exhibit 5.1).*

23.2          Form of consent of Wilmer Cutler Pickering Hale and Dorr LLP
              (included in Exhibit 8.1).*

23.3          Consent of Ernst & Young LLP regarding the financial statements
              of the Registrant.*

23.4          Consent of PricewaterhouseCoopers LLP regarding the financial
              statements of the Registrant.*

23.5          Consent of Braver & Co. regarding the financial statements of
              FSP Montague Business Center Corp., FSP Addison Circle Corp.,
              FSP Royal Ridge Corp. and FSP Collins Crossing Corp.*

24.1          Power of Attorney (included in the Signature Pages of this
              Registration Statement).*

99.1          Appraisal of FSP Addison Circle Corp. prepared by Bryan E.
              Humphries and Associates.*

<PAGE>

Exhibit No.   Exhibit
- -----------   -------

99.2          Appraisal of FSP Collins Crossing Corp. prepared by Bryan E.
              Humphries and Associates.*

99.3          Appraisal of FSP Montague Business Center Corp. prepared by
              Cushman & Wakefield of California, Inc.*

99.4          Appraisal of FSP Royal Ridge Corp. prepared by BRE- Valuation
              and Advisory Services.*

99.5          Form of Consent for Target REITs.*

99.6          Consent of A.G. Edwards & Sons, Inc.*

99.7          Fairness Opinion delivered to the Board of Directors of FSP
              Addison Circle Corp. and filed as Annex C-1 to the consent
              solicitation/prospectus, constituting a part of this
              Registration Statement and incorporated herein by reference)

99.8          Fairness Opinion delivered to the Board of Directors of FSP
              Collins Crossing Corp. and filed as Annex C-2 to the consent
              solicitation/prospectus, constituting a part of this
              Registration Statement and incorporated herein by reference).

99.9          Fairness Opinion delivered to the Board of Directors of FSP
              Montague Business Center Corp. and filed as Annex C-3 to the
              consent solicitation/prospectus, constituting a part of this
              Registration Statement and incorporated herein by reference).

99.10         Fairness Opinion delivered to the Board of Directors of FSP
              Royal Ridge Corp. and filed as Annex C-4 to the consent
              solicitation/prospectus, constituting a part of this
              Registration Statement and incorporated herein by reference).

99.11         Supplement for FSP Montague Business Center Corp.*

99.12         Supplement for FSP Addison Circle Corp.*

99.13         Supplement for FSP Royal Ridge Corp.*

99.14         Supplement for FSP Collins Crossing Corp.*

- ---------
(1)   The Registrant agrees to furnish supplementally a copy of any omitted
      schedules to this agreement to the Securities and Exchange Commission.

*     Filed herewith.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.1
<SEQUENCE>2
<FILENAME>ex4-1.txt
<TEXT>

                                                                     Exhibit 4.1


[FRONT OF STOCK CERTIFICATE]

RESTRICTED SECURITIES                                SEE LEGENDS ON REVERSE SIDE


                                State of Maryland




       0                                                                0

                        Franklin Street Properties Corp.
     FULLY                                                        NON-ASSESSABLE
                                  Common Stock

                           $.0001 Par Value Per Share






                                                   Specimen
                           of Franklin Street Properties Corp.





      President                                                  Treasurer

<PAGE>

[REVERSE OF STOCK CERTIFICATE]

                  The shares represented by this certificate have not been
            registered under the Securities Act of 1933, as amended, and may not
Franklin    be transferred, pledged or hypothecated unless and until such shares
            are registered under such Act or an opinion of counsel satisfactory
 Specimen   to the Company is obtained to the effect that such registration is
            not required.

0                 The Corporation is authorized to issue capital stock of more
$.0001 Par  than one class, consisting of Common Shares and one or more classes
State of    of Preferred Shares. The Board of Directors is authorized to
            determine the preferences, limitations and relative rights of any
            class of Preferred Shares before the issuance of any such Preferred
0           Shares, or any class thereof. The Corporation will furnish, without
            charge, to any shareholder making a written request therefor, a
            written statement of the designations, relative rights, preferences,
Franklin    conversion and other rights, voting powers, restrictions,
            limitations as to dividends, qualifications and terms and conditions
            of redemption applicable to each class of shares. Requests for such
            written statement may be directed to the Secretary of the
            Corporation at the principal office of the Corporation.

                  The shares represented by this certificate are subject to
            restrictions on Beneficial Ownership, Constructive Ownership and
            Transfer for the purpose of the Corporation's maintenance of its
            status as a "real estate investment trust" (a "REIT") under the
            Internal Revenue Code of 1986, as amended, or any successor statute
            (the "Code"). Subject to certain further restrictions, and except as
            expressly provided in the Corporation's Charter, (i) no Person may
Common      Beneficially Own or Constructively Own shares of the Corporation's
            Common Shares or Preferred Shares in excess of 9.8% in value or
0           number of shares (whichever is more restrictive) of the outstanding
President   Common Shares or Preferred Shares, respectively, of the Corporation,
            (ii) no Person may Transfer or Acquire Equity Shares if such
            Transfer or Acquisition would result in the Corporation being owned
Treasurer   by fewer than 100 Persons and (iii) no Person may Beneficially Own
            or Constructively Own Equity Shares that would result in the
            Corporation being "closely held" under Section 856(h) of the Code or
            otherwise cause the Corporation to fail to qualify as a REIT. Any
0           Person who Beneficially Owns or Constructively Owns or attempts to
            Beneficially or Constructively Own Equity Shares which causes or
0           will cause a Person to Beneficially Own or Constructively Own Equity
 Specimen   Shares in violation of the above restrictions must immediately
            notify the Corporation. If some or all of the restrictions on
            transfer or ownership set forth in clauses (i) or (iii) are violated
            by a purported Transfer of the Equity Shares represented hereby, the
            Equity Shares represented hereby will be automatically transferred
            to a Trustee of a Trust for the benefit of one or more Charitable
            Beneficiaries. In addition, the Corporation may redeem Equity Shares
            represented hereby if a purported Transfer violates the restrictions
            described above. Furthermore, attempted Transfers in violation of
            the restrictions described above may be void ab initio. A Person who
            attempts to Beneficially or Constructively Own Equity Shares in
            violation of the restrictions described above shall have no claim,
            cause of action or any recourse whatsoever against a transferor of
            such Equity Shares. All capitalized terms in this legend have the
            meanings defined in the Charter of the Corporation, as the same may
            be amended from time to time, a copy of which, including the
            restrictions on transfer and ownership, will be furnished, without
            charge, to each holder of Equity Shares who directs a request to the
            Secretary of the Corporation at the principal office of the
            Corporation.


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5.1
<SEQUENCE>3
<FILENAME>ex5-1.txt
<TEXT>

           [LETTERHEAD OF WILMER CUTLER PICKERING HALE AND DORR LLP]


                                                                     Exhibit 5.1


September 1, 2004

Franklin Street Properties Corp.
401 Edgewater Place, Suite 200
Wakefield, MA 01880


      Re:   Registration Statement on Form S-4

Ladies and Gentlemen:

      This opinion is furnished to you in connection with a Registration
Statement on Form S-4 (the "Registration Statement") filed with the Securities
and Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Securities Act"), for the registration of an aggregate of
10,894,994 shares of Common Stock, $0.0001 par value per share (the "Shares"),
of Franklin Street Properties Corp., a Maryland corporation (the "Company"),
issuable pursuant to the Agreement and Plan of Merger, dated August 13, 2004, by
and among the Company, Montague Acquisition Corp., Addison Circle Acquisition
Corp., Royal Ridge Acquisition Corp. and Collins Crossing Acquisition Corp.,
each a Delaware corporation and wholly-owned subsidiary of the Company, and FSP
Montague Business Center Corp., FSP Addison Circle Corp., FSP Royal Ridge Corp.
and FSP Collins Crossing Corp., each a Delaware corporation (the "Merger
Agreement").

      We are acting as counsel for the Company in connection with the issuance
by the Company of the Shares. We have examined signed copies of the Registration
Statement as filed with the Commission. We have also examined and relied upon
the Merger Agreement, minutes of meetings of the Board of Directors of the
Company as provided to us by the Company, stock record books of the Company as
provided to us by the Company, the Articles of Organization and By-Laws of the
Company, each as amended to date, and such other documents as we have deemed
necessary for purposes of rendering the opinions hereinafter set forth.

      In our examination of the foregoing documents, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals, the conformity to original documents of all documents submitted to
us as copies, the authenticity of the originals of such latter documents and the
legal competence of all signatories to such documents.

      We assume that the appropriate action will be taken, prior to the issuance
of the Shares in accordance with the Merger Agreement, to register and qualify
the Shares for sale under all applicable state securities or "blue sky" laws.

<PAGE>

Franklin Street Properties Corp.
September 1, 2004
Page 2


      We express no opinion herein as to the laws of any state or jurisdiction
other than the state laws of the State of Maryland, the General Corporation Law
of the State of Delaware and the federal laws of the United States of America.

      Based upon and subject to the foregoing, we are of the opinion that the
Shares to be issued by the Company have been duly authorized for issuance and,
when the Shares are issued in accordance with the terms and conditions of the
Merger Agreement, the Shares will be validly issued, fully paid and
nonassessable.

      It is understood that this opinion is to be used only in connection with
the issuance of the Shares while the Registration Statement is in effect.

      Please note that we are opining only as to the matters expressly set forth
herein, and no opinion should be inferred as to any other matters. This opinion
is based upon currently existing statutes, rules, regulations and judicial
decisions, and we disclaim any obligation to advise you of any change in any of
these sources of law or subsequent legal or factual developments which might
affect any matters or opinions set forth herein.

      We hereby consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement in accordance with the requirements of
Item 601(b)(5) of Regulation S-K under the Securities Act and to the use of our
name therein and in the related Prospectus under the caption "Legal Matters." In
giving such consent, we do not hereby admit that we are in the category of
persons whose consent is required under Section 7 of the Securities Act or the
rules and regulations of the Commission.



Very truly yours,

WILMER CUTLER PICKERING HALE AND DORR LLP



By:   /s/ Jeffrey A. Hermanson
      -------------------------------
      Jeffrey A. Hermanson, a Partner


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-8.1
<SEQUENCE>4
<FILENAME>ex8-1.txt
<TEXT>

                                                                     Exhibit 8.1


            [FORM OF OPINION OF WILMER CUTLER PICKERING HALE AND DORR
                            RELATING TO TAX MATTERS]


August 31, 2004


Franklin Street Properties Corp.
401 Edgewater Place
Suite 200
Wakefield, MA  01880-6210

      Re:   Mergers pursuant to Agreement and Plan of Merger between Franklin
            Street Properties Corp., the four corporations listed on Exhibit A
            hereto, and the four corporations listed on Exhibit B hereto.

Ladies and Gentlemen:
This opinion is being delivered to you in connection with filing of the Consent
Solicitation/ Prospectus on Form S-4 (the "Consent Solicitation") with the
Securities and Exchange Commission on ____________, 2004 relating to the
Agreement and Plan of Merger dated as of August 13, 2004 (the "Merger
Agreement"), by and between Franklin Street Properties Corp., a Maryland
corporation ("FSP Corp."), the four Delaware corporations listed on Exhibit A
hereto (each, an "Acquisition Subsidiary" and, collectively, the "Acquisition
Subsidiaries"), and the four other Delaware corporations listed on Exhibit B
hereto (each, a "Target REIT" and, collectively, the "Target REITs"). Pursuant
to the Merger Agreement, each Target REIT will merge with and into an
Acquisition Subsidiary, and the separate existence of each Target REIT shall
thereupon cease (each, a "Merger" and, collectively, the "Mergers"). Except as
otherwise provided, capitalized terms not defined herein have the meanings set
forth in the Merger Agreement and the exhibits thereto or in the letters
delivered to Wilmer Cutler Pickering Hale and Dorr LLP by FSP Corp. and the
Acquisition Subsidiaries and each Target REIT containing certain representations
of FSP Corp., the Acquisition Subsidiaries and each Target REIT relevant to this
opinion (the "Representation Letters"). All section references, unless otherwise
indicated, are to the United States Internal Revenue Code of 1986, as amended
(the "Code").

In our capacity as counsel to FSP Corp. in the Mergers, and for purposes of
rendering this opinion, we have examined and relied upon the Merger Agreement
and the exhibits thereto, the Representation Letters, the Consent Solicitation,
and such other documents as we considered relevant to our analysis. In our
examination of documents, we have assumed the authenticity of original
documents, the accuracy of copies, the genuineness of signatures, and the legal
capacity of signatories.

We have assumed that all parties to the Merger Agreement and to any other
documents examined by us have acted, and will act, in accordance with the terms
of such Merger Agreement and documents and that the Mergers will be consummated
at the Effective Time pursuant to the terms and conditions set forth in the
Merger Agreement without the waiver or modification of any such terms and
conditions. Furthermore, we have assumed that all representations contained in
the Merger Agreement, as well as those representations contained in the
Representation Letters, are, and at the Effective Time will be, true and

<PAGE>

complete in all material respects, and that any representation made in any of
the documents referred to herein "to the best of the knowledge and belief" (or
similar qualification) of any person or party is, and at the Effective Time will
be, correct without such qualification. We have also assumed that as to all
matters for which a person or entity has represented that such person or entity
is not a party to, does not have, or is not aware of, any plan, intention,
understanding, or agreement, there is no such plan, intention, understanding, or
agreement. We have not attempted to verify independently such representations,
but in the course of our representation, nothing has come to our attention that
would cause us to question the accuracy thereof.

The conclusions expressed herein represent our judgment as to the proper
treatment of certain aspects of the Mergers as well as the proper interpretation
of other matters of law covered by our opinion, in each case, under the income
tax laws of the United States based upon the Code, Treasury Regulations, case
law, and rulings and other pronouncements of the Internal Revenue Service (the
"IRS") as in effect on the date of this opinion. No assurances can be given that
such laws will not be amended or otherwise changed after the Effective Time or
that such changes will not affect the conclusions expressed herein.
Nevertheless, we undertake no responsibility to advise you of any developments
after the Effective Time in the application or interpretation of the income tax
laws of the United States.

Our opinion represents our best judgment of how a court would decide if
presented with the issues addressed herein and is not binding upon either the
IRS or any court. Thus, no assurances can be given that a position taken in
reliance on our opinion will not be challenged by the IRS or rejected by a
court.

This opinion addresses only the specific United States federal income tax
consequences set forth below, and does not address any other federal, state,
local, or foreign income, estate, gift, transfer, sales, use, or other tax
consequences that may result from the Mergers or any other transaction
(including any transaction undertaken in connection with the Mergers).

On the basis of, and subject to, the foregoing, and in reliance upon the
representations and assumptions described above, we are of the opinion that:

1.          Each Merger will constitute a reorganization within the meaning of
            Section 368(a).

2.          To the extent that the matters discussed under the heading "Material
            United States Federal Income Tax Considerations" in the Consent
            Solicitation constitute matters of law, they are accurate in all
            material respects.

No opinion is expressed as to any federal income tax consequence of the Mergers
or any other matter except as specifically set forth herein, and this opinion
may not be relied upon except with respect to the consequences specifically
discussed herein.

This opinion is intended solely for the purpose of inclusion as an exhibit to
the Consent Solicitation. It may not be relied upon for any other purpose or by
any other person or entity, and may not be made available to any other person or
entity without our prior written consent. We hereby consent to the filing of
this opinion as an exhibit to the Consent Solicitation and further consent to

<PAGE>

the use of our name in the Consent Solicitation in connection with references to
this opinion and the tax consequences of the Mergers. In giving this consent,
however, we do not hereby admit that we are in the category of persons whose
consent is required under Section 7 of the Securities Act of 1933, as amended.



Very truly yours,


<PAGE>

                                    EXHIBIT A


Montague Acquisition Corp.
Addison Acquisition Corp.
Royal Ridge Acquisition Corp.
Collins Crossing Acquisition Corp.

<PAGE>

                                    EXHIBIT B

FSP Montague Business Center Corp.
FSP Addison Corp.
FSP Royal Ridge Corp.
FSP Collins Crossing Corp.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21.1
<SEQUENCE>5
<FILENAME>ex21-1.txt
<TEXT>

                                                                    Exhibit 21.1


Subsidiaries of Franklin Street Properties Corp.

                                                              Jurisdiction of
Name                                                           Organization
- ----                                                           ------------

FSP Investments LLC                                            Massachusetts

FSP Property Management LLC                                    Massachusetts

FSP Holdings LLC                                               Delaware

FSP REIT Protective Trust                                      Massachusetts

FSP Protective TRS Corp.                                       Massachusetts

FSP Royal Ridge Acquisition Corp.                              Delaware

FSP Montague Acquisition Corp.                                 Delaware

FSP Collins Crossing Acquisition Corp.                         Delaware

FSP Addison Circle Acquisition Corp.                           Delaware

Essex Lane Associates Limited Partnership                      Massachusetts

FSP Austin N.W. Limited Partnership                            Massachusetts

FSP Blue Ravine Limited Partnership                            Massachusetts

FSP Bollman Place Limited Partnership                          Massachusetts

FSP Gateway Crossing Limited Partnership                       Massachusetts

FSP Hillview Center Limited Partnership                        Massachusetts

FSP Lyberty Way Limited Partnership                            Massachusetts

FSP North Andover Office Park Limited                          Massachusetts
    Partnership

FSP Park Seneca Limited Partnership                            Massachusetts

FSP Piedmont Center Limited Partnership                        Massachusetts

FSP Santa Clara Limited Partnership                            Massachusetts

<PAGE>

FSP Silverside Plantation Limited Partnership                  Massachusetts

FSP Southfield Centre Limited Partnership                      Massachusetts

FSP Telecom Business Center Limited                            Massachusetts
    Partnership

One Technology Drive Limited Partnership                       Massachusetts

FSP Gael Apartments Limited Partnership                        Texas

FSP Goldentop Technology Center Limited                        California
    Partnership

FSP Willow Bend Office Center Limited                          Texas
    Partnership

FSP Merrywood Apartments Limited Partnership                   Texas

FSP Park Ten Limited Partnership                               Texas

FSP Timberlake Corp.                                           Delaware

FSP Timberlake East Corp.                                      Delaware

FSP Forest Park IV NC Limited Partnership                      North Carolina


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.3
<SEQUENCE>6
<FILENAME>ex23-3.txt
<TEXT>

                                                                    Exhibit 23.3


                         Consent of Independent Auditors


We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-4) and related Prospectus of Franklin Street
Properties Corp. for the registration of 10,894,994 shares of its common stock
and to the incorporation by reference therein of our report dated February 6,
2004, with respect to the consolidated financial statements and schedule of
Franklin Street Properties Corp. included in its Annual Report (Form 10-K) for
the year ended December 31, 2003, filed with the Securities and Exchange
Commission.


                                                /s/ ERNST & YOUNG LLP


Boston, Massachusetts
August 27, 2004



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.4
<SEQUENCE>7
<FILENAME>ex23-4.txt
<TEXT>

                                                                    Exhibit 23.4



            Consent of Independent Registered Public Accounting Firm

We hereby consent to the incorporation by reference in this Registration
Statement on Form S-4 of Franklin Street Properties Corp. of our report dated
March 5, 2003, except for Note 11 as to which the date is March 15, 2004
relating to the financial statements of Franklin Street Properties Corp. as of
and for the two years ended December 31, 2002, which appears in Franklin Street
Properties Corp.'s Annual Report on Form 10-K for the year ended December 31,
2003. We also consent to the references to us under the headings "Experts" in
such Registration Statement.


/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
August 27, 2004





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.5
<SEQUENCE>8
<FILENAME>ex23-5.txt
<TEXT>

                                                                    Exhibit 23.5



                         Consent of Independent Auditors


We consent to the reference to our firm under the caption "Experts" in this
Registration Statement on Form S-4 and related Consent Solicitation/Prospectus
of Franklin Street Properties Corp. (the "Registrant") for the registration of
up to 10,894,994 shares of its common stock and to the incorporation by
reference therein of our report dated February 28, 2004, with respect to the
financial statements of FSP Addison Circle Corp., FSP Collins Crossing Corp.,
FSP Montague Business Center Corp., and FSP Royal Ridge Corp., included as
exhibits to the Current Report on Form 8-K dated August 31, 2004 of the
Registrant filed with the Securities and Exchange Commission on August 31, 2004.


/s/ Braver and Company, P.C.
Newton, Massachusetts
August 27, 2004



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>9
<FILENAME>addison.txt
<DESCRIPTION>ADDISON CIRCLE APPRAISAL
<TEXT>

                                                                    Exhibit 99.1


                                APPRAISAL REPORT

                                  Prepared For


                 BOARD OF DIRECTORS OF FSP ADDISON CIRCLE CORP.
                       & FRANKLIN STREET PROPERTIES CORP.
                         401 EDGEWATER PLACE, SUITE 200
                       WAKEFIELD, MASSACHUSETTS 01880-6210


                           COMPLETE SUMMARY APPRAISAL

                         ADDISON CIRCLE OFFICE BUILDING

                           15601 NORTH DALLAS PARKWAY

                               DALLAS, TEXAS 75001


                                   Prepared By

                         Bryan E. Humphries & Associates
                              4054 McKinney Avenue
                                    Suite 210
                               Dallas, Texas 75204
<PAGE>

July 23, 2004

Board of Directors of FSP Addison Circle Corporation and
Franklin Street Properties Corporation
401 Edgewater Place, Suite 200
Wakefield, Massachusetts 01880-6210

Attention:  Ms. Janet Notopoulos

Reference:  COMPLETE SUMMARY APPRAISAL
            Multi-Tenant Office Building
            Addison Circle Office Building
            15601 North Dallas Parkway
            Dallas, Texas 75001

Dear Ms. Notopoulos:

We have inspected and appraised the property as described herein. Conditions
pertinent to or indicative of the value of the property were investigated.

This report sets forth our findings and conclusions derived therefrom, together
with various exhibits that are considered necessary to explain the processes
followed in this appraisal. To the best of my knowledge, this appraisal is in
conformance with the current appraisal requirements of the Appraisal Institute,
the Appraisal Foundation's Uniform Standards of Professional Appraisal Practice
and the client's appraisal instructions.

The Appraisal Institute conducts a voluntary program of continuing education for
its designated members. MAIs and SRAs who meet the minimum standards of this
program are awarded periodic educational certification. I am currently certified
under this program.
<PAGE>

FSP Investments, LLC.
Re: Addison Circle Office Bldg.
July 23, 2004


The employment of the appraiser was not conditioned upon the appraisal producing
a specific value or a value within the given range.

An exposure period of twelve months is considered appropriate for the Subject
Property.

The estimated "As Is" Leased Fee Market Value of the property, as of July 8,
2004, subject to the Assumptions and Limiting Conditions stated herein, is:

Moreover, we hereby consent to a description and inclusion of the appraisal
report in any document required to be filed with the Securities and Exchange
Commission and distributed to the stockholders of companies, which the client is
considering acquiring.

        Market Value  "As Is"*                                   $54,500,000

*See Summary of Facts page for value definition

Respectfully submitted,

BRYAN E. HUMPHRIES & ASSOCIATES


Bryan E. Humphries, MAI                                          Greg Connelly
President                                                        Appraiser
TX-1320676-G                                                     TX-1324452-G

GC/D-4Z/04-1990
<PAGE>

                                TABLE OF CONTENTS

SUMMARY OF FACTS.............................................................I-1

MARKETING PERIOD.............................................................I-2

SUBJECT PROPERTY OWNERSHIP HISTORY...........................................I-3

ASSUMPTIONS AND LIMITING CONDITIONS..........................................I-4

PURPOSE, SCOPE AND FUNCTION OF APPRAISAL.....................................I-7

APPRAISAL PROCEDURE.........................................................I-10

GENERAL INFORMATION

REGIONAL AREA ANALYSIS......................................................II-1

NEIGHBORHOOD TRENDS........................................................III-1
   Neighborhood Map

SUBJECT PROPERTY............................................................IV-1
     Photographs              Flood Plain Map          Floor Plans
     Legal Description        Zoning Map               Building Elevation
     Easements                Site Plan/Survey

APPRAISAL

HIGHEST AND BEST USE.........................................................V-1

LAND VALUATION..............................................................VI-1
   Comparable Sales and Map

VALUE INDICATED BY COST APPROACH...........................................VII-1

MARKET ANALYSIS...........................................................VIII-1
    Rent Comparables & Map

VALUE INDICATED BY INCOME APPROACH..........................................IX-1

VALUE INDICATED BY MARKET DATA APPROACH......................................X-1
    Improved Sales & Map

CORRELATIONS AND CONCLUSIONS................................................XI-1
CERTIFICATE.................................................................XI-3
QUALIFICATIONS
<PAGE>

                                SUMMARY OF FACTS

Date of Appraisal and Inspection:               July 8, 2004

Dates of Preparation:                           July 8, 2004 - July 23, 2004

Purpose of Appraisal:                           To estimate the Leased Fee
                                                Market Value "As Is" of the
                                                Subject Property.


Physical Description

Type Property:                                  Multi-Tenant, Ten-Story Office
                                                Building Addison Circle Office
                                                Building 15601 Dallas Parkway
                                                Addison, Texas 75001

Land Area:                                      3.576 Acres or 155,771 SF

Building Area:                                  303,891 SF - Gross Building Area
                                                293,787 SF - Net Rentable Area

Year Built:                                     1999

Zoning:                                         UC - Urban Center


Valuation

Highest and Best Use:                           Office Development

Rights Being Appraised:                         Leased Fee Interest

Estimated Improved Land Value:                  $4,325,000

Estimated Value by Cost Approach
    "As Is"                                     $46,500,000

Estimated Value by Income Approach:
    "As Is"                                     $54,500,000

Estimated Value Range by Market Approach:
    "As Is"                                     $54,300,000 to $55,800,000


Humphries & Associates               I - 1                          D-4Z/04-1990
<PAGE>

Summary of Facts, continued


Final Value Estimate

"As Is" Market Value - Leased Fee               $54,500,000

An estimate of the Leased Fee "As Is" Market Value of a property in the
condition observed upon inspection and as it physically and legally exists
without hypothetical conditions, assumptions, or qualifications as of the date
the Subject was inspected (7/8/04), other than those described in the cover
letter and Assumptions and Limiting Conditions of this report

Exposure Period/Marketing Time

A reasonable exposure period is the amount of time in the past necessary to
expose a property to the open market in order to achieve a sale. The estimated
marketing time is the length of time it would probably take to sell the property
if it were placed on the market on the date of the "As Is" value. Exposure
period and marketing time are two distinct time periods.

Miller Commercial has conducted a market survey of reasonable marketing periods
for all property types. Their year-end 2003 survey indicates that Class A
suburban office buildings needed an average of 9.8 months to sell and Class B
space needed an average of 11.7 months to sell. The survey respondents indicated
that a property's location is the most important factor in determining a
marketing time. Based on the year-end 2003 Miller Commercial Survey and
conversations with local real estate brokers and owners. The area has had strong
demand for properties and the typical exposure time for reasonably priced
properties in the area has been 6-7 months. They also indicated that the strong
demand should continue over the next year.

Considering the estimated value arrived at and the Subject Property's location,
an estimated exposure period of 12 months is considered appropriate for the
Subject. Based upon conversations with local brokers, for well-leased properties
such as the Subject, marketing times in the future are considered to remain at
12 months.


Humphries & Associates               I - 2                          D-4Z/04-1990
<PAGE>

                       SUBJECT PROPERTY OWNERSHIP HISTORY

The Appraisal Institute requires appraisals to consider, analyze, and disclose
in reasonable detail any prior sales of the property being appraised that
occurred within the three year time period preceding the date of appraisal and
to consider, analyze, and disclose in reasonable detail any current agreement of
sale, option, or listing of the property being appraised.

The Subject Property was purchased by Champion Addison One, LP as a vacant tract
of land on November 11, 1997. Champion subsequently constructed a ten-story,
293,787 SF office building and six-level parking garage on the tract. On
September 30, 2002, the property was purchased by FSP Addison Circle Ltd.
$51,500,000 or $175.30/SF. The sale is an arm's length transaction on an all
cash basis. No other sales transactions have occurred during the past three
years.

The Subject is not listed for sale and there are no known sales contracts.


Humphries & Associates               I - 3                          D-4Z/04-1990
<PAGE>

                       ASSUMPTIONS AND LIMITING CONDITIONS

1.    It is assumed that title to the property herein appraised is good and
      merchantable, and in fee simple. The value is reported without regard to
      questions of title, boundaries, encroachments, environmental regulations,
      licenses, or other matters of a legal nature unless noncompliance has been
      stated, defined, and considered in the appraisal report.

2.    The value is estimated under the assumption that there will be no
      international or domestic political, economic, or military actions that
      will seriously affect real estate values throughout the country.

3.    Certain information concerning market and operating data was obtained from
      others. This information is verified and checked, where possible, and is
      used in this appraisal only if it is believed to be accurate and correct.
      However, such information is not guaranteed. Dimensions and areas of the
      Subject Property and of the comparables were obtained by various means and
      are not guaranteed to be exact.

4.    Real estate values are influenced by a number of external factors. The
      information contained herein is all of the data we consider necessary to
      support the value estimate. We have not knowingly withheld any pertinent
      facts, but we do not guarantee that we have knowledge of all factors which
      might influence the value of the Subject Property. Due to rapid changes in
      external factors, the value estimate is considered to be reliable only as
      of the date of the appraisal.

5.    Opinions of value contained herein are estimates. This is the definition
      of an appraisal. There is no guarantee, written or implied, that the
      Subject Property will sell for the estimated value. The estimated value
      assumes that the property is under responsible ownership and has competent
      and prudent management.

6.    The appraiser will not be required to provide testimony or attendance in
      court or before other legal authority by reason of this appraisal without
      prior agreement and arrangement between the employer and the appraiser.

7.    Disclosure of the contents of this appraisal report is governed by the
      By-Laws and Regulations of the Appraisal Institute. Neither all nor any
      part of the contents of this report (especially any opinions, analyses, or
      conclusions concerning value, the identity of the appraiser or the firm
      with which he is connected, or any reference to the Appraisal Institute or
      the M.A.I. or SRA Designation) shall be disseminated to the public through
      advertising media, public relations media, news media, sales media,
      prospectus for securities, or any other public means of communication
      without prior written consent and approval of the undersigned.


Humphries & Associates               I - 4                          D-4Z/04-1990
<PAGE>

Assumptions and Limited Conditions, continued


8.    It is assumed that there are no hidden or unapparent conditions of the
      property, subsoil, or structures which would render it more or less
      valuable, except as stated in this report. No responsibility is assumed
      for such conditions or for engineering which may be required to discover
      them. It is assumed that a prudent owner/buyer would allow inspection of
      the property by a qualified soils or structure engineer if conditions so
      required.

9.    The distribution of the total valuation in this report between land and
      improvements applies only under the reported highest and best use of the
      land. The allocation of value for land and improvements, if presented,
      must not be used in conjunction with any other appraisal and are invalid
      if so used.

10.   Estimates of costs to cure deferred maintenance are difficult at best.
      Contractors approach such problems in various ways. The estimates, if any,
      provided within this report are probable costs given current market
      conditions, available information, and the appraiser's expertise.

11.   No environmental impact studies were requested or made in conjunction with
      this appraisal, and the appraiser hereby reserves the right to alter,
      amend, revise, and/or rescind the value opinions based upon any subsequent
      environmental impact studies, research, or investigation.

12.   This appraisal was prepared by Bryan E. Humphries & Associates and
      consists of trade secrets and commercial or financial information which is
      privileged and confidential and is exempted from disclosure under 5 U.S.C.
      552 (b) (4). Please notify Bryan E. Humphries & Associates of any request
      of reproduction of this appraisal.

13.   Unless otherwise stated in this report, the existence of hazardous
      substances, including without limitation asbestos, polychlorinated
      biphenyl, petroleum leakage, or agricultural chemicals, which may or may
      not be present on the property or other environmental conditions, were not
      called to the attention of nor did the appraiser become aware of such
      during the appraiser's inspection. The appraiser has no knowledge of the
      existence of such materials on or in the property unless otherwise stated.
      The appraiser, however, is not qualified to test such substances or
      conditions. If the presence of such substances, such as asbestos, urea
      formaldehyde foam insulation, or other hazardous substances or
      environmental conditions, may affect the value of the property, the value
      estimated is predicated on the assumption that there is no such condition
      on or in the property or in such proximity thereto that it would cause a
      loss in value. No responsibility is assumed for any such conditions, nor
      for any expertise or engineering knowledge required to discover them.

14.   Anyone acting in reliance upon the opinions, judgments, conclusions, or
      data contained herein, who has the potential for monetary loss due to the
      reliance thereon, is advised to secure an independent review and
      verification of all such conclusions and/or facts. The user agrees to


Humphries & Associates               I - 5                          D-4Z/04-1990
<PAGE>

Assumptions and Limited Conditions, continued


      notify the appraiser prior to any irrevocable loan or investment decision
      of any error which would reasonably be determined from a thorough and
      knowledgeable review.

15.   By acceptance and use of this report, the user agrees that any liability
      for errors, omissions or judgment of the appraiser is limited to the
      amount of the fee charged.

16.   The limiting condition relating to the ADA is as follows:

      This appraisal has not considered the effects of the enactment of the
      Americans with Disabilities Act of 1990 (ADA), which initially became
      effective January 26, 1992. We have not made a specific compliance survey
      and analysis of this property to determine whether or not it is in
      conformity with the various detailed requirements of the ADA. Standards of
      this act are designed to provide access to all public facilities to all
      persons, regardless of mobility limitations. The act provides forceful
      encouragement for commercial establishments to enhance their accessibility
      and requires that renovations after this date fully comply with the access
      standards established by the Architectural and Transportation Barriers
      Compliance Board. Enhancements to buildings must be readily achievable and
      able to be carried out without much difficulty or expense. The act
      recognizes that "readily achievable" is different for companies depending
      on their resources. The first priority is to provide access from
      sidewalks, parking and transportation areas, with the second priority
      being to provide access to areas where goods and services are available to
      the public. Finally, access to restroom facilities must accommodate all
      persons. The modifications and costs that may be necessary for the
      property to conform to ADA can be ascertained only by a qualified
      architect. Should such a study be undertaken, and should the retrofit
      costs, if any, become known, then the appraisers reserve the right to
      re-evaluate the Subject Property.

17.   This appraisal specifically assumes the following:

      -     The legal description and survey provided by the client indicates a
            land area of 155,771 SF or 3.576 acres.

      -     According to the Dallas County Appraisal District, the gross
            building area is 301,292 SF with a net rentable area of 293,787 SF.
            The net rentable area is based on the leases and rent roll. The
            parking garage has a gross building area of 360,575 SF as indicated
            by the Dallas County Appraisal District.

      -     All rent roll, profit & loss data and current leasing information
            provided by the client is assumed correct.


Humphries & Associates               I - 6                          D-4Z/04-1990
<PAGE>

                            PURPOSE OF THE APPRAISAL

The purpose of this appraisal is to estimate the "As Is" Market Value of the
Subject Property. The rights being appraised are the Leased Fee Interest in the
property. These are defined as of July 8, 2004 as follows.

Market Value Definitions

Market Value, for the purpose of this appraisal, is defined by the Office of the
Comptroller of the Currency under 12 CFR, Part 34, Subpart C-Appraisals, 34.42
Definitions.

The most probable price which a property should bring in a competitive and open
market under all conditions requisite to fair sale, the buyer and seller, each
acting prudently, knowledgeably, and assuming the price is not affected by undue
stimulus. Implicit in this definition is the consummation of a sale as of a
specified date and the passing of title from seller to buyer under conditions
whereby:

1.    Buyer and seller are typically motivated;

2.    Both parties are well informed or well advised, and each acting in what
      they consider their own best interests;.

3.    A reasonable time is allowed for exposure in the open market;

4.    Payment is made in cash in U.S. dollars or in terms of financial
      arrangements comparable thereto; and

5.    The price represents the normal consideration for the property sold
      unaffected by special or creative financing or sales concessions granted
      by anyone associated with the sale."

Market Value "As Is" is defined by the Appraisal Institute's The Appraisal of
Real Estate book, 12th edition, 2001, as:

"An estimate of the Market Value of a property in the condition observed upon
inspection and as it physically and legally exists without hypothetical
conditions, assumptions, or qualifications of the Subject Property as of the
date of appraisal".


Humphries & Associates               I - 7                          D-4Z/04-1990
<PAGE>

Purpose, Scope and Function, continued


Leased Fee

Leased Fee, according to the Appraisal Institute's The Appraisal of Real Estate
book, 12th Edition, 2001, is defined as:

      "A Leased Fee Estate is an ownership interest held by a landlord with the
      right of use and occupancy conveyed by lease to others; the rights of
      lessor (the leased fee owner) and leased Fee are specified by contract
      terms contained within the lease."

                               Scope of Appraisal

The scope of the appraisal assignment is to estimate the Leased Fee Market Value
of the Subject Property via a narrative appraisal format in conformance with the
Appraisal Foundation's Uniform Standards of Professional Appraisal Practice
(USPAP) and the Appraisal Institute Standards.

The scope of this appraisal assignment included the following:

- -     A summary of regional area and neighborhood characteristics.

- -     A physical inspection of the Subject Property as to its condition and
      characteristics.

- -     A search of public records pertaining to the Subject - i.e., zoning
      regulations, real estate tax and assessment information, sales history,
      easements, public and/or private deed restrictions, etc.

- -     Analysis of physically possible uses, legally permissible uses,
      financially practical uses and maximally productive uses of the Subject
      Property to estimate the Highest and Best Use.

- -     An estimation of the Subject Property's reproduction cost new less
      depreciation using Marshal and Swift's Commercial Cost estimator 7.0.

- -     An estimation of the market rent, vacancy and expenses based upon market
      surveyed data, capitalizing the estimated NOI into a value at a market
      determined rate.

- -     Research of land and improved sales through sources such as county deed
      records, conversations with local real estate brokers and appraisers in
      addition to the buyers and sellers of real property.

- -     Analysis of the Subject Property's market segment with the underlying
      supply and demand factors for comparable properties.


Humphries & Associates               I - 8                          D-4Z/04-1990
<PAGE>

Purpose, Scope and Function, continued


- -     An inspection of all rent and sale comparables including the neighborhood
      by the appraisers.

- -     Produce a narrative appraisal report as discussed in the Appraisal
      Procedure.

                              Function/Intended Use

This appraisal is for use by the client (Franklin Street Properties Corp. and
FSP Addison Circle Corp. Board of Directors) for asset valuation purposes. It
may be used in connection with the acquisition, disposition and financing of the
sale of the property. This is a complete, summary appraisal that is intended for
asset valuation.

                              Competency Statement

The appraiser has valued over fifty office properties in various markets
throughout the Dallas/Fort Worth area over the past five years. For the Subject
Neighborhood, several improved and vacant office properties have been appraised
in the past two years. For these reasons, the appraiser has the professional
competency required to appraise the Subject Property.

Mr. Humphries was designated a Member of The Appraisal Institute (MAI) in 1982.
Mr. Humphries is a State Certified Appraiser in the State of Texas. The
certificate number is as follows:

Bryan E. Humphries                              TX-1320676-G

Greg Connelly                                   TX-1324452-G

As a result of the experience and expertise, Mr. Humphries and Mr. Connelly
possess the professional competency required to conclude a reliable opinion of
value.


Humphries & Associates               I - 9                          D-4Z/04-1990
<PAGE>

                               APPRAISAL PROCEDURE

The procedures followed in this appraisal revolve around an analysis of various
factors which affect the value of the Subject Property. Included in this
analysis was an investigation into such matters as the physical attributes of
the Subject Property, area and neighborhood market trends and general social,
economic, political, and environmental considerations. The valuation process
which serves as a basis for estimating the value of the Subject Property employs
as many separate appraisal techniques as are appropriate. The value of the
Subject Property is estimated by applying specific appraisal procedures that
reflect the following methods for mathematically analyzing data:

      COST APPROACH - An estimate of the present reproduction cost of the
      improvements, less accrued depreciation, plus the land value. Depreciation
      includes a deduction from reproduction cost of the improvements due to
      physical, functional, and economic causes.

      INCOME APPROACH - Capitalization of the net income that the property is
      capable of producing. This approach, of course, is applicable only in
      income-producing properties.

      MARKET APPROACH - Comparison with similar properties that have sold in the
      market. This approach can be applied to land alone or to improved
      properties.

All three approaches are applicable in the valuation of the Subject Property. As
addressed in the Correlations and Conclusions section of this report, the Income
Approach is felt to best reflect the Market Value of the Subject Property.


Humphries & Associates               I - 10                         D-4Z/04-1990
<PAGE>

                                  Regional Map


                          [MAP OF DALLAS REGIONAL AREA]


Humphries & Associates               I - 11                         D-4Z/04-1990
<PAGE>

                             REGIONAL AREA ANALYSIS


The distinguishing economic influence on the value of real estate is location.
Because of the immobility of real estate, it is dependent upon the external
environment for support to make it economically viable. This economic
environment is both general (the city, region, or area in which the property is
located) and specific (the neighborhood).

Within an environment, four forces continually exert influence on real estate
values. These forces are location, physical, social, and political/governmental
forces. The purpose of the following Area Analysis is to define the area within
which the actions of these four forces affect values of real estate similar to
the Subject.

The Subject Property is located within the growth oriented Dallas/Fort Worth
Consolidated Metropolitan Statistical Area, (CMSA) or as it is called locally,
"The Metroplex."

This 16-county area surrounding the Cities of Dallas and Fort Worth, Texas has
become one large economic area. The future external influences within this
economic area will have a profound effect upon the Subject.

The following data is the most recent available data or year-end data for
comparative purposes. Data is updated periodically as publications become
available.

POPULATION - CONTINUES TO INCREASE

The following chart is a summary of population trends (as of January 1, 2003).
The chart shows historical population trends and projected population trends for
the CMSA, the Dallas Primary Metropolitan Statistical Area (PMSA)(1), the Fort
Worth-Arlington PMSA(2), counties in each PMSA and major cities within the
counties.

(1)   Dallas PMSA - Includes Collin, Dallas, Denton, Ellis, Kaufman and Rockwall
      Counties.
(2)   Fort Worth/Arlington PMSA - Includes Johnson, Parker and Tarrant Counties.
(3)   CMSA - All counties in both PMSA's plus the counties of Palo Pinto,
      Navarro, Hunt, Hood, Erath, Somervell and Wise.


Humphries & Associates               II - 1
<PAGE>

Regional Area Analysis, continued


The CMSA(3), as a whole, has grown very rapidly since 1970. From 1970 to 2003,
the population in the Metroplex increased by an estimated 3,206,832, or about
97,177 people per year. This is a compounded annual average growth rate of 2.56%
per year. The 1990 population for the CMSA was 4,111,750. The estimated 2003
population of 5,713,450 is an increase of 1,601,700 (2.59% growth per year
compounded) people per year from 1990-2003. The rate of increase is projected to
remain constant at +/- 50,000 - 75,000 people during the next few years.

Dallas County accounted for approximately 31% of the CMSA's growth from 1970 to
2003. The 2003 estimated population of Dallas County is 2,285,600. Tarrant
County accounted for approximately 26% of the growth of the CMSA from 1970 to
2003. The 2003 estimated Tarrant County population is 1,553,850.

The greatest percentage growth has occurred in Collin and Denton Counties. The
2003 population in Collin County of 576,350 is a 6.52% compounded annual
increase over the 1990 population of 264,036. Since 2000, the annual compounded
population growth rate has eased slightly to 5.68%.

The 2003 population in Denton County of 504,750 is a 5.17% annual compounded
increase over the 1990 population of 273,525. Since 2000, the annual compounded
population growth rate has slightly increased to 5.52%.

The following is a summary of Metroplex population trends for the CMSA, the
PMSA's, counties and major cities.


Humphries & Associates               II - 2
<PAGE>

Regional Area Analysis, continued


<TABLE>
<CAPTION>
                                                                                       Revised
                                        Final       Final      Final       Final      Estimated   Estimated   Growth
                                       Census      Census     Census      Census     Population  Population    Rate
                                       4/1/70      4/1/80     4/1/90      4/1/00       1/1/02      1/1/03    2002-2003

<S>                                 <C>         <C>         <C>         <C>          <C>         <C>           <C>
Collin County                          66,920     144,576     264,036     491,675      549,350     576,350      4.91%

    Allen*                              1,940       8,314      19,315      43,554       52,400      56,750      8.30%
    Anna                                  736         855         904       1,225        1,200       1,200      0.00%
    Celina                              1,272       1,520       1,737       1,861        2,300       2,850     23.91%
    Fairview                              463         893       1,554       2,644        3,350       3,550      5.97%
    Farmersville                        2,311       2,360       2,640       3,118        3,200       3,200      0.00%
    Frisco                              1,845       3,499       6,138      33,714       50,100      55,400     10.58%
    Lowry Crossing                         NI         443         865       1,229        1,300       1,300      0.00%
    Lucas                                 540       1,370       2,205       2,890        3,100       3,300      6.45%
    McKinney                           15,193      16,256      21,283      54,369       64,900      73,550     13.33%
    Melissa                                NI         604         557       1,350        1,450       1,700     17.24%
    Murphy                                261       1,150       1,547       3,099        5,350       6,450     20.56%
    Parker                                367       1,098       1,213       1,379        1,500       1,500      0.00%
    Plano                              17,872      72,331     127,885     222,030      234,100     237,950      1.64%
    Princeton                           1,105       3,408       2,448       3,477        3,500       3,500      0.00%
    Prosper                               501         675       1,018       2,097        2,400       2,700     12.50%
    Wylie                               2,675       3,152       8,716      15,132       18,350      21,350     16.35%
    Remainder of Collin County         17,049      18,207      27,693      36,769       41,400      43,600      5.31%
    Split Cities**                      2,790       8,441      36,318      61,738       59,450      56,500     -4.96%

Dallas County                       1,327,696   1,556,419   1,852,810   2,218,899    2,264,500   2,285,600      0.93%

    Addison                               593       5,553       8,783      14,166       14,700      14,750      0.34%
    Balch Springs                      10,464      13,746      17,406      19,375       19,400      19,400      0.00%
    Cedar Hill                          2,610       6,849      19,988      32,093       36,150      38,000      5.12%
    Cockrell Hill                       3,515       3,262       3,746       4,443        4,450       4,450      0.00%
    Coppell                             1,728       3,826      16,881      35,958       38,000      38,700      1.84%
    Dallas                            844,401     904,078   1,007,618   1,188,580    1,203,050   1,211,000      0.66%
    DeSoto                              6,617      15,538      30,544      37,646       39,550      41,100      3.92%
    Duncanville                        14,105      27,781      35,008      36,081       36,200      36,300      0.28%
    Farmers Branch                     27,492      24,863      24,250      27,508       27,800      28,000      0.72%
    Garland                            81,437     138,857     180,635     215,768      220,700     222,350      0.75%
    Glenn Heights                         257       1,033       4,564       7,224        7,800       8,050      3.21%
    Grand Prairie                      50,904      71,462      99,606     127,427      134,600     137,850      2.41%
    Highland Park                      10,133       8,909       8,739       8,842        8,900       8,900      0.00%
    Hutchins                            1,715       2,837       2,719       2,805        2,700       2,700      0.00%
    Irving                             97,260     109,943     155,037     191,615      195,800     197,850      1.05%
    Lancaster                          10,522      14,807      22,117      25,894       27,550      28,700      4.17%
    Mesquite                           55,131      67,053     101,484     124,523      128,050     129,650      1.25%
    Richardson                         48,405      72,496      74,840      91,802       94,150      95,650      1.59%
    Rowlett                             2,243       7,522      23,260      44,503       47,950      49,500      3.23%
    Sachse                                777       1,640       5,346       9,751       12,200      13,050      6.97%
    Seagoville                          4,390       7,304       8,969      10,823       11,100      11,450      3.15%
    Sunnyvale                             995       1,404       2,228       2,693        3,200       3,450      7.81%
    University Park                    23,498      22,254      22,259      23,324       23,300      23,300      0.00%
    Wilmer                              1,922       2,367       2,479       3,393        3,100       3,100      0.00%
    Remainder of Dallas County         18,941       9,181       6,197       8,259        8,550       8,800      2.92%
    Split Cities**                      7,641      11,854     -31,893     -75,597      -84,450     -90,450      7.10%


Denton County                          75,633     143,126     273,525     432,976      474,850     504,750      6.30%

    Argyle                                443       1,111       1,575       2,365        2,550       2,650      3.92%
    Aubrey                                731         948       1,138       1,500        1,650       1,750      6.06%
    Bartonville                            NI         441         849       1,093        1,200       1,200      0.00%
</TABLE>


Humphries & Associates               II - 3
<PAGE>

Regional Area Analysis, continued


<TABLE>
<CAPTION>
                                        Final       Final       Final       Final     Estimated    Estimated   Growth
                                       Census      Census      Census      Census    Population   Population    Rate
                                       4/1/70      4/1/80      4/1/90      4/1/00      1/1/02       1/1/03    2002-2003

<S>                                   <C>         <C>         <C>         <C>          <C>         <C>        <C>
    Carrollton                         13,855      40,595      82,169     109,576      112,250     113,750      1.34%
    Corinth                               461       1,264       3,944      11,325       14,950      15,800      5.69%
    Denton                             39,874      48,063      66,270      80,537       85,800      90,200      5.13%
    Double Oak                             NI         836       1,664       2,179        2,250       2,300      2.22%
    Flower Mound                        1,685       4,402      15,527      50,702       55,450      57,700      4.06%
    Hickory Creek                         218       1,422       1,893       2,078        2,250       2,250      0.00%
    Highland Village                      516       3,246       7,027      12,173       12,750      13,150      3.14%
    Justin                                741         920       1,234       1,891        1,950       2,150     10.26%
    Krum                                  454         917       1,542       1,979        2,050       2,050      0.00%
    Lake Dallas                         1,431       3,177       3,656       6,166        6,400       6,500      1.56%
    Lewisville                          9,264      24,273      46,521      77,737       80,900      83,850      3.65%
    Little Elm                            363         926       1,255       3,646        7,450      11,200     50.34%
    Oak Point                              NI         387         645       1,747        1,950       1,950      0.00%
    Pilot Point                         1,663       2,211       2,538       3,538        3,700       3,750      1.35%
    Roanoke                               817         910       1,616       2,810        3,850       4,650     20.78%
    Sanger                              1,603       2,754       3,514       4,534        4,700       4,800      2.13%
    Shady Shores                          543         813       1,045       1,461        1,600       1,700      6.25%
    The Colony                             NI      11,586      22,113      26,531       31,000      34,250     10.48%
    Trophy Club                            NI          NI       3,922       6,350        6,900       7,000      1.45%
    Remainder of Denton County         12,826      19,042      26,578      41,147       43,650      44,950      2.98%
    Split Cities**                    -11,855     -27,583     -25,688     -21,305      -13,600      -6,100    -55.15%

Ellis County                           46,638      59,743      85,167     111,360      119,000     124,950      5.00%

    Ennis                              11,046      12,110      13,869      16,045       16,650      17,450      4.80%
    Ferris                              2,180       2,228       2,212       2,175        2,200       2,250      2.27%
    Italy                               1,309       1,306       1,699       1,993        2,050       2,050      0.00%
    Midlothian                          2,322       3,219       5,040       7,480        9,400      10,400     10.64%
    Oak Leaf                               NI          NI         984       1,209        1,250       1,250      0.00%
    Ovilla                                339       1,067       2,027       3,405        3,600       3,600      0.00%
    Palmer                                601       1,187       1,659       1,774        1,750       1,750      0.00%
    Red Oak                               767       1,882       3,124       4,301        5,250       5,700      8.57%
    Waxahachie                         13,452      14,624      17,984      21,426       21,250      22,450      5.65%
    Remainder of Ellis County          14,431      21,926      35,857      49,973       54,000      56,450      4.54%
    Split Cities**                        191         194         712       1,579        1,600       1,600      0.00%

Erath County                           18,141      22,560      27,991      33,001       34,000      35,000      2.94%

    Dublin                              2,810       2,723       3,190       3,754        3,900       3,950      1.28%
    Stephenville                        9,277      11,881      13,502      14,921       15,100      15,650      3.64%
    Remainder of Erath County           6,054       7,956      11,299      14,326       15,000      15,400      2.67%

Hood County                             6,368      17,714      28,981      41,100       43,650      44,950      2.98%

    Granbury                            2,473       3,332       4,045       5,718        6,000       6,150      2.50%
    Remainder of Hood County            3,895      14,382      24,936      35,382       37,650      38,800      3.05%

Hunt County                            47,948      55,248      64,343      76,596       80,050      81,950      2.37%

    Caddo Mills                           935       1,060       1,068       1,149        1,150       1,150      0.00%
    Commerce                            9,534       8,136       6,825       7,742        8,100       8,400      3.70%
    Greenville                         22,043      22,161      23,071      24,117       24,250      24,400      0.62%
    Quinlan                               844       1,002       1,360       1,370        1,350       1,350      0.00%
    West Tawakoni                         465         840         932       1,462        1,500       1,550      3.33%
    Wolfe City                          1,433       1,594       1,505       1,581        1,600       1,600      0.00%
    Remainder of Hunt County           12,694      20,455      29,582      39,420       42,100      43,500      3.33%
</TABLE>


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<PAGE>

Regional Area Analysis, continued


<TABLE>
<CAPTION>
                                        Final       Final       Final       Final     Estimated   Estimated    Growth
                                       Census      Census      Census      Census    Population  Population     Rate
                                       4/1/70      4/1/80      4/1/90      4/1/00      1/1/02      1/1/03     2002-2003

<S>                                    <C>         <C>         <C>         <C>          <C>         <C>         <C>
    Alvarado                            2,129       2,701       2,918       3,288        3,450       3,550      2.90%
    Burleson                            7,713      11,734      16,113      20,976       22,850      24,050      5.25%
    Cleburne                           16,015      19,218      22,205      26,005       26,950      27,450      1.86%
    Grandview                             935       1,205       1,245       1,358        1,400       1,450      3.57%
    Joshua                                924       1,470       3,821       4,528        4,600       4,600      0.00%
    Keene                               2,440       3,013       3,944       5,003        5,500       5,650      2.73%
    Venus*                                414         518         977       1,892        2,000       2,000      0.00%
    Remainder of Johnson County        16,133      28,891      47,285      67,583       72,250      74,350      2.91%
    Split Cities**                       -934      -1,101      -1,343      -2,840       -3,100      -3,100      0.00%

Kaufman County                         32,392      39,015      52,220      71,313       76,950      80,700      4.87%

    Combine                               249         698       1,329       1,788        1,800       1,800      0.00%
    Crandall                              774         831       1,652       2,774        2,850       3,000      5.26%
    Forney                              1,745       2,483       4,070       5,588        5,750       6,400     11.30%
    Kaufman                             4,012       4,658       5,251       6,490        6,550       6,650      1.53%
    Kemp                                  999       1,035       1,184       1,133        1,150       1,150      0.00%
    Mabank                              1,239       1,443       1,458       2,151        2,400       2,450      2.08%
    Terrell                            14,182      13,225      12,490      13,606       13,950      14,350      2.87%
    Remainder of Kaufman County         9,320      14,779      25,494      38,717       43,450      45,850      5.52%
    Split Cities**                       -128        -137        -708        -934         -950        -950      0.00%

Navarro County                         31,150      35,323      39,926      45,124       45,800      46,450      1.42%

    Corsicana                          19,972      21,712      22,911      24,485       24,300      24,400      0.41%
    Kerens                              1,446       1,582       1,702       1,681        1,750       1,750      0.00%
    Remainder of Navarro County         9,732      12,029      15,313      18,958       19,750      20,300      2.78%

Palo Pinto County                      28,962      24,062      25,055      27,026       26,600      26,900      1.13%

    Mineral Wells                      18,411      14,468      14,935      16,946       16,100      16,100      0.00%
    Remainder of Palo Pinto
County                                 10,586       9,631      10,602      12,256       12,700      13,000      2.36%
    Split Cities**                        -35         -37        -482      -2,176       -2,200      -2,200      0.00%

Parker County                          33,888      44,609      64,785      88,495       94,800      98,450      3.85%

    Aledo                                 620       1,027       1,169       1,726        1,950       2,100      7.69%
    Annetta                                NI         454         672       1,108        1,150       1,150      0.00%
    Hudson Oaks                            NI         309         711       1,637        1,650       1,650      0.00%
    Reno                                  688       1,174       2,322       2,441        2,500       2,550      2.00%
    Springtown                          1,194       1,658       1,740       2,062        2,150       2,300      6.98%
    Weatherford                        11,750      12,049      14,804      19,000       19,900      20,550      3.27%
    Willow Park                           230       1,113       2,328       2,849        2,900       3,000      3.45%
    Remainder of Parker County         18,617      25,895      39,354      53,933       58,850      61,400      4.33%
    Split Cities**                        789         930       1,685       3,739        3,750       3,750      0.00%

Rockwall County                         7,046      14,528      25,604      43,080       48,550      51,800      6.69%

    Heath                                 520       1,459       2,108       4,149        4,900       5,300      8.16%
    Rockwall                            3,121       5,939      10,486      17,976       21,050      22,850      8.55%
    Royse City                          1,535       1,566       2,206       2,957        3,550       4,100     15.49%
    Remainder of Rockwall County        1,605       4,567       7,525      10,809       11,800      12,350      4.66%
    Split Cities**                        265         997       3,279       7,189        7,250       7,200     -0.69%
    Glen Rose                           1,554       2,075       1,949       2,122        2,300       2,300      0.00%
    Remainder of Somervell County       1,239       2,079       3,411       4,687        5,100       5,250      2.94%
</TABLE>


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<PAGE>

Regional Area Analysis, continued


<TABLE>
<CAPTION>
                                        Final       Final       Final       Final    Estimated   Estimated     Growth
                                       Census      Census      Census      Census   Population  Population      Rate
                                       4/1/70      4/1/80      4/1/90      4/1/00     1/1/02      1/1/03     2002-2003

<S>                                 <C>         <C>         <C>         <C>          <C>         <C>            <C>
Tarrant County                        715,587     860,880   1,170,103   1,446,219    1,507,500   1,553,850      3.07%

    Arlington                          90,229     160,113     261,717     332,969      344,050     352,450      2.44%
    Azle                                4,493       5,822       8,868       9,600        9,750       9,850      1.03%
    Bedford                            10,049      20,821      43,762      47,152       47,500      48,300      1.68%
    Benbrook                            8,169      13,579      19,564      20,208       20,600      20,700      0.49%
    Blue Mound                          1,283       2,169       2,133       2,388        2,400       2,400      0.00%
    Colleyville                         3,342       6,700      12,724      19,636       19,950      20,150      1.00%
    Crowley                             2,662       5,852       6,974       7,467        7,850       8,350      6.37%
    Dalworthington Grdns                  757       1,100       1,758       2,186        2,250       2,250      0.00%
    Edgecliff Village                   1,143       2,695       2,715       2,550        2,550       2,550      0.00%
    Euless                             19,316      24,002      38,149      46,005       47,750      49,750      4.19%
    Everman                             4,570       5,387       5,672       5,836        5,800       5,800      0.00%
    Forest Hill                         8,236      11,684      11,482      12,949       11,550      11,650      0.87%
    Fort Worth                        393,455     385,164     447,619     534,694      557,750     577,500      3.54%
    Grapevine                           7,049      11,801      29,198      42,059       42,750      43,600      1.99%
    Haltom City                        28,127      29,014      32,856      39,018       39,450      39,500      0.13%
    Haslet                                276         262         795       1,134        1,150       1,200      4.35%
    Hurst                              27,215      31,420      33,574      36,273       36,550      36,750      0.55%
    Keller                              1,474       4,156      13,683      27,345       30,000      31,800      6.00%
    Kennedale                           3,076       2,594       4,096       5,850        6,050       6,150      1.65%
    Lake Worth                          4,958       4,394       4,591       4,618        4,650       4,650      0.00%
    Lakeside                              988         957         816       1,040        1,050       1,100      4.76%
    Mansfield                           3,658       8,102      15,615      28,031       32,200      35,950     11.65%
    N. Richland Hills                  16,514      30,592      45,895      55,635       58,550      59,800      2.13%
    Pantego                             1,779       2,431       2,371       2,318        2,700       2,650     -1.85%
    Pelican Bay                            NI          NI       1,271       1,505        1,550       1,550      0.00%
    Richland Hills                      8,865       7,977       7,978       8,132        8,250       8,250      0.00%
    River Oaks                          8,193       6,890       6,580       6,985        7,000       7,000      0.00%
    Saginaw                             2,382       5,736       8,551      12,374       14,750      15,850      7.46%
    Sansom Park                         4,771       3,921       3,928       4,181        4,150       4,150      0.00%
    Southlake                           2,031       2,808       7,082      21,519       23,600      24,150      2.33%
    Watauga                             3,778      10,284      20,009      21,908       23,000      23,750      3.26%
    Westworth Village                   4,578       3,651       2,350       2,124        1,700       1,700      0.00%
    White Settlement                   13,449      13,508      15,472      14,831       15,050      15,250      1.33%
    Remainder of Tarrant County        23,122     288,897      32,416      37,410       41,850      43,800      4.66%
    Split Cities**                      1,600       6,397      17,839      28,289       31,750      33,550      5.67%

Wise County                            19,687      26,575      34,679      48,793       52,550      54,200      3.14%

    Alvord                                791         874         865       1,007        1,050       1,100      4.76%
    Boyd                                  695         889       1,041       1,099        1,100       1,100      0.00%
    Bridgeport                          3,614       3,737       3,581       4,309        5,000       5,100      2.00%
    Decatur                             3,240       4,104       4,245       5,201        5,200       5,250      0.96%
    Runaway Bay                            NI          29         700       1,104        1,100       1,150      4.55%
    Remainder of Wise County           11,347      16,942      24,247      36,073       39,100      40,500      3.58%

Nine County Urban Area              2,351,569   2,930,545   3,885,415   5,030,828    5,271,400   5,416,450      2.75%
(Collin, Dallas, Denton, Ellis
Johnson, Kaufman, Parker,
Rockwall, Tarrant)
NCTCOG Region (16 counties)         2,506,618   3,116,181   4,111,750   5,309,277    5,561,450   5,713,450      2.73%
</TABLE>

*2000 population totals have been officially changed by the Census Bureau
** Split Cities - Represent corporate boundaries that extend into another county


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Regional Area Analysis, continued


<TABLE>
<CAPTION>
================================================================================================================
                                                SPLIT CITY TOTALS
- ----------------------------------------------------------------------------------------------------------------
        Added to        Split Cities      Population       Added to             Split Cities          Population
- ----------------------------------------------------------------------------------------------------------------

<S>                     <C>                 <C>         <C>                    <C>                     <C>
Collin County           Dallas              46,886      Ellis County           Cedar Hills                 55
                        Garland                 97                             Glenn Heights            1,669
                        Richardson          24,101                             Grand Prairie               52
                        Royse City             222                             Mansfield                  129
                        Sachse               2,580
Dallas County                                           Johnson County         Mansfield                  622
                        Carrollton          49,821
                        Combine                624      Kaufman County         Dallas                       0
                        Grapevine                0                             Seagoville                   7
                        Lewisville             267
                        Ovilla                 298      Parker County          Azle                     1,581
                        Wylie                  315                             Mineral Wells            2,176

Denton County           Coppell                592      Rockwall County        Dallas                      21
                        Dallas              26,055                             Garland                      0
                        Fort Worth              44                             Rowlett                  7,125
                        Frisco              13,218                             Wylie                      281
                        Plano                3,588
                        Southlake              480      Tarrant County         Burleson                 3,728
                                                                               Grand Prairie           32,653
================================================================================================================
</TABLE>

The following chart indicates population growth since 1987 of the total PMSA,
Dallas PMSA and Fort Worth PMSA.

                  TOTAL
                  PMSA                 DALLAS PMSA                 FW/ARL PMSA
                  ----                 -----------                 -----------

1/1/89            3,824,650             2,513,250                   1,311,400
1/1/90            3,889,800             2,556,150                   1,333,650
1/1/91            3,935,200             2,587,100                   1,348,100
1/1/92            3,987,800             2,622,800                   1,365,000
1/1/93            4,034,050             2,656,450                   1,377,600
1/1/94            4,108,150             2,708,900                   1,399,250
1/1/95            4,371,500             2,902,100                   1,469,400
1/1/96            4,453,600             2,964,000                   1,489,400
1/1/97            4,521,300             3,016,000                   1,503,700
1/1/98            4,736,000             3,161,800                   1,574,200
1/1/99            4,857,200             3,242,600                   1,614,500
1/1/00            5,030,828             3,369,303                   1,661,525
1/1/01            5,131,250             3,439,950                   1,691,300
1/1/02            5,277,750             3,538,400                   1,739,350
1/1/03            5,416,450             3,624,150                   1,792,300


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Regional Area Analysis, continued


For the past 15 years, the compound annual growth rates have been - Total PMSA
(2.37%), Dallas total PMSA (2.51%), and Ft. Worth PMSA (2.19%).

The following chart represents the fastest growing cities within the area from
2002-2003. All of these cities are located within the northern portion of the
metroplex and a majority is located near D/FW Airport.

================================================================================
           Dallas/Ft. Worth Area Cities With Fastest Percentage Growth
                                   2002 - 2003
- --------------------------------------------------------------------------------
              City*                 Population Gain                  Percent
- --------------------------------------------------------------------------------
Denton                                   5,500                         5.13%
- --------------------------------------------------------------------------------
Flower Mound                             2,240                         4.06%
- --------------------------------------------------------------------------------
Keller                                   1,800                         6.00%
- --------------------------------------------------------------------------------
Euless                                   2,000                         4.19%
- --------------------------------------------------------------------------------
The Colony                               3,420                        10.48%
- --------------------------------------------------------------------------------
Little Elm                               3,750                        50.34%
- --------------------------------------------------------------------------------
Wylie                                    2,200                         5.31%
- --------------------------------------------------------------------------------
Allen                                    4,350                         8.30%
- --------------------------------------------------------------------------------
Frisco                                    5,300                       10.58%
- --------------------------------------------------------------------------------
McKinney                                 8,650                        13.33%
- --------------------------------------------------------------------------------
Mansfield                                3,950                        11.65%
- --------------------------------------------------------------------------------
*Cities with population greater than 5,000
Source: North Central Texas Council of Governments 2003 Population Estimates
================================================================================

EMPLOYMENT

The Dallas/Ft. Worth economy created more jobs from 1990 to 2000 than any other
metropolitan area in the United States. Job creation peaked in 1997 at 130,000
jobs. The D/FW area created an additional 103,000 jobs in 1998, 88,300 in 1999
and 102,700 new jobs in 2000.


Humphries & Associates               II - 8
<PAGE>

Regional Area Analysis, continued


Following strong economic growth in 2000, the Dallas/Ft. Worth's economy began
to decline in late 2001. During 2001 and 2002, D/FW had job losses of 77,500 and
29,900. The job loss was primarily due to layoffs in high-tech,
telecommunication and travel sectors as a result of the events of 9/11 and the
national economic slowdown.

One of the driving forces for demand of real property, both vacant land and
improved property, is job growth. The chart below illustrates the number of jobs
added in recent years in the DFW CMSA.

             Year               Total Non-Ag., Job Growth
             ----               -------------------------
             1980                        67,900
             1981                        61,900
             1982                        22,400
             1983                        52,300
             1984                       141,000
             1985                       103,800
             1986                        24,200
             1987                        -7,100
             1988                        34,500
             1989                        38,500
             1990                        60,300
             1991                           200
             1992                        21,000
             1993                        55,800
             1994                        75,000
             1995                        75,000
             1996                        80,000
             1997                       130,000
             1998                       103,000
             1999                        88,300
             2000                       102,700
             2001                       -29,900
             2002                       -77,500

Source: M/PF Research, Inc. and Texas Labor Market Review.


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<PAGE>

Regional Area Analysis, continued


Metro Overview

Although the pace of annual employment loss appears to be slowing in Dallas/Ft.
Worth, the area's May job count was still significantly down from the
year-earlier level. May 2003's employment base of 2.710 million jobs was off
25,700 positions, or a 0.9% contraction from the 2nd quarter 2002 figure,
according to the Bureau of Labor Statistics.

Continuing to hurt the local economy's overall performance, the region's
high-tech and telecommunications firms have yet to find a firm footing. Troubled
by over-investment and too-little demand, both industries continue to slash
payrolls. Some of the most recent announcements came from large corporations
that have continued their downsizing efforts from 2001 and 2002. Worldcom, which
shed 20,700 positions in 2002, announced in February 2003 it will slash up to
5,000 jobs nationwide, part of a plan to emerge from bankruptcy in April. The
company did not disclose how its Richardson office would be impacted. Swedish
telecommunications equipment maker Ericsson, which employs roughly 1,600 people
at its U.S. headquarters in Plano, stated in February that it would further
downsize its employee count. The company, which eliminated 20,600 positions in
2002, has laid out a roadmap back to profitability that will include the
shedding of another 5,000 or so jobs. Present restructuring will cost 44 jobs in
Richardson and Plano, reflecting the transfer of some functions to Canada. Other
companies making notable job cuts include FSI International. In March, the
Minnesota-based company announced the closing of its microlithography unit in
Allen and the cutting of 199 jobs. Although the exact number of jobs involved is
not yet known, 800 Microsoft employees in Las Colinas face layoffs. The Redmond,
WA Company is in the process of transferring its customer call center jobs to
Canada and India. Call centers in North Carolina and Washington will also be
impacted. A local telecom equipment maker, Xtera Communications, released 50
employees in February. Cyneta Networks, maker of switching technology for
wireless networks, lost 20 positions and its CEO in March.


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<PAGE>

Regional Area Analysis, continued


Other high-tech and telecom D/FW companies that have made significant cuts
during the last year run the gamut from industry giants to recent start-ups,
including Electronic Data Systems Corp., Texas Instruments, i2 Technologies,
Inc., Southwestern Broadband, SBC Communications, Nortel Networks, Alcatel USA,
Nokia, Fujitsu, Motorola, Verizon Communications, Jabil Circuits, and Marconi
Communications to name a few.

The employment outlook survey released in February 2003 by Manpower, Inc.
indicates that 8% of Dallas area employers said they would add staff and 4% said
they would cut staff in April-June. The picture was brighter just three months
previously, when the survey reported that 20% of area employers said they would
hire and 4% said they would cut back. Uncertainty in the marketplace and a
higher level of caution, have been suggested as causes for the dip. Stronger
hiring activity is anticipated in Tarrant County, where 20% of employers expect
to hire versus 12% predicting cuts in 2nd quarter.

Transportation and tourism, another economic sector usually considered a
stronghold of the Dallas/Ft. Worth economy, is still depressed. The
transportation sector in Dallas on net lost more than 6,000 jobs during the past
year. American Airlines, the area's biggest private sector employer, after
slashing thousands of jobs in 2001 and 2002, announced in June that it would
begin laying off 3,100 flight attendants. The airline is also considering
cutting routes to reduce costs. The company has already shed 57 planes over the
past year and expects to divest itself of 57 further aircraft by next summer.
Furthermore, continued slowdown in the travel industry has forced other
travel-related companies to reduce their workforces. Sabre Holdings Corp, for
example, announced layoffs totaling nearly 500 employees by 2002's end in an
effort to reduce costs at the Internet-based travel company. This is the second
round of layoffs at Southlake-based Sabre in the last year. Cedant, corporate
parent of Avis Rent A Car, in incorporating the administrative functions of the
recently acquired Budget Rent A Car, is closing a Budget call center in
Carrollton. All 293 of the shop's employees will be let go between March 14 and
June 27, when the location


Humphries & Associates               II - 11
<PAGE>

Regional Area Analysis, continued


will be closed permanently. The logistics and transportation division of
Miami-based Ryder Systems, Inc. let go all 100 workers at its auto-parts
logistics operation in Roanoke in December Regional Area Analysis, continued

2002. A south Dallas steel container manufacturing plant owned by Ohio-based
BWAY Corp. will begin closing in early August. When the shutdown is complete at
the end of August 52 employees will have been laid off. A similar number of
employees are being transferred to the firm's Garland facility.

While D/FW layoffs continue in some economic sectors, significant growth is
underway in others. AAA Automobile Club of Southern California, the largest US
chapter of the AAA, is transferring its Texas hub from Houston to the D/FW area.
The company plans to hire 400 employees initially, with a further 400 following
shortly. Chicago-based Bank One is constructing a new operations and call center
on 22 acres of land just south of Dallas/Ft. Worth International Airport. Once
completed, staffing of the facility will add up to 1,000 people to the company's
regional employment roster. New Breed Logistics, a North Carolina company, has
leased space for a new distribution center in Ft. Worth. The facility will
employ 500 to 900 workers once fully established. A new wholesale mortgage
origination company, AmPro Mortgage Corp., relocated its corporate headquarters
from Phoenix to Dallas during 1st quarter 2003. The move added about 100 new
hires to the company's employment rolls. Increased defense spending in
particular is also proving a benefit for the Dallas/Ft. Worth area, since the
region is one of the nation's key providers of defense and security equipment
and components. In fact, in the fall of 2001, Lockheed Martin Corp. was awarded
a $200 billion defense contract. Since the defense manufacturer was awarded the
F-35 Joint Strike Fighter, employment at Ft. Worth-based Lockheed Martin has
climbed dramatically. The company has added about 2,000 new employees, and the
company anticipates hiring more. Raytheon Co. has also been boosting staff,
focusing on those with information technology and engineering expertise. The
company expects to hire 150 to 200 people in the North Texas area some time in
the next year. Additionally encouraging news comes from Parsons Corp., one of
the nation's largest engineering and construction firms. The firm plans to
expand into Ft.


Humphries & Associates               II - 12
<PAGE>

Regional Area Analysis, continued


Worth, thanks to a large contract with the Federal Aviation Administration. The
Dallas Business Journal reports that Parsons will open 10 regional offices
nationwide and employ between 900 and 1,500 engineers, technicians and support
staff as a result of a four-year, $481 million contract with the FAA. The new
Ft. Worth office will employ 50 people as well as another 100 field staff
working from the FAA's Ft. Worth-based southwest regional headquarters.

On the retail front, The Container Store is expanding its headquarters near D/FW
International Airport. The company plans to move from its Farmers Branch
location after building a 1.1 million SF headquarters building and warehouse
complex north of the airport and will expand its workforce by about 400
employees. Also, furniture retailer Rooms to Go plans to build one of the
largest retail distribution and office complexes in the region. The new Grand
Prairie facility will be home to 250 current employees, with plans calling for
the addition of another 400 employees in the future.

Growth by Industry

The Government sector has historically proven to be the D/FW employment sector
immune from job losses. This stability pushes the Government sector ahead of the
other job categories in year-ending May 2003 employment growth. Annual job gains
of 12,400 positions over the past year, primarily in the local government
subsector, equates to a 3.7% rise. The Dallas metro accounted for 8,000 of these
new jobs.

After dipping into negative employment change in year-ending 1st quarter 2003,
D/FW's Financial Activities sector has returned to positive job gain. The sector
added 200 positions to its labor pool during year-ending May 2003, a 0.1%
increase. While the Dallas metro's Financial Activities category actually shed
jobs over the past year, the addition of 700 positions in Ft. Worth counteracted
this decline.

The relatively small Natural Resources and Mining sector reported modest
cutbacks during the past year, shedding 1,000 jobs, a 7.4% reduction. The large
Services sector also reported job


Humphries & Associates               II - 13
<PAGE>

Regional Area Analysis, continued


losses, contracting by 1,700 jobs, or 0.2%, during year-ending May. Deeper cuts
of 4,600 positions, or 3.1% from May 2002 to May 2003 were noted in the
Construction sector. Transportation and Utilities positions were also hard hit,
with 6,500 fewer workers employed by the close of year-ending 2nd quarter 2003,
equating to a 4.8% loss. The Trade category eliminated 6,600 jobs, translating
to a 1.4% job base reduction.

The deepest cuts occurred in the Information and Manufacturing sectors.
Information employers lost 8,600 jobs, a 7.9% decline, during the past year.
Most Information jobs lost during the past year were seen in the Dallas area
(7,800 jobs), reflecting the concentration of struggling producers of
telecommunications equipment in the area. Difficulties continue for the region's
manufacturers. The Manufacturing sector's job pool proved the hardest hit over
the past year, with 9,300 positions cut, a 3% contraction.

The following charts detail the employment statistics:

1.    History of wage and salary employment trends -
      December 1980 to December 2002
      Source: Texas Employment Commission

2.    Wage and salary trends compared to total employment.
      Source: Texas Employment Commission


Humphries & Associates               II - 14
<PAGE>

Regional Area Analysis, continued


<TABLE>
<CAPTION>
===============================================================================================================================
                                                    Employment Statistics
- -------------------------------------------------------------------------------------------------------------------------------
         Area                Base Year         Est.            Est.          Est.            Est.          Est.          Est.
                               1986         Employment      Increase/     Employment      Increase/     Employment    Increase/
                                               1990           Year           2000            Year          2010          Year
- -------------------------------------------------------------------------------------------------------------------------------
<S>                         <C>             <C>               <C>         <C>                <C>         <C>            <C>
CMSA                        2,180,872       2,377,753         49,220      2,872,869          49,512      3,325,633      45,276
- -------------------------------------------------------------------------------------------------------------------------------
PMSA-DALLAS                 1,575,011       1,717,700         35,672      2,049,018          33,132      2,320,767      27,175
- -------------------------------------------------------------------------------------------------------------------------------
PMSA-FW/A                     605,861         660,053         13,548        823,851          16,380      1,004,866      18,102
- -------------------------------------------------------------------------------------------------------------------------------
COUNTIES* - PMSA-DALLAS*
- -------------------------------------------------------------------------------------------------------------------------------
COLLIN                         88,454          99,727          2,818        146,292           4,657        189,781       4,349
- -------------------------------------------------------------------------------------------------------------------------------
DALLAS                      1,358,015       1,474,567         29,138      1,723,440          24,887      1,919,961      19,652
- -------------------------------------------------------------------------------------------------------------------------------
DENTON                         67,953          77,754          2,450        101,166           2,341        122,830       2,166
- -------------------------------------------------------------------------------------------------------------------------------
ELLIS                          29,604          31,871            567         37,564             569         41,444         388
- -------------------------------------------------------------------------------------------------------------------------------
KAUFMAN                        21,188          22,320            283         26,376             406         28,829         245
- -------------------------------------------------------------------------------------------------------------------------------
ROCKWALL                        9,797          11,461            416         14,180             272         17,922         374
- -------------------------------------------------------------------------------------------------------------------------------
PMSA-FW/A*
- -------------------------------------------------------------------------------------------------------------------------------
JOHNSON                        34,266          36,698            608         42,267             557         49,149         688
- -------------------------------------------------------------------------------------------------------------------------------
PARKER                         20,014          21,979            491         24,714             274         28,881         417
- -------------------------------------------------------------------------------------------------------------------------------
TARRANT                       551,581         601,376         12,449        756,870          15,549        926,836      16,997
- -------------------------------------------------------------------------------------------------------------------------------
MAJOR CITIES* - COLLIN COUNTY*
- -------------------------------------------------------------------------------------------------------------------------------
ALLEN                           3,180           3,602            106          5,025             142          6,564         154
- -------------------------------------------------------------------------------------------------------------------------------
FRISCO                          2,380           2,786            102          5,179             239          8,749         357
- -------------------------------------------------------------------------------------------------------------------------------
MCKINNEY                       13,123          14,816            423         19,200             438         24,977         578
- -------------------------------------------------------------------------------------------------------------------------------
PLANO                          52,124          59,143          1,755         80,030           2,089         96,500       1,647
- -------------------------------------------------------------------------------------------------------------------------------
DALLAS COUNTY*
- -------------------------------------------------------------------------------------------------------------------------------
ADDISON                        37,534          44,680          1,787         69,006           2,433         74,540         553
- -------------------------------------------------------------------------------------------------------------------------------
CARROLLTON                     54,196          63,335          2,285         81,625           1,829         92,998       1,137
- -------------------------------------------------------------------------------------------------------------------------------
CEDAR HILL                      2,391           2,828            109          3,638              81          4,673         104
- -------------------------------------------------------------------------------------------------------------------------------
DALLAS                        892,516         947,467         13,738      1,058,647          11,118      1,158,328       9,968
- -------------------------------------------------------------------------------------------------------------------------------
DESOTO                          9,568          10,046            120         11,825             178         12,244          42
- -------------------------------------------------------------------------------------------------------------------------------
DUNCANVILLE                     9,881          11,433            388         12,700             127         12,813          11
- -------------------------------------------------------------------------------------------------------------------------------
FARMERS BRANCH                 58,807          65,723          1,729         77,348           1,163         85,408         806
- -------------------------------------------------------------------------------------------------------------------------------
GARLAND                        62,376          68,209          1,458         80,531           1,232         89,518         899
- -------------------------------------------------------------------------------------------------------------------------------
GRAND PRAIRIE                  57,518          61,564          1,012         76,188           1,462         93,369       1,718
- -------------------------------------------------------------------------------------------------------------------------------
IRVING                         95,623         109,989          3,592        142,377           3,239        172,297       3,002
- -------------------------------------------------------------------------------------------------------------------------------
MESQUITE                       30,153          32,928            694         39,463             654         45,184         572
- -------------------------------------------------------------------------------------------------------------------------------
RICHARDSON                     60,813          67,991          1,795         93,628           2,564        112,334       1,871
- -------------------------------------------------------------------------------------------------------------------------------
ROWLETT                         3,339           4,215            219          3,830             162          7,765         194
- -------------------------------------------------------------------------------------------------------------------------------
DENTON COUNTY*
- -------------------------------------------------------------------------------------------------------------------------------
DENTON                         32,001          34,339            585         37,973             363         42,095         412
- -------------------------------------------------------------------------------------------------------------------------------
FLOWER MOUND                    1,518           2,983            366          6,287             330          8,006         172
- -------------------------------------------------------------------------------------------------------------------------------
LEWISVILLE                     15,890          18,250            590         23,514             526         27,580         407
- -------------------------------------------------------------------------------------------------------------------------------
THE COLONY                      1,592           1,777             46          2,880             110          3,491          61
- -------------------------------------------------------------------------------------------------------------------------------
ROCKWALL COUNTY*
- -------------------------------------------------------------------------------------------------------------------------------
ROCKWALL                        5,389           6,076            172          8,194             212         10,777         258
- -------------------------------------------------------------------------------------------------------------------------------
TARRANT COUNTY*
- -------------------------------------------------------------------------------------------------------------------------------
ARLINGTON                      86,270          96,878          2,652        125,250           2,837        156,530       3,128
- -------------------------------------------------------------------------------------------------------------------------------
BEDFORD                        13,404          14,520            279         17,208             269         17,798          59
- -------------------------------------------------------------------------------------------------------------------------------
BENBROOK                        2,841           3,324            121          5,535             221          7,767         223
- -------------------------------------------------------------------------------------------------------------------------------
COLLEYVILLE                     1,974           2,362             97          5,021             266         11,088         607
- -------------------------------------------------------------------------------------------------------------------------------
EULESS                          8,326           9,461            284         13,872             441         16,947         308
- -------------------------------------------------------------------------------------------------------------------------------
FORT WORTH                    309,223         332,891          5,917        399,742           6,685        476,636       7,689
- -------------------------------------------------------------------------------------------------------------------------------
GRAPEVINE                      22,646          25,210            641         33,217             801         44,039       1,082
- -------------------------------------------------------------------------------------------------------------------------------
MANSFIELD                       3,980           3,973             -2          6,402             243          9,195         279
- -------------------------------------------------------------------------------------------------------------------------------
N. RICHLAND HILLS              10,390          11,692            326         16,054             436         21,154         510
===============================================================================================================================
</TABLE>

      Source: NORTH CENTRAL TEXAS COUNCIL OF GOVERNMENTS - 1991 - Most recent
      available data based on 1990 census.
      FW/A - FORT WORTH, ARLINGTON
      EMPLOYMENT - PERSONS EMPLOYED IN THE DESIGNATED AREA


Humphries & Associates               II - 15
<PAGE>

Regional Area Analysis, continued


<TABLE>
<CAPTION>
================================================================================================================================
                                             WAGE AND SALARY EMPLOYMENT TRENDS
                                                       DALLAS PMSA(000)
- --------------------------------------------------------------------------------------------------------------------------------
       DEC.       MANUFAC.    MINING    CONSTR.    TRANS.     TRADE      FIRE.     SERVICES     GOVERN.     TOTAL       CHANGE
- --------------------------------------------------------------------------------------------------------------------------------
      <C>          <C>         <C>       <C>        <C>       <C>        <C>         <C>        <C>         <C>         <C>
      1980         215.6       21.1      57.5       68.5      288.2      90.1        188.9      127.6       1057.5
- --------------------------------------------------------------------------------------------------------------------------------
      1981         216.6       25.2      60.3       74.2      297.7      93.1        203.4      124.9       1095.4       37,900
- --------------------------------------------------------------------------------------------------------------------------------
      1982         204.3       24.7      65.0       73.7      300.3      99.1        218.4      126.1       1111.6       16,200
- --------------------------------------------------------------------------------------------------------------------------------
      1983         212.8       23.7      72.0       76.4      318.8     108.0        241.0      128.3       1181.0       69,400
- --------------------------------------------------------------------------------------------------------------------------------
      1984         231.2       23.8      80.8       82.3      352.1     121.8        271.0      132.4       1295.4      114,400
- --------------------------------------------------------------------------------------------------------------------------------
      1985         231.3       23.1      85.6       85.9      366.5     131.2        282.6      140.1       1346.3       50,900
- --------------------------------------------------------------------------------------------------------------------------------
      1986         224.1       19.3      72.1       86.7      363.6     133.1        284.9      149.2       1333.0      -13,300
- --------------------------------------------------------------------------------------------------------------------------------
      1987         223.7       18.7      57.3       87.8      358.1     128.3        288.4      148.9       1311.2      -21,800
- --------------------------------------------------------------------------------------------------------------------------------
      1988         221.2       17.7      46.2       93.0      359.3     126.1        324.9      152.2       1340.6       29,400
- --------------------------------------------------------------------------------------------------------------------------------
      1989         220.2       16.9      49.1       97.8      361.6     126.4        344.9      156.7       1373.6       33,000
- --------------------------------------------------------------------------------------------------------------------------------
      1990         218.9       17.9      47.2       83.1      362.4     124.3        370.5      163.0       1387.3       13,700
- --------------------------------------------------------------------------------------------------------------------------------
      1991         210.9       18.0      43.5       85.3      363.2     127.3        370.8      168.3       1387.3            0
- --------------------------------------------------------------------------------------------------------------------------------
      1992         209.2       17.9      43.5       87.2      367.1     122.1        374.8      170.3       1392.1        4,300
- --------------------------------------------------------------------------------------------------------------------------------
      1993         209.7       16.8      52.5       88.2      370.1     120.7        410.4      177.6       1446.0       53,900
- --------------------------------------------------------------------------------------------------------------------------------
      1994         223.6       16.8      62.9       99.8      401.1     132.0        437.0      194.3       1567.5      121,500
- --------------------------------------------------------------------------------------------------------------------------------
      1995         232.9       11.8      69.3      106.5      421.1     131.5        473.1      194.7       1641.2       73,700
- --------------------------------------------------------------------------------------------------------------------------------
      1996         237.1       11.3      75.3      114.3      438.7     131.6        495.2      198.1       1701.2       60,000
- --------------------------------------------------------------------------------------------------------------------------------
      1997         243.4       12.0      83.4      124.9      448.8     134.8        532.7      197.6       1777.6       76,400
- --------------------------------------------------------------------------------------------------------------------------------
      1998         252.9       11.7      89.2      133.1      453.1     147.3        578.0      208.2       1873.5       95,900
- --------------------------------------------------------------------------------------------------------------------------------
      1999         256.5       11.8      99.3      132.6      468.9     160.8        593.4      213.2       1936.5       63,000
- --------------------------------------------------------------------------------------------------------------------------------
      2000         251.0        8.8     110.3      143.0      511.6     157.0        636.4      226.9       2045.0      108,500
- --------------------------------------------------------------------------------------------------------------------------------
      2001         232.7        9.2     104.4      140.5      508.5     157.3        619.6      230.2       1994.6      -50,400
- --------------------------------------------------------------------------------------------------------------------------------
      2002         227.3        9.2     104.0      138.3      492.5     156.9        620.9      235.6       1989.4       -5,200
- --------------------------------------------------------------------------------------------------------------------------------
                                                Ft. Worth/Arlington PMSA (000)
- --------------------------------------------------------------------------------------------------------------------------------
      1980         108.4        4.3      22.5       25.1      110.7      21.0         70.7       55.6        418.3
- --------------------------------------------------------------------------------------------------------------------------------
      1981         112.0        5.4      21.7       25.2      117.3      20.4         76.8       55.7        434.5       16,200
- --------------------------------------------------------------------------------------------------------------------------------
      1982          97.4        4.6      23.3       22.0      121.0      22.2         79.0       57.7        427.2       -7,300
- --------------------------------------------------------------------------------------------------------------------------------
      1983         102.7        4.6      27.1       24.2      126.7      24.2         85.4       57.6        452.5       25,300
- --------------------------------------------------------------------------------------------------------------------------------
      1984         110.7        4.5      31.3       26.1      136.0      26.7         95.5       59.9        490.7       38,200
- --------------------------------------------------------------------------------------------------------------------------------
      1985         114.0        4.3      32.4       26.1      139.3      28.1        103.5       62.9        510.6       19,900
- --------------------------------------------------------------------------------------------------------------------------------
      1986         114.9        3.4      29.4       27.3      139.0      28.6        109.5       63.1        515.2        4,600
- --------------------------------------------------------------------------------------------------------------------------------
      1987         117.8        3.3      25.8       28.2      135.0      28.6        113.5       65.2        517.4        2,200
- --------------------------------------------------------------------------------------------------------------------------------
      1988         119.3        3.6      18.9       31.6      134.3      26.5        115.1       69.3        518.6        1,200
- --------------------------------------------------------------------------------------------------------------------------------
      1989         120.8        4.0      22.1       33.1      140.9      27.2        123.5       71.8        543.4       24,800
- --------------------------------------------------------------------------------------------------------------------------------
      1990         116.1        4.6      22.2       56.2      153.5      27.1        136.5       77.5        593.7       50,300
- --------------------------------------------------------------------------------------------------------------------------------
      1991         104.7        4.4      19.4       59.2      151.5      28.0        142.3       79.5        589.0       -4,700
- --------------------------------------------------------------------------------------------------------------------------------
      1992         102.2        4.4      19.5       58.3      149.4      27.0        146.6       83.7        591.1        2,100
- --------------------------------------------------------------------------------------------------------------------------------
      1993         100.5        4.4      22.1       60.5      153.8      27.6        156.2       83.9        609.0       17,900
- --------------------------------------------------------------------------------------------------------------------------------
      1994         100.6        4.5      27.1       58.6      169.0      29.8        166.0       87.8        643.4       34,400
- --------------------------------------------------------------------------------------------------------------------------------
      1995         105.5        4.4      29.2       63.9      173.9      29.3        172.2       89.1        667.5       24,100
- --------------------------------------------------------------------------------------------------------------------------------
      1996         106.4        4.4      31.5       62.6      178.9      31.1        181.8       92.6        689.3       21,800
- --------------------------------------------------------------------------------------------------------------------------------
      1997         109.6        4.4      35.4       66.9      189.3      32.5        189.5       94.1        721.7       32,400
- --------------------------------------------------------------------------------------------------------------------------------
      1998         111.4        4.3      37.1       70.8      196.4      33.4        201.7       92.9        748.0       26,300
- --------------------------------------------------------------------------------------------------------------------------------
      1999         113.7        4.6      43.4       75.1      201.3      37.3        212.2       97.8        785.4       37,400
- --------------------------------------------------------------------------------------------------------------------------------
      2000         110.8        3.9      45.1       80.5      204.5      40.4        222.1      102.8        810.1       24,700
- --------------------------------------------------------------------------------------------------------------------------------
      2001         107.0        4.4      44.9       79.6      203.0      41.6        215;9      105.0        801.4       -8,700
- --------------------------------------------------------------------------------------------------------------------------------
      2002         105.0        4.6      45.4       77.7      198.2      41.6        216.6      107.0        796.1       -5,300
================================================================================================================================
</TABLE>

SOURCE: TEXAS EMPLOYMENT COMMISSION - LABOR MARKET REVIEW PUBLICATIONS


Humphries & Associates               II - 16
<PAGE>

Regional Area Analysis, continued


<TABLE>
<CAPTION>
======================================================================================================================
                                        Total Employment Summary - D/FW Area
- ----------------------------------------------------------------------------------------------------------------------
                            Total                                    %                Wage &
      December            Employed                  Change       Unemployed         Salary Total              Change
- ----------------------------------------------------------------------------------------------------------------------
        <C>               <C>                        <C>            <C>             <C>                       <C>
        1980              1,485,400                                 4.1             1,475,800
- ----------------------------------------------------------------------------------------------------------------------
        1981              1,604,800                 119,400         3.5             1,529,900                  54,100
- ----------------------------------------------------------------------------------------------------------------------
        1982              1,639,400                  34,600         5.2             1,538,800                   8,900
- ----------------------------------------------------------------------------------------------------------------------
        1983              1,759,700                 120,300         4.4             1,633,500                  94,700
- ----------------------------------------------------------------------------------------------------------------------
        1984              1,850,925                  91,225         3.7             1,786,100                 152,600
- ----------------------------------------------------------------------------------------------------------------------
        1985              1,897,000                  46,075         4.4             1,856,900                  70,800
- ----------------------------------------------------------------------------------------------------------------------
        1986              1,986,900                  89,900         6.4             1,848,200                  -8,700
- ----------------------------------------------------------------------------------------------------------------------
        1987              2,039,800                  52,900         5.3             1,828,600                 -19,600
- ----------------------------------------------------------------------------------------------------------------------
        1988              2,030,100                  -9,700         5.0             1,859,200                  30,600
- ----------------------------------------------------------------------------------------------------------------------
        1989              2,014,300                 -15,800         4.6             1,917,000                  57,800
- ----------------------------------------------------------------------------------------------------------------------
        1990              2,056,600                  42,300         5.5             1,981,000                  64,000
- ----------------------------------------------------------------------------------------------------------------------
        1991              2,026,100                 -30,500         6.4             1,976,300                  -4,700
- ----------------------------------------------------------------------------------------------------------------------
        1992              2,064,500                  38,400         6.7             2,017,300                  41,000
- ----------------------------------------------------------------------------------------------------------------------
        1993              2,302,400                 266,100         5.2             2,113,200                  95,900
- ----------------------------------------------------------------------------------------------------------------------
        1994              2,396,000                  93,600         4.8             2,210,900                  97,000
- ----------------------------------------------------------------------------------------------------------------------
        1995              2,442,700                  46,700         4.2             2,308,700                  97,800
- ----------------------------------------------------------------------------------------------------------------------
        1996              2,518,600                  75,900         3.3             2,390,500                  81,800
- ----------------------------------------------------------------------------------------------------------------------
        1997              2,624,100                 105,500         3.0             2,499,300                 108,800
- ----------------------------------------------------------------------------------------------------------------------
        1998              2,695,200                  71,100         2.7             2,621,500                 122,200
- ----------------------------------------------------------------------------------------------------------------------
        1999              2,783,500                  91,084         2.8             2,721,900                 100,400
- ----------------------------------------------------------------------------------------------------------------------
        2000              2,871,700                  88,200         2.6             2,855,100                 133,200
- ----------------------------------------------------------------------------------------------------------------------
        2001              2,799,300                 -72,400         5.6             2,796,000                 -59,100
- ----------------------------------------------------------------------------------------------------------------------
        2002              2,806,884                   7,584         6.1             2,785,500                 -10,500
======================================================================================================================
</TABLE>

UNPAID FAMILY WORKERS, DOMESTICS, AG WORKERS, AND WORKERS INVOLVED IN
LABOR/MANAGEMENT DISPUTES + WAGE AND SALARY EMPLOYMENT + SELF-EMPLOYED = TOTAL
EMPLOYED

TRANSPORTATION

In January 1974, the Dallas/Fort Worth Regional Airport began operations and
immediately made the Metroplex a major air transportation center. This giant
facility of some 17,000 acres is nine miles long and eight miles wide, at its
extremities. Air passenger and cargo levels are increasing and the area around
the airport is experiencing rapid growth. Today, the airport is the second
busiest in the nation with expansion plans underway for two new runways. Rail,
bus, trucking, etc. also serve the Metroplex. The Metroplex is considered a
transportation center of the southwest.


Humphries & Associates               II - 17
<PAGE>

Regional Area Analysis, continued


FINANCIAL DATA

The Metroplex is home for over 150 commercial banks and contains the second
largest concentration of life insurance company headquarters in the United
States. The Metroplex also is the home of numerous savings and loan
associations.

In the late 1980's, there were publicized problems in the Dallas Financial
Community. The effect of the consolidations and sales can be seen in an average
employment decline of 2,280 per year in the finance/insurance/real estates
sectors of the D/FW CMSA over the five years beginning in 1987. Another effect
has been the lack of a large CBD lending institution which is locally owned,
which has historically been a stabilizing factor not only for the CBD but the
Metroplex as a whole. The consolidation or elimination of financial institutions
(banks, savings and loans, insurance, etc.) has left large vacancies in Class B,
C & D buildings within both the Dallas and Fort Worth Central Business District
in the early 1990'S. In the latter 1990's, as financial institutions rebounded,
large mergers have taken place. These include Bank One/First Chicago,
Citibank/Travelers, Chase/Texas Commerce, Bank America/Nations Bank, etc. One of
the main reasons for these consolidations is cost savings. These consolidations
have put further pressure on Dallas and Ft. Worth CBD occupancies. The 1st Qtr.
2002 MPF/RIS, Inc. estimates CBD occupancy to be 71% for Dallas and 87% for Ft.
Worth.

The declining trend has slowly reversed with the Finance/Insurance/Real Estate
Employment sector posting gains of 10.9% (1997), 13.3% (1998), 9.4% (1999), 3.4%
(2000) and .2% (2001). Depository and Nondepository institutions (e.g., banks,
thrifts, and credit unions) produced roughly three-quarters of the gain, with
insurance agents producing much of the rest. This sector now represents 7.9% of
D/FW employment, versus 6% nationally.

PERSONAL INCOME TRENDS

Per the survey of Buying Power published annually by the Sales and Marketing
Management Magazine, the median household income for the D/FW CMSA has grown at
an annual compounded growth rate of+/-3% since 1983.


Humphries & Associates               II - 18
<PAGE>

Regional Area Analysis, continued


Residential Market Conditions

According to the 1st Quarter 2003 Residential Strategies, Inc., after two years
of economic recession that has been characterized by a net decrease over 111,000
job losses in the D/FW area, the new home industry has set yet another annual
start record. Indeed these are strange time, but the facts are what they are.
The builders have had an excellent Spring 2003 selling season and the suburban
new home annual start rate has now surpassed 38,000 units.

Starts and closings are forming a broad topping out pattern. Lot deliveries,
which were up for most of 2002, continue to outpace starts, but are beginning to
slow. The lot development pipeline reveals about 7,200 lots at the
street/utility stage and about 16,400 lots at the grading/staking stage. In
aggregate this represents about a 7.5 months supply of lots under development;
thus RSI anticipates lot levels to remain fairly flat for the next two to three
quarters.

The suburban market did surpass 38,000 starts now representing almost $8 billion
of annual single family investment in this market. It should be noted that the
Greater Fort Worth market is gradually assuming a greater share of the D/FW
demand with now nearly 14,000 annual starts. For much of the 1990's Greater Fort
Worth maintained a 31-33% share of market. Fort Worth's ability to generate more
affordable housing has propelled its growth in the past few years. Today,
Greater Tarrant County represents just shy of 37% of all metroplex housing
starts.

Finished vacant inventory remains fairly steady at 2.2 months supply and the
vacant lot supply stands just below a 2-year supply. The Fort Worth months
supply is abnormally low because of the very tight 10 months supply of lots in
the Southeast Arlington market.

The results from RSI's traffic and sales survey effort show that for January and
March of 2003, most builders, were at or above traffic and sales figures for the
same period a year ago. February and April were generally flat but still very
strong. Very welcome news came in the form of a much lower cancellation rate
that was seen during most the 4th Quarter 2002. The spring market


Humphries & Associates               II - 19
<PAGE>

Regional Area Analysis, continued


has been very good for the builders and additional good news came from the fact
that buyer behavior was unaffected by the events of the Iraq war.

Despite the positive sales trends, it should be noted that the market is
extremely competitive with numerous incentives abounding in the market. Buyers
continue to shop hard for deals. Several builders have shared with RSI that they
have sacrificed gross margin in order to achieve velocity. Thus, it is clear
that net margins are razor thin. It is an unforgiving market, and, as RSI has
watched over the past year, some smaller builders have fallen by the wayside. In
the tactical market as seen today, perhaps the most important aspect of
homebuilding is knowing one's costs on a current basis.

Builder and lender discipline remains in place in almost all price points with
regard to spec inventory and is especially effective in the under $200,000
market where inventory moves quickly today. Focusing on the $200,000+ price
points, annual closing rate by price point for the trailing five quarters. For
the price points over $250,000, closings are off 3-4% over the past year.
Finished vacant spec inventory is being well regulated. While 2.5 months supply
is considered equilibrium with regard to finished housing, it is safe to say
that the overall spec picture in all price points is very acceptable considering
the slow-down in the higher price points. While a few pockets of over-building
do exist in some select neighborhoods priced over $500,000, today's lenders
should be commended for closely watching their portfolios.

With regard to months supply of lots, overall the market is fairly balanced at
just under a 24-month supply. However, when analyzed on a price point basis, it
is apparent that there is a dichotomy in the market. There is an ample supply of
lots in the $200-250,000 price category, and an excessive supply of lots in the
+$500,000 category. In the past, many of the custom builders have complained
about the lack of locations available to them, especially in the Northern Dallas
markets since many new neighborhoods were being monopolized by the high-end
production builders. Clearly the situation has changed, and the small custom
builders that have solid financial statements should be able to take advantage
of the current situation. It should be mentioned, that


Humphries & Associates               II - 20
<PAGE>

Regional Area Analysis, continued


most of the overhang of lots in the Northeast Dallas market today are found in
the West McKinney submarket. For comparison's sake, the $500,000+ Tollway market
in Plano and Frisco has 228 starts chasing 547 lots, a 29-month supply. In West
McKinney, The $500,000+ market has 69 starts chasing 421 lots, a 73-month
supply.

Conversely, under $200,000 there continues to be a district shortage of lots
with an overall supply of only about 18-months typical in most markets. As a
result, most new development activity is focused here today, and this shortage
has clearly spurred much of the activity towards special districts.

During the 12-month period ending March 2003, D/FW resales totaled a little over
87,000 units, down about 1.7% versus a year ago. More important is to examine
the months supply of listings. Without question, D/FW saw a surge of new
listings hit the market during the 1st Quarter of 2003, pushing the months
supply up over 6-months to current levels of 6.4-months.

An examination of the months supply of listing inventory on a price point basis
as published by the North Texas Real Estate Information Systems now shows that
all price points over $110,000 are at or above a 6-month supply of listings.

While much of the increase in listings is due to the seasonality of the resale
market, it is reasonable to believe that the months supply of resales may
subside later in the year. RSI gathers resale information from two sources. The
MLS information is a compilation of 8 local MLS services and is generally
reflective of the five county D/FW area. The North Texas Real Estate Information
Service covers a 21 county area and reports a slightly higher inventory level
for the region at an 8-month supply. Regardless of the source, the conclusion
for both are the same. While in the past the resale build-up has been a factor
primarily for the high-end production and custom builders, going forward,
resales will be an issue for all price points, even the value builders.


Humphries & Associates               II - 21
<PAGE>

Regional Area Analysis, continued


Over a year-over-year basis, resales at a higher price points are flat to down.
In the heart of the market, the $100,000 to $200,000 price point, sales on a
year-over-year basis are up 3-7%.

From an inventory perspective, the 1st Quarter 2003 market saw a noticeable
increase in the number of units new to the market. In the $100,000 to $150,000
price range, inventory was up over 50% on a year-over-year basis and in the
$150,000 to $200,000 price range up 35%.

The resale market has entered a new phase insofar as there is no longer a
shortage of existing home inventory for any of the price points within which the
new homebuilders compete. Looking ahead, RSI sees three ways in which the new
home market will be effected: First, the sheer number of units in the market
simply will draw buyers that may have purchased a new home to the existing
market. Second, contingency sales will take longer to move simply due to the
abundant supply of existing homes. Third, because most markets will now have an
over-supply of existing home inventory, there will be very little to no ability
to exact price increases. In fact, for homeowners who have seen price
appreciation in their existing units who are desirous of moving their existing
home more quickly, it would not be surprising to see future discounting in the
existing home market at lower price points.

In conclusion, the outlook for the remainder of 2003 remains favorable albeit
competitive. Most builders have established good sales backlogs going into the
2nd Quarter and it appears that mortgages rates will keep the market chugging
along for the near future. Resumption of employment growth is critical for
long-term success and RSI remains hopeful that housing demand from new
employment growth will kick in before the benefits realized by low interest
rates have been wrung out of the market. The good news is that there are rewards
for those who are willing to work hard and smart, and success will be found by
those offering quality and efficiency of operation.

The following chart is a summary of the current Dallas/Ft. Worth area housing
inventory.


Humphries & Associates               II - 22
<PAGE>

Regional Area Analysis, continued


<TABLE>
<CAPTION>
==============================================================================================================
                                     Housing Inventory Analysis by Market Area
                                              Dallas 1st Quarter 2003
- --------------------------------------------------------------------------------------------------------------

                          Annual      Annual       Fin.      Vacant      Vacant       Months           Lots
     Market Area         Closings     Starts      Vacant     Supply*      Lots        Supply**       Delivered
- --------------------------------------------------------------------------------------------------------------
<S>                       <C>         <C>          <C>         <C>       <C>            <C>           <C>
Dallas Area               23,895      24,148       4,380       2.2       47,205         23.7          29,964
- --------------------------------------------------------------------------------------------------------------
Ft. Worth Area            13,895      13,469       2,317       2.1       23,244         20.1          16,857
- --------------------------------------------------------------------------------------------------------------
D/FW Area                 38,043      37,364       6,697       2.2       70,849         22.3          46,821
==============================================================================================================
</TABLE>
*2.5 months is considered equilibrium
**24.0 months is considered equilibrium

The chart indicates an undersupply of vacant lots homes and finished vacant
homes.

Multi-Family Market

The following is a summary of apartment market conditions in the D/FW area as
reported by M/PF Research, Inc.

<TABLE>
<CAPTION>
==========================================================================================================================
                                                APARTMENT MARKET PROFILE
- --------------------------------------------------------------------------------------------------------------------------
                                                                              Dallas Area    Ft. Worth Area      D/FW Area
- --------------------------------------------------------------------------------------------------------------------------
<S>                                                                           <C>                 <C>             <C>
                    Existing Apartment Units                                  371,676             133,829         505,404
                    ------------------------------------------------------------------------------------------------------
 1st Quarter        Annual Apartment Completions                                7,746               2,350          10,096
    2002            ------------------------------------------------------------------------------------------------------
                    Quarterly Apartment Unit Absorption                        -3,270                -760          -4,030
                    ------------------------------------------------------------------------------------------------------
                    Annual Apartment Unit Absorption                           -9,290                -620          -9,910
                    ------------------------------------------------------------------------------------------------------
                    Average Gross Occupancy                                      91.5%               93.0%           91.9%
                    ------------------------------------------------------------------------------------------------------
                    Change from Year-Ago Quarter                                 -4.2                -2.2            -3.7
                    ------------------------------------------------------------------------------------------------------
                    Average Quoted Monthly rent                                  $724                $631            $699
                    ------------------------------------------------------------------------------------------------------
                    Same-Store % Change from Year Ago Quarter                     0.4%                1.9%            0.8%
- --------------------------------------------------------------------------------------------------------------------------
                    Annual Apartment Unit Completions                           9,641               2,831          12,472
   1st Quarter      ------------------------------------------------------------------------------------------------------
       2003         Annual Apartment Unit Absorption                            7,900               2,200          10,100
     Forecast       ------------------------------------------------------------------------------------------------------
                    Average Gross Occupancy                                      91.3%               92.7%           91.6%
                    ------------------------------------------------------------------------------------------------------
                    Change From Year-Ago Quarter                                 -0.2                -0.3            -0.3
==========================================================================================================================
</TABLE>

Retail Market

The following is a summary of retail market conditions in the D/FW area as
reported by MPF/RIS as of the 1st Quarter 2003.


Humphries & Associates               II - 23
<PAGE>

Regional Area Analysis, continued


<TABLE>
<CAPTION>
==========================================================================================================================
                                                       Dallas Area
- --------------------------------------------------------------------------------------------------------------------------
   Quarter                         Occupancy                                         Average Base rent
- --------------------------------------------------------------------------------------------------------------------------
   Yr/Mo.          ALL          R(1)        N/C(2)        S(3)         ALL         N/C           S               Yearly
                                                                                                               Absorption
- --------------------------------------------------------------------------------------------------------------------------
<S>                <C>          <C>          <C>          <C>        <C>          <C>          <C>              <C>
  1996/4th         88%          94%          87%          93%        $12.01       $12.39       $10.39           2,071,931
- --------------------------------------------------------------------------------------------------------------------------
  1997/4th         88%          91%          89%          85%        $12.52       $12.95       $10.83           1,892,984
- --------------------------------------------------------------------------------------------------------------------------
  1998/4th         88%          88%          90%          85%        $12.99       $13.44       $11.33           1,430,829
- --------------------------------------------------------------------------------------------------------------------------
  1999/4th         89%          89%          89%          86%        $13.27       $13.77       $11.80           3,136,415
- --------------------------------------------------------------------------------------------------------------------------
  2000/4th         89%          91%          90%          87%        $14.25       $14.53       $12.69           5,094,940
- --------------------------------------------------------------------------------------------------------------------------
  2001/4th         89%          85%          91%          88%        $14.81       $15.03       $12.62           1,060,144
- --------------------------------------------------------------------------------------------------------------------------
  2002/4th         89%          90%          90%          87%        $15.11       $15.45       $13.01             371,113
- --------------------------------------------------------------------------------------------------------------------------
  2003/4th         90%          91%          90%          87%        $15.40       $15.66       $13.42           1,381,769
- --------------------------------------------------------------------------------------------------------------------------
                                                     Ft. Worth Area
- --------------------------------------------------------------------------------------------------------------------------
  1996/4th         88%          93%          87%          86%        $10.43       $10.93       $ 9.25           1,464,161
- --------------------------------------------------------------------------------------------------------------------------
  1997/4th         87%          91%          86%          85%        $10.95       $11.37       $ 9.48           1,356,287
- --------------------------------------------------------------------------------------------------------------------------
  1998/4th         88%          91%          87%          86%        $11.40       $11.83       $ 9.88             871,893
- --------------------------------------------------------------------------------------------------------------------------
  1999/4th         89%          91%          88%          88%        $11.83       $12.31       $10.11           1,484,006
- --------------------------------------------------------------------------------------------------------------------------
  2000/4th         89%          92%          88%          86%        $11.93       $12.52       $10.30             712,800
- --------------------------------------------------------------------------------------------------------------------------
  2001/4th         89%          90%          90%          87%        $12.66       $13.13       $11.02             -68,016
- --------------------------------------------------------------------------------------------------------------------------
  2002/4th         87%          87%          87%          88%        $13.04       $13.67       $11.24            -731,327
- --------------------------------------------------------------------------------------------------------------------------
  2003/4th         87%          88%          86%          88%        $13.58       $14.11       $12.07             991,106
==========================================================================================================================
</TABLE>

(1) Regional Center
(2) Neighborhood/Community Center
(3) Strip Center

As of 4th Quarter 2003, the Dallas area had a total of 122,683,464 SF of retail
space. Approximately 98,260,515 (80%) of the space is multi-tenant and
approximately 24,422,949 SF (26%) is single tenant retail space. The Fort Worth
area has a total of 59,382,001 SF of retail space of which 44,438,775 (75%) is
multi-tenant and 14,943,226 (25%) is single tenant space.

As of 4th Quarter 2003, MPF/RIS reports 28 buildings containing 1,577,165 SF are
under construction in the Dallas area. Seven of the buildings containing 566,311
SF will be owner occupied while 1,010,854 SF is multi-tenant space.
Approximately 62% of the new multi-tenant space is pre-leased. Based upon recent
absorption data for the Dallas area and improving economy, overall occupancies
can be anticipated to remain flat to slightly increasing over the next year.



Humphries & Associates               II - 24
<PAGE>

Regional Area Analysis, continued


As of 4th Quarter 2003, MPF/RIS reports 23 buildings containing 976,188 SF is
under construction in the Fort Worth area. Nine of the buildings containing
556,356 SF will be owner occupied while 419,832 SF is multi-tenant space.
Approximately 22% of the new multi-tenant space is pre-leased. Based upon recent
absorption data for the Fort Worth area and improving economy, overall
occupancies can be anticipated to remain flat to slightly increasing over the
next year.

Office

The following is a summary of office market conditions in the D/FW area as
reported by MPF/RIS as of 4th Quarter 2003.

<TABLE>
<CAPTION>
========================================================================================================================
                                                      Dallas Area
- ------------------------------------------------------------------------------------------------------------------------
       Qtr.                       Occupancy                       Annual Full Service Rent/SF
- ------------------------------------------------------------------------------------------------------------------------
    Year/Month         ALL       A         B        C        ALL         A          B           C              Annual
                                                                                                             Absorption
- ------------------------------------------------------------------------------------------------------------------------
<S>                    <C>      <C>       <C>      <C>     <C>        <C>        <C>         <C>             <C>
     1996/4th          83%      91%       79%      64%     $17.57     $20.25     $14.76      $10.86           2,440,167
- ------------------------------------------------------------------------------------------------------------------------
     1997/4th          85%      92%       84%      66%     $20.00     $23.39     $16.73      $12.03           2,748,930
- ------------------------------------------------------------------------------------------------------------------------
     1998/4th          83%      87%       80%      71%     $12.67     $24.95     $18.01      $13.41             820,984
- ------------------------------------------------------------------------------------------------------------------------
     1999/4th          79%      80%       79%      73%     $21.72     $24.73     $18.55      $14.42           2,891,086
- ------------------------------------------------------------------------------------------------------------------------
     2000/4th          83%      86%       82%      69%     $21.82     $24.53     $18.81      $14.75           3,643,893
- ------------------------------------------------------------------------------------------------------------------------
     2001/4th          77%      81%       75%      69%     $21.82     $23.70     $18.40      $14.78          -4,256,686
- ------------------------------------------------------------------------------------------------------------------------
     2002/4th          75%      78%       73%      69%     $19.70     $21.89     $17.25      $14.59          -2,779,942
- ------------------------------------------------------------------------------------------------------------------------
     2003/4th          73%      75%       71%      67%     $18.85     $21.06     $16.41      $13.71          -2,025,682(1)
- ------------------------------------------------------------------------------------------------------------------------
                                                    Ft. Worth Area
- ------------------------------------------------------------------------------------------------------------------------
     1996/4th          84%      91%       86%      77%     $14.84     $18.98     $14.76      $11.17              80,369
- ------------------------------------------------------------------------------------------------------------------------
     1997/4th          85%      98%       87%      79%     $15.85     $22.47     $16.37      $12.29             322,819
- ------------------------------------------------------------------------------------------------------------------------
     1998/4th          86%      87%       90%      81%     $17.07     $21.78     $17.04      $12.97             193,728
- ------------------------------------------------------------------------------------------------------------------------
     1999/4th          87%      88%       90%      84%     $17.86     $22.61     $17.59      $13.77             594,951
- ------------------------------------------------------------------------------------------------------------------------
     2000/4th          85%      90%       81%      84%     $18.55     $23.44     $17.94      $14.33             -80,785
- ------------------------------------------------------------------------------------------------------------------------
     2001/4th          88%      92%       88%      85%     $19.19     $24.71     $17.93      $15.11               6,737
- ------------------------------------------------------------------------------------------------------------------------
     2002/4th          85%      86%       87%      82%     $18.65     $22.93     $17.64      $15.10            -353,067
- ------------------------------------------------------------------------------------------------------------------------
     2003/4th          81%      80%       83%      80%     $17.92     $21.28     $17.64      $14.16          -1,040,278
========================================================================================================================
</TABLE>


Humphries & Associates               II - 25
<PAGE>

Regional Area Analysis, continued


As of 4th Quarter 2003, the Dallas area had 192,956,411 SF of office space. This
is broken down into 140,691,506 SF (73%) of multi-tenant space and 52,336,905
(27%) of single tenant space. The Fort Worth area has a total of 31,509,125 SF
of office space of which 22,355,951 SF (71%)is multi-tenant space and 9,153,174
SF (29%)is single tenant space.

As of 4th Quarter 2003, MPF/RIS reports eight buildings containing 642,431 SF
are under construction in the Dallas area. One building containing 241,491 SF
will be owner occupied while 400,940 SF is multi-tenant space. The majority of
the new multi-tenant space is speculative and not pre-leased. Based upon
historical absorption data for the Dallas area, overall occupancies can be
anticipated to remain flat over the next year.

As of 4th Quarter 2003, MPF/RIS indicates that eight 8 buildings containing
1,529,403 SF of office space are under construction in the Fort Worth area.
Three buildings containing 1,202,981SF will be owner-occupied and five buildings
containing 326,422 SF will be multi-tenant space. None of the new multi-tenant
space is pre-leased. Based upon historical occupancy trends, occupancies in the
Ft. Worth area are anticipated to remain flat over the next year.

Industrial

The following is a summary of the industrial market conditions in the D/FW area
as reported by MPF/RIS as of 3rd Quarter 2003.


Humphries & Associates               II - 26
<PAGE>

Regional Area Analysis, continued


<TABLE>
<CAPTION>
=========================================================================================================================
                                                Dallas Area - Warehouse
- -------------------------------------------------------------------------------------------------------------------------
                              Occupancy                                Average Gross Rent
- -------------------------------------------------------------------------------------------------------------------------
  Yr/Qtr.      All     1990     1980-     1970-    1969      ALL     1990     1980-    1970-    1969 &         Annual
                                1989      1979                                1989     1979     Older      Absorption SF
- -------------------------------------------------------------------------------------------------------------------------
<S>            <C>      <C>      <C>      <C>      <C>     <C>      <C>      <C>      <C>       <C>           <C>
  1996/4th     93%      87%      93%      94%      92%     $3.32    $3.31    $3.66    $3.31     $2.88          4,334,194
- -------------------------------------------------------------------------------------------------------------------------
  1997/4th     93%      86%      94%      94%      94%     $3.48    $3.43    $3.84    $3.47     $3.04          8,754,541
- -------------------------------------------------------------------------------------------------------------------------
  1998/4th     93%      85%      93%      95%      95%     $3.60    $3.64    $3.97    $3.57     $3.12          4,906,085
- -------------------------------------------------------------------------------------------------------------------------
  1999/4th     91%      89%      90%      93%      94%     $3.50    $3.65    $3.89    $3.40     $2.96          1,383,910
- -------------------------------------------------------------------------------------------------------------------------
  2000/4th     91%      90%      91%      93%      92%     $3.54    $3.66    $3.91    $3.43     $3.03          5,428,442
- -------------------------------------------------------------------------------------------------------------------------
  2001/4th     87%      81%      87%      90%      90%     $3.68    $3.81    $4.05    $3.57     $3.20         -2,060,361
- -------------------------------------------------------------------------------------------------------------------------
  2002/4th     87%      85%      84%      88%      90%     $3.73    $3.94    $4.11    $3.63     $3.21          5,932,881
- -------------------------------------------------------------------------------------------------------------------------
  2003/4th     86%      84%      85%      87%      89%     $3.71    $3.84    $4.07    $3.69     $3.24          7,918,807
- -------------------------------------------------------------------------------------------------------------------------
                                               Ft. Worth Area - Warehouse
- -------------------------------------------------------------------------------------------------------------------------
  1996/4th     93%      94%      94%      92%      91%     $3.19    $3.66    $3.39    $2.92     $2.81          2,239,853
- -------------------------------------------------------------------------------------------------------------------------
  1997/4th     90%      83%      94%      93%      92%     $3.35    $3.71    $3.45    $3.13     $2.93          3,063,432
- -------------------------------------------------------------------------------------------------------------------------
  1998/4th     93%      92%      93%      94%      93%     $3.43    $3.46    $3.67    $3.24     $3.11          5,461,661
- -------------------------------------------------------------------------------------------------------------------------
  1999/4th     92%      93%      92%      93%      91%     $3.30    $3.55    $3.57    $3.14     $2.80          7,612,218
- -------------------------------------------------------------------------------------------------------------------------
  2000/4th     90%      89%      91%      92%      90%     $3.38    $3.60    $3.67    $3.19     $2.94          2,931,016
- -------------------------------------------------------------------------------------------------------------------------
  2001/4th     87%      84%      88%      90%      91%     $3.71    $4.09    $3.96    $3.45     $3.11          4,305,757
- -------------------------------------------------------------------------------------------------------------------------
  2002/4th     85%      85%      86%      86%      85%     $3.80    $4.16    $3.99    $3.49     $3.21          1,207,034
- -------------------------------------------------------------------------------------------------------------------------
  2003/4th     86%      86%      87%      85%      86%     $3.81    $4.15    $4.64    $3.43     $3.16          5,186,825
=========================================================================================================================
</TABLE>

As of 4th Quarter 2003, the Dallas area had 254,507,054 SF of warehouse space.
This is broken down into 107,136,053 SF (42%) of multi-tenant space and
147,371,001 (58%) of single tenant space. The Fort Worth area has a total of
147,841,505 SF of warehouse space of which 55,599,040 SF (38%)is multi-tenant
space and 92,242,465 SF (62%)is single tenant space.

As of 4th Quarter 2003, MPF/RIS reports 15 buildings containing 1,336,417 SF are
under construction in the Dallas area. Eight buildings containing 423,557 SF
will be owner occupied while 912,860 SF is multi-tenant space. Based upon recent
absorption data for the Dallas area and improving economy, overall occupancies
can be anticipated to remain flat to slightly increasing over the next year.

As of 4th Quarter 2003, MPF/RIS indicates that 14 buildings containing 1,993,130
SF of warehouse space is under construction in the Fort Worth area. Nine
buildings containing 1,464,970 SF


Humphries & Associates               II - 27
<PAGE>

Regional Area Analysis, continued


are multi-tenant space and five buildings containing 528,160 is single tenant
owner occupied space.

Based upon recent occupancy trends, occupancies in the Ft. Worth area are
anticipated to remain flat to slightly increasing over the next year.

<TABLE>
<CAPTION>
=========================================================================================================================
                                                Dallas Area - Flex/Tech
- -------------------------------------------------------------------------------------------------------------------------
                              Occupancy                                Average Gross Rent
- -------------------------------------------------------------------------------------------------------------------------
  Yr/Qtr.      All     1990    1980-     1970-    1969      ALL     1990     1980-    1970-    1969 &         Annual
                               1989      1979                                1989     1979     Older       Absorption SF
- -------------------------------------------------------------------------------------------------------------------------
<S>            <C>      <C>      <C>      <C>      <C>     <C>      <C>      <C>      <C>       <C>            <C>
  1996/4th     91%      98%      91%      92%      81%     $6.66    $6.21    $6.85    $6.28     $5.61          2,092,624
- -------------------------------------------------------------------------------------------------------------------------
  1997/4th     91%      84%      92%      93%      85%     $7.37    $8.63    $7.47    $6.89     $6.11          2,279,425
- -------------------------------------------------------------------------------------------------------------------------
  1998/4th     90%      85%      92%      92%      86%     $7.78    $8.84    $7.89    $7.24     $6.74          1,845,279
- -------------------------------------------------------------------------------------------------------------------------
  1999/4th     88%      83%      90%      92%      85%     $7.89    $9.22    $7.98    $7.28     $6.37          1,694,061
- -------------------------------------------------------------------------------------------------------------------------
  2000/4th     89%      84%      91%      92%      82%     $8.03    $9.07    $8.11    $7.42     $6.52          1,838,667
- -------------------------------------------------------------------------------------------------------------------------
  2001/4th     84%      80%      85%      88%      82%     $8.38    $9.61    $8.40    $7.43     $6.94          1,691,219
- -------------------------------------------------------------------------------------------------------------------------
  2002/4th     82%      78%      83%      86%      86%     $8.39    $9.71    $8.44    $7.46     $6.90          1,572,856
- -------------------------------------------------------------------------------------------------------------------------
  2003/4th     79%      75%      80%      87%      71%     $8.33    $9.71    $8.26    $7.67     $7.09          3,605,616
- -------------------------------------------------------------------------------------------------------------------------
                                               Ft. Worth Area - Flex/Tech
- -------------------------------------------------------------------------------------------------------------------------
  1996/4th     87%      94%      90%      81%      89%     $6.32    $6.81    $6.56    $6.06     $1.90            -50,392
- -------------------------------------------------------------------------------------------------------------------------
  1997/4th     92%      96%      92%      89%      94%     $6.45    $8.02    $6.89    $6.16     $1.90            973,155
- -------------------------------------------------------------------------------------------------------------------------
  1998/4th     88%      89%      91%      91%      94%     $7.02    $8.93    $7.51    $6.30      NA              -39,335
- -------------------------------------------------------------------------------------------------------------------------
  1999/4th     89%      87%      89%      93%      94%     $6.62    $6.89    $7.40    $6.04     $2.97            605,732
- -------------------------------------------------------------------------------------------------------------------------
  2000/4th     91%      90%      89%      94%      94%     $6.78    $7.46    $7.49    $6.22     $2.97            332,572
- -------------------------------------------------------------------------------------------------------------------------
  2001/4th     87%      84%      88%      90%     100%     $7.50    $9.76    $7.71    $6.62     $2.97            569,070
- -------------------------------------------------------------------------------------------------------------------------
  2002/4th     88%      85%      89%      90%      94%     $7.47    $8.68    $7.39    $6.35     $2.74          1,583,494
- -------------------------------------------------------------------------------------------------------------------------
  2003/4th     87%      85%      86%      91%      89%     $7.86    $9.63    $7.57    $5.92     $4.21            393,779
=========================================================================================================================
</TABLE>

As of 4th Quarter 2003, the Dallas area had 63,823,487 SF of flex/tech space.
This is broken down into 41,243,717 SF (65%) of multi-tenant space and
22,579,770 (35%) of single tenant space. The Fort Worth area has a total of
13,037,316 SF of flex/tech space of which 7,363,474 SF (56%)is multi-tenant
space and 5,673,842 SF (44%)is single tenant space.


Humphries & Associates               II - 28
<PAGE>

Regional Area Analysis, continued


As of 4th Quarter 2003, MPF/RIS reports 11 buildings containing 1,309,683 SF are
under construction in the Dallas area. Three buildings containing 468,486 SF
will be owner occupied while 841,197 SF is multi-tenant space. Based upon recent
absorption data for the Dallas area, overall occupancies can be anticipated to
remain flat over the next year.

As of 4th Quarter 2003, MPF/RIS indicates that five buildings containing
1,413,580 SF of flex/tech space are under construction in the Fort Worth area.
Three buildings containing 1,127,333 SF is multi-tenant space and two buildings
containing 286,247 is single tenant owner occupied space. Based upon recent
absorption data for the Fort Worth area, overall occupancies can be anticipated
to remain flat over the next year.

CONCLUSIONS

The Metroplex population, employment and income are all projected to slowly
increase over the near term. M/PF, Inc. forecasts Texas and the Metroplex to
parallel or out-perform the U.S. growth, export and job creation. Forecasted
economic growth in GDP for the U.S. and Texas is estimated at a modest +/-1.5% -
2.0% for 2003.

Job growth in the metroplex is anticipated to be flat to slightly declining over
the next year. Any significant job growth is still +/- one-year away. As was
indicated by the previous charts, most real estate sectors will have difficulty
maintaining existing occupancy levels with slowing job growth along with planned
completions. Nevertheless, no sectors are anticipated to have significant
oversupplies.

Various unknown influences could have a significant impact on the metroplex
future expansion. Some of the major factors include:

1.    Slowing in the national economic expansion. Whereas the D/FW metroplex
      used to be a counter-cyclical area, the current D/FW economy tracks
      closely the national economy. This is especially true in the tech sector.


Humphries & Associates               II - 29
<PAGE>

Regional Area Analysis, continued


2.    Interest rate sensitivity - Interest rates still remain attractive for
      housing demand. The low interest rates have been a major contributor to
      improvement in the single-family market. Any substantial increase in
      interest rates could slow the recovery of the housing market.

3.    Cuts in defense spending in the Metroplex - For the Metroplex, real estate
      expansion has been significantly influenced by job growth. At this time,
      no additional defense spending cuts are anticipated for the Metroplex.
      Conversely, if the War on Terrorism escalates, job growth from this sector
      can be anticipated to increase.

4.    Additional downsizing of the telecom and high-tech industries. Based upon
      Texas A&M Research center economists, the current recession should begin
      to show recovery in the second half of 2003.


Humphries & Associates               II - 30
<PAGE>

                              NEIGHBORHOOD ANALYSIS

Real estate is an immobile commodity. As such, it is influenced by the
surrounding neighborhood. Conditions within the neighborhood can influence
buyer/seller opinions concerning real property values within the neighborhood.
Therefore, the neighborhood description is important in the valuation of real
estate. The defined neighborhood is the general area, which is considered to
have the greatest influence on the value of the Subject Property.

The property being appraised is located on the southwest corner of the Dallas
Parkway and Addison Circle in the Town of Addison. The Subject neighborhood is
considered to be that area generally bound by George Bush Freeway (SH-190) on
the north, Preston Road on the east, LBJ Freeway on the south and Midway Road on
the west.

The neighborhood is located approximately 12 miles north of the Dallas Central
Business District, and approximately 10 miles to the northeast of the
Dallas/Fort Worth International Airport.

Street access to the Subject neighborhood is considered good. The area can be
accessed via the following thoroughfares:

     Street                       Lanes                   Direction of Travel
     ------                       -----                   -------------------

George Bush Freeway          8-Lane, Divided                   East/West
Trinity Mills Road           6-Lane, Divided                   East/West
Belt Line Road               6-Lane, Divided                   East/West
Spring Valley Road           4-Lane, Divided                   East/West
Alpha Road                   4-Lane, Undivided                 East/West
LBJ Freeway                  8-Lane, Divided                   East/West
Preston Road                 6-Lane, Divided                  North/South
Midway Road                  6-Lane, Divided                  North/South
Marsh Lane                   6-Lane, Divided                  North/South
Dallas North Tollway         8-Lane, Divided                  North/South

Primary access to the Subject neighborhood is provided by the Dallas North
Tollway which runs in a north/south direction and LBJ Freeway which runs in an
east/west direction. The Dallas North Tollway is a limited access, eight-lane,


Humphries & Associates               III - 1                        D-4Z/04-1990
<PAGE>

Neighborhood Analysis, continued


divided thoroughfare extends from just north of the Dallas Central Business
District northward through the Town of Addison to SH-121. The four-lane service
road has been extended to FM-720.

LBJ Freeway (IH-635) is a limited access, eight-lane, divided thoroughfare that
forms a loop around the City of Dallas. This major freeway forms the south
boundary of the Neighborhood. The George Bush Tollway (SH-190) is a limited
access, eight-lane, divided tollway that forms the north boundary of the
Neighborhood. This tollroad was recently completed and provides access from
SH-78 to IH-35E and has greatly enhanced the accessibility in the area.

The other major artery through the area is Belt Line Road. This thoroughfare
extends east through North Dallas and Richardson providing access to North
Central Expressway and North Dallas Tollway. It also extends west through
Carrollton providing access to IH-35. Through the Town of Addison, the land
along Belt Line has been built up with a variety of retail shopping centers,
restaurants, and hotels.

The Subject area is situated in the northward growth pattern of development of
Dallas County. The Subject area is approximately 80% built up with a mixture of
small, medium and several mid-rise office buildings in Class "A", "B" and some
"C" structures, office/warehouse, office/showroom, high-tech, retail,
apartments, hotel and corporate headquarters improvements. Construction ages
range from new to 20 + years.

The dominant land use in the southwestern portion of the neighborhood is
industrial consisting mainly of office/showroom/tech type properties but also
including office/warehouse and manufacturing facilities. The majority of these
developments are located in the Metropolitan, Beltwood and Beltway Planned
Industrial Parks.

Retail development is concentrated along Belt Line Road and at major
intersections through the area. Other large retail facilities are located along
Preston Road, LBJ Freeway and the Dallas Neighborhood Analysis, continued


Humphries & Associates               III - 2                        D-4Z/04-1990
<PAGE>

Neighborhood Analysis, continued


North Tollway. Office development is scattered throughout the area with
concentrations of low- to mid-rise structures along the Dallas North Tollway and
along LBJ Freeway. Apartment and single- family residential development is
primarily located in the eastern portion of the neighborhood, east of the Dallas
North Tollway. The apartments are typically garden type, constructed in the
1980's or 1990's. Residential development is generally zero line in nature,
constructed in the 1990's.

A large concentration of retail development is located along Belt Line Road.
This development includes both retail strips and free-standing structures. The
predominant use along Belt Line Road is restaurants. In the early 1980's, the
Addison area became "wet" allowing package store liquor sales and the sale of
alcoholic beverages at restaurants. As a result, Addison became an island
surrounded by dry Dallas suburbs, which did not allow alcoholic beverage sales.
The result has been the construction of " 100 restaurants in Addison since the
early 1980's.

This neighborhood includes many restaurants and large shopping centers.
Prestonwood Mall is located just southeast of the Subject Property. This mall
has been closed and is being razed for redeveloped with mixed uses. Valley View
Mall is located on the northeast corner of LBJ Freeway and Montfort Drive and
The Galleria Mall is located on the northeast corner of LBJ Freeway and the
Dallas North Tollway.

Office and retail development is located mainly in along the primary roadways
such as Belt Line Road, Arapaho Road, Frankford Road and Preston Road. There is
a large concentration of low and mid-rise office projects located along the
Dallas Parkway and LBJ Freeway. Office development is scattered throughout the
neighborhood and is emphasized along Preston Road, Dallas Parkway, Quorum Drive,
Midway Road and Arapaho Road. The large majority of this office development was
constructed in the early and mid-1980's.

Approximately 3,790,550 SF of new office space was constructed along or near the
Dallas Parkway from 1998 through 2002. The majority of the space is mid-rise
office development located the Dallas Parkway. The office market experienced


Humphries & Associates               III - 3                        D-4Z/04-1990
<PAGE>

Neighborhood Analysis, continued


strong absorption through mid 2001, however since mid 2001, the area has had a
negative absorption.

Multi-family development is primarily located in the northwest portion of the
neighborhood along Trinity Mills and Frankford Road and in the eastern portion
of the neighborhood along Preston Road, the Dallas Parkway and Westgrove Road.
Single-family development is located in the northeast portion of the
neighborhood along the interior streets in and around Bent Tree Country Club and
Preston Trails Golf Course. The typical home is in the $200,000+ price range.

Vacant land is available throughout the neighborhood, but is concentrated in the
northern portion of the neighborhood.

Addison Airport has had a positive impact on the Subject neighborhood. The
Subject Property is located on the northeast portion of Addison Airport. The
airport is located to the west of the Dallas Parkway, north of Belt Line Road
and has a 7,200' lighted runway. Addison Airport has become a major North Dallas
private aircraft facility that accommodates corporate jets and is an important
secondary facility in the Dallas area. The airport is a full service facility
with more than 700 based aircraft and more than 150 jets and turboprop aircraft
on site.

Demographic Trends

CACI marketing Systems publishes a report which provides demographic data by zip
codes based on the 2000 census. The Subject Property is located in zip code
75248 and census tract 137.04. Selected demographic data for this area is shown
as follows:

================================================================================
     2000              2003             2000-2003             2003 Median
  Population        Population        Annual Change         Household Income
- --------------------------------------------------------------------------------
    33,863            34,567              +0.6%                 $80,147
================================================================================


Humphries & Associates               III - 4                        D-4Z/04-1990
<PAGE>

Neighborhood Analysis, continued


The low population growth reflects the built-up nature of the area. The median
household income levels are in the 96th centile nationally and state-wide.

Conclusions

The general northward growth pattern of the City of Dallas and the general
growth of the Cities of Addison/Farmers Branch/Carrollton have led to the
residential and commercial development of the area. The neighborhood is still
within the growth stage of development. Primary access to the Subject
neighborhood is provided by the Dallas North Tollway, LBJ Freeway and George
Bush Tollway (SH-190). Land uses in the Subject neighborhood include
residential, office, retail, commercial, and industrial. The overall impact of
the Subject neighborhood is considered positive due to its excellent
accessibility.


Humphries & Associates               III - 5                        D-4Z/04-1990
<PAGE>

                                Neighborhood Map


                          [DETAIL MAP OF ADDISON AREA]



Humphries & Associates               III - 6                        D-4Z/04-1990
<PAGE>

                                SUBJECT PROPERTY

The Subject Property is a 3.576-acre tract of land improved with a ten-story
293,787 NRSF office building located on the southwest corner of the Dallas
Parkway and Addison Circle in the Town of Addison, Dallas County, Texas. The
following is a brief legal description of the Subject Property.

      Being Lot 2, Block C of Addison Circle Phase II, an addition to the Town
      of Addison, Dallas County, Texas.

Size/Frontage/Access/Visibility

The tract contains 3.576 acres or 155,771 SF of land. The tract is located on
the southwest corner of Dallas Parkway and Addison Circle. The tract has
approximately 302.48' of frontage along the west side of Dallas Parkway and
approximately 214.02' of frontage along the north side of Addison Circle.

Dallas Parkway is a three-lane, one-way, southbound access road to the Dallas
North Tollway. The tollway is a six-lane, north/south, major tollway that
provides access to SH-121 to the north, LBJ Freeway and the Dallas CBD to the
south. Addison Circle is a four-lane, east/west secondary roadway that provides
access to Dallas Parkway. The south side of the Subject is bordered by Dart
(Dallas Area Rapid Transit) rail lines.

The property does not have any frontage along Spectrum Drive to the west,
however, access to the parking garage is available via an access easement to
this thoroughfare.

Addison Circle is the anchor property and only office tower within the 75-acre
Addison Circle development. This master planned development includes 1,334
multi-family units (with future plans for an additional +/- 1,600 units), an
86-unit condominium project and 125,000 SF of boutique, restaurant and service
retail space. This project has been extremely well received as each of the
components all enjoy occupancy rates of 95% or higher.


Humphries & Associates               IV - 1                         D-4Z/04-1990
<PAGE>

Subject Property, continued


Utilities

The Subject tract currently has access to all city-supplied utilities. The
current utilities are considered to be of adequate supply for the Subject
improvements. The building has high-speed internet access and fiber optics.

Shape/Topography

The Subject tract is irregular "L"-shaped with a level topography. The
topography is considered adequate for proper drainage. The Subject is situated
at the street grade of Dallas Parkway and Addison Circle. The tract is
approximately 20' above the street grade of Dallas North Tollway.

Flood Plain

According to the flood plain map provided by the Federal Emergency Management
Agency (Panel #481089-0005A, dated August 23, 2001. No portion of the tract is
located in the 100-year flood plain. The owner stated that there have been no
historical flood problems. Based on the surrounding development, the Subject is
not negatively affected by flood plain.

Easements

Various easements are situated on the Subject Property. These easements are not
considered to have a detrimental effect on the development potential of the
Subject Property tract. No other easement or private deed restrictions were
noted during the course of this appraisal. According to the survey/site plan
dated April 26, 2001 and First American Title Insurance Company Title Policy
dated August 5, 2002, there are no other easements, encroachments or
restrictions negatively affecting the property.

There is a parking garage easement between the Subject Property and Addison
Circle Two, Ltd. (Post Properties). This agreement allows Post Properties
(adjacent multi-family property owner) to use up to 250 parking garage spaces.
Post also paid for approximately 20% of the parking garage at a cost of $825,000
and pays for a portion of the maintenance costs.


Humphries & Associates               IV - 2                         D-4Z/04-1990
<PAGE>

Subject Property, continued


Neighboring Land Uses

The land uses immediately surrounding the Subject are the following.

   North         Vacant Land
   East          Office development across Dallas North Parkway
   South         Office development across railroad track
   West          Multi-family development

Zoning

The Subject Property is zoned "UC" Urban Center by the Town of Addison. The
purpose of the urban center (UC) district is to encourage the mixing of
residential, retail, office, and civic uses within an urban framework, which is
small in scale and compatible with adjacent developments. The intensity and
design of development within the district is intended to create an environment
that is compatible with major civic events, which may be convened within or
adjacent to the district. The UC district is to be applied within a special
planning area identified in the town's comprehensive plan as the urban center
and special events district in order to implement plan objectives and policies
therein. The district also is intended to promote flexibility in the development
process. It is the intent of this district that development approval shall occur
in stages, necessitating approval of a concept plan for the overall development
project, a development plan for each phase of such development, and a final
development plan for each building site or tract. Some of the allowable uses
include residential, hotel, retail, office and mixed use development. The
restrictions and permitted uses under these zoning designations are summarized
as follows:

Setback Requirements

Minimum Lot Width:                          200'
Minimum Lot Depth:                          200'
Minimum Front Yard:                         10'
Minimum Side Yard:                          10'


Humphries & Associates               IV - 3                         D-4Z/04-1990
<PAGE>

Subject Property, continued


Height Regulations

Maximum Height:                             92' - No building shall exceed
                                            50' unless the additional
                                            height is set back from the
                                            setback line one additional
                                            foot for each 2' above the 50'
                                            limit.

Additional Regulations

Maximum Lot Coverage                        92' including above ground parking
                                            structures
Minimum No. of Parking Spaces*              1 per 300 SF of NRA, 979 required
                                            spaces

*Actual number of marked parking spaces is 1,400 (required - 979). Handicapped
spaces and a ramp were noted.

For our analysis, the Subject is considered to be a legal, conforming use based
on existing zoning restrictions.

                                  Improvements

The Subject Property is comprised of a ten-story office building built in 1999.
The improvements contain 293,787 SF of net rentable area and a gross building
area of 303,892 SF. The building has a common area factor of 16.98%. Based on
the Subject's tenant configuration, the usable area is 272,026 SF. There is a
six-level (five floors above and one floor below grade) parking structure
containing +/-360,575 SF located to the west of the office building. The
building's FAR is 1.89:1, not including the parking structure.

A complete set of building plans was not provided to the appraisers. The major
components of construction were identified from personal inspection and are
summarized as follows:

                              Construction Summary

Foundation

Reinforced concrete slab with concrete reinforced piers.


Humphries & Associates               IV - 4                         D-4Z/04-1990
<PAGE>

Subject Property, continued


Framing

Reinforced concrete frame.

Exterior Walls

Multi-colored brick with cast stone panels. The bricks are non-load bearing.
Windows are double pane in aluminum frames.

Roof

Mechanically fastened EPDM, single-ply system over metal decking and truss
system. The roof has a slight pitch and has internal drains. The roof has a
10-year warranty against leaks and other failures.

HVAC

The building is air-conditioned via a chillwater system with a penthouse located
machine room, consisting primarily of electric motor driven centrifugal water
chillers, circulating water pumps, cooling tower, central station air handling
unit and temperature control air compressor. The total tonnage installed is
approximately 800 tons. An additional 200 tons of building condenser water
capacity has been sized in the building risers and cooling tower to allow for
tenant miscellaneous water usage.

Plumbing

Assumed to be standard per code. Two sets of restrooms per floor. The restrooms
appear to be handicapped accessible and are considered in compliance with ADA.
Each floor has a water fountain.

Electrical

Assumed to be standard per code and the wiring is assumed to be copper. The
building is served with 7,000 amp, 480 volt, 3 phase electrical service. Two
main switchboards are provided for the building; a 4,000 amp switchboard and a
3,000 amp switch board. Each floor has a 480/277-volt distribution panel for
general lighting, HVAC equipment and tenant power distribution.


Humphries & Associates               IV - 5                         D-4Z/04-1990
<PAGE>

Subject Property, continued


Lighting

The interior lighting is a combination of fluorescent and circular incandescent
lights. The exterior and parking lot are lighted.

Interior Walls

Gypsum board, taped, textured and painted or textured wallpaper over metal
studs.

Floor

The lobby area has marble flooring. The corridors are carpeted and the office
area is a combination of carpet, vinyl tile and ceramic tile flooring. The
restrooms have ceramic tile floors.

Ceiling

Suspended ceilings in office areas with some gypsum board, taped and painted in
the common areas.

Parking

The property contains a total of 1,400 parking spaces. There are 1,374 spaces in
the six-story (5 above and 1 below ground) parking garage plus an additional 26
surface spaces. The parking ratio is 1 space per 210 SF of rentable area. The
parking structure is poured-in-place and contains +/- 360,575 SF. Post
Properties (adjacent property owner) paid for +/- 20% of the parking garage and
has the right to use 250 total parking spaces in the garage for
residential/retail tenant use. Handicapped spaces and access ramp were noted.

Suite Doors

Solid wood doors in metal frames. Interior office ceilings are 9' 6" and all
interior doors are 9' solid wood in metal frame. All door hardware is considered
above building standard.

Stairwells

There are two stairways on each floor.


Humphries & Associates               IV - 6                         D-4Z/04-1990
<PAGE>

Subject Property, continued


Security System

The building has hours of 7 AM to 6 PM on Monday through Friday and 8 AM to 1 PM
on Saturday. Card entry access after hours. Card access to individual tenant
spaces turns electricity and HVAC on to these areas.

Fire Protection

The building includes a complete multiplex system located in a central control
station that houses all fire panels and communication devices. An emergency
generator provides backup to all emergency life safety systems, including but
not limited to, fire protection and fire alarm systems, emergency exit lighting,
stair pressurization system, fire pump and elevators. The building and parking
garage are 100% wet sprinklered.

Elevators

Six electric passenger elevators with a 3,500 lb. capacity and one electric
freight elevator with a 4,500 lb. capacity. All of the elevators were
manufactured by Otis Elevators.

Other

Good landscaping with sprinkler system. One high loading door with access to the
freight elevator. The building is wired for high speed internet access and has
fiber optic capability.

Deferred Maintenance

As of the inspection date (July 8, 2004), the property was found to be in
physically very good condition. According to the building manager (Chandra
Hamric), no significant items of deferred maintenance exist on the property. She
indicated that the building had no latent roof, foundation or environmental
problems.


Humphries & Associates               IV - 7                         D-4Z/04-1990
<PAGE>

Subject Property, continued


Environmental Hazards

No environmental hazards were noted during the course of the appraisal.
Management reports that the property had no latent environmental hazards.
However, the appraiser is not qualified to detect such hazards. A Phase I
Environmental Site Assessment was not available to the appraisers. According to
Chandra Hamric, the Subject does not have any environmental problems. This
appraisal assumes no environmental contamination exists. (Please note
Assumptions and Limiting Conditions No. 13).

American Disabilities Standards

Upon inspection, parking spaces designated for handicap use were noted. There is
an access ramp from the parking area to the building. The restrooms appear to be
in ADA compliance. The extent of ADA compliance is unknown. (Please note
Assumptions and Limiting Conditions No. 16).

Personal Property

This appraisal does not include a value on personal property such as office
furniture, kitchen appliances or tenant equipment. Only the real property of the
Subject is included in this appraisal.

Leases

The Subject Property is 99% leased to ten tenants. The leases range from
$17.00/SF to $26.67/SF gross plus electricity with a base year stop. The average
contract rent is $24.14/SF gross plus electricity.

The following data reflects the square footages for the Subject Property.

           Net Rentable                                 293,787 SF
           Usable Area                                  272,026 SF
           Gross Area                                   303,891 SF

The July 2004 rent roll summary provided by the client follows.


Humphries & Associates               IV - 8                         D-4Z/04-1990
<PAGE>

<TABLE>
<CAPTION>
====================================================================================================================================
             Tenant            Suite #    Net        Date          Rent      Annual    Annual Rent           Exp.         Base Yr./
                                        Rentable                 Increase     Rent                         Recovery         Exp.
                                          Area                     Date      Per SF                          Type           Stop
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                              <C>     <C>       <C>          <C>          <C>       <C>               <C>                <C>
Champion Partners, Ltd.          100     9,139     01/01/04-                 $20.00    $182,780.00       Base Yr.+ E        2004
Renewal-No TI's                                    12/31/04
- ------------------------------------------------------------------------------------------------------------------------------------
Countrywide Mortgage             125     5,335     04/01/04-                 $24.75    $132,041.25       Base Yr.+ E        $6.25
Renewal-No TI's                                    04/30/05
- ------------------------------------------------------------------------------------------------------------------------------------
Systemware, Inc.                 150     3,344     03/01/00-                 $26.67    $89,184.48        Base Yr.+ E        $6.50
                                                   03/31/07
- ------------------------------------------------------------------------------------------------------------------------------------
Price Edwards                    150      921         MTM                    $22.50    $20,722.50            None
- ------------------------------------------------------------------------------------------------------------------------------------
The Staubach Co.                 185     1,389     03/01/00-                 $24.23    $33,655.47        Base Yr.+ E        $6.25
                                                   04/30/09
- ------------------------------------------------------------------------------------------------------------------------------------
JD Edwards                       200     27,955    05/91/99-                 $23.95    $669,522.24       Base Yr.+ E        $6.25
                                                   02/28/05
- ------------------------------------------------------------------------------------------------------------------------------------
The Staubach Co.                 300     30,786    05/01/99-                 $24.23    $745,944.78       Base Yr.+ E        $6.25
                                                   04/30/09
- ------------------------------------------------------------------------------------------------------------------------------------
The Staubach Co.                 400     30,786    05/01/99-                 $24.23    $745,944.78       Base Yr.+ E        $6.25
                                                   04/30/09
- ------------------------------------------------------------------------------------------------------------------------------------
CTX Mortgage                     500     10,113    01/01/04-    4 Mos.Free   $18.00    $182,034.00       Base Yr.+ E        2004
                                                   04/30/09      05/01/05    $20.00    $202,260.00
$20.00/SF                                                        05/01/06    $21.00    $212,373.00
Tenant Improvement Allowance,                                    05/01/07    $22.50    $227,542.50
no charge for parking                                            05/01/08    $23.00    $232,599.00
- ------------------------------------------------------------------------------------------------------------------------------------
The Staubach Co.                 525     10,032    05/01/99-     05/01/99-   $24.23    $243,075.36       Base Yr.+ E        $6.25
                                                   04/30/09      04/30/09
- ------------------------------------------------------------------------------------------------------------------------------------
The Staubach Co.                 550     3,341     06/30/04-    2 Mos.Free   $18.00    $40,092.00        Base Yr.+ E        2004
                                                   04/30/09      05/01/05    $19.00    $63,479.00
$16.50/SF Tenant                                                 05/01/06    $20.00    $66,820.00
Improvement Allowance                                            05/01/07    $21.00    $70,161.00
                                                                 05/01/08    $22.00    $73,502.00
- ------------------------------------------------------------------------------------------------------------------------------------
Vacant                           560     4,331
- ------------------------------------------------------------------------------------------------------------------------------------
The Staubach Co.                 575     3,023     07/01/00-                 $26.00    $78,598.00        Base Yr.+ E        $6.25
                                                   04/30/09
- ------------------------------------------------------------------------------------------------------------------------------------
McLeod USA                       600     30,786    07/01/99-                 $24.64    $758,567.04       Base Yr.+ E        $6.25
                                                   03/31/07
- ------------------------------------------------------------------------------------------------------------------------------------
McLeod USA                       700     30,786    03/15/99-                 $24.64    $758,567.04       Base Yr.+ E        $6.25
                                                   03/31/07
- ------------------------------------------------------------------------------------------------------------------------------------
McLeod USA                       800     30,786    04/01/00-                 $25.85    $795,818.10       Base Yr.+ E        $6.25
                                                   03/31/07
- ------------------------------------------------------------------------------------------------------------------------------------
JD Edwards                       900     30,786    07/01/99-                 $25.11    $773,036.46       Base Yr.+ E        $6.25
                                                   04/30/06
- ------------------------------------------------------------------------------------------------------------------------------------
Systemware, Inc.                1000     16,772    03/01/00-                 $26.67    $447,309.24       Base Yr.+ E        $6.50
                                                   03/31/07
- ------------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley                  1025     8,868     02/01/00-                 $24.00    $212,832.00       Base Yr.+ E        $6.50
                                                   01/31/10      02/01/05    $26.00    $230,568.00
- ------------------------------------------------------------------------------------------------------------------------------------
HSNO                            1050     4,508     01/01/04-    2 Mos.Free   $17.00    $76,636.00        Base Yr.+ E        2004
                                                   08/30/08      03/01/05    $18.00    $81,144.00
$18.00/SF Tenant                                                 03/01/06    $20.00    $90,160.00
Improvement Allowance                                            03/01/07    $21.00    $94,668.00
- ------------------------------------------------------------------------------------------------------------------------------------
Total                                   293,787                              $24.14*  $6,986,360.74
====================================================================================================================================
</TABLE>

      *Average contract rent


Humphries & Associates               IV - 9                         D-4Z/04-1990
<PAGE>

Subject Property, continued


The building is 96% leased to eight primary tenants. The following is a brief
discussion of these tenants.

Countrywide Mortgage is one of the numerous companies under the Countrywide
Credit Industries, Inc.'s umbrella that covers a network of wholly owned
financial service companies. Countrywide Credit Industries, Inc. is a
Calabassas, California based holding company, which through its principle
subsidiary, originates, purchases, sells and services mortgage loans. Founded in
1969, Countrywide Credit Industries, Inc. is a member of the S&P 500 and the
Forbes.

Champion Partners, Ltd. Is a privately-owned opportunity driven firm
specializing in real estate strategy and implementation within both the property
and capital marketplaces. Founded in 1991 and based in Dallas, Texas, Champion
has successfully completed real estate development financing, and acquisition
assignments throughout the United States including the development of Addison
Circle One. Since its inception, champion has been involved in over 45
projects/investments comprised of over 17 million SF of buildings and nearly
1,600 acres of land totaling more than one billion dollars. In conjunction with
its principal investment and corporate build-to-suit capabilities, Champion is
actively involved in the real estate capital markets, with expertise in
sale-leaseback transactions, commercial mortgage securitization, traditional
property debt/equity financing, and asset disposition.

JD Edwards & Company provides the complete spectrum of enterprise and
business-to-business software and services to enable companies to engage in
collaborative commerce with their suppliers, customers and other business
partners. JD Edwards & Company develops, markets, and supports highly functional
Enterprise Resource Planning software solutions that operate on multiple
computing platforms. Headquartered in Denver, Colorado, this company employs
4,900 people. With a 25-year heritage, JD Edwards has built a customer based of
more than 6,300 mid-market and large enterprise customers, and generated
revenues of nearly $875 million for its 2001 fiscal year.

McLeodUSA was formed in June 1991 as McLeod Telecommunications, Inc. The company
provides integrated communications services including local services in 25
Midwest, Southwest, Northwest and Rocky Mountain states. McLeodUSA is one of the
nation's largest independent competitive local exchange carriers. The company's
business strategy is to provide voice and data services to small and medium-size
businesses and residential customers across a 25-state footprint. On April 17,
2002, McLeodUSA emerged from bankruptcy protection only 75 days after the
petition was filed. As part of the emergency plan, approximately $3 billion of
liabilities were removed and the lead investor, Fortsman Little, purchased $175
million of new stock. (Note: the


Humphries & Associates               IV - 10                        D-4Z/04-1990
<PAGE>

Subject Property, continued


bankruptcy filing was only for the holding company and did not include the main
operating subsidiary which is the tenant at Addison Circle). McLeodUSA occupies
92,358 SF in the building through 2007.

Systemware, Inc. is a privately held corporation with more than 20 years of
experience in the software and technical service industry. Founded in 1981,
Systemware is headquartered in Addison Circle with branch offices across the
United States. Systemware develops powerful enterprise output management
software that supports high volume capture, management, indexing, archival, and
presentation of enterprise information. Systemware's consulting division
provides technical solutions and supplemental staffing to its client base. The
company occupies 20,116 SF in the building through 2007 plus an additional 4,681
SF recently acquired through sublease through 2006.

The Staubach Company is a real estate service firm founded in 1977 by Roger
Staubach. The company is a full-service international real estate strategy and
services firm that provides innovative solutions for companies seeking office,
retail and industrial space. Over 525 professionals and support staff are
located in 26 offices in the United States and Mexico. The Staubach Company
provides service in more than 140 cities worldwide and in more than 42
countries.

MorganStanley is divided into three business segments; Securities - includes
underwriting; distribution and trading; merger, acquisition, restructuring, real
estate, project finance and other corporate finance advisory activities;
provision of full on-line brokerage and research services; trading of foreign
exchange and commodities as well as derivatives on a broad range of asset
categories, rates and indices; securities lending; and private equity
activities. Asset Management - includes provision of global asset management
advice and services to investors through a variety of product lines and brand
names. Credit Services - includes the issuance of the Discover Card, the
discover Platinum Card, the Morgan Stanley Dean Witter Card, the Private Issue
Card and co-branded & affinity cards and the operations of proprietary network
of merchant and cash access locations.

CTX Mortgage Company, one of the nation's largest non-bank-affiliated retail
mortgage originators, has more than 225 offices and is licensed to do business
in 48 states. CTX Mortgage offers FHA/VA, conventional, conforming, jumbo and
specialty loans. CTX Mortgage originates approximately 414 billion of loans
annually. Centex Financial Services is a wholly-owned subsidiary of Centex
Corporation. Established in 1950 in Dallas, Texas, today Centex Corp. is the
nation's premier company in building and related services: Home Building, Home
Services, Financial Services, Construction Services, and Investment Real Estate.
With revenues of approximately $10 billion, Centex is a Fortune 250 company
traded on the New York Stock Exchange under the symbol "CTX." The company has
approximately 17,000 employees located in more than 1,500 offices and
construction job sites across the nation and in the U.K.

The Subject Property is considered to have a strong credit tenant base.


Humphries & Associates               IV - 11                        D-4Z/04-1990
<PAGE>

Subject Property, continued


The majority of the leases have base year expense stops of $6.25/SF to $6.50/SF.
The new leases have a base year 2004 expense stop while Champion Partners pays
no expense reimbursement. According to the building manager, the 2004 operating
expenses are projected to be in the +/-$8.60/SF range.

According to Trey Smith (leasing agent), the asking rent for any vacant space is
$23.00/SF gross plus electricity with a base year operating expense stop. Mr.
Smith stated that the Year 1 rent will be in the $20.00/SF range with annual
$1.00/SF rent increases throughout the lease term. The Subject is offering rent
concessions in the form of 2 to 4 months of free rent. The Subject's tenant
improvement allowance is $15.00/SF to $20.00/SF for new leases and $5.00/SF for
renewals.

The typical lease commission is 4.0%. A 6.75% commission is paid if an outside
broker is utilized.

J.D. Edwards has subleased its space on the 2nd floor and 9th floor for the
remainder of its lease term. McLeod USA has subleased the 7th floor to Credit
Solutions of America for the remainder of its lease term.

The owner is working with two tenants to sublease the McLeod USA space on Floor
6 and 8. In addition to subleasing the space for the remainder of the McLeod USA
term, the tenants will extend the lease 5-years beyond the March 31, 2007 McLeod
USA expiration. According to John Donahue (Asset Manager), the leases will be
extended 5-years to 2012. Beginning on June 1, 2007, the 6th floor rent will be
$22.00/SF in Year 1, $24.00/SF in Years 2 and 3 and $25.00/SF in Years 4 and 5
with an effective rent of $24.00/SF. The tenant improvement allowance is
$11.00/SF. Beginning in June 1, 2007, the 7th floor rent will be $24.50/SF for
30 months and $25.00 for 30 months with an effective rent of $24.75/SF. The
tenant improvement allowance is $10.00/SF. The preceding leases are in draft
form and are anticipated to be executed within the next 30 days.


Humphries & Associates               IV - 12                        D-4Z/04-1990
<PAGE>

Subject Property, continued


The building manager stated that J.D. Edwards and McLeod USA have not had any
delinquent payments.

The following is a summary of the most recent leases.

Tenant:                             Champion Partners (Renewal)
Suite:                              100
Size/SF:                            9,139 SF
Term:                               12 Months (1/1/04 - 12/31/04)
Rent/SF:                            $20.00/SF
Finishout Allowance:                None

Tenant:                             Countrywide (Renewal)
Suite:                              125
Size/SF:                            5,335 SF
Term:                               12 Months (5/1/04 - 4/30/05)
Rent/SF:                            $24.75/SF
Finishout Allowance:                None

Tenant:                             CTX Mortgage (New Lease)
Suite:                              500
Size/SF:                            10,113 SF
Term:                               64 Months (1/1/04 - 4/30/09)
Rent/SF:                            Free rent in Months 1-4
                                    $18.00/SF (Year 1)
                                    $20.00/SF (Year 2)
                                    $21.00/SF (Year 3)
                                    $22.50/SF (Year 4)
                                    $23.00/SF (Year 5)
Effective Rent:                     $19.59/SF
Finishout Allowance:                $20.00/SF


Humphries & Associates               IV - 13                        D-4Z/04-1990
<PAGE>

Subject Property, continued


Tenant:                             The Staubach Company (New Lease)
Suite:                              550
Size/SF:                            3,341 SF
Term:                               59 Months (6/3/04 - 4/30/09)
Rent/SF:                            Free rent in Months 1-2
                                    $18.00/SF (Year 1)
                                    $19.00/SF (Year 2)
                                    $20.00/SF (Year 3)
                                    $21.00/SF (Year 4)
                                    $22.00/SF (Year 5)
Effective Rent:                     $20.34/SF
Finishout Allowance:                $16.50/SF

Tenant:                             HSNO (New Lease)
Suite:                              1050
Size/SF:                            4,508 SF
Term:                               56 Months (1/1/04 - 8/30/08)
Rent/SF:                            Free rent in Months 1-2
                                    $17.00/SF (Year 1)
                                    $18.00/SF (Year 2)
                                    $20.00/SF (Year 3)
                                    $21.00/SF (Year 4)
Effective Rent:                     $18.77/SF
Finishout Allowance:                $18.00/SF

Parking Revenue

Due to the recent decline in the office market, the Subject no longer charges
for parking spaces. However, the existing tenants are still paying for parking
under the terms of their leases. This account includes the Parking Revenue
received under all existing leases at Addison Circle One. The tenant's parking
option states that some tenants may convert non-reserved parking spaces to
reserved parking spaces. The following is a summary of the parking revenue.


Humphries & Associates               IV - 14                        D-4Z/04-1990
<PAGE>

Subject Property, continued


<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
                               Parking Revenue Schedule                                            Monthly
                                                                                                    Rent
- ----------------------------------------------------------------------------------------------------------
<S>                                  <C>                                                         <C>
Suite 125 - Countrywide              32 non-reserved parking spaces @ $35.00                        1,120
                                     2 reserved parking spaces @ $80.00                               160
- ----------------------------------------------------------------------------------------------------------
Suite 150 Systemware                 53 non-reserved parking spaces @ $35.00                        1,855
      1000                           25 reserved parking spaces @ $80.00                            2,000
- ----------------------------------------------------------------------------------------------------------
Suite 185 - The Staubach Co.         190 non-reserved parking spaces @ $30.00                       5,700
      200, 400, 525, 575             148 reserved parking spaces @ $40.00                           5,920
- ----------------------------------------------------------------------------------------------------------
Suite 200 - J.D. Edwards             111 non-reserved parking spaces @ $25.00                       2,775
                                     111 non-reserved parking spaces @ $30.00                       3,330
                                     13 reserved parking space @ $80.00                             1,040
- ----------------------------------------------------------------------------------------------------------
Suite 500 - CTX Mortgage             36 non-reserved parking spaces @ $0.00                             0
                                     4 reserved parking spaces @ $0.00                                  0
- ----------------------------------------------------------------------------------------------------------
Suite 600 - McLeod USA               329 non-reserved parking spaces @ $30.00                       9,870
      700, 800                       40 reserved parking spaces @ $80.00                            3,200
- ----------------------------------------------------------------------------------------------------------
Suite 1025 - Morgan Stanley          5 non-reserved parking spaces @ $30.00                           150
                                     5 reserved parking spaces @ $80.00                               400
- ----------------------------------------------------------------------------------------------------------
Suite 1050 - HSNO                    18 non-reserved parking spaces @ $0.00                             0
- ----------------------------------------------------------------------------------------------------------
                                                                                                  $37,520
                                                                                                      x12
- ----------------------------------------------------------------------------------------------------------
Total                                1,082 Spaces                                                $450,240
- ----------------------------------------------------------------------------------------------------------
</TABLE>

Conclusions

The Subject Property consists of a ten-story office building containing 293,787
SF and a six-level parking garage located on the southwest corner of Dallas
Parkway and Addison Circle in the Town of Addison, Dallas County, Texas. The
improvements are considered to be in very good condition. Please refer to the
following pages for various exhibits concerning the Subject Property.


Humphries & Associates               IV - 15                        D-4Z/04-1990
<PAGE>

Subject Property, continued


                                   Tax Exhibit

In Texas, all real estate is assessed at 100% of appraised value. Property
values are set by central appraisal districts for all taxing authorities within
that district.

The 2004 taxes for the Subject are shown below based on the certified 2004
assessed value and certified 2003 tax rates provided by the Dallas County
Appraisal District. The following is a summary of the 2004 assessed value.

<TABLE>
<CAPTION>
==========================================================================================
 Year               Improved Value              Land Value                  Total Value
- ------------------------------------------------------------------------------------------
<S>                  <C>                        <C>                         <C>
 2004                $32,386,025                $2,336,565                  $34,722,590
                     $110.24/SF                 $15.00/SF                   $118.19/SF
==========================================================================================
</TABLE>

The Subject Property is located within the taxing jurisdictions of Dallas
County, the Town of Addison and the Dallas ISD. The following is a breakdown of
the real estate taxes for the Subject Property.

<TABLE>
<CAPTION>
======================================================================================================
               Taxing Authority           2004 Assessed Value        2003 Tax Rate             Total
- ------------------------------------------------------------------------------------------------------
<S>                                           <C>                       <C>                  <C>
City of Addison                               $34,722,590               $0.42280             $146,807
- ------------------------------------------------------------------------------------------------------
Dallas ISD                                    $34,722,590               $1.63950              569,277
- ------------------------------------------------------------------------------------------------------
Dallas County*                                $34,722,590               $0.54116              187,905
- ------------------------------------------------------------------------------------------------------
Total                                         $34,722,590               $2.60346             $903,989
                                              $118.19/SF                                     $3.08/SF
======================================================================================================
</TABLE>

*Includes community college and hospital district.

Based on our appraised value, it is our conclusion that the 2004 assessed value
is considered favorable. According to the Dallas County Tax Assessor, there are
no past due taxes.


Humphries & Associates               IV - 16                        D-4Z/04-1990
<PAGE>

                     [PICTURE OF FRONT OF SUBJECT PROPERTY]

                                SUBJECT PROPERTY


                      [PICTURE OF SIDE OF SUBJECT PROPERTY]

                                SUBJECT PROPERTY


Humphries & Associates               IV - 17                        D-4Z/04-1990
<PAGE>

                           [PICTURE OF PARKING GARAGE]

                                 PARKING GARAGE


                               [PICTURE OF LOBBY]

                                     LOBBY


Humphries & Associates               IV - 18                        D-4Z/04-1990
<PAGE>

                           [PICTURE OF TYPICAL SPACE]

                                  TYPICAL SPACE


                           [PICTURE OF TYPICAL SPACE]

                                 TYPICAL SPACE


Humphries & Associates               IV - 19                        D-4Z/04-1990
<PAGE>

                           [PICTURE OF TYPICAL SPACE]

                                 TYPICAL SPACE


                           [PICTURE OF INTERIOR VIEW]

                                  INTERIOR VIEW


Humphries & Associates               IV - 20                        D-4Z/04-1990
<PAGE>

                                Legal Description

Being a tract of land situated in G.W. Fisher Survey, Abstract No. 482, Town of
Addison, Dallas County, Texas and being all of Lot 2, Block C, of the Amended
Final Plat of Addison Circle Phase II, an addition to the Town of Addison as
recorded in Volume 2000153, Page 00015 of the Deed Records Dallas County, Texas
(D.R.D.C.T.) and being all of that land described in instrument to Champion
Addison One Limited Partnership as recorded in Volume 97224, Page 00007
D.R.D.C.T.) and being more particularly described as follows;

BEGINNING at an X cut set in brick pavers at the intersection of the northerly
right-of-way line of the Dallas Area Rapid Transit Property Acquisition
Corporation tract as described in Volume 91008, Page 1390 (D.R.D.C.T.) and the
westerly right-of way line of the Dallas North Tollway;

THENCE departing the westerly right-of-way line of said Dallas North Tollway and
along the Northerly right-of-way line of said Dallas Area Rapid Transit Property
Acquisition Corporation tract South 66 degrees 45 minutes 01 seconds West a
distance of 642.54 feet to a 5/8 inch iron rod found with Huitt-Zollars cap at
the common southerly corner of Lot 1 and Lot 2, Block C of said Addison Circle
Phase II;

THENCE departing the northerly line of said Dallas Rapid Transit Property
Acquisition Corporation tract and along the common line of said Lot 1 and Lot 2
the following;

North 22 degrees 28 minutes 21 seconds West a distance of 61.15 feet to a point
for corner;

North 00 degrees 55 minutes 13 seconds East a distance of 156.58 feet to a point
for corner;

North 66 degrees 45 minutes 01 seconds East a distance of 343.62 feet to a point
for corner;

North 17 degrees 01 minutes 01 seconds West a distance of 60.70 feet to an X cut
found in brick pavers;

North 72 degrees 58 minutes 59 seconds East a distance of 68.46 feet to a P.K.
nail found in brick pavers;

North 17 degrees 01 minutes 01 seconds West a distance of 0.51 feet to a P.K.
nail found in brick pavers;

North 72 degrees 58 minutes 59 seconds East a distance of 0.67 feet to a point
for corner;

North 17 degrees 01 minutes 01 seconds West a distance of 30.57 feet to a point
for corner;

North 72 degrees 58 minutes 59 seconds East a distance of 0.54 feet to a point
for corner;

North 17 degrees 01 minutes 01 seconds West a distance of 31.75 feet
to an X cut found in brick pavers, said point being the common northerly corner
of said Lot 1 and Lot 2 and being on the southerly right-of-way line of Addison
Circle, a 109.00 foot right-of-way as recorded in Volume 97217, Page 3056
(D.R.D.C.T.);

THENCE departing the common lot line of said Lot 1 and Lot 2 and along the
southerly right-of-way line of said Addison Circle North 72 degrees 58 minutes
59 seconds East a distance of 214.02 feet to an X cut found in brick pavers,
said point being at the intersection of the southerly line of said Addison
Circle and the westerly right-of-way line of said Dallas North Tollway and being
the beginning of a non-tangent curve to the left having a radius of 1997.84
feet, a central angle of 02 degrees 27 minutes 01 seconds and being subtended by
a chord which bears South 08 degrees 44 minutes 33 seconds East at a distance of
85.43 feet;

THENCE along the westerly right-of-way line of said Dallas North Tollway and
along said curve to the left an arc distance of 85.45 feet to an X cut found in
brick pavers, said point being the beginning of a compound curve to the left
having a radius of 2964.79 feet, a central angle of 01 degrees 54 minutes 29
seconds and being subtended by a chord which bears South 12 degrees 05 minutes
47 seconds East at a distance of 98.73 feet;

THENCE continuing along the westerly right-of-way line of said Dallas North
Tollway and along said compound curve to the left an arc distance of 98.74 feet
to an X cut found in concrete;

THENCE continuing along the westerly right-of-way line of said Dallas North
Tollway South 13 degrees 03 minutes 02 seconds East a distance of 118.29 feet to
the POINT OF BEGINNING and containing 3.576 acres of land, more or less.

NOTE: This survey relies on commitment for Title Insurance by First American
Title Insurance Company, GF No. 01R02623 CR0, with an effective date of February
8, 2001 and issued February 16, 2001 for all matters of record. No additional
search for encumbrances was provided by Huitt-Zollars, Inc. and the following
affect the subject tract as noted.
<PAGE>

                                    Easements


a. Easement to Town of Addison, filed December 12, 1990, recorded in Volume
90241, Page 2799, Deed Records of Dallas County, Texas.

b. Easement to City of Addison, filed June 25, 1980, recorded in Volume 80126,
Page 480, Deed Records of Dallas County, Texas.

c. 10' water line easements, utility easement and Texas Utilities Electric
Company easements shown on the plat recorded in Volume 2000153, Page 15, Map
Records of Dallas County, Texas.

d. Texas Turnpike Authority drainage easement and slope easement shown on the
plat recorded in Volume 97217, Page 3056, Map Records of Dallas, County, Texas.
(Released by letter from North Texas Tollway Authority to Gaylord Properties,
L.P. dated November 4, 1997.)

e. 10' private electric easements, 10' street light easement, variable width TXU
Electric easements. 10' TXU Gas easement & variable width encroachment easements
shown on the plat recorded in Volume 2000153, Page 15, Map Records of Dallas
County, Texas.

f. Any and all utilities located upon subject property as set out in Ordinance
No. 085-021, a certified copy of which was filed October 23, 1997, recorded in
Volume 97207, Page 1340, Deed Records, Dallas County, Texas.

g. Terms and conditions contained in Unity Agreement by and between Addison
Circle Two, Ltd. and Gaylord Properties, L.P., filed November 13, 1997, recorded
in Volume 97223, Page 1, Deed Records, Dallas County, Texas.

h. Terms and conditions contained in Assignment of Leases and Rents dated
November 13, 1997 by CHAMPION ADDISON ONE LIMITED PARTNERSHIP to NATIONSBANK OF
TEXAS, N.A., filed of record on November 17, 1997 and recorded in Volume 97224,
Page 00076 of the Deed Records of Dallas County, Texas.

i. UCC-1 Financing Statement between CHAMPION ADDISON ONE LIMITED PARTNERSHIP
(Debtor) and NATIONSBANK OF TEXAS, N.A. (Secured Party), filed of record on
November 17, 1997 and recorded in Volume 97224, page 00084, Deed of Trust
Records, Dallas County, Texas.

j. Terms and conditions contained in Memorandum of Lease dated November 13,
1997, by and between CHAMPION ADDISON ONE LIMITED PARTNERSHIP, (Lessor) and
ADDISON CIRCLE TWO, LTD. (Lessee), filed of record on November 17, 1997 and
recorded in Volume 97224, Page 00091, of the Deed Records of Dallas County,
Texas. Memorandum also filed November 20, 1998, recorded in Volume 98229, Page
556, Deed of Records of Dallas County, Texas.

k. Terms and Conditions contained in Party Wall Agreement dated November 13,
1997, by and between CHAMPION ADDISON ONE LIMITED PARTNERSHIP and ADDISON CIRCLE
TWO, LTD. filed November 17, 1997 and recorded in Volume 97224, Page 00097 of
the Deed Records of Dallas County, Texas.

l. Terms, provisions, conditions, and easements contained in instrument fled
January 6, 1999, recorded in Volume 99004, Page 404, Deed Records of Dallas
County, Texas.

SURVEYOR'S CERTIFICATION

This survey substantially complies with the current Texas Society of
Professional Surveyors Standards and Specifications for a Category 1A, Condition
II Survey.

No part of the subject property lies within a 100-year flood plain as defined by
the U.S. Department of Housing and Urban Development pursuant to the Flood
Disaster Protection Act of 1973, amended. The subject property is located in
designated Zone B and C as explained on community panel number 481089 0005 A of
the Flood Insurance Rate Map, City of Addison, Texas, dated July 16, 1980. Areas
of local drainage are not noted on this map.

For Huitt-Zollars, Inc.
<PAGE>

                                 Flood Plain Map


                           [FLOOD INSURANCE RATE MAP]


<PAGE>

                                   Zoning Map


                           [ZONING MAP OF ADDISON, TX]


<PAGE>

                                Site Plan/Survey


                           [ADDISON CIRCLE SITE PLAN]


<PAGE>

                                   Floor Plan


                  [FLOOR PLAN FOR 3RD/4TH FLOOR ADDISON CIRCLE]


<PAGE>

                                   Floor Plan


                    [FLOOR PLAN FOR 5TH FLOOR ADDISON CIRCLE]


<PAGE>

                                   Floor Plan


                  [FLOOR PLAN FOR 6TH/7TH FLOOR ADDISON CIRCLE]


<PAGE>

                                   Floor Plan


                    [FLOOR PLAN FOR 8TH FLOOR ADDISON CIRCLE]


<PAGE>

                                   Floor Plan


                    [FLOOR PLAN FOR 9TH FLOOR ADDISON CIRCLE]


<PAGE>

                                   Floor Plan


                   [FLOOR PLAN FOR 10TH FLOOR ADDISON CIRCLE]


<PAGE>

                                 Bldg Elevation


                   [DRAWING OF SOUTH ELEVATION ADDISON CIRCLE]


<PAGE>

                                   Floor Plan


               [FLOOR PLAN FOR GARAGE GROUND FLOOR ADDISON CIRCLE]


<PAGE>

                                   Floor Plan


                    [FLOOR PLAN FOR 1ST FLOOR ADDISON CIRCLE]


<PAGE>

                                   Floor Plan


                    [FLOOR PLAN FOR 2ND FLOOR ADDISON CIRCLE]


<PAGE>

                              HIGHEST AND BEST USE

Highest and Best Use may be defined as that legal use which will yield the
highest net present value to the land, or that land use which may reasonably be
expected to produce the greatest net return over a given period of time.

The principle of Highest and Best Use determination is a function of
neighborhood land use trends, property size, shape, zoning, and other physical
factors, as well as the market environment in which the property must compete.
Investors continually attempt to maximize profits on invested capital. The
observation of investor activities in the area is an indication of that use
which can be expected to produce the greatest net return to the land.

The principle of conformity holds, in part, that conformity in use is usually a
highly desirable adjunct of real property, since it creates and/or maintains
maximum value, and it is maximum value which affords the owner maximum returns.

In arriving at the estimate of Highest and Best Use, the Subject Site is
analyzed "as if vacant and available for development" and "as improved".

"AS IF" VACANT

Possible Use

The first constraint imposed on the Subject tract is the possible use as
dictated by the physical aspects of the site. The size and location within a
given block are the most important determinants of value. In general, the larger
the tract, the greater its potential to achieve economies of scale and
flexibility in development.

The size of the parcel, considered within the constraints of the zoning has
considerable influence on its ultimate development. The key determinant in
developing the site is the permitted size of the project. More land permits


Humphries & Associates                V - 1                         D-4Z/04-1990
<PAGE>

Highest and Best Use, continued


higher density development and higher floor to area ratios permit more floor
area to land. When there is more land, the structure tends to rise in proportion
to the size of the tract. Location is important when considering the Subject's
proximity to open plazas, retail trade areas, work force areas, residential
areas, public transportation, etc.

The Subject site contains 155,771 SF of land located on the southwest corner of
Dallas Parkway and Addison Circle in the Town of Addison. The tract is irregular
in shape with a level topography. The tract is not negatively affected by the
100-year flood plain. Therefore, the Subject's development potential is not
considered to be negatively affected by its shape or flood hazard, and utilities
are available to the site.

The Subject is considered to have generally good physical characteristics for
most types of office development.

Legally Permissible

The potential use of a property is affected by public restrictions (zoning,
building codes, environmental regulations, etc.) and by private restrictions
(deed restrictions). According to the title policy and survey, there are no
easements or restrictions affecting the use of the Subject Property. No other
private restrictions were noted during the course of this appraisal. Pubic
restrictions affecting the use of the Subject Property include the allowable
land uses and development restrictions in the "UC" Urban Center zoning district
by the Town of Addison. (See Subject Property section for zoning restrictions).

We assume that only common restrictions (utility easements, building setback
requirements, etc.) exist, and they are not of any consequence to hinder the
development of the site.


Humphries & Associates                V - 2                         D-4Z/04-1990
<PAGE>

Highest and Best Use, continued


Financially Feasible/Maximally Productive

The potential uses of a property that meet the criteria of being physically
possible and legally permissible are analyzed further to determine financial
feasibility. If a potential use is capable of satisfying a required rate of
return on investment and providing a sufficient return on the land, the use is
financially practical within some price limit.

The land use which meets the criteria of being physically possible and legally
permissible is office development. Uses on similar land tracts have been
improved with office development.

Market Overview

The following chart shows the estimated years supply of office space in the DFW
RealSmart Far North Dallas Submarket.

                       Office Space Supply as of July 2004

Existing Space                                                14,216,531  SF
Less: Occupied Space (76%)                                   -10,804,564  SF
                                                             -----------

Current Supply                                                 3,411,967  SF
Plus: Projected New Supply of Space                                    0  SF
                                                             -----------

Total Amount of Space Available                                3,411,967  SF

Average 1998 - 1st Quarter 2004 Absorption                       112,857  SF

Estimated Supply of Office Space                                   30.23  Years

The submarket's occupancy of 76% is below stabilized levels. The Far North
Dallas submarket has absorbed 705,359 SF since 1998. However, the submarket
experienced negative absorption of -642,927 SF, -488,384 SF and -442,562 SF
during 2001, 2002 and 2003, respectively due to the national and regional
recession. During the first quarter the submarket experienced strong absorption
of 396,088 SF. Discussions with the leasing agents of the rent comparables


Humphries & Associates                V - 3                         D-4Z/04-1990
<PAGE>

Highest and Best Use, continued


indicate that the leasing activity has dramatically increased during 2004
because of the recovering economy. Recent construction in the Dallas area has
involved speculative, pre-leased and owner-occupied facilities.

"As Vacant" Highest and Best Use

Comparing the valuations arrived at via the Cost Approach (not including
depreciation) versus the Income and Market Approaches, office development
appears to remain feasible at this time if a property were able to lease to
stabilized levels. However, the market conditions currently indicate an
oversupply of office space in the Subject's neighborhood. It can be reasonably
concluded that the Highest and Best Use of the Subject Property, as vacant and
available to be put to its Highest and Best Use, is for office development at
some future date when market conditions indicate development to be feasible. A
significantly pre-leased or owner-occupied building would be an alternative
highest and best use in today's market environment.

"As Improved"

As mentioned previously, the Subject site is improved with a ten-story office
building containing 293,787 SF and a six-level parking garage. The property was
constructed in 1999 and is currently in very good condition.

The current Subject improvements represent a legal conforming efficient use of
the Subject site. The building is adequately competing in the marketplace for
tenants and is currently 99% leased, generally on a long-term basis.
Additionally, there is not an alternative legal use that would justify
redevelopment of the Subject site at this time. Therefore, it is the appraisers'
opinion that the current improvements represent the Highest and Best Use of the
Subject Property as improved.


Humphries & Associates                V - 4                         D-4Z/04-1990
<PAGE>

                                 LAND VALUATION

The valuation estimate for the Subject land tract is based upon the analysis of
similar land transactions found in the market in which the Subject Property must
compete.

These sales are found by a search of the Deed Records or by conversations with
Brokers or other real estate professionals. In Texas, there is no "full
disclosure" law - we must verify the sales price by conversation with the buyer,
seller, or other involved persons.

Major dissimilarities between the sales and the sale price are generally as
follows:

      TIME - The sales are analyzed to determine the amount of appreciation or
      decline in land values as time has progressed. Older sales are adjusted
      accordingly to reflect value levels.

      LOCATION - The sales are compared to the Subject Property to isolate any
      locational differences. If a sale is considered to be superior in location
      when compared to the Subject Property, a downward adjustment is made to
      the sale. The opposite occurs when the sale is considered to be in an
      inferior location - upward adjustment.

      UTILITY - The comparative differences here generally involve size, shape,
      utilities, flood prone areas, topography, road frontage or other items
      that affect the use of the sales and the Subject Property.

Our policy is to include all similar sales, but to adjust only the most
comparable sales. The rationale being that the most comparable sales require
less adjustments and result in more reliable value estimates, but we feel the
reader should have the benefit of knowing the general market.

The market sales are on the following pages.


Humphries & Associates               VI - 1                         D-4Z/04-1990
<PAGE>

                                   LAND SALE 1


Location:                    NE/S Dallas Parkway and SW/S Knoll Trail, just
                             south of Westgrove, Dallas

Grantor:                     Lucille G. Murchison

Grantee:                     Stone Plaza Associates, Ltd.

Sale Date:                   05/23/00

Size:                        1.182 Acres or 51,478 SF

Zoning:                      GO-A

Legal Desc.:                 B.C. Myers Survey, Abstract No. 964, Dallas

Recordation:                 2000202/4553

Price:                       $900,028

Per Unit:                    $17.48/SF

Terms:                       Cash to Seller

Verified:                    Buyer

Frontage:                    Dallas Parkway and Knoll Trail

Uses:                        Improved with a three story office building

Utilities:                   All Available

Flood Area:                  None

Topography:                  Level

Shape:                       Irregular

Comments:                    This tract is located approximately 4,000' north of
                             the Subject Property.

Mapsco:                      4-V


Humphries & Associates               VI - 2                         D-4Z/04-1990
<PAGE>

                                 LAND SALE NO. 2


Location:                    NWC Dallas Parkway and International Parkway,
                             Farmers Branch

Grantor:                     BCK and Partners, LP

Grantee:                     Wilcox International Place II, Ltd.

Sale Date:                   10/2/00

Size:                        8.163 acres or 355,558 SF

Zoning:                      Commercial

Legal Description:           Lot 1, Block B, International Place, Farmers Branch

Recordation:                 2000191/7872

Price:                       $10,311,182

Equivalent:                  $29.00/SF

Verified:                    Todd Ashbrook, Buyer (972-759-7800)

Topography:                  Level

Frontage:                    Dallas Parkway & International Parkway

Uses:                        Improved with a 15-story office building

Flood Plain:                 None

Shape:                       Rectangular

Utilities:                   All Available

Mapsco:                      D-14M

Comments:                    This tract is located approximately 7,500' south of
                             the Subject Property.


Humphries & Associates               VI - 3                         D-4Z/04-1990
<PAGE>

                                   LAND SALE 3


Location:                    W/S Dallas Parkway, North of Spring Valley Road,
                             Addison

Grantor:                     Ewing 8, JV

Grantee:                     The Mody Group, LP

Sale Date:                   10/15/01

Size:                        1.492 Acres or 65,083 SF

Zoning:                      Commercial

Legal Desc.:                 Lot 1, Anderson & White Addition, Addison

Recordation:                 2001100/2079

Price:                       $2,464,000

Per Unit:                    $37.86/SF

Terms:                       Cash to Seller

Verified:                    Michelle Kramer, Appraiser (281-493-3445)

Frontage:                    Dallas Parkway

Uses:                        Future retail development

Utilities:                   All available

Flood Area:                  None

Topography:                  Level

Shape:                       Rectangular

Comments:                    The tract was improved with a vacant 7,000 SF
                             automobile dealership. The buyer will raze the
                             improvements and construct a retail store.

Mapsco:                      14-M


Humphries & Associates               VI - 4                         D-4Z/04-1990
<PAGE>

                                   LAND SALE 4


Location:                    N/S Park Boulevard, just west of Dallas Tollway,
                             Plano

Grantor:                     Willow Bend Associates, LP

Grantee:                     Bank of Texas,  N.A.

Sale Date:                   12/21/01

Size:                        1.464 acres or 63,771 SF

Zoning:                      Commercial

Legal Desc.:                 Pt. Lot 8, The Shops at Willow Bend Addition, Plano

Recordation:                 0116/4705

Price:                       $1,600,000

Per Unit:                    $25.09/SF

Terms:                       Cash to Seller

Verified:                    Brian Glaser, Broker (214-954-0600)

Frontage:                    Park Boulevard

Uses:                        Improved with a Bank of Texas office building

Utilities:                   All available

Flood Area:                  None

Topography:                  Level

Shape:                       Rectangular

Comments:                    This tract is a pad site to The Shops at Willow
                             Bend Mall.

Mapsco:                      655-Q


Humphries & Associates               VI - 5                         D-4Z/04-1990
<PAGE>

                                 LAND SALE NO. 5


Location:                    SWC Spring Valley Road & Noel Road, Dallas

Grantor:                     Oomesh Parshotam & Vikram Parshot

Grantee:                     Spring Valley Houston CVS, LP

Sale Date:                   2/28/02

Size:                        2.343 Acres or 102,080 SF

Zoning:                      MU-3

Legal Description:           Block 7006, City of Dallas

Recordation:                 2002041/2315

Price:                       $3,000,000

Equivalent:                  $29.39/SF

Verified:                    Kent Hope, Seller (972-239-3288)

Topography:                  Level

Frontage:                    2 Streets

Uses:                        Future office development

Flood Plain:                 None

Shape:                       Rectangular

Utilities:                   All Available

Mapsco:                      D-14M

Comments:                    This tract will be developed with an office
                             building. The tract is located approximately
                             1,000' east of the Dallas North Tollway. This sale
                             is located approximately 8,000' southeast of the
                             Subject Property.


Humphries & Associates               VI - 6                         D-4Z/04-1990
<PAGE>

                                 LAND SALE NO. 6


Location:                    E/S Noel Road, north of Peterson Lane, Dallas

Grantor:                     USC Investment Partnership, LP

Grantee:                     Galleria Hotel Venture, LP

Sale Date:                   2/1/02

Size:                        1.253 Acres or 54,595 SF

Zoning:                      Commercial

Legal Description:           Pt. Lot 2, Block C/7017, Dallas

Recordation:                 2002022/08299

Price:                       $1,637,850

Equivalent:                  $30.00/SF

Verified:                    Phil Herrington, Buyer (501-376-6959)

Topography:                  Level

Frontage:                    1 Street

Uses:                        Future hotel development

Flood Plain:                 None

Shape:                       Rectangular

Utilities:                   All Available

Mapsco:                      D-14R

Comments:                    The tract is located across Noel Road from the
                             Galleria Mall, office town and Westin Hotel.


Humphries & Associates               VI - 7                         D-4Z/04-1990
<PAGE>

                                 Land Sales Map


                    [MAP SHOWING LOCATION OF LAND SALES 1-6]



Humphries & Associates               VI - 8                         D-4Z/04-1990
<PAGE>

Land Valuation, continued


<TABLE>
<CAPTION>
====================================================================================

      Sale #              Date           Size (SF)       Sale Price/SF      Zoning
- ------------------------------------------------------------------------------------
<S>                      <C>              <C>                <C>          <C>
        1                05/00             51,478            $17.48       GO-A
- ------------------------------------------------------------------------------------
        2                10/00            355,558            $29.00       Commercial
- ------------------------------------------------------------------------------------
        3                10/01             65,083            $37.86       Commercial
- ------------------------------------------------------------------------------------
        4                12/01             63,771            $25.09       Commercial
- ------------------------------------------------------------------------------------
        5                02/02            102,080            $29.39       MU-3
- ------------------------------------------------------------------------------------
        6                02/02             54,595            $30.00       Commercial
- ------------------------------------------------------------------------------------
     Average                              115,428            $28.14
- ------------------------------------------------------------------------------------
     Subject                              155,771              -
====================================================================================
</TABLE>

Sales 2 and 5 are considered most comparable to the Subject based on their
physical characteristics and proximity to the Subject. These are both recent
sales which were purchased for immediate development. These tracts are in the
Subject's immediate vicinity with a similar zoning as the Subject Property.
These sales will be analyzed in an adjustment grid on a following page.

The following adjustment grid analyzes the most comparable sales to the Subject
Property ("+" adjustments indicate that the comparable sale is inferior to the
Subject and must be adjusted upward; "-" adjustments indicate that the
comparable sale is superior to the Subject and must be adjusted downward; and
"0" indicates that the comparable sale and Subject are similar overall in this
factor of comparison and no adjustment is warranted).


Humphries & Associates               VI - 9                         D-4Z/04-1990
<PAGE>

Land Valuation, continued


<TABLE>
<CAPTION>
===============================================================================================
                                       ADJUSTMENT GRID
- -----------------------------------------------------------------------------------------------
                                   Subject                  Sale 2                Sale 5
- -----------------------------------------------------------------------------------------------
<S>                               <C>                    <C>                   <C>
Sale Date                                                   10/00                 02/02
- -----------------------------------------------------------------------------------------------
Size (SF)                          155,771                 355,558               102,080
- -----------------------------------------------------------------------------------------------
Zoning                               UC                   Commercial               MU-3
- -----------------------------------------------------------------------------------------------
Shape                             Irregular              Rectangular           Rectangular
- -----------------------------------------------------------------------------------------------
Frontage                           2 Sides                 2 Sides               2 Sides
- -----------------------------------------------------------------------------------------------
Flood Plain                         None                     None                  None
- -----------------------------------------------------------------------------------------------
Topography                          Level                   Level                 Level
- -----------------------------------------------------------------------------------------------
Condition of Sale                                        Arm's Length          Arm's Length
- -----------------------------------------------------------------------------------------------
Property Rights Transferred                               Fee Simple            Fee Simple
- -----------------------------------------------------------------------------------------------
Terms                                                        Cash                  Cash
- -----------------------------------------------------------------------------------------------
Price/SF                                                    $29.00                $29.39
- -----------------------------------------------------------------------------------------------
ADJUSTMENTS
- -----------------------------------------------------------------------------------------------
Financing Terms                                              -0-                   -0-
- -----------------------------------------------------------------------------------------------
Property Rights                                              -0-                   -0-
- -----------------------------------------------------------------------------------------------
Condition of Sale                                            -0-                   -0-
- -----------------------------------------------------------------------------------------------
Market Conditions                                            -0-                   -0-
- -----------------------------------------------------------------------------------------------
Adjusted Price/SF                                           $29.00                $29.39
- -----------------------------------------------------------------------------------------------
Frontage/Access/Visibility                                   -0-                   -0-
- -----------------------------------------------------------------------------------------------
Size                                                         -0-                   -0-
- -----------------------------------------------------------------------------------------------
Zoning                                                       -0-                   -0-
- -----------------------------------------------------------------------------------------------
Shape                                                        -5%                   -5%
- -----------------------------------------------------------------------------------------------
Flood Plain                                                  -0-                   -0-
- -----------------------------------------------------------------------------------------------
Total Adjustment                                             -0-                   -0-
- -----------------------------------------------------------------------------------------------
Adj. Price/SF                                               $27.55                $27.92
===============================================================================================
</TABLE>


Humphries & Associates               VI - 10                        D-4Z/04-1990
<PAGE>

Land Valuation, continued


                           Explanation of Adjustments

Financing Terms

All sales were sold for cash or at market terms. No adjustment for financing
terms is appropriate.

Real Property Rights Conveyed

This adjustment is considered for any differences in the real property rights
being conveyed in the sale. Properties in which less than the full Fee Simple
Estate is transferred frequently sell for a lower price. If the leasehold estate
is conveyed, any improvements constructed may exhibit a different expense
structure (and net income stream) than an improved property where land and
building are held in common ownership. Because these factors can have an impact
on value, one of the initial steps in the valuation process is a determination
of real property interests that have been conveyed. All sales were sold in Fee
Simple. No adjustment will be made.

Conditions of Sale

All sales are considered to be arm's length transactions. No adjustment for
conditions of sale will be made.

Market Conditions (Time)

Market conditions may change between the time of sale of a comparable property
and the date of the appraisal of the Subject. Under such circumstances, the
price of the comparable property would be different at the later time (the date
of the appraisal), and an adjustment would have to be made to the actual
transaction price. Changed market conditions often result from various causes
such as inflation, deflation, changing demand, and changing supply.

The sales occurred within the past 3.5 years and are considered market
transactions. Limited vacant land tracts are available along the Dallas North
Tollway. No significant increase or decrease in land prices has occurred during
this period. Thus, no adjustment for this factor is considered necessary.


Humphries & Associates               VI - 10                        D-4Z/04-1990
<PAGE>

Land Valuation, continued


Frontage/Access/Visibility

The Subject Property is located on the southwest corner of the Dallas Parkway
and Addison Circle in the City of Addison. The Dallas Parkway is a one-way
(southbound) access road to Dallas North Tollway. The tollway is a major
north/south thoroughfare that provides access to SH-121 and SH-190 to the north
and LBJ Freeway and Dallas CBD to the south. Addison Circle is a four-lane,
east/west secondary roadway that provides access to the Dallas Parkway. The
south side of the Subject is bordered by a DART (Dallas Area Rapid Transit) rail
lines. The Subject is located in an area heavily developed with mid to high-rise
office buildings and hotels. The Subject's overall location is considered good.

Sale 2 is located on the northwest corner of the Dallas Parkway and
International Parkway in the City of Farmers Branch. The Dallas Parkway is a
one-way (southbound) access road to Dallas North Tollway. The tollway is a major
north/south thoroughfare that provides access to SH-121 and SH-190 to the north
and LBJ Freeway and Dallas CBD to the south. International Parkway is a
secondary east/west secondary roadway that provides access to the Dallas
Parkway. This sale is located in an area heavily developed with mid to high-rise
office buildings and hotels. The overall location is considered good.

Sale 5 is located on the southwest corner of Spring Valley Road and Noel Road
approximately 1,000' east of the Dallas North Tollway in the City of Dallas.
Spring Valley Road is a six-lane, east/west primary roadway that provides access
to the Dallas North Tollway to the west and Central Expressway (US-75) to the
east. This sale is located in an area heavily developed with office, hotel and
retail uses. The overall location is considered good.

The Subject and comparable sales are located along major thoroughfares in close
proximity to each other. The overall location, access and visibility of the
Subject and comparable sales is considered similar and no adjustment is
considered necessary.


Humphries & Associates               VI - 12                        D-4Z/04-1990
<PAGE>

Land Valuation, continued


Size

Typically, smaller land tracts sell for more on a per square foot basis compared
to larger land tracts. The Subject Property contains 155,771 SF of land. Sale 2
contains 355,558 SF and Sale 5 contains 102,080 SF. An analysis of the available
land sales did not reveal an adjustment. Therefore, no adjustment is considered
reasonable.

Shape/Topography

The Subject Property is an "L" shaped tract with a level topography. Both
comparable sales are rectangular in shape with a level topography. The Subject
irregular shape is considered to create some loss in development utility and a
downward adjustment is warranted. A market-extracted adjustment is not available
from the comparable sales. For our analysis, a subjective downward adjustment of
5% is considered reasonable and will be applied to Sale 2 and 5.

Zoning

The Subject and comparable sales allow for similar commercial uses and no
adjustment is warranted. The Subject Property and comparables were purchased for
office development.

Conclusion

The comparable sales have an adjusted range of $27.55/SF to $27.92/SF with an
average of $27.74/SF. Both of the comparable sales are considered to be good
indicators of value and will be given equal emphasis indicating the middle of
the range. For our analysis, a range of $27.50/SF to $28.00/SF is considered
reasonable. The price/SF is applied to the Subject land area as follows:

                            $27.50    x    155,771 SF    =    $4,283,703
                            $28.00    x    155 771 SF    =    $4,361,588


Estimated Market Value of Subject Land    Say,            $4,325,000  Rounded
                                                              ($27.77/SF)


Humphries & Associates               VI - 13                        D-4Z/04-1990
<PAGE>

                        VALUE INDICATED BY COST APPROACH

The Cost Approach is based upon the principle of substitution, which affirms
that no prudent investor would pay more for a property than the cost to acquire
the land and construct improvements of equal desirability and utility without
undue delay. Because cost and market value are closely related when properties
are new, the Cost Approach is a good indication of market value for new or
relatively new properties. When improvements are older or do not represent the
Highest and Best Use of the land as though vacant, the accuracy of the Cost
Approach is limited due to the difficulty of estimating accrued depreciation.

The procedure involved in deriving a value estimate by the Cost Approach is
shown below.

1.    Estimate the value of the Subject Property as though vacant and available
      to be developed to its highest and best use.

2.    Estimate the replacement cost of the improvements (the cost of
      construction of improvements having equal utility to the Subject
      Improvements).

3.    Estimate the accrued depreciation in the improvements (physical
      deterioration, functional obsolescence, and external obsolescence) and
      deduct estimated depreciation from the replacement cost of the
      improvements.

4.    Add the depreciated replacement cost of the improvements to land value.
      This total is the value estimate by the Cost Approach.

Current construction costs (including material costs, labor costs, equipment
costs, indirect costs, etc.) for all types of buildings are maintained in our
files. In addition to this basic data, we have access to the Marshall Valuation
Services cost data. This service allows for an estimate of construction costs by
component characteristics, construction type and quality, and location.

The Marshall Valuation Service cost range used as a basis for our analysis
adhere to the following guidelines.


Humphries & Associates               VII - 1                        D-4Z/04-1990
<PAGE>

Value Indicated by Cost Approach, continued


What is Included

- -     Normal interest on building funds during the period of construction and
      processing fee or service charge is included.

- -     Sales taxes on materials are included.

- -     Normal site preparation including excavation for foundation and backfill.

- -     Utilities from structure to lot line figured for typical setback.

- -     Contractor's overhead and profit including job supervision, workman's
      compensation, fire and liability insurance, unemployment insurance, etc.,
      are included.

- -     Actual costs used are final costs to the developer which contain
      architect's and engineer's fees. These in turn include plans, plan checks,
      surveys and building permits.

For our analysis, these soft cost items are separated out and shown as
individual line items.

What is Not Included

- -     Cost of buying or assemblage of land; demolition; off-site costs, any
      other cost of doing business not directly attributable to the basic
      structure.

- -     Unusual or extraordinary land improvement costs (e.g., pilings or hillside
      foundations).

- -     Costs of land planning or preliminary concept and layout for large
      developments are not included, nor is interest or taxes on the land.

- -     Discounts or bonuses paid for financing are considered a cost of doing
      business.

- -     Furnishings and fixtures, usually not found in the general contract, that
      are peculiar to a definite tenant, such as seating or kitchen equipment,
      etc.

- -     Marketing costs to create occupancy including model or advertising
      expenses, or temporary operation of property owners associations.

- -     All allowance for developer's overhead and profit which is typically based
      on a percentage of the total project cost.


Humphries & Associates               VII - 2                        D-4Z/04-1990
<PAGE>

Value Indicated by Cost Approach, continued


This program provides an estimate of current construction costs by component
characteristics, construction quality, and location based upon actual
construction costs of similar properties.

Depreciation

Physical Depreciation

Depreciation is defined as a loss in value from the replacement cost of
improvements and is caused by physical deterioration, functional obsolescence,
and/or external obsolescence. Physical deterioration is evidenced by normal wear
and tear over the economic life of the improvements and is either curable or
incurable. The improvements were considered in very good condition upon
inspection and no deferred maintenance will be deducted in this report.

The Subject Improvements were completed in 1999 and are approximately 5 years
old. According to Marshall Valuation Service, the Subject Property is considered
a Good/Excellent Class A office building. These type of buildings of equivalent
design and construction typically have an economic life of approximately 45 to
50 years. The Subject has been well maintained and its effective age is
considered to be equal to its actual age. The effective age of the Subject is
estimated to be 5 years. Based upon a projected 50-year economic life, incurable
physical deterioration is estimated at 10% (5 ) 50 = 0.10).

Functional Obsolescence

Functional obsolescence is caused by property characteristics such as functional
inadequacy or superadequacy and is either curable or incurable.

The design and amenity package of the Subject Improvements are equal to the
competing office projects in the immediate area. Therefore, no deduction for
Functional Obsolescence is considered necessary.


Humphries & Associates               VII - 3                        D-4Z/04-1990
<PAGE>

Cost Approach, continued


Economic Obsolescence

Economic obsolescence is defined as an impairment of desirability or useful life
arising from factors external to the property, such as economic forces or
environmental changes which affect supply/demand relationships in the market.
Loss in the use and value of a property arising from the factors of economic
obsolescence is to be distinguished from loss in value from physical
deterioration and functional obsolescence, both of which are inherent in a
property.

Economic obsolescence is extremely difficult to quantify and the results are
often highly subjective.

A method of measuring economic obsolescence is rent loss, which is the
difference between the effective rental rates and the stabilized rentals
associated with the lease-up. The property is currently 99% leased at market
rates, therefore no deduction for economic obsolescence is necessary.

Developer's Profit

The Cost Approach value estimate includes indirect costs such as construction
period interest expense, architectural and engineering fees, loan fees, and
contractor's overhead and profit. An allowance is also made for developer's
overhead and profit because the Cost Approach value estimate must correlate with
the Income and Market Approaches to value. Developer's profit typically ranges
from 5% to 15% of total project costs.

As stated earlier, Post Properties paid for approximately 20% of the parking
garage at a cost of +/- $825,000. In the following cost analysis, the parking
garage square footage will be reduced by 20% to reflect Post Properties'
position in the parking garage.

On the following pages is a value estimate for the Subject Property via the Cost
Approach followed by the Commercial Cost Estimator 7.


Humphries & Associates                VII - 4                       D-4Z/04-1990
<PAGE>

7/19/2004                        Summary Report                          Page: 1
================================================================================

Estimate Number            :  0
Estimate ID                :  Addison Circle
Property Owner             :  FSP
Property Address           :  15601 Dallas Parkway
Property City              :  Addison
State/Province             :  Texas
ZIP/Postal Code            :  75001

Section 1

Occupancy                                 Class               Height     Rank
                                 -------------------------    ------     ----
  100% Office Building           Reinforced concrete frame     14.00      3.5
  Tota1 Area                     : 303,891
  Number of Stories (Building)   : 10.00
  Number of Stories (Section)    : 1.00
  Shape                          : 2.00

Components                           Units/%                   Other
                                     -------                   -----
  Exterior Walls:
    Stud - Brick Veneer               100%
  HVAC (Heating):
    Package Unit                      100%
  Sprinklers:
    Sprinklers                        100%
  Elevators:
    Passenger #                          5
    Freight Power #                      1

Section 2

Occupancy                                 Class               Height     Rank
                                 -------------------------    ------     ----
  100% Parking Structure         Reinforced concrete frame      8.00      2.0
  Total Area                     : 288,460
  Number of Stories (Building)   : 6.00
  Number of Stories (Section)    : 1.00
  Shape                          : 2.00

Components                               Units/%                Other
                                         -------                -----
  Exterior Walls:
    Brick with Clay Tile Back-up          100%
  Sprinklers:
    Sprinklers                            100%
  Elevators:
    Passenger #                              2

    Cost as of       07/2004

                                  Units/%             Cost            Total
                                  -------             ----            -----
  Basic Structure
    Base Cost                     592,351             54.32         32,178,954
    Exterior Walls                592,351             11.95          7,077,688
    Heating & Cooling             303,891              6.27          1,905,397
    Elevators                           8        158,614.63          1,268,917


                          Cost Data by Marshall & Swift
                                      VII-5
<PAGE>

7/19/2004                        Summary Report                          Page: 2
================================================================================

Estimate Number              :  0
ZIP/Posta1 Code              :  75001

    Sprinklers                    592,351              1.52           90 1,964
  Basic Structure Cost            592,351             73.15         43,332,920

  Miscellaneous
    Concrete Paving                20,000              3.00             60,000
    Landscaping, Lighting, Etc.    50,000              1.00             50,000
  Total Cost                      592,351             73.34         43,442,920



                          Cost Data by Marshall & Swift
                                      VII-6
<PAGE>

Cost Approach, continued


                            Segregated Cost Estimate

Total Office Building, Parking Garage and Other Costs(1)            $42,617,920
Plus: Developer's Overhead and Profit @ 10%                           4,261,792
                                                                    -----------

Total Replacement Cost of Improvements                              $46,879,712

Less Depreciation
      Physical
         Deferred Maintenance - Physical Curable                              0
         Physical Incurable @ 10% of Replacement Cost                -4,687,971
      Functional                                                              0
      Economic
         Rent Loss & Lease Commissions                                        0
         Economic Obsolescence                                                0
                                                                    -----------

Depreciated Replacement Cost of Improvements                        $42,191,741
Plus: Land Value                                                      4,325,000
                                                                    -----------

Estimated Value Via Cost Approach "As Is"                           $46,516,741

                                                             Say,   $46,500,000

Cost Analysis (Per 303,891 Square Foot of Gross Building Area)

Total Building and Other Costs                                  $154.26/SF

Depreciated Replacement Cost of Improvements                    $138.84/SF

Estimated Value Via Cost Approach                               $153.02/SF


(1) The total construction costs have been reduced by $825,000 to reflect Post
Properties participation in the parking garage.


Humphries & Associates               VII - 7                        D-4Z/04-1990
<PAGE>

                                 MARKET ANALYSIS

According to the Appraisal Institute's The Appraisal of Real Estate book, 12th
Edition, 2002, market analysis is defined as "The identification and study of
the market for a particular economic good or service." Based upon the highest
and best use "As Improved" for the Subject Property being a continued use as an
office building, the appraisers have surveyed the current office market
conditions in the Dallas area and the Subject submarket. Three sources of data
will be used to gauge the overall office market conditions. They are (1) D/FW
RealSmart, (2) CoStar and (3) interviews with area leasing agents in competing
office buildings.

D/FW RealSmart Report (Dallas/Fort Worth Area)

D/FW RealSmart publishes an office survey on a semi-annual basis for the D/FW
area. This area is divided into 32 office submarkets (sectors). The Subject
Property is located in the Far North Dallas Submarket (Sector 11).

Office buildings that lease office space as their primary function with at least
20,000 SF of space are included in the D/FW RealSmart report. All figures
represent multi-tenant space unless otherwise stated. Office buildings are
generally placed into classes that characterize their general market appeal. Age
characteristics are an important part of this classification system. The classes
are defined as follows.

Class "A"

This class of space has an excellent location and access to attract the highest
quality tenants. They must also be well managed professionally. Usually, this
type of structure has new and high quality finish.

Class "B"

Most have a good location with fairly high quality management, construction and
tenancy. This type of building must show very little functional obsolescence and
deterioration.


Humphries & Associates              VIII - 1                        D-4Z/02-1716
<PAGE>

Market Analysis, continued


Class "C"

This class of space is usually 15 - 25 years old, but maintaining steady
occupancy.

Given the Subject Property's location, rent levels, age and tenant profile, it
is considered to exhibit Class B characteristics.

The following summary indicates the historical market factors of absorption,
occupancy and rental rates by class over the last 12.25 years for the Dallas/Ft.
Worth area.

<TABLE>
<CAPTION>
===========================================================================================================
                                             ABSORPTION (000'S)
- -----------------------------------------------------------------------------------------------------------
                           Dallas Area                           Fort Worth Area
- ------------  --------------------------------------  --------------------------------------  -------------
   Year          Class A      Class B     Class C        Class A     Class B      Class C       Total D/FW
- ------------  --------------------------------------  --------------------------------------  -------------
<S>             <C>          <C>           <C>           <C>         <C>          <C>           <C>
   1992           -447.1        130.5      -220.5         -63.5       -89.8        -93.7          -784.1
- ------------  --------------------------------------  --------------------------------------  -------------
   1993          1,016.5        579.4       315.1         206.6       106.5         55.2         2,279.4
- ------------  --------------------------------------  --------------------------------------  -------------
   1994          2,671.3      1,355.5       299.4        -597.6       368.5         93.7         4,190.8
- ------------  --------------------------------------  --------------------------------------  -------------
   1995          1,885.6        942.0       -68.5         505.6       245.5         81.2         3,600.4
- ------------  --------------------------------------  --------------------------------------  -------------
   1996          1,394.1        695.9       340.7         331.1         206         54.4         3,022.2
- ------------  --------------------------------------  --------------------------------------  -------------
   1997          1,427.7      1,225.2       127.5         204.8       154.7         -5.7         3,134.3
- ------------  --------------------------------------  --------------------------------------  -------------
   1998            716.7        -88.2        95.5          79.5        25.6        109.4           938.6
- ------------  --------------------------------------  --------------------------------------  -------------
   1999          2,577.9        182.4       130.7         595.0       246.2        -35.8         1,976.0
- ------------  --------------------------------------  --------------------------------------  -------------
   2000          4,351.1        213.9      -921.0         560.6      -575.2        -66.1         3,563.1
- ------------  --------------------------------------  --------------------------------------  -------------
   2001           -964.7     -2,460.2      -832.0          97.8        59.6       -150.7        -4,249.9
- ------------  --------------------------------------  --------------------------------------  -------------
   2002         -2,779.9      1,907.2      -794.0        -353.1      -186.3        -30.4        -3,133.0
- ------------  --------------------------------------  --------------------------------------  -------------
   2003         -2,025.7     -1,636.4      -816.4        -515.3      -311.9       -213.2        -5,518.8
- ------------  --------------------------------------  --------------------------------------  -------------
1st Qtr. 04        603.0        350.8       160.9         136.6       172.2        261.1         1,684.5
============  ======================================  ======================================  =============
</TABLE>


Humphries & Associates              VIII - 2                        D-4Z/02-1716
<PAGE>

Market Analysis, continued


As can be seen, 1992 was a down year while a dramatic recovery was staged in
1993, which continued through 2000. The D/FW area experienced a dramatic
negative absorption of -4,249,949 SF during 2001 due to the national recession
and events of September 11, 2001. The negative absorption continued during 2002
with a total of -3,133,009 SF. The Dallas and Ft. Worth areas had negative
absorption of -4,478,487 SF and -1,040,278F, respectively during 2003.

As of late 2003, the national and regional economy was improving. During the 1st
Quarter 2004, the Dallas area absorbed 1,114,654 SF while the Fort Worth area
absorbed 569,882 SF for a total absorption of 1,684,536 SF.

<TABLE>
<CAPTION>
==================================================================================================
                                             OCCUPANCY
- --------------------------------------------------------------------------------------------------
                              Dallas Area                             Fort Worth Area
- ---------------  ---------------------------------------  ----------------------------------------
     Year           Class A      Class B      Class C         Class A      Class B       Class C
- ---------------  ---------------------------------------  ----------------------------------------
<S>                   <C>          <C>          <C>             <C>          <C>           <C>
     1992             79%          72%          45%             85%          76%           57%
- ---------------  ---------------------------------------  ----------------------------------------
     1993             82%          74%          44%             85%          82%           58%
- ---------------  ---------------------------------------  ----------------------------------------
     1994             86%          76%          55%             81%          85%           60%
- ---------------  ---------------------------------------  ----------------------------------------
     1995             89%          78%          62%             86%          88%           72%
- ---------------  ---------------------------------------  ----------------------------------------
     1996             91%          79%          64%             92%          91%           78%
- ---------------  ---------------------------------------  ----------------------------------------
     1997             93%          85%          67%             89%          87%           80%
- ---------------  ---------------------------------------  ----------------------------------------
     1998             87%          80%          72%             88%          91%           82%
- ---------------  ---------------------------------------  ----------------------------------------
     1999             80%          80%          73%             88%          90%           85%
- ---------------  ---------------------------------------  ----------------------------------------
     2000             86%          82%          69%             90%          81%           84%
- ---------------  ---------------------------------------  ----------------------------------------
     2001             81%          75%          69%             92%          88%           85%
- ---------------  ---------------------------------------  ----------------------------------------
     2002             78%          73%          69%             86%          87%           82%
- ---------------  ---------------------------------------  ----------------------------------------
     2003             75%          71%          67%             80%          83%           80%
- ---------------  ---------------------------------------  ----------------------------------------
 1st Qtr. 04          76%          71%          68%             81%          86%           83%
===============  =======================================  ========================================
</TABLE>


Humphries & Associates              VIII - 3                        D-4Z/02-1716
<PAGE>

Market Analysis, continued


Increased occupancy levels were witnessed in virtually every class from 1993 to
1997 in the D/FW area. The occupancy levels generally peaked during 1997 and
trended downward since until bottoming out in 2003. The occupancy increased
slightly in the 1st Quarter 2004.

<TABLE>
<CAPTION>
==================================================================================================
                                           RENTAL TRENDS
- --------------------------------------------------------------------------------------------------
                              Dallas Area                             Fort Worth Area
- --------------  ----------------------------------------  ----------------------------------------
    Year           Class A       Class B      Class C         Class A       Class B      Class C
- --------------  ----------------------------------------  ----------------------------------------
<S>                 <C>          <C>           <C>             <C>          <C>           <C>
    1992            $15.80       $11.57        $ 9.62          $15.49       $11.97        $ 9.70
- --------------  ----------------------------------------  ----------------------------------------
    1993            $15.25       $11.31        $ 9.24          $15.19       $11.88        $ 9.74
- --------------  ----------------------------------------  ----------------------------------------
    1994            $15.87       $11.92        $ 9.49          $15.16       $12.10        $ 9.72
- --------------  ----------------------------------------  ----------------------------------------
    1995            $17.41       $12.68        $ 9.65          $16.22       $12.89        $ 9.92
- --------------  ----------------------------------------  ----------------------------------------
    1996            $20.43       $14.76        $10.85          $18.98       $14.85        $11.11
- --------------  ----------------------------------------  ----------------------------------------
    1997            $23.40       $16.98        $12.02          $22.47       $16.38        $12.30
- --------------  ----------------------------------------  ----------------------------------------
    1998            $24.96       $18.28        $13.55          $21.78       $17.05        $12.97
- --------------  ----------------------------------------  ----------------------------------------
    1999            $24.73       $18.55        $14.42          $22.61       $17.59        $13.77
- --------------  ----------------------------------------  ----------------------------------------
    2000            $24.53       $18.81        $14.75          $23.44       $17.94        $14.33
- --------------  ----------------------------------------  ----------------------------------------
    2001            $23.70       $18.45        $14.78          $24.71       $17.93        $15.11
- --------------  ----------------------------------------  ----------------------------------------
    2002            $21.89       $17.25        $14.39          $22.93       $17.64        $15.10
- --------------  ----------------------------------------  ----------------------------------------
    2003            $21.06       $16.41        $13.71          $21.28       $17.64        $14.16
- --------------  ----------------------------------------  ----------------------------------------
 1st Qtr. 04        $20.87       $16.45        $13.51          $21.57       $17.70        $14.46
==============  ========================================  ========================================
</TABLE>

As with increasing occupancy levels, the same is shown for rental rate growth.
Rental rates began to increase in 1995 and exhibited substantial increases
through 1998. The rental rate increase slowed after 1998 and has experienced
minimal decreases through 2002. During 2003, the rental rates experienced
further declines. As with the occupancy levels, rental rates appear to have
bottomed out and have begun to increase in 2004.


Humphries & Associates              VIII - 4                        D-4Z/02-1716
<PAGE>

Market Analysis, continued


The following chart summarizes the 1st Quarter 2004 D/FW RealSmart office data
for the Dallas area.

<TABLE>
<CAPTION>
===========================================================================================
                                                                     Avg. Absorption Last
                                   Rate              Occupancy              12 Mos.
- -------------------------------------------------------------------------------------------
<S>                               <C>                   <C>               <C>
All Buildings                     $18.73                73%               -1,597,500
- -------------------------------------------------------------------------------------------
Class A Building                  $20.87                76%                -386,789
- -------------------------------------------------------------------------------------------
Class B Building                  $16.45                71%                -955,340
- -------------------------------------------------------------------------------------------
Class C Building                  $13.51                68%                -255,371
===========================================================================================
</TABLE>

Sector #11 - Far North Dallas

The following is a summary of the 1st Quarter 2004 rate structure for the
Subject sector.

<TABLE>
<CAPTION>
======================================================================================
                                Total          Class A        Class B       Class C
- --------------------------------------------------------------------------------------
<S>                            <C>             <C>           <C>            <C>
Rents                           $19.54         $20.37         $15.88        $14.94
- --------------------------------------------------------------------------------------
Occupancy                        76%             76%            72%           84%
- --------------------------------------------------------------------------------------
Absorption 12 Mos.             226,823         348,406       -108,000       -13,583
======================================================================================
</TABLE>

The following chart indicates the rents and absorption trends for this sector
over the past 5 years.


Humphries & Associates              VIII - 5                        D-4Z/02-1716
<PAGE>

Market Analysis, continued


<TABLE>
<CAPTION>
==============================================================================================================================
                         Occupancy                      Annual Full-Service                     Quarterly Absorption
                                                             Rent/Sq Ft                               (Sq Ft)
- ------------  ------------------------------  -------------------------------------  -----------------------------------------
  Year/Qtr      All      A      B      C          All       A         B        C         All         A          B        C
- ------------  ------------------------------  -------------------------------------  -----------------------------------------
<S>             <C>    <C>     <C>    <C>       <C>       <C>      <C>      <C>        <C>        <C>        <C>       <C>
 1998/1st       .92%   .91%    .93%   .98%      $22.15    $23.69   $18.18    $9.50     -248,517   -242,430     -7,043      956
- ------------  ------------------------------  -------------------------------------  -----------------------------------------
 1998/2nd       .90%   .88%    .93%   .98%      $22.72    $24.09   $18.42   $13.14      117,988     96,848     23,139   -1,999
- ------------  ------------------------------  -------------------------------------  -----------------------------------------
 1998/3rd       .88%   .87%    .92%   .98%      $23.14    $24.23   $18.42   $11.44      348,439    344,898      1,540    2,001
- ------------  ------------------------------  -------------------------------------  -----------------------------------------
 1998/4th       .84%   .83%    .93%   .98%      $23.27    $24.43   $18.37   $11.44      -53,476    -74,027     20,551        0
- ------------  ------------------------------  -------------------------------------  -----------------------------------------
 1999/1st       .86%   .84%    .92%   100%      $23.27    $24.46   $18.88   $12.09      625,117    631,450     -8,332    1,999
- ------------  ------------------------------  -------------------------------------  -----------------------------------------
 1999/2nd       .83%   .81%    .89%   100%      $23.27    $24.37   $19.05   $12.09      -20,933     61,496    -82,429
- ------------  ------------------------------  -------------------------------------  -----------------------------------------
 1999/3rd       .84%   .83%    .89%   100%      $23.08    $24.12   $19.04   $12.09      200,611    202,634     -2,023
- ------------  ------------------------------  -------------------------------------  -----------------------------------------
 1999/4th       .83%   .81%    .89%   100%      $22.99    $24.03   $19.04   $12.98      160,125    143,634     16,491
- ------------  ------------------------------  -------------------------------------  -----------------------------------------
 2000/1st       .83%   .81%    .89%   100%      $22.99    $24.03   $19.04   $12.98            0          0          0
- ------------  ------------------------------  -------------------------------------  -----------------------------------------
 2000/2nd       .83%   .81%    .89%   100%      $22.99    $24.03   $19.04   $12.98            0          0          0
- ------------  ------------------------------  -------------------------------------  -----------------------------------------
 2000/3rd       .83%   .82%    .90%   100%      $22.83    $23.81   $19.12   $12.98      356,544    328,581     27,963
- ------------  ------------------------------  -------------------------------------  -----------------------------------------
 2000/4th       .86%   .85%    .93%   100%      $23.19    $24.19   $19.43   $12.99      397,246    341,183     56,063
- ------------  ------------------------------  -------------------------------------  -----------------------------------------
 2001/1st       .91%   .91%    .91%   100%      $23.52    $24.47   $19.49   $12.99      681,998    734,209    -52,211
- ------------  ------------------------------  -------------------------------------  -----------------------------------------
 2001/2nd       .87%   .88%    .86%   .70%      $23.51    $24.48   $19.37   $14.30     -564,542   -359,190   -126,357  -78,995
- ------------  ------------------------------  -------------------------------------  -----------------------------------------
 2001/3rd       .86%   .86%    .86%   .74%      $23.41    $24.40   $19.45   $15.57     -205,471   -206,734      4,263   -3,000
- ------------  ------------------------------  -------------------------------------  -----------------------------------------
 2001/4th       .82%   .81%    .85%   .79%      $22.61    $23.60   $19.19   $15.21     -554,912   -535,149    -34,118   14,355
- ------------  ------------------------------  -------------------------------------  -----------------------------------------
 2002/1st       .77%   .76%    .84%   .80%      $21.40    $22.20   $18.77   $15.29     -366,120   -340,420    -29,276    3,576
- ------------  ------------------------------  -------------------------------------  -----------------------------------------
 2002/2nd       .75%   .73%    .82%   .68%      $21.55    $22.61   $17.60   $16.52     -328,326   -276,131    -39,264  -12,931
- ------------  ------------------------------  -------------------------------------  -----------------------------------------
 2002/3rd       .76%   .73%    .85%   .97%      $20.89    $21.87   $17.33   $14.60      139,485     77,054     59,735    2,696
- ------------  ------------------------------  -------------------------------------  -----------------------------------------
 2002/4th       .76%   .74%    .83%   .97%      $20.61    $21.61   $16.99   $13.88       66,577    113,513    -46,936
- ------------  ------------------------------  -------------------------------------  -----------------------------------------
 2003/1st       .74%   .73%    .75%   .91%      $20.15    $20.98   $16.87   $14.56     -273,297    -63,043   -210,254
- ------------  ------------------------------  -------------------------------------  -----------------------------------------
 2003/2nd       .74%   .73%    .79%   .87%      $20.06    $20.98   $16.59   $12.82       56,476    -31,926     91,004   -2,602
- ------------  ------------------------------  -------------------------------------  -----------------------------------------
 2003/3rd       .73%   .72%    .74%   .90%      $19.88    $20.67   $16.81   $12.95     -197,692    -78,286   -122,606    3,200
- ------------  ------------------------------  -------------------------------------  -----------------------------------------
 2003/4th       .73%   .74%    .68%   .78%      $19.77    $20.59   $16.25   $14.10      -28,049    153,628   -157,132  -24,545
- ------------  ------------------------------  -------------------------------------  -----------------------------------------
 2004/1st       .76%   .76%    .72%   .84%      $19.54    $20.37   $15.88   $14.94      396,088    304,990     80,734   10,364
============  ==============================  =====================================  =========================================
</TABLE>

During the past 6.25 years, the Far North Dallas submarket absorbed 705,359 SF
of office space. This equates to an average absorption of 112,857 SF. The
submarket experienced negative absorption of -642,927 SF, -488,384 SF and
- -442,562 SF during 2001, 2002 and 2003, respectively. However, during the first
quarter the submarket experienced strong absorption of 396,088 SF. Discussions
with the leasing agents of the rent comparables indicate that the leasing
activity has dramatically increased during 2004.

Since the 1st Quarter of 2001, the overall occupancy steadily declined from 91%
to 73% in the 4th Quarter 2003. The positive absorption 1st Quarter 2004 caused
the occupancy to increase three points to 76%.


Humphries & Associates              VIII - 6                        D-4Z/02-1716
<PAGE>

Market Analysis, continued


There has been 143,472 SF of office construction during the past two years. No
new construction has occurred since the 3rd Quarter of 2002. As of the date of
appraisal, no office space is under construction in the Far North Dallas
Submarket.

Rental rates in the Far North Dallas Submarket have decreased from $22.15/SF as
of 1st Quarter 1998 to $19.54/SF as of 1st Quarter 2004. Rental rates peaked in
the 1st Quarter of 2001 and $23.51/SF and have steadily decreased to its current
level. The average rental for Class A space is $20.37/SF.

The appraiser has access to Costar Office Market Survey. Costar surveys office
buildings in the D/FW area on a monthly basis. According to Costar, the Subject
Property is located in the Quorum/Bent Tree submarket. This submarket is bounded
by Frankford Road to the north, Alpha Road on the south, Hillcrest Road to the
east and Josey Lane to the west. The following chart summarizes the office
market conditions as of July 2004.


Humphries & Associates              VIII - 7                        D-4Z/02-1716
<PAGE>

Market Analysis, continued


<TABLE>
<CAPTION>
=======================================================================================================================
                                     Quorum/Bent Tree Overall Office Market Summary
=======================================================================================================================
                                     % Vacant Available             SF Vacant Available             Est. Rent/SF
                               -------------------------------  --------------------------  ---------------------------
   Date   Bldg    RBA/SF        Direct     Sublet     Total       Direct   Sublet   Total     Direct  Sublet    Total
- ----------------------------  --------------------------------  --------------------------  ---------------------------
<S>        <C>   <C>           <C>        <C>       <C>            <C>      <C>     <C>       <C>     <C>      <C>
 Current   255   20,854,758    3,898,449  448,716   4,347,165      18.7%    2.2%    20.8%     $18.27  $14.73   $17.94
- ----------------------------  --------------------------------  --------------------------  ---------------------------
  Q2/04    255   20,854,758    3,930,050  380,839   4,310,889      18.8%    1.8%    20.7%     $18.27  $15.44   $18.03
- ----------------------------  --------------------------------  --------------------------  ---------------------------
  Q1/04    255   20,854,758    4,185,784  372,213   4,557,997      20.1%    1.8%    21.9%     $18.54  $15.75   $18.28
- ----------------------------  --------------------------------  --------------------------  ---------------------------
  Q4/03    254   20,854,758    3,855,292  336,512   4,191,804      18.5%    1.6%    20.1%     $18.68  $15.82   $18.48
- ----------------------------  --------------------------------  --------------------------  ---------------------------
  Q3/03    254   20,854,758    3,854,390  333,033   4,187,423      18.5%    1.6%    20.1%     $18.82  $16.51   $18.64
- ----------------------------  --------------------------------  --------------------------  ---------------------------
  Q2/03    250   20,837,258    3,544,774  404,029   3,948,803      17.0%    1.9%    19.0%     $18.90  $15.83   $18.56
- ----------------------------  --------------------------------  --------------------------  ---------------------------
  Q1/03    250   20,837,258    3,477,548   89,161   3,566,709      16.7%    0.4%    17.1%     $19.17  $12.89   $19.05
- ----------------------------  --------------------------------  --------------------------  ---------------------------
  Q4/02    248   20,827,835    3,535,443  576,615   4,112,058      17.0%    2.8%    19.7%     $19.69  $14.62   $19.08
- ----------------------------  --------------------------------  --------------------------  ---------------------------
  Q3/02    246   20,795,553    3,237,986  643,080   3,881,066      15.6%    3.1%    18.7%     $20.41  $15.99   $19.80
- ----------------------------  --------------------------------  --------------------------  ---------------------------
  Q2/02    244   20,787,566    3,113,385  762,468   3,875,853      15.0%    3.7%    18.6%     $21.42  $17.44   $20.70
- ----------------------------  --------------------------------  --------------------------  ---------------------------
  Q1/02    244   20,787,566    3,132,788  848,645   3,981,433      15.1%    4.1%    19.2%     $21.90  $17.84   $21.13
- ----------------------------  --------------------------------  --------------------------  ---------------------------
  Q4/01    242   20,031,834    2,520,823  944,179   364659002      12.6%    4.7%    17.3%     $22.69  $18.02   $21.69
============================  ================================  ==========================  ===========================
</TABLE>

The direct vacancy rate steadily increased from 12.6% as of 4th Quarter 2001 to
18.7% in July 2004. The vacancy has been in the +/-18-20% range during the past
12 months. Including sublet space, the overall vacancy rate is 20.8% as of July
2004.

The average direct rental rate in the Quorum/Bent Tree Submarket is $18.27/SF as
of July 2004. Rental rates have generally trended downward since peaking at
$22.69/SF in the 1st Quarter 2002. The average sublet rental rate is $14.73/SF.


Humphries & Associates              VIII - 8                        D-4Z/02-1716
<PAGE>

Market Analysis, continued


<TABLE>
<CAPTION>
============================================================================================================================
                                  Quorum/Bent Tree Office Absorption & Construction Summary
============================================================================================================================
                                 Delivered Inventory              Net Absorption                   Gross Absorption
                               ------------------------  ---------------------------------  --------------------------------
 Date     Bldg    RBA/SF         # of Bldgs.    RBA         Direct     Sublet     Total       Direct     Sublet     Total
- -----------------------------  ------------------------  ---------------------------------  --------------------------------
<S>         <C>   <C>                <C>      <C>           <C>        <C>       <C>          <C>       <C>       <C>
 Current    255   20,854,758          0          0           28,594    -66,480   -37,886      179,615    23,038    202,653
- -----------------------------  ------------------------  ---------------------------------  --------------------------------
  Q2/04     255   20,854,758          0          0          -41,440    -87,766   -129,206     405,986    51,713    457,699
- -----------------------------  ------------------------  ---------------------------------  --------------------------------
  Q1/04     255   20,854,758          1        6,000       -102,830    -49,575   -152,405     419,124    83,905    503,029
- -----------------------------  ------------------------  ---------------------------------  --------------------------------
  Q4/03     254   20,854,758          0          0          -15,625      2,059   -13,566      522,402    50,302    572,704
- -----------------------------  ------------------------  ---------------------------------  --------------------------------
  Q3/03     254   20,854,758          4        11,500      -311,802     97,497   -214,305     492,668   218,940    711,608
- -----------------------------  ------------------------  ---------------------------------  --------------------------------
  Q2/03     250   20,837,258          0          0         -202,052     44,686   -157,366     383,783   129,819    513,602
- -----------------------------  ------------------------  ---------------------------------  --------------------------------
  Q1/03     250   20,837,258          2        9,423       -104,369    129,788     25,419     472,403   254,779    727,182
- -----------------------------  ------------------------  ---------------------------------  --------------------------------
  Q4/02     248   20,827,835          2        32,282      -167,760     22,243   -145,517     548,165   118,849    667,014
- -----------------------------  ------------------------  ---------------------------------  --------------------------------
  Q3/02     246   20,795,553          2        7,987       -199,319    110,326    -88,993     402,339   171,351    573,690
- -----------------------------  ------------------------  ---------------------------------  --------------------------------
  Q2/02     244   20,787,566          0          0           27,569     88,265   115,834      373,129   2199890    593,019
- -----------------------------  ------------------------  ---------------------------------  --------------------------------
  Q1/02     244   20,787,566          2       755,732       237,338    192,358   429,696      729,617   342,226   1,068,843
- -----------------------------  ------------------------  ---------------------------------  --------------------------------
  Q4/01     242   20,031,834          0          0         -106,770     16,299    -90,471     375,429   167,549    542,978
=============================  ========================  =================================  ================================
</TABLE>

The Quorum/Bent Tree submarket had a total net absorption of -458,766 SF since
4th Quarter 2001. Sublet space experienced positive absorption of 499,700 SF
during the same period.

Discussions with leasing agents of the rent comparables indicate that the
leasing activity has increased significantly during the past six months.

Office Market Survey

To further isolate and define current office market trends in the Subject
submarket, competing office buildings were surveyed by Bryan E. Humphries &


Humphries & Associates              VIII - 9                        D-4Z/02-1716
<PAGE>

Market Analysis, continued


Associates. These office buildings are similar to the Subject Improvements in
terms of age, condition, design and location. The following is a summary of the
lease comparables for office buildings included in our survey. At the end of
this section, these lease comparables are shown in detail.

<TABLE>
<CAPTION>
=====================================================================================================
                                                                       Effective
      Comparable          Size (SF)     Year Built     Occupancy     Lease Rate/SF     Lease Type
- -----------------------------------------------------------------------------------------------------
<S>                        <C>             <C>           <C>         <C>              <C>
1. Millennium I            362,000         2000           91%        $23.00-$23.50    + Electricity
- -----------------------------------------------------------------------------------------------------
2. Tollway Plaza           182,638         1999           96%        $21.00-$22.00    + Electricity
- -----------------------------------------------------------------------------------------------------
3. Centura Tower I         412,521         1999           92%           $19.50        + Electricity
- -----------------------------------------------------------------------------------------------------
4. Colonnade III           377,639         1998           90%        $20.00-$22.00    + Electricity
- -----------------------------------------------------------------------------------------------------
Average                    333,700         1999           92%           $21.57        + Electricity
- -----------------------------------------------------------------------------------------------------
Subject Property           293,787         1999          100%           $24.14*       + Electricity
=====================================================================================================
</TABLE>

* The subject has contract rents ranging from $17.00/SF to $26.67/SF plus
electricity. The average contract rent is $24.14/SF.


Humphries & Associates              VIII - 10                       D-4Z/02-1716
<PAGE>

                       OFFICE BUILDING LEASE COMPARABLE 1

                      [PICTURE OF FRONT OF OFFICE BUILDING]

                                  Millennium I
                              15455 Dallas Parkway
                                 Addison, Texas

Year Built:                 2000
No. Floors:                 14
Rentable SF:                362,000 SF
Current Occupancy:          91%
SF Available:               32,580 SF

Rental Rate:                The asking rate is $24.00/SF plus Electricity.
                            Actual leases are at $23.00 to $23.50/SF plus
                            Electricity

Finishout:
        New Lease:          $25.00/SF for 1st generation shell space & $20.00/SF
                            for 2nd generation space.
        Renewal:            Negotiable
Lease Commissions:          4.5%
Building Factor:            NA
Construction:               Masonry and glass exterior


Humphries & Associates              VIII - 11                       D-4Z/02-1716
<PAGE>

Office Building Lease Comparable 1, continued


Lease Terms & Conditions

Expenses pass-thru using the first lease year as the base year. The owner
projects the 2004 expense stop at $7.41/SF with electricity reimbursements at
$1.50/SF.

Parking:                    Surface concrete and seven-level parking garage
As of:                      7/04
Verified:                   Nancy Reddin, Broker (972/663-9700)

Comments:                   Fourteen-story office building located on the
                            northwest corner of Dallas Parkway and Arapaho Road
                            just south of the Subject Property. The parking
                            garage is available at no charge, however reserved
                            spaces are $75 per month per space. The individual
                            tenant electricity is +/- $1.50/SF. Free rent of 1
                            to 2 months is available on a three year lease. Five
                            year leases get four months free.


Humphries & Associates              VIII - 12                       D-4Z/02-1716
<PAGE>

                       OFFICE BUILDING LEASE COMPARABLE 2

                      [PICTURE OF FRONT OF OFFICE BUILDING]

                                  Tollway Plaza
                              15950 Dallas Parkway
                                 Addison, Texas

Year Built:                 1999
No. Floors:                 8
Rentable SF:                182,638 SF
Current Occupancy:          96%
SF Available:               7,306 SF

Rental Rate:                The asking rate is $23.00/SF + electricity. Actual
                            leases are at $21.00/SF to $22.00/SF plus
                            Electricity.

Finishout:
        New:                Negotiable
        Renewal:            Negotiable
Lease Commissions:          4.5%
Building Factor:            16.0%
Construction:               Glass and metal exterior


Humphries & Associates              VIII - 13                       D-4Z/02-1716
<PAGE>

Office Building Lease Comparable 2, continued


Lease Terms & Conditions

Expense pass-through using the first lease year as the base year. The 2004
operating expense is estimated at $8.00/SF.

Parking:                    Surface concrete and multi-level parking garage
As of:                      7/04
Verified:                   Bob Buell (972/404-3131)

Comments:                   Eight-story office building located along the east
                            side of Dallas Parkway just north of the Subject
                            Property. There is a multi-level parking garage.
                            There is no charge for non-reserved parking spaces
                            and a monthly charge of $50 for reserved spaces. The
                            broker stated that rent concessions in the form of
                            reducing the rental rate $1.00/SF to $2.00/SF are
                            being offered.


Humphries & Associates              VIII - 14                       D-4Z/02-1716
<PAGE>

                       OFFICE BUILDING LEASE COMPARABLE 3

                      [PICTURE OF FRONT OF OFFICE BUILDING]

                                 Centura Tower I
                              14185 Dallas Parkway
                                  Dallas, Texas

Year Built:                 1999
No. Floors:                 15
Rentable SF:                412,521 SF
Current Occupancy:          92%
SF Available:               33,002 SF

Rental Rate:                The asking rental rate is $22.50/SF to $23.00/SF +
                            electricity. Actual leases are being executed at
                            $19.50/SF plus electricity.

Finishout:
        New:                $28.00/SF to $30.00/SF for new leases
        Renewal:            Negotiable
Commissions:                4.5%
Building Factor:            16.0%
Construction:               Masonry exterior


Humphries & Associates              VIII - 15                       D-4Z/02-1716
<PAGE>

Office Building Lease Comparable 3, continued


Lease Terms & Conditions

Expense pass-through using the first lease year as the base year. The 2004 base
year stop is $7.50/SF.

Parking:                    Surface concrete and 8 level parking garage
As of:                      07/04

Verified:                   J. Dale Ray (972/770-4000)

Comments:                   Fifteen-story veneer office building located on the
                            southwest corner of Dallas Parkway and Arapaho Road.
                            The broker stated that rent concessions in the form
                            of reducing the rental rate $2.50/SF to $3.00/SF are
                            being offered.


Humphries & Associates              VIII - 16                       D-4Z/02-1716
<PAGE>

                       OFFICE BUILDING LEASE COMPARABLE 4

                      [PICTURE OF FRONT OF OFFICE BUILDING]

                                  Colonnade III
                              15305 Dallas Parkway
                                 Addison, Texas

Year Built:                 1998
No. Floors:                 16
Rentable SF:                377,639 SF
Current Occupancy:          90%
SF Available:               37,764 SF

Rental Rate:                Effective rental rates are $20.00/SF to $22.00/SF +
                            electricity
Finishout:
        New:                $15.00/SF for new lease
        Renewal:            Negotiable
Lease Commissions:          4.5%
Building Factor:            15%
Construction:               Granite and glass exterior


Humphries & Associates              VIII - 17                       D-4Z/02-1716
<PAGE>

Office Building Lease Comparable 4, continued


Lease Terms & Conditions

Expenses pass-thru using the first lease year as the base year. The estimated
2004 operating expense is $9.00/SF.

Parking:                    Surface concrete and multi-level parking garage

As of:                      7/04

Verified:                   James Esquivel (972/851-7062)

Comments:                   Sixteen-story office building located on the
                            southwest corner of Dallas Parkway and Arapaho
                            Road just south of the Subject Property. Free rent
                            up to six months is available. There is no charge
                            for the parking garage.


Humphries & Associates              VIII - 18                       D-4Z/02-1716
<PAGE>

                               Rent Comparable Map


                 [MAP SHOWING LOCATIONS OF RENT COMPARABLES 1-4]


Humphries & Associates              VIII - 19                       D-4Z/02-1716

<PAGE>

                       VALUE INDICATED BY INCOME APPROACH

The Income Approach is based on the theory that the value of a property is the
present worth of the net income it will produce during the remainder of its
economic life. The Income Approach requires estimates of rental income,
vacancy/collection loss, and operating expenses for a property. Several
techniques are available for processing the resultant net income estimate into a
value by the Income Approach.

The analysis of the external market influences have identified the following
trends that affect the income and expenses that the Subject Property should
command:

1.    Job growth in the metroplex is anticipated to be 25,000 to 50,000 over the
      next year. This is an improvement from the 29,900 job loss in 2001 and
      77,500 job loss in 2002. Based on the year-to-date 12/03 Texas Labor
      Market review, job growth for 2003 is anticipated to be slightly negative.
      For 2004, job growth is predicted to once again be positive. Most real
      estate sectors will have difficulty maintaining existing occupancy levels
      with slowing job growth along with planned completions. Nevertheless, no
      sectors are anticipated to have significant oversupplies.

2.    Both DFW RealSmart and CoStar indicate the Subject's Submarket to be below
      stabilized occupancy levels. The average rental rate is $19.54/SF
      according to 1st Quarter 2004 DFW RealSmart and $18.27/SF according to
      July 2004 CoStar. Discussions with leasing agents indicate that overall
      leasing activity has significantly increased during the past six months.

Rental Income

In order to estimate the gross rental income that the Subject Property should
command, comparable buildings in the Subject market area were analyzed as
compared to the existing lease structure of the Subject.

Lease Comparable Analysis

The market area lease comparables were detailed before this report section and
are summarized as follows.


Humphries & Associates               IX - 1                          D4Z/04-1990
<PAGE>

Income Approach, continued


<TABLE>
<CAPTION>
==============================================================================================================
                                                                            Effective Lease
        Comparable            Size (SF)      Year Built     Occupancy           Rate/SF         Lease Type
- --------------------------------------------------------------------------------------------------------------
<S>                            <C>              <C>            <C>           <C>               <C>
1. Millennium I                362,000          2000           91%           $23.00-$23.50     + Electricity
- --------------------------------------------------------------------------------------------------------------
2. Tollway Plaza               182,638          1999           96%           $21.00-$22.00     + Electricity
- --------------------------------------------------------------------------------------------------------------
3. Centura Tower I             412,521          1999           92%              $19.50         + Electricity
- --------------------------------------------------------------------------------------------------------------
4. Colonnade III               377,639          1998           90%           $20.00-$22.00     + Electricity
- --------------------------------------------------------------------------------------------------------------
Average                        333,700          1999           92%              $21.57         + Electricity
- --------------------------------------------------------------------------------------------------------------
Subject Property               293,787          1999           99%              $24.14*        + Electricity
==============================================================================================================
</TABLE>

*The subject has contract rents ranging from $17.00/SF to $26.67/SF plus
electricity. The average contract rent is $24.14/SF.

The Subject Property and rent comparables are recently constructed office
buildings located in close proximity to each other. The comparables are direct
competitors with the Subject Property and are considered good indicators of a
market rent.

The comparables have effective rents ranging from $19.50/SF to $23.50/SF plus
electricity. The Subject has contract rents ranging from $17.00/SF to $26.67/SF
plus electricity with an average of $24.14/SF. The Subject's most recent leases
start at $17-20.00/SF with annual $1.00/SF increases thus increasing the
effective rent to the $20.00/SF to $21.00/SF range. The Subject and rent
comparables are offering free rent of 1 to 4 months for a five year lease.

Subject's Existing Lease Analysis

The Subject Property is 99% leased with contract rents averaging $24.14/SF. The
Subject is considered similar to the comparables in terms of overall location
and finishout. The comparables range from 8-16 stories and have secured parking
structures. The comparables are located along or in close proximity to the
Subject Property and Dallas North Tollway.


Humphries & Associates               IX - 2                          D4Z/04-1990
<PAGE>

Income Approach, continued


Considering the condition of the tenant spaces for the Subject Property, the
Subject's older contract leases appear to be slightly above market. A rental
rate in the middle of the comparable range is considered reasonable. For our
analysis, a reasonable market rental rate for the Subject is estimated at
$20.50/SF plus electricity.

Estimated Market Lease Rate

Rental Rate:               $20.50/SF (Free rent is projected during the next
                           12 months)

Term:                      5 Years

Conditions:                Gross lease plus electricity with base year expense
                           stops.

Finishout:                 When tenants renew their leases or new tenants
                           sign leases, an alteration charge (finishout) is
                           incurred. The amount of finishout spent on
                           renewing tenants will be $7.50/SF. New tenants
                           will receive $15.00/SF for a finishout allowance.

Commissions:               Blended 5.0% for new and 1.0% for renewal tenants.

Parking Revenue and Fiber Income

The Subject charges for non-reserved and reserved parking spaces from the
parking garage. There are currently 1,082 leased spaces, which generates a
monthly and annual income of $37,520 and $450,240, respectively. The first year
parking revenue is $450,240 and will be utilized in our report.

In addition, the Subject has an annual income of $2,400 through 2007 from
Airband for Fiberoptics. This amount will be utilized in this report.

Expense Reimbursements

The Subject is leased on a gross basis plus electricity with a base year stop.
Any increase over the base year stop is passed through to the tenants on a
prorata basis for reimbursement. The Subject has base year operating expense
stops of $6.25/SF and $6.50/SF. The new tenants have a 2004 base year stop that
is projected by management to be in the $8.60/SF to $9.25/SF range.
The 921


Humphries & Associates               IX - 3                          D4Z/04-1990
<PAGE>

Income Approach, continued


SF Price Edwards space in Suite 150 does not have any expense recoveries or
individual tenant electricity expense. According to the lease, the base year
operating expense stop for the majority of the building (237,702 SF) is
$6.25/SF. These stops will be applied appropriately to each tenant in the cash
flow.

Vacancy/Collection Loss Estimate

In projecting annual vacancy/collection loss for the Subject Property,
consideration is given to the current vacancy rate of the Subject Property (1%),
8% vacancy rate of the rent comparables, 24% vacancy of the DFW RealSmart survey
and 18.7% vacancy indicated by the CoStar survey. According to Miller
Commercial's Year-End 2003 North Texas Investment Survey, the typical holding
period for properties like the Subject is 7.6 years. The Subject is currently
99% leased, of which 70% of the space is leased for +/-3-6 more years.
Approximately 30% of the building is leased for +/- 5 years. As indicated by the
rent comparables, typically Class A investment grade office buildings outperform
the overall market. Long-term leases to high quality tenants allow these
properties to maintain high occupancy and rent levels during market downturns.
Therefore, over a stabilized holding period of say 10 years, a stabilized
vacancy rate of 5.0% is considered appropriate.

The following chart summarizes the expiration date per year of various spaces.


Humphries & Associates               IX - 4                          D4Z/04-1990
<PAGE>

Income Approach, continued


<TABLE>
<CAPTION>
==============================================================================================================
     Suite           Tenant                            Expiration Date              SF          % of Bldg.
- --------------------------------------------------------------------------------------------------------------
<S>              <C>                                        <C>                    <C>             <C>
      100        Champion Partners                          12/31/04               9,139
- --------------------------------------------------------------------------------------------------------------
                                                             Total                 9,139           3.1%
- --------------------------------------------------------------------------------------------------------------
                                                  Year 2005
- --------------------------------------------------------------------------------------------------------------
      200        JD Edwards                                 02/28/05               27,955
- --------------------------------------------------------------------------------------------------------------
      900        JD Edwards                                 02/28/05               30,786
- --------------------------------------------------------------------------------------------------------------
      125        Countrywide                                04/30/05               5,335
- --------------------------------------------------------------------------------------------------------------
                                                             Total                 64,076          21.8%
- --------------------------------------------------------------------------------------------------------------
                                                  Year 2007
- --------------------------------------------------------------------------------------------------------------
      150        Systemware                                 03/31/07               3,344
- --------------------------------------------------------------------------------------------------------------
      1000       Systemware                                 03/31/07               16,772
- --------------------------------------------------------------------------------------------------------------
      600        McLeod USA                                 04/30/07               30,786
- --------------------------------------------------------------------------------------------------------------
      700        McLeod USA                                 04/30/07               30,786
- --------------------------------------------------------------------------------------------------------------
      800        McLeod USA                                 04/30/07               30,786
- --------------------------------------------------------------------------------------------------------------
                                                             Total                112,474          38.3%
- --------------------------------------------------------------------------------------------------------------
                                                  Year 2008
- --------------------------------------------------------------------------------------------------------------
      1050       HSNO                                       08/30/08               4,508           1.5%
- --------------------------------------------------------------------------------------------------------------
                                                  Year 2009
- --------------------------------------------------------------------------------------------------------------
      185        The Staubach Company                       04/30/09               1,389
- --------------------------------------------------------------------------------------------------------------
      300        The Staubach Company                       04/30/09               30,786
- --------------------------------------------------------------------------------------------------------------
      400        The Staubach Company                       04/30/09               30,786
- --------------------------------------------------------------------------------------------------------------
      525        The Staubach Company                       04/30/09               10,032
- --------------------------------------------------------------------------------------------------------------
      550        The Staubach Company                       04/30/09               3,341
- --------------------------------------------------------------------------------------------------------------
      575        The Staubach Company                       04/30/09               3,023
- --------------------------------------------------------------------------------------------------------------
                                                             Total                 79,357          27.0%
- --------------------------------------------------------------------------------------------------------------
                                                  Year 2010
- --------------------------------------------------------------------------------------------------------------
      1025       Morgan Stanley                             01/31/10               8,868
- --------------------------------------------------------------------------------------------------------------
                                                             Total                 8,868           3.0%
==============================================================================================================
</TABLE>


Humphries & Associates               IX - 5                          D4Z/04-1990
<PAGE>

Income Approach, continued


Operating Expense Estimate

The building was completed in early 1999. The appraiser was supplied with income
and expense statements for the years 2000 through 2003 as well as the 2004
budget. These statements are summarized as follows.

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
                                        Addison Circle Operating Statement
                                            2000 and 2001 - 293,787 SF
- ---------------------------------------------------------------------------------------------------------------
                                                    2000 Amount     2000 Per SF      2001 Amount    2001 Per SF
- ---------------------------------------------------------------------------------------------------------------
<S>                                                  <C>              <C>             <C>               <C>
Rental Income                                        $6,364,237       $21.66          $6,705,254        $22.82
- ---------------------------------------------------------------------------------------------------------------
Expense Recoveries                                      561,301         1.91             624,825          2.13
- ---------------------------------------------------------------------------------------------------------------
Parking Income                                          532,425         1.81             463,320          1.58
- ---------------------------------------------------------------------------------------------------------------
Other Income                                             42,009         0.14              32,784          0.11
- ---------------------------------------------------------------------------------------------------------------
Total Income                                         $7,499,972       $25.53          $7,826,183        $26.64
- ---------------------------------------------------------------------------------------------------------------

- ---------------------------------------------------------------------------------------------------------------
Expenses
- ---------------------------------------------------------------------------------------------------------------
Real Estate Taxes                                    $1,109,935       $ 3.78          $1,153,423        $ 3.93
- ---------------------------------------------------------------------------------------------------------------
Insurance                                                42,761         0.15              42,123          0.14
- ---------------------------------------------------------------------------------------------------------------
Utilities*                                              158,900         0.54             262,588          0.89
- ---------------------------------------------------------------------------------------------------------------
Janitorial                                              268,080         0.91             253,817          0.86
- ---------------------------------------------------------------------------------------------------------------
Maintenance & Repairs                                   531,046         1.81             135,923          1.80
- ---------------------------------------------------------------------------------------------------------------
General & Administrative **                             189,808         0.65             197,974          0.67
- ---------------------------------------------------------------------------------------------------------------
Management Fee                                          130,175         0.44             135,923          0.46
- ---------------------------------------------------------------------------------------------------------------
Total Operating Expense                              $2,430,705       $ 8.27          $2,573,676        $ 8.76
- ---------------------------------------------------------------------------------------------------------------
Net Operating Income                                 $5,069,267       $17.25          $5,252,507        $17.88
- ---------------------------------------------------------------------------------------------------------------
*Utility expense does not include individual tenant electricity expense.
**The 2001 general and administrative expense includes $2,508 in non-billable
expenses.
- ---------------------------------------------------------------------------------------------------------------
</TABLE>


Humphries & Associates               IX - 6                          D4Z/04-1990
<PAGE>

Income Approach, continued


<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
                                              Addison Circle Operating Statement
                                                  2002, 2003 and 2004 Budget
                                                          293,787 SF
- --------------------------------------------------------------------------------------------------------------------------------
                                                    2002       2002               2003        2003              Budget 2004
- --------------------------------------------------------------------------------------------------------------------------------
                                                  Amount        PSF             Amount         PSF             Amount     PSF
- --------------------------------------------------------------------------------------------------------------------------------
<S>                                            <C>             <C>           <C>              <C>           <C>          <C>
Rental Income                                   $6,708,929     $22.84         $6,998,628      $23.82         $6,879,844  $23.42
- --------------------------------------------------------------------------------------------------------------------------------
Reimbursement - Operating Exp.                    $910,010      $3.10         $1,080,114       $3.68           $834,491   $2.84
- --------------------------------------------------------------------------------------------------------------------------------
Parking Income                                    $452,316      $1.54           $475,320       $1.62           $405,360   $1.38
- --------------------------------------------------------------------------------------------------------------------------------
Other Income                                       $20,618      $0.07            $25,446       $0.09            $34,200   $0.12
- --------------------------------------------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------------------------------------------
Total Income                                    $8,091,873     $27.54         $8,579,508      $29.20         $8,153,895  $27.75
- --------------------------------------------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------------------------------------------
Utilities*                                       -$189,989     -$0.65          -$322,290      -$1.10          -$139,924  -$0.48
- --------------------------------------------------------------------------------------------------------------------------------
Repair/Maintenance                               -$594,398     -$2.02          -$565,842      -$1.93          -$581,885  -$1.98
- --------------------------------------------------------------------------------------------------------------------------------
Janitorial/Cleaning                              -$232,639     -$0.79          -$241,935      -$0.82          -$262,355  -$0.89
- --------------------------------------------------------------------------------------------------------------------------------
Real Estate Taxes                              -$1,169,623     -$3.98        -$1,283,767      -$4.37          -$871,706  -$2.97
- --------------------------------------------------------------------------------------------------------------------------------
Insurance                                         -$73,397     -$0.25           -$70,437      -$0.24           -$83,025  -$0.28
- --------------------------------------------------------------------------------------------------------------------------------
General/Administrative                           -$191,662     -$0.65           -$72,531      -$0.25          -$223,629  -$0.76
- --------------------------------------------------------------------------------------------------------------------------------
Management Fee                                   -$141,391     -$0.48          -$216,291      -$0.74          -$220,653  -$0.75
- --------------------------------------------------------------------------------------------------------------------------------
Non-Recoverable Expenses                                $0      $0.00           -$31,587      -$0.11           -$94,908  -$0.32
- --------------------------------------------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------------------------------------------
Total Operating Expenses                       -$2,593,099     -$8.83        -$2,804,680      -$9.55        -$2,478,085  -$8.43
- --------------------------------------------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------------------------------------------
Net Operating Income                            $5,498,774     $18.72         $5,774,828      $19.66         $5,675,810  $19.32
- --------------------------------------------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------------------------------------------
Less: Leasing Commissions                               $0      $0.00                 $0       $0.00                 $0   $0.00
- --------------------------------------------------------------------------------------------------------------------------------
Less: Tenant Improvements                               $0      $0.00                 $0       $0.00                 $0   $0.00
- --------------------------------------------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------------------------------------------
Cash Flow                                       $5,498,774     $18.72         $5,774,828      $19.66         $5,675,810  $19.32
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>

*Utility expense does not include individual tenant electricity

In addition to the previously shown data, an income/expense analysis published
by BOMA International (known as the "BOMA Experience Exchange Report") will be
utilized. This publication reports operating income and expense data for office
buildings by geographic area. 2003 BOMA report using 2002 data for all suburban
office buildings and suburban office buildings 100,000 SF - 299,999 SF in the
Dallas area is summarized as follows.


Humphries & Associates               IX - 7                          D4Z/04-1990
<PAGE>

Income Approach, continued


A summary of the BOMA expense data and key components of the Subject Property's
operating levels are presented as follows.

<TABLE>
<CAPTION>
===========================================================================================================
                                                  PER SF
- -----------------------------------------------------------------------------------------------------------
                                                                       Dallas All       Dallas Suburban
                                         Subject Property               Suburban       100,000 - 299,999
- -----------------------------------------------------------------------------------------------------------
                                     2002                2003            2002               2002
- -----------------------------------------------------------------------------------------------------------
<S>                                 <C>                 <C>              <C>                <C>
Management                          $0.48               $0.74            $0.49              $0.52
- -----------------------------------------------------------------------------------------------------------
Payroll                             $0.00(1)            $0.00(1)         $0.45              $0.51
- -----------------------------------------------------------------------------------------------------------
Real Estate Taxes                   $3.98               $4.37            $3.13              $2.99
- -----------------------------------------------------------------------------------------------------------
Insurance                           $0.25               $0.24            $0.21              $0.20
- -----------------------------------------------------------------------------------------------------------
Utilities                           $0.65(2)            $1.102           $1.62              $1.61
- -----------------------------------------------------------------------------------------------------------
Maintenance/Repair(3)               $2.02               $1.93            $1.73              $1.60
- -----------------------------------------------------------------------------------------------------------
Janitorial                          $0.79               $0.82            $0.79              $0.79
- -----------------------------------------------------------------------------------------------------------
Administrative                      $0.65               $0.25            $0.25              $0.15
- -----------------------------------------------------------------------------------------------------------
Advertising                         $0.00               $0.00            $0.06              $0.07
- -----------------------------------------------------------------------------------------------------------
Miscellaneous                       $0.00               $0.11            $0.00              $0.00
- -----------------------------------------------------------------------------------------------------------
Totals                              $8.83               $9.55            $8.73              $8.44
- -----------------------------------------------------------------------------------------------------------
Tenant Finish/Lease
Commissions                           NA                  NA             $3.13              $1.85
===========================================================================================================
</TABLE>

(1) The Subject's payroll expense is included in maintenance/repairs.
(2) Does not include individual tenant space electricity. The BOMA data
    typically considers the landlord paying the utilities.
(3) Includes roads, grounds, landscaping and security.

Based upon the actual expenses of the Subject and the BOMA data, the following
stabilized expense categories are appropriate for the Subject. Consideration is
given to the physical characteristics of the Subject Improvements and to the
estimated market lease rate.


Humphries & Associates               IX - 8                          D4Z/04-1990
<PAGE>

Income Approach, continued


Management

Represents a charge for management of the investment and includes all aspects of
management supervision. Management expense is estimated as a percentage of
effective gross income. Considering the Subject Property is a ten tenant
building with long-term leases in effect, a first-year management expense is
estimated at 3.0% of effective gross income.

Payroll

Includes payroll, payroll taxes, and payroll benefits for administrative,
grounds and maintenance personnel. The Subject's payroll expense is in the
+/-$0.90/SF to $1.00/SF range. Under the Subject's accounting practices, the
payroll expense is included in the Maintenance/Repairs and
General/Administrative categories. BOMA indicates a payroll expense of $0.45/SF
to $0.51/SF. For our analysis, a reasonable payroll expense of $0.50/SF is
considered reasonable and will be included in the Maintenance/Repairs category.

Janitorial

This includes all fees for outside contractors associated with general cleaning
operation of the Subject. The 2002 and 2003 janitorial expense was $0.79/SF and
$0.82/SF, respectively. According to the 2004 budget, the 2004 Janitorial
expense is estimated at $0.89/SF. The BOMA data indicated a janitorial expense
of $0.79/SF. The janitorial expense is estimated to be $0.85/SF.

Real Estate Taxes

Includes all real estate taxes applicable to the Subject Property. Based upon
the 2004 assessed value of $34,722,590 ($118.19/SF) and the applicable 2003 ad
valorem tax rates (2.60346%), real estate taxes for the Subject Property are
approximately $903,989 or $3.08/SF. For our analysis, the current assessed value
is considered reasonable and will be utilized. Post Properties reimburses the
owner 3.5714% of the real estate taxes for its portion of the parking garage.
This equates to $32,285 ($903,989 x 3.5714%) or $0.11/SF. The net real estate
tax expense is $871,704 ($903,989 - $32,285) or $2.97/SF.

Insurance

Includes all one-year charges for fire, liability, compensation, and theft
insurance in addition to insurance premiums. Post Properties reimburses the
owner for 3.5714% of the insurance expense for its interest in the parking
garage. The following costs are net of the Post reimbursement. The


Humphries & Associates               IX - 9                          D4Z/04-1990
<PAGE>

Income Approach, continued


2002 and 2003 insurance expense was $0.25/SF to $0.24/SF, respectively. The 2004
insurance premium is $83,025 or $0.28/SF. For our analysis, a first year
insurance expense is based on the actual premium of $83,025 or $0.28/SF.

Maintenance and Repairs

Accounts for all items of general maintenance and repair, structural repair,
exterior painting, heating, roofing repairs, etc. Also included in this category
is landscaping maintenance, parking, roads and security items. Items such as
tenant modifications are considered capital expenditures and are not considered
expense items in the analysis. Maintenance is a volatile expense item. It will
normally include a certain amount of capital items, which would traditionally be
covered under a reserve heading. Maintenance will vary significantly from
project to project and is a function of building age, design, condition, etc.
The Subject is a multi-tenant office building that is approximately 5 years old
and is in very good condition. The 2002 and 2003 expenses were $2.02/SF and
$1.93/SF, respectively including +/-$0.50/SF for payroll and payroll benefits.
The 2004 budget projects a maintenance/repairs expense of $1.98/SF. BOMA
indicates a M/R expense of $1.73/SF to $1.60 and a payroll expense of $0.45/SF
to $0.51/SF for a total expense of $2.18/SF and $2.11/SF. The Subject is a new
structure with many of the typical maintenance and repair items under warranty.
Given its age, size, occupancy and good condition, maintenance and repairs are
estimated at $2.00/SF. A portion of the Maintenance/Repairs is considered to be
payroll.

Reserves for Replacement

Replacement Reserves consist of a sinking fund that is established for
replacements of certain components other than the building itself. The annual
amount is based upon the cost of replacement divided by the useful life of the
component. In actual practice, such items are replaced using operating revenues
and are capitalized over the economic life of the item. Because the
capitalization rates used to capitalize the net operating income (calculated in
the proforma shown later in this section) do not factor in reserves, this amount
will not be included in the Maintenance/Repairs expense estimate for the
proforma used in our direct capitalization.


Humphries & Associates               IX - 10                         D4Z/04-1990
<PAGE>

Income Approach, continued


<TABLE>
<CAPTION>
===============================================================================================================
                                         Replacement Reserves Calculation
- ---------------------------------------------------------------------------------------------------------------
                                                                      Sinking Fund
     Reserve Item           Economic Life       Replacement Cost       Factor @ 7%     Replacement Reserves
- ---------------------------------------------------------------------------------------------------------------
<S>                           <C>                 <C>                    <C>                 <C>
Roof Cover                    30 Years            $ 146,878              0.0105              $  1,542
- ---------------------------------------------------------------------------------------------------------------
HVAC                          25 Years            $1,905,397             0.0244              $ 46,492
- ---------------------------------------------------------------------------------------------------------------
Paving                        30 Years            $  60,000              0.0105              $    630
- ---------------------------------------------------------------------------------------------------------------
Total Replacement Reserves                                                                   $ 48,664
                                                                                             $0.17/SF
===============================================================================================================
</TABLE>

The replacement reserves are estimated at $0.15/SF. The sales used in the market
typically do not include a deduction for reserves. For our direct
capitalization, no deduction for reserves will be made. Reserves will be
deducted in our cash flow analysis.

Utilities

The individual tenant spaces are individually metered for electricity. The
tenants pay for their electricity cost. The landlord is responsible for the
common area electricity, water and sewer expenses. Post Properties reimburses
the owner for 3.5714% of the utility expense for its interest in the parking
garage. The following costs are net of the Post Properties reimbursements. The
Subject's 2002 and 2003 utility expense was $0.65/SF and $1.10/SF net of
individual tenant electricity reimbursement. The 2004 budget indicates a utility
expense of $0.48/SF. The BOMA utility expense of $1.62/SF and $1.61/SF is high
because it includes individual unit electricity. For our analysis, the
first-year utility expense is projected at $1.00/SF.

General/Administration/Advertising, Leasing Costs/Miscellaneous

This expense includes items such as professional fees, dues and subscriptions,
telephone, postage, office equipment supplies, advertising/promotions, leasing
expenses and an allowance for expenses not included in any of the previous
expense categories including expense leakage during vacant periods. The category
also includes +/-$0.42/SF for payroll and payroll benefits. The Subject Property
is 99% leased to ten tenants and has incurred minimal marketing expenses. The
Subject is encumbered generally with long-term leases and will have minimal
advertising expense. The Subject's 2002 and 2003 General & Administrative
expense was $0.65/SF and $0.25/SF. The 2004 budget projects a $0.76/SF General
and Administrative expense. The stabilized general/administrative,
advertising/promotion and miscellaneous expenses are estimated at $0.75/SF.


Humphries & Associates               IX - 11                         D4Z/04-1990
<PAGE>

Income Approach, continued


Based on the previous income, vacancy and expense analysis, the following
stabilized proforma is deemed appropriate for the Subject.

                            ADDISON CIRCLE I PROFORMA
                                   293,787 NRA

<TABLE>
<CAPTION>
Income                                                               Total      Per SF
- ------                                                               -----      ------

<S>                                         <C>        <C>         <C>          <C>
Gross Rental Income                                                $6,986,361   $ 23.78
Plus: Parking Garage & Airband Revenue                                452,640      1.54
Plus: Recoveries*                                                     562,568      1.91
                                                                   ----------   -------

Total Income                                                       $8,001,569   $ 27.24
Less Vacancy @ 5%                                                    -400,078    - 1.36
                                                                   ----------   -------
Effective Gross Income                                             $7,601,491   $ 25.87

Expenses
- --------

Management Fees                               3.0%     $ 228,045
Property Tax                                $2.97/SF     871,704
Insurance                                   $0.28/SF      83,025
Utilities                                   $1.00/SF     293,787
Maint./Repair                               $2.00/SF     587,574
Janitorial                                  $0.85/SF     249,719
Gen./Admin./Misc                            $0.75/SF     220,340
                                                       ---------

Total Expenses                                                     $2,534,194   $  8.63
                                                                   ----------   -------

Net Operating Income                                               $5,067,297   $ 17.25
</TABLE>

*Calculated in the first year of the Discounted Cash Flow Analysis.


Humphries & Associates               IX - 12                         D4Z/04-1990
<PAGE>

Income Approach, continued


Capitalization

Several capitalization techniques are available to process income into an
indication of value. The appropriate technique is determined by the
quality/quantity of available market data and by area market conditions. The
capitalization methods that are most widely used by appraisers are Direct
Capitalization and Yield Capitalization.

Direct Capitalization

Direct capitalization techniques are used to convert a single year's estimated
income into a value indication. This is accomplished by dividing the income
estimate by an income rate or multiplying the income estimate by an income
factor. In direct capitalization, a precise distinction between return on and
return of capital is not made. However, a satisfactory rate of return for the
investor and return of capital invested are implicit in the rates or factors
used in direct capitalization because they are derived from similar investment
properties.

Direct capitalization will be used in this analysis because of the availability
of current market data. The direct capitalization formula applicable to this
method is as follows:

                             Net Operating Income
        Property Value = ---------------------------
                         Overall Capitalization Rate

To derive a capitalization rate for the Subject Property, four sources of
information will be analyzed such as local office building sales, the Year-End
2003 Miller Commercial survey, the 1st Quarter 2004 Korpacz Investor Survey and
the 1st Quarter 2004 American Council of Life Insurance Survey. This information
was obtained from various surveys conducted nationally and locally in the
Dallas/Fort Worth and North Texas area.


Humphries & Associates               IX - 13                         D4Z/04-1990
<PAGE>

Income Approach, continued


Local Office Building Sales Survey

The following surveys, recent office building sales in the Subject area and the
Dallas area were acquired from involved parties. These sales are adjusted to the
equivalent of cash as addressed in the Market Approach section of this
appraisal.

The following is a summary of recent sales of office buildings in the Dallas
area. These sales are all within similar market environments as the Subject and
are considered to reflect a probable range of investor attitudes toward the
Subject Property.

<TABLE>
<CAPTION>
=================================================================================================================================
                                                    OFFICE BUILDING SALES SUMMARY
- ---------------------------------------------------------------------------------------------------------------------------------
                                                                           Net                         Stabilized
                         Sale      Occu. at        Year                  Rentable                        Sales          Proforma
        Sale             Date        Sale         Built     Condition    Area (SF)  Stories     GIM    Price/NRSF         OAR*
- ---------------------------------------------------------------------------------------------------------------------------------
<S>                      <C>         <C>           <C>         <C>       <C>          <C>      <C>     <C>                <C>
1. 5950 Sherry           06/02       99%           1999        Good      196,997       9       7.50x   $ 194.93           8.82%
- --------------------------------------------------------------------------------------------------------------------------------
2. Premier Place         05/03       85%           1986        Good      395,901      21       6.50x   $ 136.40           8.02%
- --------------------------------------------------------------------------------------------------------------------------------
3. Granite Tower         09/03       99%           1999        Good      240,145      10       6.36x   $ 139.92           8.86%
- --------------------------------------------------------------------------------------------------------------------------------
4. Millennium I          10/03       91%           2000        Good      362,000      14       6.28x   $ 144.34           9.25%
- --------------------------------------------------------------------------------------------------------------------------------
5. Park Place            10/03       92%           1986        Good      177,296      14       7.04x   $ 175.98           8.10%
- --------------------------------------------------------------------------------------------------------------------------------
   Average                  --       93%           1994          --      274,468      14       6.74x   $ 158.31           8.61%
- --------------------------------------------------------------------------------------------------------------------------------
   Subject                  --       99%           1999        Good      293,787      10          --         --             --
================================================================================================================================
</TABLE>

*Overall rates are not considered to include reserves.

The comparable sales have OARs ranging from 8.02% to 9.25% with an average of
8.61%. Sales 1 and 5 are considered most similar to the Subject. These sales
have an OAR range of 8.10% to 8.82% and average 8.46%.


Humphries & Associates               IX - 14                         D4Z/04-1990
<PAGE>

Income Approach, continued


Miller Commercial Survey

The data shown in the following table was published in a Year-End 2003 real
estate investment survey by Miller Commercial, Inc. This survey indicates the
capitalization rates and discount rates which were derived from sales of various
real estate properties in the North Texas area.

<TABLE>
<CAPTION>
====================================================================================================
                                       Capitalization Rates
- ----------------------------------------------------------------------------------------------------
                                Going-In                    Stabilized                   Reversion
- ----------------------------------------------------------------------------------------------------
<S>                               <C>                         <C>                          <C>
Apartments                        7.1%                         8.1%                        8.3%
Offices                           8.8%                         9.4%                        9.6%
- -------                           ----                         ----                        ----
Retail                            9.1%                         9.9%                        10.1%
Industrial                        8.6%                         9.0%                         9.6%
Hotel                             9.5%                        10.5%                        11.0%
- ----------------------------------------------------------------------------------------------------
<CAPTION>
                                                       Discount Rates
- ----------------------------------------------------------------------------------------------------
<S>                                               <C>
Apartments                                         7.5% - 10.0% -  9.3% Average
Offices                                            9.0% - 11.0% - 10.2% Average
- -------                                            ------------
Retail                                             8.5% - 11.0%  - 9.5% Average
Industrial                                         8.0% - 11.5% -  9.2% Average
Hotels                                            10.5% - 12.5% - 11.5% Average
====================================================================================================
</TABLE>

This survey data indicates a going-in rate for investment quality Class A and B
office properties of 8.8%, a stabilized rate of 9.4%, a reversion rate of 9.6%
and a weighted average discount rate of 10.2%.

Korpacz Real Estate Investor Survey

The 1st Quarter 2004 Korpacz Real Estate Investor Survey summarizes the expected
rates of return, property selection criteria, and investment outlook of a
representative sample of large institutional investors in the U.S. The following
chart shows the results of the 1st Quarter 2004 survey for office properties.


Humphries & Associates               IX - 15                         D4Z/04-1990
<PAGE>

Income Approach, continued


<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
                              Korpacz Real Estate Investor
                              SurveyDallas Office Buildings
                                    1st Quarter 2004
- ---------------------------------------------------------------------------------------
                                           Range                             Average
- ---------------------------------------------------------------------------------------
<S>                                    <C>                                   <C>
Overall Cap Rate                       6.00%-10.50%                           8.77%*
- ---------------------------------------------------------------------------------------
Residual Cap Rate                      7.50%-11.00%                           9.27%
- ---------------------------------------------------------------------------------------
Discount Rate (IRR)                    8.50%-12.25%                          10.51%
- ---------------------------------------------------------------------------------------
</TABLE>

*All cash transaction capitalization rate.

Residual capitalization rates ranged from 7.50% to 11.0% with an average of
9.27%. Discount rates ranged from 8.50% to 12.25% with an average of 10.51%.

Debt Coverage Ratio Estimation of a Capitalization Rate

Derivation of a capitalization rate using this technique is based on the
following formula:

            Ro = DCR X Rm X M

Where:

      Ro     =   Capitalization Rate
      DCR    =   Debt Coverage Ratio
      Rm     =   Mortgage Constant
      M      =   Loan to Value Ratio

Based on the 1st Quarter 2004 Investment Bulletin of the American Council of
Life Insurance Survey of mortgage loan commitments for commercial properties,
the following terms were indicated for office properties. This publication
represents 2/3rds of the commercial mortgage held by U.S. life insurance
companies. The following chart summarizes the data by loan size from $25,000,000
and over and for all loans.


Humphries & Associates               IX - 16                         D4Z/04-1990
<PAGE>

Income Approach, continued


<TABLE>
<CAPTION>
================================================================================================================================
                                     Survey of Mortgage Commitments on Commercial Properties
- --------------------------------------------------------------------------------------------------------------------------------
                                                                                Averages
- --------------------------------------  ----------------------------------------------------------------------------------------
 Property Type   No. of       Amount        Loan      Contract     Yield/      Debt       Loan/    Cap        %        Maturity
   Loan Size      Loans     Committed      Amount    Int. Rate     Fees      Coverage     Value    Rate    Constant    (Yrs/Mos)
- --------------------------------------  ----------------------------------------------------------------------------------------
                              ($000)       ($000)
- --------------------------------------  ----------------------------------------------------------------------------------------
<S>                <C>      <C>            <C>         <C>          <C>        <C>       <C>       <C>       <C>          <C>
All Loans          129      1,706,843      13,231      5.21%        5.30       2.08      62.1%     8.7%      7.1%         9/3
- --------------------------------------  ----------------------------------------------------------------------------------------
>$25M               15        946,242      63,083      5.08%        5.19       2.43      57.7%     8.7%      6.5%         8/6
======================================  ========================================================================================
</TABLE>

                                    All Loans
                                    ---------

                             Ro = 2.08 x .071 x .621

                             Ro = 9.17%

                                  $25M and Over
                                  -------------

                             Ro = 2.43 x .065 x .577

                             Ro = 9.11%

The 9.17% and 9.11% can be compared to the 8.7% capitalization rates listed by
the Investment Bulletin. The 8.7% capitalization rate represents the NOI/Value
upon which the loan was based.

Capitalization Rate Summary

A summary of the rates of the various publications, market sales and debt
coverage ratio estimation, and the American Council of Life Insurance survey, is
presented as follows:


Humphries & Associates               IX - 17                         D4Z/04-1990
<PAGE>

Income Approach, continued


<TABLE>
<CAPTION>
================================================================================================================
                                             Going-In       Stabilized       Terminal         Discount Rate
- ----------------------------------------------------------------------------------------------------------------
<S>                                            <C>             <C>             <C>               <C>
Miller Commercial                               8.8%           9.4%            9.6%               10.2%
- ----------------------------------------------------------------------------------------------------------------
Korpacz Survey                                 9.27%           8.77%           8.77%             10.51%
- ----------------------------------------------------------------------------------------------------------------
Debt Coverage Ratio - All Loans                 NA             9.17%             NA                 NA
- ----------------------------------------------------------------------------------------------------------------
Debt Coverage Ratio $25M & Over                 N/A            9.11%            N/A                N/A
- ----------------------------------------------------------------------------------------------------------------
American Council of Life
Insurance - All Loans                           N/A             8.7%            N/A                N/A
- ----------------------------------------------------------------------------------------------------------------
American Council of Life
Insurance - $25M & Over                         NA              8.7%             NA                 NA
- ----------------------------------------------------------------------------------------------------------------
Market Sales                                    N/A            8.61%            N/A                N/A
================================================================================================================
</TABLE>

All of the capitalization rates described by the surveys apply to typically "A"
and some "B" quality properties that are considered investment quality near or
at stabilized levels.

The rates indicated by the surveys range from 8.77% to 9.6%. The OAR for the
Subject is best indicated by the improved sales, which range from 8.02% to 9.25%
and average 8.61%. The Subject is most similar to Sales 1 and 5 which have OAR's
of 8.10% to 8.82% with an average of 8.46%. For our analysis, an OAR of 8.75% to
9.00% is considered reasonable and will be utilized.

The following charts show the Estimated Market Value Range via Direct
Capitalization.


Humphries & Associates               IX - 18                         D4Z/04-1990
<PAGE>

Income Approach, continued


<TABLE>
<CAPTION>
=========================================================================================
      Stabilized Net Income           Overall Rate           "As Is" Value Estimate
- -----------------------------------------------------------------------------------------
<S>        <C>                            <C>                     <C>
           $5,067,297                     8.75%                   $57,911,966
- -----------------------------------------------------------------------------------------
           $5,067,297                     9.00%                   $56,303,300
=========================================================================================
</TABLE>

Estimated Value Range Via Income Approach
   Via Direct Capitalization, "As Is",            $56,300,000   to   $58,000,000

Cash Flow (Yield Capitalization)

The discounted cash flow analysis is a yield capitalization technique and is
applicable to existing improvements such as the Subject Property or to proposed
improvements. A typical discounted cash flow analysis projects rental income,
occupancy levels, and operating expenses over a typical holding period based
upon historical and projected future market trends.

The annual cash flows are discounted into a present worth over a range of
discount rates (rates of return) currently required by investors in properties
similar to the Subject Property. A discounted cash flow analysis is considered
to be most representative of the potential performance of a property in an
unbalanced market because it allows for increases/decreases in income,
occupancy, and expenses over the projected holding period. The following is an
explanation of each segment of the discounted cash flow analysis, utilizing the
ARGUS software program.

      The gross potential rental income for the Subject is based on the existing
      contract leases. The current market rent for all lease space within the
      Subject is estimated at $20.50/SF plus electricity with a base year
      expense stop. The one vacant space will lease in January 2005 at $20.50/SF
      with two months of free rent. Free rent of two months will be applied to
      leases rolling during the next 12 months and will no longer be used after
      that period.

      Based on information discussed in the Market Analysis and Income Approach
      sections of this report, market rents are projected to increase at 3.5%
      per year beginning in Year 2 of the cash flow. Rent growth is projected to
      spike to 10% per year in Years 3 and 4, then slow to 3.5% for the
      remaining term. Miller Commercial projects rent growth of approximately
      1.29% in Year 1, 2.79% in Year 2 and 4.42% in Year 3 and thereafter. After
      the contract rents roll to the projected 5-year lease term, the rents will
      continue to increase 3.5% annually.


Humphries & Associates               IX - 19                         D4Z/04-1990
<PAGE>

Income Approach, continued


      The Subject has ancillary income in the form of parking revenue and
      fiberoptic revenue. Due to the downturn in the office market, parking
      revenue is no longer attainable in today's market. As market conditions
      continue to improve, the Subject will be able to charge for parking. This
      is estimated to occur during the next 12-18 months. Based on the Subject
      leases that currently pay for parking, only Countrywide Mortgage's lease
      will expire within the next 18 months. However, Countrywide just renewed
      its lease in January of 2004 and continues to pay for parking. Based on
      the preceding, the first year parking revenue of $450,240 and fiberoptic
      revenue of $2,400 are projected to increase 3.5% annually throughout the
      DCF.

2.    BOMA indicates that, excluding the taxes and insurance expense, expenses
      have increased +/-2.3% annually during the past 10 years. Miller
      Commercial projects expense growth of 2.93% in Year 1, 3.42% in Year 2 and
      3.58% in Year 3 and thereafter. With the exception of management, all
      expenses will be increased 3.5% per year beginning in Year 2. Management
      is calculated at 3% of the effective gross income.

3.    Stabilized vacancy/credit loss is estimated at 5% for the entire cash flow
      period. In the cash flow, vacancy/credit loss is a calculated function of
      lease turnover during the holding period and vacancy and collection loss.
      A vacancy period of 6 months with a renewal probability of 75% is applied
      to each tenant. This results in an average vacancy over the 10-year cash
      flow of +/-3%. Therefore, a 2.0% general vacancy has been included.

4.    With the Subject estimated to be leased at market rents, as tenants'
      leases expire, it is estimated that 75% will renew their leases and 25%
      will vacate. Lease commissions are estimated at a market rate of 5.0% for
      new tenants, 1% for renewals, and 3.0% as a blended rate. Finishout costs
      for new tenants are estimated at a market rate of $15.00/SF. For renewing
      tenants a finishout estimate of $7.50/SF is applied. A 5-year term is
      applied to any new lease.

5.    The typical new lease will be on a gross basis with a base year expense
      stop on all operating expenses. The tenant will pay the individual unit
      electricity. The Price Edwards space (management office) in Suite 175 does
      not pay any expense reimbursements. When this spaces roll to market, the
      space will pay expense reimbursements.

6.    A deduction of $44,068 is applied to the first year of the cash flow for
      replacement reserves. This amount is increased at 3.5% per year in Years
      2-10.

7.    The cash flow program is based on a 10-year holding period with reversion
      occurring at the end of the 10th year. The reversion sale price is
      calculated based on the 10th year NOI divided by the appropriate reversion
      capitalization rate.


Humphries & Associates               IX - 20                         D4Z/04-1990
<PAGE>

Income Approach, continued


      In order to arrive at the appropriate reversion cap rate, several sources
      were considered. These sources include stabilized capitalization rates
      from actual sales of office buildings in the Dallas area as well as the
      year-end 2003 Miller Commercial Survey and 1st Quarter 2004 Korpacz
      Survey. The results of these surveys are summarized earlier in this
      section.

      As is shown in the surveys, a premium is usually attached to reversionary
      capitalization rates due to increased risk as compared to going-in
      capitalization rates. Therefore, we have estimated an appropriate
      reversionary capitalization rate for the Subject Property at 9.0%. The
      reversion rate is typically slightly greater than the capitalization rate
      used in the direct capitalization. Additionally, selling expenses are
      estimated at 2% of the reversionary sale price.

8.    In order to select an appropriate discount rate for the cash flow, a
      year-end 2003 investment survey by Miller Commercial and 1st Quarter 2004
      Korpacz Investment Survey will be utilized. The results of these surveys
      are listed as follows.

                         Office Building Discount Rates
                         ------------------------------

                                           Range                   Average
                                           -----                   -------

     Miller Commercial Survey            9.0% - 11.0%               10.2%
     Korpacz                            8.5% - 12.25%              10.51%

Based on these surveys and considering the Subject's good location, long-term
leases and credit strength of the tenants, a discount rate range of 10.0% to
10.5% is used to estimate the present value of the cash flows.

he DCF and present value calculations are presented on the following pages.


Humphries & Associates               IX - 21                         D4Z/04-1990
<PAGE>

               SCHEDULE OF PROSPECTIVE CASH FLOW - ADDISON CIRCLE
           In Inflated Dollars for the Fiscal Year Beginning 7/1/2004

<TABLE>
<CAPTION>
                                   Year 1      Year 2       Year 3       Year 4       Year 5       Year 6       Year 7
For the Years Ending              Jun-2005    Jun-2006     Jun-2007     Jun-2008     Jun-2009     Jun-2010     Jun-2011
<S>                             <C>          <C>          <C>          <C>          <C>          <C>          <C>
POTENTIAL GROSS REVENUE
Base Rental Revenue              6,960,695    6,897,302    6,920,905    6,839,981    7,059,222    7,548,945    8,061,299
Absorption & Turnover Vacancy     -250,152       -3,257     -437,510            0     -416,194     -371,636      -29,679
                                ----------   ----------   ----------   ----------   ----------   ----------   ----------
Scheduled Base Rental Revenue    6,710,543    6,894,045    6,483,395    6,839,981    6,643,028    7,177,309    8,031,620

Expense Reimbursement Revenue
Management Fee                      49,920       47,219       44,685       29,185       32,282       16,883       17,509
Real Estate Taxes                  193,776      185,379      184,292      126,537      141,057       74,785       73,503
Insurance                           18,458       17,657       17,553       12,054       13,438        7,123        6,997
Utilities                           65,307       62,477       62,111       42,645       47,538       25,205       24,773
Maintenance/Repairs                130,616      124,954      124,226       85,291       95,081       50,406       49,546
Janitorial                          55,512       53,107       52,792       36,250       40,410       21,424       21,058
General/Administrative              48,979       46,856       46,583       31,985       35,656       18,905       18,579
                                ----------   ----------   ----------   ----------   ----------   ----------   ----------
Total Reimbursement Revenue        562,568      537,649      532,242      363,947      405,462      214,731      211,965

Parking Garage                     450,240      465,998      482,308      499,189      516,661      534,744      553,460
Airband                              2,400        2,484        2,571        2,661        2,754        2,850        2,950
                                ----------   ----------   ----------   ----------   ----------   ----------   ----------
TOTAL POTENTIAL GROSS REVENUE    7,725,751    7,900,176    7,500,516    7,705,778    7,567,905    7,929,634    8,799,995
General Vacancy                   -154,515     -158,004     -150,010     -154,116     -151,358     -158,593     -176,000
                                ----------   ----------   ----------   ----------   ----------   ----------   ----------
EFFECTIVE GROSS REVENUE          7,571,236    7,742,172    7,350,506    7,551,662    7,416,547    7,771,041    8,623,995
                                ----------   ----------   ----------   ----------   ----------   ----------   ----------
OPERATING EXPENSES
Management Fee                     227,137      232,265      220,515      226,550      222,496      233,131      258,720
Real Estate Taxes                  871,704      902,214      933,791      966,474    1,000,300    1,035,311    1,071,547
Insurance                           83,025       85,931       88,938       92,051       95,273       98,608      102,059
Utilities                          293,787      304,070      314,712      325,727      337,127      348,927      361,139
Maintenance/Repairs                587,574      608,139      629,424      651,454      674,255      697,854      722,278
Janitorial                         249,719      258,459      267,505      276,868      286,558      296,588      306,968
General/Administrative             220,340      228,052      236,034      244,295      252,845      261,695      270,854
                                ----------   ----------   ----------   ----------   ----------   ----------   ----------
TOTAL OPERATING EXPENSES         2,533,286    2,619,130    2,690,919    2,783,419    2,868,854    2,972,114    3,093,565
                                ----------   ----------   ----------   ----------   ----------   ----------   ----------
NET OPERATING INCOME             5,037,950    5,123,042    4,659,587    4,768,243    4,547,693    4,798,927    5,530,430
                                ----------   ----------   ----------   ----------   ----------   ----------   ----------
LEASING & CAPITAL COSTS
Tenant Improvements                722,995       60,703    1,129,548            0       48,497    1,244,935      749,043
Leasing Commissions                171,293       14,236      281,536            0       12,847      329,783      198,422
Replacement Reserves                44,068       45,610       47,207       48,859       50,569       52,339       54,171
                                ----------   ----------   ----------   ----------   ----------   ----------   ----------
TOTAL LEASING & CAPITAL COSTS      938,356      120,549    1,458,291       48,859      111,913    1,627,057    1,001,636
                                ----------   ----------   ----------   ----------   ----------   ----------   ----------
CASH FLOW BEFORE DEBT SERVICE    4,099,594    5,002,493    3,201,296    4,719,384    4,435,780    3,171,870    4,528,794
  & TAXES                       ==========   ==========   ==========   ==========   ==========   ==========   ==========

RESALE AMOUNT
  Gross Proceeds from Sale      55,977,222   56,922,689   51,773,189   52,980,478   50,529,922   53,321,411   61,449,222
  Commissions & Other Costs     -1,119,544   -1,138,454   -1,035,464   -1,059,610   -1,010,598   -1,066,428   -1,228,984
                                ----------   ----------   ----------   ----------   ----------   ----------   ----------
NET PROCEEDS FROM SALE          54,857,678   55,784,235   50,737,725   51,920,868   49,519,324   52,254,983   60,220,238
                                ==========   ==========   ==========   ==========   ==========   ==========   ==========
</TABLE>

<TABLE>
<CAPTION>
                                     Year 8      Year 9        Year 10
For the Years Ending                Jun-2012    Jun-2013       Jun-2014
<S>                                <C>          <C>          <C>
POTENTIAL GROSS REVENUE
Base Rental Revenue                 8,359,222    8,937,585    9,240,402
Absorption & Turnover Vacancy        -276,129     -285,792      -23,711
                                   ----------   ----------   ----------
Scheduled Base Rental Revenue       8,083,093    8,651,793    9,216,691

Expense Reimbursement Revenue
Management Fee                         25,202       20,270       29,870
Real Estate Taxes                     106,007       82,903      122,133
Insurance                              10,097        7,896       11,631
Utilities                              35,728       27,942       41,162
Maintenance/Repairs                    71,455       55,879       82,324
Janitorial                             30,370       23,750       34,988
General/Administrative                 26,796       20,956       30,874
                                   ----------   ----------   ----------
Total Reimbursement Revenue           305,655      239,596      352,982

Parking Garage                        572,831      592,880      613,631
Airband                                 3,053        3,160        3,271
                                   ----------   ----------   ----------
TOTAL POTENTIAL GROSS REVENUE       8,964,632    9,487,429   10,186,575
General Vacancy                      -179,293     -189,749     -203,732
                                   ----------   ----------   ----------
EFFECTIVE GROSS REVENUE             8,785,339    9,297,680    9,982,843
                                   ----------   ----------   ----------
OPERATING EXPENSES
Management Fee                        263,560      278,930      299,485
Real Estate Taxes                   1,109,051    1,147,868    1,188,043
Insurance                             105,631      109,328      113,155
Utilities                             373,779      386,861      400,402
Maintenance/Repairs                   747,558      773,723      800,803
Janitorial                            317,712      328,832      340,341
General/Administrative                280,334      290,146      300,301
                                   ----------   ----------   ----------
TOTAL OPERATING EXPENSES            3,197,625    3,315,688    3,442,530
                                   ----------   ----------   ----------
NET OPERATING INCOME                5,587,714    5,981,992    6,540,313
                                   ----------   ----------   ----------
LEASING & CAPITAL COSTS
Tenant Improvements                         0    1,388,501       57,599
Leasing Commissions                         0      367,814       15,258
Replacement Reserves                   56,067       58,029       60,060
                                   ----------   ----------   ----------
TOTAL LEASING & CAPITAL COSTS          56,067    1,814,344      132,917
                                   ----------   ----------   ----------
CASH FLOW BEFORE DEBT SERVICE       5,531,647    4,167,648    6,407,396
  & TAXES                          ==========   ==========   ==========

RESALE AMOUNT
  Gross Proceeds from Sale         62,085,711   66,466,578   72,670,144
  Commissions & Other Costs        -1,241,714   -1,329,332   -1,453,403
                                   ----------   ----------   ----------
NET PROCEEDS FROM SALE             60,843,997   65,137,246   71,216,741
                                   ==========   ==========   ==========
</TABLE>


Humphries & Associates               IX - 22                         D4Z/04-1990
<PAGE>

                           PROSPECTIVE PRESENT VALUE
               Cash Flow Before Debt Service plus Property Resale
                    Discounted Monthly over a 10-Year Period

<TABLE>
<CAPTION>
                                For the                   P.V. of       P.V. of        P.V. of        P.V. of        P.V. of
Analysis                         Year        Annual      Cash Flow     Cash Flow      Cash Flow      Cash Flow      Cash Flow
 Period                         Ending     Cash Flow      @ 8.50%       @ 9.00%        @ 9.50%       @ 10.00%       @ 10.50%
 ------                         ------     ---------      -------       -------        -------       --------       --------

<S>                             <C>       <C>          <C>           <C>            <C>            <C>            <C>
Year 1                          Jun-2005   4,099,594     3,951,410     3,943,273      3,935,196      3,927,177      3,919,217
Year 2                          Jun-2006   5,002,493     4,408,808     4,377,600      4,346,761      4,316,287      4,286,169
Year 3                          Jun-2007   3,201,296     2,656,726     2,628,931      2,601,551      2,574,575      2,547,998
Year 4                          Jun-2008   4,719,384     3,534,825     3,477,772      3,421,900      3,367,182      3,313,585
Year 5                          Jun-2009   4,435,780     3,070,636     3,007,683      2,946,304      2,886,453      2,828,086
Year 6                          Jun-2010   3,171,870     1,998,625     1,947,277      1,897,474      1,849,163      1,802,294
Year 7                          Jun-2011   4,528,794     2,634,927     2,555,739      2,479,280      2,405,443      2,334,127
Year 8                          Jun-2012   5,531,647     2,995,255     2,893,512      2,795,672      2,701,568      2,611,042
Year 9                          Jun-2013   4,167,648     2,043,791     1,963,347      1,886,417      1,812,832      1,742,431
Year 10                         Jun-2014   6,407,396     2,942,014     2,815,793      2,695,533      2,580,927      2,471,685
                                          ----------   -----------   -----------    -----------    -----------    -----------
Total Cash Flow                           45,265,902    30,237,017    29,610,927     29,006,088     28,421,607     27,856,634
Property Resale @ 9% Cap Rate             71,216,741    31,498,126    30,082,721     28,736,965     27,457,137     26,239,727
                                                       -----------   -----------    -----------    -----------    -----------
Total Property Present Value                           $61,735,143   $59,693,648    $57,743,053    $55,878,744    $54,096,361
                                                       ===========   ===========    ===========    ===========    ===========

Rounded to Thousands                                   $61,735,000   $59,694,000    $57,743,000    $55,879,000    $54,096,000
                                                       ===========   ===========    ===========    ===========    ===========

Per SqFt                                               $    210.14   $    203.19    $    196.55    $    190.20    $    184.13

PERCENTAGE VALUE DISTRIBUTION

Assured Income                                               23.09%        23.67%         24.27%         24.87%         25.48%
Prospective Income                                           25.89%        25.93%         25.96%         25.99%         26.01%
Prospective Property Resale                                  51.02%        50.40%         49.77%         49.14%         48.41%
                                                       ===========   ===========    ===========    ===========    ===========
                                                               100%          100%           100%           100%           100%
</TABLE>

<TABLE>
<CAPTION>
                                     P.V. of        P.V. of
Analysis                            Cash Flow      Cash Flow
 Period                             @ 11.00%       @ 11.50%
 ------                             --------       --------

<S>                               <C>            <C>
Year 1                              3,911,314      3,903,467
Year 2                              4,256,403      4,226,984
Year 3                              2,521,812      2,496,009
Year 4                              3,261,084      3,209,649
Year 5                              2,771,158      2,715,630
Year 6                              1,756,816      1,712,682
Year 7                              2,265,236      2,198,677
Year 8                              2,523,941      2,440,121
Year 9                              1,675,065      1,610,589
Year 10                             2,367,533      2,268,213
                                  -----------    -----------
Total Cash Flow                    27,310,362     26,782,021
Property Resale @ 9% Cap Rate      25,081,431     23,979,130
                                  -----------    -----------
Total Property Present Value      $52,391,793    $50,761,151
                                  ===========    ===========

Rounded to Thousands              $52,392,000    $50,761,000
                                  ===========    ===========

Per SqFt                          $    178.33    $    172.78

PERCENTAGE VALUE DISTRIBUTION

Assured Income                          26.10%         26.72%
Prospective Income                      26.03%         26.04%
Prospective Property Resale             47.87%         47.24%
                                  ===========    ===========
                                          100%           100%
</TABLE>


Humphries & Associates               IX - 23                         D4Z/04-1990
<PAGE>

              SUPPORTING SCHEDULE -- AVERAGE SQUARE FEET OCCUPANCY

<TABLE>
<CAPTION>
                                     Year 1      Year 2      Year 3      Year 4      Year 5
For the Years Ending                Jun-2005    Jun-2006    Jun-2007    Jun-2008    Jun-2009
                                    --------    --------    --------    --------    --------
<S>                        <C>       <C>        <C>        <C>          <C>         <C>
TENANT                     SUITE
Champion Partners           100        7,616      9,139      9,139        9,139       9,139
Country Wide                125        4,446      5,335      5,335        5,335       5,335
Systemwide                  150        3,344      3,344      2,787        3,344       3,344
Price Edwards & Co.         175          921        768        921          921         921
Staubach                    185        1,389      1,389      1,389        1,389       1,158
JD Edwards                  200       23,296     27,955     27,955       27,955      27,955
Staubach                    300       30,786     30,786     30,786       30,786      25,655
Staubach                    400       30,786     30,786     30,786       30,786      25,655
CTX Mortgage                500       10,113     10,113     10,113       10,113       8,428
Staubach                    525       10,032     10,032     10,032       10,032       8,360
Staubach                    550        3,341      3,341      3,341        3,341       2,784
Staubach                    575        3,023      3,023      3,023        3,023       2,519
McLeod USA                  600       30,786     30,786     25,655       30,786      30,786
McLeod USA                  700       30,786     30,786     25,655       30,786      30,786
McLeod USA                  800       10,848     10,848      9,040       10,848      10,848
McLeod USA                  800        4,545      4,545      3,788        4,545       4,545
McLeod USA                  800       15,393     15,393     12,828       15,393      15,393
JD Edwards                  900       25,655     30,786     30,786       30,786      30,786
Systemware                 1000       16,772     16,772     13,977       16,772      16,772
Morgan Stanley             1025        8,868      8,868      8,868        8,868       8,868
HSNO                       1050        4,508      4,508      4,508        4,508       3,757
Vacant Space                560        2,166      4,331      4,331        4,331       4,331
                                     -------    -------    -------      -------     -------
TOTAL AMOUNT PER YEAR                279,419    293,634    275,041      293,787     278,124
                                     =======    =======    =======      =======     =======
AVERAGE PERCENT OCCUPANCY              95.11%     99.95%     93.62%      100.00%      94.67%
</TABLE>

<TABLE>
<CAPTION>
                                Year 6       Year 7      Year 8      Year 9      Year 10
For the Years Ending           Jun-2010     Jun-2011    Jun-2012    Jun-2013     Jun-2014
                               --------     --------    --------    --------     --------
<S>                            <C>          <C>         <C>         <C>          <C>
TENANT
Champion Partners                7,616        9,139       9,139       9,139        9,139
Country Wide                     5,335        4,446       5,335       5,335        5,335
Systemwide                       3,344        3,344       3,065       3,065        3,344
Price Edwards & Co.                921          768         921         921          921
Staubach                         1,389        1,389       1,389       1,389        1,389
JD Edwards                      23,296       27,955      27,955      27,955       27,955
Staubach                        30,786       30,786      30,786      30,786       30,786
Staubach                        30,786       30,786      30,786      30,786       30,786
CTX Mortgage                    10,113       10,113      10,113      10,113       10,113
Staubach                        10,032       10,032      10,032      10,032       10,032
Staubach                         3,341        3,341       3,341       3,341        3,341
Staubach                         3,023        3,023       3,023       3,023        3,023
McLeod USA                      30,786       30,786      28,221      28,221       30,786
McLeod USA                      30,786       30,786      28,221      28,221       30,786
McLeod USA                      10,848       10,848       9,944       9,944       10,848
McLeod USA                       4,545        4,545       4,166       4,166        4,545
McLeod USA                      15,393       15,393      14,110      14,110       15,393
JD Edwards                      25,655       30,786      30,786      30,786       30,786
Systemware                      16,772       16,772      15,374      15,374       16,772
Morgan Stanley                   7,390        8,868       8,868       8,868        8,868
HSNO                             4,508        4,508       4,508       4,508        3,757
Vacant Space                     3,609        4,331       4,331       4,331        4,331
                               -------      -------     -------     -------      -------
TOTAL AMOUNT PER YEAR          280,274      292,744     284,414     284,414      293,036
                               =======      =======     =======     =======      =======
AVERAGE PERCENT OCCUPANCY        95.40%       99.65%      96.81%      96.81%       99.74%
</TABLE>


Humphries & Associates               IX - 24                         D4Z/04-1990
<PAGE>

                             PROPERTY SUMMARY REPORT

TIMING & INFLATION
Analysis Period:                      July 1, 2004 to June 30, 2014; 10 years
Inflation Method:                     Fiscal
General Inflation Rate:               3.5%

PROPERTY SIZE & OCCUPANCY
Property Size:                        293,787 Square Feet
Alternate Size:                       1 Square Foot
Number of rent roll tenants:          22
Total Occupied Area:                  289,456 Square Feet
                                      98.53% during first month of analysis

GENERAL VACANCY
Method:                               Percent of Potential Gross Revenue
Amount:                               2.00%

PROPERTY PURCHASE & RESALE
Purchase Price:                       --
Resale Method:                        Capitalize Net Operating Income
Cap Rate:                             9.00%
Cap Year:                             Year 10
Commission/Closing Cost:              2.00%
Net Cash Flow from Sale:              $71,216,741

PRESENT VALUE DISCOUNTING
Discount Method:                      Monthly
Unleveraged Discount Rate:            10.00%
Unleveraged Present Value:            $55,878,744 at 10.00%


Humphries & Associates               IX - 25                         D4Z/04-1990
<PAGE>

Income Approach, continued


The present value of the cash flows and reversion is summarized:

                                                            Discount Rate
                                                            -------------

                                                        10.5%           10.0%
                                                        -----           -----

PW - 10 Year Hold - 10th Year Cap                    $54,096,000     $55,879,000

Value Indicated by Yield Capitalization
                          Say,                       $54,000,000     $55,800,000

Income Approach Summary

The values indicated by the direct capitalization and yield capitalization
methods are shown as follows:

Value Range Indicated by Direct
Capitalization                                       $56,300,000 to  $58,000,000

Value Indicated by Yield Capitalization              $54,000,000     $55,800,000

Both the yield capitalization and direct capitalization techniques are
considered reliable values. Therefore, the Leased Fee "As Is" Market Value
estimated via the Income Approach is:

      Leased Fee "As Is" Market Value............. $54,500,000 ($185.51/SF)


Humphries & Associates               IX - 26                         D4Z/04-1990
<PAGE>

                              MARKET DATA APPROACH

Humphries & Associates D-4Z/04-1990 An indication of value can be obtained by
comparison with other similarly improved properties that have sold in the
Market. This approach is also called the Direct Sales Comparison Approach.

The critical element in the application of this approach is the determination of
what constitutes "the market". It may or may not be appropriate to consider only
those sales in the immediate vicinity of the Subject. The Appraiser must apply
judgment in selecting those available sales which would compete in the market
with the Subject Property for investor monies.

There are several units of comparison which may be used to compare one operating
property against another. These comparison units include:

1.    The Gross Rent/Income Multiplier - Purchasers pay so many times gross
      earnings when they purchase income producing real estate (Sales
      Price/Gross Income). The Gross Income estimate for the Subject Property
      reflects its ability to compete in the market. The location, condition,
      size, etc. of the Subject is reflected in this Gross Income estimate. So,
      no comparison adjustments are necessary when market multipliers are used
      with the Gross Income estimate of the Subject Property to arrive at a
      value indication (Estimated Gross Income x GRM/GIM).

2.    Price/SF, Price/Unit, or other comparatives require subjective adjustments
      to compensate for dissimilarities between the sales and the Subject
      Property. Generally, such comparisons are less reliable then GRM analysis.
      However, in periods of market instability, with high vacancies and rental
      reductions, concessions, etc., the sales price per SF indicator becomes
      much more reliable.

A summary of office building sales that have sold in the market area will be
shown. The sales are all within similar market environments as the Subject and
are considered to reflect a probable range of investor attitudes given the
current market environment toward the Subject. The summary will be followed by
detailed pages of each sale.


Humphries & Associates               X - 1                           D4Z/04-1990
<PAGE>

Market Data Approach, continued


<TABLE>
<CAPTION>
====================================================================================================================================
                                                 OFFICE BUILDING SALES SUMMARY
- ------------------------------------------------------------------------------------------------------------------------------------
        Sale           Sale Date    Occu. at     Year     Condition   Net Rentable  Stories     GIM        Stabilized       Proforma
                                      Sale       Built                 Area (SF)                        Sales Price/NRSF      OAR*
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                      <C>           <C>       <C>        <C>         <C>           <C>      <C>          <C>              <C>
1. 5950 Sherry           06/02         99%       1999       Good        196,997        9       7.50x        $194.93          8.82%
- ------------------------------------------------------------------------------------------------------------------------------------
2. Premier Place         05/03         85%       1986       Good        395,901        21      6.50x        $136.40          8.02%
- ------------------------------------------------------------------------------------------------------------------------------------
3. Granite Tower         09/03         99%       1999       Good        240,145        10      6.36x        $139.92          8.86%
- ------------------------------------------------------------------------------------------------------------------------------------
4. Millennium I          10/03         91%       2000       Good        362,000        14      6.28x        $144.34          9.25%
- ------------------------------------------------------------------------------------------------------------------------------------
5. Park Place            10/03         92%       1986       Good        177,296        14      7.04x        $175.98          8.10%
- ------------------------------------------------------------------------------------------------------------------------------------
   Average                  --         93%       1994         --        274,468        14      6.74x        $158.31          8.61%
- ------------------------------------------------------------------------------------------------------------------------------------
   Subject                  --         99%       1999       Good        293,787        10        --              --            --
====================================================================================================================================
</TABLE>

*Overall rates are not considered to include reserves.

      The comparables have sales prices ranging from $136.40/SF to $194.93/SF
      with an average of $158.31. The Subject is most similar to Sale 1 and Sale
      5. These sales range from $175.98/SF to $194.93/SF with an average of
      $185.46/SF. Sale 1 and 5 will be adjusted to the Subject Property in the
      following grid.


Humphries & Associates               X - 2                           D4Z/04-1990
<PAGE>

                                 IMPROVED SALE 1

                    [PICTURE OF SHERRY LANE OFFICE BUILDING]

Name:                               5950 Sherry Lane Office Building
Address:                            5950 Sherry Lane, Dallas, Texas 75225
Mapsco:                             D-25W

Grantor:                            Blackstone Partners
Grantee:                            RREEF Sherry Lane, LP
Sale Date:                          6/28/02
Recordation:                        2002118/9267

Sales Data
Sale Price                          $38,400,000, Cash to Seller

General Data
Land Area:                          1.341 Acres or 58,391 SF
NRA:                                196,997 SF
FAR:                                3.37:1

Improvement Data
Year Built:                         1999
Net Rentable Area:                  196,997 SF


Humphries & Associates               X - 3                           D4Z/04-1990
<PAGE>

Improved Sale 1, continued


No. of Stories:                     9
Type Construction:                  Steel frame with brick veneer
Condition:                          Good
Parking:                            Surface concrete and underground garage

Economic Data

Occupancy at Sale:                  99%

      =========================================================
      Income & Expense Data                 Proforma    Per SF
      ---------------------------------------------------------
      Potential Gross Income             $ 5,121,922   $ 26.00
      ---------------------------------------------------------
      Less: Vacancy @ 5%                    -256,096     -1.30
      ---------------------------------------------------------
      EGI                                $ 4,865,826   $ 24.70
      ---------------------------------------------------------
      Less Expense                        -1,477,478     -7.50
      ---------------------------------------------------------
      NOI                                $ 3,388,348   $ 17.20
      =========================================================

Units of Comparison                 Proforma

OAR                                 8.82%
GIM:                                7.50x
Adjusted Sales Price/NLSF:          $194.93
Verified:                           Barry Brown, Broker (214/265-0880)

Comments

The actual income and expense data at the time of sale was provided by the
broker. Contract rents are in the $25.00/SF - $26.00/SF full service plus
electricity range. The tenants include UBS PaineWebber, McCurley, Kinser,
McCurley, & Nelson LLP, Heidrick & Struggles International, Inc., FleetBoston,
Financial Corp., Coldwell Banker, Dr. Pepper/Seven Up Bottling Group, Virginia
Cook Realtors, Kessler & Collins PC, Broadband Venture Partners, Guy Carpenter
&Co., Inc., Stonegate Securities, Inc., Corporate Search Partners, Luce &
Williams, Ltd., Public Strategies, Inc., Trammell Crow Co., Lacerte
Technologies, Inc., Hampshire Capital Corp., Westwood Companies, Donald A. Berg
Investments.


Humphries & Associates               X - 4                           D4Z/04-1990
<PAGE>

                                 IMPROVED SALE 2

                    [PICTURE OF PREMIER PLACE BUILDING]

Name:                               Premier Place
Address:                            5910 Central Expressway, Dallas, Texas 75206
Mapsco:                             D-36E

Grantor:                            New Premplace Corporation
Grantee:                            Premier Place Associates, LP
Sale Date:                          5/22/03
Recordation:                        2003099/3952

Sales Data
Sale Price                          $54,000,000, Cash to Seller

General Data
Land Area:                          3.173 Acres or 138,226 SF
NRA:                                395,901 SF
FAR:                                2.86:1

Improvement Data
Year Built:                         1986
Net Rentable Area:                  395,901 SF


Humphries & Associates               X - 5                           D4Z/04-1990
<PAGE>

Improved Sale 2, continued


No. of Stories:                     21
Type Construction:                  Steel frame with glass exterior
Condition:                          Good
Parking:                            Surface concrete with underground parking
                                    and a parking garage.

Economic Data

Occupancy at Sale:                  85%

       ==================================================================
       Income & Expense Data                           Proforma    Per SF
       ------------------------------------------------------------------
       Potential Gross Income                       $ 8,301,321   $21.00
       ------------------------------------------------------------------
       Less: Vacancy @ 5%                              -415,066    -1.05
       ------------------------------------------------------------------
       EGI                                          $ 7,886,255   $19.95
       ------------------------------------------------------------------
       Less Expense                                  -3,557,709    -9.00
       ------------------------------------------------------------------
       NOI                                          $ 4,328,546   $10.95
       ==================================================================

Units of Comparison                 Proforma

OAR                                 8.02%
GIM:                                6.50x
Sales Price/NLSF:                   $136.40
Verified:                           Jeff Stone, Broker (214/265-0880)

Comments

The actual income and expense data at the time of sale was provided by the
broker. The tenants include Merrill Lynch, America First Insurance, Drexel
Development Company, Hatfield Halcomb Architects, Kleinert Engineering,
Southwest Housing Management Corp., Twin Creek Partners, Thomas & Blackwood,
LLP, Odyssey Information Services, Docucorp International, MillerParker,
Berkshire Mortgage Finance, Mitsui Bussan Logistics, CABC, Buchanan & Burke,
Insurance Designers of Dallas, Pope Law Firm, Hillcrest Mortgage, Texas Capital
Bancshares, Sandia Development, etc.


Humphries & Associates               X - 6                           D4Z/04-1990
<PAGE>

                                 IMPROVED SALE 3

                    [PICTURE OF GRANITE TOWER BUILDING]

Name:                               Granite Tower
Address:                            4055 Valley View Lane, Farmers Branch 75244
Mapsco:                             D-14P

Grantor:                            GPI Tower, Ltd.
Grantee:                            GIP Granite, LP
Sale Date:                          9/22/03
Recordation:                        2003188/11280

Sales Data
Sale Price                          $33,600,000, Cash to Seller

General Data
Land Area:                          5.576 Acres or 242,870 SF
NRA:                                240,145 SF
FAR:                                0.99:1

Improvement Data
Year Built:                         1999
Net Rentable Area:                  240,145 SF


Humphries & Associates               X - 7                           D4Z/04-1990
<PAGE>

Improved Sale 3, continued

No. of Stories:                     10
Type Construction:                  Steel and reinforced concrete with granite
                                    and glass exterior
Condition:                          Good
Parking:                            Surface concrete and multi-level parking
                                    structure.

Economic Data

Occupancy at Sale:                  99%

       ======================================================
       Income & Expense Data             Proforma      Per SF
       ------------------------------------------------------
       Potential Gross Income          $5,283,190      $22.00
       ------------------------------------------------------
       Less: Vacancy @ 5%                -264,160       -1.10
       ------------------------------------------------------
       EGI                             $5,019,030      $20.90
       ------------------------------------------------------
       Less Expense                    -2,041,233       -8.50
       ------------------------------------------------------
       NOI                             $3,388,347      $12.40
       ======================================================

Units of Comparison                 Proforma

OAR                                 8.86%
GIM:                                6.36x
Sales Price/NLSF:                   $139.92
Verified:                           Gary Carr, Broker (972/458-4800)

Comments

The building is located on the northwest quadrant of LBJ Freeway (IH-635) and
Midway Road in the City of Farmers Branch. The actual income and expense data at
the time of sale was provided by the broker. The building was 99% leased at the
time of sale. Tenants include Carreker Corp., TMP Worldwide, Purchasing
Management International, United Dominion Realty Trust, Wachovia Maesk Sealand,
EdSoft Software Corp., Lay Machinery, Time Warner Telecom, Adecco, Granite Tower
Mgt., Bell South Wireless Sales, PSN Inc., Ciber Enterprise Out Sourcing, Xilnx,
IBS, Inc., CBIZ Benefits and Insurance Services.


Humphries & Associates               X - 8                           D4Z/04-1990
<PAGE>

                                 IMPROVED SALE 4

                        [PICTURE OF MILLENIUM I BUILDING]

Name:                               Millennim I Office Building
Address:                            15455 Dallas Parkway, Dallas, Texas 75001
Mapsco:                             D-14D

Grantor:                            MIL Phase I Dallas, LP
Grantee:                            RREEF Millenium 1, LP
Sale Date:                          10/9/03
Recordation:                        2003201/5644

Sales Data
Sale Price                          $52,250,000, Cash to Seller

General Data
Land Area:                          3.339 Acres or 145,466 SF
NRA:                                362,000 SF
FAR:                                2.49:1

Improvement Data
Year Built:                         2000
Net Rentable Area:                  362,000 SF


Humphries & Associates               X - 9                           D4Z/04-1990
<PAGE>

Improved Sale 4, continued

No. of Stories:                     14
Type Construction:                  Steel frame with glass and stone veneer
Condition:                          Good
Parking:                            Surface concrete and parking garage

Economic Data

Occupancy at Sale:                  91%

       ===============================================================
       Income & Expense Data                     Proforma      Per SF
       ---------------------------------------------------------------
       Potential Gross Income                  $8,326,000      $22.00
       ---------------------------------------------------------------
       Less: Vacancy @ 5%                        -416,300       -1.15
       ---------------------------------------------------------------
       EGI                                     $7,909,700      $21.85
       ---------------------------------------------------------------
       Less Expense                            -3,077,000       -8.50
       ---------------------------------------------------------------
       NOI                                     $4,832,700      $13.35
       ===============================================================

Units of Comparison                 Proforma

OAR                                 9.25%
GIM:                                6.28x
Adjusted Sales Price/NLSF:          $144.34
Verified:                           Gary Carr, Broker (972/458-2678)

Comments

The actual income and expense data at the time of sale was provided by the
broker. The tenants include Cushman & Wakefield, Muse Stancil, SAS Institute,
Dresser, Inc., Mentor Graphics, Medhost, ING Financial Services, Fortis Capital,
Home Box Office, Frost Bank, WiPro, First Magnus Financial, Opus, Sanofi
Synthelabo, Crystal Decisions, Dynamic Design, Meritax, New Horizon,
Wynne-Jackson, Integrrsource, Mind Electric, M 2 Konstruction, Graham Glass,
Regus Business Centre, California Carwash Systems, Diversity Job Link, C-Tech
and Natural Tax Resource Group.


Humphries & Associates               X - 10                          D4Z/04-1990
<PAGE>

                                 IMPROVED SALE 5

                [PICTURE OF PARK PLACE ON TURTLE CREEK BUILDING]

Name:                               Park Place on Turtle Creek
Address:                            2911 Turtle Creek Boulevard, Dallas, Texas
                                    75204
Mapsco:                             D-45B

Grantor:                            Park Place on Turtle Creek, LP
Grantee:                            CF Turtle Creek Office, LP
Sale Date:                          10/15/03
Recordation:                        2003205/0047

Sales Data
Sale Price                          $31,200,000, Cash to Seller

General Data
Land Area:                          1.234 Acres or 54,134 SF
NRA:                                177,296 SF
FAR:                                3.28:1

Improvement Data
Year Built:                         1986
Net Rentable Area:                  177,296 SF


Humphries & Associates               X - 11                          D4Z/04-1990
<PAGE>

Improved Sale 5, continued

No. of Stories:                     14
Type Construction:                  Steel frame with stone and glass veneer
Condition:                          Good
Parking:                            Surface concrete and underground garage

Economic Data

Occupancy at Sale:                  92%

       ==============================================================
       Income & Expense Data                     Proforma      Per SF
       --------------------------------------------------------------
       Potential Gross Income                  $4,432,400      $25.00
       --------------------------------------------------------------
       Less: Vacancy @ 5%                        -221,620       -1.25
       --------------------------------------------------------------
       EGI                                     $4,210,780      $23.75
       --------------------------------------------------------------
       Less Expense                            -1,684,312       -9.50
       --------------------------------------------------------------
       NOI                                     $2,526,468      $14.25
       ==============================================================

Units of Comparison                 Proforma

OAR                                 8.10%
GIM:                                7.04x
Adjusted Sales Price/NLSF:          $175.98
Verified:                           Mark Mitchell, Broker (972/248-2200)

Comments

The actual income and expense data at the time of sale was provided by the
broker. The tenants include PNB Financial Dallas, Howie & Sweeney, HQ Global
Workplaces, Belmont Group, Intermerc Corporation, Law Office, Belmont, Boeckman
Investments, Taylor Loehmeyer Corrigan, La Jolla Bank, Thomas Cook Currency
Services, British Consulate, Bagelsteins Express, Aftco Associates, Parker,
Walter Skinner Commercial Realty Services, Hill Company, Fox Limousine Services,
Aztec Development Properties, Rosetta Energy, Regency Pro Valet Parking,
Riversoft Inc., Skidmore Advertising, Capital Markets Group, Pool Energy
Services, Dallas Market Center, Asiatic International and Lexington Capital
Group.


Humphries & Associates               X - 12                          D4Z/04-1990
<PAGE>

                                 Office Sales Map


                  [MAP SHOWING LOCATION OF IMPROVED SALES 1-5]


Humphries & Associates               X - 13                          D4Z/04-1990
<PAGE>

Market Data Approach, continued


SALES PRICE PER SQUARE FOOT ANALYSIS

The following adjustment grid analyzes the sales that are considered to be the
most comparable to the Subject Property ("+" adjustments indicate that the
comparable sale is inferior to the Subject and must be adjusted upward; "-"
adjustments indicated that the comparable is superior to the Subject and must be
adjusted downward; and "0" indicates that the comparable sale is similar to the
Subject in this factor of comparison and no adjustment is warranted).

Comparables 1 and 5 are considered the most similar to the Subject Property and
will be adjusted in the following grid. Both sales are multi-tenant office
projects with similar location characteristics as the Subject Property. The
sales are adjusted as follows.


Humphries & Associates               X - 14                          D4Z/04-1990
<PAGE>

Market Data Approach, continued


<TABLE>
<CAPTION>
================================================================================================================
                                           Subject                     Sale 1                   Sale 5
- ----------------------------------------------------------------------------------------------------------------
<S>                                     <C>                         <C>                      <C>
Sale Date                                     --                       06/02                    10/03
- ----------------------------------------------------------------------------------------------------------------
Net Rentable Area (SF)/Stories            293,787/10                 196,997/9                177,296/14
- ----------------------------------------------------------------------------------------------------------------
FAR                                         1.89:1                     3.37:1                   3.28:1
- ----------------------------------------------------------------------------------------------------------------
Location                                Dallas Parkway                 Sherry                Turtle Creek
- ----------------------------------------------------------------------------------------------------------------
Access/visibility                            Good                       Good                     Good
- ----------------------------------------------------------------------------------------------------------------
Occupancy at Sale                            100%                       99%                      92%
- ----------------------------------------------------------------------------------------------------------------
Year Built/Renovated                         1999                       1999                     1986
- ----------------------------------------------------------------------------------------------------------------
Condition                                    Good                       Good                     Good
- ----------------------------------------------------------------------------------------------------------------
Conditions of Sale                                                  Arm's Length             Arm's Length
- ----------------------------------------------------------------------------------------------------------------
Property Rights Conveyed                                             Leased Fee               Leased Fee
- ----------------------------------------------------------------------------------------------------------------
Price/SF (Stabilized)                                                 $194.93                  $175.98
- ----------------------------------------------------------------------------------------------------------------
Terms                                                                   -0-                      -0-
- ----------------------------------------------------------------------------------------------------------------
Real Property Rights Conveyed                                           -0-                      -0-
- ----------------------------------------------------------------------------------------------------------------
Market Conditions                                                       -0-                      -0-
- ----------------------------------------------------------------------------------------------------------------
Conditions of Sale                                                      -0-                      -0-
- ----------------------------------------------------------------------------------------------------------------
Adjusted Price/SF                                                     $194.93                  $175.98
- ----------------------------------------------------------------------------------------------------------------
Location/Access/Visibility                                              -5%                      +5%
- ----------------------------------------------------------------------------------------------------------------
Age/Condition                                                           -0-                      +3%
- ----------------------------------------------------------------------------------------------------------------
Density                                                                 -0-                      -0-
- ----------------------------------------------------------------------------------------------------------------
Size                                                                    -0-                      -0-
- ----------------------------------------------------------------------------------------------------------------
Amenities                                                               -0-                      -0-
- ----------------------------------------------------------------------------------------------------------------
Occupancy                                                               -0-                      -0-
- ----------------------------------------------------------------------------------------------------------------
Total Adjustments                                                       -5%                      +8%
- ----------------------------------------------------------------------------------------------------------------
Adjusted Price/SF                                                     $185.18                  $190.06
================================================================================================================
</TABLE>

The following is a description of the adjustments made to the comparable office
building sales.

Terms

All of the comparable sales sold on an all cash basis and no adjustment is
necessary.

Market Conditions

Market conditions may change between the time of sale of a comparable property
and the date of the appraisal of the Subject. Under such circumstances, the
price of the comparable property would be different at the later time (the date
of the appraisal), and an adjustment would have to made to the actual
transaction price. Changed market conditions often result from various causes
such as inflation, deflation, changing demand, and changing supply.


Humphries & Associates               X - 15                          D4Z/04-1990
<PAGE>

Market Data Approach, continued


All sales occurred within the last 25 months and are recent transactions. No
adjustment is considered necessary.

Conditions of Sale

All sales are considered to be arm's length transactions. No adjustment for
Conditions of Sale will be made.

Real Property Rights Conveyed

The first adjustment to be considered is for any differences in the property
rights being conveyed in the sale. Properties in which less than the full Fee
Simple Estate is transferred frequently sell for a lesser price. Land conveyed
as a Fee Simple may not be immediately developable, or the rents paid under the
lease may impact the desirability of a particular site and hence, the price
paid. If the leasehold estate is conveyed, any improvements constructed may
exhibit a different expense structure (and net income stream) than an improved
property where land and building are held in common ownership. Because these
factors can have an impact on value, one of the initial steps in the valuation
process is a determination of the real property interests, which have been
conveyed.

No determination could be made whether the Leased Fee Interest of the adjusted
sales were significantly different than the Fee Simple Interest of the Subject.
Reportedly, the lease rates of the sales represent market rates. Therefore, no
adjustment will be made.

Location/Access/Visibility

The Subject Property is located on the SWC of the Dallas Parkway and Addison
Circle in the City of Addison. The Dallas Parkway is a three-lane, one-way,
southbound access road to the Dallas North Tollway. The Dallas North Tollway is
a major north/south thoroughfare that provides access to LBJ Freeway and the
Dallas CBD to the south and SH-190 and SH-121 to the north. The Subject is
located in an area that is heavily developed with office uses.

The Subject is located in zip code 75248 and the Far North Dallas Submarket
according to DFW RealSmart. The average rental rate and occupancy for Class A
space within this sector is $20.37/SF and 76%, respectively. The weighted
rent/occupancy of this sale is $15.48/SF. The zip code has a 2003 population of
34,567 which represents a 0.6% annual increase since 2000. The median household
income is $80,147.

Sale 1 is located on the SEC of Lomo Alto Drive and Sherry Lane in the City of
Dallas. Lomo Alto is a two-lane, one-way, northbound access road to the Dallas
North Tollway. Sherry Lane is a two-lane, east/west secondary roadway. Sale 1 is
located within Preston Center which is heavily developed with office uses.
Preston Center historically has the highest office rents in the D/FW area. The
location is considered superior to the Subject and a downward adjustment is
warranted.


Humphries & Associates               X - 16                          D4Z/04-1990
<PAGE>

Market Data Approach, continued


Sale 1 is located in zip code 75225 and the North Dallas Submarket. The average
rental rate and occupancy for Class A space within this sector is $24.08/SF and
89%, respectively. The weighted rent/occupancy of this sale is $21.43/SF. The
zip code has a 2003 population of 20,400 which represents a 0.5% annual increase
since 2000. The median household income is $124,474.

Sale 5 is located along Turtle Creek Boulevard at Cedar Springs Avenue in the
City of Dallas. Cedar Springs Avenue is a primary thoroughfare while Turtle
Creek Boulevard is a secondary roadway that provides average access and
visibility. This sale is located in an area heavily development with office and
high-rise residential uses.

Sale 5 is located in zip code 75204 and the Oak Lawn Submarket. The average
rental rate and occupancy for Class A space within this sector is $21.70/SF and
76%, respectively. The weighted rent/occupancy of this sale is $16.49/SF. The
zip code has a 2003 population of 23,802 which represents a 3.3% annual increase
since 2000. The median household income is $44,870. The overall location is
considered inferior to the Subject due to its lack of freeway access and
visibility and a downward adjustment will be made.

For our analysis, a downward adjustment of 5% will be applied to Sale 1 and an
upward 5% will be applied to Sale 5.

Age/Condition

The Subject Property was completed in 1999 and is considered in good condition.
Sale 1 was completed in 1999 and is considered in good condition similar to the
Subject. No adjustment will be applied to Sale 1 for age/condition. Sale 5 was
completed in 1986 and is considered in good condition. Sale 5 is 13 years older
than the Subject and will be adjusted upward 3% due to its inferior age.

Density

The Subject has a FAR of 1.89:1. This compares to the FAR of Sales 1 and 5 of
3.37:1 and 3.28:1. The comparables have higher FAR's, however, this is offset by
its subterranean parking garage and no adjustment will be applied.

Size

The Subject contains 293,787 SF. The comparable sales range from 177,296 SF to
196,997 SF. The overall size of the Subject and comparable sales is similar and
no adjustment is warranted.


Humphries & Associates               X - 17                          D4Z/04-1990
<PAGE>

Market Data Approach, continued


Amenities

The Subject is a ten-story office building with multi-level parking garage. The
comparable sales are 9 to 14-story office buildings with multi-level parking
structures. The Subject Property and comparable sales have similar amenities and
no adjustment is warranted.

Occupancy

The Subject and comparable sales are all leased to stabilized occupancy levels.
No adjustment for occupancy will be applied.

Conclusion

The comparables have an adjusted range of $185.18/SF to $190.06/SF with an
average of $187.62/SF. Both of the comparable sales are considered good
indicators of value indicating the middle of the adjusted range. Therefore,
based upon the physical and locational characteristics of the Subject Property
as compared to the market sales, an appropriate price per SF for the Subject
Property is considered to be say, $185.00/SF to $190.00/SF.

NLA of Subject Property                              293,787            293,787
Price Per Square Foot                              x $185.00          x $190.00
                                                   ---------        -----------

                                                 $54,350,595   to   $55,819,530

Estimated "As Is" Market Value Range
via Market Data Approach                  Say,   $54,300,000   to   $55,800,000


Humphries & Associates               X - 18                          D4Z/04-1990
<PAGE>

                           CORRELATION AND CONCLUSIONS


The purpose of this appraisal is to estimate the Leased Fee Market Value of the
Subject Property "As Is" as of July 8, 2004. The methods used to estimate the
value of the Subject Property are outlined in the Appraisal Procedure section of
this appraisal. The estimated values are summarized below.

Land Value
"As Vacant and Available to be Developed:       $4,325,000

Value Indicated by Cost Approach:
      "As Is"                                   $46,500,000

Value Indicated by Income Approach:
      "As Is"                                   $54,500,000

Value Range Indicated by Market Approach:
      "As Is"                                   $54,300,000 - $55,800,000

Physical factors control the effectiveness of the Subject Property (the ability
to compete in the market for tenants). The design, and condition of the Subject
Improvements are similar to or slightly inferior as compared to other office
buildings in the Dallas area.

The Cost Approach is an accurate gauge of the current replacement cost of the
Subject Property. It reflects the design and construction characteristics of the
Subject Improvements and current cost trends. However, it does not adequately
reflect current office market conditions in the Subject Neighborhood and the
D/FW area.

Rental, occupancy, and expense trends in the Subject's area and the immediate
area are incorporated into the estimates of value via the Income and Market
Approaches. The estimated market rentals and occupancy were based upon the
location, design, and age/condition of the Subject Property.


Humphries & Associates               XI - 1                        D-4Z/04-1990
<PAGE>

Correlation and Conclusions, continued


The Income Approach value was derived via direct capitalization and yield
capitalization methods. Direct capitalization and Discounted Cash Flow Analysis
are considered to be a close approximation of market value and is based upon the
income-producing potential of the Subject Property. The discounted cash flow
analysis analyzes the actual leases and projects the rental income, occupancy
levels and operating expenses on a typical holding period based upon historical
and projected future market trends. This approach is considered to be the most
reliable indication of market value.

The Market Approach is derived from sales of office buildings in the Dallas
area. These sales are all in similar economic environments as the Subject
Property. The Market Approach reflects current investor attitudes toward
properties similar to the Subject and supports the value indicated by the Income
Approach.

Based upon the foregoing analysis, the estimated Leased Fee Market Value of the
Subject Property as of July 8, 2004, is:

                  "As Is"                             $54,500,000


Humphries & Associates               XI - 2                        D-4Z/04-1990
<PAGE>

                                   CERTIFICATE

I certify that, to the best of my knowledge and belief,...

      The statements of fact contained in this report are true and correct.

      The reported analyses, opinions, and conclusions are limited only by the
      reported assumptions and limiting conditions, and are my personal,
      impartial, unbiased professional analyses, opinions, and conclusions.

      As of the date of the appraisal only, I have no present or prospective
      interest in the property that is the subject of this report, and I have no
      personal interest or bias with respect to the parties involved.

      My compensation is not contingent on the reporting of a predetermined
      value or direction in value that favors the cause of the client, the
      amount of the value estimate, the attainment of a stipulated result, or
      the occurrence of a subsequent event. This appraisal assignment was not
      based on a requested minimum valuation, specific valuation, or the
      approval of a loan.

      No one provided significant professional assistance to the persons signing
      this report.

      My analysis, opinions, and conclusions were developed, and this report has
      been prepared, in conformity with the requirements of the Code of
      Professional Ethics and the Uniform Standards of Professional Appraisal
      Practice of the Appraisal Institute.

      The use of this report is subject to the requirements of the Appraisal
      Institute relating to review by its duly authorized representatives.

      As of the date of the appraisal, I have completed the requirements of the
      continuing education program of the Appraisal Institute.

      Greg Connelly participated in preparing the analysis, conclusions, and
      opinions concerning real estate that are set forth in the appraisal
      report. The Subject Property, all comparable data, and surrounding
      neighborhood were physically inspected by Greg Connelly and Bryan
      Humphries.

      Based upon my investigation and my experience, I estimate that the Leased
      Fee Market Value of the said property, under the assumptions and limiting
      conditions as stated, as of July 8, 2004, is:

            "As Is"                             $54,500,000



- -----------------------                         ------------------------
Bryan E. Humphries, MAI                         Greg Connelly
TX-1320676-G                                    TX-1324452-G


Humphries & Associates               XI - 3                        D-4Z/04-1990
<PAGE>

SUMMARY OF QUALIFICATIONS - Bryan E. Humphries, MAI

Currently

Owner, BRYAN E. HUMPHRIES, INC.

Experience

Over 24 years experience in the appraisal of real properties, including
commercial, multi-family, industrial, and special purpose properties, for
mortgage bankers, savings and loan associations, insurance companies, attorneys,
private individuals, public utilities, and governmental agencies.

Primary areas of concentration during the last five years include the appraisal
of multi-family and office properties. Additional experience includes ownership
and management of various multi-family and office properties.

Education

Graduated from Texas Tech University in 1974:  B.B.A. Business
Graduated from Texas Tech University in 1976:  M.S. Finance
Completed college, SREA, and AIREA courses in real estate appraisal
Qualified as "Expert" in real estate valuation in various courts

Professional Designations and Affiliations

MAI                     Member (#6514), Appraisal Institute

AI                      Admissions Committee, North Texas Chapter 17,
                        1983-1992 (Chairman, 1989-1990); National Admissions
                        Review (1994-1996); Education Committee (1988); Region
                        8 Representative (1994, 1996, 1997, 2002); North Texas
                        Chapter 17 Board of Directors (1993 - 1995; 1999 -
                        2001) Appraisal Institute National Screener
                        (1996-2001)

Broker                  Licensed Broker (#216136-12), Texas Real Estate
                        Commission

State Certified         Texas State Certified - General Real Estate Appraiser
                        (#TX 1320676-G)

State Certified         Texas State Certified - Property Tax Consultant
                        (00003440)

Member                  North Texas Commercial Association of Realtors

Member                  Real Estate Financial Executive Association


Humphries & Associates                                             D-4Z/04-1990

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>10
<FILENAME>collins.txt
<DESCRIPTION>COLLINS CROSSING APPRAISAL
<TEXT>

                                                                    Exhibit 99.2


                                APPRAISAL REPORT

                                  Prepared For


                 BOARD OF DIRECTORS OF FSP ADDISON CIRCLE CORP.
                       & FRANKLIN STREET PROPERTIES CORP.
                         401 EDGEWATER PLACE, SUITE 200
                       WAKEFIELD, MASSACHUSETTS 01880-6210


                           COMPLETE SUMMARY APPRAISAL

                            COLLINS CROSSING BUILDING

                          1500 & 1600 GREENVILLE AVENUE

                             RICHARDSON, TEXAS 75080


                                   Prepared By

                         Bryan E. Humphries & Associates
                              4054 McKinney Avenue
                                    Suite 210
                               Dallas, Texas 75204


Humphries & Associates                                              D-7U/04-1991
<PAGE>

July 23, 2004


Board of Directors of FSP Collins Crossing Circle Corporation and
Franklin Street Properties Corporation
401 Edgewater Place, Suite 200
Wakefield, Massachusetts 01880-6210

Attention:  Ms. Janet Notopoulos
            President

Reference:  COMPLETE SUMMARY APPRAISAL
            Multi-Tenant Office Building & Excess Land
            Collins Crossing Building
            1500 & 1600 Greenville Avenue
            Richardson, Texas 75080

Dear Ms. Notopoulos:

We have inspected and appraised the property as described herein. Conditions
pertinent to or indicative of the value of the property were investigated.

This report sets forth our findings and conclusions derived therefrom, together
with various exhibits that are considered necessary to explain the processes
followed in this appraisal. To the best of my knowledge, this appraisal is in
conformance with the current appraisal requirements of the Appraisal Institute,
the Appraisal Foundation's Uniform Standards of Professional Appraisal Practice
and the client's appraisal instructions.

The Appraisal Institute conducts a voluntary program of continuing education for
its designated members. MAIs and SRAs who meet the minimum standards of this
program are awarded periodic educational certification. I am currently certified
under this program.


Humphries & Associates                                              D-7U/04-1991
<PAGE>

FSP Investments, LLC.
Re: Collins Crossing Office Bldg. & Excess Land
July 23, 2004


The employment of the appraiser was not conditioned upon the appraisal producing
a specific value or a value within the given range.

An exposure period of twelve months is considered appropriate for the Subject
Property.

Moreover, we hereby consent to a description and inclusion of the appraisal
report in any document required to be filed with the Securities and Exchange
Commission and distributed to the stockholders of companies, which the client is
considering acquiring.

The estimated "As Is" Leased Fee Market Value of the Subject improvements, and
"As Is" Fee Simple Market Value of the Excess Land, as of July 8, 2004, subject
to the Assumptions and Limiting Conditions stated herein, is:

      Leased Fee Market Value "As Is" of Improvements*           $47,100,000**

      Fee Simple Market Value "As Is" of Excess Land*            $ 1,400,000

*See Summary of Facts page for value definition **Not including excess land.


Respectfully submitted,

BRYAN E. HUMPHRIES & ASSOCIATES


Bryan E. Humphries, MAI                               Greg Connelly
President                                             Appraiser
TX-1320676-G                                          TX-1324452-G

GC/D-7U/04-1991


Humphries & Associates                                              D-7U/04-1991
<PAGE>

                                TABLE OF CONTENTS

SUMMARY OF FACTS...........................................................I-1

MARKETING PERIOD...........................................................I-2

SUBJECT PROPERTY OWNERSHIP HISTORY.........................................I-3

ASSUMPTIONS AND LIMITING CONDITIONS........................................I-4

PURPOSE, SCOPE AND FUNCTION OF APPRAISAL...................................I-7

APPRAISAL PROCEDURE.......................................................I-10

GENERAL INFORMATION

REGIONAL AREA ANALYSIS....................................................II-1

NEIGHBORHOOD TRENDS......................................................III-1
   Neighborhood Map

SUBJECT PROPERTY..........................................................IV-1
    Survey/Site Plan           Flood Plain Map         Floor Plans
    Legal Description          Zoning Map              Building Elevation

APPRAISAL

HIGHEST AND BEST USE.......................................................V-1

LAND VALUATION............................................................VI-1
   Comparable Sales and Map

VALUE INDICATED BY COST APPROACH.........................................VII-1

MARKET ANALYSIS  .......................................................VIII-1
    Rent Comparables & Map

VALUE INDICATED BY INCOME APPROACH........................................IX-1

VALUE INDICATED BY MARKET DATA APPROACH....................................X-1
    Improved Sales & Map

CORRELATIONS AND CONCLUSIONS..............................................XI-1

CERTIFICATE...............................................................XI-3
QUALIFICATIONS


Humphries & Associates                                              D-7U/04-1991
<PAGE>

                                SUMMARY OF FACTS


Date of Appraisal and Inspection:      July 8, 2004

Dates of Preparation:                  July 8, 2004 - July 23, 2004

Purpose of Appraisal:                  To estimate the Leased Fee and Fee
                                       Simple Market Value "As Is" of the
                                       Subject Property.

Physical Description

Type Property:                         Multi-Tenant, 11-Story Office Building
                                       Collins Crossing Office Building
                                       1500 and 1600 Greenville Avenue
                                       Richardson, Texas 75080

Land Area:                             6.509 Acres or 283,550 SF (Building Site)
                                       3.552 Acres or 154,717 SF (Excess Land)

Building Area:                         322,264 SF - Gross Building Area
                                       298,766 SF - Net Rentable Area

Year Built:                            1999

Zoning:                                "PD" Ordinance 3123-A & 3277-A

Valuation

Highest and Best Use "As Vacant"       Office Development
Highest and Best Use "As Improved"     Office Development

Rights Being Appraised:                Leased Fee and Fee Simple Interest

Estimated Improved Land Value:         $2,600,000

Estimated Excess Land Value:           $1,400,000

Estimated Value by Cost Approach
   "As Is"                             $46,000,000*

Estimated Value by Income Approach:
   "As Is"                             $47,100,000*

*Not including Excess Land


Humphries & Associates                I - 1                         D-7U/04-1991
<PAGE>

Summary of Facts, continued


Estimated Value Range by Market Approach:
   "As Is"                                $46,300,000 to  $47,800,000*

*Not including Excess Land


Final Value Estimate

"As Is" Market Value - Leased Fee         $47,100,000

"As Is" Market Value - Fee Simple         $ 1,400,000

An estimate of the Leased Fee and Fee Simple "As Is" Market Value of a property
in the condition observed upon inspection and as it physically and legally
exists without hypothetical conditions, assumptions, or qualifications as of the
date the Subject was inspected (7/8/04), other than those described in the cover
letter and Assumptions and Limiting Conditions of this report


Humphries & Associates                I - 2                         D-7U/04-1991
<PAGE>

                          EXPOSURE PERIOD/MARKEING TIME


A reasonable exposure period is the amount of time in the past necessary to
expose a property to the open market in order to achieve a sale. The estimated
marketing time is the length of time it would probably take to sell the property
if it were placed on the market on the date of the "As Is" value. Exposure
period and marketing time are two distinct time periods.

Miller Commercial has conducted a market survey of reasonable marketing periods
for all property types. Their year-end 2003 survey indicates that Class A
suburban office buildings needed an average of 9.8 months to sell and Class B
space needed an average of 11.7 months to sell. The survey respondents indicated
that a property's location is the most important factor in determining a
marketing time. Based on the year-end 2003 Miller Commercial Survey and
conversations with local real estate brokers and owners. The area has had strong
demand for properties and the typical exposure time for reasonably priced
properties in the area has been 6-7 months. They also indicated that the strong
demand should continue over the next year.

Considering the estimated value arrived at and the Subject Property's location,
an estimated exposure period of 12 months is considered appropriate for the
Subject. Based upon conversations with local brokers, for well-leased properties
such as the Subject, marketing times in the future are considered to remain at
12 months.


Humphries & Associates                I - 3                         D-7U/04-1991
<PAGE>

                      SUBJECT PROPERTY OWNERSHIP HISTORY


The Appraisal Institute requires appraisals to consider, analyze, and disclose
in reasonable detail any prior sales of the property being appraised that
occurred within the three year time period preceding the date of appraisal and
to consider, analyze, and disclose in reasonable detail any current agreement of
sale, option, or listing of the property being appraised.

The Subject Property was purchased by TR Commercial Realty, Ltd. as a
10.061-acre vacant tract of land on October 23, 1997. The buyer subsequently
constructed an 11-story, 298,766 NRSF office building and a six-level parking
garage on 6.509 acres. The remaining 3.552-acre tract is considered excess land.
The property (improved and vacant tract) was purchased by FSP Collins Crossing,
LP for $45,175,000 on March 3, 2003. The sale was an arm's length transaction on
an all cash basis. No other sales transactions have occurred during the past
three years.

The Subject Property is not currently listed for sale and there are no known
sales contracts.


Humphries & Associates                I - 4                         D-7U/04-1991
<PAGE>

                      ASSUMPTIONS AND LIMITING CONDITIONS


1.    It is assumed that title to the property herein appraised is good and
      merchantable, and in fee simple. The value is reported without regard to
      questions of title, boundaries, encroachments, environmental regulations,
      licenses, or other matters of a legal nature unless noncompliance has been
      stated, defined, and considered in the appraisal report.

2.    The value is estimated under the assumption that there will be no
      international or domestic political, economic, or military actions that
      will seriously affect real estate values throughout the country.

3.    Certain information concerning market and operating data was obtained from
      others. This information is verified and checked, where possible, and is
      used in this appraisal only if it is believed to be accurate and correct.
      However, such information is not guaranteed. Dimensions and areas of the
      Subject Property and of the comparables were obtained by various means and
      are not guaranteed to be exact.

4.    Real estate values are influenced by a number of external factors. The
      information contained herein is all of the data we consider necessary to
      support the value estimate. We have not knowingly withheld any pertinent
      facts, but we do not guarantee that we have knowledge of all factors which
      might influence the value of the Subject Property. Due to rapid changes in
      external factors, the value estimate is considered to be reliable only as
      of the date of the appraisal.

5.    Opinions of value contained herein are estimates. This is the definition
      of an appraisal. There is no guarantee, written or implied, that the
      Subject Property will sell for the estimated value. The estimated value
      assumes that the property is under responsible ownership and has competent
      and prudent management.

6.    The appraiser will not be required to provide testimony or attendance in
      court or before other legal authority by reason of this appraisal without
      prior agreement and arrangement between the employer and the appraiser.

7.    Disclosure of the contents of this appraisal report is governed by the
      By-Laws and Regulations of the Appraisal Institute. Neither all nor any
      part of the contents of this report (especially any opinions, analyses, or
      conclusions concerning value, the identity of the appraiser or the firm
      with which he is connected, or any reference to the Appraisal Institute or
      the M.A.I. or SRA Designation) shall be disseminated to the public through
      advertising media, public relations media, news media, sales media,
      prospectus for securities, or any other public means of communication
      without prior written consent and approval of the undersigned.


Humphries & Associates                I - 5                         D-7U/04-1991
<PAGE>

Assumptions and Limited Conditions, continued


8.    It is assumed that there are no hidden or unapparent conditions of the
      property, subsoil, or structures which would render it more or less
      valuable, except as stated in this report. No responsibility is assumed
      for such conditions or for engineering which may be required to discover
      them. It is assumed that a prudent owner/buyer would allow inspection of
      the property by a qualified soils or structure engineer if conditions so
      required.

9.    The distribution of the total valuation in this report between land and
      improvements applies only under the reported highest and best use of the
      land. The allocation of value for land and improvements, if presented,
      must not be used in conjunction with any other appraisal and are invalid
      if so used.

10.   Estimates of costs to cure deferred maintenance are difficult at best.
      Contractors approach such problems in various ways. The estimates, if any,
      provided within this report are probable costs given current market
      conditions, available information, and the appraiser's expertise.

11.   No environmental impact studies were requested or made in conjunction with
      this appraisal, and the appraiser hereby reserves the right to alter,
      amend, revise, and/or rescind the value opinions based upon any subsequent
      environmental impact studies, research, or investigation.

12.   This appraisal was prepared by Bryan E. Humphries & Associates and
      consists of trade secrets and commercial or financial information which is
      privileged and confidential and is exempted from disclosure under 5 U.S.C.
      552 (b) (4). Please notify Bryan E. Humphries & Associates of any request
      of reproduction of this appraisal.

13.   Unless otherwise stated in this report, the existence of hazardous
      substances, including without limitation asbestos, polychlorinated
      biphenyl, petroleum leakage, or agricultural chemicals, which may or may
      not be present on the property or other environmental conditions, were not
      called to the attention of nor did the appraiser become aware of such
      during the appraiser's inspection. The appraiser has no knowledge of the
      existence of such materials on or in the property unless otherwise stated.
      The appraiser, however, is not qualified to test such substances or
      conditions. If the presence of such substances, such as asbestos, urea
      formaldehyde foam insulation, or other hazardous substances or
      environmental conditions, may affect the value of the property, the value
      estimated is predicated on the assumption that there is no such condition
      on or in the property or in such proximity thereto that it would cause a
      loss in value. No responsibility is assumed for any such conditions, nor
      for any expertise or engineering knowledge required to discover them.

14.   Anyone acting in reliance upon the opinions, judgments, conclusions, or
      data contained herein, who has the potential for monetary loss due to the
      reliance thereon, is advised to secure an independent review and
      verification of all such conclusions and/or facts. The user agrees to


Humphries & Associates                I - 6                         D-7U/04-1991
<PAGE>

Assumptions and Limited Conditions, continued


      notify the appraiser prior to any irrevocable loan or investment decision
      of any error which would reasonably be determined from a thorough and
      knowledgeable review.

15.   By acceptance and use of this report, the user agrees that any liability
      for errors, omissions or judgment of the appraiser is limited to the
      amount of the fee charged.

16.   The limiting condition relating to the ADA is as follows:

      This appraisal has not considered the effects of the enactment of the
      Americans with Disabilities Act of 1990 (ADA), which initially became
      effective January 26, 1992. We have not made a specific compliance survey
      and analysis of this property to determine whether or not it is in
      conformity with the various detailed requirements of the ADA. Standards of
      this act are designed to provide access to all public facilities to all
      persons, regardless of mobility limitations. The act provides forceful
      encouragement for commercial establishments to enhance their accessibility
      and requires that renovations after this date fully comply with the access
      standards established by the Architectural and Transportation Barriers
      Compliance Board. Enhancements to buildings must be readily achievable and
      able to be carried out without much difficulty or expense. The act
      recognizes that "readily achievable" is different for companies depending
      on their resources. The first priority is to provide access from
      sidewalks, parking and transportation areas, with the second priority
      being to provide access to areas where goods and services are available to
      the public. Finally, access to restroom facilities must accommodate all
      persons. The modifications and costs that may be necessary for the
      property to conform to ADA can be ascertained only by a qualified
      architect. Should such a study be undertaken, and should the retrofit
      costs, if any, become known, then the appraisers reserve the right to
      re-evaluate the Subject Property.

17.   This appraisal specifically assumes the following:

      -     The legal description and survey provided by the client indicates a
            land area of 283,550 SF or 6.509 acres for the building site and
            3.552 acres or 154,717 SF for the excess land tract.

      -     According to the construction plans and rent roll, the gross
            building area is 322,264 SF with a net rentable area of 298,766 SF.
            The parking garage has a gross building area of 288,300 SF as
            indicated by the Dallas County Appraisal District. According to the
            rent roll provided by the seller, the net rentable area is 300,846
            SF with 2,080 SF of vacant space. Jeff Carter with Trammel Crow
            (seller) stated that the 2,080 SF is unaccountable space and that
            the Subject is 100% leased. For our analysis, the NRA of 298,766 SF
            is assumed correct.


Humphries & Associates                I - 7                         D-7U/04-1991
<PAGE>

                           PURPOSE OF THE APPRAISAL


The purpose of this appraisal is to estimate the "As Is" Market Value of the
Subject Property. The rights being appraised are the Leased Fee and Fee Simple
Interest in the property. These are defined as of July 8, 2004 as follows.

                                   Definitions

Market Value Definitions

Market Value, for the purpose of this appraisal, is defined by the Office of the
Comptroller of the Currency under 12 CFR, Part 34, Subpart C-Appraisals, 34.42
Definitions.

The most probable price which a property should bring in a competitive and open
market under all conditions requisite to fair sale, the buyer and seller, each
acting prudently, knowledgeably, and assuming the price is not affected by undue
stimulus. Implicit in this definition is the consummation of a sale as of a
specified date and the passing of title from seller to buyer under conditions
whereby:

1.    Buyer and seller are typically motivated;

2.    Both parties are well informed or well advised, and each acting in what
      they consider their own best interests;.

3.    A reasonable time is allowed for exposure in the open market;

4.    Payment is made in cash in U.S. dollars or in terms of financial
      arrangements comparable thereto; and

5.    The price represents the normal consideration for the property sold
      unaffected by special or creative financing or sales concessions granted
      by anyone associated with the sale."

Market Value "As Is" is defined by the Appraisal Institute's The Appraisal of
Real Estate book, 12th edition, 2001, as:

"An estimate of the Market Value of a property in the condition observed upon
inspection and as it physically and legally exists without hypothetical
conditions, assumptions, or qualifications of the Subject Property as of the
date of appraisal".


Humphries & Associates                I - 8                         D-7U/04-1991
<PAGE>

Purpose, Scope and Function, continued


Leased Fee

Leased Fee, according to the Appraisal Institute's The Appraisal of Real Estate
book, 12th Edition, 2001, is defined as:

      "A Leased Fee Estate is an ownership interest held by a landlord with the
      right of use and occupancy conveyed by lease to others; the rights of
      lessor (the leased fee owner) and leased Fee are specified by contract
      terms contained within the lease."

Fee Simple

According to the Appraisal Institute's The Appraisal of Real Estate book, 12th
Edition, 2001, Fee Simple is defined as follows:

      "A Fee Simple Estate implies absolute ownership unencumbered by any other
      interest of estate."

                               Scope of Appraisal

The scope of the appraisal assignment is to estimate the Leased Fee and Fee
Simple Market Value of the Subject Property via a narrative appraisal format in
conformance with the Appraisal Foundation's Uniform Standards of Professional
Appraisal Practice (USPAP) and the Appraisal Institute Standards.

The scope of this appraisal assignment included the following:

- -     A summary of regional area and neighborhood characteristics.

- -     A physical inspection of the Subject Property as to its condition and
      characteristics.

- -     A search of public records pertaining to the Subject - i.e., zoning
      regulations, real estate tax and assessment information, sales history,
      easements, public and/or private deed restrictions, etc.

- -     Analysis of physically possible uses, legally permissible uses,
      financially practical uses and maximally productive uses of the Subject
      Property to estimate the Highest and Best Use.

- -     An estimation of the Subject Property's reproduction cost new less
      depreciation using Marshal and Swift's Commercial Cost estimator 7.0.


Humphries & Associates                I - 9                         D-7U/04-1771
<PAGE>

Purpose, Scope and Function, continued


- -     An estimation of the market rent, vacancy and expenses based upon market
      surveyed data, capitalizing the estimated NOI into a value at a market
      determined rate.

- -     Research of land and improved sales through sources such as county deed
      records, conversations with local real estate brokers and appraisers in
      addition to the buyers and sellers of real property.

- -     Analysis of the Subject Property's market segment with the underlying
      supply and demand factors for comparable properties.

- -     An inspection of all rent and sale comparables including the neighborhood
      by the appraisers.

- -     Produce a narrative appraisal report as discussed in the Appraisal
      Procedure.

                              Function/Intended Use

This appraisal is for use by the client (Franklin Street Properties Corp. and
FSP Collins Crossing Corp. Board of Directors) for asset valuation purposes. It
may be used in connection with the acquisition, disposition and financing of the
sale of the property. This is a complete, summary appraisal that is intended for
asset valuation.

                              Competency Statement

The appraiser has valued over fifty office properties in various markets
throughout the Dallas/Fort Worth area over the past five years. For the Subject
Neighborhood, several improved and vacant office properties have been appraised
in the past two years. For these reasons, the appraiser has the professional
competency required to appraise the Subject Property.

Mr. Humphries was designated a Member of The Appraisal Institute (MAI) in 1982.
Mr. Humphries is a State Certified Appraiser in the State of Texas. The
certificate number is as follows:

Bryan E. Humphries                        TX-1320676-G
Greg Connelly                             TX-1324452-G

As a result of the experience and expertise, Mr. Humphries and Mr. Connelly
possess the professional competency required to conclude a reliable opinion of
value.


Humphries & Associates                I - 10                        D-7U/04-1771
<PAGE>

                               APPRAISAL PROCEDURE

The procedures followed in this appraisal revolve around an analysis of various
factors that affect the value of the Subject Property. Included in this analysis
was an investigation into such matters as the physical attributes of the Subject
Property, area and neighborhood market trends, and general social, economic,
political, and environmental considerations. The valuation process that serves
as a basis for estimating the value of the Subject Property employs as many
separate appraisal techniques as are appropriate. The value of the Subject
Property is estimated by applying specific appraisal procedures that reflect the
following methods for mathematically analyzing data:

      COST APPROACH - An estimate of the present reproduction cost of the
      improvements, less accrued depreciation, plus the land value. Depreciation
      includes a deduction from reproduction cost of the improvements due to
      physical, functional, and economic causes.

      INCOME APPROACH - Capitalization of the net income that the property is
      capable of producing. This approach, of course, is applicable only in
      income-producing properties.

      MARKET APPROACH - Comparison with similar properties that have sold in the
      market. This approach can be applied to land alone or to improved
      properties.

All three approaches are applicable in the valuation of the Subject Property. As
addressed in the Correlations and Conclusions section of this report, the Income
Approach is felt to best reflect the Market Value of the Subject Improvements.
Only the Market Data Approach will be utilized to value the excess land.


Humphries & Associates                I - 11                        D-7U/04-1771
<PAGE>

                                  Regional Map


                          [MAP OF DALLAS REGIONAL AREA]



Humphries & Associates                I - 12                        D-7U/04-1771
<PAGE>

                             REGIONAL AREA ANALYSIS


The distinguishing economic influence on the value of real estate is location.
Because of the immobility of real estate, it is dependent upon the external
environment for support to make it economically viable. This economic
environment is both general (the city, region, or area in which the property is
located) and specific (the neighborhood).

Within an environment, four forces continually exert influence on real estate
values. These forces are location, physical, social, and political/governmental
forces. The purpose of the following Area Analysis is to define the area within
which the actions of these four forces affect values of real estate similar to
the Subject.

The Subject Property is located within the growth oriented Dallas/Fort Worth
Consolidated Metropolitan Statistical Area, (CMSA) or as it is called locally,
"The Metroplex."

This 16-county area surrounding the Cities of Dallas and Fort Worth, Texas has
become one large economic area. The future external influences within this
economic area will have a profound effect upon the Subject.

The following data is the most recent available data or year-end data for
comparative purposes. Data is updated periodically as publications become
available.

POPULATION - CONTINUES TO INCREASE

The following chart is a summary of population trends (as of January 1, 2003).
The chart shows historical population trends and projected population trends for
the CMSA, the Dallas Primary Metropolitan Statistical Area (PMSA)(1), the Fort
Worth-Arlington PMSA(2), counties in each PMSA and major cities within the
counties.

(1) Dallas PMSA - Includes Collin, Dallas, Denton, Ellis, Kaufman and Rockwall
Counties.
(2) Fort Worth/Arlington PMSA - Includes Johnson, Parker and Tarrant Counties.
(3) CMSA - All counties in both PMSA's plus the counties of Palo Pinto, Navarro,
Hunt, Hood, Erath, Somervell and Wise.


Humphries & Associates               II - 1
<PAGE>

Regional Area Analysis, continued


The CMSA(3), as a whole, has grown very rapidly since 1970. From 1970 to 2003,
the population in the Metroplex increased by an estimated 3,206,832, or about
97,177 people per year. This is a compounded annual average growth rate of 2.56%
per year. The 1990 population for the CMSA was 4,111,750. The estimated 2003
population of 5,713,450 is an increase of 1,601,700 (2.59% growth per year
compounded) people per year from 1990-2003. The rate of increase is projected to
remain constant at +/-50,000 - 75,000 people during the next few years.

Dallas County accounted for approximately 31% of the CMSA's growth from 1970 to
2003. The 2003 estimated population of Dallas County is 2,285,600. Tarrant
County accounted for approximately 26% of the growth of the CMSA from 1970 to
2003. The 2003 estimated Tarrant County population is 1,553,850.

The greatest percentage growth has occurred in Collin and Denton Counties. The
2003 population in Collin County of 576,350 is a 6.52% compounded annual
increase over the 1990 population of 264,036. Since 2000, the annual compounded
population growth rate has eased slightly to 5.68%.

The 2003 population in Denton County of 504,750 is a 5.17% annual compounded
increase over the 1990 population of 273,525. Since 2000, the annual compounded
population growth rate has slightly increased to 5.52%.

The following is a summary of Metroplex population trends for the CMSA, the
PMSA's, counties and major cities.


Humphries & Associates               II - 2
<PAGE>

Regional Area Analysis, continued


<TABLE>
<CAPTION>
                                                                                    Revised
                                      Final       Final       Final       Final    Estimated    Estimated    Growth
                                     Census      Census     Census      Census     Population  Population     Rate
                                     4/1/70      4/1/80     4/1/90      4/1/00       1/1/02      1/1/03    2002-2003

<S>                               <C>         <C>         <C>         <C>          <C>         <C>           <C>
Collin County                        66,920     144,576     264,036     491,675      549,350     576,350      4.91%

    Allen*                            1,940       8,314      19,315      43,554       52,400      56,750      8.30%
    Anna                                736         855         904       1,225        1,200       1,200      0.00%
    Celina                            1,272       1,520       1,737       1,861        2,300       2,850     23.91%
    Fairview                            463         893       1,554       2,644        3,350       3,550      5.97%
    Farmersville                      2,311       2,360       2,640       3,118        3,200       3,200      0.00%
    Frisco                            1,845       3,499       6,138      33,714       50,100      55,400     10.58%
    Lowry Crossing                       NI         443         865       1,229        1,300       1,300      0.00%
    Lucas                               540       1,370       2,205       2,890        3,100       3,300      6.45%
    McKinney                         15,193      16,256      21,283      54,369       64,900      73,550     13.33%
    Melissa                              NI         604         557       1,350        1,450       1,700     17.24%
    Murphy                              261       1,150       1,547       3,099        5,350       6,450     20.56%
    Parker                              367       1,098       1,213       1,379        1,500       1,500      0.00%
    Plano                            17,872      72,331     127,885     222,030      234,100     237,950      1.64%
    Princeton                         1,105       3,408       2,448       3,477        3,500       3,500      0.00%
    Prosper                             501         675       1,018       2,097        2,400       2,700     12.50%
    Wylie                             2,675       3,152       8,716      15,132       18,350      21,350     16.35%
    Remainder of Collin County       17,049      18,207      27,693      36,769       41,400      43,600      5.31%
    Split Cities**                    2,790       8,441      36,318      61,738       59,450      56,500     -4.96%

Dallas County                     1,327,696   1,556,419   1,852,810   2,218,899    2,264,500   2,285,600      0.93%

    Addison                             593       5,553       8,783      14,166       14,700      14,750      0.34%
    Balch Springs                    10,464      13,746      17,406      19,375       19,400      19,400      0.00%
    Cedar Hill                        2,610       6,849      19,988      32,093       36,150      38,000      5.12%
    Cockrell Hill                     3,515       3,262       3,746       4,443        4,450       4,450      0.00%
    Coppell                           1,728       3,826      16,881      35,958       38,000      38,700      1.84%
    Dallas                          844,401     904,078   1,007,618   1,188,580    1,203,050   1,211,000      0.66%
    DeSoto                            6,617      15,538      30,544      37,646       39,550      41,100      3.92%
    Duncanville                      14,105      27,781      35,008      36,081       36,200      36,300      0.28%
    Farmers Branch                   27,492      24,863      24,250      27,508       27,800      28,000      0.72%
    Garland                          81,437     138,857     180,635     215,768      220,700     222,350      0.75%
    Glenn Heights                       257       1,033       4,564       7,224        7,800       8,050      3.21%
    Grand Prairie                    50,904      71,462      99,606     127,427      134,600     137,850      2.41%
    Highland Park                    10,133       8,909       8,739       8,842        8,900       8,900      0.00%
    Hutchins                          1,715       2,837       2,719       2,805        2,700       2,700      0.00%
    Irving                           97,260     109,943     155,037     191,615      195,800     197,850      1.05%
    Lancaster                        10,522      14,807      22,117      25,894       27,550      28,700      4.17%
    Mesquite                         55,131      67,053     101,484     124,523      128,050     129,650      1.25%
    Richardson                       48,405      72,496      74,840      91,802       94,150      95,650      1.59%
    Rowlett                           2,243       7,522      23,260      44,503       47,950      49,500      3.23%
    Sachse                              777       1,640       5,346       9,751       12,200      13,050      6.97%
    Seagoville                        4,390       7,304       8,969      10,823       11,100      11,450      3.15%
    Sunnyvale                           995       1,404       2,228       2,693        3,200       3,450      7.81%
    University Park                  23,498      22,254      22,259      23,324       23,300      23,300      0.00%
    Wilmer                            1,922       2,367       2,479       3,393        3,100       3,100      0.00%
    Remainder of Dallas County       18,941       9,181       6,197       8,259        8,550       8,800      2.92%
    Split Cities**                    7,641      11,854     -31,893     -75,597      -84,450     -90,450      7.10%

Denton County                        75,633     143,126     273,525     432,976      474,850     504,750      6.30%

    Argyle                              443       1,111       1,575       2,365        2,550       2,650      3.92%
    Aubrey                              731         948       1,138       1,500        1,650       1,750      6.06%
    Bartonville                          NI         441         849       1,093        1,200       1,200      0.00%
</TABLE>


Humphries & Associates               II - 3
<PAGE>

Regional Area Analysis, continued


<TABLE>
<CAPTION>
                                        Final       Final      Final       Final     Estimated   Estimated    Growth
                                       Census      Census     Census      Census     Population  Population    Rate
                                       4/1/70      4/1/80     4/1/90      4/1/00       1/1/02      1/1/03    2002-2003

<S>                                   <C>         <C>         <C>         <C>          <C>         <C>        <C>
    Carrollton                         13,855      40,595      82,169     109,576      112,250     113,750      1.34%
    Corinth                               461       1,264       3,944      11,325       14,950      15,800      5.69%
    Denton                             39,874      48,063      66,270      80,537       85,800      90,200      5.13%
    Double Oak                             NI         836       1,664       2,179        2,250       2,300      2.22%
    Flower Mound                        1,685       4,402      15,527      50,702       55,450      57,700      4.06%
    Hickory Creek                         218       1,422       1,893       2,078        2,250       2,250      0.00%
    Highland Village                      516       3,246       7,027      12,173       12,750      13,150      3.14%
    Justin                                741         920       1,234       1,891        1,950       2,150     10.26%
    Krum                                  454         917       1,542       1,979        2,050       2,050      0.00%
    Lake Dallas                         1,431       3,177       3,656       6,166        6,400       6,500      1.56%
    Lewisville                          9,264      24,273      46,521      77,737       80,900      83,850      3.65%
    Little Elm                            363         926       1,255       3,646        7,450      11,200     50.34%
    Oak Point                              NI         387         645       1,747        1,950       1,950      0.00%
    Pilot Point                         1,663       2,211       2,538       3,538        3,700       3,750      1.35%
    Roanoke                               817         910       1,616       2,810        3,850       4,650     20.78%
    Sanger                              1,603       2,754       3,514       4,534        4,700       4,800      2.13%
    Shady Shores                          543         813       1,045       1,461        1,600       1,700      6.25%
    The Colony                             NI      11,586      22,113      26,531       31,000      34,250     10.48%
    Trophy Club                            NI          NI       3,922       6,350        6,900       7,000      1.45%
    Remainder of Denton County         12,826      19,042      26,578      41,147       43,650      44,950      2.98%
    Split Cities**                    -11,855     -27,583     -25,688     -21,305      -13,600      -6,100    -55.15%

Ellis County                           46,638      59,743      85,167     111,360      119,000     124,950      5.00%

    Ennis                              11,046      12,110      13,869      16,045       16,650      17,450      4.80%
    Ferris                              2,180       2,228       2,212       2,175        2,200       2,250      2.27%
    Italy                               1,309       1,306       1,699       1,993        2,050       2,050      0.00%
    Midlothian                          2,322       3,219       5,040       7,480        9,400      10,400     10.64%
    Oak Leaf                               NI          NI         984       1,209        1,250       1,250      0.00%
    Ovilla                                339       1,067       2,027       3,405        3,600       3,600      0.00%
    Palmer                                601       1,187       1,659       1,774        1,750       1,750      0.00%
    Red Oak                               767       1,882       3,124       4,301        5,250       5,700      8.57%
    Waxahachie                         13,452      14,624      17,984      21,426       21,250      22,450      5.65%
    Remainder of Ellis County          14,431      21,926      35,857      49,973       54,000      56,450      4.54%
    Split Cities**                        191         194         712       1,579        1,600       1,600      0.00%

Erath County                           18,141      22,560      27,991      33,001       34,000      35,000      2.94%

    Dublin                              2,810       2,723       3,190       3,754        3,900       3,950      1.28%
    Stephenville                        9,277      11,881      13,502      14,921       15,100      15,650      3.64%
    Remainder of Erath County           6,054       7,956      11,299      14,326       15,000      15,400      2.67%

Hood County                             6,368      17,714      28,981      41,100       43,650      44,950      2.98%

    Granbury                            2,473       3,332       4,045       5,718        6,000       6,150      2.50%
    Remainder of Hood County            3,895      14,382      24,936      35,382       37,650      38,800      3.05%

Hunt County                            47,948      55,248      64,343      76,596       80,050      81,950      2.37%

    Caddo Mills                           935       1,060       1,068       1,149        1,150       1,150      0.00%
    Commerce                            9,534       8,136       6,825       7,742        8,100       8,400      3.70%
    Greenville                         22,043      22,161      23,071      24,117       24,250      24,400      0.62%
    Quinlan                               844       1,002       1,360       1,370        1,350       1,350      0.00%
    West Tawakoni                         465         840         932       1,462        1,500       1,550      3.33%
    Wolfe City                          1,433       1,594       1,505       1,581        1,600       1,600      0.00%
    Remainder of Hunt County           12,694      20,455      29,582      39,420       42,100      43,500      3.33%
</TABLE>


Humphries & Associates               II - 4
<PAGE>

Regional Area Analysis, continued


<TABLE>
<CAPTION>
                                        Final       Final      Final       Final      Estimated    Estimated   Growth
                                       Census      Census     Census      Census     Population   Population    Rate
                                       4/1/70      4/1/80     4/1/90      4/1/00       1/1/02       1/1/03    2002-2003

<S>                                    <C>         <C>         <C>         <C>          <C>         <C>         <C>
    Alvarado                            2,129       2,701       2,918       3,288        3,450       3,550      2.90%
    Burleson                            7,713      11,734      16,113      20,976       22,850      24,050      5.25%
    Cleburne                           16,015      19,218      22,205      26,005       26,950      27,450      1.86%
    Grandview                             935       1,205       1,245       1,358        1,400       1,450      3.57%
    Joshua                                924       1,470       3,821       4,528        4,600       4,600      0.00%
    Keene                               2,440       3,013       3,944       5,003        5,500       5,650      2.73%
    Venus*                                414         518         977       1,892        2,000       2,000      0.00%
    Remainder of Johnson County        16,133      28,891      47,285      67,583       72,250      74,350      2.91%
    Split Cities**                       -934      -1,101      -1,343      -2,840       -3,100      -3,100      0.00%

Kaufman County                         32,392      39,015      52,220      71,313       76,950      80,700      4.87%

    Combine                               249         698       1,329       1,788        1,800       1,800      0.00%
    Crandall                              774         831       1,652       2,774        2,850       3,000      5.26%
    Forney                              1,745       2,483       4,070       5,588        5,750       6,400     11.30%
    Kaufman                             4,012       4,658       5,251       6,490        6,550       6,650      1.53%
    Kemp                                  999       1,035       1,184       1,133        1,150       1,150      0.00%
    Mabank                              1,239       1,443       1,458       2,151        2,400       2,450      2.08%
    Terrell                            14,182      13,225      12,490      13,606       13,950      14,350      2.87%
    Remainder of Kaufman County         9,320      14,779      25,494      38,717       43,450      45,850      5.52%
    Split Cities**                       -128        -137        -708        -934         -950        -950      0.00%

Navarro County                         31,150      35,323      39,926      45,124       45,800      46,450      1.42%

    Corsicana                          19,972      21,712      22,911      24,485       24,300      24,400      0.41%
    Kerens                              1,446       1,582       1,702       1,681        1,750       1,750      0.00%
    Remainder of Navarro County         9,732      12,029      15,313      18,958       19,750      20,300      2.78%

Palo Pinto County                      28,962      24,062      25,055      27,026       26,600      26,900      1.13%

    Mineral Wells                      18,411      14,468      14,935      16,946       16,100      16,100      0.00%
    Remainder of Palo Pinto            10,586       9,631      10,602      12,256       12,700      13,000      2.36%
County
    Split Cities**                        -35         -37        -482      -2,176       -2,200      -2,200      0.00%

Parker County                          33,888      44,609      64,785      88,495       94,800      98,450      3.85%

    Aledo                                 620       1,027       1,169       1,726        1,950       2,100      7.69%
    Annetta                                NI         454         672       1,108        1,150       1,150      0.00%
    Hudson Oaks                            NI         309         711       1,637        1,650       1,650      0.00%
    Reno                                  688       1,174       2,322       2,441        2,500       2,550      2.00%
    Springtown                          1,194       1,658       1,740       2,062        2,150       2,300      6.98%
    Weatherford                        11,750      12,049      14,804      19,000       19,900      20,550      3.27%
    Willow Park                           230       1,113       2,328       2,849        2,900       3,000      3.45%
    Remainder of Parker County         18,617      25,895      39,354      53,933       58,850      61,400      4.33%
    Split Cities**                        789         930       1,685       3,739        3,750       3,750      0.00%

Rockwall County                         7,046      14,528      25,604      43,080       48,550      51,800      6.69%

    Heath                                 520       1,459       2,108       4,149        4,900       5,300      8.16%
    Rockwall                            3,121       5,939      10,486      17,976       21,050      22,850      8.55%
    Royse City                          1,535       1,566       2,206       2,957        3,550       4,100     15.49%
    Remainder of Rockwall County        1,605       4,567       7,525      10,809       11,800      12,350      4.66%
    Split Cities**                        265         997       3,279       7,189        7,250       7,200     -0.69%
    Glen Rose                           1,554       2,075       1,949       2,122        2,300       2,300      0.00%
    Remainder of Somervell County       1,239       2,079       3,411       4,687        5,100       5,250      2.94%
</TABLE>


Humphries & Associates               II - 5
<PAGE>

Regional Area Analysis, continued


<TABLE>
<CAPTION>
                                       Final       Final      Final       Final     Estimated    Estimated    Growth
                                      Census      Census     Census      Census     Population  Population     Rate
                                      4/1/70      4/1/80     4/1/90      4/1/00       1/1/02      1/1/03    2002-2003

<S>                                 <C>         <C>         <C>         <C>          <C>         <C>           <C>
Tarrant County                        715,587     860,880   1,170,103   1,446,219    1,507,500   1,553,850      3.07%

    Arlington                          90,229     160,113     261,717     332,969      344,050     352,450      2.44%
    Azle                                4,493       5,822       8,868       9,600        9,750       9,850      1.03%
    Bedford                            10,049      20,821      43,762      47,152       47,500      48,300      1.68%
    Benbrook                            8,169      13,579      19,564      20,208       20,600      20,700      0.49%
    Blue Mound                          1,283       2,169       2,133       2,388        2,400       2,400      0.00%
    Colleyville                         3,342       6,700      12,724      19,636       19,950      20,150      1.00%
    Crowley                             2,662       5,852       6,974       7,467        7,850       8,350      6.37%
    Dalworthington Grdns                  757       1,100       1,758       2,186        2,250       2,250      0.00%
    Edgecliff Village                   1,143       2,695       2,715       2,550        2,550       2,550      0.00%
    Euless                             19,316      24,002      38,149      46,005       47,750      49,750      4.19%
    Everman                             4,570       5,387       5,672       5,836        5,800       5,800      0.00%
    Forest Hill                         8,236      11,684      11,482      12,949       11,550      11,650      0.87%
    Fort Worth                        393,455     385,164     447,619     534,694      557,750     577,500      3.54%
    Grapevine                           7,049      11,801      29,198      42,059       42,750      43,600      1.99%
    Haltom City                        28,127      29,014      32,856      39,018       39,450      39,500      0.13%
    Haslet                                276         262         795       1,134        1,150       1,200      4.35%
    Hurst                              27,215      31,420      33,574      36,273       36,550      36,750      0.55%
    Keller                              1,474       4,156      13,683      27,345       30,000      31,800      6.00%
    Kennedale                           3,076       2,594       4,096       5,850        6,050       6,150      1.65%
    Lake Worth                          4,958       4,394       4,591       4,618        4,650       4,650      0.00%
    Lakeside                              988         957         816       1,040        1,050       1,100      4.76%
    Mansfield                           3,658       8,102      15,615      28,031       32,200      35,950     11.65%
    N. Richland Hills                  16,514      30,592      45,895      55,635       58,550      59,800      2.13%
    Pantego                             1,779       2,431       2,371       2,318        2,700       2,650     -1.85%
    Pelican Bay                            NI          NI       1,271       1,505        1,550       1,550      0.00%
    Richland Hills                      8,865       7,977       7,978       8,132        8,250       8,250      0.00%
    River Oaks                          8,193       6,890       6,580       6,985        7,000       7,000      0.00%
    Saginaw                             2,382       5,736       8,551      12,374       14,750      15,850      7.46%
    Sansom Park                         4,771       3,921       3,928       4,181        4,150       4,150      0.00%
    Southlake                           2,031       2,808       7,082      21,519       23,600      24,150      2.33%
    Watauga                             3,778      10,284      20,009      21,908       23,000      23,750      3.26%
    Westworth Village                   4,578       3,651       2,350       2,124        1,700       1,700      0.00%
    White Settlement                   13,449      13,508      15,472      14,831       15,050      15,250      1.33%
    Remainder of Tarrant County        23,122     288,897      32,416      37,410       41,850      43,800      4.66%
    Split Cities**                      1,600       6,397      17,839      28,289       31,750      33,550      5.67%

Wise County                            19,687      26,575      34,679      48,793       52,550      54,200      3.14%

    Alvord                                791         874         865       1,007        1,050       1,100      4.76%
    Boyd                                  695         889       1,041       1,099        1,100       1,100      0.00%
    Bridgeport                          3,614       3,737       3,581       4,309        5,000       5,100      2.00%
    Decatur                             3,240       4,104       4,245       5,201        5,200       5,250      0.96%
    Runaway Bay                            NI          29         700       1,104        1,100       1,150      4.55%
    Remainder of Wise County           11,347      16,942      24,247      36,073       39,100      40,500      3.58%

Nine County Urban Area              2,351,569   2,930,545   3,885,415   5,030,828    5,271,400   5,416,450      2.75%
(Collin, Dallas, Denton, Ellis
Johnson, Kaufman, Parker,
Rockwall, Tarrant)
NCTCOG Region (16 counties)         2,506,618   3,116,181   4,111,750   5,309,277    5,561,450   5,713,450      2.73%
</TABLE>

*2000 population totals have been officially changed by the Census Bureau
** Split Cities - Represent corporate boundaries that extend into another county


Humphries & Associates               II - 6
<PAGE>

Regional Area Analysis, continued


<TABLE>
<CAPTION>
==================================================================================================================
                                                 SPLIT CITY TOTALS
- ------------------------------------------------------------------------------------------------------------------
        Added to             Split Cities       Population         Added to           Split Cities     Population
- ------------------------------------------------------------------------------------------------------------------
<S>                       <C>                     <C>           <C>                    <C>                <C>
Collin County             Dallas                  46,886        Ellis County           Cedar Hills            55
                          Garland                     97                               Glenn Heights       1,669
                          Richardson              24,101                               Grand Prairie          52
                          Royse City                 222                               Mansfield             129
                          Sachse                   2,580
Dallas County                                                   Johnson County         Mansfield             622
                          Carrollton              49,821
                          Combine                    624        Kaufman County         Dallas                  0
                          Grapevine                    0                               Seagoville              7
                          Lewisville                 267
                          Ovilla                     298        Parker County          Azle                1,581
                          Wylie                      315                               Mineral Wells       2,176

Denton County             Coppell                    592        Rockwall County        Dallas                 21
                          Dallas                  26,055                               Garland                 0
                          Fort Worth                  44                               Rowlett             7,125
                          Frisco                  13,218                               Wylie                 281
                          Plano                    3,588
                          Southlake                  480        Tarrant County         Burleson            3,728
                                                                                       Grand Prairie      32,653
==================================================================================================================
</TABLE>

The following chart indicates population growth since 1987 of the total PMSA,
Dallas PMSA and Fort Worth PMSA.

                     TOTAL
                      PMSA             DALLAS PMSA                 FW/ARL PMSA
                      ----             -----------                 -----------

1/1/89            3,824,650             2,513,250                   1,311,400
1/1/90            3,889,800             2,556,150                   1,333,650
1/1/91            3,935,200             2,587,100                   1,348,100
1/1/92            3,987,800             2,622,800                   1,365,000
1/1/93            4,034,050             2,656,450                   1,377,600
1/1/94            4,108,150             2,708,900                   1,399,250
1/1/95            4,371,500             2,902,100                   1,469,400
1/1/96            4,453,600             2,964,000                   1,489,400
1/1/97            4,521,300             3,016,000                   1,503,700
1/1/98            4,736,000             3,161,800                   1,574,200
1/1/99            4,857,200             3,242,600                   1,614,500
1/1/00            5,030,828             3,369,303                   1,661,525
1/1/01            5,131,250             3,439,950                   1,691,300
1/1/02            5,277,750             3,538,400                   1,739,350
1/1/03            5,416,450             3,624,150                   1,792,300


Humphries & Associates               II - 7
<PAGE>

Regional Area Analysis, continued


For the past 15 years, the compound annual growth rates have been - Total PMSA
(2.37%), Dallas total PMSA (2.51%), and Ft. Worth PMSA (2.19%).

The following chart represents the fastest growing cities within the area from
2002-2003. All of these cities are located within the northern portion of the
metroplex and a majority is located near D/FW Airport.

================================================================================
           Dallas/Ft. Worth Area Cities With Fastest Percentage Growth
                                   2002 - 2003
- --------------------------------------------------------------------------------
              City*              Population Gain                    Percent
- --------------------------------------------------------------------------------
Denton                                5,500                          5.13%
- --------------------------------------------------------------------------------
Flower Mound                          2,240                          4.06%
- --------------------------------------------------------------------------------
Keller                                1,800                          6.00%
- --------------------------------------------------------------------------------
Euless                                2,000                          4.19%
- --------------------------------------------------------------------------------
The Colony                            3,420                         10.48%
- --------------------------------------------------------------------------------
Little Elm                            3,750                         50.34%
- --------------------------------------------------------------------------------
Wylie                                 2,200                          5.31%
- --------------------------------------------------------------------------------
Allen                                 4,350                          8.30%
- --------------------------------------------------------------------------------
Frisco                                5,300                         10.58%
- --------------------------------------------------------------------------------
McKinney                              8,650                         13.33%
- --------------------------------------------------------------------------------
Mansfield                             3,950                         11.65%
- --------------------------------------------------------------------------------
*Cities with population greater than 5,000
Source: North Central Texas Council of Governments 2003 Population Estimates
================================================================================

EMPLOYMENT

The Dallas/Ft. Worth economy created more jobs from 1990 to 2000 than any other
metropolitan area in the United States. Job creation peaked in 1997 at 130,000
jobs. The D/FW area created an additional 103,000 jobs in 1998, 88,300 in 1999
and 102,700 new jobs in 2000.


Humphries & Associates               II - 8
<PAGE>

Regional Area Analysis, continued


Following strong economic growth in 2000, the Dallas/Ft. Worth's economy began
to decline in late 2001. During 2001 and 2002, D/FW had job losses of 77,500 and
29,900. The job loss was primarily due to layoffs in high-tech,
telecommunication and travel sectors as a result of the events of 9/11 and the
national economic slowdown.

One of the driving forces for demand of real property, both vacant land and
improved property, is job growth. The chart below illustrates the number of jobs
added in recent years in the DFW CMSA.

         Year       Total Non-Ag., Job Growth
         ----       -------------------------
         1980                67,900
         1981                61,900
         1982                22,400
         1983                52,300
         1984               141,000
         1985               103,800
         1986                24,200
         1987                -7,100
         1988                34,500
         1989                38,500
         1990                60,300
         1991                   200
         1992                21,000
         1993                55,800
         1994                75,000
         1995                75,000
         1996                80,000
         1997               130,000
         1998               103,000
         1999                88,300
         2000               102,700
         2001               -29,900
         2002               -77,500

Source: M/PF Research, Inc. and Texas Labor Market Review.


Humphries & Associates               II - 9
<PAGE>

Regional Area Analysis, continued


Metro Overview

Although the pace of annual employment loss appears to be slowing in Dallas/Ft.
Worth, the area's May job count was still significantly down from the
year-earlier level. May 2003's employment base of 2.710 million jobs was off
25,700 positions, or a 0.9% contraction from the 2nd quarter 2002 figure,
according to the Bureau of Labor Statistics.

Continuing to hurt the local economy's overall performance, the region's
high-tech and telecommunications firms have yet to find a firm footing. Troubled
by over-investment and too-little demand, both industries continue to slash
payrolls. Some of the most recent announcements came from large corporations
that have continued their downsizing efforts from 2001 and 2002. Worldcom, which
shed 20,700 positions in 2002, announced in February 2003 it will slash up to
5,000 jobs nationwide, part of a plan to emerge from bankruptcy in April. The
company did not disclose how its Richardson office would be impacted. Swedish
telecommunications equipment maker Ericsson, which employs roughly 1,600 people
at its U.S. headquarters in Plano, stated in February that it would further
downsize its employee count. The company, which eliminated 20,600 positions in
2002, has laid out a roadmap back to profitability that will include the
shedding of another 5,000 or so jobs. Present restructuring will cost 44 jobs in
Richardson and Plano, reflecting the transfer of some functions to Canada. Other
companies making notable job cuts include FSI International. In March, the
Minnesota-based company announced the closing of its microlithography unit in
Allen and the cutting of 199 jobs. Although the exact number of jobs involved is
not yet known, 800 Microsoft employees in Las Colinas face layoffs. The Redmond,
WA Company is in the process of transferring its customer call center jobs to
Canada and India. Call centers in North Carolina and Washington will also be
impacted. A local telecom equipment maker, Xtera Communications, released 50
employees in February. Cyneta Networks, maker of switching technology for
wireless networks, lost 20 positions and its CEO in March.


Humphries & Associates               II - 10
<PAGE>

Regional Area Analysis, continued


Other high-tech and telecom D/FW companies that have made significant cuts
during the last year run the gamut from industry giants to recent start-ups,
including Electronic Data Systems Corp., Texas Instruments, i2 Technologies,
Inc., Southwestern Broadband, SBC Communications, Nortel Networks, Alcatel USA,
Nokia, Fujitsu, Motorola, Verizon Communications, Jabil Circuits, and Marconi
Communications to name a few.

The employment outlook survey released in February 2003 by Manpower, Inc.
indicates that 8% of Dallas area employers said they would add staff and 4% said
they would cut staff in April-June. The picture was brighter just three months
previously, when the survey reported that 20% of area employers said they would
hire and 4% said they would cut back. Uncertainty in the marketplace and a
higher level of caution, have been suggested as causes for the dip. Stronger
hiring activity is anticipated in Tarrant County, where 20% of employers expect
to hire versus 12% predicting cuts in 2nd quarter.

Transportation and tourism, another economic sector usually considered a
stronghold of the Dallas/Ft. Worth economy, is still depressed. The
transportation sector in Dallas on net lost more than 6,000 jobs during the past
year. American Airlines, the area's biggest private sector employer, after
slashing thousands of jobs in 2001 and 2002, announced in June that it would
begin laying off 3,100 flight attendants. The airline is also considering
cutting routes to reduce costs. The company has already shed 57 planes over the
past year and expects to divest itself of 57 further aircraft by next summer.
Furthermore, continued slowdown in the travel industry has forced other
travel-related companies to reduce their workforces. Sabre Holdings Corp, for
example, announced layoffs totaling nearly 500 employees by 2002's end in an
effort to reduce costs at the Internet-based travel company. This is the second
round of layoffs at Southlake-based Sabre in the last year. Cedant, corporate
parent of Avis Rent A Car, in incorporating the administrative functions of the
recently acquired Budget Rent A Car, is closing a Budget call center in
Carrollton. All 293 of the shop's employees will be let go between March 14 and
June 27, when the location


Humphries & Associates               II - 11
<PAGE>

Regional Area Analysis, continued


will be closed permanently. The logistics and transportation division of
Miami-based Ryder Systems, Inc. let go all 100 workers at its auto-parts
logistics operation in Roanoke in December Regional Area Analysis, continued

2002. A south Dallas steel container manufacturing plant owned by Ohio-based
BWAY Corp. will begin closing in early August. When the shutdown is complete at
the end of August 52 employees will have been laid off. A similar number of
employees are being transferred to the firm's Garland facility.

While D/FW layoffs continue in some economic sectors, significant growth is
underway in others. AAA Automobile Club of Southern California, the largest US
chapter of the AAA, is transferring its Texas hub from Houston to the D/FW area.
The company plans to hire 400 employees initially, with a further 400 following
shortly. Chicago-based Bank One is constructing a new operations and call center
on 22 acres of land just south of Dallas/Ft. Worth International Airport. Once
completed, staffing of the facility will add up to 1,000 people to the company's
regional employment roster. New Breed Logistics, a North Carolina company, has
leased space for a new distribution center in Ft. Worth. The facility will
employ 500 to 900 workers once fully established. A new wholesale mortgage
origination company, AmPro Mortgage Corp., relocated its corporate headquarters
from Phoenix to Dallas during 1st quarter 2003. The move added about 100 new
hires to the company's employment rolls. Increased defense spending in
particular is also proving a benefit for the Dallas/Ft. Worth area, since the
region is one of the nation's key providers of defense and security equipment
and components. In fact, in the fall of 2001, Lockheed Martin Corp. was awarded
a $200 billion defense contract. Since the defense manufacturer was awarded the
F-35 Joint Strike Fighter, employment at Ft. Worth-based Lockheed Martin has
climbed dramatically. The company has added about 2,000 new employees, and the
company anticipates hiring more. Raytheon Co. has also been boosting staff,
focusing on those with information technology and engineering expertise. The
company expects to hire 150 to 200 people in the North Texas area some time in
the next year. Additionally encouraging news comes from Parsons Corp., one of
the nation's largest engineering and construction firms. The firm plans to
expand into Ft.


Humphries & Associates               II - 12
<PAGE>

Regional Area Analysis, continued


Worth, thanks to a large contract with the Federal Aviation Administration. The
Dallas Business Journal reports that Parsons will open 10 regional offices
nationwide and employ between 900 and 1,500 engineers, technicians and support
staff as a result of a four-year, $481 million contract with the FAA. The new
Ft. Worth office will employ 50 people as well as another 100 field staff
working from the FAA's Ft. Worth-based southwest regional headquarters.

On the retail front, The Container Store is expanding its headquarters near D/FW
International Airport. The company plans to move from its Farmers Branch
location after building a 1.1 million SF headquarters building and warehouse
complex north of the airport and will expand its workforce by about 400
employees. Also, furniture retailer Rooms to Go plans to build one of the
largest retail distribution and office complexes in the region. The new Grand
Prairie facility will be home to 250 current employees, with plans calling for
the addition of another 400 employees in the future.

Growth by Industry
The Government sector has historically proven to be the D/FW employment sector
immune from job losses. This stability pushes the Government sector ahead of the
other job categories in year-ending May 2003 employment growth. Annual job gains
of 12,400 positions over the past year, primarily in the local government
subsector, equates to a 3.7% rise. The Dallas metro accounted for 8,000 of these
new jobs.

After dipping into negative employment change in year-ending 1st quarter 2003,
D/FW's Financial Activities sector has returned to positive job gain. The sector
added 200 positions to its labor pool during year-ending May 2003, a 0.1%
increase. While the Dallas metro's Financial Activities category actually shed
jobs over the past year, the addition of 700 positions in Ft. Worth counteracted
this decline.

The relatively small Natural Resources and Mining sector reported modest
cutbacks during the past year, shedding 1,000 jobs, a 7.4% reduction. The large
Services sector also reported job


Humphries & Associates               II - 13
<PAGE>

Regional Area Analysis, continued


losses, contracting by 1,700 jobs, or 0.2%, during year-ending May. Deeper cuts
of 4,600 positions, or 3.1% from May 2002 to May 2003 were noted in the
Construction sector. Transportation and Utilities positions were also hard hit,
with 6,500 fewer workers employed by the close of year-ending 2nd quarter 2003,
equating to a 4.8% loss. The Trade category eliminated 6,600 jobs, translating
to a 1.4% job base reduction.

The deepest cuts occurred in the Information and Manufacturing sectors.
Information employers lost 8,600 jobs, a 7.9% decline, during the past year.
Most Information jobs lost during the past year were seen in the Dallas area
(7,800 jobs), reflecting the concentration of struggling producers of
telecommunications equipment in the area. Difficulties continue for the region's
manufacturers. The Manufacturing sector's job pool proved the hardest hit over
the past year, with 9,300 positions cut, a 3% contraction.

The following charts detail the employment statistics:

1.     History of wage and salary employment trends -
       December 1980 to December 2002
       Source: Texas Employment Commission

2.     Wage and salary trends compared to total employment.
       Source: Texas Employment Commission


Humphries & Associates               II - 14
<PAGE>

Regional Area Analysis, continued


<TABLE>
<CAPTION>
===============================================================================================================================
                                                    Employment Statistics
- -------------------------------------------------------------------------------------------------------------------------------
         Area                Base Year         Est.           Est.           Est.            Est.           Est.         Est.
                               1986         Employment      Increase/     Employment      Increase/      Employment   Increase/
                                               1990           Year           2000            Year           2010         Year
- -------------------------------------------------------------------------------------------------------------------------------
<S>                         <C>             <C>               <C>         <C>                <C>         <C>            <C>
CMSA                        2,180,872       2,377,753         49,220      2,872,869          49,512      3,325,633      45,276
- -------------------------------------------------------------------------------------------------------------------------------
PMSA-DALLAS                 1,575,011       1,717,700         35,672      2,049,018          33,132      2,320,767      27,175
- -------------------------------------------------------------------------------------------------------------------------------
PMSA-FW/A                     605,861         660,053         13,548        823,851          16,380      1,004,866      18,102
- -------------------------------------------------------------------------------------------------------------------------------
COUNTIES* - PMSA-DALLAS*
- -------------------------------------------------------------------------------------------------------------------------------
COLLIN                         88,454          99,727          2,818        146,292           4,657        189,781       4,349
- -------------------------------------------------------------------------------------------------------------------------------
DALLAS                      1,358,015       1,474,567         29,138      1,723,440          24,887      1,919,961      19,652
- -------------------------------------------------------------------------------------------------------------------------------
DENTON                         67,953          77,754          2,450        101,166           2,341        122,830       2,166
- -------------------------------------------------------------------------------------------------------------------------------
ELLIS                          29,604          31,871            567         37,564             569         41,444         388
- -------------------------------------------------------------------------------------------------------------------------------
KAUFMAN                        21,188          22,320            283         26,376             406         28,829         245
- -------------------------------------------------------------------------------------------------------------------------------
ROCKWALL                        9,797          11,461            416         14,180             272         17,922         374
- -------------------------------------------------------------------------------------------------------------------------------
PMSA-FW/A*
- -------------------------------------------------------------------------------------------------------------------------------
JOHNSON                        34,266          36,698            608         42,267             557         49,149         688
- -------------------------------------------------------------------------------------------------------------------------------
PARKER                         20,014          21,979            491         24,714             274         28,881         417
- -------------------------------------------------------------------------------------------------------------------------------
TARRANT                       551,581         601,376         12,449        756,870          15,549        926,836      16,997
- -------------------------------------------------------------------------------------------------------------------------------
MAJOR CITIES* - COLLIN COUNTY*
- -------------------------------------------------------------------------------------------------------------------------------
ALLEN                           3,180           3,602            106          5,025             142          6,564         154
- -------------------------------------------------------------------------------------------------------------------------------
FRISCO                          2,380           2,786            102          5,179             239          8,749         357
- -------------------------------------------------------------------------------------------------------------------------------
MCKINNEY                       13,123          14,816            423         19,200             438         24,977         578
- -------------------------------------------------------------------------------------------------------------------------------
PLANO                          52,124          59,143          1,755         80,030           2,089         96,500       1,647
- -------------------------------------------------------------------------------------------------------------------------------
DALLAS COUNTY*
- -------------------------------------------------------------------------------------------------------------------------------
ADDISON                        37,534          44,680          1,787         69,006           2,433         74,540         553
- -------------------------------------------------------------------------------------------------------------------------------
CARROLLTON                     54,196          63,335          2,285         81,625           1,829         92,998       1,137
- -------------------------------------------------------------------------------------------------------------------------------
CEDAR HILL                      2,391           2,828            109          3,638              81          4,673         104
- -------------------------------------------------------------------------------------------------------------------------------
DALLAS                        892,516         947,467         13,738      1,058,647          11,118      1,158,328       9,968
- -------------------------------------------------------------------------------------------------------------------------------
DESOTO                          9,568          10,046            120         11,825             178         12,244          42
- -------------------------------------------------------------------------------------------------------------------------------
DUNCANVILLE                     9,881          11,433            388         12,700             127         12,813          11
- -------------------------------------------------------------------------------------------------------------------------------
FARMERS BRANCH                 58,807          65,723          1,729         77,348           1,163         85,408         806
- -------------------------------------------------------------------------------------------------------------------------------
GARLAND                        62,376          68,209          1,458         80,531           1,232         89,518         899
- -------------------------------------------------------------------------------------------------------------------------------
GRAND PRAIRIE                  57,518          61,564          1,012         76,188           1,462         93,369       1,718
- -------------------------------------------------------------------------------------------------------------------------------
IRVING                         95,623         109,989          3,592        142,377           3,239        172,297       3,002
- -------------------------------------------------------------------------------------------------------------------------------
MESQUITE                       30,153          32,928            694         39,463             654         45,184         572
- -------------------------------------------------------------------------------------------------------------------------------
RICHARDSON                     60,813          67,991          1,795         93,628           2,564        112,334       1,871
- -------------------------------------------------------------------------------------------------------------------------------
ROWLETT                         3,339           4,215            219          3,830             162          7,765         194
- -------------------------------------------------------------------------------------------------------------------------------
DENTON COUNTY*
- -------------------------------------------------------------------------------------------------------------------------------
DENTON                         32,001          34,339            585         37,973             363         42,095         412
- -------------------------------------------------------------------------------------------------------------------------------
FLOWER MOUND                    1,518           2,983            366          6,287             330          8,006         172
- -------------------------------------------------------------------------------------------------------------------------------
LEWISVILLE                     15,890          18,250            590         23,514             526         27,580         407
- -------------------------------------------------------------------------------------------------------------------------------
THE COLONY                      1,592           1,777             46          2,880             110          3,491          61
- ------------------------------------------------------------------------------------------------------------------------------
ROCKWALL COUNTY*
- -------------------------------------------------------------------------------------------------------------------------------
ROCKWALL                        5,389           6,076            172          8,194             212         10,777         258
- -------------------------------------------------------------------------------------------------------------------------------
TARRANT COUNTY*
- -------------------------------------------------------------------------------------------------------------------------------
ARLINGTON                      86,270          96,878          2,652        125,250           2,837        156,530       3,128
- -------------------------------------------------------------------------------------------------------------------------------
BEDFORD                        13,404          14,520            279         17,208             269         17,798          59
- -------------------------------------------------------------------------------------------------------------------------------
BENBROOK                        2,841           3,324            121          5,535             221          7,767         223
- -------------------------------------------------------------------------------------------------------------------------------
COLLEYVILLE                     1,974           2,362             97          5,021             266         11,088         607
- -------------------------------------------------------------------------------------------------------------------------------
EULESS                          8,326           9,461            284         13,872             441         16,947         308
- -------------------------------------------------------------------------------------------------------------------------------
FORT WORTH                    309,223         332,891          5,917        399,742           6,685        476,636       7,689
- -------------------------------------------------------------------------------------------------------------------------------
GRAPEVINE                      22,646          25,210            641         33,217             801         44,039       1,082
- -------------------------------------------------------------------------------------------------------------------------------
MANSFIELD                       3,980           3,973             -2          6,402             243          9,195         279
- -------------------------------------------------------------------------------------------------------------------------------
N. RICHLAND HILLS              10,390          11,692            326         16,054             436         21,154         510
===============================================================================================================================
</TABLE>

      Source: NORTH CENTRAL TEXAS COUNCIL OF GOVERNMENTS - 1991 - Most recent
      available data based on 1990 census.
      FW/A - FORT WORTH, ARLINGTON
      EMPLOYMENT - PERSONS EMPLOYED IN THE DESIGNATED AREA


Humphries & Associates               II - 15
<PAGE>

Regional Area Analysis, continued


<TABLE>
<CAPTION>
================================================================================================================================
                                              WAGE AND SALARY EMPLOYMENT TRENDS
                                                       DALLAS PMSA(000)
- --------------------------------------------------------------------------------------------------------------------------------
      DEC.        MANUFAC.    MINING    CONSTR.    TRANS.     TRADE      FIRE.     SERVICES     GOVERN.      TOTAL       CHANGE
- --------------------------------------------------------------------------------------------------------------------------------
 <S>               <C>         <C>      <C>        <C>        <C>       <C>          <C>        <C>         <C>         <C>
      1980         215.6       21.1      57.5       68.5      288.2      90.1        188.9      127.6       1057.5
- --------------------------------------------------------------------------------------------------------------------------------
      1981         216.6       25.2      60.3       74.2      297.7      93.1        203.4      124.9       1095.4       37,900
- --------------------------------------------------------------------------------------------------------------------------------
      1982         204.3       24.7      65.0       73.7      300.3      99.1        218.4      126.1       1111.6       16,200
- --------------------------------------------------------------------------------------------------------------------------------
      1983         212.8       23.7      72.0       76.4      318.8     108.0        241.0      128.3       1181.0       69,400
- --------------------------------------------------------------------------------------------------------------------------------
      1984         231.2       23.8      80.8       82.3      352.1     121.8        271.0      132.4       1295.4      114,400
- --------------------------------------------------------------------------------------------------------------------------------
      1985         231.3       23.1      85.6       85.9      366.5     131.2        282.6      140.1       1346.3       50,900
- --------------------------------------------------------------------------------------------------------------------------------
      1986         224.1       19.3      72.1       86.7      363.6     133.1        284.9      149.2       1333.0      -13,300
- --------------------------------------------------------------------------------------------------------------------------------
      1987         223.7       18.7      57.3       87.8      358.1     128.3        288.4      148.9       1311.2      -21,800
- --------------------------------------------------------------------------------------------------------------------------------
      1988         221.2       17.7      46.2       93.0      359.3     126.1        324.9      152.2       1340.6       29,400
- --------------------------------------------------------------------------------------------------------------------------------
      1989         220.2       16.9      49.1       97.8      361.6     126.4        344.9      156.7       1373.6       33,000
- --------------------------------------------------------------------------------------------------------------------------------
      1990         218.9       17.9      47.2       83.1      362.4     124.3        370.5      163.0       1387.3       13,700
- --------------------------------------------------------------------------------------------------------------------------------
      1991         210.9       18.0      43.5       85.3      363.2     127.3        370.8      168.3       1387.3            0
- --------------------------------------------------------------------------------------------------------------------------------
      1992         209.2       17.9      43.5       87.2      367.1     122.1        374.8      170.3       1392.1        4,300
- --------------------------------------------------------------------------------------------------------------------------------
      1993         209.7       16.8      52.5       88.2      370.1     120.7        410.4      177.6       1446.0       53,900
- --------------------------------------------------------------------------------------------------------------------------------
      1994         223.6       16.8      62.9       99.8      401.1     132.0        437.0      194.3       1567.5      121,500
- --------------------------------------------------------------------------------------------------------------------------------
      1995         232.9       11.8      69.3      106.5      421.1     131.5        473.1      194.7       1641.2       73,700
- --------------------------------------------------------------------------------------------------------------------------------
      1996         237.1       11.3      75.3      114.3      438.7     131.6        495.2      198.1       1701.2       60,000
- --------------------------------------------------------------------------------------------------------------------------------
      1997         243.4       12.0      83.4      124.9      448.8     134.8        532.7      197.6       1777.6       76,400
- --------------------------------------------------------------------------------------------------------------------------------
      1998         252.9       11.7      89.2      133.1      453.1     147.3        578.0      208.2       1873.5       95,900
- --------------------------------------------------------------------------------------------------------------------------------
      1999         256.5       11.8      99.3      132.6      468.9     160.8        593.4      213.2       1936.5       63,000
- --------------------------------------------------------------------------------------------------------------------------------
      2000         251.0        8.8     110.3      143.0      511.6     157.0        636.4      226.9       2045.0      108,500
- --------------------------------------------------------------------------------------------------------------------------------
      2001         232.7        9.2     104.4      140.5      508.5     157.3        619.6      230.2       1994.6      -50,400
- --------------------------------------------------------------------------------------------------------------------------------
      2002         227.3        9.2     104.0      138.3      492.5     156.9        620.9      235.6       1989.4       -5,200
- --------------------------------------------------------------------------------------------------------------------------------
                                                Ft. Worth/Arlington PMSA (000)
- --------------------------------------------------------------------------------------------------------------------------------
      1980         108.4        4.3      22.5       25.1      110.7      21.0         70.7       55.6        418.3
- --------------------------------------------------------------------------------------------------------------------------------
      1981         112.0        5.4      21.7       25.2      117.3      20.4         76.8       55.7        434.5       16,200
- --------------------------------------------------------------------------------------------------------------------------------
      1982          97.4        4.6      23.3       22.0      121.0      22.2         79.0       57.7        427.2       -7,300
- --------------------------------------------------------------------------------------------------------------------------------
      1983         102.7        4.6      27.1       24.2      126.7      24.2         85.4       57.6        452.5       25,300
- --------------------------------------------------------------------------------------------------------------------------------
      1984         110.7        4.5      31.3       26.1      136.0      26.7         95.5       59.9        490.7       38,200
- --------------------------------------------------------------------------------------------------------------------------------
      1985         114.0        4.3      32.4       26.1      139.3      28.1        103.5       62.9        510.6       19,900
- --------------------------------------------------------------------------------------------------------------------------------
      1986         114.9        3.4      29.4       27.3      139.0      28.6        109.5       63.1        515.2        4,600
- --------------------------------------------------------------------------------------------------------------------------------
      1987         117.8        3.3      25.8       28.2      135.0      28.6        113.5       65.2        517.4        2,200
- --------------------------------------------------------------------------------------------------------------------------------
      1988         119.3        3.6      18.9       31.6      134.3      26.5        115.1       69.3        518.6        1,200
- --------------------------------------------------------------------------------------------------------------------------------
      1989         120.8        4.0      22.1       33.1      140.9      27.2        123.5       71.8        543.4       24,800
- --------------------------------------------------------------------------------------------------------------------------------
      1990         116.1        4.6      22.2       56.2      153.5      27.1        136.5       77.5        593.7       50,300
- --------------------------------------------------------------------------------------------------------------------------------
      1991         104.7        4.4      19.4       59.2      151.5      28.0        142.3       79.5        589.0       -4,700
- --------------------------------------------------------------------------------------------------------------------------------
      1992         102.2        4.4      19.5       58.3      149.4      27.0        146.6       83.7        591.1        2,100
- --------------------------------------------------------------------------------------------------------------------------------
      1993         100.5        4.4      22.1       60.5      153.8      27.6        156.2       83.9        609.0       17,900
- --------------------------------------------------------------------------------------------------------------------------------
      1994         100.6        4.5      27.1       58.6      169.0      29.8        166.0       87.8        643.4       34,400
- --------------------------------------------------------------------------------------------------------------------------------
      1995         105.5        4.4      29.2       63.9      173.9      29.3        172.2       89.1        667.5       24,100
- --------------------------------------------------------------------------------------------------------------------------------
      1996         106.4        4.4      31.5       62.6      178.9      31.1        181.8       92.6        689.3       21,800
- --------------------------------------------------------------------------------------------------------------------------------
      1997         109.6        4.4      35.4       66.9      189.3      32.5        189.5       94.1        721.7       32,400
- --------------------------------------------------------------------------------------------------------------------------------
      1998         111.4        4.3      37.1       70.8      196.4      33.4        201.7       92.9        748.0       26,300
- --------------------------------------------------------------------------------------------------------------------------------
      1999         113.7        4.6      43.4       75.1      201.3      37.3        212.2       97.8        785.4       37,400
- --------------------------------------------------------------------------------------------------------------------------------
      2000         110.8        3.9      45.1       80.5      204.5      40.4        222.1      102.8        810.1       24,700
- --------------------------------------------------------------------------------------------------------------------------------
      2001         107.0        4.4      44.9       79.6      203.0      41.6        215;9      105.0        801.4       -8,700
- --------------------------------------------------------------------------------------------------------------------------------
      2002         105.0        4.6      45.4       77.7      198.2      41.6        216.6      107.0        796.1       -5,300
================================================================================================================================
</TABLE>

      SOURCE: TEXAS EMPLOYMENT COMMISSION - LABOR MARKET REVIEW PUBLICATIONS


Humphries & Associates               II - 16
<PAGE>

         Regional Area Analysis, continued


<TABLE>
<CAPTION>
======================================================================================================================
                                        Total Employment Summary - D/FW Area
- ----------------------------------------------------------------------------------------------------------------------
                            Total                                    %                Wage &
      December            Employed                  Change       Unemployed         Salary Total              Change
- ----------------------------------------------------------------------------------------------------------------------
<S>                       <C>                       <C>             <C>             <C>                       <C>
        1980              1,485,400                                 4.1             1,475,800
- ----------------------------------------------------------------------------------------------------------------------
        1981              1,604,800                 119,400         3.5             1,529,900                  54,100
- ----------------------------------------------------------------------------------------------------------------------
        1982              1,639,400                  34,600         5.2             1,538,800                   8,900
- ----------------------------------------------------------------------------------------------------------------------
        1983              1,759,700                 120,300         4.4             1,633,500                  94,700
- ----------------------------------------------------------------------------------------------------------------------
        1984              1,850,925                  91,225         3.7             1,786,100                 152,600
- ----------------------------------------------------------------------------------------------------------------------
        1985              1,897,000                  46,075         4.4             1,856,900                  70,800
- ----------------------------------------------------------------------------------------------------------------------
        1986              1,986,900                  89,900         6.4             1,848,200                  -8,700
- ----------------------------------------------------------------------------------------------------------------------
        1987              2,039,800                  52,900         5.3             1,828,600                 -19,600
- ----------------------------------------------------------------------------------------------------------------------
        1988              2,030,100                  -9,700         5.0             1,859,200                  30,600
- ----------------------------------------------------------------------------------------------------------------------
        1989              2,014,300                 -15,800         4.6             1,917,000                  57,800
- ----------------------------------------------------------------------------------------------------------------------
        1990              2,056,600                  42,300         5.5             1,981,000                  64,000
- ----------------------------------------------------------------------------------------------------------------------
        1991              2,026,100                 -30,500         6.4             1,976,300                  -4,700
- ----------------------------------------------------------------------------------------------------------------------
        1992              2,064,500                  38,400         6.7             2,017,300                  41,000
- ----------------------------------------------------------------------------------------------------------------------
        1993              2,302,400                 266,100         5.2             2,113,200                  95,900
- ----------------------------------------------------------------------------------------------------------------------
        1994              2,396,000                  93,600         4.8             2,210,900                  97,000
- ----------------------------------------------------------------------------------------------------------------------
        1995              2,442,700                  46,700         4.2             2,308,700                  97,800
- ----------------------------------------------------------------------------------------------------------------------
        1996              2,518,600                  75,900         3.3             2,390,500                  81,800
- ----------------------------------------------------------------------------------------------------------------------
        1997              2,624,100                 105,500         3.0             2,499,300                 108,800
- ----------------------------------------------------------------------------------------------------------------------
        1998              2,695,200                  71,100         2.7             2,621,500                 122,200
- ----------------------------------------------------------------------------------------------------------------------
        1999              2,783,500                  91,084         2.8             2,721,900                 100,400
- ----------------------------------------------------------------------------------------------------------------------
        2000              2,871,700                  88,200         2.6             2,855,100                 133,200
- ----------------------------------------------------------------------------------------------------------------------
        2001              2,799,300                 -72,400         5.6             2,796,000                 -59,100
- ----------------------------------------------------------------------------------------------------------------------
        2002              2,806,884                   7,584         6.1             2,785,500                 -10,500
======================================================================================================================
</TABLE>

UNPAID FAMILY WORKERS, DOMESTICS, AG WORKERS, AND WORKERS INVOLVED IN
LABOR/MANAGEMENT DISPUTES + WAGE AND SALARY EMPLOYMENT + SELF-EMPLOYED = TOTAL
EMPLOYED

TRANSPORTATION

In January 1974, the Dallas/Fort Worth Regional Airport began operations and
immediately made the Metroplex a major air transportation center. This giant
facility of some 17,000 acres is nine miles long and eight miles wide, at its
extremities. Air passenger and cargo levels are increasing and the area around
the airport is experiencing rapid growth. Today, the airport is the second
busiest in the nation with expansion plans underway for two new runways. Rail,
bus, trucking, etc. also serve the Metroplex. The Metroplex is considered a
transportation center of the southwest.


Humphries & Associates               II - 17
<PAGE>

Regional Area Analysis, continued


FINANCIAL DATA

The Metroplex is home for over 150 commercial banks and contains the second
largest concentration of life insurance company headquarters in the United
States. The Metroplex also is the home of numerous savings and loan
associations.

In the late 1980's, there were publicized problems in the Dallas Financial
Community. The effect of the consolidations and sales can be seen in an average
employment decline of 2,280 per year in the finance/insurance/real estates
sectors of the D/FW CMSA over the five years beginning in 1987. Another effect
has been the lack of a large CBD lending institution which is locally owned,
which has historically been a stabilizing factor not only for the CBD but the
Metroplex as a whole. The consolidation or elimination of financial institutions
(banks, savings and loans, insurance, etc.) has left large vacancies in Class B,
C & D buildings within both the Dallas and Fort Worth Central Business District
in the early 1990'S. In the latter 1990's, as financial institutions rebounded,
large mergers have taken place. These include Bank One/First Chicago,
Citibank/Travelers, Chase/Texas Commerce, Bank America/Nations Bank, etc. One of
the main reasons for these consolidations is cost savings. These consolidations
have put further pressure on Dallas and Ft. Worth CBD occupancies. The 1st Qtr.
2002 MPF/RIS, Inc. estimates CBD occupancy to be 71% for Dallas and 87% for Ft.
Worth.

The declining trend has slowly reversed with the Finance/Insurance/Real Estate
Employment sector posting gains of 10.9% (1997), 13.3% (1998), 9.4% (1999), 3.4%
(2000) and .2% (2001). Depository and Nondepository institutions (e.g., banks,
thrifts, and credit unions) produced roughly three-quarters of the gain, with
insurance agents producing much of the rest. This sector now represents 7.9% of
D/FW employment, versus 6% nationally.

PERSONAL INCOME TRENDS

Per the survey of Buying Power published annually by the Sales and Marketing
Management Magazine, the median household income for the D/FW CMSA has grown at
an annual compounded growth rate of +/-3% since 1983.


Humphries & Associates               II - 18
<PAGE>

Regional Area Analysis, continued


Residential Market Conditions

According to the 1st Quarter 2003 Residential Strategies, Inc., after two years
of economic recession that has been characterized by a net decrease over 111,000
job losses in the D/FW area, the new home industry has set yet another annual
start record. Indeed these are strange time, but the facts are what they are.
The builders have had an excellent Spring 2003 selling season and the suburban
new home annual start rate has now surpassed 38,000 units.

Starts and closings are forming a broad topping out pattern. Lot deliveries,
which were up for most of 2002, continue to outpace starts, but are beginning to
slow. The lot development pipeline reveals about 7,200 lots at the
street/utility stage and about 16,400 lots at the grading/staking stage. In
aggregate this represents about a 7.5 months supply of lots under development;
thus RSI anticipates lot levels to remain fairly flat for the next two to three
quarters.

The suburban market did surpass 38,000 starts now representing almost $8 billion
of annual single family investment in this market. It should be noted that the
Greater Fort Worth market is gradually assuming a greater share of the D/FW
demand with now nearly 14,000 annual starts. For much of the 1990's Greater Fort
Worth maintained a 31-33% share of market. Fort Worth's ability to generate more
affordable housing has propelled its growth in the past few years. Today,
Greater Tarrant County represents just shy of 37% of all metroplex housing
starts.

Finished vacant inventory remains fairly steady at 2.2 months supply and the
vacant lot supply stands just below a 2-year supply. The Fort Worth months
supply is abnormally low because of the very tight 10 months supply of lots in
the Southeast Arlington market.

The results from RSI's traffic and sales survey effort show that for January and
March of 2003, most builders, were at or above traffic and sales figures for the
same period a year ago. February and April were generally flat but still very
strong. Very welcome news came in the form of a much lower cancellation rate
that was seen during most the 4th Quarter 2002. The spring market


Humphries & Associates               II - 19
<PAGE>

Regional Area Analysis, continued


has been very good for the builders and additional good news came from the fact
that buyer behavior was unaffected by the events of the Iraq war.

Despite the positive sales trends, it should be noted that the market is
extremely competitive with numerous incentives abounding in the market. Buyers
continue to shop hard for deals. Several builders have shared with RSI that they
have sacrificed gross margin in order to achieve velocity. Thus, it is clear
that net margins are razor thin. It is an unforgiving market, and, as RSI has
watched over the past year, some smaller builders have fallen by the wayside. In
the tactical market as seen today, perhaps the most important aspect of
homebuilding is knowing one's costs on a current basis.

Builder and lender discipline remains in place in almost all price points with
regard to spec inventory and is especially effective in the under $200,000
market where inventory moves quickly today. Focusing on the $200,000+ price
points, annual closing rate by price point for the trailing five quarters. For
the price points over $250,000, closings are off 3-4% over the past year.
Finished vacant spec inventory is being well regulated. While 2.5 months supply
is considered equilibrium with regard to finished housing, it is safe to say
that the overall spec picture in all price points is very acceptable considering
the slow-down in the higher price points. While a few pockets of over-building
do exist in some select neighborhoods priced over $500,000, today's lenders
should be commended for closely watching their portfolios.

With regard to months supply of lots, overall the market is fairly balanced at
just under a 24-month supply. However, when analyzed on a price point basis, it
is apparent that there is a dichotomy in the market. There is an ample supply of
lots in the $200-250,000 price category, and an excessive supply of lots in the
+$500,000 category. In the past, many of the custom builders have complained
about the lack of locations available to them, especially in the Northern Dallas
markets since many new neighborhoods were being monopolized by the high-end
production builders. Clearly the situation has changed, and the small custom
builders that have solid financial statements should be able to take advantage
of the current situation. It should be mentioned, that


Humphries & Associates               II - 20
<PAGE>

Regional Area Analysis, continued


most of the overhang of lots in the Northeast Dallas market today are found in
the West McKinney submarket. For comparison's sake, the $500,000+ Tollway market
in Plano and Frisco has 228 starts chasing 547 lots, a 29-month supply. In West
McKinney, The $500,000+ market has 69 starts chasing 421 lots, a 73-month
supply.

Conversely, under $200,000 there continues to be a district shortage of lots
with an overall supply of only about 18-months typical in most markets. As a
result, most new development activity is focused here today, and this shortage
has clearly spurred much of the activity towards special districts.

During the 12-month period ending March 2003, D/FW resales totaled a little over
87,000 units, down about 1.7% versus a year ago. More important is to examine
the months supply of listings. Without question, D/FW saw a surge of new
listings hit the market during the 1st Quarter of 2003, pushing the months
supply up over 6-months to current levels of 6.4-months.

An examination of the months supply of listing inventory on a price point basis
as published by the North Texas Real Estate Information Systems now shows that
all price points over $110,000 are at or above a 6-month supply of listings.

While much of the increase in listings is due to the seasonality of the resale
market, it is reasonable to believe that the months supply of resales may
subside later in the year. RSI gathers resale information from two sources. The
MLS information is a compilation of 8 local MLS services and is generally
reflective of the five county D/FW area. The North Texas Real Estate Information
Service covers a 21 county area and reports a slightly higher inventory level
for the region at an 8-month supply. Regardless of the source, the conclusion
for both are the same. While in the past the resale build-up has been a factor
primarily for the high-end production and custom builders, going forward,
resales will be an issue for all price points, even the value builders.


Humphries & Associates               II - 21
<PAGE>

Regional Area Analysis, continued


Over a year-over-year basis, resales at a higher price points are flat to down.
In the heart of the market, the $100,000 to $200,000 price point, sales on a
year-over-year basis are up 3-7%.

From an inventory perspective, the 1st Quarter 2003 market saw a noticeable
increase in the number of units new to the market. In the $100,000 to $150,000
price range, inventory was up over 50% on a year-over-year basis and in the
$150,000 to $200,000 price range up 35%.

The resale market has entered a new phase insofar as there is no longer a
shortage of existing home inventory for any of the price points within which the
new homebuilders compete. Looking ahead, RSI sees three ways in which the new
home market will be effected: First, the sheer number of units in the market
simply will draw buyers that may have purchased a new home to the existing
market. Second, contingency sales will take longer to move simply due to the
abundant supply of existing homes. Third, because most markets will now have an
over-supply of existing home inventory, there will be very little to no ability
to exact price increases. In fact, for homeowners who have seen price
appreciation in their existing units who are desirous of moving their existing
home more quickly, it would not be surprising to see future discounting in the
existing home market at lower price points.

In conclusion, the outlook for the remainder of 2003 remains favorable albeit
competitive. Most builders have established good sales backlogs going into the
2nd Quarter and it appears that mortgages rates will keep the market chugging
along for the near future. Resumption of employment growth is critical for
long-term success and RSI remains hopeful that housing demand from new
employment growth will kick in before the benefits realized by low interest
rates have been wrung out of the market. The good news is that there are rewards
for those who are willing to work hard and smart, and success will be found by
those offering quality and efficiency of operation.

The following chart is a summary of the current Dallas/Ft. Worth area housing
inventory.


Humphries & Associates               II - 22
<PAGE>

Regional Area Analysis, continued


<TABLE>
<CAPTION>
====================================================================================================================
                                     Housing Inventory Analysis by Market Area
                                              Dallas 1st Quarter 2003
- --------------------------------------------------------------------------------------------------------------------
                            Annual        Annual       Fin.        Vacant     Vacant        Months           Lots
     Market Area           Closings       Starts      Vacant       Supply*     Lots        Supply**       Delivered
- --------------------------------------------------------------------------------------------------------------------
<S>                          <C>         <C>          <C>             <C>     <C>              <C>           <C>
Dallas Area                  23,895      24,148       4,380           2.2     47,205           23.7          29,964
- --------------------------------------------------------------------------------------------------------------------
Ft. Worth Area               13,895      13,469       2,317           2.1     23,244           20.1          16,857
- --------------------------------------------------------------------------------------------------------------------
D/FW Area                    38,043      37,364       6,697           2.2     70,849           22.3          46,821
====================================================================================================================
</TABLE>

*2.5 months is considered equilibrium
**24.0 months is considered equilibrium

The chart indicates an undersupply of vacant lots homes and finished vacant
homes.

Multi-Family Market

The following is a summary of apartment market conditions in the D/FW area as
reported by M/PF Research, Inc.

<TABLE>
<CAPTION>
==========================================================================================================================
                                                APARTMENT MARKET PROFILE
- --------------------------------------------------------------------------------------------------------------------------
                                                                              Dallas Area    Ft. Worth Area      D/FW Area
- --------------------------------------------------------------------------------------------------------------------------
<S>                                                                           <C>                 <C>             <C>
                    Existing Apartment Units                                  371,676             133,829         505,404
                    ------------------------------------------------------------------------------------------------------
   1st Quarter      Annual Apartment Completions                                7,746               2,350          10,096
      2003          ------------------------------------------------------------------------------------------------------
                    Quarterly Apartment Unit Absorption                        -3,270                -760          -4,030
                    ------------------------------------------------------------------------------------------------------
                    Annual Apartment Unit Absorption                           -9,290                -620          -9,910
                    ------------------------------------------------------------------------------------------------------
                    Average Gross Occupancy                                     91.5%               93.0%           91.9%
                    ------------------------------------------------------------------------------------------------------
                    Change from Year-Ago Quarter                                 -4.2                -2.2            -3.7
                    ------------------------------------------------------------------------------------------------------
                    Average Quoted Monthly rent                                  $724                $631            $699
                    ------------------------------------------------------------------------------------------------------
                    Same-Store % Change from Year Ago Quarter                    0.4%                1.9%            0.8%
- --------------------------------------------------------------------------------------------------------------------------
                    Annual Apartment Unit Completions                           9,641               2,831          12,472
   1st Quarter      ------------------------------------------------------------------------------------------------------
       2003         Annual Apartment Unit Absorption                            7,900               2,200          10,100
     Forecast       ------------------------------------------------------------------------------------------------------
                    Average Gross Occupancy                                     91.3%               92.7%           91.6%
                    ------------------------------------------------------------------------------------------------------
                    Change From Year-Ago Quarter                                 -0.2                -0.3            -0.3
==========================================================================================================================
</TABLE>

Retail Market

The following is a summary of retail market conditions in the D/FW area as
reported by MPF/RIS as of the 1st Quarter 2003.


Humphries & Associates               II - 23
<PAGE>

Regional Area Analysis, continued


<TABLE>
<CAPTION>
==========================================================================================================================
                                                       Dallas Area
- --------------------------------------------------------------------------------------------------------------------------
   Quarter                         Occupancy                                  Average Base rent
- --------------  --------------------------------------------------  --------------------------------------  --------------
                                                                                                                Yearly
   Yr/Mo.          ALL          R(1)        N/C(2)        S(3)        ALL          N/C           S            Absorption
- --------------  --------------------------------------------------  --------------------------------------  --------------
<S>                <C>          <C>          <C>          <C>        <C>          <C>          <C>              <C>
  1996/4th         88%          94%          87%          93%        $12.01       $12.39       $10.39           2,071,931
- --------------  --------------------------------------------------  --------------------------------------  --------------
  1997/4th         88%          91%          89%          85%        $12.52       $12.95       $10.83           1,892,984
- --------------  --------------------------------------------------  --------------------------------------  --------------
  1998/4th         88%          88%          90%          85%        $12.99       $13.44       $11.33           1,430,829
- --------------  --------------------------------------------------  --------------------------------------  --------------
  1999/4th         89%          89%          89%          86%        $13.27       $13.77       $11.80           3,136,415
- --------------  --------------------------------------------------  --------------------------------------  --------------
  2000/4th         89%          91%          90%          87%        $14.25       $14.53       $12.69           5,094,940
- --------------  --------------------------------------------------  --------------------------------------  --------------
  2001/4th         89%          85%          91%          88%        $14.81       $15.03       $12.62           1,060,144
- --------------  --------------------------------------------------  --------------------------------------  --------------
  2002/4th         89%          90%          90%          87%        $15.11       $15.45       $13.01             371,113
- --------------  --------------------------------------------------  --------------------------------------  --------------
  2003/4th         90%          91%          90%          87%        $15.40       $15.66       $13.42           1,381,769
- --------------------------------------------------------------------------------------------------------------------------
                                                     Ft. Worth Area
- --------------------------------------------------------------------------------------------------------------------------
  1996/4th         88%          93%          87%          86%        $10.43       $10.93       $ 9.25           1,464,161
- --------------  --------------------------------------------------  --------------------------------------  --------------
  1997/4th         87%          91%          86%          85%        $10.95       $11.37       $ 9.48           1,356,287
- --------------  --------------------------------------------------  --------------------------------------  --------------
  1998/4th         88%          91%          87%          86%        $11.40       $11.83       $ 9.88             871,893
- --------------  --------------------------------------------------  --------------------------------------  --------------
  1999/4th         89%          91%          88%          88%        $11.83       $12.31       $10.11           1,484,006
- --------------  --------------------------------------------------  --------------------------------------  --------------
  2000/4th         89%          92%          88%          86%        $11.93       $12.52       $10.30             712,800
- --------------  --------------------------------------------------  --------------------------------------  --------------
  2001/4th         89%          90%          90%          87%        $12.66       $13.13       $11.02             -68,016
- --------------  --------------------------------------------------  --------------------------------------  --------------
  2002/4th         87%          87%          87%          88%        $13.04       $13.67       $11.24            -731,327
- --------------  --------------------------------------------------  --------------------------------------  --------------
  2003/4th         87%          88%          86%          88%        $13.58       $14.11       $12.07             991,106
==========================================================================================================================
</TABLE>

  (1) Regional Center
  (2) Neighborhood/Community Center
  (3) Strip Center

As of 4th Quarter 2003, the Dallas area had a total of 122,683,464 SF of retail
space. Approximately 98,260,515 (80%) of the space is multi-tenant and
approximately 24,422,949 SF (26%) is single tenant retail space. The Fort Worth
area has a total of 59,382,001 SF of retail space of which 44,438,775 (75%) is
multi-tenant and 14,943,226 (25%) is single tenant space.

As of 4th Quarter 2003, MPF/RIS reports 28 buildings containing 1,577,165 SF are
under construction in the Dallas area. Seven of the buildings containing 566,311
SF will be owner occupied while 1,010,854 SF is multi-tenant space.
Approximately 62% of the new multi-tenant space is pre-leased. Based upon recent
absorption data for the Dallas area and improving economy, overall occupancies
can be anticipated to remain flat to slightly increasing over the next year.


Humphries & Associates               II - 24
<PAGE>

Regional Area Analysis, continued


As of 4th Quarter 2003, MPF/RIS reports 23 buildings containing 976,188 SF is
under construction in the Fort Worth area. Nine of the buildings containing
556,356 SF will be owner occupied while 419,832 SF is multi-tenant space.
Approximately 22% of the new multi-tenant space is pre-leased. Based upon recent
absorption data for the Fort Worth area and improving economy, overall
occupancies can be anticipated to remain flat to slightly increasing over the
next year.

Office

The following is a summary of office market conditions in the D/FW area as
reported by MPF/RIS as of 4th Quarter 2003.

<TABLE>
<CAPTION>
========================================================================================================================
                                                      Dallas Area
- ------------------------------------------------------------------------------------------------------------------------
       Qtr.                       Occupancy                       Annual Full Service Rent/SF
- -------------------  -----------------------------------  --------------------------------------------  ----------------
                                                                                                            Annual
    Year/Month         ALL       A         B        C        ALL         A          B           C         Absorption
- -------------------  -----------------------------------  --------------------------------------------  ----------------
<S>                    <C>      <C>       <C>      <C>     <C>        <C>        <C>         <C>             <C>
     1996/4th          83%      91%       79%      64%     $17.57     $20.25     $14.76      $10.86           2,440,167
- -------------------  -----------------------------------  --------------------------------------------  ----------------
     1997/4th          85%      92%       84%      66%     $20.00     $23.39     $16.73      $12.03           2,748,930
- -------------------  -----------------------------------  --------------------------------------------  ----------------
     1998/4th          83%      87%       80%      71%     $12.67     $24.95     $18.01      $13.41             820,984
- -------------------  -----------------------------------  --------------------------------------------  ----------------
     1999/4th          79%      80%       79%      73%     $21.72     $24.73     $18.55      $14.42           2,891,086
- -------------------  -----------------------------------  --------------------------------------------  ----------------
     2000/4th          83%      86%       82%      69%     $21.82     $24.53     $18.81      $14.75           3,643,893
- -------------------  -----------------------------------  --------------------------------------------  ----------------
     2001/4th          77%      81%       75%      69%     $21.82     $23.70     $18.40      $14.78          -4,256,686
- -------------------  -----------------------------------  --------------------------------------------  ----------------
     2002/4th          75%      78%       73%      69%     $19.70     $21.89     $17.25      $14.59          -2,779,942
- -------------------  -----------------------------------  --------------------------------------------  ----------------
     2003/4th          73%      75%       71%      67%     $18.85     $21.06     $16.41      $13.71         -2,025,6821
- ------------------------------------------------------------------------------------------------------------------------
                                                    Ft. Worth Area
- ------------------------------------------------------------------------------------------------------------------------
     1996/4th          84%      91%       86%      77%     $14.84     $18.98     $14.76      $11.17              80,369
- -------------------  -----------------------------------  --------------------------------------------  ----------------
     1997/4th          85%      98%       87%      79%     $15.85     $22.47     $16.37      $12.29             322,819
- -------------------  -----------------------------------  --------------------------------------------  ----------------
     1998/4th          86%      87%       90%      81%     $17.07     $21.78     $17.04      $12.97             193,728
- -------------------  -----------------------------------  --------------------------------------------  ----------------
     1999/4th          87%      88%       90%      84%     $17.86     $22.61     $17.59      $13.77             594,951
- -------------------  -----------------------------------  --------------------------------------------  ----------------
     2000/4th          85%      90%       81%      84%     $18.55     $23.44     $17.94      $14.33             -80,785
- -------------------  -----------------------------------  --------------------------------------------  ----------------
     2001/4th          88%      92%       88%      85%     $19.19     $24.71     $17.93      $15.11               6,737
- -------------------  -----------------------------------  --------------------------------------------  ----------------
     2002/4th          85%      86%       87%      82%     $18.65     $22.93     $17.64      $15.10            -353,067
- -------------------  -----------------------------------  --------------------------------------------  ----------------
     2003/4th          81%      80%       83%      80%     $17.92     $21.28     $17.64      $14.16          -1,040,278
========================================================================================================================
</TABLE>


Humphries & Associates               II - 25
<PAGE>

Regional Area Analysis, continued


As of 4th Quarter 2003, the Dallas area had 192,956,411 SF of office space. This
is broken down into 140,691,506 SF (73%) of multi-tenant space and 52,336,905
(27%) of single tenant space. The Fort Worth area has a total of 31,509,125 SF
of office space of which 22,355,951 SF (71%)is multi-tenant space and 9,153,174
SF (29%)is single tenant space.

As of 4th Quarter 2003, MPF/RIS reports eight buildings containing 642,431 SF
are under construction in the Dallas area. One building containing 241,491 SF
will be owner occupied while 400,940 SF is multi-tenant space. The majority of
the new multi-tenant space is speculative and not pre-leased. Based upon
historical absorption data for the Dallas area, overall occupancies can be
anticipated to remain flat over the next year.

As of 4th Quarter 2003, MPF/RIS indicates that eight 8 buildings containing
1,529,403 SF of office space are under construction in the Fort Worth area.
Three buildings containing 1,202,981SF will be owner-occupied and five buildings
containing 326,422 SF will be multi-tenant space. None of the new multi-tenant
space is pre-leased. Based upon historical occupancy trends, occupancies in the
Ft. Worth area are anticipated to remain flat over the next year.

Industrial

The following is a summary of the industrial market conditions in the D/FW area
as reported by MPF/RIS as of 3rd Quarter 2003.


Humphries & Associates               II - 26
<PAGE>

Regional Area Analysis, continued


<TABLE>
<CAPTION>
=========================================================================================================================
                                                Dallas Area - Warehouse
- -------------------------------------------------------------------------------------------------------------------------
                              Occupancy                                Average Gross Rent
- ------------  ------------------------------------------  ---------------------------------------------  ----------------
                                1980-    1970-                               1980-    1970-    1969 &          Annual
  Yr/Qtr.      All     1990     1989     1979     1969      ALL     1990     1989     1979      Older       Absorption SF
- ------------  ------------------------------------------  ---------------------------------------------  ----------------
<S>            <C>      <C>      <C>      <C>      <C>     <C>      <C>      <C>      <C>       <C>           <C>
  1996/4th     93%      87%      93%      94%      92%     $3.32    $3.31    $3.66    $3.31     $2.88          4,334,194
- ------------  ------------------------------------------  ---------------------------------------------  ----------------
  1997/4th     93%      86%      94%      94%      94%     $3.48    $3.43    $3.84    $3.47     $3.04          8,754,541
- ------------  ------------------------------------------  ---------------------------------------------  ----------------
  1998/4th     93%      85%      93%      95%      95%     $3.60    $3.64    $3.97    $3.57     $3.12          4,906,085
- ------------  ------------------------------------------  ---------------------------------------------  ----------------
  1999/4th     91%      89%      90%      93%      94%     $3.50    $3.65    $3.89    $3.40     $2.96          1,383,910
- ------------  ------------------------------------------  ---------------------------------------------  ----------------
  2000/4th     91%      90%      91%      93%      92%     $3.54    $3.66    $3.91    $3.43     $3.03          5,428,442
- ------------  ------------------------------------------  ---------------------------------------------  ----------------
  2001/4th     87%      81%      87%      90%      90%     $3.68    $3.81    $4.05    $3.57     $3.20         -2,060,361
- ------------  ------------------------------------------  ---------------------------------------------  ----------------
  2002/4th     87%      85%      84%      88%      90%     $3.73    $3.94    $4.11    $3.63     $3.21          5,932,881
- ------------  ------------------------------------------  ---------------------------------------------  ----------------
  2003/4th     86%      84%      85%      87%      89%     $3.71    $3.84    $4.07    $3.69     $3.24          7,918,807
- -------------------------------------------------------------------------------------------------------------------------
                                               Ft. Worth Area - Warehouse
- -------------------------------------------------------------------------------------------------------------------------
  1996/4th     93%      94%      94%      92%      91%     $3.19    $3.66    $3.39    $2.92     $2.81          2,239,853
- ------------  ------------------------------------------  ---------------------------------------------  ----------------
  1997/4th     90%      83%      94%      93%      92%     $3.35    $3.71    $3.45    $3.13     $2.93          3,063,432
- ------------  ------------------------------------------  ---------------------------------------------  ----------------
  1998/4th     93%      92%      93%      94%      93%     $3.43    $3.46    $3.67    $3.24     $3.11          5,461,661
- ------------  ------------------------------------------  ---------------------------------------------  ----------------
  1999/4th     92%      93%      92%      93%      91%     $3.30    $3.55    $3.57    $3.14     $2.80          7,612,218
- ------------  ------------------------------------------  ---------------------------------------------  ----------------
  2000/4th     90%      89%      91%      92%      90%     $3.38    $3.60    $3.67    $3.19     $2.94          2,931,016
- ------------  ------------------------------------------  ---------------------------------------------  ----------------
  2001/4th     87%      84%      88%      90%      91%     $3.71    $4.09    $3.96    $3.45     $3.11          4,305,757
- ------------  ------------------------------------------  ---------------------------------------------  ----------------
  2002/4th     85%      85%      86%      86%      85%     $3.80    $4.16    $3.99    $3.49     $3.21          1,207,034
- ------------  ------------------------------------------  ---------------------------------------------  ----------------
  2003/4th     86%      86%      87%      85%      86%     $3.81    $4.15    $4.64    $3.43     $3.16          5,186,825
=========================================================================================================================
</TABLE>

As of 4th Quarter 2003, the Dallas area had 254,507,054 SF of warehouse space.
This is broken down into 107,136,053 SF (42%) of multi-tenant space and
147,371,001 (58%) of single tenant space. The Fort Worth area has a total of
147,841,505 SF of warehouse space of which 55,599,040 SF (38%)is multi-tenant
space and 92,242,465 SF (62%)is single tenant space.

As of 4th Quarter 2003, MPF/RIS reports 15 buildings containing 1,336,417 SF are
under construction in the Dallas area. Eight buildings containing 423,557 SF
will be owner occupied while 912,860 SF is multi-tenant space. Based upon recent
absorption data for the Dallas area and improving economy, overall occupancies
can be anticipated to remain flat to slightly increasing over the next year.

As of 4th Quarter 2003, MPF/RIS indicates that 14 buildings containing 1,993,130
SF of warehouse space is under construction in the Fort Worth area. Nine
buildings containing 1,464,970 SF


Humphries & Associates               II - 27
<PAGE>

Regional Area Analysis, continued


are multi-tenant space and five buildings containing 528,160 is single tenant
owner occupied space.

Based upon recent occupancy trends, occupancies in the Ft. Worth area are
anticipated to remain flat to slightly increasing over the next year.

<TABLE>
<CAPTION>
=========================================================================================================================
                                                Dallas Area - Flex/Tech
- -------------------------------------------------------------------------------------------------------------------------
                              Occupancy                                Average Gross Rent
- ------------  ------------------------------------------  ---------------------------------------------  ----------------
                                1980-    1970-                               1980-    1970-     1969 &         Annual
  Yr/Qtr.      All     1990     1989     1979     1969      ALL     1990     1989     1979      Older       Absorption SF
- ------------  ------------------------------------------  ---------------------------------------------  ----------------
<S>            <C>      <C>      <C>      <C>      <C>     <C>      <C>      <C>      <C>       <C>            <C>
  1996/4th     91%      98%      91%      92%      81%     $6.66    $6.21    $6.85    $6.28     $5.61          2,092,624
- ------------  ------------------------------------------  ---------------------------------------------  ----------------
  1997/4th     91%      84%      92%      93%      85%     $7.37    $8.63    $7.47    $6.89     $6.11          2,279,425
- ------------  ------------------------------------------  ---------------------------------------------  ----------------
  1998/4th     90%      85%      92%      92%      86%     $7.78    $8.84    $7.89    $7.24     $6.74          1,845,279
- ------------  ------------------------------------------  ---------------------------------------------  ----------------
  1999/4th     88%      83%      90%      92%      85%     $7.89    $9.22    $7.98    $7.28     $6.37          1,694,061
- ------------  ------------------------------------------  ---------------------------------------------  ----------------
  2000/4th     89%      84%      91%      92%      82%     $8.03    $9.07    $8.11    $7.42     $6.52          1,838,667
- ------------  ------------------------------------------  ---------------------------------------------  ----------------
  2001/4th     84%      80%      85%      88%      82%     $8.38    $9.61    $8.40    $7.43     $6.94          1,691,219
- ------------  ------------------------------------------  ---------------------------------------------  ----------------
  2002/4th     82%      78%      83%      86%      86%     $8.39    $9.71    $8.44    $7.46     $6.90          1,572,856
- ------------  ------------------------------------------  ---------------------------------------------  ----------------
  2003/4th     79%      75%      80%      87%      71%     $8.33    $9.71    $8.26    $7.67     $7.09          3,605,616
- -------------------------------------------------------------------------------------------------------------------------
                                               Ft. Worth Area - Flex/Tech
- -------------------------------------------------------------------------------------------------------------------------
  1996/4th     87%      94%      90%      81%      89%     $6.32    $6.81    $6.56    $6.06     $1.90            -50,392
- ------------  ------------------------------------------  ---------------------------------------------  ----------------
  1997/4th     92%      96%      92%      89%      94%     $6.45    $8.02    $6.89    $6.16     $1.90            973,155
- ------------  ------------------------------------------  ---------------------------------------------  ----------------
  1998/4th     88%      89%      91%      91%      94%     $7.02    $8.93    $7.51    $6.30      NA              -39,335
- ------------  ------------------------------------------  ---------------------------------------------  ----------------
  1999/4th     89%      87%      89%      93%      94%     $6.62    $6.89    $7.40    $6.04     $2.97            605,732
- ------------  ------------------------------------------  ---------------------------------------------  ----------------
  2000/4th     91%      90%      89%      94%      94%     $6.78    $7.46    $7.49    $6.22     $2.97            332,572
- ------------  ------------------------------------------  ---------------------------------------------  ----------------
  2001/4th     87%      84%      88%      90%     100%     $7.50    $9.76    $7.71    $6.62     $2.97            569,070
- ------------  ------------------------------------------  ---------------------------------------------  ----------------
  2002/4th     88%      85%      89%      90%      94%     $7.47    $8.68    $7.39    $6.35     $2.74          1,583,494
- ------------  ------------------------------------------  ---------------------------------------------  ----------------
  2003/4th     87%      85%      86%      91%      89%     $7.86    $9.63    $7.57    $5.92     $4.21            393,779
=========================================================================================================================
</TABLE>

As of 4th Quarter 2003, the Dallas area had 63,823,487 SF of flex/tech space.
This is broken down into 41,243,717 SF (65%) of multi-tenant space and
22,579,770 (35%) of single tenant space. The Fort Worth area has a total of
13,037,316 SF of flex/tech space of which 7,363,474 SF (56%)is multi-tenant
space and 5,673,842 SF (44%)is single tenant space.


Humphries & Associates               II - 28
<PAGE>

Regional Area Analysis, continued


As of 4th Quarter 2003, MPF/RIS reports 11 buildings containing 1,309,683 SF are
under construction in the Dallas area. Three buildings containing 468,486 SF
will be owner occupied while 841,197 SF is multi-tenant space. Based upon recent
absorption data for the Dallas area, overall occupancies can be anticipated to
remain flat over the next year.

As of 4th Quarter 2003, MPF/RIS indicates that five buildings containing
1,413,580 SF of flex/tech space are under construction in the Fort Worth area.
Three buildings containing 1,127,333 SF is multi-tenant space and two buildings
containing 286,247 is single tenant owner occupied space. Based upon recent
absorption data for the Fort Worth area, overall occupancies can be anticipated
to remain flat over the next year.

CONCLUSIONS

The Metroplex population, employment and income are all projected to slowly
increase over the near term. M/PF, Inc. forecasts Texas and the Metroplex to
parallel or out-perform the U.S. growth, export and job creation. Forecasted
economic growth in GDP for the U.S. and Texas is estimated at a modest +/-1.5% -
2.0% for 2003.

Job growth in the metroplex is anticipated to be flat to slightly declining over
the next year. Any significant job growth is still +/-one-year away. As was
indicated by the previous charts, most real estate sectors will have difficulty
maintaining existing occupancy levels with slowing job growth along with planned
completions. Nevertheless, no sectors are anticipated to have significant
oversupplies.

Various unknown influences could have a significant impact on the metroplex
future expansion. Some of the major factors include:

1.    Slowing in the national economic expansion. Whereas the D/FW metroplex
      used to be a counter-cyclical area, the current D/FW economy tracks
      closely the national economy. This is especially true in the tech sector.


Humphries & Associates               II - 29
<PAGE>

Regional Area Analysis, continued


2.    Interest rate sensitivity - Interest rates still remain attractive for
      housing demand. The low interest rates have been a major contributor to
      improvement in the single-family market. Any substantial increase in
      interest rates could slow the recovery of the housing market.

3.    Cuts in defense spending in the Metroplex - For the Metroplex, real estate
      expansion has been significantly influenced by job growth. At this time,
      no additional defense spending cuts are anticipated for the Metroplex.
      Conversely, if the War on Terrorism escalates, job growth from this sector
      can be anticipated to increase.

4.    Additional downsizing of the telecom and high-tech industries. Based upon
      Texas A&M Research center economists, the current recession should begin
      to show recovery in the second half of 2003.


Humphries & Associates               II - 30
<PAGE>

                              NEIGHBORHOOD ANALYSIS


Real estate is an immobile commodity. As such, it is influenced by the
surrounding neighborhood. Conditions within the neighborhood can influence
buyer/seller opinions concerning real property values within the neighborhood.
Therefore, the neighborhood description is important in the valuation of real
estate. The defined neighborhood is the general area, which is considered to
have the greatest influence on the value of the Subject Property.

The property being appraised is located on the northeast corner of Greenville
Avenue and Collins Boulevard with additional frontage along the west side of
Alma Road in the City of Richardson. The neighborhood is considered to be that
area generally bound by the President George Bush Highway (SH-190) on the north,
Plano Road on the east, Arapaho Road on the south and Coit Road on the west.

The neighborhood is located approximately 15 miles north of the Dallas Central
Business District, approximately five miles to the north of IH-635 (LBJ Freeway)
and approximately 18 miles to the northeast of the Dallas/Fort Worth
International Airport.

Access

Primary access to the Subject neighborhood is provided by the Central Expressway
(US Highway 75) and George Bush Tollway (SH-190). Central Expressway (US-75)
runs in a north/south direction, from the Dallas Central Business District to
the Oklahoma border and beyond. It is a limited access, eight-lane, divided
major freeway that bisects the neighborhood. SH-190 (President George Bush
Freeway) is a limited access, eight-lane, east/west tollway that forms the north
boundary of the neighborhood. This major tollway provides access from the City
of Garland to Stemmons Freeway (IH-35E).

Renner Road, Campbell Road and Arapaho Road are the primary east/west arteries
through the area. These thoroughfares extend from east of Central Expressway to
west of the Dallas North Tollway.


Humphries & Associates               III - 1                        D-7U/04-1991
<PAGE>

Neighborhood Analysis, continued


Coit Road and Plano Road are primary north/south thoroughfares in the
neighborhood. These roads provided access from LBJ Freeway (IH-635) to the south
to the George Bush Tollway (SH-190) and SH-121 to the north.

Street access to the Subject neighborhood is considered good. The area can be
accessed via the following thoroughfares:

     Street                             Lanes                Direction of Travel
     ------                             -----                -------------------

     George Bush Freeway (SH-190)       8-Lanes, Divided     East/West
     Renner Road                        4/6-Lanes, Divided   East/West
     Campbell Road                      6-Lanes, Divided     East/West
     Collins Boulevard                  4/6-Lanes, Divided   East/West
     Arapaho Road                       6-Lanes, Divided     East/West
     Coit Road                          6-Lanes, Divided     North/South
     Central Expressway (US-75)         8-Lanes, Divided     North/South
     Plano Road                         6-Lanes, Divided     North/South

Demographic Trends

CACI Marketing Systems publishes population and other demographic data by zip
code based on the 2000 census and estimated updates. The Subject Property is
located in zip code area 75080 and Census tract 190.10. The following chart
shows selected demographic data for this area.

<TABLE>
<CAPTION>
==============================================================================================
                                               Annual
 Zip             2000              2003        Change          2003 Per        2003 Median
 Code         Population        Population    2000-2003     Capita Income    Household Income
- ----------------------------------------------------------------------------------------------
<S>             <C>              <C>           <C>            <C>                 <C>
   75080        41,105           43,844        2.0%           $29,908             $61,393
==============================================================================================
</TABLE>

CACI projects population growth during the next five years of 2.3% annually to
49,007. The income levels are in the 87th and 89th centile nationally and
statewide, respectively.


Humphries & Associates               III - 2                        D-7U/04-1991
<PAGE>

Neighborhood Analysis, continued


Development Trends

The Subject area is situated in the northward growth pattern of development of
Dallas County and Collin County. The Subject area is approximately 70% built up
with a variety of commercial and residential uses. The neighborhood has a
combination of retail, offices, commercial and residential uses. Commercial
development is located primarily along the Central Expressway, Plano Parkway and
at the intersections of the primary roadways.

The Richardson "Telecom Corridor", which contains more than 500 high-tech and
telecommunications companies, is located in the eastern portion of the
neighborhood. This area has over 80,000 daytime workers, making it the largest
D/FW daytime employment center outside the Dallas CBD. This area is generally
bounded by Central Expressway on the west, SH-190 on the north, Plano Road on
the east and Arapaho Road on the south. The following is a summary of some of
the companies in this area.

<TABLE>
<CAPTION>
===========================================================================================
                             Richardson Telecom Company List
- -------------------------------------------------------------------------------------------
         Company                      Industry                           No. of Employees
- -------------------------------------------------------------------------------------------
<S>                          <C>                                               <C>
Texas Instruments            Semiconductors                                    12,000
- -------------------------------------------------------------------------------------------
Nortel Networks              Digital Telecommunications Networks                4,700
- -------------------------------------------------------------------------------------------
MCI Worldcom                 Telephone Services Engineering                     2,900
- -------------------------------------------------------------------------------------------
SBC/Southwestern Bell        Software & Wireless Communications                 2,140
- -------------------------------------------------------------------------------------------
Fujitsu                      Telecommunications Equipment Mfg.                  1,424
- -------------------------------------------------------------------------------------------
Cingular Wireless            Mobile Communications                              1,300
- -------------------------------------------------------------------------------------------
Cisco Systems                Networking/telecommunications                      1,000
- -------------------------------------------------------------------------------------------
Hewlett-Packard              Superconductor Design & Mfg.                       1,000
- -------------------------------------------------------------------------------------------
Rockwell/Collins             Communications & Avionics Systems                   700
- -------------------------------------------------------------------------------------------
Samsung Telecom              Telecommunications Equipment, R&D                   650
===========================================================================================
</TABLE>


Humphries & Associates               III - 3                        D-7U/04-1991
<PAGE>

Neighborhood Analysis, continued


See Market Analysis section for further discussion on the Telecom Corridor
(Richardson office submarket).

Office development consisting primarily of multi-story structures is located
along the Central Expressway. These buildings cater to the Telecom Corridor.
Garden style office buildings are located throughout the neighborhood. New
multi-story office development has been occurring in the neighborhood in recent
years. There has been 1,812,498 SF of multi-tenant office construction in the
Richardson sector since 2001.

Due to the downturn in the economy its affect on the high-tech and
telecommunications industry, the Richardson (Telecom Corridor) has experienced
significant tenant move-outs since 2001. The submarket experienced negative
absorption of -368,554 SF, -590,465 SF and -418,085 SF during 2001, 2002 and
2003, respectively. The negative absorption caused the occupancy to decline from
+/-95% to +/-69% as of 4th Quarter 2003. However, during the first quarter the
submarket experienced strong absorption of 332,324 SF. Discussions with the
leasing agents of the rent comparables indicate that the leasing activity has
dramatically increased during 2004.

Industrial and high-tech (flex) development is located in the southeast portion
of the neighborhood. This development is a part of the Telecom Corridor and is
bordered by Central Expressway on the west, Plano Road on the east, Campbell
Road on the north and Arapaho Road on the south. The majority of this
development was constructed in the 1980s.

Retail development in the neighborhood is concentrated along Campbell Road, Coit
Road and Plano Road at the major intersections. Plano Parkway and Central
Expressway with pockets of retail development situated at the major
intersections. Retail construction is occurring throughout the neighborhood. A
large shopping center is located on the northeast and southeast corner of
Campbell Road and Coit Road. The northwest corner of Renner Road and Custer Road
was recently improved with a shopping center.


Humphries & Associates               III - 4                        D-7U/04-1991
<PAGE>

Neighborhood Analysis, continued


The largest concentration of retail development is located around Collin Creek
Mall. The mall is located just north of the neighborhood on the northwest corner
of Central Expressway (US-75) and Plano Parkway.

Residential development is located west of Central Expressway and consists
primarily of moderate single-family housing. These homes typically range in
price from $100,000 to $200,000, with an age of +30 years. Apartments are
scattered throughout the neighborhood. The apartments are typically garden-type
that were constructed in the late 1970s/1980s or the 1990s. New single-family
and multi-family development has and is occurring in the northern portion of the
neighborhood.

Conclusions

The Subject Neighborhood is characterized by office and high-tech development
along the Telecom Corridor of the City of Richardson. The area experienced
strong growth until 2001 due to the boon in the high-tech and telecommunication
industries, however, the downturn in the economy has had a negative affect on
the office and high-tech market. The neighborhood is considered to be in the
stability stage of development. The overall aspects of the Neighborhood are
considered positive due to its accessibility and strong industry base.


Humphries & Associates               III - 5                        D-7U/04-1991
<PAGE>

                                Neighborhood Map


                      [DETAIL MAP OF COLLINS CROSSING AREA]



Humphries & Associates               III - 6                        D-7U/04-1991
<PAGE>

                                SUBJECT PROPERTY

The Subject Property is a 6.509-acre tract of land improved with an 11-story
298,766 NRSF office building located on the northeast corner of Greenville
Avenue and Collins Blvd. with additional frontage along the west side of Alma
Road in the City of Richardson, Dallas County, Texas. In addition, there is a
3.552-acre excess land tract that abuts the north side of the building site. The
following is a brief legal description of the Subject Property.

      Building Site - Being Lot 1A, Block 1 of Collins Crossing, an addition to
      the City of Richardson, Dallas County, Texas.

      Excess Land Tract - Lot 2, Block 1 of Collins Crossing, an addition to the
      City of Richardson, Dallas County, Texas.


Size/Frontage/Access/Visibility

The improved tract contains 6.509 acres or 283,550 SF of land. The tract has
approximately 513.44' of frontage along the southeast side of Greenville Avenue,
approximately 712.35' of frontage along the north side of Collins Blvd. and
approximately 654.06' of frontage along the west side of Alma Road.

The excess land tract abuts the north side of the improved tract. The tract has
+/-359.85' of frontage along the west side of Alma Road and +/-630.00' of
frontage along the east side of Greenville Avenue.

Greenville Avenue is a six-lane, northeast/southwest, divided primary
thoroughfare that provides access to LBJ Freeway to the south and the George
Bush Tollway (SH-190) to the north. Collins Boulevard is a four/six-lane,
east/west, divided primary thoroughfare that provides access to Plano Road to
the east and Central Expressway to the west. Collins Boulevard is raised at
Greenville Avenue and crosses Central Expressway. Access to Greenville Avenue
from Collins Blvd. is available from a one-lane, access road. The Alma Road is a
four-lane, north/south, divided roadway that merges with Greenville Avenue to
the north and Collins Boulevard to the south.


Humphries & Associates               IV - 1                         D-7U/04-1991
<PAGE>

Subject Property, continued


Access to the building site is available from two curb cuts along Greenville
Avenue, one curb cut along the one-lane access road to Greenville Avenue and
two-curb cuts along Collins Boulevard. The tract has good visibility from
Central Expressway (US-75) which is located approximately 200' west of the
Subject. Additionally, the northbound exit ramp from Central Expressway and
Campbell Road is located just south of the Subject. Traffic exiting Central can
cross the DART light rail track at Collins Blvd. and gain immediate access to
the Subject. The Subject Property is considered to have good access and
visibility.

Utilities

The Subject tracts have access to all city-supplied utilities. The utilities are
considered to be of adequate supply for the Subject improvements. The building
has high-speed internet access and fiber optics.

Shape/Topography

The Subject tracts are slightly irregular shaped with a level to slightly
sloping topography. The topography is considered adequate for proper drainage.
The tracts are situated basically at the street grade of Greenville Avenue and
Collins Blvd. The tract is slightly +/-20' below the street grade of Collins
Blvd., however, it is basically at the street grade of the Greenville Avenue
access road.

Flood Plain

According to the flood plain map provided by the Federal Emergency Management
Agency (Panel #480184-0015C, dated July 2, 1991. No portion of the tract is
located in the 100-year flood plain. The owner's representative stated that
there have been no historical flood problems. Based on the surrounding
development, the Subject is not negatively affected by flood plain.


Humphries & Associates               IV - 2                         D-7U/04-1991
<PAGE>

Subject Property, continued


Easements

Various easements are situated on the Subject Property. These easements are not
considered to have a detrimental effect on the development potential of the
Subject Property tract. No other easement or private deed restrictions were
noted during the course of this appraisal. According to the survey/site plan
conducted by Brittain & Crawford dated March 1, 2002 and Chicago Title Insurance
Company Title Policy dated April 1, 1998, there are no other easements,
encroachments or restrictions negatively affecting the property.

Neighboring Land Uses

The land uses immediately surrounding the Subject are the following.

   North     Vacant land and office/tech/industrial development
   East      Restaurant, industrial and high-tech development to the east across
             Alma Road
   South     Vacant land to the south across Collins Blvd.
   West      DART rail line to the west across Greenville Avenue, restaurant and
             office development across Central Expressway.

Zoning

The Subject Property is zoned "PD" Planned Development as outlined in Ordinance
3123-A and 3277-A per the City of Richardson (see Addenda for complete
ordinance). Under the terms of the "PD", the following conditions apply.

1.    All development shall be in substantial conformance with the attached
      Conceptual Site Plan (Market Exhibit "B").

2.    Factory certified installation of commercial grade Class PB Exterior
      Insulation and Finish System (EIFS) shall be permitted on the exterior
      walls of the hotel above the first floor level only. The first floor level
      and the pavilion shall be constructed of 100% masonry materials and
      recladding of the first floor of the hotel shall be prohibited.

3.    A standing seam metal roof shall be required for the hotel.

4.    No drive-through or drive-up food service shall be permitted in the
      proposed restaurant.


Humphries & Associates               IV - 3                         D-7U/04-1991
<PAGE>

Subject Property, continued


5.    A minimum 10' landscape strip shall be provided adjacent to all streets.

6.    The US-75 Amenities Guidelines shall be implemented along Greenville
      Avenue.

7.    Where required for widening or site access, turn lanes and street
      easements shall be granted to the City of Richardson in lieu of
      right-of-way dedication.

8.    Prior to the issuance of a certificate of occupancy for the first building
      on the property, the following street improvements shall be made at the
      developer's cost:

      a.    Left-turn lane on Greenville;

      b.    Improvements to Alma Road (southbound lanes of Alma, including
            medians and turn lanes);

      c.    Improvements to the ramp between Collins Blvd. and Greenville Avenue
            (resulting in three continuous lanes).

9.    In addition to the turn lanes and deceleration lanes shown on the
      Conceptual Site Plan, a right-turn lane in Greenville Avenue shall be
      provided at the northernmost access drive into the site.

10.   A limited-service hotel shall be considered a permitted use on this
      property.

The following additional use is permitted and authorized for the excess and
tract.

1.    Assemble/collect/reprogram/calibrate/merge and integrate
      electronic/technical hardware with communications/scientific software,
      provided that:

      a.    All such activity shall take place completely within the building.

      b.    All materials shall be stored indoors.

      c.    All loading areas shall be in compliance with Chapter 16 of the City
            of Richardson Code of Ordinances."

Minimum No. of Parking Spaces*          1 per 300 SF of NRA, 996 required spaces

*Actual number of marked parking spaces is 1,143 (required - 996). Handicapped
spaces and a ramp were noted.


Humphries & Associates               IV - 4                         D-7U/04-1991
<PAGE>

Subject Property, continued


For our analysis, the Subject is considered to be a legal, conforming use based
on existing zoning restrictions.

                                  Improvements

The building site is improved with an 11-story, Class A office building
completed in August of 1999. The improvements contain 298,766 SF of net rentable
area and a gross building area of 322,264 SF. The building has a common area
factor of 8.12%. Based on the Subject's tenant configuration, the usable area is
274,497 SF. There is a six-level (five floors above and one floor below grade)
parking structure containing +/-314,642 SF located to the south of the office
building. The building's FAR is 1.05:1, not including the parking structure.

A complete set of building plans was not provided to the appraisers. The major
components of construction were identified from personal inspection and are
summarized as follows:

                              Construction Summary

Foundation

Reinforced 5" concrete slab with concrete reinforced piers.

Framing

Reinforced concrete frame (concrete pan slabs and joists).

Exterior Walls

6" pre-cast off-white cast concrete panels. The walls have 31/2batt insulation.
Windows are double pane in aluminum frames.

Roof

4-ply built-up asphalt over R-20 insulation on concrete roof structure.


Humphries & Associates               IV - 5                         D-7U/04-1991
<PAGE>

Subject Property, continued


HVAC

The building is air-conditioned via a chillwater system with a 6,153 SF
penthouse located machine room, consisting primarily of electric motor driven
centrifugal water chillers, circulating water pumps, cooling tower, central
station air handling unit and temperature control air compressor. The total
tonnage installed is approximately 900 tons within two chillers. Each floor has
an air-handling unit.

Plumbing

Assumed to be standard per code. One set of mens' and womens' restrooms per
floor. The restrooms appear to be handicapped accessible and are considered in
compliance with ADA. Hot water is provided by two 80 gallon electric heaters.
Each floor has 3 water fountains.

Electrical

Assumed to be standard per code and the wiring is assumed to be copper. The
building is served with 8,000 amp, 480 volt, 3 phase electrical service. Each
floor has a 480/277-volt distribution panel for general lighting, HVAC equipment
and tenant power distribution.

Lighting

The interior lighting is a combination of fluorescent, circular incandescent
lights and ceiling-mounted incandescent lights. The exterior and parking lot and
structure are lighted.

Interior Walls

Gypsum board, taped, textured and painted or textured wallpaper over metal
studs. The lobby has Mahogany panels.

Floor

The lobby area has granite flooring. The majority of the building is carpeted.
The breakroom and kitchen areas are vinyl or ceramic tile. The restrooms have
ceramic tile floors.


Humphries & Associates               IV - 6                         D-7U/04-1991
<PAGE>

Subject Property, continued


Ceiling

Suspended ceilings in office areas with some gypsum board, taped and painted in
the common areas.

Parking

The property contains a total of 1,143 parking spaces. There are 964 spaces in
the six-story (5 above and 1 below ground) parking garage plus an additional 179
surface spaces. The parking ratio is 1 space per 261 SF of rentable area. The
parking structure is poured-in-place reinforced concrete and contains +/-314,642
SF with two sump pumps. All paving is concrete. Handicapped spaces and access
ramp were noted.

Suite Doors

Solid wood doors in metal frames. Interior office ceilings are 9' 0" and all
interior doors are 9' solid wood in metal frame. All door hardware is considered
above building standard.

Stairwells

There are two fire-rated stairways on each floor.

Security System

The building has hours of 7 AM to 7 PM on Monday through Friday and 7 AM to 1 PM
on Saturday. Card entry access after hours.

Fire Protection

The building includes a complete multiplex system located in a central control
station that houses all fire panels and communication devices. An emergency
generator provides backup to all emergency life safety systems, including but
not limited to, fire protection and fire alarm systems, emergency exit lighting,
stair pressurization system, fire pump and elevators. The building and parking
garage are 100% wet sprinklered. Numerous fire extinguishers and alarm pulls
were noted.


Humphries & Associates               IV - 7                         D-7U/04-1991
<PAGE>

Subject Property, continued


Elevators

Five electric passenger elevators with a 3,500 lb. capacity and one electric
freight elevator with a 5,000 lb. capacity. All of the elevators were
manufactured by Otis Elevators.

Kitchen

The restaurant space has a full service kitchen with grease trap, floor drains
and standard commercial kitchen equipment and appliances.

Other

Good landscaping with sprinkler system. One dock high loading door with access
to the freight elevator. The building is wired for high-speed internet access
and has fiber optic capability.

Deferred Maintenance

As of the inspection date (July 8, 2004), the property was found to be in
physically very good condition. According to Chris Shingleton (building
engineer), no significant items of deferred maintenance exist on the property.
He indicated that the building had no latent roof, foundation or environmental
problems.

Environmental Hazards

No environmental hazards were noted during the course of the appraisal.
Management reports that the property had no material environmental hazards.
However, the appraiser is not qualified to detect such hazards. A Phase I
Environmental Site Assessment was not available to the appraisers. According to
Chris Shingleton, the Subject does not have any environmental problems. This
appraisal assumes no material environmental contamination exists. (Please note
Assumptions and Limiting Conditions No. 13).


Humphries & Associates               IV - 8                         D-7U/04-1991
<PAGE>

Subject Property, continued


American Disabilities Standards

Upon inspection, parking spaces designated for handicap use were noted. There is
an access ramp from the parking area to the building. The restrooms appear to be
in ADA compliance. The extent of ADA compliance is unknown. (Please note
Assumptions and Limiting Conditions No. 16).

Personal Property

This appraisal does not include a value on personal property such as office
furniture, kitchen appliances or tenant equipment. Only the real property of the
Subject is included in this appraisal.

Leases

The Subject Property is 100% leased to three tenants. The leases range from
$22.00/SF to $24.87/SF gross plus electricity with a base year stop. The average
contract rent is $22.60/SF gross plus electricity.

The following is a brief of the Inet and Macromedia lease.

                                 Brief of Lease

Lessor:                            Collins Crossing, Ltd.
Lessee:                            Macromedia, Inc.
Square Footage:                         55,394 NRSF
                                        53,000 SF (Usable)
Floor:                                  4th & 5th
Suite:                                  400 & 500
Date:                                   August 30, 2000 to February 28, 2006
Lease Term:                             66 Months


Humphries & Associates              IV - 9                         D-7U/04-1991
<PAGE>

Subject Property, continued


Rental:                            Months (Date)   Annual Rent/SF   Monthly Rent
                                   -------------   --------------   ------------

                                       3 (6/01/04)      $24.87       $  114,788
                                       3 (9/01/04)      $24.89       $  114,913
                                       3 (12/1/04)      $24.92       $  115,038
                                       3 (3/01/05)      $24.96       $  115,163
                                       9 (6/04/05)      $24.76       $  115,213
                                       -----------       -----        ---------

Total                                 66                $24.76       $7,259,991

Expense Stop:                      $6.25/SF

Reimbursable Expenses:             All expenses and disbursements of
                                   every kind which landlord incurs, pays or
                                   become obligated to pay in connection with
                                   the ownership, operation, and maintenance of
                                   the building (including the associated
                                   parking facilities), determined in
                                   accordance with generally accepted federal
                                   income tax basis accounting principles
                                   consistently applied.

Lease Commissions:                 6.5% (4.5% to outside broker & 2.0% to
                                   inside broker)

Finishout Allowance:               $20.00/SF

Renewal Option:                    One 5-year term at market rates

Rights of Assignment:              No assignment or sublease without permission
                                   of landlord; not to be unreasonably withheld.

Security:                          $113,413

Lease Improvements:                No alterations without landlord consent.

Notes:                             The premises contain 40,000 SF initially (6
                                   month period), will contain 47,697 SF (6
                                   month period) after the First Must-Take
                                   Expansion Obligation and will contain 55,394
                                   SF (54 month period) after the Second
                                   Must-Take Expansion.


Humphries & Associates              IV - 10                        D-7U/04-1991
<PAGE>

Subject Property, continued


                                 Brief of Lease

Lessor:                            Collins Crossing, Ltd.
Lessee:                            Inet Technologies, Inc.
Square Footage:                    241,372 NRSF
                                        233,849 SF (Usable)
Floor:                                  1st, 2nd, 3rd, 6th, 7th, 8th, 9th, 10th
                                        & 11th
Suite:                                  100, 200, 300, 600, 700, 800, 900, 1000
                                        & 1100
Date:                                   Varies to June 30, 2010. (Suite 200
                                        began on 3/1/00; Suites 100, 700, 800,
                                        900, 1000 & 1100 began on 7/1/00, Suite
                                        600 began on 10/1/00 and Suite 300 began
                                        on 4/1/01.
Lease Term:                             120 Months

<TABLE>
<CAPTION>
Rental:                            Months             Annual Rent/SF     Monthly Rent
                                   ------             --------------     ------------

<S>                                <C>                     <C>             <C>
                                   Lease Start             $22.00          $442,515
                                   Escalation (7/1/05)     $24.00          $482,744
</TABLE>

Expense Stop:                      $6.47/SF

Reimbursable                       Expenses: All expenses and disbursements of
                                   every kind which landlord incurs, pays or
                                   become obligated to pay in connection with
                                   the ownership, operation, and maintenance of
                                   the building (including the associated
                                   parking facilities), determined in
                                   accordance with generally accepted federal
                                   income tax basis accounting principles
                                   consistently applied.

Lease Commissions:                 6.5% (4.5% to outside broker & 2.0% to inside
                                   broker)

Finishout Allowance:               $25.00/SF

Renewal Option:                    Two 5-year term at market rates

Rights of Assignment:              No assignment or sublease without permission
                                   of landlord; not to be unreasonably withheld.

Lease Improvements:                No alterations without landlord consent.

Notes:                             The developer received City of Richardson
                                   incentives of $600,000. The tenant has
                                   exclusive building signage rights. The
                                   tenant paid $250,000 for 102 parking spaces
                                   along the front of the building.


Humphries & Associates              IV - 11                        D-7U/04-1991
<PAGE>

Subject Property, continued


The following data reflects the square footages for the Subject Property.

               Net Rentable                     298,766 SF
               Usable Area                      274,497 SF
               Gross Area                       322,264 SF

The July 2004 rent roll summary provided by the client follows.


Humphries & Associates              IV - 12                        D-7U/04-1991
<PAGE>

Subject Property, continued


<TABLE>
<CAPTION>
===============================================================================================================================
                                                           Rent
                                                         Increase      Annual                            Exp.         Base Yr.
     Tenant        Suite #      NRA          Date          Date        Rent SF        Annual Rent    Recovery SF**    Stop SF
- -------------------------------------------------------------------------------------------------------------------------------
<S>                 <C>      <C>           <C>           <C>            <C>           <C>                <C>            <C>
Inet                 100      15,476       7/1/00-                      $22.00        $  340,472         $1.83          $6.47
                                           6/30/10        7/1/05        $24.00        $  371,424
- -------------------------------------------------------------------------------------------------------------------------------
Inet                 200      26,046       3/1/00-                      $22.00        $  573,012         $1.83          $6.47
                                           6/30/10        7/1/05        $24.00        $  625,104
- -------------------------------------------------------------------------------------------------------------------------------
Inet                 300      28,550       4/1/01-                      $22.00        $  628,100         $1.83          $6.47
                                           6/30/10        7/1/05        $24.00        $  685,200
- -------------------------------------------------------------------------------------------------------------------------------
Inet                 600      28,550       10/1/00-                     $24.00        $  685,200         $1.83          $6.47
                                           6/30/10        7/1/05        $26.00        $  742,300
- -------------------------------------------------------------------------------------------------------------------------------
Inet                 700      28,550       7/1/00-                      $22.00        $  628,100         $1.83          $6.47
                                           6/30/10        7/1/05        $24.00        $  685,200
- -------------------------------------------------------------------------------------------------------------------------------
Inet                 800      28,550       7/1/00-                      $22.00        $  628,100         $1.83          $6.47
                                           6/30/10        7/1/05        $24.00        $  685,200
- -------------------------------------------------------------------------------------------------------------------------------
Inet                 900      28,550       7/1/00-                      $22.00        $  628,100         $1.83          $6.47
                                           6/30/10        7/1/05        $24.00        $  685,200
- -------------------------------------------------------------------------------------------------------------------------------
Inet                1000      28,550       7/1/00-                      $22.00        $  628,100         $1.83          $6.47
                                           6/30/10        7/1/05        $24.00        $  685,200
- -------------------------------------------------------------------------------------------------------------------------------
Inet                1100      28,550       7/1/00-                      $22.00        $  628,100         $1.83          $6.47
                                           6/30/10        7/1/05        $24.00        $  685,200
- -------------------------------------------------------------------------------------------------------------------------------
La Cuisine Cafe      110       2,000       2/11/02-                     $ 8.40        $   16,800         Base Year      $7.08
                                           2/28/09        3/1/07        $10.80        $   21,600
- -------------------------------------------------------------------------------------------------------------------------------
Macromedia           400/     55,394       8/30/00-                     $24.87        $1,377,456         $2.75          $6.25
                     500                   2/28/06       09/01/04       $24.89        $1,378,956
                                                         12/01/04       $24.92        $1,380,456
                                                         03/01/05       $24.95        $1,381,956
                                                         06/01/05       $24.96        $1,382,556
- -------------------------------------------------------------------------------------------------------------------------------
Total                        298,766                                                  $6,761,540
                                                                                      $    22.63*
===============================================================================================================================
</TABLE>

      *Average contract rental rate.
      **Expense recoveries include individual unit electricity and operating
      expenses.


Humphries & Associates              IV - 13                        D-7U/04-1991
<PAGE>

Subject Property, continued


The building is 100% leased to two primary tenants. The following is a brief
discussion of these tenants.

Inet Technologies, Inc. (NASDAQ: INET) is a global provider of communications
software products that enable communications carriers to more strategically and
profitably operate their businesses. Its Unified Assurance Solution and
Diagnostics products help customers reduce capital and operating expenditures,
improve customer acquisition and retention rates, protect and grow revenues and
more quickly and effectively develop products or services. The Unified Assurance
Solution includes the GeoProbe, Orion and Beamer products. These products
capture actual network traffic and then process, correlate and analyze the
traffic data to create and display customer experience information, service
quality metrics and a network-wide view. The Company's Diagnostics products
include the Spectra2, Spectra and Spectra Trunk Tester, which assist equipment
manufacturers and communications carriers in designing, deploying and
maintaining current and next-generation networks and network elements.

Revenues for the year ending December 31, 2003 were $103.8 million versus
revenues of $101.9 million for 2002. This represents a 1.9% increase. The 2003
net income was $11.7 million. The company has 39.2 million shares of outstanding
stock with a market capitalization of $480.84 million. The company ended the
year with $118.5 million in cash and cash equivalents and remains free of
long-term debt. Inet has approximately employees and is based in Richardson,
Texas.

Inet has agreed to be purchased by Tektronix, Inc. (NYSE: TEK) with a scheduled
closing in September 2004. Tektronix will buy all of Inet's outstanding stock
for about $12.50 per share, consisting of $6.25 in stock and $6.25 in cash. The
price is a 17 percent premium on Inet's closing price of $10.70 on Tuesday June
29, 2004. With the deal, Tektronix will essentially double its telecom business
to $200 million. And, with its broader technology offerings, it should be able
to better grow the business.


Humphries & Associates              IV - 14                         D-7U/04-1991
<PAGE>

Subject Property, continued


Tektronix, Inc. manufactures, markets and services test, measurement and
monitoring solutions to a wide variety of customers in many industries,
including computing, communications, semiconductors, broadcast, education,
government, military/aerospace, research, automotive and consumer electronics.
The Company enables its customers to design, manufacture, deploy, monitor and
service next-generation global communications networks, computing and advanced
technologies. Revenue is derived principally through the development and
marketing of a range of products including oscilloscopes; logic analyzers;
signal sources; communication test equipment, including mobile protocol test,
wireless field test and spectrum analysis equipment; video test equipment, and
related components, support services and accessories.

Revenues for the year ending May 2004 were $920.6 million versus revenues of
$791.0 million for the year ending May 2003. This represents a 16% increase. The
2003 net income was $21.2 million. The company has 84.63 million shares of
outstanding stock with a market capitalization of $2.53 billion. The company
ended 2003 with $190.4 million in cash and cash equivalents with approximately
$55 million in long-term debt.

Macromedia Inc. is an independent software company providing software that
empowers designers, developers and business users to create and deliver
effective user experiences on the Internet, fixed media and wireless and digital
devices. The Company's integrated family of technologies enables the development
of Internet solutions, including Websites, rich media content and Internet
applications across multiple platforms and devices. Macromedia serves three
markets: the Designer and Developer, the Business User and the Consumer. In
January 2003, the Company acquired Presedia, Inc., a provider of online
presentation and e-learning solutions for sales, marketing, corporate
communications and online training. In December 2003, the Company acquired eHelp
Corporation, a company engaged in help authoring.

Macromedia had sales for the year ending March 2003 of $336.9 million. Sales for
the year ending March 2004 increased 9.8% to $369.8 million. Net income for the
year ending March 2004


Humphries & Associates              IV - 15                         D-7U/04-1991
<PAGE>

Subject Property, continued


was $41.5 million. The company has 68.25 million shares of outstanding stock
with a market capitalization of $1.465 billion.

The company has cash and equivalents of $92.7 million as of March 2004 with no
long-term debt. Standard & Poors rates Macromedias financial strength as "C".

Based on Inet's and Tektronix, Inc. cash, cash equivalents and minimal long-term
debt, Inet is considered a good long-term tenant. Macromedia and LaCuisine Cafe
are considered average tenants. Since Inet accounts for 81% of the building, the
Subject Property is considered to have an average to good credit tenant base.

Lease Structure

Inet has a base year stop of $6.47/SF with actual 2003 expense recoveries of
$1.83/SF. Macromedia has a base year stop of $6.25/SF with actual 2002 expense
recoveries of $2.75/SF. LaCuisine Cafe has a base year expense stop of $7.08/SF.

According to Jeff Carter (Building Manager), the asking rent for any vacant
space is $20.00/SF gross plus electricity with a base year operating expense
stop. The Subject's actual tenant improvement allowance for Inet and Macromedia
ranged from $20.00/SF to $25.00/SF for first generation finishout.

Mr. Carter stated that they project spending $12.00/SF - $15.00/SF finishout on
new leases and $8.00/SF - $12.00/SF for renewals based upon the entire building
being second-generation space.

The typical lease commission is 6.5% with 4.5% paid to an outside broker and
2.0% paid to the inside broker.


Humphries & Associates              IV - 16                        D-7U/04-1991
<PAGE>

Subject Property, continued


As of July 2004, Inet had vacated the 3rd, 6th and 7th floors containing 85,650
SF (28,550 SF per floor). According to company representatives, Inet will
reoccupy the space after the sale to Tektronix, Inc. has been completed.

Macromedia had vacated the 4th floor containing 27,697 SF and has subleased the
entire floor to ASG Insurance Company at +/-$17.00/SF plus electricity "As Is"
until February 28, 2006 (remaining lease term).

ASG reportedly wants to extend the lease beyond the sublease term and expand
into the 27,697 SF Macromedia space on the 5th floor. As of the date of
appraisal, no tenant (Inet & Macromedia) rent payments have been delinquent.

Parking Revenue

As of the date of this appraisal, no parking revenue is generated.

Conclusions

The Subject Property consists of an 11-story office building containing 298,766
NRSF and a six-level parking garage located on the northeast corner of
Greenville Avenue and Collins Blvd. in the City of Richardson, Dallas County,
Texas. The improvements are considered to be in very good condition. Please
refer to the following pages for various exhibits concerning the Subject
Property.


Humphries & Associates              IV - 17                        D-7U/04-1991
<PAGE>

Subject Property, continued


                                   Tax Exhibit

In Texas, all real estate is assessed at 100% of appraised value. Property
values are set by central appraisal districts for all taxing authorities within
that district.

The 2004 taxes for the Subject are shown below based on the certified 2004
assessed value and certified 2003 tax rates provided by the Dallas County
Appraisal District. The following is a summary of the 2004 assessed value.

================================================================================
                      Office Building - #420487200101A0000
================================================================================
         Year          Improved Value          Land Value       Total Value
- --------------------------------------------------------------------------------
         2004           $24,481,740            $2,268,260       $26,750,000
                         $81.94/SF              $8.00/SF         $89.53/SF
================================================================================

The Subject Property is located within the taxing jurisdictions of Dallas
County, the City of Richardson and the Richardson ISD. The following is a
breakdown of the real estate taxes for the Subject Property.

================================================================================
    Taxing Authority         2004 Assessed Value     2003 Tax Rate      Total
- --------------------------------------------------------------------------------
City of Richardson                $26,750,000           $0.47785       $127,825
- --------------------------------------------------------------------------------
Richardson ISD                    $26,750,000           $1.82000        486,850
- --------------------------------------------------------------------------------
Dallas County*                    $26,750,000           $0.54116        144,760
- --------------------------------------------------------------------------------
Total                             $26,750,000           $2.83901       $759,435
                                  $ 89.53/SF                           $2.54/SF
================================================================================

*Includes community college and hospital district.

Based on our appraised value, it is our conclusion that the 2004 assessed value
is considered favorable. According to the Dallas County Tax Assessor, there are
no past due taxes.


Humphries & Associates              IV - 18                        D-7U/04-1991
<PAGE>

Subject Property, continued


                                   Tax Exhibit

The following information pertains to the Subject Excess Land.

================================================================================
                        Excess Land - #420487200102A0000
================================================================================
         Year         Improved Value        Land Value           Total Value
- --------------------------------------------------------------------------------
         2004               0               $1,060,540            $1,060,640
                            0               $ 6.85/SF             $ 6.85/SF
================================================================================

The Subject Property is located within the taxing jurisdictions of Dallas
County, the City of Richardson and the Richardson ISD. The following is a
breakdown of the real estate taxes for the Subject Property. The real estate
taxes are based on 2003 tax rates and 2004 assessed values.

The following is a breakdown of the real estate taxes for the Subject Property.

================================================================================
      Taxing Authority      2004 Assessed Value      2003 Tax Rate         Total
- --------------------------------------------------------------------------------
City of Richardson              $1,060,540             $0.47785          $ 5,068
- --------------------------------------------------------------------------------
Richardson ISD                  $1,060,540             $1.82000           19,302
- --------------------------------------------------------------------------------
Dallas County*                  $1,060,540             $0.54116            5,739
- --------------------------------------------------------------------------------
Total                           $1,060,540             $2.83901          $30,109
================================================================================

*Includes community college and hospital district.

There are no past due taxes and the assessed value is considered low based on
the value estimate contained in this report.


Humphries & Associates              IV - 19                        D-7U/04-1991
<PAGE>

                          [PICTURE OF SUBJECT PROPERTY]

                                SUBJECT PROPERTY


                          [PICTURE OF SUBJECT PROPERTY]

                                SUBJECT PROPERTY


Humphries & Associates              IV - 20                        D-7U/04-1991
<PAGE>

                               [PICTURE OF LOBBY]

                                      LOBBY


                           [PICTURE OF INTERIOR VIEW]

                                  INTERIOR VIEW


Humphries & Associates              IV - 21                        D-7U/04-1991
<PAGE>

                           [PICTURE OF INTERIOR VIEW]

                                  INTERIOR VIEW


                           [PICTURE OF INTERIOR VIEW]

                                  INTERIOR VIEW


Humphries & Associates              IV - 22                        D-7U/04-1991
<PAGE>

                           [PICTURE OF PARKING GARAGE]

                                 PARKING GARAGE


                        [PICTURE OF SURFACE PARKING AREA]

                              SURFACE PARKING AREA


Humphries & Associates              IV - 23                       D-7U/04-1991
<PAGE>

                            [PICTURE OF EXCESS LAND]

                                   EXCESS LAND


                            [PICTURE OF EXCESS LAND]

                                   EXCESS LAND


Humphries & Associates              IV - 9                         D-7U/04-1991
<PAGE>

                         [PICTURE OF GREENVILLE AVENUE]

                                GREENVILLE AVENUE


                             [PICTURE OF ALMA ROAD]

                                    ALMA ROAD


Humphries & Associates              IV - 25                        D-7U/04-1991
<PAGE>

                            [PICTURE OF COLLINS ROAD]

                                  COLLINS ROAD


Humphries & Associates              IV - 26                        D-7U/04-1991
<PAGE>

                               City of Richardson


                           [MAP OF RICHARDSON, TEXAS]



Humphries & Associates              IV - 27                        D-7U/04-1991
<PAGE>

                                    Zone Map


                 [ZONE MAP SHOWING LOCATION OF COLLINS CROSSING]



Humphries & Associates              IV - 28                        D-7U/04-1991
<PAGE>

                        Survey/Site Plan - Improved Site


                     [SURVEY/SITE PLAN OF COLLINS CROSSING]



Humphries & Associates              IV - 29                        D-7U/04-1991
<PAGE>


                 [FLOOR PLAN OF COLLINS CROSSING: GROUND FLOOR]



Humphries & Associates              IV - 30                        D-7U/04-1991
<PAGE>

                                Second Floor Plan


                 [FLOOR PLAN OF COLLINS CROSSING: SECOND FLOOR]



Humphries & Associates              IV - 31                        D-7U/04-1991
<PAGE>


                        [FLOOR PLAN OF COLLINS CROSSING]



Humphries & Associates              IV - 32                        D-7U/04-1991
<PAGE>

                               Eleventh Floor Plan


                [FLOOR PLAN OF COLLINS CROSSING: ELEVENTH FLOOR]



Humphries & Associates              IV - 33                        D-7U/04-1991
<PAGE>

                                    Penthouse


                 [FLOOR PLAN OF COLLINS CROSSING: PENTHOUSE]



Humphries & Associates              IV - 34                        D-7U/04-1991
<PAGE>


                     [DRAWING OF COLLINS CROSSING BUILDING]


Humphries & Associates              IV - 35                        D-7U/04-1991
<PAGE>

                        Survey/Site Plan - Excess Land


               [SURVEY/SITE PLAN OF COLLINS CROSSING EXCESS LAND]




Humphries & Associates              IV - 36                        D-7U/04-1991
<PAGE>

                              HIGHEST AND BEST USE


Highest and Best Use may be defined as that legal use which will yield the
highest net present value to the land, or that land use which may reasonably be
expected to produce the greatest net return over a given period of time.

The principle of Highest and Best Use determination is a function of
neighborhood land use trends, property size, shape, zoning, and other physical
factors, as well as the market environment in which the property must compete.
Investors continually attempt to maximize profits on invested capital. The
observation of investor activities in the area is an indication of that use
which can be expected to produce the greatest net return to the land.

The principle of conformity holds, in part, that conformity in use is usually a
highly desirable adjunct of real property, since it creates and/or maintains
maximum value, and it is maximum value which affords the owner maximum returns.

In arriving at the estimate of Highest and Best Use, the Subject Site is
analyzed "as if vacant and available for development" and "as improved".

"AS IF" VACANT

Possible Use

The first constraint imposed on the Subject tract is the possible use as
dictated by the physical aspects of the site. The size and location within a
given block are the most important determinants of value. In general, the larger
the tract, the greater its potential to achieve economies of scale and
flexibility in development.

The size of the parcel, considered within the constraints of the zoning has
considerable influence on its ultimate development. The key determinant in
developing the site is the permitted size of the project. More land permits
higher density development and higher floor to area ratios permit


Humphries & Associates                V - 1                         D-7U/04-1991
<PAGE>

Highest and Best Use, continued


more floor area to land. When there is more land, the structure tends to rise in
proportion to the size of the tract. Location is important when considering the
Subject's proximity to open plazas, retail trade areas, work force areas,
residential areas, public transportation, etc.

The Subject site contains 10.061 acres of land located on the northeast corner
of Greenville Avenue and Collins Blvd. with additional frontage along the west
side of Alma Road in the City of Richardson. The tract is irregular in shape
with a level to slightly sloping topography. The tract is not negatively
affected by the 100-year flood plain. Therefore, the Subject's development
potential is not negatively affected by its shape or flood hazard, and utilities
are available to the site.

The Subject is considered to have generally good physical characteristics for
most types of office development.

Legally Permissible

The potential use of a property is affected by public restrictions (zoning,
building codes, environmental regulations, etc.) and by private restrictions
(deed restrictions). According to the title policy and survey, there are no
easements or restrictions affecting the use of the Subject Property. No other
private restrictions were noted during the course of this appraisal. Pubic
restrictions affecting the use of the Subject Property include the allowable
land uses and development restrictions in the PD-3123-A and 3277-A by the City
of Richardson. (See Subject Property section for zoning restrictions).

We assume that only common restrictions (utility easements, building setback
requirements, etc.) exist, and they are not of any consequence to hinder the
development of the site.


Humphries & Associates                V - 2                         D-7U/04-1991
<PAGE>

Highest and Best Use, continued


Financially Feasible/Maximally Productive

The potential uses of a property that meet the criteria of being physically
possible and legally permissible are analyzed further to determine financial
feasibility. If a potential use is capable of satisfying a required rate of
return on investment and providing a sufficient return on the land, the use is
financially practical within some price limit.

The land use which meets the criteria of being physically possible and legally
permissible is office development. Uses on similar land tracts have been
improved with office development.

Market Overview

The following chart shows the estimated years supply of office space in DFW
RealSmart's Richardson Submarket.

                   Office Space Supply as of 1st Quarter 2004

Existing Space                                                  7,114,064  SF
Less: Occupied Space (74%)                                     -5,264,407  SF
                                                               ----------

Current Supply                                                  1,849,657  SF
Plus: Projected New Supply of Space                                     0  SF
                                                               ----------

Total Amount of Space Available                                 1,849,657  SF

Average 6.25 Year Absorption                                       50,647  SF

Estimated Supply of Office Space                                    36.52  Years

The submarket's occupancy of 74% is below stabilized levels. The Richardson
submarket has absorbed 316,546 SF since 1998. However, the submarket experienced
negative absorption of -368,554 SF, -590,465 SF and -418,085 SF during 2001,
2002 and 2003, respectively due to the national and regional recession. During
the first quarter the submarket experienced strong absorption of 332,324 SF.
Discussions with the leasing agents of the rent comparables indicate that the
leasing activity has dramatically increased during 2004 because of the
recovering economy. Recent construction in the Dallas area has involved
speculative, pre-leased and owner-occupied facilities.


Humphries & Associates                V - 3                         D-7U/04-1991
<PAGE>

Highest and Best Use, continued


"As Vacant" Highest and Best Use

Comparing the valuations arrived at via the Cost Approach (not including
depreciation) versus the Income and Market Approaches, office development
appears to remain feasible at this time if a property were able to lease to
stabilized levels. However, the market conditions currently indicate an
oversupply of office space in the Subject's neighborhood. It can be reasonably
concluded that the Highest and Best Use of the Subject Property, as vacant and
available to be put to its Highest and Best Use, is for office development at
some future date when market conditions indicate development to be feasible. A
significantly pre-leased or owner-occupied building would be an alternative
highest and best use in today's market environment.

"As Improved"

As mentioned previously, the Subject site is improved with an 11-story office
building containing 298,766 NRSF and a six-level parking garage. The property
was completed in August of 1999 and is currently in very good condition.

The current Subject improvements represent a legal conforming efficient use of
the Subject site. The building is adequately competing in the marketplace for
tenants and is currently 100% leased, generally on a long-term basis.
Additionally, there is not an alternative legal use that would justify
redevelopment of the Subject site at this time. Therefore, it is the appraisers'
opinion that the current improvements represent the Highest and Best Use of the
Subject Property as improved.


Humphries & Associates                V - 4                         D-7U/04-1991
<PAGE>

                                 LAND VALUATION


The valuation estimate for the Subject land tract is based upon the analysis of
similar land transactions found in the market in which the Subject Property must
compete.

These sales are found by a search of the Deed Records or by conversations with
Brokers or other real estate professionals. In Texas, there is no "full
disclosure" law - we must verify the sales price by conversation with the buyer,
seller, or other involved persons.

Major dissimilarities between the sales and the sale price are generally as
follows:

      TIME - The sales are analyzed to determine the amount of appreciation or
      decline in land values as time has progressed. Older sales are adjusted
      accordingly to reflect value levels.

      LOCATION - The sales are compared to the Subject Property to isolate any
      locational differences. If a sale is considered to be superior in location
      when compared to the Subject Property, a downward adjustment is made to
      the sale. The opposite occurs when the sale is considered to be in an
      inferior location - upward adjustment.

      UTILITY - The comparative differences here generally involve size, shape,
      utilities, flood prone areas, topography, road frontage or other items
      that affect the use of the sales and the Subject Property.

Our policy is to include all similar sales, but to adjust only the most
comparable sales. The rationale being that the most comparable sales require
less adjustments and result in more reliable value estimates, but we feel the
reader should have the benefit of knowing the general market.

The market sales are on the following pages.


Humphries & Associates               VI - 1                         D-7U/04-1991
<PAGE>

                                   LAND SALE 1


Location:                  Northeast corner Campbell Road and Campbell Creek
                           Blvd., Richardson

Grantor:                   State Farm Mutual Auto Insurance Co.

Grantee:                   Echo Campbell Creek, Ltd.

Sale Date:                 2/8/01

Size:                      2.544 acres or 110,800 SF

Zoning:                    IM-1

Legal Desc.:               Lot 1, Block B, Campbell Creek Addition, Richardson

Recordation:               2001030/3159

Price:                     $889,000

Per Unit:                  $8.02/SF

Terms:                     Cash to Seller

Verified:                  Richard Payne, Buyer (972/235-0281)

Frontage:                  Campbell and Campbell Creek

Uses:                      Future Development

Utilities:                 All Available

Flood Area:                None

Topography:                Level

Shape:                     Rectangular

Comments:                  This tract is located approximately 3,000' northeast
                           of the Subject Property.

Mapsco:                    D-8S


Humphries & Associates               VI - 2                         D-7U/04-1991
<PAGE>

                                   LAND SALE 2


Location:                  Southwest corner Central Expressway (US-75) and
                           Goldmark Drive, Dallas

Grantor:                   75 & Goldmark, LLC

Grantee:                   Chrysler Realty Corp.

Sale Date:                 3/2/01

Size:                      6.188 Acres or 269,534 SF

Zoning:                    MU-3

Legal Desc.:               Part of Block B/7761, Keystone Park Section 5, Dallas

Recordation:               2001047/975

Price:                     $2,695,340

Per Unit:                  $10.00/SF

Terms:                     Cash to Seller

Verified:                  James Vosburgh, Seller (214/360-1700)

Frontage:                  Central Expressway and Goldmark (limited visibility
                           on US-75)

Uses:                      Car Dealership

Utilities:                 All Available

Flood Area:                None

Topography:                Level to Sloping

Shape:                     Irregular

Comments:                  This tract is located approximately 3 miles southwest
                           of the Subject Property.

Mapsco:                    D-16Q


Humphries & Associates               VI - 3                         D-7U/04-1991
<PAGE>

                                   LAND SALE 3


Location:                  Northeast corner Collins Road and Alma Road,
                           Richardson

Grantor:                   A. H. Roddy company

Grantee:                   Tess Partners, Ltd.

Sale Date:                 5/1/01

Size:                      1.672 Acres or 72,832 SF

Zoning:                    Commercial

Legal Desc.:               Block C, Central Park Addition, Richardson

Recordation:               2001089/5498

Price:                     $582,576

Per Unit:                  $8.00/SF

Terms:                     Cash to Seller

Verified:                  George Roddy, Seller

Frontage:                  Collins Blvd. and Alma Road

Uses:                      Improved with a restaurant.

Utilities:                 All Available

Flood Area:                None

Topography:                Level

Shape:                     Rectangular

Comments:                  This tract is located across Alma Road from the
                           Subject Property.

Mapsco:                    D-7V


Humphries & Associates               VI - 4                         D-7U/04-1991
<PAGE>

                                   LAND SALE 4


Location:                  Adjacent to northeast corner George Bush Tollway
                           (SH-190) and Jupiter Road, Plano

Grantor:                   Briar Oaks Properties, Ltd.

Grantee:                   Shinn Hospitality, Ltd.

Sale Date:                 7/31/01

Size:                      3.49 Acres or 152,024 SF

Zoning:                    Commercial

Legal Desc.:               Lots 1 & 2, One-Ninety & Jupiter Addition, Plano

Recordation:               5005/3077

Price:                     $1,502,000

Per Unit:                  $9.88/SF

Terms:                     Cash to Seller

Verified:                  David Hicks, Broker (972/776-7000)

Frontage:                  George Bush Tollway and Jupiter Road

Uses:                      Future hotel development

Utilities:                 All Available

Flood Area:                None

Topography:                Level

Shape:                     Irregular

Comments:                  The tract has +/-337' of frontage along George Bush
                           Tollway and +/-48' of frontage along Jupiter
                           Road.

Mapsco:                    D-8C


Humphries & Associates               VI - 5                         D-7U/04-1991
<PAGE>

                                   LAND SALE 5


Location:                  N/S Campbell Road, east of Coit Road, Richardson

Grantor:                   A.O.C. Land Investment, LLC

Grantee:                   1120 Campbell Road, Ltd.

Sale Date:                 3/4/03

Size:                      1.553 Acres or 67,650 SF

Zoning:                    Commercial

Legal Desc.:               Land in J.W. Curtis Survey, Abstract No. 345,
                           Richardson

Recordation:               2003045/06937

Price:                     $439,725

Per Unit:                  $6.50/SF

Terms:                     Cash to Seller

Verified:                  Jim Jamerson, Broker (214/526-6262)

Frontage:                  Campbell Road

Uses:                      Multi-tenant office building

Utilities:                 All Available

Flood Area:                None

Topography:                Level

Shape:                     Rectangular

Comments:                  The tract was purchased for development of a 13,300
                           SF multi-tenant office building. The location is
                           inferior to the Subject Property.

Mapsco:                    D-6Q


Humphries & Associates               VI - 6                         D-7U/04-1991
<PAGE>

                                   LAND SALE 6


Location:                  NE/S George Bush Tollway (SH-190) service road just
                           southeast of Renner Road, Richardson

Grantor:                   Rosewood Property Company

Grantee:                   Breckenridge Properties, LP

Sale Date:                 6/13/03

Size:                      2.999 Acres or 130,651 SF

Zoning:                    Commercial (I-M)

Legal Desc.:               Lot 1, Block A, 190 Corporate Center, Richardson

Recordation:               5441/3057

Price:                     $882,000

Per Unit:                  $6.75/SF

Terms:                     Cash to Seller

Verified:                  Susan Fish with Seller (214/756-6150)

Frontage:                  George Bush Tollway

Uses:                      Future office development

Utilities:                 All Available

Flood Area:                None

Topography:                Level

Shape:                     Rectangular

Comments:                  The tract is located along the George Bush
                           Tollway and was purchased for development of an
                           office building. The location is inferior to the
                           Subject Property.

Mapsco:                    D-9E


Humphries & Associates               VI - 7                         D-7U/04-1991
<PAGE>

                                   LAND SALE 7


Location:                  NEC Greenville Avenue and Royal Lane, Dallas

Grantor:                   Carter-Royal Partnership, Ltd.

Grantee:                   Shea Commercial Properties, LLC

Sale Date:                 9/26/03

Size:                      5.887 Acres or 256,438 SF

Zoning:                    Commercial

Legal Desc.:               Part of City Block 8143, Dallas

Recordation:               2003193/08858

Price:                     $2,700,000

Per Unit:                  $10.53/SF

Terms:                     Cash to Seller

Verified:                  Buyer (214/696-2020)

Frontage:                  Greenville Avenue and Royal Lane

Uses:                      Future office development

Utilities:                 All Available

Flood Area:                None

Topography:                Level

Shape:                     Irregular

Comments:                  The tract was purchased for development of six
                           one-story office buildings. The east side of the
                           tract is bordered by a creek.

Mapsco:                    D-26G


Humphries & Associates               VI - 8                         D-7U/04-1991
<PAGE>


                                 Land Sales Map


                    [MAP SHOWING LOCATION OF LAND SALES 1-7]



Humphries & Associates               VI - 9                         D-7U/04-1991
<PAGE>

Land Valuation, continued


<TABLE>
<CAPTION>
===========================================================================================================
        Sale #                Date               Size (SF)          Sale Price/SF       Zoning
- -----------------------------------------------------------------------------------------------------------
<S>                           <C>                 <C>                   <C>            <C>
          1                   02/01               110,800               $ 8.02         IM-1
- -----------------------------------------------------------------------------------------------------------
          2                   03/01               269,534               $10.00         MU-3
- -----------------------------------------------------------------------------------------------------------
          3                   05/01                72,832               $ 8.00         Commercial
- -----------------------------------------------------------------------------------------------------------
          4                   07/01               152,024               $ 9.88         Commercial
- -----------------------------------------------------------------------------------------------------------
          5                   03/03                67,650               $ 6.50         Commercial
- -----------------------------------------------------------------------------------------------------------
          6                   06/03               130,651               $ 6.75         Commercial
- -----------------------------------------------------------------------------------------------------------
          7                   09/03               256,438               $10.53         Commercial
- -----------------------------------------------------------------------------------------------------------
       Average                                    151,418               $ 8.53
- -----------------------------------------------------------------------------------------------------------
          Subject Building Site                   283,550                 -            PD-3123-A & 3277-A
- -----------------------------------------------------------------------------------------------------------
               Excess Land                        154,717                 -            PD-3123-A & 3277-A
===========================================================================================================
</TABLE>


Sales 1 and 4 are considered most comparable to the Subject based on their
physical characteristics and proximity to the Subject. These sales will be
analyzed in an adjustment grid on a following page.

The following adjustment grid analyzes the most comparable sales to the Subject
Property ("+" adjustments indicate that the comparable sale is inferior to the
Subject and must be adjusted upward; "-" adjustments indicate that the
comparable sale is superior to the Subject and must be adjusted downward; and
"0" indicates that the comparable sale and Subject are similar overall in this
factor of comparison and no adjustment is warranted).


Humphries & Associates               VI - 10                        D-7U/04-1991
<PAGE>

Land Valuation, continued


<TABLE>
<CAPTION>
=====================================================================================================================
                                                  ADJUSTMENT GRID
- ----------------------------------------------------------------------------------------------------------------------
                                        Building Site                     Sale 1                      Sale 4
- -------------------------------  -----------------------------  ----------------------------  ------------------------
<S>                                 <C>                                <C>                         <C>
Sale Date                                                                  02/01                       07/01
- -------------------------------  -----------------------------  ----------------------------  ------------------------
Size (SF)                                  283,550                        110,800                     152,024
- -------------------------------  -----------------------------  ----------------------------  ------------------------
Zoning                                       PD                            IM-1                     Commercial
- -------------------------------  -----------------------------  ----------------------------  ------------------------
Shape                                Slightly Irregular                 Rectangular                  Irregular
- -------------------------------  -----------------------------  ----------------------------  ------------------------
Frontage                                   3 Sides                        2 Sides                     2 Sides
- -------------------------------  -----------------------------  ----------------------------  ------------------------
Flood Plain                                 None                           None                        None
- -------------------------------  -----------------------------  ----------------------------  ------------------------
Topography                          Level to Slight Slope                  Level                       Level
- --------------------------------------------------------------  ----------------------------  ------------------------
Condition of Sale                                                      Arm's Length                Arm's Length
- --------------------------------------------------------------  ----------------------------  ------------------------
Property Rights Transferred                                             Fee Simple                  Fee Simple
- --------------------------------------------------------------  ----------------------------  ------------------------
Terms                                                                      Cash                        Cash
- --------------------------------------------------------------  ----------------------------  ------------------------
Price/SF                                                                   $8.02                       $9.88
- ----------------------------------------------------------------------------------------------------------------------
ADJUSTMENTS
- ----------------------------------------------------------------------------------------------------------------------
Financing Terms                                                             -0-                         -0-
- --------------------------------------------------------------  ----------------------------  ------------------------
Property Rights                                                             -0-                         -0-
- --------------------------------------------------------------  ----------------------------  ------------------------
Condition of Sale                                                           -0-                         -0-
- --------------------------------------------------------------  ----------------------------  ------------------------
Market Conditions                                                           -0-                         -0-
- --------------------------------------------------------------  ----------------------------  ------------------------
Adjusted Price/SF                                                          $8.02                       $9.88
- --------------------------------------------------------------  ----------------------------  ------------------------
Location/Frontage/Access/Visibility                                        +15%                         -0-
- --------------------------------------------------------------  ----------------------------  ------------------------
Size                                                                        -5%                         -5%
- --------------------------------------------------------------  ----------------------------  ------------------------
Zoning                                                                      -0-                         -0-
- --------------------------------------------------------------  ----------------------------  ------------------------
Shape                                                                       -0-                         -0-
- --------------------------------------------------------------  ----------------------------  ------------------------
Flood Plain                                                                 -0-                         -0-
- --------------------------------------------------------------  ----------------------------  ------------------------
Total Adjustment                                                           +10%                         -5%
- --------------------------------------------------------------  ----------------------------  ------------------------
Adj. Price/SF                                                              $8.82                       $9.39
======================================================================================================================
</TABLE>


Humphries & Associates               VI - 11                        D-7U/04-1991
<PAGE>

Land Valuation, continued


                           Explanation of Adjustments

Financing Terms

All sales were sold for cash or at market terms. No adjustment for financing
terms is appropriate.

Real Property Rights Conveyed

This adjustment is considered for any differences in the real property rights
being conveyed in the sale. Properties in which less than the full Fee Simple
Estate is transferred frequently sell for a lower price. If the leasehold estate
is conveyed, any improvements constructed may exhibit a different expense
structure (and net income stream) than an improved property where land and
building are held in common ownership. Because these factors can have an impact
on value, one of the initial steps in the valuation process is a determination
of real property interests that have been conveyed. All sales were sold in Fee
Simple. No adjustment will be made.

Conditions of Sale

All sales are considered to be arm's length transactions. No adjustment for
conditions of sale will be made.

Market Conditions (Time)

Market conditions may change between the time of sale of a comparable property
and the date of the appraisal of the Subject. Under such circumstances, the
price of the comparable property would be different at the later time (the date
of the appraisal), and an adjustment would have to be made to the actual
transaction price. Changed market conditions often result from various causes
such as inflation, deflation, changing demand, and changing supply.

The sales occurred within the past 41 months and are considered market
transactions. Based on the available sales data, no significant increase or
decrease in land prices has occurred over the last 41 months. Thus, no
adjustment for this factor is considered necessary.


Humphries & Associates               VI - 12                        D-7U/04-1991
<PAGE>

Land Valuation, continued


Location/Frontage/Access/Visibility

The Subject's building site is located on the northeast corner of Greenville
Avenue and Collins Boulevard with additional frontage along the west side of
Alma Road in the City of Richardson. Greenville Avenue is a six-lane,
northeast/southwest, divided primary thoroughfare that provides access to LBJ
Freeway to the south and the George Bush Tollway (SH-190) to the north. Collins
Boulevard is a four/six-lane, east/west, divided primary thoroughfare that
provides access to Plano Road to the east and Central Expressway to the west.
Collins Boulevard is raised at Greenville Avenue and crosses Central Expressway.
Access to Greenville Avenue from Collins Blvd. is available from a one-lane,
access road. The Alma Road is a four-lane, north/south, divided roadway that
merges with Greenville Avenue to the north and Collins Boulevard to the south.

Access to the Subject is available from two curb cuts along Greenville Avenue,
one curb cut along the one-lane access road to Greenville Avenue and two-curb
cuts along Collins Boulevard. The tract has good visibility and access from
Central Expressway (US-75) which is located approximately 200' west of the
Subject. The Subject Property is considered to have good access and visibility
and is located in an area heavily developed with office uses.

Sale 1 is located on the NEC of Campbell Road and Campbell Creek Blvd., in the
City of Richardson, approximately 3,000' northeast of the Subject. Campbell Road
is a six-lane, divided, east/west primary thoroughfare while Campbell Creek is a
secondary north/south roadway. The tract is located in an area developed with
office and high-tech uses. The overall location is considered to have inferior
access and visibility versus the Subject and an upward adjustment is warranted.

Sale 4 is adjacent to the NEC of the George Bush Tollway Service Road (SH-190)
and Jupiter Road in the City of Plano. The service road is a three-lane,
one-way, northwest bound access road to SH-190. SH-190 is an eight-lane,
divided, major tollway that provides good access and visibility. Jupiter Road is
a six-lane, divided, north/south primary thoroughfare. This tract is located in
an area that is being developed with office, high-tech and commercial uses. The
overall location is similar to the Subject and no adjustment is warranted.


Humphries & Associates               VI - 13                        D-7U/04-1991
<PAGE>

Land Valuation, continued


A comparison of Sale 1 with Sale 4 indicates an upward adjustment of
approximately 15% to Sale 4. This adjustment is reasonable and will be applied
to Sale 1.

Size

Typically, smaller land tracts sell for more on a per square foot basis compared
to larger land tracts. The Subject Property contains 283,550 SF of land. Sale 1
contains 110,800 SF and Sale 4 contains 152,024 SF. The comparables are 2.6x and
1.9x smaller than the Subject Property and a subjective adjustment of 5%
downward will be applied.

Shape/Topography

The Subject Property is a slightly irregular shaped tract with a level to
slightly sloping topography. Both comparable sales are rectangular in shape with
a level topography. The overall shape and topography is similar and no
adjustment is warranted.

Zoning

The Subject and comparable sales allow for similar office and commercial uses
and no adjustment is warranted.

Conclusion

The comparable sales have an adjusted range of $8.82/SF to $9.39/SF with an
average of $9.11/SF. Both of the comparable sales are considered to be good
indicators of value, however Sale 1 is the closest and most similar to the
Subject Property indicating the low to middle of the adjusted range. For our
analysis, a range of $8.85/SF to $9.25/SF is considered reasonable. The price/SF
is applied to the Subject land area as follows:


Humphries & Associates               VI - 14                        D-7U/04-1991
<PAGE>

Land Valuation, continued


                  Price/SF        Size/SF          Value Range
                  --------        -------          -----------
                  $8.85    x    283,550 SF    =    $2,509,418
                  $9.25    x    283,550 SF    =    $2,622,838

Estimated Market Value of Building Site    Say,    $2,600,000 Rounded
                                                       ($9.17/SF)

Excess Land Tract

The Excess Land tract is located on the south corner of Greenville Avenue and
Alma Road abutting the north side of the building site. The tract contains
154,717 SF and is irregular in shape with a level topography. The excess land
tract is considered to have slightly inferior access, visibility and shape
characteristics compared to the building site, however, its smaller size is
superior. For our analysis, a downward adjustment of 5% will be applied for its
inferior location and shape, while an upward 5% adjustment will be applied for
its superior size. The two adjustments offset each other and no adjustment will
be applied to the building site value range of $8.85/SF to $9.25/SF. The value
range of $8.85/SF to $9.25/SF will be applied to the excess land area as
follows.

                     Size/SF               Price/SF       Value Range
                     -------               --------       -----------

                   154,717 SF       x       $8.85/SF =     $1,369,245

                   154,717 SF       x       $9.25/SF =     $1,431,132

Estimated Land Value of Excess Land Tract, Say,            $1,400,000 ($9.05/SF)


Humphries & Associates               VI - 15                        D-7U/04-1991
<PAGE>

                       VALUE INDICATED BY COST APPROACH

The Cost Approach is based upon the principle of substitution, which affirms
that no prudent investor would pay more for a property than the cost to acquire
the land and construct improvements of equal desirability and utility without
undue delay. Because cost and market value are closely related when properties
are new, the Cost Approach is a good indication of market value for new or
relatively new properties. When improvements are older or do not represent the
Highest and Best Use of the land as though vacant, the accuracy of the Cost
Approach is limited due to the difficulty of estimating accrued depreciation.

The procedure involved in deriving a value estimate by the Cost Approach is
shown below.

1.    Estimate the value of the Subject Property as though vacant and available
      to be developed to its highest and best use.

2.    Estimate the replacement cost of the improvements (the cost of
      construction of improvements having equal utility to the Subject
      Improvements).

3.    Estimate the accrued depreciation in the improvements (physical
      deterioration, functional obsolescence, and external obsolescence) and
      deduct estimated depreciation from the replacement cost of the
      improvements.

4.    Add the depreciated replacement cost of the improvements to land value.
      This total is the value estimate by the Cost Approach.

Current construction costs (including material costs, labor costs, equipment
costs, indirect costs, etc.) for all types of buildings are maintained in our
files. In addition to this basic data, we have access to the Marshall Valuation
Services cost data. This service allows for an estimate of construction costs by
component characteristics, construction type and quality, and location.

The Marshall Valuation Service cost range used as a basis for our analysis
adhere to the following guidelines.


Humphries & Associates               VII - 1                        D-7U/04-1991
<PAGE>

Value Indicated by Cost Approach, continued


What is Included

- -     Normal interest on building funds during the period of construction and
      processing fee or service charge is included.

- -     Sales taxes on materials are included.

- -     Normal site preparation including excavation for foundation and backfill.

- -     Utilities from structure to lot line figured for typical setback.

- -     Contractor's overhead and profit including job supervision, workman's
      compensation, fire and liability insurance, unemployment insurance, etc.,
      are included.

- -     Actual costs used are final costs to the developer which contain
      architect's and engineer's fees. These in turn include plans, plan checks,
      surveys and building permits.

For our analysis, these soft cost items are separated out and shown as
individual line items.

What is Not Included

- -     Cost of buying or assemblage of land; demolition; off-site costs, any
      other cost of doing business not directly attributable to the basic
      structure.

- -     Unusual or extraordinary land improvement costs (e.g., pilings or hillside
      foundations).

- -     Costs of land planning or preliminary concept and layout for large
      developments are not included, nor is interest or taxes on the land.

- -     Discounts or bonuses paid for financing are considered a cost of doing
      business.

- -     Furnishings and fixtures, usually not found in the general contract, that
      are peculiar to a definite tenant, such as seating or kitchen equipment,
      etc.

- -     Marketing costs to create occupancy including model or advertising
      expenses, or temporary operation of property owners associations.

- -     An allowance for developer's overhead and profit that is typically based
      on a percentage of the total project cost.


Humphries & Associates               VII - 2                        D-7U/04-1991
<PAGE>

Value Indicated by Cost Approach, continued


This program provides an estimate of current construction costs by component
characteristics, construction quality, and location based upon actual
construction costs of similar properties.

Depreciation

Physical Depreciation

Depreciation is defined as a loss in value from the replacement cost of
improvements and is caused by physical deterioration, functional obsolescence,
and/or external obsolescence. Physical deterioration is evidenced by normal wear
and tear over the economic life of the improvements and is either curable or
incurable. No deferred maintenance is deducted in this report.

The Subject Improvements were completed in August of 1999 and are approximately
5 years old. According to Marshall Valuation Service, the Subject Property is
considered an average Class A office building. This type of building of
equivalent design and construction typically have an economic life of
approximately 45 to 50 years. The Subject has been well maintained and its
effective age is considered to be equal to its actual age. The effective age of
the Subject is estimated to be 5 years. Based upon a projected 50-year economic
life, incurable physical deterioration is estimated at 10% (5 ) 50 = 0.10).

Functional Obsolescence

Functional obsolescence is caused by property characteristics such as functional
inadequacy or superadequacy and is either curable or incurable.

The design and amenity package of the Subject Improvements are equal to the
competing office projects in the immediate area. Therefore, no deduction for
Functional Obsolescence is considered necessary.


Humphries & Associates               VII - 3                        D-7U/04-1991
<PAGE>

Value Indicated by Cost Approach, continued


Economic Obsolescence

Economic obsolescence is defined as an impairment of desirability or useful life
arising from factors external to the property, such as economic forces or
environmental changes which affect supply/demand relationships in the market.
Loss in the use and value of a property arising from the factors of economic
obsolescence is to be distinguished from loss in value from physical
deterioration and functional obsolescence, both of which are inherent in a
property.

Economic obsolescence is extremely difficult to quantify and the results are
often highly subjective.

A method of measuring economic obsolescence is rent loss, which is the
difference between the effective rental rates and the stabilized rentals
associated with the lease-up. The property is currently 100% leased at market
rates. No deduction for economic obsolescence is necessary.

Developer's Profit

The Cost Approach value estimate includes indirect costs such as construction
period interest expense, architectural and engineering fees, loan fees, and
contractor's overhead and profit. An allowance is also made for developer's
overhead and profit because the Cost Approach value estimate must correlate with
the Income and Market Approaches to value. Developer's profit typically ranges
from 5% to 15% of total project costs.

On the following pages is a value estimate for the Subject Property via the Cost
Approach followed by the Commercial Cost Estimator 7.


Humphries & Associates               VII - 4                        D-7U/04-1991
<PAGE>

7/19/2004                        Summary Report                          Page: 1
================================================================================

Estimate Number                     :  138
Property Owner                      :  FSP Partners
Property Address                    :  1500 Greenville Avenue
Property City                       :  Richardson
State/Province                      :  Texas
ZIP/Postal Code                     :  75090

Section 1

Occupancy                                     Class              Height    Rank
                                   -------------------------     ------    ----
  100% Office Building             Reinforced concrete frame      14.00    3.5
  Total Area                       : 322,264
  Number of Stories (Building)     : 12.00
  Number of Stories (Section)      : 1.00
  Shape                            : 2.00

Components                              Units/%            Other
                                        -------            -----
  HVAC (Heating):
    Package Unit                          100%
  Elevators:
    Passenger #                              5
    Freight Power #                          1
  Sprinklers:
    Wet Sprinklers                        100%
  Exterior Walls:
    Concrete, Precast Panels              100%

Section 2

Occupancy                                     Class              Height    Rank
                                   -------------------------     ------    ----
  100% Parking Structure           Reinforced concrete frame      8.00     2.0
  Total Area                       : 288,300
  Number of Stories (Building)     : 6.00
  Number of Stories (Section)      : 1.00
  Shape                            : 2.00

Components                              Units/%            Other
                                        -------            -----
  Exterior Walls:
    Concrete, Precast Panels              100%
  Elevators:
    Passenger #                              2
  Sprinklers:
    Wet Sprinklers                        100%

  Cost as of 07/2004

                                       Units/%         Cost            Total
                                       -------      ----------      ----------
  Basic Structure
    Base Cost                          610,564           55.79      34,065,574
    Exterior Walls                     610,564            8.63       5,266,577
    Heating & Cooling                  322,264            6.33       2,039,931
    Elevators                                8      131,084.50       1,048,676
    Sprinklers                         610,564            1.20         731,492


Humphries & Associates               VII - 5                        D-7U/04-1991
<PAGE>

7/19/2004                        Summary Report                          Page: 2
================================================================================

Estimate Number                       : 138
ZIP/Postal Code                       : 75080

  Basic structure cost                 610,564           70.68      43,152,250

  Miscellaneous
    Concrete Paving                    200,000            3.25         650,000
    Landscaping, Lights, Security      100,000            1.00         100,000
  Total Cost                           610,564           71.90      43,902,250


Humphries & Associates               VII - 6                        D-7U/04-1991
<PAGE>

Value Indicated by Cost Approach, continued


                            Segregated Cost Estimate


Total Office Building, Parking Garage and Other Costs              $43,902,250
Plus: Developer's Overhead and Profit @ 10%                          4,390,225
                                                                   -----------

Total Replacement Cost of Improvements                             $48,292,475

Less Depreciation
        Physical
          Deferred Maintenance - Physical Curable                            0
          Physical Incurable @ 10% of Replacement Cost              -4,829,248
          Less Deferred Maintenance                                          0
        Functional                                                           0
        Economic
          Rent Loss & Lease Commissions                                      0
          Economic Obsolescence                                              0
                                                                   -----------

Depreciated Replacement Cost of Improvements                       $43,463,227
Plus:   Land Value                                                   2,600,000
                                                                   -----------

Estimated Value Via Cost Approach "As Is"                          $46,063,227

                                                   Say,            $46,000,000


Cost Analysis (Per 322,264 Square Foot of Gross Building Area)

Total Building and Other Costs                        $149.85/SF

Depreciated Replacement Cost of Improvements          $134.87/SF

Estimated Value Via Cost Approach                     $142.74/SF


Humphries & Associates               VII - 7                        D-7U/04-1991
<PAGE>

                                MARKET ANALYSIS

According to the Appraisal Institute's The Appraisal of Real Estate book, 12th
Edition, 2002, market analysis is defined as "The identification and study of
the market for a particular economic good or service." Based upon the highest
and best use "As Improved" for the Subject Property being a continued use as an
office building, the appraisers have surveyed the current office market
conditions in the Dallas area and the Subject submarket. Three sources of data
will be used to gauge the overall office market conditions. They are (1) D/FW
RealSmart, (2) CoStar and (3) interviews with area leasing agents in competing
office buildings.

D/FW RealSmart Report (Dallas/Fort Worth Area)

D/FW RealSmart publishes an office survey on a semi-annual basis for the D/FW
area. This area is divided into 32 office submarkets (sectors). The Subject
Property is located in the Richardson Submarket (Sector 12).

Office buildings that lease office space as their primary function with at least
20,000 SF of space are included in the D/FW RealSmart report. All figures
represent multi-tenant space unless otherwise stated. Office buildings are
generally placed into classes that characterize their general market appeal. Age
characteristics are an important part of this classification system. The classes
are defined as follows.

Class "A"

This class of space has an excellent location and access to attract the highest
quality tenants. They must also be well managed professionally. Usually, this
type of structure has new and high quality finish.

Class "B"

Most have a good location with fairly high quality management, construction and
tenancy. This type of building must show very little functional obsolescence and
deterioration.


Humphries & Associates              VIII - 1                        D-7U/04-1991
<PAGE>

Market Analysis, continued


Class "C"

This class of space is usually 15 - 25 years old, but maintaining steady
occupancy.

Given the Subject Property's location, rent levels, age and tenant profile, it
is considered to exhibit Class B characteristics.

The following summary indicates the historical market factors of absorption,
occupancy and rental rates by class over the last 12.25 years for the Dallas/Ft.
Worth area.

<TABLE>
<CAPTION>
==============================================================================================
                                      ABSORPTION (000'S)
- ----------------------------------------------------------------------------------------------
                         Dallas Area                     Fort Worth Area
- -------------  --------------------------------  -------------------------------  ------------
   Year          Class A   Class B    Class C     Class A    Class B   Class C     Total D/FW
- -------------  --------------------------------  -------------------------------  ------------
<S>              <C>       <C>        <C>           <C>       <C>       <C>         <C>
   1992           -447.1     130.5    -220.5        -63.5     -89.8     -93.7        -784.1
- -------------  --------------------------------  -------------------------------  ------------
   1993          1,016.5     579.4     315.1        206.6     106.5      55.2       2,279.4
- -------------  --------------------------------  -------------------------------  ------------
   1994          2,671.3   1,355.5     299.4       -597.6     368.5      93.7       4,190.8
- -------------  --------------------------------  -------------------------------  ------------
   1995          1,885.6     942.0     -68.5        505.6     245.5      81.2       3,600.4
- -------------  --------------------------------  -------------------------------  ------------
   1996          1,394.1     695.9     340.7        331.1       206      54.4       3,022.2
- -------------  --------------------------------  -------------------------------  ------------
   1997          1,427.7   1,225.2     127.5        204.8     154.7      -5.7       3,134.3
- -------------  --------------------------------  -------------------------------  ------------
   1998            716.7     -88.2      95.5         79.5      25.6     109.4         938.6
- -------------  --------------------------------  -------------------------------  ------------
   1999          2,577.9     182.4     130.7        595.0     246.2     -35.8       1,976.0
- -------------  --------------------------------  -------------------------------  ------------
   2000          4,351.1     213.9    -921.0        560.6    -575.2     -66.1       3,563.1
- -------------  --------------------------------  -------------------------------  ------------
   2001           -964.7  -2,460.2    -832.0         97.8      59.6    -150.7      -4,249.9
- -------------  --------------------------------  -------------------------------  ------------
   2002         -2,779.9   1,907.2    -794.0       -353.1    -186.3     -30.4      -3,133.0
- -------------  --------------------------------  -------------------------------  ------------
   2003         -2,025.7  -1,636.4    -816.4       -515.3    -311.9    -213.2      -5,518.8
- -------------  --------------------------------  -------------------------------  ------------
1st Qtr. 04        603.0     350.8     160.9        136.6     172.2     261.1       1,684.5
==============================================================================================
</TABLE>


Humphries & Associates              VIII - 2                        D-7U/04-1991
<PAGE>

Market Analysis, continued


As can be seen, 1992 was a down year while a dramatic recovery was staged in
1993, which continued through 2000. The D/FW area experienced a dramatic
negative absorption of -4,249,949 SF during 2001 due to the national recession
and events of September 11, 2001. The negative absorption continued during 2002
with a total of -3,133,009 SF. The Dallas and Ft. Worth areas had negative
absorption of -4,478,487 SF and -1,040,278F, respectively during 2003.

As of late 2003, the national and regional economy was improving. During the 1st
Quarter 2004, the Dallas area absorbed 1,114,654 SF while the Fort Worth area
absorbed 569,882 SF for a total absorption of 1,684,536 SF.

================================================================================
                                    OCCUPANCY
- --------------------------------------------------------------------------------
                        Dallas Area                      Fort Worth Area
- ------------  ---------------------------------  -------------------------------
   Year        Class A    Class B    Class C      Class A    Class B    Class C
- ------------  ---------------------------------  -------------------------------
   1992          79%        72%        45%          85%        76%        57%
- ------------  ---------------------------------  -------------------------------
   1993          82%        74%        44%          85%        82%        58%
- ------------  ---------------------------------  -------------------------------
   1994          86%        76%        55%          81%        85%        60%
- ------------  ---------------------------------  -------------------------------
   1995          89%        78%        62%          86%        88%        72%
- ------------  ---------------------------------  -------------------------------
   1996          91%        79%        64%          92%        91%        78%
- ------------  ---------------------------------  -------------------------------
   1997          93%        85%        67%          89%        87%        80%
- ------------  ---------------------------------  -------------------------------
   1998          87%        80%        72%          88%        91%        82%
- ------------  ---------------------------------  -------------------------------
   1999          80%        80%        73%          88%        90%        85%
- ------------  ---------------------------------  -------------------------------
   2000          86%        82%        69%          90%        81%        84%
- ------------  ---------------------------------  -------------------------------
   2001          81%        75%        69%          92%        88%        85%
- ------------  ---------------------------------  -------------------------------
   2002          78%        73%        69%          86%        87%        82%
- ------------  ---------------------------------  -------------------------------
   2003          75%        71%        67%          80%        83%        80%
- ------------  ---------------------------------  -------------------------------
1st Qtr. 04      76%        71%        68%          81%        86%        83%
============  =================================  ===============================


Humphries & Associates              VIII - 3                        D-7U/04-1991
<PAGE>

Market Analysis, continued


Increased occupancy levels were witnessed in virtually every class from 1993 to
1997 in the D/FW area. The occupancy levels generally peaked during 1997 and
trended downward since until bottoming out in 2003. The occupancy increased
slightly in the 1st Quarter 2004.

================================================================================
                                  RENTAL TRENDS
- --------------------------------------------------------------------------------
                        Dallas Area                     Fort Worth Area
- ------------  -------------------------------  ---------------------------------
   Year        Class A    Class B    Class C    Class A     Class B    Class C
- ------------  -------------------------------  ---------------------------------
   1992        $15.80     $11.57      $ 9.62     $15.49     $11.97      $ 9.70
- ------------  -------------------------------  ---------------------------------
   1993        $15.25     $11.31      $ 9.24     $15.19     $11.88      $ 9.74
- ------------  -------------------------------  ---------------------------------
   1994        $15.87     $11.92      $ 9.49     $15.16     $12.10      $ 9.72
- ------------  -------------------------------  ---------------------------------
   1995        $17.41     $12.68      $ 9.65     $16.22     $12.89      $ 9.92
- ------------  -------------------------------  ---------------------------------
   1996        $20.43     $14.76      $10.85     $18.98     $14.85      $11.11
- ------------  -------------------------------  ---------------------------------
   1997        $23.40     $16.98      $12.02     $22.47     $16.38      $12.30
- ------------  -------------------------------  ---------------------------------
   1998        $24.96     $18.28      $13.55     $21.78     $17.05      $12.97
- ------------  -------------------------------  ---------------------------------
   1999        $24.73     $18.55      $14.42     $22.61     $17.59      $13.77
- ------------  -------------------------------  ---------------------------------
   2000        $24.53     $18.81      $14.75     $23.44     $17.94      $14.33
- ------------  -------------------------------  ---------------------------------
   2001        $23.70     $18.45      $14.78     $24.71     $17.93      $15.11
- ------------  -------------------------------  ---------------------------------
   2002        $21.89     $17.25      $14.39     $22.93     $17.64      $15.10
- ------------  -------------------------------  ---------------------------------
   2003        $21.06     $16.41      $13.71     $21.28     $17.64      $14.16
- ------------  -------------------------------  ---------------------------------
1st Qtr. 04    $20.87     $16.45      $13.51     $21.57     $17.70      $14.46
================================================================================

As with increasing occupancy levels, the same is shown for rental rate growth.
Rental rates began to increase in 1995 and exhibited substantial increases
through 1998. The rental rate increase slowed after 1998 and has experienced
minimal decreases through 2002. During 2003, the rental rates experienced
further declines. As with the occupancy levels, rental rates appear to have
bottomed out and have begun to increase in 2004. Market Analysis, continued


Humphries & Associates              VIII - 4                        D-7U/04-1991
<PAGE>

Market Analysis, continued


The following chart summarizes the 1st Quarter 2004 D/FW RealSmart office data
for the Dallas area.

===============================================================================
                                Rate          Occupancy      Avg. Absorption
                                                               Last 12 Mos.
- -------------------------------------------------------------------------------
All Buildings                  $18.73            73%            -1,597,500
- -------------------------------------------------------------------------------
Class A Building               $20.87            76%              -386,789
- -------------------------------------------------------------------------------
Class B Building               $16.45            71%              -955,340
- -------------------------------------------------------------------------------
Class C Building               $13.51            68%              -255,371
===============================================================================

Sector #12 - Richardson

The following is a summary of the 1st Quarter 2004 rate structure for the
Subject sector.

================================================================================
                                  Total       Class A     Class B     Class C
- --------------------------------------------------------------------------------
Rents                            $17.45        $18.95      $16.70      $13.81
- --------------------------------------------------------------------------------
Occupancy                          74%           78%          69%        75%
- --------------------------------------------------------------------------------
Absorption 12 Mos.               -53,537      181,170     -178,542    -56,165
================================================================================

The following chart indicates the rents and absorption trends for this sector
over the past 6.25 years.


Humphries & Associates              VIII - 5                        D-7U/04-1991
<PAGE>

Market Analysis, continued


<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
                         Occupancy                      Annual Full-Service                      Quarterly Absorption
                                                             Rent/Sq Ft                                (Sq Ft)
- -------------  --------------------------------  -------------------------------------  ---------------------------------------
  Year/Qtr         All      A      B       C         All       A         B        C         All        A         B         C
- -------------  --------------------------------  -------------------------------------  ---------------------------------------
 <S>              <C>     <C>    <C>     <C>       <C>      <C>       <C>      <C>       <C>       <C>       <C>       <C>
 1998 / 1st       .94%    .94%   .94%    .92%      $19.03   $22.86    $17.73   $12.85         446    -4,798     4,452       792
- -------------  --------------------------------  -------------------------------------  ---------------------------------------
 1998 / 2nd       .92%    .91%   .93%    .90%      $19.49   $23.46    $18.01   $13.26     -79,564   -58,902   -24,112     3,450
- -------------  --------------------------------  -------------------------------------  ---------------------------------------
 1998 / 3rd       .93%    .91%   .95%    .88%      $19.29   $23.17    $17.91   $13.60      27,891     4,911    51,494   -28,514
- -------------  --------------------------------  -------------------------------------  ---------------------------------------
 1998 / 4th       .85%    .83%   .86%    .89%      $19.47   $22.97    $17.76   $13.46     212,166   228,875   -22,435     5,726
- -------------  --------------------------------  -------------------------------------  ---------------------------------------
 1999 / 1st       .76%    .62%   .85%    .90%      $19.02   $22.90    $18.33   $13.63    -142,653  -137,108    -5,943       398
- -------------  --------------------------------  -------------------------------------  ---------------------------------------
 1999 / 2nd       .69%    .52%   .80%    .89%      $19.78   $23.25    $18.51   $16.00      90,513    83,020    15,901    -8,408
- -------------  --------------------------------  -------------------------------------  ---------------------------------------
 1999 / 3rd       .67%    .51%   .79%    .90%      $19.71   $23.04    $18.42   $15.98      34,719    42,902   -18,700    10,517
- -------------  --------------------------------  -------------------------------------  ---------------------------------------
 1999 / 4th       .70%    .51%   .85%    .91%      $19.73   $23.06    $18.51   $15.95     165,362    20,594   131,445    13,323
- -------------  --------------------------------  -------------------------------------  ---------------------------------------
 2000 / 1st       .70%    .51%   .85%    .91%      $19.73   $23.06    $18.51   $15.95           0         0         0         0
- -------------  --------------------------------  -------------------------------------  ---------------------------------------
 2000 / 2nd       .70%    .51%   .85%    .91%      $19.73   $23.06    $18.51   $15.95           0         0         0         0
- -------------  --------------------------------  -------------------------------------  ---------------------------------------
 2000 / 3rd       .78%    .66%   .87%    .90%      $20.46   $24.05    $18.71   $16.11     433,981   407,226    40,999   -14,244
- -------------  --------------------------------  -------------------------------------  ---------------------------------------
 2000 / 4th       .93%    .98%   .87%    .95%      $21.33   $24.90    $18.69   $16.53     618,465   593,817   -15,918    40,566
- -------------  --------------------------------  -------------------------------------  ---------------------------------------
 2001 / 1st       .95%    100%   .91%    .90%      $21.69   $24.68    $19.43   $16.83      94,705    49,371    78,614   -33,280
- -------------  --------------------------------  -------------------------------------  ---------------------------------------
 2001 / 2nd       .88%    .89%   .90%    .81%      $21.71   $25.19    $19.64   $16.31    -369,367  -260,003   -31,708   -77,656
- -------------  --------------------------------  -------------------------------------  ---------------------------------------
 2001 / 3rd       .86%    .83%   .90%    .82%      $21.69   $25.08    $19.75   $16.32     117,160   105,402     1,585    10,173
- -------------  --------------------------------  -------------------------------------  ---------------------------------------
 2001 / 4th       .79%    .76%   .86%    .71%      $21.02   $24.29    $18.63   $15.35    -211,052   -23,991   -80,613  -106,448
- -------------  --------------------------------  -------------------------------------  ---------------------------------------
 2002 / 1st       .76%    .75%   .79%    .70%      $20.46   $23.28    $18.41   $15.23    -206,373   -40,149  -165,193    -1,031
- -------------  --------------------------------  -------------------------------------  ---------------------------------------
 2002 / 2nd       .73%    .73%   .77%    .62%      $19.75   $22.41    $17.75   $14.93    -218,605   -55,778   -40,353  -122,474
- -------------  --------------------------------  -------------------------------------  ---------------------------------------
 2002 / 3rd       .74%    .72%   .78%    .70%      $18.88   $21.04    $17.65   $15.56      15,484    -5,077    21,714    -1,153
- -------------  --------------------------------  -------------------------------------  ---------------------------------------
 2002 / 4th       .72%    .73%   .75%    .64%      $18.51   $20.42    $17.36   $15.66    -180,971    21,557   -68,629  -133,899
- -------------  --------------------------------  -------------------------------------  ---------------------------------------
 2003 / 1st       .71%    .76%   .72%    .62%      $18.01   $19.50    $17.07   $15.61     -32,224    45,872   -60,815   -17,281
- -------------  --------------------------------  -------------------------------------  ---------------------------------------
 2003 / 2nd       .73%    .80%   .72%    .55%      $17.72   $18.80    $17.29   $14.49     106,280   177,655    14,306   -85,681
- -------------  --------------------------------  -------------------------------------  ---------------------------------------
 2003 / 3rd       .69%    .73%   .71%    .53%      $17.76   $18.99    $17.19   $14.95    -261,565  -216,071   -24,204   -21,290
- -------------  --------------------------------  -------------------------------------  ---------------------------------------
 2003 / 4th       .69%    .71%   .66%    .74%      $17.34   $19.00    $16.58   $14.29    -230,576     1,428  -277,556    45,552
- -------------  --------------------------------  -------------------------------------  ---------------------------------------
 2004 / 1st       .74%    .78%   .69%    .75%      $17.45   $18.95    $16.70   $13.81     332,324   218,158   108,912     5,254
- -------------  --------------------------------  -------------------------------------  ---------------------------------------
</TABLE>

During the past 6.25 years, the Richardson submarket absorbed 316,546 SF of
office space. This equates to an average absorption of 50,647 SF. The submarket
experienced negative absorption of -368,554 SF, -590,465 SF and -418,085 SF
during 2001, 2002 and 2003, respectively. However, during the first quarter the
submarket experienced strong absorption of 332,324 SF. Discussions with the
leasing agents of the rent comparables indicate that the leasing activity has
dramatically increased during 2004.

The extreme occupancy decline was due to the national and regional recession.
The Richardson submarket has a high concentration of telecom and high-tech
companies that have been hit hard by the recent economic slowdown.



Humphries & Associates              VIII - 6                        D-7U/04-1991
<PAGE>

Market Analysis, continued


Since the 1st Quarter of 2001, the overall occupancy steadily declined from 95%
to 69% in the 4th Quarter 2003. The positive absorption 1st Quarter 2004 caused
the occupancy to increase five points to 74%.

There has been 1,812,498 SF of office construction since 2001. During 2003,
there was 943,984 SF of multi-tenant office construction. As of the date of
appraisal, no office space is under construction in the Richardson Submarket.

Rental rates in the Richardson Submarket have steadily decreased since peaking
at $21.71/SF as of 2nd Quarter 2001 to $17.45/SF as of 1st Quarter 2004. The
average rental for Class A space is $18.95/SF.

The appraiser has access to Costar Office Market Survey. Costar surveys office
buildings in the D/FW area on a monthly basis. According to Costar, the Subject
Property is located in the Richardson submarket. This submarket is bounded by
SH-190 to the north, Spring Valley Road to the south, Hillcrest Road to the east
and Jupiter Road to the west. The following chart summarizes the office market
conditions as of July 2004.


Humphries & Associates              VIII - 7                        D-7U/04-1991
<PAGE>

Market Analysis, continued


<TABLE>
<CAPTION>
===================================================================================================================================
                                              Richardson Overall Office Market Summary
===================================================================================================================================
                                          SF Vacant Available                % Vacant Available                 Est. Rent/SF
                                --------------------------------------  ----------------------------  -----------------------------
   Date    Bldg      RBA/SF         Direct       Sublet       Total      Direct     Sublet    Total     Direct    Sublet     Total
- ------------------------------  --------------------------------------  ----------------------------  -----------------------------
<S>         <C>    <C>            <C>           <C>         <C>           <C>       <C>       <C>       <C>       <C>       <C>
 Current    210    13,644,603     2,959,421      869,297    3,828,718     21.7%      6.4%     28.1%     $16.80    $18.05    $17.09
- ------------------------------  --------------------------------------  ----------------------------  -----------------------------
  Q2/04     210    13,644,603     2,878,579      882,067    3,760,646     21.1%      6.5%     27.6%     $16.73    $17.83    $17.00
- ------------------------------  --------------------------------------  ----------------------------  -----------------------------
  Q1/04     209    13,631,103     3,006,119      942,110    3,948,229     22.1%      6.9%     29.0%     $17.03    $17.63    $17.18
- ------------------------------  --------------------------------------  ----------------------------  -----------------------------
  Q4/03     209    13,631,103     3,053,683      981,141    4,034,824     22.4%      7.2%     29.6%     $17.11    $16.80    $17.03
- ------------------------------  --------------------------------------  ----------------------------  -----------------------------
  Q3/03     208    13,619,103     2,654,526     1,017,113   3,671,639     19.5%      7.5%     27.0%     $17.56    $16.71    $17.32
- ------------------------------  --------------------------------------  ----------------------------  -----------------------------
  Q2/03     208    13,619,103     2,721,905      918,999    3,640,904     20.0%      6.7%     26.7%     $17.72    $17.42    $17.64
- ------------------------------  --------------------------------------  ----------------------------  -----------------------------
  Q1/03     208    13,619,103     2,775,048      622,660    3,397,708     20.4%      4.6%     24.9%     $17.95    $17.80    $17.92
- ------------------------------  --------------------------------------  ----------------------------  -----------------------------
  Q4/02     208    13,619,103     2,448,259     1,073,165   3,521,424     18.0%      7.9%     25.9%     $18.28    $18.85    $18.48
- ------------------------------  --------------------------------------  ----------------------------  -----------------------------
  Q3/02     208    13,619,103     1,998,611     1,461,968   3,460,579     14.7%     10.7%     25.4%     $19.49    $19.48    $19.48
- ------------------------------  --------------------------------------  ----------------------------  -----------------------------
  Q2/02     208    13,619,103     2,099,165     1,427,189   3,526,354     15.4%     10.5%     25.9%     $19.99    $19.57    $19.83
- ------------------------------  --------------------------------------  ----------------------------  -----------------------------
  Q1/02     207    13,512,293     2,032,635     1,444,072   3,467,707     15.0%     10.7%     25.7%     $20.65    $20.17    $20.44
- ------------------------------  --------------------------------------  ----------------------------  -----------------------------
  Q4/01     207    13,512,293     1,645,486      783,670    2,429,156     12.2%      5.8%     18.0%     $20.74    $19.81    $20.37
===================================================================================================================================
</TABLE>

The direct vacancy rate steadily increased from 12.2% as of 4th Quarter 2001 to
21.7% in July 2004. The vacancy has been in the +/-20-22% range during the past
12 months. Including sublet space, the overall vacancy rate is 28.1% as of July
2004.

The average direct rental rate in the Richardson Submarket is $16.80/SF as of
July 2004. Rental rates have generally trended downward since peaking at
$20.74/SF in the 4th Quarter 2001. The average sublet rental rate is $18.05/SF.


Humphries & Associates              VIII - 8                        D-7U/04-1991
<PAGE>

Market Analysis, continued


<TABLE>
<CAPTION>
====================================================================================================================================
                                         Richardson Office Absorption & Construction Summary
====================================================================================================================================
                                    Delivered Inventory                Net Absorption                        Gross Absorption
                                 ------------------------  -------------------------------------  ----------------------------------
   Date    Bldg     RBA/SF        # of Bldgs.     RBA         Direct       Sublet       Total        Direct      Sublet      Total
- -------------------------------  ------------------------  -------------------------------------  ----------------------------------
<S>         <C>   <C>                 <C>       <C>          <C>          <C>         <C>           <C>          <C>        <C>
 Current    210   13,644,603           0           0          -41,909      -17,711     -59,620       97,302       23,096    120,398
- -------------------------------  ------------------------  -------------------------------------  ----------------------------------
  Q2/04     210   13,644,603           1         13,500        98,022       64,713     162,735      271,557       79,232    350,789
- -------------------------------  ------------------------  -------------------------------------  ----------------------------------
  Q1/04     209   13,631,103           0           0          -41,946       56,747      14,801      247,196       81,222    328,418
- -------------------------------  ------------------------  -------------------------------------  ----------------------------------
  Q4/03     209   13,631,103           1         12,000      -244,402       33,695    -210,707      311,238       92,016    403,254
- -------------------------------  ------------------------  -------------------------------------  ----------------------------------
  Q3/03     208   13,619,103           0           0           32,991       67,000      99,991      314,027      173,176    487,203
- -------------------------------  ------------------------  -------------------------------------  ----------------------------------
  Q2/03     208   13,619,103           0           0          -85,399      -94,642    -180,041      326,728       80,872    407,600
- -------------------------------  ------------------------  -------------------------------------  ----------------------------------
  Q1/03     208   13,619,103           0           0         -345,161       73,692    -271,469      288,738      278,915    567,653
- -------------------------------  ------------------------  -------------------------------------  ----------------------------------
  Q4/02     208   13,619,103           0           0         -369,726      401,375      31,649      535,899      551,785   1,087,684
- -------------------------------  ------------------------  -------------------------------------  ----------------------------------
  Q3/02     208   13,619,103           0           0          -71,069      -45,290    -116,359      648,350       79,189    727,539
- -------------------------------  ------------------------  -------------------------------------  ----------------------------------
  Q2/02     208   13,619,103           1        106,810        82,812       65,226     148,038      291,993      121,969    413,962
- -------------------------------  ------------------------  -------------------------------------  ----------------------------------
  Q1/02     207   13,512,293           0           0         -248,428     -695,744    -944,172      127,082      124,649    251,731
- -------------------------------  ------------------------  -------------------------------------  ----------------------------------
  Q4/01     207   13,512,293           6        661,411       424,720     -278,204     146,516      634,713      116,473    751,186
====================================================================================================================================
</TABLE>

The Richardson submarket had a total direct negative absorption of -809,495 SF
since 4th Quarter 2001. Sublet space experienced negative absorption of -369,143
SF during the same period.

Discussions with leasing agents of the rent comparables indicate that the
leasing activity has increased significantly during the past six months.

Office Market Survey

To further isolate and define current office market trends in the Subject
submarket, competing office buildings were surveyed by Bryan E. Humphries &
Associates. These office buildings are similar to the Subject Improvements in
terms of age, condition, design and location. The following


Humphries & Associates              VIII - 9                        D-7U/04-1991
<PAGE>

Market Analysis, continued


is a summary of the lease comparables for office buildings included in our
survey. At the end of this section, these lease comparables are shown in detail.

<TABLE>
<CAPTION>
======================================================================================
                                                 Quoted
    Comparable        Size    Year   Occupancy    Lease     Finishout     Lease Type
                      (SF)    Built              Rate/SF
- --------------------------------------------------------------------------------------
<S>                 <C>       <C>       <C>      <C>        <C>          <C>
1. Lookout Plaza    155,092   2001      98%      $18.00      $15.00      + Electricity
- --------------------------------------------------------------------------------------
2. Creekview        101,000   1999      73%      $16.50     $15-20.00    + Electricity
- --------------------------------------------------------------------------------------
3. Greenway II      154,329   1985     100%      $15.00      $15.00      + Electricity
- --------------------------------------------------------------------------------------
4. Ericsson Center  178,689   1986      70%      $18.50     $10-15.00    + Electricity
- --------------------------------------------------------------------------------------
Average             147,278   1993      85%      $17.00      $15.00      + Electricity
- --------------------------------------------------------------------------------------
Subject Property    298,766   1999     100%      $22.63*                 + Electricity
======================================================================================
</TABLE>

*The subject has contract rents ranging from $8.40/SF to $24.87/SF plus
electricity. The average contract rent is $22.63/SF.

Conclusions

The Richardson submarket has experienced decreasing occupancy and rental rates
in recent years. Discussions with area leasing agents indicate that the overall
leasing activity has dramatically increased during 2004.


Humphries & Associates              VIII - 10                       D-7U/04-1991
<PAGE>

Market Analysis, continued


                      OFFICE BUILDING LEASE COMPARABLE 1




                                  Lookout Plaza
                              1301 E. Lookout Drive
                                Richardson, Texas

Year Built:             2001
No. Floors:             3
Rentable SF:            155,092 SF
Current Occupancy:      98%
SF Available:           3,102 SF

Quoted Rental Rate:     $18.00/SF plus Electricity
Finishout:              $15.00/SF for new lease, negotiable for renewal.
Lease Commissions:      6.5%
Building Factor:        12.0%
Construction:           Brick and glass exterior

Lease Terms & Conditions

Expenses pass-thru using the first lease year as the base year. The base year
expense stop is estimated at $5.32/SF.

Parking:                Surface concrete and multi-level parking garage


Humphries & Associates              VIII - 11                       D-7U/04-1991
<PAGE>

Office Building Lease Comparable 1, continued


As of:                  7/04

Verified:               Art Kline, Broker (972/644-2400)

Comments:               Samsung Telecommunications is the primary tenant.
                        Samsung is leasing 137,000 for 10-years (12/1/03 to
                        11/30/11) at $17.00/SF plus electricity. The lease
                        included a $30.00/SF tenant improvement allowance and 3
                        months of free rent. The vacant space is being marketed
                        at $18.00/SF plus electricity.


Humphries & Associates              VIII - 12                       D-7U/04-1991
<PAGE>

                       OFFICE BUILDING LEASE COMPARABLE 2


                     [PHOTO OF CREEKVIEW CORPORATE CENTER I]


                          Creekview Corporate Center I
                             2301 Greenville Avenue
                                Richardson, Texas

Year Built:             1999
No. Floors:             4
Rentable SF:            101,000 SF
Current Occupancy:      73%
SF Available:           27,270 SF
Actual Rental Rate:     $16.50/SF + electricity
Finishout:              $15.00/SF to $20.00/SF (Turnkey) for new lease,
                        negotiable on re-lease.
Lease Commissions:      6.0%
Building Factor:        13.0%
Construction:           Brick veneer and glass exterior

Lease Terms & Conditions

Expense pass-through using the first lease year as the base year. The 2003
operating expense was $8.06/SF.

Parking:                Surface concrete and multi-level underground parking
                        garage
As of:                  7/04
Verified:               Debra Borum, Broker (972/231-6693)


Humphries & Associates              VIII - 13                       D-7U/04-1991
<PAGE>

Office Building Lease Comparable 2, continued


Comments:               Four-story office building located along the northeast
                        side of Greenville Avenue just southwest of Plano Road.
                        The building is currently offering rent concessions in
                        the form of free rent. The typical concession is one
                        free month for every year of a lease. A five-year lease
                        would get five months free.


Humphries & Associates              VIII - 14                       D-7U/04-1991
<PAGE>

                       OFFICE BUILDING LEASE COMPARABLE 3


                             [PHOTO OF GREENWAY II]


                                   Greenway II
                               2400 Lakeside Blvd.
                                Richardson, Texas

Year Built:             1985
No. Floors:             7
Rentable SF:            154,329 SF
Current Occupancy:      100%
SF Available:           0 SF
Actual Rental Rate:     $15.00/SF
Finishout:              $15.00/SF for new lease (2nd generation space);
                        negotiable for renewal
Commissions:            7.0%
Building Factor:        12%
Construction:           Brick veneer

Lease Terms & Conditions

Expense pass-through using the first lease year as the base year. The 2003 base
year stop is $7.15/SF.

Parking:                Surface concrete and underground parking garage
As of:                  7/04


Humphries & Associates              VIII - 15                       D-7U/04-1991
<PAGE>

Office Building Lease Comparable 3, continued


Verified:               Darrin Roberts, Broker (972/458-4976)

Comments:               Seven-story veneer office building located along
                        Lakeside Boulevard just north of the Subject Property.
                        Parking is provided by surface concrete and a parking
                        garage. The building is 100% leased to Blue Cross Blue
                        Shield. The 10-year lease began in January of 2003 and
                        included one year of free rent with a tenant improvement
                        allowance of $30.00/SF.


Humphries & Associates              VIII - 16                       D-7U/04-1991
<PAGE>

                      OFFICE BUILDING LEASE COMPARABLE 4


                           [PHOTO OF ERICSSON CENTER]


                                 Ericsson Center
                                740 Campbell Road
                                Richardson, Texas

Year Built:             1986
No. Floors:             10
Rentable SF:            178,689 SF
Current Occupancy:      70%
SF Available:           53,607 SF

Quoted Rental Rate:     $18.50/SF + electricity
Finishout:              $10.00/SF for new 3-year lease & $15.00/SF for a new
                        5-year lease, negotiable for renewal
Lease Commissions:      4.5%
Building Factor:        15%
Construction:           Brick and glass exterior

Lease Terms & Conditions

Expenses pass-thru using the first lease year as the base year. The estimated
2004 operating expense is $7.25/SF.


Humphries & Associates              VIII - 17                       D-7U/04-1991
<PAGE>

Office Building Lease Comparable 4, continued



Parking:                Surface concrete and multi-level parking garage

As of:                  7/04

Verified:               Chris Doggett, Broker (972/458-7585)

Comments:               Ten-story office building located on the southwest
                        quadrant of Greenville Avenue and Campbell Road with
                        good visibility from Central Expressway.

                        The most recent leases are summarized as follows.

                        Tenant: Labcorp.
                        Date:   5 years (3/04-2/09)
                        Length: 60 months
                        Size:   18,247 SF
                        Rent:   $17.50/SF plus electricity with 12 months of
                                free rent
                        TI's:   $5.00/SF

                        Tenant: Brown & Hoffmeister
                        Date:   5 years (5/04-10/09)
                        Length: 66 months
                        Size:   10,244 SF
                        Rent:   $18.50/SF plus electricity with 6 months of
                                free rent
                        TI's:   $25.00/SF


Humphries & Associates              VIII - 18                       D-7U/04-1991
<PAGE>

                               Rent Comparable Map


                 [MAP SHOWING LOCATIONS OF RENT COMPARABLES 1-4]


Humphries & Associates              VIII - 19                       D-7U/04-1991
<PAGE>


                       VALUE INDICATED BY INCOME APPROACH

The Income Approach is based on the theory that the value of a property is the
present worth of the net income it will produce during the remainder of its
economic life. The Income Approach requires estimates of rental income,
vacancy/collection loss, and operating expenses for a property. Several
techniques are available for processing the resultant net income estimate into a
value by the Income Approach.

The analysis of the external market influences have identified the following
trends that affect the income and expenses that the Subject Property should
command:

1.    Job growth in the metroplex is anticipated to be 25,000 to 50,000 over the
      next year. This is an improvement from the 29,900 job loss in 2001 and
      77,500 job loss in 2002. Based on the year-to-date 12/03 Texas Labor
      Market review, job growth for 2003 is anticipated to be slightly negative.
      For 2004, job growth is predicted to once again be positive. Most real
      estate sectors will have difficulty maintaining existing occupancy levels
      with slowing job growth along with planned completions. Nevertheless, no
      sectors are anticipated to have significant oversupplies.

2.    Both DFW RealSmart and CoStar indicate the Subject's Submarket to be below
      stabilized occupancy levels. The average rental rate is $17.45/SF
      according to 1st Quarter 2004 DFW RealSmart and $16.80/SF according to
      July 2004 CoStar. Discussions with leasing agents indicate that overall
      leasing activity has significantly increased during the past six months.

Rental Income

In order to estimate the gross rental income that the Subject Property should
command, comparable buildings in the Subject market area were analyzed as
compared to the existing lease structure of the Subject.

Lease Comparable Analysis

The market area lease comparables were detailed before this report section and
are summarized as follows.


Humphries & Associates               IX - 1                          D7U/04-1991
<PAGE>

Income Approach, continued


<TABLE>
<CAPTION>
====================================================================================
                                                Quoted
Comparable            Size    Year   Occupancy   Lease      Finishout   Lease Type
                      (SF)    Built             Rate/SF
- ------------------------------------------------------------------------------------
<C>                 <C>       <C>      <C>       <C>        <C>        <C>
1. Lookout Plaza    155,092   2001      98%      $18.00      $15.00    + Electricity
- ------------------------------------------------------------------------------------
2. Creekview        101,000   1999      73%      $16.50     $15-20.00  + Electricity
- ------------------------------------------------------------------------------------
3. Greenway II      154,329   1985     100%      $15.00      $15.00    + Electricity
- ------------------------------------------------------------------------------------
4. Ericsson Center  178,689   1986      70%      $18.50     $10-15.00  + Electricity
- ------------------------------------------------------------------------------------
Average             147,278   1993      85%      $17.00      $15.00    + Electricity
- ------------------------------------------------------------------------------------
Subject Property    298,766   1999     100%      $22.63*               + Electricity
====================================================================================
</TABLE>

*The subject has contract rents ranging from $8.40/SF to $24.87/SF plus
electricity. The average contract rent is $22.63/SF.

The comparables have rents ranging from $15.00/SF to $18.50/SF plus electricity
with an average of $17.00/SF. The Subject has contract rents ranging from
$8.40/SF to $24.87/SF plus electricity with an average of $22.63/SF. Due to the
slowdown in the economy and telecommunications/high-tech industries, rental
rates have decreased dramatically during the past 18 months. Current rental
rates appear to be in the $17.00/SF to $18.00/SF plus electricity range. The
market is also offering free rent of one month for each year of the lease.

The Subject Property and rent comparables are high quality mid-rise office
buildings located in close proximity to each other. The comparables are direct
competitors with the Subject Property and are considered good indicators of a
market rent. However, the above-described rents are generally based upon
second-generation space and a finishout allowance of $15.00/SF. For a tenant to
achieve the same type benefits of specific finish as the Subject, a finishout
charge of $25/SF to $30/SF would be anticipated. Based upon a +/-5-year lease
term, a +/-$3.00/SF rent premium would be appropriate for a developer to
amortize the additional finishout cost. Thus, considering the Subject's
finishout relative to the comparables, an adjusted asking lease rate for the
comparables would be +/-$20.00/SF to $21.00/SF.


Humphries & Associates               IX - 2                          D7U/04-1991
<PAGE>

Income Approach, continued


Per DFW RealSmart and CoStar, overall rents in the Richardson submarket have
decreased in recent years to an average of $17.45/SF and $16.80/SF,
respectively. Class A office space averages $18.95/SF according to the 1st
Quarter 2004 DFW RealSmart.

Subject's Existing Lease Analysis

The Subject Property is 100% leased with contract rents averaging $22.63/SF. The
Subject is considered similar to the comparables physically and locationally. It
appears that the contract leases appear to be slightly above market. Based on
the Subject's location, age/condition and finishout, a rental rate slightly
above the comparable range is considered reasonable. For our analysis, a
reasonable market rental rate for the Subject is estimated at $20.00/SF plus
electricity.

Estimated Market Lease Rate

Rental Rate:      $20.00/SF (Free rent is projected during the next 12 months)

Term:             5 Years

Conditions:       Gross lease plus electricity with base year expense stops.

Finishout:        When tenants renew their leases or new tenants sign leases, an
                  alteration charge (finishout) is incurred. The amount of
                  finishout spent on renewing tenants will be $7.50/SF. New
                  tenants will receive $15.00/SF for a finishout allowance.

Commissions:      Blended 5.0% for new and 1.0% for renewal tenants.

Ancillary Income

The Subject has provisions in the leases for the potential for parking income.
However, no parking revenue is being charged and none is anticipated over the
near term. Airborne Express leases space for a drop off container. The lease is
renewed annually at $125/year. T-Speed Communications leases and operates
telecommunications equipment through December of 2005. The monthly rent during
2004 and 2005 is $771.75 and $810.34, respectively. Inet pays $400 per month or
$4,800 annually in rent for LaCuisine Cafe. Based on the preceding, the first
year ancillary income is calculated at $14,186 or $0.05/SF.


Humphries & Associates               IX - 3                          D7U/04-1991
<PAGE>

Income Approach, continued


Expense Reimbursements

The Subject is leased on a gross basis plus electricity with a base year stop.
Any increase over the base year stop is passed through to the tenants on a
prorata basis for reimbursement. The Subject has base year operating expense
stops of $6.25/SF, $6.47/SF and $7.08/SF. According to the rent roll, the base
year operating expense stop for the majority of the building (241,372 SF or 80%)
is $6.47/SF. These stops will be applied appropriately to each tenant in the
cash flow.

Vacancy/Collection Loss Estimate

In projecting annual vacancy/collection loss for the Subject Property,
consideration is given to the current vacancy rate of the Subject Property (0%),
15% vacancy rate of the rent comparables, 26% vacancy of the DFW RealSmart
survey and 21.7% vacancy indicated by the CoStar survey.

According to Miller Commercial's Year-End 2003 North Texas Investment Survey,
the typical holding period for properties like the Subject is 7.6 years. The
Subject is currently 100% leased, of which 81% of the space is leased for +/-6
more years. The remaining 19% of the building is leased for +/-18 months,
however both the tenant and sub-tenant have expressed interest in extending the
leases for an additional five years.

Typically Class A investment grade office buildings similar to the Subject
outperform the overall market. Long-term leases to high quality tenants allow
these properties to maintain high occupancy and rent levels during market
downturns. Therefore, over a stabilized holding period of say 10 years, a
stabilized vacancy rate of 5.0% is considered appropriate.

The following chart summarizes the expiration date per year of various spaces.


Humphries & Associates               IX - 4                          D7U/04-1991
<PAGE>

Income Approach, continued


==============================================================================
   Suite          Tenant             Expiration Date       SF      % of  Bldg.
- ------------------------------------------------------------------------------
    400     Macromedia                  02/28/06         27,697       9.2%
- ------------------------------------------------------------------------------
    500     Macromedia                  02/28/06         27,697       9.2%
- ------------------------------------------------------------------------------
                                          Total          55,394      18.4%
- ------------------------------------------------------------------------------
                                  Year 2009
- ------------------------------------------------------------------------------
    110     LaCuisine Cafe              02/28/09          2,000       0.7%
- ------------------------------------------------------------------------------
                                          Total           2,000       0.7%
- ------------------------------------------------------------------------------
                                  Year 2010
- ------------------------------------------------------------------------------
    100     Inet                        06/30/10         15,476       5.1%
- ------------------------------------------------------------------------------
    200     Inet                        06/30/10         26,046       8.7%
- ------------------------------------------------------------------------------
    300     Inet                        06/30/10         28,550       9.5%
- ------------------------------------------------------------------------------
    600     Inet                        06/30/10         28,550       9.5%
- ------------------------------------------------------------------------------
    700     Inet                        06/30/10         28,550       9.5%
- ------------------------------------------------------------------------------
    800     Inet                        06/30/10         28,550       9.5%
- ------------------------------------------------------------------------------
    900     Inet                        06/30/10         28,550       9.5%
- ------------------------------------------------------------------------------
   1000     Inet                        06/30/10         28,550       9.5%
- ------------------------------------------------------------------------------
   1100     Inet                        06/30/10         28,550       9.5%
- ------------------------------------------------------------------------------
                                          Total         241,372      80.3%
==============================================================================

Operating Expense Estimate

The appraiser was supplied with income and expense statements for the years
2000, 2001, 2002 and 2003. In addition, the budgeted 2003 income/expense data
was available. These statements were annualized and are summarized as follows.


Humphries & Associates               IX - 5                          D7U/04-1991
<PAGE>

Income Approach, continued


- -------------------------------------------------------------------------------
                      Collins Crossing Operating Statement
                          2000 and 2001 - 298,766 NRSF
- -------------------------------------------------------------------------------
                                 2000 Amount    2000      2001 Amount   2001 Per
                                               Per SF                     SF
- -------------------------------------------------------------------------------
Rental Income                     $2,646,678    $8.86     $6,439,875    $21.55
- -------------------------------------------------------------------------------
Electric Reimbursement               215,120     0.72        555,764      1.86
- -------------------------------------------------------------------------------
Expense Reimbursement                      0        0        112,163      0.38
- -------------------------------------------------------------------------------
Parking Income                           100        0            100         0
- -------------------------------------------------------------------------------
Miscellaneous Income                 600,632     2.01         14,614      0.05
- -------------------------------------------------------------------------------
Total Income                      $3,462,530   $11.59     $7,122,516    $23.84
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Expenses
- -------------------------------------------------------------------------------
Real Estate Taxes                   $292,010    $0.98     $1,026,250    $ 3.43
- -------------------------------------------------------------------------------
Insurance                             11,002     0.04         31,454      0.11
- -------------------------------------------------------------------------------
Payroll                              239,610     0.80        324,064      1.08
- -------------------------------------------------------------------------------
Utilities*                           269,536     0.90        556,917      1.86
- -------------------------------------------------------------------------------
Janitorial                           117,006     0.39        243,012      0.81
- -------------------------------------------------------------------------------
Maintenance & repairs                116,616     0.39        219,388      0.73
- -------------------------------------------------------------------------------
General & Administrative              42,646     0.14         59,824      0.20
- -------------------------------------------------------------------------------
Management Fee                        43,918     0.15        136,466      0.46
- -------------------------------------------------------------------------------
Total Operating Expenses          $1,132,344    $3.79     $2,597,375    $ 8.69
- -------------------------------------------------------------------------------
Net Operating Income              $2,330,186    $7.80     $4,525,141    $15.15
- -------------------------------------------------------------------------------
*Utility expense includes individual tenant electricity expense.
- -------------------------------------------------------------------------------


Humphries & Associates               IX - 6                          D7U/04-1991
<PAGE>

Income Approach, continued


<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
                                         Collins Crossing Operating Statement
                                              2002, 2003 and 2004 Budget
                                                      298,766 SF
- ------------------------------------------------------------------------------------------------------------------------
                                                     2002       2002            2003     2003      Budget 2004
- ------------------------------------------------------------------------------------------------------------------------
                                                   Amount        PSF          Amount      PSF           Amount      PSF
- ------------------------------------------------------------------------------------------------------------------------
<S>                                            <C>            <C>         <C>          <C>          <C>          <C>
Rental Income                                  $6,747,017     $22.58      $7,058,994   $23.63       $7,058,994   $23.63
- ------------------------------------------------------------------------------------------------------------------------
Reimbursement - Electricity                      $624,044      $2.09        $596,888    $2.00         $595,602    $1.99
- ------------------------------------------------------------------------------------------------------------------------
Reimbursement - Operating Expenses               $236,854      $0.79        $152,011    $0.51         $186,732    $0.63
- ------------------------------------------------------------------------------------------------------------------------
Other Income                                       $6,545      $0.02            $493    $0.00               $0    $0.00
                                               ----------     ------      ----------   ------       ----------   ------
- ------------------------------------------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------------------------
Total Income                                   $7,614,490     $25.49      $7,808,386   $26.14       $7,841,328   $26.25
- ------------------------------------------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------------------------
Utilities*                                      -$554,686     -$1.86       -$544,124   -$1.82        -$627,300   -$2.10
- ------------------------------------------------------------------------------------------------------------------------
Repair/Maintenance                              -$237,861     -$0.80       -$194,730   -$0.65        -$350,815   -$1.17
- ------------------------------------------------------------------------------------------------------------------------
Janitorial/Cleaning                             -$219,418     -$0.73       -$177,013   -$0.59        -$245,600   -$0.82
- ------------------------------------------------------------------------------------------------------------------------
Real Estate Taxes                               -$922,414     -$3.09       -$831,856   -$2.78        -$872,232   -$2.92
- ------------------------------------------------------------------------------------------------------------------------
Insurance                                        -$42,207     -$0.14        -$80,124   -$0.27         -$95,400   -$0.32
- ------------------------------------------------------------------------------------------------------------------------
General/Administrative                           -$66,742     -$0.22       -$104,150   -$0.35         -$94,500   -$0.32
- ------------------------------------------------------------------------------------------------------------------------
Management Fee                                  -$148,457     -$0.50       -$224,209   -$0.75        -$219,528   -$0.73
- ------------------------------------------------------------------------------------------------------------------------
Payroll                                          $319,385      $1.07       -$345,013   -$1.15        -$392,615   -$1.31
                                               ----------     ------      ----------   ------       ----------   ------
- ------------------------------------------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------------------------
Total Operating Expenses                      -$2,511,170     -$8.41     -$2,501,220   -$8.37      -$2,897,990   -$9.70
- ------------------------------------------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------------------------
Net Operating Income                           $5,103,320     $17.08      $5,307,166   $17.76       $4,943,338   $16.55
- ------------------------------------------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------------------------
Less: Leasing Commissions                              $0      $0.00              $0    $0.00               $0    $0.00
- ------------------------------------------------------------------------------------------------------------------------
Less: Tenant Improvements                              $0      $0.00              $0    $0.00               $0    $0.00
                                               ----------     ------      ----------   ------       ----------   ------
- ------------------------------------------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------------------------
Cash Flow                                      $5,498,774     $18.72      $5,307,166   $17.76       $4,943,338   $16.55
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>

*Utility expense includes individual tenant electricity

In addition to the previously shown data, an income/expense analysis published
by BOMA International (known as the "BOMA Experience Exchange Report") will be
utilized. This publication reports operating income and expense data for office
buildings by geographic area. 2003 BOMA report using 2002 data for all suburban
office buildings and suburban office buildings 100,000 SF - 299,999 SF in the
Dallas area is summarized as follows.


Humphries & Associates               IX - 7                          D7U/04-1991
<PAGE>

Income Approach, continued


A summary of the BOMA expense data and key components of the Subject Property's
operating levels are presented as follows.

===============================================================================
                                     PER SF
- -------------------------------------------------------------------------------
                                                 Dallas All    Dallas Suburban
                           Subject Property      Suburban     100,000 - 299,999
- -------------------------------------------------------------------------------
                         2002           2003        2002           2002
- -------------------------------------------------------------------------------
Management               $0.50         $0.75        $0.49         $0.52
- -------------------------------------------------------------------------------
Payroll                  $1.07         $1.15        $0.45         $0.51
- -------------------------------------------------------------------------------
Real Estate Taxes        $3.09         $2.78        $3.13         $2.99
- -------------------------------------------------------------------------------
Insurance                $0.14         $0.27        $0.21         $0.20
- -------------------------------------------------------------------------------
Utilities                $1.86         $1.82        $1.62         $1.61
- -------------------------------------------------------------------------------
Maintenance/Repair(1)    $0.80         $0.65        $1.73         $1.60
- -------------------------------------------------------------------------------
Janitorial               $0.73         $0.59        $0.79         $0.79
- -------------------------------------------------------------------------------
Administrative           $0.22         $0.35        $0.25         $0.15
- -------------------------------------------------------------------------------
Advertising              $0.00         $0.00        $0.06         $0.07
- -------------------------------------------------------------------------------
Miscellaneous            $0.00         $0.00        $0.00         $0.00
- -------------------------------------------------------------------------------
Totals                   $8.41         $8.37        $8.73         $8.44
- -------------------------------------------------------------------------------
Tenant Finish/Lease
Commissions               NA             NA         $3.13         $1.85
===============================================================================

(1) Includes roads, grounds, landscaping and security.

Based upon the actual expenses of the Subject and the BOMA data, the following
stabilized expense categories are appropriate for the Subject. Consideration is
given to the physical characteristics of the Subject Improvements and to the
estimated market lease rate.

Management

Represents a charge for management of the investment and includes all aspects of
management supervision. Management expense is estimated as a percentage of
effective gross income. Considering the Subject Property is a three-tenant
building with long term leases in effect, a first-year management expense is
estimated at 3.0% of effective gross income.


Humphries & Associates               IX - 8                          D7U/04-1991
<PAGE>

Income Approach, continued


Payroll

Includes payroll, payroll taxes, and payroll benefits for administrative,
security, grounds and maintenance personnel. The Subject's payroll expense in
2002 and 2003 was $1.07/SF and $1.15/SF, respectively. The 2004 budget indicates
a payroll expense of $1.31/SF. BOMA indicates a payroll expense of $0.40/SF to
$0.51/SF. For our analysis, a reasonable payroll expense of $1.10/SF is
considered reasonable and will be utilized.

Janitorial

This includes all fees for outside contractors associated with general cleaning
operation of the Subject. The 2002 and 2003 janitorial expense was $0.73/SF and
$0.59/SF, respectively. According to the 2004 budget, the 2004 Janitorial
expense is estimated at $0.82/SF. The BOMA data indicated a janitorial expense
of $0.79/SF. The first year janitorial expense is estimated to be $0.80/SF.

Real Estate Taxes

Includes all real estate taxes applicable to the Subject Property. Based upon
the 2004 assessed value of $26,750,590 ($89.53/SF) and the applicable 2003 ad
valorem tax rates (2.83901%), real estate taxes for the Subject Property are
approximately $759,435 or $2.54/SF. For our analysis, the current assessed value
is considered reasonable and will be utilized.

Insurance

Includes all one-year charges for fire, liability, compensation, and theft
insurance in addition to insurance premiums. The Subject's 2002 and 2003
insurance expense was $0.14/SF and $0.27/SF, respectively. The 2004 insurance
premium is $0.32/SF or $95,605. BOMA indicated an insurance expense of $0.21/SF
to $0.20/SF. For our analysis, a first year insurance expense is based on the
actual premium of $95,605 or $0.32/SF.


Humphries & Associates               IX - 9                          D7U/04-1991
<PAGE>

Income Approach, continued


Maintenance and Repairs

Accounts for all items of general maintenance and repair, structural repair,
exterior painting, heating, roofing repairs, etc. Also included in this category
is landscaping maintenance, parking, roads and security items. Items such as
tenant modifications are considered capital expenditures and are not considered
expense items in the analysis. Maintenance is a volatile expense item. It will
normally include a certain amount of capital items, which would traditionally be
covered under a reserve heading. Maintenance will vary significantly from
project to project and is a function of building age, design, condition, etc.
The Subject is a multi-tenant office building that is approximately 5 years old
and is in very good condition. The 2002 and 2003 expenses were $0.80/SF and
$0.65/SF. The 2004 budget projects a maintenance/repairs expense of $1.17/SF.
BOMA indicates a M/R expense of $1.73/SF and $1.60/SF. The Subject is a new
structure with many of the typical maintenance and repair items under warranty.
Given its age, size, occupancy and good condition, maintenance and repairs are
estimated at $1.00/SF.

Reserves for Replacement

Replacement Reserves consist of a sinking fund that is established for
replacements of certain components other than the building itself. The annual
amount is based upon the cost of replacement divided by the useful life of the
component. In actual practice, such items are replaced using operating revenues
and are capitalized over the economic life of the item. Because the
capitalization rates used to capitalize the net operating income (calculated in
the proforma shown later in this section) do not factor in reserves, this amount
will not be included in the Maintenance/Repairs expense estimate for the
proforma used in our direct capitalization.

===============================================================================
                       Replacement Reserves Calculation
- -------------------------------------------------------------------------------
  Reserve Item    Economic Life   Replacement    Sinking Fund    Replacement
                                      Cost        Factor @ 7%      Reserves
- -------------------------------------------------------------------------------
Roof Cover          30 Years        $150,748        0.0105         $ 1,583
- -------------------------------------------------------------------------------
HVAC                25 Years       $2,039,931       0.0244         $49,774
- -------------------------------------------------------------------------------
Paving              30 Years        $650,000        0.0105         $ 6,825
- -------------------------------------------------------------------------------
Total Replacement Reserves                                         $581824
                                                                   $0.19/SF
===============================================================================


Humphries & Associates               IX - 10                         D7U/04-1991
<PAGE>

Income Approach, continued


The replacement reserves are estimated at $0.15/SF. The sales used in the market
typically do not include a deduction for reserves. For our direct
capitalization, no deduction for reserves will be made. Reserves will be
deducted in our cash flow analysis.

Utilities

The individual tenant spaces are individually metered for electricity. The
tenants pay for their electricity cost. The landlord is responsible for the
common area electricity, water and sewer expenses. The Subject's 2002 and 2003
utility expense was $1.86/SF and $1.82/SF, respectively. The 2004 budget
indicates a total utility expense of $2.10/SF. The BOMA utility expense of
$1.85/SF and $2.02/SF. The Subject's historical utilities expense is considered
slightly low because 3 to 4 floors have been vacant during the past two years.
For our analysis, the stabilized utilities are estimated at $2.10/SF.

General/Administrative

General and administrative expenses include items such as professional fees,
dues and subscriptions, telephone, postage, and office equipment supplies,
promotion, leasing and an allowance for expenses not included in any of the
previous expense categories including expense leakage during vacant periods. The
Subject Property is 100% leased to three tenants and has incurred no marketing
expenses. The Subject is encumbered generally with long-term leases and will
have minimal advertising expense. The Subject's 2002 and 2003 General &
Administrative expense was $0.22/SF and $0.29/SF. The 2004 budget projects a
$0.32/SF General and Administrative expense. The stabilized
advertising/promotion, administration, and miscellaneous expenses are estimated
at $0.30/SF.


Humphries & Associates               IX - 11                         D7U/04-1991
<PAGE>

Income Approach, continued


Based on the previous income, vacancy and expense analysis, the following
stabilized proforma is deemed appropriate for the Subject.

                            COLLINS CROSSING PROFORMA
                                   298,766 NRA

Income                                                       Total    Per SF
- ------                                                       -----    ------

Gross Rental Income (Contract Rent)                      $6,761,540   $22.63
Plus: Ancillary Income                                       14,186     0.05
Plus:  Recoveries*                                          739,967     2.48
                                                         ----------    -----

Total Income                                             $7,515,693   $25.16
Less Vacancy @ 5%                                          -375,785   - 1.26
                                                         ----------   ------

Effective Gross Income                                   $7,139,908   $23.90

Expenses
- --------

Management Fees                 3.0%    $  214,197
Payroll                       $1.10/SF     328,643
Property Tax                  $2.54/SF     759,435
Insurance                     $0.32/SF      95,605
Utilities                     $2.10/SF     627,409
Maint./Repair                 $1.00/SF     298,766
Janitorial                    $0.80/SF     239,013
Gen./Admin./Misc.             $0.30/SF      89,630
                                         ---------

Total Expenses                                           $2,652,698   $ 8.88
                                                         ----------   ------

Net Operating Income                                     $4,487,210   $15.02

*Calculated in the first year of the Discounted Cash Flow Analysis. Includes
all operating expenses.


Humphries & Associates               IX - 12                         D7U/04-1991
<PAGE>

Income Approach, continued


Capitalization

Several capitalization techniques are available to process income into an
indication of value. The appropriate technique is determined by the
quality/quantity of available market data and by area market conditions. The
capitalization methods that are most widely used by appraisers are Direct
Capitalization and Yield Capitalization.

Direct Capitalization

Direct capitalization techniques are used to convert a single year's estimated
income into a value indication. This is accomplished by dividing the income
estimate by an income rate or multiplying the income estimate by an income
factor. In direct capitalization, a precise distinction between return on and
return of capital is not made. However, a satisfactory rate of return for the
investor and return of capital invested are implicit in the rates or factors
used in direct capitalization because they are derived from similar investment
properties.

Direct capitalization will be used in this analysis because of the availability
of current market data. The direct capitalization formula applicable to this
method is as follows:

                                     Net Operating Income
              Property Value  =  ---------------------------
                                 Overall Capitalization Rate

To derive a capitalization rate for the Subject Property, four sources of
information will be analyzed such as local office building sales, the Year-End
2003 Miller Commercial survey, the 1st Quarter 2004 Korpacz Investor Survey and
the 1st Quarter 2004 American Council of Life Insurance Survey. This information
was obtained from various surveys conducted nationally and locally in the
Dallas/Fort Worth and North Texas area.


Humphries & Associates               IX - 13                         D7U/04-1991
<PAGE>

Income Approach, continued


Local Office Building Sales Survey

The following surveys, recent office building sales in the Subject area and the
Dallas area were acquired from involved parties. The office building sales are
adjusted to the equivalent of cash as addressed in the Market Approach section
of this appraisal.

<TABLE>
<CAPTION>
====================================================================================================================================
                                                    OFFICE BUILDING SALES SUMMARY
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                          Net
                                    Occu. at     Year                   Rentable                        Stabilized Sales   Proforma
        Sale           Sale Date      Sale       Built    Condition    Area (SF)    Stories     GIM        Price/NRSF        OAR*
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                      <C>          <C>        <C>        <C>         <C>           <C>      <C>          <C>             <C>
1. 5600 Headquarters     10/02        100%       2000       Good        166,238        3       9.96x        $159.41         9.25%
- ------------------------------------------------------------------------------------------------------------------------------------
2. 5950 Sherry           06/02         99%       1999       Good        196,997        9       7.50x        $194.93         8.82%
- ------------------------------------------------------------------------------------------------------------------------------------
3. Premier Place         05/03         85%       1986       Good        395,901        21      6.50x        $136.40         8.02%
- ------------------------------------------------------------------------------------------------------------------------------------
4.  Granite Tower        09/03         99%       1999       Good        240,145        10      6.36x        $139.92         8.86%
- ------------------------------------------------------------------------------------------------------------------------------------
5. Millennium I          10/03         91%       2000       Good        362,000        14      6.28x        $144.34         9.25%
- ------------------------------------------------------------------------------------------------------------------------------------
6. Park Place            10/03         92%       1986       Good        177,296        14      7.04x        $175.98         8.10%
- ------------------------------------------------------------------------------------------------------------------------------------
7. 1401 Nolan Ryan       12/03        100%       2003       Good        233,783        3       12.83x       $128.32         7.03%
- ------------------------------------------------------------------------------------------------------------------------------------
8. 150 Highland          03/04        100%       2004       Good        160,000        3       10.10x       $143.75         9.34%
- ------------------------------------------------------------------------------------------------------------------------------------
    Average                -           96%       1997         -         241,545        9       8.32x        $152.88         8.59%
- ------------------------------------------------------------------------------------------------------------------------------------
    Subject                -          100%       1999       Good        298,766        11        -             -              -
====================================================================================================================================
</TABLE>

*Overall rates are not considered to include reserves.

The comparable sales have OARs ranging from 7.03% to 9.34% with an average of
8.59%. Sales 2, 6 and 8 are considered most similar to the Subject. These sales
have an OAR range of 8.10% to 9.34% and average 8.75%.


Humphries & Associates               IX - 14                         D7U/04-1991
<PAGE>

Income Approach, continued


Miller Commercial Survey

The data shown in the following table was published in a Year-End 2003 real
estate investment survey by Miller Commercial, Inc. This survey indicates the
capitalization rates and discount rates which were derived from sales of various
real estate properties in the North Texas area.

================================================================================
                                     Capitalization Rates
- --------------------------------------------------------------------------------
                              Going-In           Stabilized          Reversion
- --------------------------------------------------------------------------------
Apartments                       7.1%               8.1%                8.3%
Offices                          8.8%               9.4%                9.6%
- -------                          ----              -----               -----
Retail                           9.1%               9.9%               10.1%
Industrial                       8.6%               9.0%                9.6%
Hotel                            9.5%              10.5%               11.0%
- --------------------------------------------------------------------------------
                                            Discount Rates
- --------------------------------------------------------------------------------
Apartments                           7.5% - 10.0% - 9.3% Average
Offices                              9.0% - 11.0% - 10.2% Average
- -------                             -------------
Retail                               8.5% - 11.0% - 9.5% Average
Industrial                           8.0% - 11.5% - 9.2% Average
Hotels                              10.5% - 12.5% - 11.5% Average
================================================================================

This survey data indicates a going-in rate for investment quality Class A and B
office properties of 8.8%, a stabilized rate of 9.4%, a reversion rate of 9.6%
and a weighted average discount rate of 10.2%.

Korpacz Real Estate Investor Survey

The 1st Quarter 2004 Korpacz Real Estate Investor Survey summarizes the expected
rates of return, property selection criteria, and investment outlook of a
representative sample of large institutional investors in the U.S. The following
chart shows the results of the 1st Quarter 2004 survey for office properties.


Humphries & Associates               IX - 15                         D7U/04-1991
<PAGE>

Income Approach, continued


- --------------------------------------------------------------------------------
                      Korpacz Real Estate Investor Survey
                            Dallas Office Buildings
                                1st Quarter 2004
- --------------------------------------------------------------------------------
                                      Range                     Average
- --------------------------------------------------------------------------------
Overall Cap Rate                  6.00% - 10.50%                 8.77%*
- --------------------------------------------------------------------------------
Residual Cap Rate                 7.50% - 11.00%                 9.27%
- --------------------------------------------------------------------------------
Discount Rate (IRR)               8.50% - 12.25%                10.51%
- --------------------------------------------------------------------------------

*All cash transaction capitalization rate.

Residual capitalization rates ranged from 7.50% to 11.0% with an average of
9.27%. Discount rates ranged from 8.50% to 12.25% with an average of 10.51%.

Debt Coverage Ratio Estimation of a Capitalization Rate

Derivation of a capitalization rate using this technique is based on the
following formula:

            Ro  =  DCR  X  Rm  X  M

Where:

    Ro    =  Capitalization Rate
    DCR   =  Debt Coverage Ratio
    Rm    =  Mortgage Constant
    M     =  Loan to Value Ratio


Based on the 1st Quarter 2004 Investment Bulletin of the American Council of
Life Insurance Survey of mortgage loan commitments for commercial properties,
the following terms were indicated for office properties. This publication
represents 2/3rds of the commercial mortgage held by U.S. life insurance
companies. The following chart summarizes the data by loan size from $25,000,000
and over and for all loans.


Humphries & Associates               IX - 16                         D7U/04-1991
<PAGE>

Income Approach, continued


<TABLE>
<CAPTION>
==================================================================================================================================
                                    Survey of Mortgage Commitments on Commercial Properties
- ----------------------------------------------------------------------------------------------------------------------------------
                                                                                  Averages
- ---------------------------------------  -----------------------------------------------------------------------------------------
 Property Type   No. of       Amount        Loan      Contract     Yield/      Debt      Loan/     Cap         %       Maturity
   Loan Size      Loans     Committed      Amount    Int. Rate      Fees     Coverage    Value     Rate    Constant    (Yrs/Mos)
- ---------------------------------------  -----------------------------------------------------------------------------------------
                              ($000)       ($000)
- ---------------------------------------  -----------------------------------------------------------------------------------------
<S>                <C>      <C>            <C>         <C>          <C>        <C>       <C>       <C>       <C>          <C>
All Loans          129      1,706,843      13,231      5.21%        5.30       2.08      62.1%     8.7%      7.1%         9/3
- ---------------------------------------  -----------------------------------------------------------------------------------------
>$25M               15       946,242       63,083      5.08%        5.19       2.43      57.7%     8.7%      6.5%         8/6
==================================================================================================================================
</TABLE>

                                    All Loans

                             Ro = 2.08 x .071 x .621

                                   Ro = 9.17%

                                  $25M and Over

                             Ro = 2.43 x .065 x .577

                                   Ro = 9.11%


The 9.17% and 9.11% can be compared to the 8.7% capitalization rates listed by
the Investment Bulletin. The 8.7% capitalization rate represents the NOI/Value
upon which the loan was based.

Capitalization Rate Summary

A summary of the rates of the various publications, market sales and debt
coverage ratio estimation, and the American Council of Life Insurance survey, is
presented as follows:


Humphries & Associates               IX - 17                         D7U/04-1991
<PAGE>

Income Approach, continued


===============================================================================
                              Going-In   Stabilized  Terminal   Discount Rate
- -------------------------------------------------------------------------------
Miller Commercial               8.8%        9.4%       9.6%         10.2%
- -------------------------------------------------------------------------------
Korpacz Survey                  9.27%       8.77%      8.77%        10.51%
- -------------------------------------------------------------------------------
Debt Coverage Ratio - All        NA         9.17%       NA            NA
Loans
- -------------------------------------------------------------------------------
Debt Coverage Ratio $25M &       N/A        9.11%       N/A          N/A
Over
- -------------------------------------------------------------------------------
American Council of Life         N/A        8.7%        N/A          N/A
Insurance - All Loans
- -------------------------------------------------------------------------------
American Council of Life         NA         8.7%        NA            NA
Insurance - $25M & Over
- -------------------------------------------------------------------------------
Market Sales                     N/A        8.59%       N/A          N/A
===============================================================================

All of the capitalization rates described by the surveys apply to typically "A"
and some "B" quality properties that are considered investment quality near or
at stabilized levels.

Conclusions

The stabilized rates indicated by the surveys range from 8.7% to 9.4%. The OAR
for the Subject is best indicated by the improved sales, which range from 7.03%
to 9.34% and average 8.59%. The Subject is most similar to Sales 2, 6 and 8
which have OAR's of 8.10% to 9.34% with an average of 8.75%. For our analysis,
an OAR of 9.25% to 9.75% is considered reasonable and will be utilized.


Humphries & Associates               IX - 18                         D7U/04-1991
<PAGE>

Income Approach, continued


The following charts show the Estimated Market Value Range via Direct
Capitalization.

================================================================================
 Stabilized Net Income          Overall Rate          "As Is" Value Estimate
- --------------------------------------------------------------------------------
      $4,487,210                    9.25%                   $48,510,378
- --------------------------------------------------------------------------------
      $4,487,210                    9.75%                   $46,022,667
================================================================================

Estimated Value Range Via Income Approach
  Via Direct Capitalization, "As Is",             $46,000,000  to  $48,500,000

Cash Flow (Yield Capitalization)

The discounted cash flow analysis is a yield capitalization technique and is
applicable to existing improvements such as the Subject Property or to proposed
improvements. A typical discounted cash flow analysis projects rental income,
occupancy levels, and operating expenses over a typical holding period based
upon historical and projected future market trends.

The annual cash flows are discounted into a present worth over a range of
discount rates (rates of return) currently required by investors in properties
similar to the Subject Property. A discounted cash flow analysis is considered
to be most representative of the potential performance of a property in an
unbalanced market because it allows for increases/decreases in income,
occupancy, and expenses over the projected holding period. The following is an
explanation of each segment of the discounted cash flow analysis, utilizing the
ARGUS 8.6.02 software program.

The following is an explanation of each segment of the cash flow for the
Subject.

      The gross potential rental income for the Subject is based on the existing
      contract leases. The Subject leases are considered to be at market. The
      current market rent for all lease space within the Subject is estimated at
      $20.00/SF plus electricity with a base year expense stop for the Inet and
      Macromedia space. The estimated market rate for the La Cuisine Cafe space
      is $9.00/SF plus electricity. Free rent is prevalent in today's market,
      however by the time any space in the Subject rolls to market in February
      of 2006 (approximately 20 months), the market conditions are projected to
      have improved to a point where free rent is no longer necessary.


Humphries & Associates               IX - 19                         D7U/04-1991
<PAGE>

Income Approach, continued


      Based on information discussed in the Market Analysis and Income Approach
      sections of this report, market rents are projected to increase at 3.5%
      per year beginning in Year 2 of the cash flow. Rent growth is projected to
      spike to 10% per year in Years 3, 4 and 5 as the market returns to
      stabilized occupancy and rent levels then slow to 3.5% for the remaining
      term. Miller Commercial projects rent growth of approximately 1.29% in
      Year 1, 2.79% in Year 2 and 4.42% in Year 3 and thereafter. After the
      contract rents roll to the projected 5-year lease term, the rents will
      continue to increase 3.5% annually.

      The Subject has provisions in the leases for the potential for parking
      income. However, no parking revenue is being charged and none is
      anticipated over the near term. Airborne Express leases space for a drop
      off container. The lease is renewed annually at $125/year. T-Speed
      Communications leases and operates telecommunications equipment through
      December of 2005. The monthly rent during 2004 and 2005 is $771.75 and
      $810.34, respectively. In addition, Inet pays $400 per month in rent for
      LaCuisine Cafe. Based on the preceding, the first year ancillary income is
      calculated at $14,186 and is projected to increase 3.5% annually
      throughout the DCF.

2.    BOMA indicates that, excluding the taxes and insurance expense, expenses
      have increased +/-2.3% annually during the past 10 years. Miller
      Commercial projects expense growth of 2.93% in Year 1, 3.42% in Year 2 and
      3.58% in Year 3 and thereafter. With the exception of management, all
      expenses will be increased 3.5% per year beginning in Year 2. Management
      is calculated at 3% of the effective gross income.

3.    In the cash flow, vacancy/credit loss is a calculated function of lease
      turnover during the holding period and vacancy and collection loss. A
      vacancy period of 6 months with a renewal probability of 75% is applied to
      Inet and Macromedia space. A 50% renewal probability will be applied to
      the LaCuisine Cafe space. This results in an average turnover vacancy over
      the 10-year holding period of +/-2.0%. In addition to the turnover
      vacancy, once Macromedia's lease expires an additional 1% of general
      vacancy is added in years 3 through 6. Once Inet's initial lease expires
      in year 6, the general vacancy is increased to 3% in years 7-10. Thus, the
      average per year total vacancy (rollover and general) for the cash flow is
      3.6%.

4.    Lease commissions are estimated at a market rate of 6.5% for new tenants
      and 2.0% for renewals. Finishout costs for new tenants are estimated at a
      market rate of $15.00/SF. For renewing tenants a finishout estimate of
      $7.50/SF is applied. A 5-year term is applied to any new lease.

5.    The typical new lease will be on a gross basis with a base year expense
      stop on all operating expenses. The tenant will pay the individual unit
      electricity. When these spaces roll to market, the space will pay expense
      reimbursements.


Humphries & Associates               IX - 20                         D7U/04-1991
<PAGE>

Income Approach, continued


6.    A deduction of $44,815 is applied to the first year of the cash flow for
      replacement reserves. This amount is increased at 3.5% per year in Years
      2-10.

7.    The cash flow program is based on a 10-year holding period with reversion
      occurring at the end of the 10th year. The reversion sale price is
      calculated based on the 10th year NOI divided by the appropriate reversion
      capitalization rate.

      In order to arrive at the appropriate reversion cap rate, several sources
      were considered. These sources include stabilized capitalization rates
      from actual sales of office buildings in the Dallas area as well as the
      Year-End 2003 Miller Commercial Survey and 1st Quarter 2004 Korpacz
      Survey. The results of these surveys are summarized earlier in this
      section.

      As is shown in the surveys, a premium is usually attached to reversionary
      capitalization rates due to increased risk as compared to going-in
      capitalization rates. Therefore, we have estimated an appropriate
      reversionary capitalization rate for the Subject Property at 9.75%. The
      reversion rate is typically slightly greater than the capitalization rate
      used in the direct capitalization. Additionally, selling expenses are
      estimated at 2% of the reversionary sale price.

8.    In order to select an appropriate discount rate for the cash flow, a
      Year-End 2003 investment survey by Miller Commercial and 1st Quarter 2004
      Korpacz Investment Survey will be utilized. The results of these surveys
      are listed as follows.

                        Office Building Discount Rates

                                         Range                    Average
                                         -----                    -------

     Miller Commercial Survey         9.0% - 11.0%                 10.2%
     Korpacz                         8.5% - 12.25%                10.51%


Humphries & Associates               IX - 21                         D7U/04-1991
<PAGE>

Income Approach, continued


Based on these surveys and considering the Subject's good location, long-term
leases and overall credit strength of the tenants, a discount rate range of
10.5% to 11.0% is used to estimate the present value of the cash flows.

The DCF and present value calculations are presented on the following pages.


Humphries & Associates               IX - 22                         D7U/04-1991
<PAGE>

              SCHEDULE OF PROSPECTIVE CASH FLOW - COLLINS CROSSING
           In Inflated Dollars for the Fiscal Year Beginning 7/1/2004

<TABLE>
<CAPTION>
                                    Year 1     Year 2     Year 3     Year 4     Year 5
For the Years Ending               Jun-2005   Jun-2006   Jun-2007   Jun-2008   Jun-2009
                                   --------   --------   --------   --------   --------
<S>                               <C>        <C>        <C>        <C>        <C>
POTENTIAL GROSS REVENUE
Base Rental Revenue               6,764,226  7,170,802  7,021,773  7,065,340  7,108,185
Absorption & Turnover Vacancy             0   -191,109          0          0     -6,199
                                  ---------  ---------  ---------  ---------  ---------
Scheduled Base Rental Revenue     6,764,226  6,979,693  7,021,773  7,065,340  7,101,986

Expense Reimbursement Revenue
Management Fee                       63,415     67,054     70,236     88,552    103,583
Payroll                              91,415    100,045    112,418    148,928    181,679
Property Tax                        211,248    231,178    259,788    344,149    419,827
Insurance                            26,592     29,105     32,704     43,323     52,852
Utilities                           174,526    190,991    214,621    284,321    346,837
Maintenance/Repairs                  83,104     90,946    102,205    135,387    165,158
Janitorial                           66,484     72,761     81,763    108,313    132,128
General/Administrative               24,931     27,285     30,662     40,621     49,551
                                  ---------  ---------  ---------  ---------  ---------
Total Reimbursement Revenue         741,715    809,365    904,397  1,193,594  1,451,615

Ancilliary Income                    14,186     14,683     16,151     17,766     19,542
                                  ---------  ---------  ---------  ---------  ---------
TOTAL POTENTIAL GROSS REVENUE     7,520,127  7,803,741  7,942,321  8,276,700  8,573,143
General Vacancy                           0          0    -79,423    -82,767    -85,793
                                  ---------  ---------  ---------  ---------  ---------
EFFECTIVE GROSS REVENUE           7,520,127  7,803,741  7,862,898  8,193,933  8,487,350
                                  ---------  ---------  ---------  ---------  ---------
OPERATING EXPENSES
Management Fee                      225,604    234,112    235,887    245,818    254,620
Payroll                             328,643    340,146    374,160    411,576    452,734
Property Tax                        759,435    786,015    864,617    951,078  1,046,186
Insurance                            95,605     98,951    108,846    119,731    131,704
Utilities                           627,409    649,368    714,305    785,736    864,309
Maintenance/Repairs                 298,766    309,223    340,145    374,160    411,576
Janitorial                          239,013    247,378    272,116    299,328    329,261
General/Administrative               89,630     92,767    102,044    112,248    123,473
                                  ---------  ---------  ---------  ---------  ---------
TOTAL OPERATING EXPENSES          2,664,105  2,757,960  3,012,120  3,299,675  3,613,863
                                  ---------  ---------  ---------  ---------  ---------
NET OPERATING INCOME              4,856,022  5,045,781  4,850,778  4,894,258  4,873,487
                                  ---------  ---------  ---------  ---------  ---------
LEASING & CAPITAL COSTS
Tenant Improvements                       0    537,495          0          0     20,664
Leasing Commissions                       0    192,153          0          0      3,989
Replacement Reserves                 44,815     46,384     51,022     56,124     61,736
                                  ---------  ---------  ---------  ---------  ---------
TOTAL LEASING & CAPITAL COSTS        44,815    776,032     51,022     56,124     86,389
                                  ---------  ---------  ---------  ---------  ---------
CASH FLOW BEFORE DEBT SERVICE
  & TAXES                         4,811,207  4,269,749  4,799,756  4,838,134  4,787,098
                                  =====================================================

<CAPTION>
                                    Year 6      Year 7     Year 8     Year 9     Year 10
For the Years Ending               Jun-2010    Jun-2011   Jun-2012   Jun-2013    Jun-2014
                                   --------    --------   --------   --------    --------
<S>                               <C>        <C>         <C>        <C>        <C>
POTENTIAL GROSS REVENUE
Base Rental Revenue               7,153,631   8,518,608  9,050,412  9,367,176   9,695,029
Absorption & Turnover Vacancy             0  -1,459,798          0          0      -2,454
                                  ---------  ----------  ---------  ---------  ----------
Scheduled Base Rental Revenue     7,153,631   7,058,810  9,050,412  9,367,176   9,692,575

Expense Reimbursement Revenue
Management Fee                      102,925      13,119     13,648     24,151      34,729
Payroll                             201,437      26,518     25,594     44,210      62,779
Property Tax                        465,487      61,276     59,139    102,166     145,063
Insurance                            58,597       7,714      7,446     12,859      18,264
Utilities                           384,561      50,627     48,857     84,401     119,843
Maintenance/Repairs                 183,123      24,109     23,264     40,191      57,071
Janitorial                          146,502      19,284     18,609     32,155      45,654
General/Administrative               54,935       7,232      6,978     12,055      17,119
                                  ---------  ----------  ---------  ---------  ----------
Total Reimbursement Revenue       1,597,567     209,879    203,535    352,188     500,522

Ancilliary Income                    20,226      20,934     21,667     22,425      23,210
                                  ---------  ----------  ---------  ---------  ----------
TOTAL POTENTIAL GROSS REVENUE     8,771,424   7,289,623  9,275,614  9,741,789  10,216,307
General Vacancy                     -87,714    -262,483   -278,268   -292,254    -306,563
                                  ---------  ----------  ---------  ---------  ----------
EFFECTIVE GROSS REVENUE           8,683,710   7,027,140  8,997,346  9,449,535   9,909,744
                                  ---------  ----------  ---------  ---------  ----------
OPERATING EXPENSES
Management Fee                      260,511     210,814    269,920    283,486     297,292
Payroll                             468,579     484,980    501,954    519,522     537,706
Property Tax                      1,082,803   1,120,701  1,159,925  1,200,523   1,242,541
Insurance                           136,314     141,085    146,023    151,133     156,423
Utilities                           894,560     925,870    958,275    991,815   1,026,528
Maintenance/Repairs                 425,981     440,890    456,321    472,292     488,823
Janitorial                          340,785     352,712    365,057    377,834     391,058
General/Administrative              127,794     132,267    136,897    141,688     146,647
                                  ---------  ----------  ---------  ---------  ----------
TOTAL OPERATING EXPENSES          3,737,327   3,809,319  3,994,372  4,138,293   4,287,018
                                  ---------  ----------  ---------  ---------  ----------
NET OPERATING INCOME              4,946,383   3,217,821  5,002,974  5,311,242   5,622,726
                                  ---------  ----------  ---------  ---------  ----------
LEASING & CAPITAL COSTS
Tenant Improvements                       0   3,339,312    793,183          0           0
Leasing Commissions                       0   1,193,797    283,561          0           0
Replacement Reserves                 63,897      66,134     68,448     70,844      73,324
                                  ---------  ----------  ---------  ---------  ----------
TOTAL LEASING & CAPITAL COSTS        63,897   4,599,243  1,145,192     70,844      73,324
                                  ---------  ----------  ---------  ---------  ----------
CASH FLOW BEFORE DEBT SERVICE
  & TAXES                         4,882,486  -1,381,422  3,857,782  5,240,398   5,549,402
                                  =======================================================
</TABLE>


Humphries & Associates               IX - 23                         D7U/04-1991
<PAGE>

                            PROSPECTIVE PRESENT VALUE
               Cash Flow Before Debt Service plus Property Resale
                    Discounted Monthly over a 10-Year Period

<TABLE>
<CAPTION>
                                 For the                   P.V. of      P.V. of      P.V. of      P.V. of
Analysis                          Year         Annual     Cash Flow    Cash Flow    Cash Flow    Cash Flow
Period                           Ending      Cash Flow     @ 8.00%      @ 8.50%      @ 9.00%      @ 9.50%
- --------                        --------    ----------  -----------  -----------  -----------  -----------

<S>                             <C>         <C>         <C>          <C>          <C>          <C>
Year  1                         Jun-2005     4,811,207    4,614,994    4,603,548    4,592,190    4,580,921
Year  2                         Jun-2006     4,269,749    3,816,502    3,790,930    3,765,652    3,740,661
Year  3                         Jun-2007     4,799,756    3,945,642    3,899,572    3,854,255    3,809,675
Year  4                         Jun-2008     4,838,134    3,682,447    3,622,671    3,564,139    3,506,820
Year  5                         Jun-2009     4,787,098    3,374,947    3,304,934    3,236,691    3,170,166
Year  6                         Jun-2010     4,882,486    3,187,390    3,106,894    3,028,794    2,953,006
Year  7                         Jun-2011    -1,381,422     -915,436     -892,902     -871,003     -849,717
Year  8                         Jun-2012     3,857,782    2,136,593    2,062,161    1,990,649    1,921,927
Year  9                         Jun-2013     5,240,398    2,714,882    2,609,854    2,509,347    2,413,150
Year  10                        Jun-2014     5,549,402    2,662,085    2,547,310    2,437,982    2,333,819
                                            ----------  -----------  -----------  -----------  -----------
Total Cash Flow                             41,654,590   29,220,046   28,654,972   28,108,696   27,580,428
Property Resale @ 9.75% Cap                 56,515,605   26,177,660   24,996,028   23,872,802   22,804,848
                                                        -----------  -----------  -----------  -----------
Total Property Present Value                            $55,397,706  $53,651,000  $51,981,498  $50,385,276
                                                        ==================================================

Rounded to Thousands                                    $55,398,000  $53,651,000  $51,981,000  $50,385,000
                                                        ==================================================

Per SqFt                                                    $185.42      $179.58      $173.99      $168.64

PERCENTAGE VALUE DISTRIBUTION

Assured Income                                               39.21%       39.99%       40.76%       41.54%
Prospective Income                                           13.54%       13.42%       13.31%       13.20%
Prospective Property Resale                                  47.25%       46.59%       45.93%       45.26%
                                                        ==================================================
                                                            100.00%      100.00%      100.00%      100.00%

<CAPTION>
                                               P.V. of      P.V. of       P.V. of     P.V. of       P.V. of
Analysis                                      Cash Flow    Cash Flow     Cash Flow   Cash Flow     Cash Flow
Period                                         @ 10.00%     @ 10.50%     @ 11.00%     @ 11.50%     @ 12.00%
- --------                                    -----------  -----------  -----------  -----------  -----------

<S>                                         <C>          <C>          <C>          <C>          <C>
Year  1                                       4,569,738    4,558,640    4,547,627    4,536,698    4,525,851
Year  2                                       3,715,954    3,691,527    3,667,374    3,643,492    3,619,875
Year  3                                       3,765,817    3,722,666    3,680,206    3,638,424    3,597,307
Year  4                                       3,450,684    3,395,701    3,341,843    3,289,079    3,237,386
Year  5                                       3,105,307    3,042,065    2,980,393    2,920,246    2,861,577
Year  6                                       2,879,451    2,808,054    2,738,743    2,671,447    2,606,100
Year  7                                        -829,026     -808,910     -789,353     -770,337     -751,845
Year  8                                       1,855,877    1,792,381    1,731,331    1,672,622    1,616,153
Year  9                                       2,321,057    2,232,877    2,148,426    2,067,530    1,990,027
Year  10                                      2,234,554    2,139,937    2,049,730    1,963,709    1,881,661
                                            -----------  -----------  -----------  -----------  -----------
Total Cash Flow                              27,069,413   26,574,938   26,096,320   25,632,910   25,184,092
Property Resale @ 9.75% Cap                  21,789,212   20,823,110   19,903,919   19,029,164   18,196,512
                                            -----------  -----------  -----------  -----------  -----------
Total Property Present Value                $48,858,625  $47,398,048  $46,000,239  $44,662,074  $43,380,604
                                            ===============================================================

Rounded to Thousands                        $48,859,000  $47,398,000  $46,000,000  $44,662,000  $43,381,000
                                            ===============================================================

Per SqFt                                        $163.53      $158.65      $153.97      $149.49      $145.20

PERCENTAGE VALUE DISTRIBUTION

Assured Income                                   42.32%       43.11%       43.89%       44.68%       45.46%
Prospective Income                               13.08%       12.96%       12.84%       12.71%       12.59%
Prospective Property Resale                      44.60%       43.93%       43.27%       42.61%       41.95%
                                            ===============================================================
                                                100.00%      100.00%      100.00%      100.00%      100.00%
</TABLE>


Humphries & Associates               IX - 24                         D7U/04-1991
<PAGE>

              SUPPORTING SCHEDULE -- AVERAGE SQUARE FEET OCCUPANCY

<TABLE>
<CAPTION>
For the Years                    Year 1    Year 2    Year 3    Year 4    Year 5    Year 6    Year 7     Year 8    Year 9    Year 10
Ending                          Jun-2005  Jun-2006  Jun-2007  Jun-2008  Jun-2009  Jun-2010  Jun-2011   Jun-2012  Jun-2013  Jun-2014
                                --------  --------  --------  --------  --------  --------  --------   --------  --------  --------
<S>                     <C>      <C>       <C>       <C>       <C>       <C>       <C>       <C>        <C>       <C>       <C>
TENANT                 SUITE
Inet                    100      15,476    15,476    15,476    15,476    15,476    15,476    12,897     15,476    15,476    15,476
Inet                    200      26,046    26,046    26,046    26,046    26,046    26,046    21,705     26,046    26,046    26,046
Inet                    300      28,550    28,550    28,550    28,550    28,550    28,550    23,792     28,550    28,550    28,550
Inet                    600      28,550    28,550    28,550    28,550    28,550    28,550    23,792     28,550    28,550    28,550
Inet                    700      28,550    28,550    28,550    28,550    28,550    28,550    23,792     28,550    28,550    28,550
Inet                    800      28,550    28,550    28,550    28,550    28,550    28,550    23,792     28,550    28,550    28,550
Inet                    900      28,550    28,550    28,550    28,550    28,550    28,550    23,792     28,550    28,550    28,550
Inet                   1000      28,550    28,550    28,550    28,550    28,550    28,550    23,792     28,550    28,550    28,550
Inet                    100      28,550    28,550    28,550    28,550    28,550    28,550    23,792     28,550    28,550    28,550
La Cuisine Cafe         110       2,000     2,000     2,000     2,000     1,500     2,000     2,000      2,000     2,000     1,833
Macromedia              400      55,394    46,162    55,394    55,394    55,394    55,394    46,162     55,394    55,394    55,394
                               --------  --------  --------   -------  --------  --------  --------   --------  --------  --------
TOTAL AMOUNT PER YEAR           298,766   289,534   298,766   298,766   298,266   298,766   249,305    298,766   298,766   298,599
                               ============================   =====================================   ============================
AVERAGE PERCENT OCCUPANCY       100.00%    96.91%   100.00%   100.00%    99.83%   100.00%    83.44%    100.00%   100.00%    99.94%
</TABLE>


Humphries & Associates               IX - 25                         D7U/04-1991
<PAGE>

                          PROPERTY SUMMARY REPORT

TIMING & INFLATION
Analysis Period:               July 1, 2004 to June 30, 2014; 10 years
Inflation Method:              Fiscal
General Inflation Rate:        3.5%

PROPERTY SIZE & OCCUPANCY
Property Size:                 298,766 Square Feet
Alternate Size:                1 Square Foot
Number of rent roll tenants:   11
Total Occupied Area:           298,766 Square Feet
                               100.00% during first month of analysis

GENERAL VACANCY
Method:                        Percent of Potential Gross Revenue
Amount:                        0.00% for 2 years
                               1.00% for 4 years
                               3.00% for 6 years
                               0.00% thereafter

PROPERTY PURCHASE & RESALE
Purchase Price:                -
Resale Method:                 Capitalize Net Operating Income
Cap Rate:                      9.75%
Cap Year:                      Year 10
Commission/Closing Cost:       2.00%
Net Cash Flow from Sale:       $56,515,605

PRESENT VALUE DISCOUNTING
Discount Method:               Monthly
Unleveraged Discount Rate:     10.00%
Unleveraged Present Value:     $48,858,625 at 10.00%


Humphries & Associates               IX - 26                         D7U/04-1991
<PAGE>

Income Approach, continued

The present value of the cash flows and reversion is summarized:

                                                    Discount Rate
                                                    -------------

                                                 11.0%           10.5%
                                                 -----           -----

  PW - 10 Year Hold - 10th Year Cap           $46,000,000      $47,398,000

  Value Indicated by Yield Capitalization
                            Say,              $46,000,000      $47,400,000

Income Approach Summary

The values indicated by the direct capitalization and yield capitalization
methods are shown as follows:

Value Indicated by Direct Capitalization      $46,000,000  to  $48,500,000

Value Range Indicated by Yield
Capitalization                                $46,000,000  to  $47,400,000

Both the yield capitalization and direct capitalization techniques are
considered reliable values. For our analysis, a value somewhere between the two
methods is considered reasonable. Therefore, the Leased Fee "As Is" Market Value
estimated via the Income Approach is:

    Leased Fee "As Is" Market Value............. $47,100,000   ($157.65/SF)


Humphries & Associates               IX - 27                         D7U/04-1991
<PAGE>

                              MARKET DATA APPROACH

An indication of value can be obtained by comparison with other similarly
improved properties that have sold in the Market. This approach is also called
the Direct Sales Comparison Approach.

The critical element in the application of this approach is the determination of
what constitutes "the market". It may or may not be appropriate to consider only
those sales in the immediate vicinity of the Subject. The Appraiser must apply
judgment in selecting those available sales which would compete in the market
with the Subject Property for investor monies.

There are several units of comparison which may be used to compare one operating
property against another. These comparison units include:

1.    The Gross Rent/Income Multiplier - Purchasers pay so many times gross
      earnings when they purchase income producing real estate (Sales
      Price/Gross Income). The Gross Income estimate for the Subject Property
      reflects its ability to compete in the market. The location, condition,
      size, etc. of the Subject is reflected in this Gross Income estimate. So,
      no comparison adjustments are necessary when market multipliers are used
      with the Gross Income estimate of the Subject Property to arrive at a
      value indication (Estimated Gross Income x GRM/GIM).

2.    Price/SF, Price/Unit, or other comparatives require subjective adjustments
      to compensate for dissimilarities between the sales and the Subject
      Property. Generally, such comparisons are less reliable then GRM analysis.
      However, in periods of market instability, with high vacancies and rental
      reductions, concessions, etc., the sales price per SF indicator becomes
      much more reliable.

A summary of office building sales that have sold in the market area will be
shown. The sales are all within similar market environments as the Subject and
are considered to reflect a probable range of investor attitudes given the
current market environment toward the Subject. The summary will be followed by
detailed pages of each sale.


Humphries & Associates                X - 1                         D-7U/04-1991
<PAGE>

Market Data Approach, continued


<TABLE>
<CAPTION>
====================================================================================================================================
                                                    OFFICE BUILDING SALES SUMMARY
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                         Net
                                    Occu. at    Year                   Rentable                        Stabilized Sales   Proforma
        Sale           Sale Date      Sale      Built    Condition    Area (SF)    Stories     GIM        Price/NRSF        OAR*
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                      <C>          <C>       <C>        <C>         <C>           <C>      <C>          <C>             <C>
1. 5600 Headquarters     10/02        100%      2000       Good        166,238        3       9.96x        $159.41         9.25%
- ------------------------------------------------------------------------------------------------------------------------------------
2. 5950 Sherry           06/02         99%      1999       Good        196,997        9       7.50x        $194.93         8.82%
- ------------------------------------------------------------------------------------------------------------------------------------
3. Premier Place         05/03         85%      1986       Good        395,901        21      6.50x        $136.40         8.02%
- ------------------------------------------------------------------------------------------------------------------------------------
4.  Granite Tower        09/03         99%      1999       Good        240,145        10      6.36x        $139.92         8.86%
- ------------------------------------------------------------------------------------------------------------------------------------
5. Millennium I          10/03         91%      2000       Good        362,000        14      6.28x        $144.34         9.25%
- ------------------------------------------------------------------------------------------------------------------------------------
6. Park Place            10/03         92%      1986       Good        177,296        14      7.04x        $175.98         8.10%
- ------------------------------------------------------------------------------------------------------------------------------------
7. 1401 Nolan Ryan       12/03        100%      2003       Good        233,783        3       12.83x       $128.32         7.03%
- ------------------------------------------------------------------------------------------------------------------------------------
8. 150 Highland          03/04        100%      2004       Good        160,000        3       10.10x       $143.75         9.34%
- ------------------------------------------------------------------------------------------------------------------------------------
    Average                -           96%      1997         -         241,545        9       8.32x        $152.88         8.59%
- ------------------------------------------------------------------------------------------------------------------------------------
    Subject                -          100%      1999       Good        298,766        11        -             -              -
====================================================================================================================================
</TABLE>

*Overall rates are not considered to include reserves.

The comparables have sales prices ranging from $128.32/SF to $194.93/SF with an
average of $152.88. The Subject is most similar to Sale 2, 6 and 8. These sales
range from $143.75/SF to $194.93/SF with an average of $171.55/SF.


Humphries & Associates                X - 2                         D-7U/04-1991
<PAGE>

Market Data Approach, continued


                                 IMPROVED SALE 1


                           [PHOTO OF INTUIT BUILDING]


Name:                   Intuit Building
Address:                5601 Headquarters, Plano, Texas 75024
Mapsco:                 D-556J

Grantor:                KDC TX I Investment, Ltd.
Grantee:                Wells Operating Partnership, LP
Sale Date:              10/01/02
Recordation:            5265/4401

Sales Data
Sale Price              $26,500,000, Cash to Seller

General Data

Land Area:              10.70 Acres or 466,092 SF
NRA:                    166,238 SF
FAR:                    0.36:1

Improvement Data

Year Built:             2000
Net Rentable Area:      166,238 SF


Humphries & Associates                X - 3                         D-7U/04-1991
<PAGE>

Improved Sale 1, continued


No. of Stories:         3
Type Construction:      Concrete frame
Condition:              Good
Parking:                Surface concrete - 3-story parking garage

Economic Data

Occupancy at Sale:      100%

=============================================================================
Income & Expense Data                           Proforma          Per SF
- -----------------------------------------------------------------------------
Potential Gross Income                         $2,659,808         $16.00
- -----------------------------------------------------------------------------
Less: Vacancy @ 5%                               -132,990          -0.80
- -----------------------------------------------------------------------------
EGI                                            $2,526,818         $15.20
- -----------------------------------------------------------------------------
Less Expense                                      -75,805          -0.46
- -----------------------------------------------------------------------------
NOI                                            $2,451,013         $14.74
=============================================================================

Units of Comparison                       Proforma

OAR                                       9.25%
GIM:                                      9.96x
Adjusted Sales Price/NLSF:                $159.41
Verified:                                 Andra King with Seller (214/696-1700)

Comments

The actual income and expense data at the time of sale was provided by the
broker. The building is 100% leased to Intuit with nine years remaining on the
lease. The rate is $16.00/SF NNN.


Humphries & Associates                X - 4                         D-7U/04-1991
<PAGE>

                                 IMPROVED SALE 2


                   [PHOTO OF 5950 SHERRY LANE OFFICE BUILDING]


Name:                   5950 Sherry Lane Office Building
Address:                5950 Sherry Lane, Dallas, Texas 75225
Mapsco:                 D-25W

Grantor:                Blackstone Partners
Grantee:                RREEF Sherry Lane, LP
Sale Date:              6/28/02
Recordation:            2002118/9267

Sales Data
Sale Price              $38,400,000, Cash to Seller

General Data
Land Area:              1.341 Acres or 58,391 SF
NRA:                    196,997 SF
FAR:                    3.37:1

Improvement Data
Year Built:             1999
Net Rentable Area:      196,997 SF


Humphries & Associates                X - 5                         D-7U/04-1991
<PAGE>

Improved Sale 2, continued


No. of Stories:         9
Type Construction:      Steel frame with brick veneer
Condition:              Good
Parking:                Surface concrete and underground garage

Economic Data

Occupancy at Sale:      99%

==============================================================================
Income & Expense Data                            Proforma          Per SF
- ------------------------------------------------------------------------------
Potential Gross Income                          $5,121,922         $26.00
- ------------------------------------------------------------------------------
Less: Vacancy @ 5%                                -256,096          -1.30
- ------------------------------------------------------------------------------
EGI                                             $4,865,826         $24.70
- ------------------------------------------------------------------------------
Less Expense                                    -1,477,478          -7.50
- ------------------------------------------------------------------------------
NOI                                             $3,388,348         $17.20
==============================================================================

Units of Comparison                       Proforma

OAR                                       8.82%
GIM:                                      7.50x
Adjusted Sales Price/NLSF:                $194.93
Verified:                                 Barry Brown, Broker (214/265-0880)

Comments

The actual income and expense data at the time of sale was provided by the
broker. Contract rents are in the $25.00/SF - $26.00/SF full service plus
electricity range. The tenants include UBS PaineWebber, McCurley, Kinser,
McCurley, & Nelson LLP, Heidrick & Struggles International, Inc., FleetBoston,
Financial Corp., Coldwell Banker, Dr. Pepper/Seven Up Bottling Group, Virginia
Cook Realtors, Kessler & Collins PC, Broadband Venture Partners, Guy Carpenter
&Co., Inc., Stonegate Securities, Inc., Corporate Search Partners, Luce &
Williams, Ltd., Public Strategies, Inc., Trammell Crow Co., Lacerte
Technologies, Inc., Hampshire Capital Corp., Westwood Companies, Donald A. Berg
Investments.


Humphries & Associates                X - 6                         D-7U/04-1991
<PAGE>

                                 IMPROVED SALE 3


                            [PHOTO OF PREMIER PLACE]


Name:                   Premier Place
Address:                5910 Central Expressway, Dallas, Texas 75206
Mapsco:                 D-36E

Grantor:                New Premplace Corporation
Grantee:                Premier Place Associates, LP
Sale Date:              5/22/03
Recordation:            2003099/3952

Sales Data
Sale Price              $54,000,000, Cash to Seller

General Data
Land Area:              3.173 Acres or 138,226 SF
NRA:                    395,901 SF
FAR:                    2.86:1

Improvement Data
Year Built:             1986
Net Rentable Area:      395,901 SF


Humphries & Associates                X - 7                         D-7U/04-1991
<PAGE>

Improved Sale 3, continued

No. of Stories:         21
Type Construction:      Steel frame with glass exterior
Condition:              Good
Parking:                Surface concrete with underground parking and a
                        parking garage.

Economic Data

Occupancy at Sale:      85%

=============================================================================
Income & Expense Data                           Proforma          Per SF
- -----------------------------------------------------------------------------
Potential Gross Income                         $8,301,321         $21.00
- -----------------------------------------------------------------------------
Less: Vacancy @ 5%                               -415,066          -1.05
- -----------------------------------------------------------------------------
EGI                                            $7,886,255         $19.95
- -----------------------------------------------------------------------------
Less Expense                                   -3,557,709          -9.00
- -----------------------------------------------------------------------------
NOI                                            $4,328,546         $10.95
=============================================================================

Units of Comparison                       Proforma

OAR                                       8.02%
GIM:                                      6.50x
Sales Price/NLSF:                         $136.40
Verified:                                 Jeff Stone, Broker (214/265-0880)

Comments

The actual income and expense data at the time of sale was provided by the
broker. The tenants include Merrill Lynch, America First Insurance, Drexel
Development Company, Hatfield Halcomb Architects, Kleinert Engineering,
Southwest Housing Management Corp., Twin Creek Partners, Thomas & Blackwood,
LLP, Odyssey Information Services, Docucorp International, MillerParker,
Berkshire Mortgage Finance, Mitsui Bussan Logistics, CABC, Buchanan & Burke,
Insurance Designers of Dallas, Pope Law Firm, Hillcrest Mortgage, Texas Capital
Bancshares, Sandia Development, etc.


Humphries & Associates                X - 8                         D-7U/04-1991
<PAGE>

                                 IMPROVED SALE 4


                            [PHOTO OF GRANITE TOWER]


Name:                   Granite Tower
Address:                4055 Valley View Lane, Farmers Branch 75244
Mapsco:                 D-14P

Grantor:                GPI Tower, Ltd.
Grantee:                GIP Granite, LP
Sale Date:              9/22/03
Recordation:            2003188/11280

Sales Data
Sale Price              $33,600,000, Cash to Seller

General Data
Land Area:              5.576 Acres or 242,870 SF
NRA:                    240,145 SF
FAR:                    0.99:1

Improvement Data
Year Built:             1999
Net Rentable Area:      240,145 SF


Humphries & Associates                X - 9                         D-7U/04-1991
<PAGE>

Improved Sale 4, continued


No. of Stories:         10
Type Construction:      Steel and reinforced concrete with granite and
                        glass exterior
Condition:              Good
Parking:                Surface concrete and multi-level parking structure.

Economic Data

Occupancy at Sale:      99%

============================================================================
Income & Expense Data                          Proforma          Per SF
- ----------------------------------------------------------------------------
Potential Gross Income                        $5,283,190         $22.00
- ----------------------------------------------------------------------------
Less: Vacancy @ 5%                              -264,160          -1.10
- ----------------------------------------------------------------------------
EGI                                           $5,019,030         $20.90
- ----------------------------------------------------------------------------
Less Expense                                  -2,041,233          -8.50
- ----------------------------------------------------------------------------
NOI                                           $2,977,797         $12.40
============================================================================

Units of Comparison                       Proforma

OAR                                       8.86%
GIM:                                      6.36x
Sales Price/NLSF:                         $139.92
Verified:                                 Gary Carr, Broker (972/458-4800)

Comments

The building is located on the northwest quadrant of LBJ Freeway (IH-635) and
Midway Road in the City of Farmers Branch. The actual income and expense data at
the time of sale was provided by the broker. The building was 99% leased at the
time of sale. Tenants include Carreker Corp., TMP Worldwide, Purchasing
Management International, United Dominion Realty Trust, Wachovia Maesk Sealand,
EdSoft Software Corp., Lay Machinery, Time Warner Telecom, Adecco, Granite Tower
Mgt., Bell South Wireless Sales, PSN Inc., Ciber Enterprise Out Sourcing, Xilnx,
IBS, Inc., CBIZ Benefits and Insurance Services.


Humphries & Associates                X - 10                        D-7U/04-1991
<PAGE>

                                 IMPROVED SALE 5


                     [PHOTO OF MILLENNIM I OFFICE BUILDING]


Name:                   Millennim I Office Building
Address:                15455 Dallas Parkway, Dallas, Texas 75001
Mapsco:                 D-14D

Grantor:                MIL Phase I Dallas, LP
Grantee:                RREEF Millenium 1, LP
Sale Date:              10/9/03
Recordation:            2003201/5644

Sales Data
Sale Price              $52,250,000, Cash to Seller

General Data
Land Area:              3.339 Acres or 145,466 SF
NRA:                    362,000 SF
FAR:                    2.49:1

Improvement Data
Year Built:             2000
Net Rentable Area:      362,000 SF


Humphries & Associates                X - 11                        D-7U/04-1991
<PAGE>

Improved Sale 5, continued

No. of Stories:         14
Type Construction:      Steel frame with glass and stone veneer
Condition:              Good
Parking:                Surface concrete and parking garage

Economic Data

Occupancy at Sale:      91%

============================================================================
Income & Expense Data                          Proforma          Per SF
- ----------------------------------------------------------------------------
Potential Gross Income                        $8,326,000         $22.00
- ----------------------------------------------------------------------------
Less: Vacancy @ 5%                              -416,300          -1.15
- ----------------------------------------------------------------------------
EGI                                           $7,909,700         $21.85
- ----------------------------------------------------------------------------
Less Expense                                  -3,077,000          -8.50
- ----------------------------------------------------------------------------
NOI                                           $4,832,700         $13.35
============================================================================

Units of Comparison                       Proforma

OAR                                       9.25%
GIM:                                      6.28x
Adjusted Sales Price/NLSF:                $144.34
Verified:                                 Gary Carr, Broker (972/458-2678)

Comments

The actual income and expense data at the time of sale was provided by the
broker. The tenants include Cushman & Wakefield, Muse Stancil, SAS Institute,
Dresser, Inc., Mentor Graphics, Medhost, ING Financial Services, Fortis Capital,
Home Box Office, Frost Bank, WiPro, First Magnus Financial, Opus, Sanofi
Synthelabo, Crystal Decisions, Dynamic Design, Meritax, New Horizon,
Wynne-Jackson, Integrrsource, Mind Electric, M 2 Konstruction, Graham Glass,
Regus Business Centre, California Carwash Systems, Diversity Job Link, C-Tech
and Natural Tax Resource Group.


Humphries & Associates                X - 12                        D-7U/04-1991
<PAGE>

                                 IMPROVED SALE 6


                      [PHOTO OF ARK PLACE ON TURTLE CREEK]


Name:                   Park Place on Turtle Creek
Address:                2911 Turtle Creek Boulevard, Dallas, Texas 75204
Mapsco:                 D-45B

Grantor:                Park Place on Turtle Creek, LP
Grantee:                CF Turtle Creek Office, LP
Sale Date:              10/15/03
Recordation:            2003205/0047

Sales Data
Sale Price              $31,200,000, Cash to Seller

General Data
Land Area:              1.234 Acres or 54,134 SF
NRA:                    177,296 SF
FAR:                    3.28:1

Improvement Data
Year Built:             1986
Net Rentable Area:      177,296 SF


Humphries & Associates                X - 13                        D-7U/04-1991
<PAGE>

Improved Sale 6, continued


No. of Stories:         14
Type Construction:      Steel frame with stone and glass veneer
Condition:              Good
Parking:                Surface concrete and underground garage

Economic Data

Occupancy at Sale:      92%

============================================================================
Income & Expense Data                          Proforma          Per SF
- ----------------------------------------------------------------------------
Potential Gross Income                        $4,432,400         $25.00
- ----------------------------------------------------------------------------
Less: Vacancy @ 5%                              -221,620          -1.25
- ----------------------------------------------------------------------------
EGI                                           $4,210,780         $23.75
- ----------------------------------------------------------------------------
Less Expense                                  -1,684,312          -9.50
- ----------------------------------------------------------------------------
NOI                                           $2,526,468         $14.25
============================================================================

Units of Comparison                       Proforma

OAR                                       8.10%
GIM:                                      7.04x
Adjusted Sales Price/NLSF:                $175.98
Verified:                                 Mark Mitchell, Broker (972/248-2200)

Comments

The actual income and expense data at the time of sale was provided by the
broker. The tenants include PNB Financial Dallas, Howie & Sweeney, HQ Global
Workplaces, Belmont Group, Intermerc Corporation, Law Office, Belmont, Boeckman
Investments, Taylor Loehmeyer Corrigan, La Jolla Bank, Thomas Cook Currency
Services, British Consulate, Bagelsteins Express, Aftco Associates, Parker,
Walter Skinner Commercial Realty Services, Hill Company, Fox Limousine Services,
Aztec Development Properties, Rosetta Energy, Regency Pro Valet Parking,
Riversoft Inc., Skidmore Advertising, Capital Markets Group, Pool Energy
Services, Dallas Market Center, Asiatic International and Lexington Capital
Group.


Humphries & Associates                X - 14                        D-7U/04-1991
<PAGE>

                                 IMPROVED SALE 7


Name:                   Siemens Dematic Headquarters
Address:                1401 Nolan Ryan Parkway, Arlingont, Texas 76011
Mapsco:                 T-69Y

Grantor:                TCDFW SDPA BTS, LP
Grantee:                Lexington Arlington, LP
Sale Date:              12/23/03
Recordation:            203473460

Sales Data

Sale Price              $30,000,090, Cash to Seller

General Data

Land Area:              14.136 Acres or 615,758 SF
NRA:                    233,783 SF
FAR:                    0.38:1

Improvement Data

Year Built:             2003
Net Rentable Area:      233,783 SF


Humphries & Associates                X - 15                        D-7U/04-1991
<PAGE>

Improved Sale 7, continued


No. of Stories:         3
Type Construction:      Concrete frame
Condition:              Good
Parking:                Surface concrete

Economic Data

Occupancy at Sale:      100%

============================================================================
Income & Expense Data                          Proforma          Per SF
- ----------------------------------------------------------------------------
Potential Gross Income                        $2,337,830         $10.00
- ----------------------------------------------------------------------------
Less: Vacancy @ 5%                              -116,892          -0.50
- ----------------------------------------------------------------------------
EGI                                           $2,220,938         $ 9.50
- ----------------------------------------------------------------------------
Less Expense                                    -111,954          -0.48
- ----------------------------------------------------------------------------
NOI                                           $2,108,984         $ 9.02
============================================================================

Units of Comparison                     Proforma

OAR                                     7.03%
GIM:                                    12.83x
Adjusted Sales Price/NLSF:              $128.32
Verified:                               Denton Walker with Seller (214/979-6100)

Comments

The actual income and expense data at the time of sale was provided by the
broker. The building was a build-to-suit for Siemens Dematic. The 20-year lease
has increases every 5-years. The base year rent is $10.00/SF NNN.


Humphries & Associates                X - 16                        D-7U/04-1991
<PAGE>

                                 IMPROVED SALE 8


                           [PHOTO OF CENTEX BUILDING]


Name:                   Centex Building
Address:                150 Highland Drive, Lewisville, Texas 75067
Mapsco:                 D-1J

Grantor:                Centex Office Vista Ridge Lewisville II, LP
Grantee:                Keystone Strategies, USA
Sale Date:              4/30/04
Recordation:            NA

Sales Data
Sale Price              $23,000,000, Cash to Seller

General Data
Land Area:              11.35 Acres or 494,354 SF
NRA:                    160,000 SF
FAR:                    0.32:1

Improvement Data

Year Built:             2004
Net Rentable Area:      160,000 SF


Humphries & Associates                X - 17                        D-7U/04-1991
<PAGE>

Improved Sale 8, continued


No. of Stories:         3
Type Construction:      Concrete tiltwall
Condition:              Good
Parking:                Surface concrete - 3-story parking garage

Economic Data

Occupancy at Sale:      100%

============================================================================
Income & Expense Data                          Proforma          Per SF
- ----------------------------------------------------------------------------
Potential Gross Income                        $2,277,542         $14.23
- ----------------------------------------------------------------------------
Less: Vacancy @ 5%                              -113,877          -0.71
- ----------------------------------------------------------------------------
EGI                                           $2,163,665         $13.52
- ----------------------------------------------------------------------------
Less Expense                                     -16,000          -0.10
- ----------------------------------------------------------------------------
NOI                                           $2,147,665         $13.42
============================================================================

Units of Comparison                       Proforma

OAR                                       9.34%
GIM:                                      10.10x
Adjusted Sales Price/NLSF:                $143.75
Verified:                                 Sales Contract and Buyer

Comments

The actual income and expense data at the time of sale was provided by the
lease. The building is a build-to-suit for Centex Mortgage. The base rate is
$13.00/SF NNN with 3% annual increase throughout the 20-year term. The average
rent over the 20-year term is $2,277,542 or $14.23/SF NNN. There is parking
underneath the building, surface concrete and a three-level parking garage.


Humphries & Associates                X - 18                        D-7U/04-1991
<PAGE>

                                 Office Sales Map


                  [MAP SHOWING LOCATION OF IMPROVED SALES 1-8]



Humphries & Associates                X - 19                        D-7U/04-1991
<PAGE>

Market Data Approach, continued


SALES PRICE PER SQUARE FOOT ANALYSIS

The following adjustment grid analyzes the sales that are considered to be the
most comparable to the Subject Property ("+" adjustments indicate that the
comparable sale is inferior to the Subject and must be adjusted upward; "-"
adjustments indicated that the comparable is superior to the Subject and must be
adjusted downward; and "0" indicates that the comparable sale is similar to the
Subject in this factor of comparison and no adjustment is warranted).

Comparables 2, 6 and 8 are considered the most similar to the Subject Property
and will be adjusted in the following grid. Sale 2 and 6 are mid-rise
multi-tenant office buildings while Sale 8 is a single tenant office building.
The overall location of the sales is considered similar to the Subject Property.
The sales are adjusted as follows.


Humphries & Associates                X - 20                        D-7U/04-1991
<PAGE>

Market Data Approach, continued


<TABLE>
<CAPTION>
================================================================================================
                                         ADJUSTMENT GRID
- ------------------------------------------------------------------------------------------------
                                   Subject           Sale 2          Sale 6           Sale 8
- ------------------------------  ---------------  --------------  ---------------  --------------
<S>                              <C>              <C>             <C>              <C>
Sale Date                             -               06/02           10/03            03/04
- ------------------------------  ---------------  --------------  ---------------  --------------
Rentable Area (SF)/Stories        298,766/11        196,997/9      177,296/14        160,000/3
- ------------------------------  ---------------  --------------  ---------------  --------------
FAR                                 1.05:1           3.37:1          3.28:1           0.32:1
- ------------------------------  ---------------  --------------  ---------------  --------------
Location                             1500         5950 Sherry,     2911 Turtle     150 Highland,
                                 Greenville,      Dallas 75225       Creek,         Lewisville
                                  Richardson                      Dallas 75204
- ------------------------------  ---------------  --------------  ---------------  --------------
Access/visibility                    Good             Good            Good             Good
- ------------------------------  ---------------  --------------  ---------------  --------------
Occupancy at Sale                    100%              99%             92%             100%
- ------------------------------  ---------------  --------------  ---------------  --------------
Year Built/Renovated                 1999             1999            1986             2004
- ------------------------------  ---------------  --------------  ---------------  --------------
Condition                            Good             Good            Good             Good
- -----------------------------------------------  --------------  ---------------  --------------
Conditions of Sale                                Arm's Length    Arm's Length     Arm's Length
- -----------------------------------------------  --------------  ---------------  --------------
Property Rights Conveyed                           Leased Fee      Leased Fee       Leased Fee
- -----------------------------------------------  --------------  ---------------  --------------
Price/SF (Stabilized)                                $194.93         $175.98          $143.75
- ------------------------------------------------------------------------------------------------
ADJUSTMENTS
- ------------------------------------------------------------------------------------------------
Terms                                                  -0-             -0-              -0-
- -----------------------------------------------  --------------  ---------------  --------------
Real Property Rights Conveyed                          -0-             -0-              -0-
- -----------------------------------------------  --------------  ---------------  --------------
Market Conditions                                      -0-             -0-              -0-
- -----------------------------------------------  --------------  ---------------  --------------
Conditions of Sale                                     -0-             -0-              -0-
- -----------------------------------------------  --------------  ---------------  --------------
Adjusted Price/SF                                    $194.93         $175.93          $143.75
- -----------------------------------------------  --------------  ---------------  --------------
Location/Access/Visibility                            -20%            -15%              +5%
- -----------------------------------------------  --------------  ---------------  --------------
Age/Condition                                          -0-             -0-              -3%
- -----------------------------------------------  --------------  ---------------  --------------
Density                                                +5%             +5%              -0-
- -----------------------------------------------  --------------  ---------------  --------------
Size                                                   -0-             -0-              -0-
- -----------------------------------------------  --------------  ---------------  --------------
Amenities                                              -0-             -0-              +3%
- -----------------------------------------------  --------------  ---------------  --------------
Occupancy                                              -0-             -0-              -0-
- -----------------------------------------------  --------------  ---------------  --------------
Total Adjustments                                     -15%            -10%              +5%
- -----------------------------------------------  --------------  ---------------  --------------
Adjusted Price/SF                                    $165.69         $158.34          $150.94
================================================================================================
</TABLE>

The following is a description of the adjustments made to the comparable office
building sales.

Terms

All of the comparable sales sold on an all cash basis and no adjustment is
necessary.


Humphries & Associates                X - 21                        D-7U/04-1991
<PAGE>

Market Data Approach, continued


Market Conditions

Market conditions may change between the time of sale of a comparable property
and the date of the appraisal of the Subject. Under such circumstances, the
price of the comparable property would be different at the later time (the date
of the appraisal), and an adjustment would have to made to the actual
transaction price. Changed market conditions often result from various causes
such as inflation, deflation, changing demand, and changing supply.

All sales occurred within the last 24 months and are recent transactions. No
adjustment is considered necessary.

Conditions of Sale

All sales are considered to be arm's length transactions. No adjustment for
Conditions of Sale will be made.

Real Property Rights Conveyed

The first adjustment to be considered is for any differences in the property
rights being conveyed in the sale. Properties in which less than the full Fee
Simple Estate is transferred frequently sell for a lesser price. Land conveyed
as a Fee Simple may not be immediately developable, or the rents paid under the
lease may impact the desirability of a particular site and hence, the price
paid. If the leasehold estate is conveyed, any improvements constructed may
exhibit a different expense structure (and net income stream) than an improved
property where land and building are held in common ownership. Because these
factors can have an impact on value, one of the initial steps in the valuation
process is a determination of the real property interests, which have been
conveyed.

No determination could be made whether the Leased Fee Interest of the adjusted
sales were significantly different than the Fee Simple Interest of the Subject.
Reportedly, the lease rates of the sales represent market rates based upon the
tenant's creditworthiness, lease term and type of finishout. Therefore, no
adjustment will be made.

Location/Access/Visibility

The Subject Property is located on the northeast corner of Greenville Avenue and
Collins Boulevard with additional frontage along the west side of Alma Road in
the City of Richardson. Greenville Avenue is a six-lane, northeast/southwest,
divided primary thoroughfare that provides access to LBJ Freeway to the south
and the George Bush Tollway (SH-190) to the north. Collins Boulevard is a
four/six-lane, east/west, divided primary thoroughfare that provides access to
Plano Road


Humphries & Associates                X - 22                        D-7U/04-1991
<PAGE>

Market Data Approach, continued


to the east and Central Expressway to the west. Collins Boulevard is raised at
Greenville Avenue and crosses Central Expressway. Access to Greenville Avenue
from Collins Blvd. is available from a one-lane, access road. The Alma Road is a
four-lane, north/south, divided roadway that merges with Greenville Avenue to
the north and Collins Boulevard to the south.

Access to the Subject is available from two curb cuts along Greenville Avenue,
one curb cut along the one-lane access road to Greenville Avenue and two-curb
cuts along Collins Boulevard. The tract has good visibility and access from
Central Expressway (US-75) which is located approximately 200' west of the
Subject. The Subject Property is considered to have good access and visibility
and is located in an area heavily developed with office uses.

The Subject is located in zip code 75080 and the Richardson Submarket. The
average rental rate and occupancy for Class A space within this sector is
$18.95/SF and 78%, respectively according to DFW RealSmart. The weighted
rent/occupancy of the Subject is $14.78/SF. The zip code has a 2003 population
of 43,844 which represents a 2.0% annual increase from 2000. The median
household income is $61,393.

Sale 2 is located on the SEC of Lomo Alto Drive and Sherry Lane in the City of
Dallas. Lomo Alto is a two-lane, one-way, northbound access road to the Dallas
North Tollway. Sherry Lane is a two-lane, east/west secondary roadway. Sale 2 is
located within Preston Center which is heavily developed with office uses.
Preston Center historically has the highest office rents in the D/FW area. The
location is considered superior to the Subject and a downward adjustment is
warranted.

Sale 2 is located in zip code 75225 and the North Dallas Submarket. The average
rental rate and occupancy for Class A space within this sector is $24.08/SF and
89%, respectively. The weighted rent/occupancy of this sale is $21.43/SF. The
zip code has a 2003 population of 20,400 which represents a 0.5% annual increase
since 2000. The median household income is $124,474. The overall location is
superior to the Subject and a downward adjustment will be made.

Sale 6 is located along Turtle Creek Boulevard at Cedar Springs Avenue in the
City of Dallas. Cedar Springs Avenue is a primary thoroughfare while Turtle
Creek Boulevard is a secondary roadway that provides average access and
visibility. This sale is located in an area heavily development with office and
high-rise residential uses.

Sale 6 is located in zip code 75204 and the Oak Lawn Submarket. The average
rental rate and occupancy for Class A space within this sector is $21.70/SF and
76%, respectively. The weighted rent/occupancy of this sale is $16.49/SF. The
zip code has a 2003 population of 23,802 which represents a 3.3% annual increase
since 2000. The median household income is $44,870. The overall location is
considered superior to the Subject and a downward adjustment will be made.

Sale 8 is located along the southeast side of Highland Avenue at Clubridge Drive
just north of State Highway 121 in the City of Lewisville. Highland Avenue is a
four-lane secondary roadway. The building has visibility from State Highway 121.


Humphries & Associates                X - 23                        D-7U/04-1991
<PAGE>

Market Data Approach, continued


Sale 8 is located just north of State Highway 121 (SH-121) and approximately one
mile southwest of Stemmons Freeway (IH-35E). SH-121 is being extended from
Stemmons Freeway to the SH-121 merge (Subject area) to the southwest and has
greatly enhanced the accessibility to the area. Vista Ridge Mall is located
approximately 3,000' northeast of the Subject.

Sale 8 is located in the Lewisville submarket. This office submarket has an
average rent and occupancy for Class A space of $15.20/SF and 66%. The weighted
rent/occupancy is $10.32/SF. The overall location is deemed inferior to the
Subject and an upward adjustment will be made.

Based on a weighted rent/occupancy analysis, downward adjustments of
approximately 45% and 12%, respectively are indicated to Sale 2 and Sale 6. For
our analysis, downward adjustments of 20% and 15%, respectively are reasonable
and will be applied to Sale 2 and 6. The indicated adjustment to Sale 8 is
approximately 30% to Sale 8. The indicated adjustment is considered high and a
tempered upward adjustment of 5% upward will be applied.

Age/Condition

The Subject Property was completed in 1999 and is considered in good condition.
The comparable sales were constructed in 1999, 1986 and 2004, respectively and
are considered in good condition similar to the Subject. Sale 6 is 13 years
older than the Subject and will be adjusted upward 3% due to its inferior age.
Comparable 8 is new construction and will be adjusted downward by 3%. No
adjustment is considered necessary to Sale 2.

Density

The Subject has a FAR of 1.05:1. This compares to the FAR of Sales 2, 6 and 8 of
3.37:1, 3.28:1 and 0.32:1. The Subject has a lower FAR versus Sales 2 and 6 and
a higher FAR compared to Sale 8. The Subject and comparables have structured
parking which offsets a majority of the adjustment. For our analysis, an upward
adjustment of 5% will be applied to Sales 2 and 6. No adjustment is considered
necessary to Sale 8.

Size

The Subject contains 298,766 SF. The comparable sales range from 160,000 SF to
196,997 SF. The overall size of the Subject and comparable sales is similar and
no adjustment is warranted.


Humphries & Associates                X - 24                        D-7U/04-1991
<PAGE>

Market Data Approach, continued


Amenities

The Subject is an eleven-story office building with multi-level parking garage.
The Subject's upper floors offer scenic views and the parking structure provides
security. Comparables 2 and 6 are nine and fourteen-story office buildings with
multi-level parking structures and no adjustment is necessary. Sale 8 is a
three-story office building with surface parking as well as a 3 level parking
garage and parking underneath the building. Sale 8 is considered to have
inferior amenities compared to the Subject and an upward adjustment is
warranted. For our analysis, a subjective upward adjustment of 5% is considered
reasonable and will be applied to Sale 8.

Occupancy/Tenancy

The Subject and comparable sales are all leased to stabilized occupancy levels.
The overall tenant credit of the Subject and comparables is also considered
similar. No adjustment for occupancy or tenancy will be applied.

Conclusion

The comparables have an adjusted range of $150.94/SF to $165.69/SF with an
average of $158.32/SF. All of the comparable sales are considered good
indicators of value and will receive equal emphasis indicating the middle of the
adjusted range. Therefore, based upon the physical and locational
characteristics of the Subject Property as compared to the market sales, an
appropriate price per SF for the Subject Property is considered to be say,
$155.00/SF to $160.00/SF.


NLA of Subject Property                      298,766              298,766
Price Per Square Foot                      x $155.00             x $160.00
                                           ---------             ---------

                                         $46,308,730     to    $47,802,560

Estimated "As Is" Market Value Range
via Market Data Approach        Say,     $46,300,000     to    $47,800,000


Humphries & Associates                X - 25                        D-7U/04-1991
<PAGE>

                          CORRELATIONS AND CONCLUSIONS

The purpose of this appraisal is to estimate the Leased Fee Market Value of the
Subject Property "As Is" as of July 8, 2004. The methods used to estimate the
value of the Subject Property are outlined in the Appraisal Procedure section of
this appraisal. The estimated values are summarized below.

Land Value
"As Vacant and Available to be Developed:       $2,600,000

Excess Land
"As Vacant and Available to be Developed:       $1,400,000

Value Indicated by Cost Approach:
      "As Is"                                   $46,000,000*

Value Indicated by Income Approach:
      "As Is"                                   $47,100,000*

Value Range Indicated by Market Approach:
      "As Is"                                   $46,300,000 - $47,800,000*

*Not including Excess Land

Physical factors control the effectiveness of the Subject Property (the ability
to compete in the market for tenants). The design, and condition of the Subject
Improvements are similar to other office buildings in the Dallas area.

The Cost Approach is an accurate gauge of the current replacement cost of the
Subject Property. It reflects the design and construction characteristics of the
Subject Improvements and current cost trends. However, it does not adequately
reflect current office market conditions in the Subject Neighborhood and the
D/FW area.

Rental, occupancy, and expense trends in the Subject's area and the immediate
area are incorporated into the estimates of value via the Income and Market
Approaches. The estimated


Humphries & Associates               XI - 1                         D-7U/04-1991
<PAGE>

Correlations and Conclusions, continued


market rentals and occupancy were based upon the location, design, and
age/condition of the Subject Property.

The Income Approach value was derived via direct capitalization and yield
capitalization methods. Direct capitalization and Discounted Cash Flow Analysis
are considered to be a close approximation of market value and is based upon the
income-producing potential of the Subject Property. The discounted cash flow
analysis analyzes the actual leases and projects the rental income, occupancy
levels and operating expenses on a typical holding period based upon historical
and projected future market trends. This approach is considered to be the most
reliable indication of market value.

The Market Approach is derived from sales of office buildings in the Dallas
area. These sales are all in similar economic environments as the Subject
Property. The Market Approach reflects current investor attitudes toward
properties similar to the Subject and supports the value indicated by the Income
Approach.

Based upon the foregoing analysis, the estimated Leased Fee Market Value of the
Subject Property as of July 8, 2004, is:

      Leased Fee Market Value "As Is" of Improvements             $47,100,000*

      Fee Simple Market Value "As Is" of Excess Land              $ 1,400,000


*Not including excess land.


Humphries & Associates               XI - 2                         D-7U/04-1991
<PAGE>

                                  CERTIFICATE


I certify that, to the best of my knowledge and belief,...

      The statements of fact contained in this report are true and correct.

      The reported analyses, opinions, and conclusions are limited only by the
      reported assumptions and limiting conditions, and are my personal,
      impartial, unbiased professional analyses, opinions, and conclusions.

      As of the date of the appraisal only, I have no present or prospective
      interest in the property that is the subject of this report, and I have no
      personal interest or bias with respect to the parties involved.

      My compensation is not contingent on the reporting of a predetermined
      value or direction in value that favors the cause of the client, the
      amount of the value estimate, the attainment of a stipulated result, or
      the occurrence of a subsequent event. This appraisal assignment was not
      based on a requested minimum valuation, specific valuation, or the
      approval of a loan.

      No one provided significant professional assistance to the persons signing
      this report.

      My analysis, opinions, and conclusions were developed, and this report has
      been prepared, in conformity with the requirements of the Code of
      Professional Ethics and the Uniform Standards of Professional Appraisal
      Practice of the Appraisal Institute.

      The use of this report is subject to the requirements of the Appraisal
      Institute relating to review by its duly authorized representatives.

      As of the date of the appraisal, I have completed the requirements of the
      continuing education program of the Appraisal Institute.

      Greg Connelly participated in preparing the analysis, conclusions, and
      opinions concerning real estate that are set forth in the appraisal
      report. The Subject Property, all comparable data, and surrounding
      neighborhood were physically inspected by Greg Connelly and Bryan
      Humphries.


Humphries & Associates               XI - 3                         D-7U/04-1991
<PAGE>

Correlations and Conclusions, continued


      Based upon my investigation and my experience, I estimate that the Leased
      Fee Market Value of the Subject improvements and Fee Simple Market Value
      of the excess Land as of July 8, 2004, under the assumptions and limiting
      conditions as stated, is:

      Leased Fee Market Value "As Is" of Improvements           $47,100,000*

      Fee Simple Market Value "As Is" of Excess Land            $ 1,400,000

      *Not including Excess Land


___________________________                     ___________________________
Bryan E. Humphries, MAI                         Greg Connelly
TX-1320676-G                                    TX-1324452-G


Humphries & Associates               XI - 4                         D-7U/04-1991
<PAGE>

SUMMARY OF QUALIFICATIONS - Bryan E. Humphries, MAI

Currently

Owner, BRYAN E. HUMPHRIES, INC.

Experience

Over 24 years experience in the appraisal of real properties, including
commercial, multi-family, industrial, and special purpose properties, for
mortgage bankers, savings and loan associations, insurance companies, attorneys,
private individuals, public utilities, and governmental agencies.

Primary areas of concentration during the last five years include the appraisal
of multi-family and office properties. Additional experience includes ownership
and management of various multi-family and office properties.

Education

Graduated from Texas Tech University in 1974:  B.B.A. Business
Graduated from Texas Tech University in 1976:  M.S. Finance
Completed college, SREA, and AIREA courses in real estate appraisal
Qualified as "Expert" in real estate valuation in various courts


Professional Designations and Affiliations

MAI                 Member (#6514), Appraisal Institute

AI                  Admissions Committee, North Texas Chapter 17, 1983-1992
                    (Chairman, 1989-1990); National Admissions Review
                    (1994-1996); Education Committee (1988); Region 8
                    Representative (1994, 1996, 1997, 2002); North Texas Chapter
                    17 Board of Directors (1993 - 1995; 1999 - 2001) Appraisal
                    Institute National Screener (1996-2001)

Broker              Licensed Broker (#216136-12), Texas Real Estate Commission

State Certified     Texas State Certified - General Real Estate Appraiser
                    (#TX 1320676-G)

State Certified     Texas State Certified - Property Tax Consultant (00003440)

Member              North Texas Commercial Association of Realtors

Member              Real Estate Financial Executive Association


Humphries & Associates                                              D-7U/04-1991

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.3
<SEQUENCE>11
<FILENAME>montague.txt
<DESCRIPTION>MONTAGUE APPRAISAL
<TEXT>

                                                                    Exhibit 99.3





COMPLETE APPRAISAL OF
REAL PROPERTY

Two Existing Research and Development
Buildings
2730-60 Junction Avenue and
404-410 Plumeria Drive
San Jose, Santa Clara County, California 95134

IN A SELF-CONTAINED
APPRAISAL REPORT

As of July 7, 2004

Prepared For:
Franklin Street Properties Corporation
and the Directors of FSP Montague Business
Center Corporation
401 Edgewater Place, Suite 200
Wakefield, MA 01880


Prepared By:
Cushman & Wakefield of California, Inc.
Valuation Services, Advisory Group
560 S. Winchester Boulevard, Suite 200
San Jose, California 95128
C&W File ID: 04-31010-9343

- --------------------------------------------------------------------------------
VALUATION SERVICES                                                ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                  [LOGO] CUSHMAN &
                                         WAKEFIELD(R)

                                         Cushman & Wakefield of California, Inc.
                                         560 S. Winchester Boulevard, Suite 200
                                         San Jose, California 95128
                                         408.436.5500 Tel
                                         408.434.1554 fax
                                         ww.cushwake.com
July 14, 2004

Mr. John F. Donahue
Asset Manager
Franklin Street Properties Corporation
and the Directors of FSP Montague Business Center Corporation
401 Edgewater Place, Suite 200
Wakefield, MA 01880

Re: Complete Appraisal of Real Property
    In a Self-Contained Report

    Two Existing Research and Development Buildings
    2730-60 Junction Avenue and
    404-410 Plumeria Drive
    San Jose, Santa Clara County, California 95134

    C&W File ID: 04-31010- 9343

Dear Mr. Donahue:

In fulfillment of our agreement as outlined in the Letter of Engagement, we are
pleased to transmit our complete appraisal report on the property referenced
above.

The value opinion reported below is qualified by certain assumptions, limiting
conditions, certifications, and definitions, which are set forth in the report.
We particularly call your attention to the following extraordinary assumptions
and hypothetical conditions:

Extraordinary Assumptions: This appraisal employs no extraordinary assumptions.

Hypothetical Conditions: This appraisal employs no hypothetical conditions.

This report was prepared for Franklin Street Properties Corporation and the
Directors of FP Montague Business Center Corporation and is intended only for
their specified use in connection with a private offering.

If you plan to use the appraisal report or our name in any offering memoranda or
other investment material, or in the event the Client provides a copy of this
appraisal to, or permits reliance thereon by, any person or entity not
authorized by C&W in writing to use or rely thereon, Client hereby agrees to
indemnify and hold C&W, its affiliates and the respective shareholders,
directors, officers and employees, harmless from and against all damages
expenses, claims and costs, including attorneys' fees, incurred in investigating
and defending any claim arising from or in any way connected to the use of, or
reliance upon, the appraisal by any such unauthorized person or entity.
Moreover, we hereby consent to a description and inclusion of the appraisal
report in any document required to be filed with the Securities and Exchange
Commission.
<PAGE>

                                                      Cushman & Wakefield, Inc.
Mr. John F. Donahue
Franklin Street Properties Corporation
and the Directors of FSP Montague Business Center Corporation
July 14, 2004
Page 2


If the Appraisal is referred to or included in any offering material or
prospectus, the Appraisal shall be deemed referred to or included for
informational purposes only and C&W, its employees and the Appraiser have no
liability to such recipients. C&W disclaims any and all liability to any party
other than the party which retained C&W to prepare the Appraisal.

This appraisal report has been prepared in accordance with our interpretation
of the Uniform Standards of Professional Appraisal Practice (USPAP), including
the Competency Provision.

The property was inspected by and the report was prepared by Michael G. Davis,
MAI.

This appraisal employs the Sales Comparison and Income Capitalization
Approaches. Based on our analysis and knowledge of the subject property type
and relevant investor profiles, it is our opinion that all approaches would be
considered meaningful and applicable in developing a credible value conclusion.
Given the age of the improvements and degree of external obsolescence currently
in the market, estimating depreciation is very subjective. Thus, the Cost
Approach was not considered a reliable value approach and therefore, was not
used in this analysis.

Based on our Complete Appraisal as defined by the Uniform Standards of
Professional Appraisal Practice, we have developed an opinion that the market
value of the leased fee estate of the referenced property, subject to the
assumptions and limiting conditions, certifications, extraordinary and
hypothetical conditions, if any, and definitions, "as is" on July 7, 2004 is:

                             TWENTY MILLION DOLLARS

                                   $20,000,000
<PAGE>

                                                      Cushman & Wakefield, Inc.
Mr. John F. Donahue
Franklin Street Properties Corporation
and the Directors of FSP Montague Business Center Corporation
July 14, 2004
Page 3

Based on recent market transactions, as well as discussions with market
participants, a sale of the subject property at the above-stated opinion of
market value would have required an exposure time of approximately twelve (12)
months. Furthermore, a marketing period of approximately twelve (12) months is
currently warranted for the subject property.

This letter is invalid as an opinion of value if detached from the report,
which contains the text, exhibits, and Addenda.

Respectfully submitted,

CUSHMAN & WAKEFIELD OF CALIFORNIA, INC.


/s/ Michael G. Davis
- --------------------------
Michael G. Davis, MAI
Director
California Certified General Appraiser
License No. AG001700
www.cushwake.com
408.436.5500
408.434.1554 Fax
<PAGE>

                                                        SUMMARY OF SALIENT FACTS
================================================================================

Common Property Name:          N/A

Location:                      2730-60 Junction Avenue and
                               404-410 Plumeria Drive
                               San Jose, Santa Clara County, California 95134

                               The site is located on the southeast corner of
                               Junction Avenue and Plumeria Drive. Montague
                               Expressway borders the site's northern lot line.

Property Description:          The property consists of a 2-building, 1-story
                               R&D facility containing 145,951 square feet of
                               net rentable area on 10.110 acres of land.

Assessor's Parcel Numbers:     097-14-043 and 083

Interest Appraised:            Leased Fee Estate

Date of Value:                 July 7, 2004

Date of Inspection:            July 7, 2004

Ownership:                     FSP Montague Business Center Corporation

Occupancy:                     The subject property is 100.0% leased to Novellus
                               Systems. The lease is scheduled to terminate on
                               12/31/06. The property is currently vacant and is
                               being marketed by Novellus for sublease.
                               According to Randy McFarland, Real Estate and
                               Security Manager for Novellus Systems, Novellus
                               will not renew its lease following termination
                               in December 2006.

Current Property Taxes

   Total Assessment:           $18,100,000

   2003/2004 Property Taxes:   $210,011

Highest and Best Use

   If Vacant:                  An office/R&D facility developed to the highest
                               density possible when market conditions improve.

   As Improved:                As it is currently developed

- --------------------------------------------------------------------------------
VALUATION SERVICES                                                ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                        SUMMARY OF SALIENT FACTS
================================================================================

Site & Improvements

Zoning:                        I - Industrial

Land Area:                     10.11 acres
                               440,392 square feet

Number of Stories:             1

Year Built:                    1982 and 1983

Type of Construction:          Concrete Tilt-up with steel column infill

Gross Building Area:           145,951 square feet

Net Rentable Area:             145,951 square feet

Percentage of Office Space:    2370 Junction Avenue is improved with 50% office
                               area (remainder in manufacturing and some
                               warehouse space) and 404-410 Plumeria Drive is
                               improved with 100% office area.

Clear Ceiling Height:          9' to 12' in office areas. 14' in the
                               lab/assembly areas in 2730-60 Junction Avenue

Loading Doors:                 2 dock highs, 2 drive in doors

VALUE INDICATORS

Cost Approach:

   Indicated Value:            N/A

   Per Square Foot (NRA):      N/A

Sales Comparison Approach:

   Indicated Value:            $21,200,000

   Per Square Foot (NRA):      $145.25

- --------------------------------------------------------------------------------
VALUATION SERVICES                                                ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                        SUMMARY OF SALIENT FACTS
================================================================================

Income Capitalization Approach

Discounted Cash Flow

   Projection Period:               11 years

   Holding Period:                  10 years

   Terminal Capitalization Rate:    9%

   Internal Rate of Return:         10%

   Indicated Value:                 $19,400,000

Direct Capitalization

   Net Operating Income:            N/A

   Capitalization Rate:             N/A

   Indicated Value:                 N/A

Reconciled Income Approach Value:   $19,400,000

   Per Square Foot (NRA):           $132.92

FINAL VALUE CONCLUSION

 Market Value As Is Leased Fee:     $20,000,000

   Per Square Foot (NRA):           $137.03

   Exposure Time:                   12 months

   Marketing Time:                  12 months

Extraordinary Assumptions and Hypothetical Conditions

Extraordinary Assumptions

An extraordinary assumption is defined by the Uniform Standards of Professional
Appraisal Practice as "an assumption, directly related to a specific
assignment, which, if found to be false could alter the appraiser's opinions or
conclusions. Extraordinary assumptions presume as fact otherwise uncertain
information about physical, legal or economic characteristics of the subject
property; or about conditions external to the property, such as market
conditions or trends; or about the integrity of data used in an analysis."

This appraisal employs no extraordinary assumptions.

Hypothetical Conditions

A hypothetical condition is defined by the Uniform Standards of Professional
Appraisal Practice as "that which is contrary to what exists but is supposed
for the purpose of analysis. Hypothetical conditions assume conditions contrary
to known facts about physical, legal, or economic characteristics of the
subject property; or about conditions external to the property, such as market
conditions or trends; or about the integrity of data used in an analysis."

This appraisal employs no hypothetical conditions.

- --------------------------------------------------------------------------------
VALUATION SERVICES                                                ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                             SUBJECT PHOTOGRAPHS
================================================================================

                     [PHOTO OF 404-410 PLUMERIA DRIVE FRONT]

                    Front Elevation of 404-410 Plumeria Drive


                     [PHOTO OF 404-410 PLUMERIA DRIVE REAR]

                    Rear Elevation of 404-410 Plumeria Drive

- --------------------------------------------------------------------------------
VALUATION SERVICES                                                ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>
                                                             SUBJECT PHOTOGRAPHS
- --------------------------------------------------------------------------------

                     [PHOTO OF 404-410 PLUMERIA DRIVE LOBBY]

                         Lobby in 404-410 Plumeria Drive


                    [PHOTO OF 404-410 PLUMERIA DRIVE OFFICE]

                Typical Office Interior in 404-410 Plumeria Drive

- --------------------------------------------------------------------------------
VALUATION SERVICES                                                ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                             SUBJECT PHOTOGRAPHS
================================================================================

                    [PHOTO OF 404-410 PLUMERIA DRIVE OFFICE]

                Typical Office Interior in 404-410 Plumeria Drive


              [PHOTO OF 404-410 PLUMERIA DRIVE SHIPPING/RECEIVING]

                Shipping/Receiving Area in 404-410 Plumeria Drive

- --------------------------------------------------------------------------------
VALUATION SERVICES                                                ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                             SUBJECT PHOTOGRAPHS
================================================================================

                   [PHOTO OF 2370-2760 JUNCTION AVENUE FRONT]

                  Front Elevation of 2370-2760 Junction Avenue

                    [PHOTO OF 2370-2760 JUNCTION AVENUE REAR]

                   Rear Elevation of 2370-2760 Junction Avenue

- --------------------------------------------------------------------------------
VALUATION SERVICES                                                ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                             SUBJECT PHOTOGRAPHS
================================================================================

                   [PHOTO OF 2370-2760 JUNCTION AVENUE LOBBY]

                       Lobby in 2370-2760 Junction Avenue


                   [PHOTO OF 2370-2760 JUNCTION AVENUE OFFICE]

              Typical Office Interior in 2370-2760 Junction Avenue

- --------------------------------------------------------------------------------
VALUATION SERVICES                                                ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                             SUBJECT PHOTOGRAPHS
================================================================================

                [PHOTO OF 2370-2760 JUNCTION AVENUE LAB INTERIOR]

                Typical Lab Interior in 2370-2760 Junction Avenue


                 [PHOTO OF 2370-2760 JUNCTION AVENUE CLEAN ROOM]

             Decommissioned Clean Room in 2370-2760 Junction Avenue

- --------------------------------------------------------------------------------
VALUATION SERVICES                                                ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                             SUBJECT PHOTOGRAPHS
================================================================================

                           [PHOTO OF NORTH JUNCTION]

                      Looking North Along Junction Avenue

                           [PHOTO OF SOUTH JUNCTION]

                      Looking South Along Junction Avenue

- --------------------------------------------------------------------------------
VALUATION SERVICES                                                ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                               TABLE OF CONTENTS
================================================================================

INTRODUCTION.................................................................. 1

REGIONAL MAP.................................................................. 5

REGIONAL ANALYSIS............................................................. 6

LOCAL AREA MAP................................................................22

R&D MARKET ANALYSIS...........................................................28

SITE DESCRIPTION..............................................................32

IMPROVEMENTS DESCRIPTION......................................................35

REAL PROPERTY TAXES AND ASSESSMENTS...........................................38

ZONING........................................................................39

HIGHEST AND BEST USE..........................................................40

VALUATION PROCESS.............................................................42

SALES COMPARISON APPROACH.....................................................44

INCOME CAPITALIZATI0N APPROACH................................................52

RECONCILIATION AND FINAL VALUE OPINION........................................63

ASSUMPTIONS AND LIMITING CONDITIONS...........................................64

CERTIFICATION OF APPRAISAL....................................................67

ADDENDA.......................................................................68


- --------------------------------------------------------------------------------
VALUATION SERVICES                                                ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                                    INTRODUCTION
================================================================================

Identification of Property

Common Property Name:         N/A

Location:                     2730-60 Junction Avenue and
                              404-410 Plumeria Drive
                              San Jose, Santa Clara County, California 95134

                              The site is located on the southeast
                              corner of Junction Avenue and Plumeria
                              Drive. Montague Expressway borders the
                              site northern lot line.

Property Description:         The property consists of a 2-building, 1-story
                              R&D facility containing 145,951 square feet of
                              net rentable area on 10.110 acres of land.

Assessor's Parcel Numbers:    097-14-043 and 083

Property Ownership and Recent History

Current Ownership:            FSP Montague Business Center Corporation

Sale History:                 FSP Montague Business Center Corporation (Franklin
                              Street Properties) purchased the subject property
                              from Teachers Insurance and Annuity Association of
                              America in August 2002. The sales price was
                              $26,000,000. At the time of sale, the property was
                              100% leased (but not occupied) by Novellus
                              Systems.

Current Disposition:          To the best of our knowledge, the property is not
                              under contract of sale nor is it being marketed
                              for sale.

Intended Use and Users of the Appraisal

This appraisal is intended to provide an opinion of the market value of the
leased fee interest in the property for the exclusive use of Franklin Street
Properties Corporation and the Directors of FSP Montague Business Center
Corporation in connection with a private offering. All other uses and users are
unintended, unless specifically stated in the letter of transmittal.

Dates of Inspection and Valuation

The value conclusion reported herein is as of July 7, 2004. The property was
inspected on July 7, 2004 by Michael G. Davis, MAI.

Property Rights Appraised

Leased Fee interest.

Scope of the Appraisal

This is a complete appraisal presented in a self-contained report, intended to
comply with the reporting requirements set forth under the Uniform Standards of
Professional Appraisal Practice (USPAP) for a Self-Contained Appraisal Report.

- --------------------------------------------------------------------------------
VALUATION SERVICES                    1                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                                    INTRODUCTION
================================================================================

In preparation of this appraisal, we investigated numerous improved sales in the
subject's market, analyzed rental data, and considered the input of buyers,
sellers, brokers, property developers and public officials. Additionally, we
investigated the general regional economy as well as the specifics of the local
area of the subject.

The scope of this appraisal required collecting primary and secondary data
relative to the subject property. The depth of the analysis is intended to be
appropriate in relation to the significance of the appraisal issues as presented
herein. The data have been analyzed and confirmed with sources believed to be
reliable, whenever possible, leading to the value conclusions set forth in this
report. In the context of completing this report, we have made a physical
inspection of the subject property and the improved sales and rental
comparables. The valuation process involved utilizing generally accepted
market-derived methods and procedures considered appropriate to the assignment.

This appraisal employs the Sales Comparison and Income Capitalization
Approaches. Based on our analysis and knowledge of the subject property type and
relevant investor profiles, it is our opinion that all approaches would be
considered meaningful and applicable in developing a credible value conclusion.
Given the age of the improvements and degree of external obsolescence currently
in the market, estimating depreciation is very subjective. Thus, the Cost
Approach was not considered a reliable value approach and therefore, was not
used in this analysis.

Definitions of Value, Interest Appraised and Other Terms

The following definitions of pertinent terms are taken from the Dictionary of
Real Estate Appraisal, Third Edition (1993), published by the Appraisal
Institute, as well as other sources.

Market Value

      Market value is one of the central concepts of the appraisal practice.
      Market value is differentiated from other types of value in that it is
      created by the collective patterns of the market. A current economic
      definition agreed upon by agencies that regulate federal financial
      institutions in the United States of America follows, taken from the
      glossary of the Uniform Standards of Professional Appraisal Practice of
      The Appraisal Foundation:

      The most probable price which a property should bring in a competitive and
      open market under all conditions requisite to a fair sale, the buyer and
      seller, each acting prudently and knowledgeably, and assuming the price is
      not affected by undue stimulus. Implicit in this definition is the
      consummation of a sale as of a specified date and the passing of title
      from seller to buyer under conditions whereby:

      1.    Buyer and seller are typically motivated;

      2.    Both parties are well informed or well advised, and acting in what
            they consider their own best interests;

      3.    A reasonable time is allowed for exposure in the open market;

      4.    Payment is made in terms of cash in US dollars or in terms of
            financial arrangements comparable thereto; and

      5.    The price represents the normal consideration for the property sold
            unaffected by special or creative financing or sales concessions
            granted by anyone associated with the sale.

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VALUATION SERVICES                    2                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                                    INTRODUCTION
================================================================================

Leased Fee Estate

      An ownership interest held by a landlord with the rights of use and
      occupancy conveyed by lease to others. The rights of the lessor (the
      leased fee owner) and the leased fee are specified by contract terms
      contained within the lease.

Market Rent

      The rental income that a property would most probably command on the open
      market, indicated by the current rents paid and asked for comparable space
      as of the date of appraisal.

Cash Equivalent

      A price expressed in terms of cash, as distinguished from a price
      expressed totally or partly in terms of the face amounts of notes or other
      securities that cannot be sold at their face amounts.

Market Value As Is on Appraisal Date

      The value of specific ownership rights of an identified parcel of real
      estate as of the effective date of the appraisal; related to what
      physically exists and excludes all assumptions concerning hypothetical
      conditions.

Exposure Time and Marketing Time

Exposure Time

      Under Paragraph 3 of the Definition of Market Value, the value opinion
      presumes that "A reasonable time is allowed for exposure in the open
      market". Exposure time is defined as the length of time the property
      interest being appraised would have been offered on the market prior to
      the hypothetical consummation of a sale at the market value on the
      effective date of the appraisal. Exposure time is presumed to precede the
      effective date of the appraisal.

The reasonable exposure period is a function of price, time and use. It is not
an isolated opinion of time alone. Exposure time is different for various types
of real estate and under various market conditions. As noted above, exposure
time is always presumed to precede the effective date of appraisal. It is the
length of time the property would have been offered prior to a hypothetical
market value sale on the effective date of appraisal. It is a retrospective
opinion based on an analysis of recent past events, assuming a competitive and
open market. It assumes not only adequate, sufficient and reasonable time but
adequate, sufficient and a reasonable marketing effort. Exposure time and
conclusion of value are therefore interrelated.

Based on our review of national investor surveys, discussions with market
participants and information gathered during the sales verification process, a
reasonable exposure time for the subject property at the value concluded within
this report would have been approximately twelve (12) months. This assumes an
active and professional marketing plan would have been employed by the current
owner.

Marketing Time

      Marketing time is an opinion of the time that might be required to sell a
      real property interest at the appraised value. Marketing time is presumed
      to start on the effective date of the appraisal and take place subsequent
      to the effective date of the

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VALUATION SERVICES                    3                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                                    INTRODUCTION
================================================================================

      appraisal. The opinion of marketing time uses some of the same data
      analyzed in the process of estimating reasonable exposure time and it is
      not intended to be a prediction of a date of sale.

We believe, based on the assumptions employed in our analysis, as well as our
selection of investment parameters for the subject, that our value conclusion
represents a price achievable within twelve (12) months.

Legal Description

We were not provided with the subject's legal description. However, the subject
site is identified by Santa Clara County as assessor's parcel numbers 097-14-043
and 083.

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VALUATION SERVICES                    4                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                                    REGIONAL MAP
================================================================================

                                [MAP OF REGION]

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VALUATION SERVICES                    5                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                               REGIONAL ANALYSIS
================================================================================

Economic and Demographic Analysis

Regional Area Overview

Silicon Valley encompasses 1,740 square miles of land and is comprised of San
Mateo County and Santa Clara County. San Mateo County is essentially the
peninsula formed by San Francisco Bay and the Pacific Ocean (save for the City
and County of San Francisco at its northern tip). Santa Clara County lies at the
south of San Francisco Bay and is much larger geographically than San Mateo
County. Silicon Valley is part of the greater San Francisco-Oakland-San Jose
Consolidated Metropolitan Statistical Area (CMSA) which includes the Primary
Metropolitan Statistical Areas (PMSAs) of San Francisco (Marin, San Francisco
and San Mateo Counties), San Jose (Santa Clara County), Santa Cruz (Santa Cruz
County), Oakland (Alameda and Contra Costa Counties), Vallejo-Fairfield-Napa
(Napa and Solano Counties) and Santa Rosa (Sonoma County).

Silicon Valley's Northern California location on the San Francisco Bay provides
for a fairly mild climate year round. The topography of the area varies from
beaches to mountains, providing for myriad microclimates and recreational
venues.

                      SAN FRANCISCO CMSA COMPONENT COUNTIES

                           [MAP OF SAN FRANCISCO CMSA]

       Silicon Valley Counties            Other San Francisco CMSA Counties
       -----------------------            ---------------------------------
       San Mateo                          Sonoma
       Santa Clara                        Napa
                                          Solano
                                          Marin
                                          Contra Costa
                                          Alameda
                                          Santa Cruz

Source: Cushman & Wakefield Analytics

Silicon Valley has long been the high-tech center of the nation and despite the
technology fallout that has beset the region, remains so. Increased business
investment in computers and related equipment was the driving force of the
Silicon Valley economy throughout the late 1990s into the 2000s. Rising stock
valuations, an influx of venture capital, investment in hardware and software in
anticipation of Y2K, and the continuous need by businesses to enhance
productivity, fueled the growth of Silicon Valley's industries. As business
investment waned, however, so did Silicon Valley's prosperity.

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VALUATION SERVICES                    6                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                               REGIONAL ANALYSIS
================================================================================

The Silicon Valley's technology sector accounts for nearly a quarter of its
employment base. As a growing economy that lacks significant diversity across
industrial sectors, Silicon Valley tends to exhibit more volatile growth than do
more economically diversified markets.

Demographic Profile

Both Santa Clara and San Mateo counties are considered highly desirable but
expensive places to live. The median age of Silicon Valley's population is 36.0
years, just above the median age of the nation's top 100 largest metropolitan
areas (Top 100) of 35.7 years.

Silicon Valley's labor pool is highly skilled and highly compensated, resulting
in a very high per capita income. Its average household income is a staggering
58 percent above the Top 100 average, and its median household income is an even
more impressive 63 percent above the Top 100 median.

Silicon Valley has a vastly higher percentage of households in the $100,000 plus
annual income cohort--41 percent versus 20 percent across the Top 100. At the
lower end of the income strata with annual incomes under $50,000, Silicon
Valley's share of households is far less than that of the Top 100--28 percent
versus 49 percent.

                           DEMOGRAPHIC CHARACTERISTICS
                    Silicon Valley vs. Top 100 MSAs and U.S.
                                 2003 Estimates

- --------------------------------------------------------------------------------
                                                      Top 100
                                       Silicon         Metro
Characteristic                          Valley         Areas*          U.S.
- --------------------------------------------------------------------------------
Median Age (years)                          36.0          35.7          36.1
- --------------------------------------------------------------------------------
Average Annual Household Income         $110,900       $70,000       $63,200
- --------------------------------------------------------------------------------
Median Annual Household Income          $ 84,800       $52,000       $46,900
- --------------------------------------------------------------------------------
Households by Annual Income Level:
- --------------------------------------------------------------------------------
  <$25 000                                  11.5%         22.5%         25.6%
- --------------------------------------------------------------------------------
  $25,000 to $49,999                        16.0%         26.0%         27.7%
- --------------------------------------------------------------------------------
  $50,000 to $74,999                        16.7%         19.4%         19.2%
- --------------------------------------------------------------------------------
  $75,000 to $99,999                        14.7%         12.4%         11.3%
- --------------------------------------------------------------------------------
  $100,000 plus                             41.1%         19.7%         16.1%
- --------------------------------------------------------------------------------
Education Breakdown:
- --------------------------------------------------------------------------------
  < High School                             16.3%         18.4%         19.6%
- --------------------------------------------------------------------------------
  High School Graduate                      16.4%         25.8%         28.5%
- --------------------------------------------------------------------------------
  College < Bachelor Degree                 27.5%         27.6%         27.4%
- --------------------------------------------------------------------------------
  Bachelor Degree                           24.0%         17.8%         15.7%
- --------------------------------------------------------------------------------
  Advanced Degree                           15.7%         10.3%          8.9%
- --------------------------------------------------------------------------------
              Source: Claritas, Inc., Cushman & Wakefield Analytics

      *     The Top 100 Metro Areas are comprised of the 100 largest
            metropolitan statistical areas within the U.S. in terms of total
            employment as of 2002.

Silicon Valley's population breakdown by educational achievement follows a
similar pattern to incomes, reflective of the strong correlation between the two
demographic factors. The San Francisco Bay Area is home to some of the nation's
most prestigious universities, including

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VALUATION SERVICES                    7                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                               REGIONAL ANALYSIS
================================================================================

Stanford University, University of California (UC) Berkeley and UC San
Francisco. Over 31 percent of Silicon Valley's population has a bachelor or
graduate degree, compared to just 24 percent for the Top 100. And, while 50
percent of the Top 100 population has just a high school diploma or less, that
figure is a substantially lower 38 percent in Silicon Valley.

Population

Silicon Valley, with a current population of 2.4 million, has significantly
lagged the Top 100 in terms of its population growth between 1993 and 2003.
Silicon Valley, with an average annual growth rate of just 0.7 percent, also
grew more slowly than the San Francisco CMSA as a whole. While Silicon Valley
briefly exceeded the Top 100's population growth rate during 1996 and 1997, it
has since significantly lagged the Top 100 and indeed saw a decline in
population during 2002 and 2003.

                            POPULATION GROWTH BY YEAR
                           Silicon Valley vs. Top 100
                                   1990 - 2008


                                   [BAR CHART]


Source: Economy.com, Cushman & Wakefield Analytics

      NOTE: In this Exhibit and all subsequent time-series graphs, the shaded
            bars indicate the periods of a U.S. economic recession.

Population growth is forecast to under-perform substantially the Top 100 over
the forecast period. Between 2003 to 2008, Silicon Valley's average population
growth rate, at 0.7 percent annually, is expected to lag both the CMSA (0.9
percent) and the Top 100 (1.0 percent).

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VALUATION SERVICES                    8                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                               REGIONAL ANALYSIS
================================================================================

                     ANNUALIZED POPULATION GROWTH BY COUNTY
                 Silicon Valley vs. San Francisco CMSA Counties
                                   1993 - 2008

- --------------------------------------------------------------------------------
                                                               Annual Growth
                                                 Forecast   --------------------
Population (000s)            1993       2003       2008        93-03    03-08
================================================================================
United States              259,919.0  290,933.0  303,495.0      1.1%     0.8%
- --------------------------------------------------------------------------------
  Top 100 MSAs             161,837.4  183,642.9  193,359.0      1.3%     1.0%
- --------------------------------------------------------------------------------
   San Francisco CMSA        6,514.1    7,116.1    7,458.2      0.9%     0.9%
- --------------------------------------------------------------------------------
     Silicon Valley          2,218.8    2,373.2    2,454.2      0.7%     0.7%
- --------------------------------------------------------------------------------
       Santa Clara County    1,549.2    1,674.9    1,733.1      0.8%     0.7%
- --------------------------------------------------------------------------------
       San Mateo County        669.6      698.4      721.1      0.4%     0.6%
- --------------------------------------------------------------------------------
       Alameda County        1,339.2    1,469.7    1,521.5      0.9%     0.7%
- --------------------------------------------------------------------------------
       Contra Costa County     852.5      995.6    1,061.1      1.6%     1.3%
- --------------------------------------------------------------------------------
       San Francisco County    740.3      757.7      774.8      0.2%     0.4%
- --------------------------------------------------------------------------------
       Marin County            238.0      245.9      256.6      0.3%     0.9%
- --------------------------------------------------------------------------------
       Other CMSA Counties   1,125.3    1,274.0    1,389.9      1.2%     1.8%
- --------------------------------------------------------------------------------
                Source: Economy.com, Cushman Wakefield Analytics

Silicon Valley's greatest concentrations of population are generally between the
west shore of San Francisco Bay and Interstate 280. Within San Mateo County, the
communities of Daly City, Foster City, San Mateo and Redwood City are among the
most densely populated. Within Santa Clara County, Mountain View, Sunnyvale,
Cupertino, San Jose and Milpitas have the greatest population density. The
lowest population concentrations are along the coastal ranges of San Mateo
County and the hills to the east of Santa Clara County.

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VALUATION SERVICES                    9                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                               REGIONAL ANALYSIS
================================================================================

                     POPULATION PER SQUARE MILE BY ZIP CODE
                                 Silicon Valley
                                      2003


                                [POPULATION MAP]


Source: Claritas, Inc., Cushman & Wakefield Analytics

Households

As Silicon Valley's population growth has trailed the Top 100 over the past 10
years, its household formation rate has lagged the Top 100 to an even greater
extent. Between 1993 and 2003, growth in Silicon Valley's number of households
averaged just 0.5 percent annually, somewhat below the CMSA's 0.8 percent annual
growth rate and far below the Top 100 growth rate of 1.4 percent annually.
Household growth was negative in 2002 and 2003 as out-migration from Silicon
Valley continued.

Worsening net out-migration is an indicator of an economy not yet in recovery.
Migration originally turned negative in 1999 when the economy was still strong,
but a lack of affordable housing drove many households out of Silicon Valley.
Then, as job losses mounted, out-migration accelerated. The magnitude of net
out-migration is indicative of the depth of Silicon Valley's recession. Until
the local jobless rate begins to subside and narrow the gap with other metro
areas within the Western U.S., out-migration is apt to continue.

Growth in household formations for Silicon Valley between 2003 and 2008 is
forecast to improve to 1.0 percent--above its population growth rate, but
significantly less than the projected rate of 1.3 percent for the CMSA and 1.4
percent for the Top 100.

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VALUATION SERVICES                    10                          ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                               REGIONAL ANALYSIS
================================================================================

Growth in household formations for Silicon Valley between 2002 and 2007 is
forecast at a meager 0.5 percent -- above its population growth rate, but
significantly less than the projected rate of 1.1 percent for the CMSA and 1.3
percent for the Top 100.

                            HOUSEHOLD GROWTH BY YEAR
                           Silicon Valley vs. Top 100
                                   1990 - 2008


                                   [BAR CHART]


Source: Economy.com, Cushman & Wakefield Analytics

Income

In 2003, the median household income in Silicon Valley was $84,800. This figure
is a staggering 63 percent higher than the median income for the Top 100.
Between 1993 and 2003, Silicon Valley's 4.6 percent average annual growth in
median household income far exceeded the Top 100 average annual growth of 3.6
percent. Broken down by county, Santa Clara County's average annual growth rate
was 4.5 percent, and the average annual growth in median household income for
San Mateo County was an even stronger strong 4.7 percent.

Through 2008, median household income growth in Silicon Valley is expected to
slow considerably to 3.1 percent, with San Mateo County forecast for 3.3
percent and Santa Clara County expected to average annual increases of just 3.0
percent. By comparison, the median household income for the Top 100 is forecast
to average roughly 2.8 percent annual growth.

Silicon Valley remains the most affluent region in the Bay Area. The highest
income households are generally located to the south and west of Interstate 280
and south and east of Interstate 680. Only three ZIP code areas in Silicon
Valley have a median household income of less than $50,000 (and two of those are
the locations of Stanford and San Jose State University). In addition, there are
but a few in the $50,000 to $75,000 income cohort, with those predominantly
located in Daly City and South San Francisco within San Mateo County, and north,
central and east San Jose within Santa Clara County.

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VALUATION SERVICES                   11                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                               REGIONAL ANALYSIS
================================================================================

                MEDIAN HOUSEHOLD INCOME DISTRIBUTION BY ZIP CODE
                                 Silicon Valley
                                      2003


                                  [MEDIAN MAP]

Source: Claritas, Inc., Cushman & Wakefield Analytics

Regional Economic Overview

Silicon Valley's workforce has declined by more than 14 percent from its peak in
late 2000, an extraordinary loss of 199,400 jobs. The downturn has been so
severe that it generated the first annual decline in population since World War
II during 2002 and then again in 2003. The economy's rise was so fast and its
downturn so sharp that given a projected steady growth rate beginning in 2004,
it is expected be more than a decade before the employment level during the 2000
peak is reached again.

San Jose is still struggling to rebound from its deep recession. While
industrial production has been rising since 2001, the vast amount of excess
capacity in nearly all industries has not yet sparked a turnaround in
employment, which continued to decline through the fall of 2003. Towards the end
of 2003, however, industrial production reached a new high, which will likely
generate enough productive activity to soon require added labor.

Total employment appeared to stabilize during the later half of 2003, but there
is no guarantee that the labor market's downturn has ended as key industries,
such as electronics and related business and professional services, continue to
shed workers. On a bright note, however, payrolls in the information services
industry, which includes software, was stable during the

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VALUATION SERVICES                   12                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                               REGIONAL ANALYSIS
================================================================================

second half of 2003, and there is anecdotal evidence that a moderate pace of new
hiring is now ongoing, although employers are being very selective in the hiring
process.

Until the tech-related industries - which are the drivers of Silicon Valley's
economy -- resume hiring, the local labor market is not expected to expand in
any robust manner. Job gains during 2003 were limited to construction, hotels,
and restaurants. Employment within the business and professional services
industry only leveled off. Its lack of growth indicates that the economy is not
yet strong enough to allow firms to spend anew on services such as legal,
accounting, design, or advertising.

A weak economy is evident in business bankruptcy filings. Through third quarter
of 2003, they had risen continuously since the tech downturn in late 2000. This
trend contrasts with the rest of the nation, where business filings have been on
the decline now for two years. Personal filings tell a somewhat different story.
They continued to rise through the third quarter of 2003 but at a pace on par
with that of the U.S.

The rebound under way in semiconductor capital equipment is a bright spot within
the local economy. A rising book-to-bill ratio for North American chip producers
is indicative of an expanding industry. Chip orders rose for the four
consecutive months ending in November 2003. Moreover, the book-to-bill ratio was
above 1.0 in October and November, indicating that orders are greater than
shipments. This is the first true sign of expansion since the tech downturn in
late 2000. While this does not mean that a surge of hiring is on the horizon, an
improvement in profitability among chip fabrication equipment makers will help
set the groundwork for labor market expansion next year.

Although other improving economic indicators remain sparse, retailers are no
longer paring staff, indicating some stability in personal income and consumer
spending. Similarly, employment in financial services is no longer declining.
Also, leisure and hospitality industry payrolls remained level during 2003, a
good indicator of stable business travel to the area. Indeed, the local hotel
industry is considering ways to help fund an expansion of San Jose downtown
convention center. Thus, the worst of the multiplier effects of the tech
downturn may be diminishing.

Real estate markets are also experiencing some positive trends. Construction
employment has been rising since March, largely due to an increase in
residential construction permits. Moreover, house prices firmed in the third
quarter.

Software and tech services will likely lead San Jose's rebound. Current examples
include the remake of Hewlett-Packard into a service-based firm and the non-stop
expansion of Internet-retailer eBay. However, these industries will be slow to
turn around until venture capital placements turn broadly upward. As of the
third quarter 2003, only biotech placements were on the rise.

The near-term outlook is bolstered by an initial agreement between BEA Systems
and the City of San Jose to develop an office complex that would ultimately
accommodate 8,400 workers. eBay also is asking the city for permission to build
more densely on its property. While neither project is certain, it is indicative
of some software and service firms' desire to remain in Silicon Valley, close to
its experienced labor, and not move elsewhere in search of lower real estate
costs or business costs.

Gross Product

Silicon Valley enjoyed a 10-year period of astounding 8.7 percent average annual
growth in its gross product, compared to 3.6 percent for the Top 100, with
phenomenal peaks in 1999 and 2000 of 18.6 and 25.9 percent, respectively.
Silicon Valley's real gross product experienced

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VALUATION SERVICES                   13                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                               REGIONAL ANALYSIS
================================================================================

negative 2.3 percent growth during 2002, followed by positive but nominal 0.2
percent growth during 2003. Over the five-year forecast period of 2003 to 2008,
gross product is expected to grow at an average annual rate of 3.9 percent,
exceeding the forecasted Top 100 rate of 3.1 percent.

                        REAL GROSS PRODUCT GROWTH BY YEAR
                           Silicon Valley vs. Top 100
                                   1990 - 2008


                                   [BAR CHART]


Source: Economy.com, Cushman & Wakefield Analytics

Employment Trends

Silicon Valley's employment base is far less diversified than the U.S. overall.
High-tech employment accounts for nearly one-fourth of all employment within
Silicon Valley, compared to about four percent across the Top 100. The Valley is
significantly more concentrated in Manufacturing (18 versus 10 percent) and
Professional and Business Services (18 versus 14 percent) than the Top 100. Both
of those sectors locally have substantial high-tech components.

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VALUATION SERVICES                   14                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                               REGIONAL ANALYSIS
================================================================================

                              EMPLOYMENT BY SECTOR
                           Silicon Valley vs. Top 100
                                      2003


                                  [BAR CHART]


Construction
Manufacturing
Trade, Transportation, & Utilities
Information
Financial Activities
Professional & Business Services
Education & Health Services
Leisure & Hospitality
Other Services (except Govt.)
Government
Office-using

Source: Economy.com, Cushman & Wakefield Analytics

Compared to the Top 100, Silicon Valley is relatively less weighted in the
sectors of Government (11 versus 15 percent) and Transportation and Utilities
(17 versus 20 percent). During 2003, Silicon Valley's only sector to see
employment growth was Education and Health Services. The sectors of
Manufacturing, Professional and Business Services, as well as Information all
saw experienced significant declines in employment over the course of 2003.

Among the San Francisco CMSA's counties, Silicon Valley has by far the largest
share of total employment (38 percent) and realized the second largest increase
in total employment between 1993 and 2003 of over 114,000 jobs (trailing the
Oakland PMSA's 169,000 jobs). Silicon Valley is also expected to capture the
second largest share of new job creations between 2003 and 2008 of 82,000 jobs,
just behind the Oakland PMSA with 87,000 jobs.

                           TOTAL EMPLOYMENT BY COUNTY
                               San Francisco CMSA
                                      2003


                                  [PIE CHART]

                              Santa Clara       28%
                              Alameda           22%
                              San Francisco     17%
                              Other Counties    12%
                              Contra Costa      11%
                              San Mateo         10%


Source: Economy.com, Cushman & Wakefield Analytics

Between 1993 and 2003, Silicon Valley's total employment increased at an average
annual rate of 1.0 percent, significantly below the Top 100 rate of 1.7 percent.
More recently, total employment has declined. Silicon Valley's total employment
is not forecast to recover to its pre-

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VALUATION SERVICES                   15                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                               REGIONAL ANALYSIS
================================================================================

recession level until the next decade. Following an nominal increase in 2004,
between 2005 and 2008, Silicon Valley employment is forecast to grow at an
annual average of 1.7 percent and slightly lag the projected Top 100 rate.

              TOTAL EMPLOYMENT GROWTH AND UNEMPLOYMENT RATE BY YEAR
                           Silicon Valley vs. Top 100
                                   1990 - 2008


                                  [BAR CHART]


Source: Economy.com, Cushman & Wakefield Analytics

Over most of the past decade, Silicon Valley's unemployment rate had been
substantially lower than that across the Top 100. However, with the 2001
economic recession and the corresponding loss of many of the region's jobs,
Silicon Valley's unemployment rate lost its advantage over the Top 100. The
jobless rate jumped from its low point of 1.9 percent in 2000 to 7.5 percent in
2002. The unemployment rate is projected to trend slowly marginally downward
during 2004 and then gradually recede to 5.8 percent by 2008--by which time the
Top 100 unemployment rate is expected to decline to 4.8 percent.

Silicon Valley is home to 12 of the 2002 Fortune 500 corporations:
Hewlett-Packard Company (ranked 14), Intel (58), Cisco Systems (95), Solectron
Corporation (158), Sun Microsystems Inc. (155), Oracle Corporation (190),
Agilent Technologies Inc. (292), Calpine Corporation (246), Applied Materials
Inc. (327), Apple Computer Inc. (300), CNF Inc. (347), and Maxtor Corporation
(421). Following is a table of Silicon Valley's largest non-government
employers.

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VALUATION SERVICES                   16                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                               REGIONAL ANALYSIS
================================================================================

                          TOP NON-GOVERNMENT EMPLOYERS
                                 Silicon Valley
                                      2003
- --------------------------------------------------------------------------------
                                                                  Number of MSA
Employer                                                            Employees
- --------------------------------------------------------------------------------
United Airlines                                                      17,700
Cisco Systems                                                        13,000
Applied Materials, Inc.                                              12,400
Hewlett-Packard Company/Agilent                                      10,000
Stanford University                                                  10,900
Kaiser Permanente                                                     9,100
Oracle Corporation                                                    7,400
Intel Corporation                                                     7,000
Lockheed Martin Missiles & Space                                      6,700
Solectron Corporation                                                 6,000
Sanmina                                                               6,000
AT&T                                                                  5,200
UCSF Stanford Health Care                                             4,200
Genentech                                                             3,700
Apple Computer, Inc.                                                  3,000
3Com Corporation                                                      3,000
Advanced Micro Devices                                                2,900
Raychem Corporation                                                   2,900
Visa USA/International                                                2,700
Mills Peninsula Health Services                                       2,500
- --------------------------------------------------------------------------------
Source: Economy.com, Cushman & Wakefield Analytics

In the early 1990s, Silicon Valley and San Francisco had roughly the same number
of office workers--roughly 200,000 each. As of year-end 2003, while San
Francisco still had 190,000, Silicon Valley had nearly 300,000. Between 1993 and
2003, Silicon Valley's office-using employment grew at an average annual rate of
3.4 percent, while San Francisco netted zero growth. By comparison, office-using
employment for the Top 100 grew at an average 2.4 percent annual rate. Silicon
Valley's surge in office-using employment that took place during the 1990s has
ended, however. Recently, Silicon Valley has seen three consecutive years of
declining office-using employment, including a staggering 11.8 percent decrease
during 2002.

Office-using employment within Silicon Valley is expected to increase during
2004 by 1.6 percent. Over the forecast period, office-using employment is
forecast to rise at an annual 2.9 percent rate through 2008--outperforming the
CMSA's projected 2.6 percent growth rate and outpacing the 2.4 percent rate
forecast for the Top 100.

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VALUATION SERVICES                   17                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                               REGIONAL ANALYSIS
================================================================================

                  TOTAL OFFICE-USING EMPLOYMENT GROWTH BY YEAR
                           Silicon Valley vs. Top 100
                                   1990 - 2008


                                  [BAR CHART]


Source: Economy.com, Cushman & Wakefield Analytics

The South Bay's largest concentrations of office-using employment are located
along the Highway 101 corridor in the cities of San Jose, Milpitas, Santa Clara,
Sunnyvale, Cupertino, Mountain View and Palo Alto. Moving up the Peninsula, the
largest concentrations office-using employees in San Mateo County are found in
Redwood Shores, Menlo Park, Redwood City, Foster City and San Mateo.

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VALUATION SERVICES                   18                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                               REGIONAL ANALYSIS
================================================================================

              OFFICE-USING EMPLOYMENT PER SQUARE MILE BY ZIP CODE
                                 Silicon Valley
                                      2003


                          [OFFICE-USING EMPLOYMENT MAP]


Source: Claritas, Inc., Cushman & Wakefield Analytics

Transportation Network

As in much of the rest of the Bay Area, Silicon Valley freeways are a challenge
during commute hours. Interstates 280, 680, 880, U.S. 101, Highways 85, 87 and
92 are the primary freeways serving Silicon Valley. Also, a number of
expressways criss-cross Santa Clara County. From the East Bay, the San Mateo
Bridge (Highway 92) feeds commuters into San Mateo County and the Dumbarton
Bridge feeds commuters into northern Santa Clara County.

Silicon Valley's public transportation system consists of commuter trains, buses
and light rail. The rails for the CalTrain commuter train extend 77 miles from
Gilroy in southern Santa Clara County to the South of Market district in San
Francisco. CalTrain has an average daily ridership of over 30,000.

The Santa Clara Valley Transportation Authority's (VTA) light rail system has
two lines--an east-west line extending from Downtown Mountain View to Milpitas
at Interstate 880, and a north-south line from Baypoint near Highway 237 to
south San Jose's Santa Teresa District. Weekday ridership averages 20,000. San
Mateo County has no light rail system.

Separate bus systems run in each county--Santa Clara County's run by VTA and San
Mateo County's run by SamTrans. VTA average weekday bus boardings are
approximately 146,000. SamTrans, serving a significantly smaller population,
averages 58,000 weekday boardings.

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VALUATION SERVICES                   19                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                               REGIONAL ANALYSIS
================================================================================

The Bay Area Rapid Transit System (BART), a high-speed rail system serving
predominantly Alameda and Contra Costa County commuters heading into San
Francisco, has recently extended into northern San Mateo County and to San
Francisco International Airport. An extension of BART into Santa Clara County
from Fremont in Alameda County is also proposed.

Located within the geography of San Mateo County, San Francisco International
Airport (SFO), which opened its new International Terminal in 2000, was the 19th
busiest airport in the world for the year 2002 with 31.4 million arrivals and
departures. SFO is negotiating to add runways to fuel future growth, but the
plan is stalled due to environmental concerns of adding more landfill to San
Francisco Bay.

San Jose International Airport (SJC) handled 11.7 million passengers during
fiscal 2002 through its existing 31 gates. SJC has won approval for a 40-gate
expansion that is expected to greatly improve air transport in and out of
Silicon Valley.

Quality of Life/Amenities

Major Attractions and Amenities

Silicon Valley is an area with many unique characteristics. Its topographic
features include valleys, mountains, ocean, bay, and lakes. It also has a wide
variety of development ranging from urban high-rise, suburban mid-rise,
industrial, residential, and agricultural land to natural and undeveloped open
space.

A variety of venues include San Jose's Tech Museum, the Winchester Mystery
House, and the Rosicrucian Egyptian Museum. Paramount's Great America is a
prominent theme park in Santa Clara. Santa Cruz Beach & Boardwalk is about an
hour away. The valleys warm summers make San Jose's Raging Waters, the Bay
Area's largest water theme park, a very popular destination.

Perhaps one of the valley's best amenities is its proximity to San Francisco. In
addition, the Wine Country in Napa and Sonoma Counties are also only about a
two-hour drive from the south bay. Monterey, Carmel and Big Sur are about an
hour drive, and Lake Tahoe and Yosemite National Park are roughly four hours
from Silicon Valley.

Silicon Valley is home to the San Jose Sharks professional hockey team. In
addition, Santa Clara County is often mentioned when the Oakland A's baseball
team discusses a relocation. The headquarters and practice facilities for the
San Francisco 49ers are located in the city of Santa Clara.

Education

The San Francisco Bay Area is home to numerous institutions of higher learning.
The large number of world-class educational and research facilities--more than
35 colleges and universities--positively impacts the entire Bay Area economy.
Silicon Valley's most prestigious university is Stanford University in Palo
Alto, but the region is also well served by San Jose State, College of San
Mateo, Santa Clara University, University of California Santa Cruz and
University of California Berkeley.

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VALUATION SERVICES                   20                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                               REGIONAL ANALYSIS
================================================================================

                          MAJOR COLLEGES/UNIVERSITIES
                                 Silicon Valley
                                      2003

- ------------------------------------------------------------------------------
                                                             Full/Part Time
College/University                                             Enrollment
- ------------------------------------------------------------------------------
San Jose State University                                       30,400
De Anza College                                                 25,000
Mission College                                                 17,300
Stanford University                                             16,400
Evergreen Valley College                                        12,200
College of San Mateo                                            11,900
Santa Clara University                                           6,800
Foothill College                                                 4,700
- ------------------------------------------------------------------------------

Source: San Francisco Business Times Book of Lists, Cushman & Wakefield
Analytics

Medical Facilities

Silicon Valley has a comprehensive healthcare network. The area's major
healthcare facilities include the Stanford Medical Center, Santa Clara Valley
Medical Center, Kaiser Permanente (3 hospitals), Regional Medical Center of San
Jose, El Camino Hospital, Sequoia Hospital and VA Palo Alto.

Regional Summary

Even with a turnaround in tech demand, the pace of San Jose's rebound will be
mild, due in part to potential mergers within the area. Differential performance
will generate merger & acquisition potential that could result in some further
shakeout of employment. However, factors such as continued innovative
competition, as evidenced by the competition between AMD and Intel, plentiful
office and flex space that lowers costs for startups and expansions, and an
improved environment for Initial Public Offerings (IPOs) lend support to an
economy that will begin to expand by mid-2004.

Silicon Valley's moderate climate and attractive quality-of-life factors are
expected to continue attracting top talent to the region--at least those who can
afford its high cost of living and housing costs. Its first-class educational
institutions will continue to seed the region with tech-savvy graduates. Silicon
Valley still maintains the highest share of nationwide venture capital
investments. Silicon Valley's substantial biotechnology industry remains strong
and has attracted venture capital in the wake of the dotcom bust. Research
related to anti-bioterrorism may provide an additional boost to these firms.

Longer term, innovation and R&D are expected to revive the local economy and to
bring its performance on par with that of the nation's top 100 metropolitan
areas. When the national and global economies eventually rebound, capital
investment would likely surge and further stimulate Silicon Valley's tech
manufacturing base. As computer software becomes more sophisticated, more
powerful computers will be required to run the software, boosting investment in
computers. Finally, defense and homeland security spending are expected to
bolster R&D in the valley.

- --------------------------------------------------------------------------------
VALUATION SERVICES                   21                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                                  LOCAL AREA MAP
================================================================================


                          [MAP OF LOCAL SAN JOSE AREA]


- --------------------------------------------------------------------------------
VALUATION SERVICES                   22                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                                  LOCAL AREA MAP
- --------------------------------------------------------------------------------

Introduction

The subject property is in the "Golden Triangle" which encompasses the area
between State Highway 237, Interstate 880, and U.S. Highway 101. The Golden
Triangle is home to notable high-technology firms.

Area Characteristics

The area immediate to the subject is approximately three miles northwest of the
San Jose Central Business District, and approximately one mile north of the
Mineta San Jose International Airport. The local area consists primarily of
research and development buildings. All of the developments in the immediate
area are one and two-story, concrete tilt-up buildings in average to good
condition. Most of the existing buildings were constructed in the 1970s and
1980s.

Office/Research and Development Facilities

The local area consists predominantly of office/research and development
facilities. The area includes the corporate headquarters of internationally
recognized companies. The subject is in the southern part of the area defined
above. The southern end of the area is improved with the following developments:

      o     Sun Microsystems occupies a three-story, office/research and
            development building (built in 1997) containing 147,000 square feet
            near the southeast corner of North First Street and Montague
            Expressway.

      o     A six-story office building, containing 120,000 square feet with
            subterranean parking is located adjacent to the Sun Microsystems
            building, directly on the southeast corner of North First Street and
            Montague Expressway. It was completed in 1999.

      o     Lockheed Martin and Globalstar Telecommunications occupy the former
            Ford Aerospace facility consisting of a six-building, 543,900-square
            foot office/research and development complex on the northeast corner
            of Montague Expressway and Zanker Road.

      o     Corporate Plaza is two-building, 180,OOO-square foot complex on the
            southwest corner of Montague Expressway and Zanker Road.

      o     Hitachi Instruments owns and occupies a 100,000 square foot research
            and development facility on the northeast corner of Montague
            expressway and North First Street.

      o     Cadence Design Systems occupies a 10-building campus containing
            nearly 780,000 square feet, along the north side of Montague
            Expressway at Seely Avenue and River Oaks Parkway.

      o     Montague Technology Park is located along Montague Expressway,
            across the street from the subject property. It is a four-building,
            office/research and development facility. Each building is a
            two-story structure occupied by a single tenant.

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VALUATION SERVICES                   23                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                                  LOCAL AREA MAP
================================================================================

      o     Equity Office Properties' Central Park Plaza is a six-building,
            office/research and development facility located adjacent to the
            subject site. It has frontage along Junction Avenue and Zanker Road.

      o     Cisco Systems is the largest employer in the Golden Triangle. It
            originally developed a 45-acre site along Rio Robles and Tasman
            Drive in latter-1994. This project consists of eight, two-story
            buildings, collectively containing 819,000 square feet of net
            rentable area. Cisco Systems completed four additional buildings
            collectively containing 553,500 square feet along Vista Montana and
            Champion Court in late-1995. Three additional research and
            development buildings, also occupied by Cisco Systems, were
            completed in early-1997 along Tasman Drive, Rio Robles, and North
            First Street. These buildings collectively contain 313,650 square
            feet. Cisco Systems completed an additional 2.6 million square feet
            on 139 acres, located on the east side of Zanker Road, just south of
            State Highway 237. Cisco Systems also purchased over 150 acres of
            land in the neighboring district of Alviso, north of State Highway
            237. The land will accommodate up to 1.6 million square feet of
            office and R&D space. Given the severe downturn in the high-tech
            industry over the past year however, Cisco has moth-balled the two
            existing buildings in this development and does not plan to build
            anymore space in the foreseeable future.

      o     In latter-1996, Atmel Corporation completed a large, research and
            development building on a 38-acre site bordered by North First
            Street, U.S. Highway 101 Guadalupe Parkway and O'Nel Drive, just
            south of the local area boundaries. SymmetriCom occupies a newer,
            two-story, research and development building directly across the
            street from Atmel.

      o     Altera Corporation, a programmable semi-conductor chip manufacturer,
            completed a 500,000-square foot campus in early-1998 on two parcels
            located along North First Street and Innovation Drive.

      o     BEA occupies a two-building development, containing 220,000 square
            feet, on the northwest corner of North First Street and Guadalupe
            Parkway. These buildings are four-story, steel-frame structures. BEA
            also purchased over 40 acres of vacant land adjacent to this
            development for expansion. However, development plans are on hold
            given the erosion of the market conditions.

      o     Phase I of the former Novell, Inc. corporate campus, located on the
            southwest corner of North First Street and Guadalupe Parkway, was
            completed in mid-1999. Phase I consists of five, two to four-story,
            steel frame, office/research and development buildings. Phase I
            collectively contains 533,342 square feet of gross building area.
            Phase II was to consist of five additional buildings. eBay purchased
            the campus and vacant land from Novell in mid-2003, for its own
            occupancy.

      o     A 350,000 square foot, research and development complex, known as
            Valley Technology Park, was built along the east side of Zanker
            Road, between Trimble Road and Plumeria Drive, in late-1998. Carr
            America purchased the former Ferrara Meat Packing Plant containing
            21.4-acres. Carr America also developed a 258,000-square foot,
            two-story, research and development building along Orchard Parkway
            and Trimble Road, known as the Valley Research Park.

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VALUATION SERVICES                   24                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                                  LOCAL AREA MAP
================================================================================

      o     Mozart Development Company constructed two, two and three-story,
            office/research and development buildings collectively containing
            approximately 126,000 square feet along Orchard Parkway, just west
            of North First Street in late-2000. The entire facility was
            pre-leased.

      o     Lincoln Property Company completed Lincoln Technology Center, a
            four-building, office/research and development project along North
            First Street, just south of Trimble Road in 2001. Collectively, the
            buildings contain 248,000 square feet. The property was pre-leased
            to Sun Microsystems.

The following are the most notable office/research and development facilities in
northern end of the local area:

      o     KLA Instrument's corporate campus is located along Rio Robles. It
            consists of three, two-story, concrete tilt-up research and
            development buildings in very good condition. The last of these
            buildings was completed in May 1996.

      o     Amdahl occupies several one and two-story buildings, along North
            First Street and Rio Robles. Novellus Systems' corporate campus is
            located on the southeast corner of North First Street and
            Headquarters Drive. This facility is comprised of six, one and
            two-story buildings collectively containing 333,500 square feet.
            Novellus also owns and occupies five additional buildings near their
            main campus.

      o     Menlo Equities developed the Corporate Technology Centre, a 35-acre
            site along the south side of State Highway 237, Headquarters Drive
            and Holger Way. The development, completed in mid-2000, consists of
            eight, two-story, office/research and development buildings
            collectively containing 602,000 square feet.

Office Developments

The local area also includes notable, multi-tenant office facilities.

      o     The South Bay Center is a class "B" office park located on the east
            side of North First Street between Trimble Road and Component Drive.
            The park consists of six buildings collectively containing 424,200
            square feet.

      o     Bayshore Plaza is a six-story, class "A" building facility
            containing 100,000 square feet located just south of the subject.

      o     North First Street Plaza is a six-story office building located
            across the street from Bayshore Plaza, containing approximately
            120,000 square feet.

      o     Capital Towers, a five-story office building containing 82,500
            square feet n the corner of North First Street and Brokaw Road.

      o     Orchard Plaza is a three-story, concrete tilt-up office building on
            the corner of North First Street and Charcot Avenue.

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VALUATION SERVICES                   25                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                                  LOCAL AREA MAP
================================================================================

Residential Developments

      o     River Oak Village includes two apartment complexes, both mid-rise
            and garden-style, as several condominium complexes and a community
            retail facility along Montague Expressway and River Oaks Parkway.
            This master-planned development is approximately one block north of
            the subject site. It was built in the early-1990s.

      o     The Northpark Apartments are among several new apartment/condominium
            projects that were constructed in 2000 and 2001 along the east side
            of North First Street at Rio Robles. This development is part of a
            master-planned area that will eventually be built-out with a total
            of 2,500 units.

      o     Several apartment and condominium complexes, built in the
            latter-1990s, are located off of Renaissance Drive, just west of
            North First Street.

Access and Transportation

The subject area enjoys very good access.

      o     Interstate 880, the Nimitz Freeway, is located less than one mile
            east of the subject site. It courses in a north/south direction
            providing access northward to the City of Oakland, and southward
            through the City of San Jose, becoming State Highway 17, which
            provides access to the City of Santa Cruz.

      o     U.S. Highway 101, the Bayshore Freeway, is located 1-1/2 miles south
            of the subject site. It courses northward through San Francisco and
            southward through San Jose, terminating in the City of Los Angeles.
            This freeway serves most Santa Clara County cities.

      o     Guadalupe Parkway is located at the southern end of the local area.
            It courses southwestward providing access to northbound U.S. Highway
            101. It also provides access southward through Downtown San Jose, to
            State Highway 85.

      o     Montague Expressway abuts the subject site. It courses an east/west
            direction providing access from U.S. Highway 101, to the west, and
            Interstate 880, to the east, to the subject area.

      o     State Highway 237 is located 2 miles north of the subject site. It
            provides access westward to the City of Mountain View and eastward
            to Interstate 680.

Although the private automobile is still the most prevalent mode of
transportation, the Santa Clara County Transit System provides bus service to
all communities within the County. Bus stops are located proximate to the
subject site along Montague Expressway. A Santa Clara Light Rail station is
located approximately two blocks west of the subject site, at the North First
Street/Orchard Parkway intersection.

Summary and Conclusions

In summary, the local area is within the Golden Triangle, which includes a
myriad of high-technology firms. Many of the developments in the area are the
corporate headquarters of internationally recognized companies. Therefore, the
area has become a recognized, corporate

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VALUATION SERVICES                    26                          ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                                  LOCAL AREA MAP
================================================================================

location. Most of the facilities in the area were constructed between the
mid-1980's and mid-1990's. Though significant new development is evident in the
area, several proposed office and R&D campuses have been shelved given currently
soft market conditions. Consequently, the area is in a stable period. The area
is not expected to see further growth until economic conditions improve and
vacancy substantially declines.

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VALUATION SERVICES                    27                          ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

- --------------------------------------------------------------------------------
MARKETBEAT SNAPSHOT
- --------------------------------------------------------------------------------
INDUSTRIAL OVERVIEW                                           First Quarter 2004
SILICON VALLEY, CALIFORNIA

Silicon Valley's industrial market continued to struggle in the first quarter of
2004. Despite the fact that the worldwide semiconductor industry is expected to
increase revenue by 22.6% this year, and although many companies such as Intel
and Synopsys will benefit from international consumer demands of mobile phones
and personal electronics, many technology companies are expanding in other
countries rather than locally. Because the U.S. only allows certain technologies
and limits the amount of advanced equipment to be exported, other countries,
such as China and India, are beginning to lure designers from the Silicon
Valley. Both Intel and Synopsys are planning to expand facilities in China. It
is estimated that in six years China will be the second largest chip maker in
the world. Though offshoring continues to be an issue, jobs outside of the
technology industry have helped Silicon Valley unemployment rate decrease 2.1
points over the last year to 6.8% in February 2004. Hiring is expected to rise
in industries such as services and public administration, construction, and
non-durable goods manufacturing.

Consolidations, relocations, and high tech tenants moving into more prestigious
office buildings has caused the Silicon Valley's overall industrial vacancy to
increase from 18.0% first quarter 2003 to 19.8% first quarter 2004. An
additional 4.1 million square feet (msf) of vacant high tech space has been
added in that time frame. The warehouse/distribution sector has also added
707,615 square feet (sf) of vacant space from first quarter 2003 to first
quarter 2004. The manufacturing sector on the other hand has 94,398 square feet
(sf) less vacant from first quarter 2003.

Several large availabilities were added to the already saturated industrial
market in the first quarter. There were 320,000 sf of high tech sublease space
put on the market at 3105-3195 Kifer Road in Fremont. Other recently vacated
availabilities include 246,500 sf of warehouse/distribution space at 28350
Fremont Boulevard, 109,400 sf of warehouse/distribution space at 590 Brennan
Street, and 93,748 sf of high tech space at 47214 Lakeview Boulevard.

The increase in availabilities continues to push asking rental rates downward.
From first quarter 2003 to first quarter 2004, high tech asking rental rates
declined 22.3% to $.91 per square foot per month (psf/mo), manufacturing asking
rental rates declined 25.6% to $.67 psf/mo, and warehouse/distribution asking
rental rated declined 18.1% to $.45 psf/mo.

Though vacancy continued to increase, leasing activity is stable. There were 2.1
msf leased in the first quarter, similar to the quarterly activity seen
throughout 2003. Google subleased 103,640 sf at 1565 & 1585 Charleston Road,
Allied Telesyn subleased 85,000 sf of high tech space at 3200 North First
Street, and the County of Santa Clara subleased 76,872 sf of manufacturing space
at 1877 Senter Road.

- ----------------------------------------

Though the 2.1 msf of first quarter
leasing activity is healthy, additional
space becoming available has caused the
vacancy to rise from first quarter 2003.

- ----------------------------------------

Sales activity remained stable as well with 1.4 msf of user and investor sales
occurring during the fist three months of 2004. Prudential purchased 911-1001
Murphy Ranch Road for $70.0 million, the County of Santa Clara purchased 2310 &
2314 North First Street for $33.8 million, and Dollinger Properties purchased
45635-45655 Northport Loop for $5.9 million.
                                                              [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
                                                Global Real Estate Solutions(TM)
<PAGE>

INDUSTRIAL OVERVIEW, SILICON VALLEY, CALIFORNIA               First Quarter 2004

CUSHMAN & WAKEFIELD MARKET HIGHLIGHTS

<TABLE>
<CAPTION>
Significant 1Q04 New Lease Transactions

<S>                           <C>                          <C>                        <C>         <C>
1565 & 1585 Charleston Road   Mountain View, North         Google                     103,640     High Tech
3200 North First Street       San Jose, No. First Street   Allied Telesyn              85,000     High Tech
1877 Senter Road              San Jose, Central            County of Santa Clara       76,872     Manufacturing
1171 Montague Expressway      Milpitas                     Bizcom Electronics          75,547     Warehouse/Distribution
1625 Charleston Road          Mountain View, North         Google                      67,000     High Tech
8200 Central Avenue           Newark                       Usb Payment Processing      59,020     High Tech
670 McCarthy Boulevard        Milpitas                     Macronix America            53,284     High Tech

<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Significant 1Q04 Sale Transactions
- --------------------------------------------------------------------------------------------------------------
<S>                               <C>                          <C>                        <C>       <C>
911-1001 Murphy Ranch Road        Milpitas                     Prudential                 351,000   $70,000,000
2310 & 2314 North First Street    San Jose, No. First Street   County of Santa Clara      199,440   $33,800,000
45635-655 Northport Loop East     Fremont, Bayside             Dollinger Properties        63,845    $5,937,845
4545-4575 Cushing Parkway         Fremont, Automall            Bema Electronics            58,130    $5,115,440
580 Cottonwood Drive              Milpitas                     Promise Technology          48,384    $4,983,552
1220 Midas Way                    Sunnyvale, East              Atlantic Pearl Investments  54,500    $4,150,000
</TABLE>

- --------------------------------------------------------------------------------
Significant 1Q04 Construction Completions
- --------------------------------------------------------------------------------
N/A

- --------------------------------------------------------------------------------
Significant Projects Under Construction
- --------------------------------------------------------------------------------
N/A

- --------------------------------------------------------------------------------
CUSHMAN & WAKEFIELD MARKET/SUBMARKET STATISTICS
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
                                          Overall    YTD                       YTD           YTD       Direct Weighted Average
                                  No. of  Vacancy  Leasing      Under      Construction     Direct        Net Rental Rate
  Market/Submarket    Inventory   Bldgs.   Rate    Activity  Construction  Completions    Absorption   HT     MFG    W/D   OS**
- --------------------------------------------------------------------------------------------------------------------------------
<S>                 <C>           <C>      <C>      <C>           <C>          <C>     <C>             <C>    <C>    <C>    <C>
  Campbell            2,400,692      76    10.2%     16,295        0            0          (2,267)     $1.02  $0.74  $0.65  N/A
  Cupertino           4,474,088      69    19.9%     28,862        0            0          (8,876)     $1.02  $1.55    N/A  N/A
  Fremont            38,873,926     623    16.4%    243,469        0            0        (481,232)     $0.81  $0.62  $0.44  N/A
  Los Gatos             755,048      24    14.3%     34,927        0            0          31,707      $1.22    N/A    N/A  N/A
  Milpitas           21,319,205     309    24.2%    205,864        0            0          31,997      $0.74  $0.70  $0.48  N/A
  Mountain View      14,978,066     379    24.3%    362,112        0            0        (240,259)     $1.07  $1.10  $0.74  N/A
  Newark              7,409,892     101    26.2%    102,857        0            0          48,760      $0.75  $0.69  $0.41  N/A
  San Jose           73,419,224   1,221    18.5%    800,479        0            0        (238,125)     $0.89  $0.57  $0.43  N/A
  Santa Clara        37,237,572     715    20.8%    161,930        0            0        (307,730)     $0.96  $0.76  $0.45  N/A
  Sunnyvale          30,133,166     681    20.4%    219,077        0            0        (355,451)     $0.97  $0.80  $0.55  N/A
- --------------------------------------------------------------------------------------------------------------------------------
  TOTAL             231,000,879   4,198    19.8%  2,175,872        0            0      (1,521,476)     $0.92  $0.70  $0.44  N/A
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>

* Rental rate reflects $psf/mo
** OS inventory does not exist in this market

For more information, please contact our Research Department
Cushman & Wakefield, Inc.
560 South Winchester Boulevard, Suite 200
San Jose, California 95128
(408) 436-5500

This report contains information available to the public and has been relied
upon by Cushman & Wakefield on the basis that it is accurate and complete.
Cushman & Wakefield accepts no responsibility if this should prove not to be the
case. No warranty or representation, express or implied, is made to the accuracy
or completeness of the information contained herein, and same is submitted
subject to errors, omissions, change of price, rental or other conditions,
withdrawal without notice, and to any special listing conditions imposed by our
principals.

Copyright (C) 2004 Cushman & Wakefield, Inc. All rights reserved.    $125.00

                                                              [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
                                                Global Real Estate Solutions(TM)
<PAGE>

                                                              R&D MARKET ANAYSIS
================================================================================

                                 Silicon Valley
                         High Technology Market Trends


                                  [BAR CHART]


<TABLE>
<CAPTION>
                     Year-end     Year-end    Year-end    Year-end     Year-end     Year-end      Year-end     Mid-Year
                       1997         1998        1999        2000         2001         2002          2003         2004
- ------------------------------------------------------------------------------------------------------------------------
<S>                 <C>          <C>         <C>         <C>          <C>          <C>           <C>          <C>
Overall Avails       4,924,112   12,645,056   8,832,301   3,757,107   17,461,406   30,147,117    36,002,751   35,086,309
- ------------------------------------------------------------------------------------------------------------------------
Leasing Activity    13,235,439   10,473,542  16,290,949  24,981,205    8,064,821    6,560,934     8,861,357    3,435,874
- ------------------------------------------------------------------------------------------------------------------------
Overall Rent             $1.46        $1.59       $1.40       $4.18        $1.96        $1.24         $0.94        $0.87
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>

*Vacancy Rate is the overall vacancy rate for both direct and sublease space.
 Rent Rate is the NNN weighted average asking rental rate for both direct and
 sublease space.

                                    San Jose
                         High Technology Market Trends


                                  [BAR CHART]


<TABLE>
<CAPTION>
                      Year-end     Year-end    Year-end    Year-end    Year-end    Year-end      Year-end     Mid-Year
                        1997         1998        1999        2000        2001        2002          2003         2004
- ------------------------------------------------------------------------------------------------------------------------
<S>                   <C>         <C>         <C>         <C>         <C>         <C>           <C>          <C>
Overall Avails        1,844,490   3,851,679   3,080,767   1,144,546   4,888,028   10,084,084    11,033,170   10,093,764
- ------------------------------------------------------------------------------------------------------------------------
Leasing Activity      3,290,138   2,878,389   4,683,319   9,029,202   2,124,499    1,433,669     2,143,637      846,086
- ------------------------------------------------------------------------------------------------------------------------
Overall Rent              $1.40       $1.51       $1.43       $3.03       $1.92        $1.23         $0.91        $0.81
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>

*Vacancy Rate is the overall vacancy rate for both direct and sublease space.
 Rent Rate is the NNN weighted average asking rental rate for both direct and
 sublease space.
 Availabilities include all vacancies in built buildings. Leasing activity is
 year-to-date, excluding renewals.
 Source: Cushman & Wakefield Research Services

Vacancy Trends

As with the overall industrial market, Silicon Valley hi-tech vacancy increased
from 2.8% at the end of 2000 to 23.6% at the end of the 2nd quarter of 2004,
while hi-tech vacancy in San Jose increased from 3.0% to 23.3%.

Under Construction

At the end of the 2nd quarter 2004, no industrial space was under construction
in Silicon Valley.

Leasing Activity

Demand for both office and industrial space throughout Silicon Valley
dramatically diminished from 2000 through the end of 2002. Though gross leasing
activity increased in 2003 to 8.9 million square feet, it still is considered
relatively anemic given historical trends. Brokers interviewed have universally
stated that leasing activity is not expected to significantly improve until
sometime in 2005.

Rental Rates

Average R&D asking rental rates increased substantially in Silicon Valley by
2000, to $4.18 per square foot per month, triple-net. However, the weighted
average asking rental rate decreased

- --------------------------------------------------------------------------------
VALUATION SERVICES                   30                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                              R&D MARKET ANAYSIS
================================================================================

to $0.87 per square foot per month, by the end of the 2nd quarter 2004. At the
same time, asking rental rates for R&D space in San Jose dropped to $0.81 per
square foot per month, triple-net. We should note that actual consummated rates
are lower than the asking rates.

Based on our research of R&D space in San Jose, discussed later in the Income
Capitalization Approach, monthly rental rates generally range from $0.65 to
$0.75 per square foot, triple-net, depending on quality and office build-out.
Leases typically include 3% annual rent increases. Lease terms are typically 3
to 5 years. Free rent is more prevalent in the marketplace. In most cases,
landlords are giving tenant improvement allowances on pre-improved space between
$5.00 and $10.00 per square foot.

Summary and Conclusions

The Silicon Valley industrial market enjoyed unprecedented demand over the past
decade, particularly over the past three years with the explosion of the "dot
com" companies. As a result vacancy rates decreased to historically low levels
and rental rates increased to unprecedented levels by the end of 2000.

With the implosion of the "dot com" phenomenon the market declined significantly
since the end of 2000. Vacancy throughout the region has nearly quadrupled and
leasing activity has slowed. As a result, rental rates have dropped to levels
achieved back in 1996 and 1997. Most market participants do not believe that the
market will begin to measurably improve until sometime in 2005.

- --------------------------------------------------------------------------------
VALUATION SERVICES                   31                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                                SITE DESCRIPTION
================================================================================

Location:                      2730-60 Junction Avenue and
                               404-410 Plumeria Drive
                               San Jose, Santa Clara County, California 95134

                               The site is located on the southeast corner of
                               Junction Avenue and Plumeria Drive. Montague
                               Expressway borders the site northern lot line.

Shape:                         Generally rectangular

Topography:                    Level at and at the finished street grade.

Land Area:                     10.11 acres

                               440,392 square feet

Frontage, Access, Visibility:  Approximately 768 feet along Junction Avenue
                               Approximately 309 feet along Plumeria Drive
                               Approximately 921 feet along Montague Expressway

Soil Conditions:               We did not receive nor review a soil report.
                               However, we assume that the soil's
                               load-bearing capacity is sufficient to
                               support existing structures. We did not
                               observe any evidence to the contrary during
                               our physical inspection of the property.
                               Drainage appears to be adequate.

Utilities

  Water:                       San Jose City

  Sewer:                       San Jose City

  Electricity:                 Pacific Gas and Electric Company

  Gas:                         Pacific Gas and Electric Company

  Telephone:                   SBC

Site Improvements:             The site includes an asphaltic, surface
                               parking lot surrounding the buildings,
                               concrete walkways and parking curbs.
                               Landscaping includes lawns, trees and shrubs
                               along portions of the building perimeters,
                               the lot lines and streets. Landscaping is in
                               average to good condition.

Land Use Restrictions:         We were not given a title report to review.
                               We do not know of any easements,
                               encroachments, or restrictions that would
                               adversely affect the site's use. However, we
                               recommend a title search to determine whether
                               any adverse conditions exist.

Flood Map:                     National Flood Insurance Rate Map Community Panel
                               Number 060349-0008F, dated February 19, 1986.

Flood Zone:                    The subject Property is located in Flood Hazard
                               Zone "B" which are areas inundated under 500 year
                               flooding.

Wetlands:                      We were not given a Wetlands survey. If
                               subsequent engineering data reveal the presence
                               of regulated wetlands, it could materially affect
                               property value. We recommend a wetlands survey
                               by a competent engineering firm.

- --------------------------------------------------------------------------------
VALUATION SERVICES                   32                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                                SITE DESCRIPTION
================================================================================

Seismic Hazard:                 The site is not located in a Special Study
                                Zone as established by California's
                                Alquist-Priolo Geological Hazards Act.

Hazardous Substances:           We observed no evidence of toxic or hazardous
                                substances during our inspection of the site.
                                However, we are not trained to perform
                                technical environmental inspections and
                                recommend the services of a professional
                                engineer for this purpose.

Overall Functionality:          The subject site is functional for its current
                                use.

- --------------------------------------------------------------------------------
VALUATION SERVICES                   33                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                                SITE DESCRIPTION
================================================================================

                                    PLAT MAP


                    [PLAT MAP MARKED WITH SUBJECT LOCATION]


- --------------------------------------------------------------------------------
VALUATION SERVICES                   34                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                        IMPROVEMENTS DESCRIPTION
================================================================================

The following description of improvements is based upon our physical inspection
of the improvements along with our discussions with the property manager.

General Description

  Year Built:                 1982 and 1983

  Number of Buildings:        2

  Number of Stories:          1

  Land To Building Ratio:     3.02 to 1

  Gross Building Area:        145,951 square feet (2730-60 Junction Ave.
                              contains 90,467 sf and 404-410 Plumeria Dr.
                              contains 55,484 sf)

  Net Rentable Area:          145,951 square feet

Construction Detail

  Basic Construction:         Concrete Tilt-up with steel column infill

  Foundation:                 Poured concrete slab

  Framing:                    Structural steel with masonry and concrete
                              encasement

  Percent of Office Space:    2370 Junction Avenue is improved with 50% office
                              area (remainder in manufacturing and some
                              warehouse space) and 404-410 Plumeria Drive is
                              improved with 100% office area.

  Percent Air Conditioned:    95%

  Clear Ceiling Height:       9' to 12' in office areas. 14' in the lab/assembly
                              areas in 2730-60 Junction Avenue

  Loading Doors:              2 dock highs, 2 drive in doors

  Floors:                     Concrete poured over metal deck. Each floor is
                              bridged by structural steel floor beams.

  Exterior Walls:             Painted concrete tilt-up

  Roof Cover:                 Flat roofing system consisting of built-up
                              assemblies and metal mansards.

  Windows:                    The windows are solar-tinted windows in anodized
                              aluminum frames.

  Pedestrian Doors:           Double Glass entry doors at the main lobbies

- --------------------------------------------------------------------------------
VALUATION SERVICES                   35                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                        IMPROVEMENTS DESCRIPTION
================================================================================

Mechanical Detail

  Heating and Cooling:        Roof-mounted package HVAC units.

  Plumbing:                   The plumbing system is assumed to be adequate
                              for existing use and in compliance with local
                              law and building codes. The plumbing system
                              is typical of other R&D properties in the
                              area with a combination of PVC, steel, copper
                              and cast iron piping throughout the building.
                              Adequate restrooms for men and women are
                              situated throughout the building.

  Electrical Service:         Assumed adequate for R&D use.

  Elevator Service:           The buildings do not contain elevators (one-story
                              structures).

  Fire Protection:            The buildings are fully sprinklered. They have a
                              central station monitoring linked directly to the
                              local fire department.

Interior Detail

  Layout:                     The subject property is a 2-building complex.
                              2730-60 Junction Avenue is improved with
                              approximately 50% office area, 40% assembly
                              area (including decommissioned clean rooms)
                              and 10% warehouse area. 404-410 Plumeria
                              Drive is improved with 100% office area. The
                              office areas include open areas, private
                              perimeter and interior offices and conference
                              rooms. All areas excluding the warehouse area
                              in 2730-60 Junction Avenue, are HVAC-served.

  Floor Covering:             Commercial grade carpet in the office areas.
                              Vinyl tile in the corridors, lab, assembly
                              and employee break areas. Ceramic tile in the
                              restrooms. Concrete slab in the warehouse
                              area of 2730-60 Junction Avenue.

  Walls:                      Painted gysumboard.

  Ceilings:                   Dropped acoustical tile panel systems in the
                              office, lab and assembly areas. Exposed
                              construction slab in the warehouse area of
                              2730-60 Junction Avenue.

  Lighting:                   Recessed fluorescent fixtures.

  Restrooms:                  The building features adequate restrooms for men
                              and women in both the office and warehouse areas.

Site Improvements

  Parking:                    580 spaces (3.97:1,000 Sq Ft). Parking appears
                              adequate

  Onsite Landscaping:         A variety of trees, shrubbery and grass.

  Other:                      Concrete curbs and walkways.

Personal Property:            Personalty was excluded from our valuation.

Capital Improvements:         Other than normal routine property maintenance,
                              there are no major capital improvement
                              expenditures planned in the immediate future.

- --------------------------------------------------------------------------------
VALUATION SERVICES                   36                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                        IMPROVEMENTS DESCRIPTION
================================================================================

Summary

  Condition:                  Average

                              The buildings have been adequately maintained
                              and provide an average to good appearance
                              relative to competing buildings within the
                              market.

                              We did not inspect the roofs of the buildings
                              or make a detailed inspection of the
                              mechanical systems. The appraisers however,
                              are not qualified to render an opinion as to
                              the adequacy or condition of these
                              components. The client is urged to retain an
                              expert in this field if detailed information
                              is needed about the adequacy and condition of
                              mechanical systems.

  Quality:                    Average

  Design and Functionality:   The buildings are office/R&D structures that are
                              functionally designed for their intended use.

  Actual Age:                 11 and 12 years

  Effective Age:              10 years

  Expected Economic Life:     45 years

  Remaining Economic Life:    35 years

Americans With Disabilities Act

The Americans With Disabilities Act (ADA) became effective January 26, 1992. We
have not made, nor are we qualified to make a compliance survey of this property
to determine whether or not it is in conformity with the requirements of the
ADA. It is possible that a compliance survey could reveal that the property is
not in compliance with one or more of the requirements of the Act. If so, this
fact could have a negative effect upon the value of the property. Since we have
not been provided with the results of a survey, we did not analyze the results
of possible non-compliance.

Hazardous Substances

We are not aware of any potentially hazardous materials (such as formaldehyde
foam insulation, asbestos insulation, radon gas emitting materials, or other
potentially hazardous materials) which may have been used in the construction of
the improvements. However, we are not qualified to detect such materials and
urge the client to employ an expert in the field to determine if such hazardous
materials exist.

- --------------------------------------------------------------------------------
VALUATION SERVICES                   37                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                            REAL PROPERTY TAXES AND ASSSESSMENTS
================================================================================

Current Property Taxes

The property is subject to the taxing jurisdiction of Santa Clara County. The
assessors' parcel identification numbers are 097-14-043 and 083. The assessment
and taxes for the property are presented below:

                          PROPERTY TAX DATA (2003/2004)

================================================================================
                                                                2003/2004
                                                           ---------------
Assessed Value
   Land:                                                      $11,000,000
   Improvements:                                                7,100,000
                                                              -----------
   Total:                                                     $18,100,000
Tax Rate                                                         0.010867
   Direct Assessments                                              13,318
                                                              -----------
Total Property Taxes and Assessments                             $210,011

Building Area (SF)                                                145,951
Property Taxes per Square Foot                                      $1.44
================================================================================

Total taxes for the property are $210,011, or $1.44 per square foot. The taxes
above include direct assessments totaling $13,318. These assessments are
perpetual paid.

If the subject properties were sold, they would be reassessed at market value by
the county assessor. The county assessor commonly bases the market value of a
property on its sale price.

- --------------------------------------------------------------------------------
VALUATION SERVICES                   38                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                                          ZONING
================================================================================

The property is zoned I - Industrial by the City of San Jose. Permitted uses
within this district include research and development facilities, manufacturing,
and warehouse uses. Zoning regulations imposed within this district are as
follows:

                               ZONING REGULATIONS
- --------------------------------------------------------------------------------
Minimum Lot Area:           10,000 square feet
Maximum Coverage Ratio:     50% to 60%
Maximum Building Height:    45 feet
Maximum Lot Coverage:       50% to 60%
Required On-Site Parking:   1 space per net square foot of research and
                            development floor area. Net square footage
                            is calculated at 85% of gross building area.

Minimum Yard Setbacks
  Front:                    25 feet
- --------------------------------------------------------------------------------

We are not experts in the interpretation of complex zoning ordinances but the
property appears to be a conforming use based on our review of public
information. The determination of compliance is beyond the scope of a real
estate appraisal.

We know of no deed restrictions, private or public, that further limit the
subject property's use. The research required to determine whether or not such
restrictions exist, however, is beyond the scope of this appraisal assignment.
Deed restrictions are a legal matter and only a title examination by an attorney
or title company can usually uncover such restrictive covenants. Thus, we
recommend a title search to determine if any such restrictions do exist.

- --------------------------------------------------------------------------------
VALUATION SERVICES                   39                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                            HIGHEST AND BEST USE
================================================================================

Definition Of Highest And Best Use

According to The Dictionary of Real Estate Appraisal Third Edition (1993), a
publication of the Appraisal Institute, the highest and best use is defined as:

      The reasonably probable and legal use of vacant land or an improved
      property, which is physically possible, appropriately supported,
      financially feasible, and that results in the highest value. The four
      criteria the highest and best use must meet are legal permissibility,
      physical possibility, financial feasibility, and maximum profitability.

Highest And Best Use Criteria

We have evaluated the site's highest and best use both as currently improved and
as if vacant. In both cases, the property's highest and best use must meet four
criteria. That use must be (1), legally permissible (2) physically possible, (3)
financially feasible, and (4) maximally productive.

Legally Permissible

The first test concerns permitted uses. According to our understanding of the
zoning ordinance, noted earlier in this report, the site may legally be improved
with structures that accommodate office/R&D, light manufacturing and assembly,
and warehouse uses. Aside from the site's zoning regulations, we are not aware
of any legal restrictions that limit the potential uses of the subject.

Physically Possible

The second test is what is physically possible. As discussed in the "Site
Description" section of the report, the site's size, soil, topography, etc. do
not physically limit its use. The subject site is of adequate shape and size to
accommodate almost all urban and suburban uses.

Financial Feasibility and Maximal Productivity

The third and fourth tests are what is financially feasible and what will
produce the highest net return. After analyzing the physically possible and
legally permissible uses of the property, the highest and best use must be
considered in light of financial feasibility and maximum productivity. For a
potential use to be seriously considered, it must have the potential to provide
a sufficient return to attract investment capital over alternative forms of
investment. A positive net income or acceptable rate of return would indicate
that a use is financially feasible.

As discussed in the Market Analysis, the market has eroded significantly over
the past few years, sending vacancy rates up significantly and rental rates
downward.

Highest and Best Use of Site As Though Vacant

Considering the subject site's physical characteristics and location, as well as
the state of the local market, it is our opinion that the Highest and Best Use
of the subject site as though vacant is an office/R&D facility developed to the
highest density possible when market conditions improve. .

- --------------------------------------------------------------------------------
VALUATION SERVICES                   40                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                            HIGHEST AND BEST USE
================================================================================

Highest and Best Use of Property As Improved

According to the Dictionary of Real Estate Appraisal, highest and best use of
the property improved is defined as:

      The use that should be made of a property as it exists. An existing
      property should be renovated or retained "as is" so long as it continues
      to contribute to the total market value of the property, or until the
      return from a new improvement would more than offset the cost of
      demolishing the existing building and constructing a new one.

It is our opinion, the existing buildings add value to the site as if vacant,
therefore dictating a continuation of its current use. In conclusion, it is our
opinion that the Highest and Best Use of the subject property as improved is as
it is currently developed.

- --------------------------------------------------------------------------------
VALUATION SERVICES                   41                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                               VALUATION PROCESS
================================================================================

Methodology

There are three generally accepted approaches available in developing an opinion
of value: the Cost, Sales Comparison and Income Capitalization approaches. We
have considered each in this appraisal to develop an opinion of the market value
of the subject property. In appraisal practice, an approach to value is included
or eliminated based on its applicability to the property type being valued and
the quality of information available. The reliability of each approach is
dependent upon the availability and comparability of the market data uncovered
as well as the motivation and thinking of purchasers in the market for a
property such as the subject. Each approach is discussed below, and
applicability to the subject property is briefly addressed in the following
summary.

Land Value

Developing an opinion of land value is typically accomplished via the Sales
Comparison Approach by analyzing recent sales transactions of sites of
comparable zoning and utility adjusted for differences which exist between the
comparables and the subject. Valuation is typically accomplished using a unit of
comparison such as price per square foot of land or potential building area.
Adjustments are applied to the unit of comparison from an analysis of comparable
sales, and the adjusted unit of comparison is then used to derive a value for
the subject site.

Cost Approach

The Cost Approach is based upon the proposition that an informed purchaser would
pay no more for the subject than the cost to produce a substitute property with
equivalent utility. This approach is particularly applicable when the property
being appraised involves relatively new improvements, which represent the
highest and best use of the land; or when relatively unique or specialized
improvements are located on the site, for which there exist few improved sales
or leases of comparable properties.

In the Cost Approach, the appraiser forms an opinion of the cost of all
improvements, depreciating them to reflect any value loss from physical,
functional and external causes. Land value, entrepreneurial profit and
depreciated improvement costs are then added resulting in a value estimate for
the subject property.

Sales Comparison Approach

The Sales Comparison Approach utilizes sales of comparable properties, adjusted
for differences, to indicate a value for the subject property. Valuation is
typically accomplished using a unit of comparison such as price per square foot
of building area, effective gross income multiplier or net income multiplier.
Adjustments are applied to the unit of comparison from an analysis of comparable
sales, and the adjusted unit of comparison is then used to derive a value for
the subject property.

Income Capitalization Approach

This approach first determines the income-producing capacity of a property by
utilizing contract rents on leases in place and by estimating market rent from
rental activity at competing properties for the vacant space. Deductions then
are made for vacancy and collection loss and operating expenses. The resulting
net operating income is divided by an overall capitalization rate to derive an
opinion of value for the subject property. The capitalization rate represents
the

- --------------------------------------------------------------------------------
VALUATION SERVICES                   42                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                               VALUATION PROCESS
================================================================================

relationship between net operating income and value. This method is referred to
as Direct Capitalization.

Related to the Direct Capitalization Method is the Discounted Cash Flow Method.
In this method, periodic cash flows (which consist of net operating income less
capital costs) and a reversionary value are developed and discounted to a
present value using an internal rate of return that is determined by analyzing
current investor yield requirements for similar investments.

Summary

This appraisal employs the Sales Comparison and Income Capitalization
Approaches. Based on our analysis and knowledge of the subject property type and
relevant investor profiles, it is our opinion that all approaches would be
considered meaningful and applicable in developing a credible value conclusion.
Given the age of the improvements and degree of external obsolescence currently
in the market, estimating depreciation is very subjective. Thus, the Cost
Approach was not considered a reliable value approach and therefore, was not
used in this analysis.

The valuation process is concluded by analyzing each approach to value used in
the appraisal. When more than one approach is used, each approach is judged
based on its applicability, reliability, and the quantity and quality of its
data. A final value opinion is chosen that either corresponds to one of the
approaches to value, or is a correlation of all the approaches used in the
appraisal.

- --------------------------------------------------------------------------------
VALUATION SERVICES                   43                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                       SALES COMPARISON APPROACH
================================================================================

Methodology

In the Sales Comparison Approach, we developed an opinion of value by comparing
the subject property with similar, recently sold properties in the surrounding
or competing area. Inherent in this approach is the principle of substitution,
which states that when a property is replaceable in the market, its value tends
to be set at the cost of acquiring an equally desirable substitute property,
assuming that no costly delay is encountered in making the substitution.

By analyzing sales that qualify as arm's-length transactions between willing and
knowledgeable buyers and sellers, we can identify value and price trends. The
basic steps of this approach are:

1.    Research recent, relevant property sales and current offerings throughout
      the competitive area;

2.    Select and analyze properties that are similar to the property appraised,
      analyzing changes in economic conditions that may have occurred between
      the sale date and the date of value, and other physical, functional, or
      location factors;

3.    Identify sales that include favorable financing and calculate the cash
      equivalent price;

4.    Reduce the sale prices to a common unit of comparison such as price per
      square foot of net rentable area, effective gross income multiplier, or
      net income per square foot;

5.    Make appropriate comparative adjustments to the prices of the comparable
      properties to relate them to the property being appraised; and

6.    Interpret the adjusted sales data and draw a logical value conclusion.

The most widely used and market-oriented unit of comparison for properties such
as the subject is the sales price per square foot of net rentable area. All
comparable sales were analyzed on this basis. On the following pages we present
a summary of the improved properties that we compared to the subject property, a
map showing their locations, and the adjustment process.

Due to the nature of the subject property and the level of detail available for
the comparable data, we have elected to analyze the comparables through
application of:

      o     A traditional adjustment grid utilizing percentage adjustments

- --------------------------------------------------------------------------------
VALUATION SERVICES                   44                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                       SALES COMPARISON APPROACH
================================================================================

                       COMPARABLE R&D PROPERTY SALES MAP


                              [PROPERTY SALES MAP]


- --------------------------------------------------------------------------------
VALUATION SERVICES                   45                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                       SALES COMPARISON APPROACH
================================================================================

<TABLE>
<CAPTION>
============================================================================================================
SUMMARY OF IMPROVED SALES
============================================================================================================
                                                              Sales                                    L:B
                Address                   Grantor             Price       Site SF     Yr. Built       Ratio
       -----------------------------------------------------------------------------------------------------
 No.          City, state                 Grantee              Date      Bldg NRA      Quality        Rail
============================================================================================================
<S>    <C>                        <C>                      <C>           <C>          <C>            <C>
         2305 Mission College
  1            Boulevard           Nortel Networks., Inc.  $40,355,000    687,377      1979-89       1.95:1
       -----------------------------------------------------------------------------------------------------
            Santa Clara, CA        South Bay Development       7/02       353,159      Average         No
- ------------------------------------------------------------------------------------------------------------
  2       1110 Ringwood Court        Bedford Properties    $40,000,000    636,412        1985        2.92:1
       -----------------------------------------------------------------------------------------------------
             San Jose, CA           Teachers Insurance &
                                       Annuity Assoc.          9/02       217,824      Average         No
- ------------------------------------------------------------------------------------------------------------
  3        4275 Burton Drive          Agnew Road, LLC      $10,300,371    214,060        1985        2.13:1
       -----------------------------------------------------------------------------------------------------
            Santa Clara, CA       NLFC 1998-2 Santa Clara      1/03       100,608      Average         No
                                           LLP
- ------------------------------------------------------------------------------------------------------------
           2300-2330 Central
              Expressway,
  4    2770-2890 Scott Boulevard,
         and 2001 Walsh Avenue     BRE/San Tomas II, LLC   $110,000,000  1,637,855    1972-2000      2.62:1
       -----------------------------------------------------------------------------------------------------
            Santa Clara, CA       Mission West Properties      4/03       624,812        Good          No
- ------------------------------------------------------------------------------------------------------------
           991-1225 Montague
  5           Expressway            Cisco Systems, Inc.    $20,133,200    540,144        2000        2.41:1
       -----------------------------------------------------------------------------------------------------
             Milpitas, CA          South Bay Development       9/03       223,664     Very Good        No
- ------------------------------------------------------------------------------------------------------------
  6       5400 Bayfront Plaza               3Com           $118,100,000  1,472,110     1990-97       1.68:1
       -----------------------------------------------------------------------------------------------------
            Santa Clara, CA        Marvel Semicounductor      10/03       876,359     Very Good        No
- ------------------------------------------------------------------------------------------------------------
  7     1184-1194 Mathilda Ave         Menlo Equities      $85,000,000    533,479        2000        2.00:1
       -----------------------------------------------------------------------------------------------------
             Sunnyvale, CA            Clarion Partners         5/04       266,740     Excellent        No
- ------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
====================================================================================
SUMMARY OF IMPROVED SALES
====================================================================================
                                     DOORS:       Percent         Price       NOI
                Address              Dock-Hi      Office           PSF        PSF
       -----------------------------------------------------------------------------
 No.          City, state           Drive-in   Ceilings (ft.)     Occup.      OAR
====================================================================================
<S>    <C>                           <C>         <C>             <C>        <C>
         2305 Mission College
  1            Boulevard                4          90.0%         $114.27    $11.22
       -----------------------------------------------------------------------------
            Santa Clara, CA             2          14 ft            0%       9.8%
- ------------------------------------------------------------------------------------
  2       1110 Ringwood Court           5          95.0%         $183.63    $17.81
       -----------------------------------------------------------------------------
             San Jose, CA
                                       12          16 ft          100%       9.7%
- ------------------------------------------------------------------------------------
  3        4275 Burton Drive            0          60.0%         $102.38     $7.34
       -----------------------------------------------------------------------------
            Santa Clara, CA             2          14 ft            0%        7.2%

- ------------------------------------------------------------------------------------
           2300-2330 Central
              Expressway,
  4    2770-2890 Scott Boulevard,
         and 2001 Walsh Avenue         18          90.0%         $176.05    $17.96
       -----------------------------------------------------------------------------
            Santa Clara, CA             7        14 to 24          90%       10.2%
- ------------------------------------------------------------------------------------
           991-1225 Montague
  5           Expressway                2         100.0%         $90.02       N/A
       -----------------------------------------------------------------------------
             Milpitas, CA               B          14 ft           0%         N/A
- ------------------------------------------------------------------------------------
  6       5400 Bayfront Plaza        2 to 5       100.0%         $134.76      N/A
       -----------------------------------------------------------------------------
            Santa Clara, CA             A        12 to 14          26%        N/A
- ------------------------------------------------------------------------------------
  7     1184-1194 Mathilda Ave          4         100.0%         $318.66    $34.98
       -----------------------------------------------------------------------------
             Sunnyvale, CA              A          12 ft          100%       11.0%
- ------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Subject Property                          440,392   1982 and 1983     3.02          2
                        -----------------------------------------------------------------------------------------------------
                                          145,951      Average         No           2                    100%
- -----------------------------------------------------------------------------------------------------------------------------
<S>                       <C>             <C>            <C>         <C>           <C>        <C>         <C>       <C>
Survey Minimum            $10,300,371     214,060        1985        1.68:1         0          60.0%      $90.02     $7.34
- -----------------------------------------------------------------------------------------------------------------------------
Survey Maximum           $118,100,000    1,637,855       2000        2.92:1        18         100.0%      $318.66   $34.98
- -----------------------------------------------------------------------------------------------------------------------------
Survey Average            $60,555,510     817,348        1993        2.24:1         6          90.7%      $159.97   $17.86
- -----------------------------------------------------------------------------------------------------------------------------
Survey Minimum               7/02         100,608                                   2          12 ft        0%       7.2%
- -----------------------------------------------------------------------------------------------------------------------------
Survey Maximum               5/04         876,359                                  12          16 ft       100%      11.0%
- -----------------------------------------------------------------------------------------------------------------------------
Survey Average               4/03         380,452                                   6          15 ft        40%      9.6%
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>

- --------------------------------------------------------------------------------
VALUATION SERVICES                   46                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                       SALES COMPARISON APPROACH
================================================================================

<TABLE>
<CAPTION>
================================================================================
IMPROVED SALE ADJUSTMENT GRID
================================================================================
                   ECONOMIC ADJUSTMENTS (CUMULATIVE)

       Price      Property        Conditions
       PSF &       Rights            of                    Market
No.    Date       Conveyed          Sale      Financing  Conditions    Subtotal
================================================================================
<S>  <C>        <C>               <C>           <C>        <C>         <C>
1    $114.27    Fee Simple/Mkt.   Arms-Length   None       Superior    $109.70
        7/02         0.0%            20.0%      0.0%        -20.0%      -4.0%
- --------------------------------------------------------------------------------
2    $183.63    Leased Fee/Mkt.   Arms-Length   None       Superior    $146.91
        9/02         0.0%            0.0%       0.0%        -20.0%     -20.0%
- --------------------------------------------------------------------------------
3    $102.38    Fee Simple/Mkt.   Arms-Length   None       Superior    $87.02
        1/03         0.0%            0.0%       0.0%        -15.0%     -15.0%
- --------------------------------------------------------------------------------
4    $176.05    Leased Fee/Mkt.   Arms-Length   None       Superior    $158.45
        4/03         0.0%            0.0%       0.0%        -10.0%     -10.0%
- --------------------------------------------------------------------------------
5    $90.02     Fee Simple/Mkt.   Arms-Length   None       Superior    $102.62
        9/03         0.0%            20.0%      0.0%        -5.0%       14.0%
- --------------------------------------------------------------------------------
6    $134.76    Leased Fee/Mkt.   Arms-Length   None       Superior    $128.02
       10/03         0.0%            0.0%       0.0%        -5.0%       -5.0%
- --------------------------------------------------------------------------------
7    $318.66    Leased Fee/Mkt.   Arms-Length   None       Similar     $318.66
        5/04         0.0%            0.0%       0.0%         0.0%        0.0%
================================================================================
</TABLE>

<TABLE>
<CAPTION>
=================================================================================================================
IMPROVED SALE ADJUSTMENT GRID
=================================================================================================================
                                            PROPERTY CHARACTERISTIC ADJUSTMENTS (ADDITIVE)

       Price                       Age,                                                           Adj.
       PSF &                     Quality    Percent   Ceiling                                   Price
No.    Date     Location  Size  Condition   Office     Height    Utility*  Economics   Other      PSF     Overall
=================================================================================================================
<S>  <C>        <C>      <C>      <C>       <C>        <C>       <C>        <C>        <C>      <C>      <C>
1    $114.27    Similar  Larger   Similar   Similar    Similar   Similar    Inferior   Similar  $142.61  Inferior
        7/02     0.0%     5.0%     0.0%       0.0%      0.0%       0.0%      25.0%      0.0%     30.0%
- -----------------------------------------------------------------------------------------------------------------
2    $183.63   Inferior  Similar Superior   Similar    Similar   Similar    Inferior   Similar  $154.25  Inferior
        9/02     5.0%     0.0%     -5.0%      0.0%      0.0%       0.0%       5.0%      0.0%      5.0%
- -----------------------------------------------------------------------------------------------------------------
3    $102.38    Similar  Similar  Similar   Inferior   Similar   Similar    Inferior   Similar  $126.18  Inferior
        1/03     0.0%     0.0%     0.0%      20.0%      0.0%       0.0%      25.0%      0.0%     45.0%
- -----------------------------------------------------------------------------------------------------------------
4    $176.05    Similar  Larger  Superior   Similar    Similar   Similar    Inferior   Similar  $150.53  Superior
        4/03     0.0%    10.0%    -20.0%      0.0%      0.0%       0.0%       5.0%      0.0%     -5.0%
- -----------------------------------------------------------------------------------------------------------------
5    $90.02    Inferior  Similar Superior   Similar    Similar   Similar    Inferior   Similar  $118.01  Inferior
        9/03     5.0%     0.0%    -15.0%      0.0%      0.0%       0.0%      25.0%      0.0%     15.0%
- -----------------------------------------------------------------------------------------------------------------
6    $134.76    Similar  Larger  Superior   Similar    Similar   Similar    Inferior   Similar  $147.23  Inferior
       10/03     0.0%    15.0%    -20.0%      0.0%      0.0%       0.0%      20.0%      0.0%     15.0%
- -----------------------------------------------------------------------------------------------------------------
7    $318.66    Similar  Similar Superior   Similar    Similar   Similar    Superior   Similar  $143.40  Superior
        5/04     0.0%     0.0%    -20.0%      0.0%      0.0%       0.0%      -35.0%     0.0%    -55.0%
=================================================================================================================
</TABLE>

* Utility includes land/bldg ratio, rail and loading docks

- --------------------------------------------------------------------------------
SALES SUMMARY
================================================================================
Price Range                       Unadj. Price PSF   Adj. Price PSF
- --------------------------------------------------------------------------------
      Low                           $ 90.02              $118.01
                                  ---------------------------------
      High                          $318.66              $154.25
                                  ---------------------------------
      Average                       $159.97              $140.32
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
VALUE CONCLUSION
================================================================================
Indicated Value per Square Foot NRA                                      $145.00
Net Rentable Area in Square Feet                                       x 145,951
                                                                  --------------
Indicated Value                                                      $21,162,895
  Rounded to nearest $100,000                                        $21,200,000
  Per square foot                                                        $145.25
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
VALUATION SERVICES                   47                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                       SALES COMPARISON APPROACH
================================================================================

Percentage Adjustment Method

Adjustment Process

The sales that we have utilized represent the best available information that
could be compared to the subject property. The major elements of comparison for
an analysis of this type include the property rights conveyed, the financial
terms incorporated into a particular transaction, the conditions or motivations
surrounding the sale, changes in market conditions since the sale, the location
of the real estate, its physical traits and the economic characteristics of the
property.

The first adjustment made to the market data takes into account differences
between the subject property and the comparable property sales with regard to
the legal interest transferred. Advantageous financing terms or peculiar
conditions of sale are then adjusted to reflect a normal market transaction.
Next, changes in market conditions must be accounted for, thereby creating a
time adjusted price. Lastly, adjustments for location, physical traits and the
economic characteristics of the market data are made in order to generate the
final adjusted unit rate, which is appropriate for the subject property.

We have made a downward adjustment to those comparables considered superior to
the subject. Conversely, an upward adjustment was made to those comparables
considered to be inferior.

Property Rights Conveyed

All of the sales utilized in this analysis involved either the transfer of the
fee simple or leased fee interest. Since we are appraising the leased fee
interest of the subject property, no adjustments were required.

Financial Terms

To the best of our knowledge, all of the sales utilized in this analysis were
accomplished with cash or market-oriented financing. Therefore, no adjustments
were required.

Conditions of Sale

Adjustments for conditions of sale usually reflect the motivations of the buyer
and the seller. In many situations the conditions of sale may significantly
affect transaction prices. Sales 2 through 4, 6 and 7 are considered to be
"arms-length" market transactions between both knowledgeable buyers and sellers
on the open market. Therefore, no adjustments were required. However, upward
adjustments were made in the cases of sale 1 and as the sellers were motivated
to dispose of the assets.

Market Conditions

The sales occurred between July 2002 and May 2004. As previously stated, the
market declined from 2002 through late-2003. Therefore, downward adjustments
were made in the cases of sales 1 through 6.

Location

An adjustment for location is required when the location characteristics of a
comparable property are different from those of the subject property. The
subject property is considered a

- --------------------------------------------------------------------------------
VALUATION SERVICES                   48                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                       SALES COMPARISON APPROACH
================================================================================

good location, and it has very good access and visibility. Each comparable was
adjusted accordingly.

Physical Traits

Various physical characteristics were analyzed including size, age, condition,
quality, percent office, ceiling height, and utility (land-to-building ratio,
rail service, and loading doors). Each sale was adjusted accordingly.

Economic Characteristics

This adjustment is used to reflect differences in rent levels, operating expense
ratios, occupancy levels, and other items that would have an economic impact on
the transaction. Each comparable was adjusted accordingly.

Other

This category accounts for any other adjustments not previously discussed. Based
on our analysis of these sales, none required any additional adjustment.

Discussion of Comparable Sales

Comparable Sale No. 1

This is the July 2002 sale of an R&D property located at 2305 Mission College
Boulevard in Santa Clara, CA. The site contains 687,377 square feet and is
improved with 353,159 square feet of net rentable area. The improvements were
constructed between 1979 and 1989 and are of average quality. The facility has a
clear ceiling height of 14 feet. The property is the sale of the former Nortel
facility consisting of three, connected buildings. The buildings were improved
with 90% office space and 10% lab space at sale. The interior and exterior of
the buildings were renovated in 1995 and are in good condition. The actual sales
price was $25,650,000. However, the buyer incurred renovation costs of
$1,038,240. The buyer estimated total lease-up costs at $13,646,760. Thus, the
adjusted price, reflecting stabilized occupancy, was estimated at $40,335,000.
The buyer reported that they were getting a "good deal" as the seller was
motivated to dispose of its excess space. The property sold from Nortel
Networks., Inc. to South Bay Development for $40,355,000 or $114.27 per square
foot. The overall rate based on market rent and stabilized occupancy was 9.82
percent. After all adjustments, this comparable indicated an adjusted unit value
of $142.61 per square foot.

Comparable Sale No. 2

This is the September 2002 sale of an R&D property located at 1110 Ringwood
Court in San Jose, CA. The site contains 636,412 square feet and is improved
with a 217,824 square feet of net rentable area. The improvements were
constructed in 1985, and are of average quality. The facility has 95 percent
office space and a clear ceiling height of 16 feet. The comparable is the sale
of a five-building, R&D property located in the International Business Park in
northeast San Jose. The buildings are one-story, concrete tilt-up structures.
The parking ratio is 4 spaces per 1,000 square feet of building area. Philips
Semiconductors was the majority tenant. The weighted average monthly rental rate
at sale was $1.55 per square foot, triple-net. Market rent at sale was estimated
between $1.00 and $1.20 per square foot, triple-net. The property sold from
Bedford Properties to Teachers Insurance & Annuity Assoc. for $40,000,000 or
$183.63 per square foot. The overall rate at the time of sale was 9.70 percent.
The occupancy at the

- --------------------------------------------------------------------------------
VALUATION SERVICES                   49                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                       SALES COMPARISON APPROACH
================================================================================

time of sale was 100 percent. After all adjustments, this comparable indicated
an adjusted unit value of $154.25 per square foot.

Comparable Sale No. 3

This is the January 2003 sale of an R&D property located at 4275 Burton Drive in
Santa Clara CA. The site contains 214,060 square feet and is improved with a
100,608 square foot building. The improvements were constructed in 1985, and are
of average quality. The facility has 60 percent office space and a clear ceiling
height of 14 feet. The property is a two-story building purchased vacant by an
investor. The building is improved with 15% open manufacturing area and 25%
warehouse area. The actual sales price was $7,300,371. However, the adjusted
price shown includes lease-up costs of $3,000,000 estimated by the buyer. The
stabilized NOI is based on the buyer's perception of market rent of $0.65 per
square foot per month, triple-net, a 5% vacancy and collection loss factor and
1% for non-reimbursable expenses. The OAR shown is based on the stabilized
income and the adjusted sales price. The property sold from Agnew Road, LLC to
NLFC 1998-2 Santa Clara LLP. After all adjustments, this comparable indicated an
adjusted unit value of $126.18 per square foot.

Comparable Sale No. 4

This is the April 2003 sale of a property located at 2300-2330 Central
Expressway, 2770-2890 Scott Boulevard, and 2001 Walsh Avenue in Santa Clara, CA.
The site contains 1,637,855 square feet and is improved with a 624,812 square
feet of net rentable area. The improvements were constructed between 1972 and
2000, and are of good quality. Overall, the facility is improved with 90 percent
office space and a clear ceiling height between 14 and 24 feet, depending on the
building. The property is the San Tomas Technology Park, a seven-building
development consisting of: three, two-story, office/R&D buildings; one,
one-story, office/R&D building; one, one-story R&D/flex building; one,
three-story, steel frame office building; and one, one-story,
industrial/warehouse building. The development was 90% leased to 4 tenants at
sale at monthly rental rates ranging from $0.73 per square foot, triple-net (the
industrial/warehouse space) to $5.51 per square foot, triple-net, (the
three-story office space). The property sold from BRE/San Tomas II, LLC to
Mission West Properties for $110,000,000 or $176.05 per square foot. The overall
rate at the time of sale was 10.20 percent. The occupancy at the time of sale
was 90 percent. After all adjustments, this comparable indicated an adjusted
unit value of $150.53 per square foot.

Comparable Sale No. 5

This is the September 2003 sale of a property located at 991-1225 Montague
Expressway in Milpitas, CA. The site contains 540,144 square feet and is
improved with 223,664 square feet of net rentable area. The improvements were
constructed in 2000, and are of very good quality. The property is a former
Cisco Systems campus. It consists of four, concrete tilt-up office/R&D buildings
with Interstate State 680 exposure. Cisco Systems purchased the buildings,
effectively buying-out their lease obligation, and double-escrowed the property
to South Bay Development. The buyer purchased the property vacant for re-sale of
the buildings individually. The actual sales was $8,950,000. However, the buyer
estimated necessary T.I.s to build out the space with a 100% office build-out at
$50 per square foot. Thus, the adjusted sales price of approximately $90 per
square foot reflects built-out space. Reportedly, the seller was motivated to
dispose of its excess space. The property sold from Cisco Systems, Inc. to South
Bay Development for $20,133,200 or $90.02 per square foot. After all
adjustments, this comparable indicated an adjusted unit value of $118.01 per
square foot.

- --------------------------------------------------------------------------------
VALUATION SERVICES                   50                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                       SALES COMPARISON APPROACH
================================================================================

Comparable Sale No. 6

This is the October 2003 sale of a property located at 5400 Bayfront Plaza in
Santa Clara, CA. The site contains 1,472,110 square feet and is improved with
876,359 square feet of net rentable area. The improvements were constructed
between 1990 and 1997 and are of very good quality. The facility has 100 percent
office space and a clear ceiling height of 12 to 14 feet. The property is the
former 3-Com West Campus in Marriott Business Park. It consists of four, steel
frame office/R&D buildings. The campus includes a full-service cafeteria,
auditorium center and fitness center. At the time of sale, Magma leased 129,734
square feet of the campus from 3-Com. Most of the remaining space was vacant.
The actual sales price was $63,933,000. However, the buyer purchased the
property for its own occupancy. The buyer was to incur an additional $70 to $75
per square foot on all of the buildings excluding the building leased to Magma,
for exterior re-finish and to renovate and bring all of the interiors to code.
Thus, we estimated the adjusted cost to reflect a renovated facility up to
current code at $118,100,000. The property sold from 3Com to Marvel
Semiconductor for $118,100,000 or $134.76 per square foot. After all
adjustments, this comparable indicated an adjusted unit value of $147.23 per
square foot.

Comparable Sale No. 7

This is the May 2004 sale of a property located at 1184-1194 Mathilda Ave in
Sunnyvale, CA. The site contains 533,479 square feet and is improved with
266,740 square feet of net rentable area. The improvements were constructed in
2000, and are of excellent quality. The facility is improved with 100 percent
office space and has a clear ceiling height of 12 feet. The property consists of
two office/R&D buildings leased to Juniper Networks through 2012 and 2013.
Juniper Networks is a B credit, network appliance manufacturer. The rental rates
at sale were $2.87 and $2.77 per square foot per month, respectively. The leases
are structured with annual 3.5% increases. The property sold from Menlo Equities
to Clarion Partners for $85,000,000 or $318.66 per square foot. The overall rate
at the time of sale was 10.98 percent. After all adjustments, this comparable
indicated an adjusted unit value of $143.40 per square foot.

Summary of Percentage Adjustment Method

After adjustments the comparable improved sales reflect unit prices ranging from
$118.01 to $154.25 per square foot with an average adjusted price of $140.32 per
square foot.

Based on the adjustments made, we conclude that the indicated value by the
Percentage Adjustment Method is:

==================================================================
 Net Rentable Area:                                     145,951
 Concluded Price Per Square Foot:                   x   $145.00
                                                    -----------
 Indicated Value:                                   $21,162,895
  Rounded:                                          $21,200,000
  Per Square Foot:                                      $145.25
==================================================================

- --------------------------------------------------------------------------------
VALUATION SERVICES                   51                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                  INCOME CAPITALIZATION APPROACH
================================================================================

Methodology

The Income Capitalization Approach is a method of converting the anticipated
economic benefits of owning property into a value through the capitalization
process. The principle of "anticipation" underlies this approach in that
investors recognize the relationship between an asset's income and its value. In
order to value the anticipated economic benefits of a particular property,
potential income and expenses must be projected, and the most appropriate
capitalization method must be selected.

The two most common methods of converting net income into value are Direct
Capitalization and Discounted Cash Flow. In direct capitalization, net operating
income is divided by an overall capitalization rate to indicate an opinion of
market value. In the discounted cash flow method anticipated future cash flows
and a reversionary value are discounted to an opinion of net present value at a
chosen yield rate (internal rate of return).

As discussed in this section, the subject property is leased 240% above-market
for the next 2-1/2 years. Given the subjectivity of selecting a capitalization
rate to reflect this condition, the direct capitalization method was not used.
The discounted cash flow method is the most appropriate in this assignment as it
best reflects fluctuations in anticipated income when the lease to Novellus
Systems expires. Thus, it was the only Income Capitalization Approach method
used in this analysis.

Occupancy Status and Lease Structure

The subject is 100% leased to Novellus Systems. The original lease commenced in
1989 (under Gasonics, Inc. - subsequently acquired by Novellus) and expires on
December 31, 2006. The coupon rental at the date of value was $2.31 per square
foot per month. The lease is triple-net whereby the tenant is responsible for
all operating expenses including management fees. The remaining lease term is
approximately 2-1/2 years. The rental rate increases to $2.42 per square foot
per month on May 1, 2005 and to $2.55 per square foot per month on May 1, 2006.
The subject's weighted average monthly rental rate over the next 12 months
approximately $2.33 per square foot, triple-net. Based on our market rent
conclusion below, the subject property is currently leased approximately 240%
above-market.

Tenant Profile

Novellus Systems, Inc. is a top maker of semiconductor production equipment,
including chemical vapor deposition systems that layer dielectric (insulating)
material on semiconductor wafers, physical vapor deposition systems that layer
conductive metals, and electrofill systems that deposit copper layers. It also
makes surface preparation systems that clean wafers before each round of
deposition. Among its customers are chip giants Samsung Electronics (27% of
sales), Intel, Taiwan Semiconductor, and IBM; Novellus has sold its wares to all
of the world's top chip manufacturers.

Even during the harsh downturn that afflicted the global semiconductor industry
from 2001 to 2003, Novellus Systems posted solid financial performance thanks to
strict cost controls and an emphasis on sales of higher-margin, cutting-edge
production equipment. During this same period it expanded into the market for
chemical mechanical planarization (CMP) systems with its 2002 purchase of
SpeedFam-IPEC. It has also made smaller, complementary additions to its product
lines, for example through its 2004 acquisition of Angstron Systems and its
planned buy of German manufacturing equipment maker Peter Wolters AG.

- --------------------------------------------------------------------------------
VALUATION SERVICES                   52                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                  INCOME CAPITALIZATION APPROACH
================================================================================

Novellus outsources the manufacture of major subassemblies to minimize its fixed
costs and capital expenditures.

Novellus Systems is not rated by Moody's or Standard & Poors. However, Novellus
Systems, Inc. is publicly traded on the NASDAQ (NVLS). Novellus' market
capitalization as of July 13, 2004 was $4.32 billion. Novellus' gross sales in
2003 were $925 million, up from $840 million in 2002. However, Novellus reported
negative net income before taxes of $15.2 million in 2003, down from a positive
net income in 2002 of 23.1 million.

Rent Comparables

The following table summarizes rental activity in competing buildings in the
market.

<TABLE>
<CAPTION>
==========================================================================================================================
RENT COMPARABLES
==========================================================================================================================
      Property Location                                               Rent Steps           % Office
    --------------------------  Lease   Size     Term      Rent/   -----------------------------------  Free Rent
No.      Tenant Name            Date     SF     (years)    (SF)    Expense Recoveries   Ceiling Height   (Months)   TI/SF
==========================================================================================================================
<S> <C>                        <C>     <C>        <C>     <C>      <C>                       <C>            <C>     <C>
1   2043-2047 Zanker Road      Dec-03  28,960     5       $0.55    $0.03/sf/mo.annual        20%            0       $5.00
    San Jose, CA
    ---------------------                                          -----------------------------------
    APG                                                                   NNN                18'
- --------------------------------------------------------------------------------------------------------------------------
2   2125 Zanker Road           Jan-04  19,900     3       $0.69    $0.02/sf/mo.annual                       3       $1.00
    Building B
    San Jose, CA
    ---------------------                                          -----------------------------------
    Silicon Motion, Inc                                                   NNN                16'
- --------------------------------------------------------------------------------------------------------------------------
3   McCandless River Oak I     Feb-04  15,258     5       $0.70      3% per annum            90%            0       $12.00
    651-655 River Oaks
    Parkway #6
    San Jose, CA
    ---------------------                                          -----------------------------------
    Homosense                                                             NNN                10'
- --------------------------------------------------------------------------------------------------------------------------
4   1781-1785 Fox Drive        Mar-04  13,829     5       $0.65      Mos.30-60: $0.70/sf     90%            0       As Is
    San Jose, CA
    ---------------------                                          -----------------------------------
    kanematsu USA                                                         NNN                12'
- --------------------------------------------------------------------------------------------------------------------------
5   McCandless River Oak I     Mar-04   6,400     4       $0.75      3% per annum            90%            0       $10.00
    641-645 River Oaks
    Parkway #5
    San Jose, CA
    ---------------------                                          -----------------------------------
    Meade Construction                                                    NNN                15'
    Group
- --------------------------------------------------------------------------------------------------------------------------
6   801-841 Fox Lane           Mar-04  42,477     5       $0.75      3% per annum            80%            0       As Is
    San Jose, CA
    ---------------------                                          -----------------------------------
    Immersion                                                             NNN                16'
==========================================================================================================================
    Survey Low:                Nov-03   5,272     2       $0.55                                             0       $0.00
    Survey High:               May-04  76,145     10      $0.75                                             3       $12.00
==========================================================================================================================
</TABLE>

- --------------------------------------------------------------------------------
VALUATION SERVICES                   53                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                  INCOME CAPITALIZATION APPROACH
- --------------------------------------------------------------------------------

                           COMPARABLE R&D RENTAL MAP


                                  [MAP OF AREA]

- --------------------------------------------------------------------------------
VALUATION SERVICES                   54                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                  INCOME CAPITALIZATION APPROACH
================================================================================

Conclusion of Market Rent

We have analyzed recent leases negotiated in competitive buildings in the
marketplace, which range from $.55 to $.75 per square foot, per month,
triple-net. Most of the rent comparables reflect starting rental rates between
approximately $0.65 and $0.75 per square foot per month. All of the comparable
leases include annual or periodic rent steps. Under triple-net terms tenants
reimburse the landlord all operating expenses including management fees.
Landlords are generally responsible for capital expenditures.

Despite dropping rent levels since it was signed, an overall upward adjustment
was made in the case of rent comparable 1 for its inferior age, condition and
office build-out. Greatest reliance was placed on the remaining comparables due
to their similarity to the subject with respect to location and physical
characteristics.

2730-60 Junction Avenue is the largest of the two subject buildings. It is
improved with 50% office area with the remainder in manufacturing/lab area and
some unimproved warehouse space. 404-410 Plumeria Drive is the smaller of the
two subject buildings. It is improved with 100% office space, much of which is
in average to good condition. Given that this building is more highly improved
than 2730-60 Junction Avenue, we concluded a higher market rent for 404-410
Plumeria Drive in comparison to 2370-60 Junction Avenue. Based on the rent
comparables, our market rent estimates for the subject property are presented
below.

================================================================================
MARKET RENT ESTIMATE                2730-60 Junction Ave.  404-10 Plumeria Dr.
================================================================================
Market Rent Per Square Foot/Mo.           $0.65                   $0.75

Contract Rent Increase                  3% per annum           3% per annum

Lease Type                               Triple Net             Triple Net

Lease Term (years)                          5                       5
================================================================================

Miscellaneous Revenue

None was assumed.

Expense Reimbursements

The existing tenant is responsible for its pro-rata share of all operating
expenses including management fees. Future tenants are assumed to be responsible
for their pro rata share of all operating expenses including management fees
while the landlord is responsible for capital expenditures.

Vacancy and Collection Loss

Both the investor and the appraiser are primarily interested in the cash
revenues that an income property is likely to produce annually over a specified
period of time rather than what it could produce if it were always 100% occupied
and all the tenants were actually paying their rent in full and on time. It is
normally a prudent practice to expect some income loss, either in the form of
actual vacancy or in the form of turnover, non-payment, or slow payment of rent
by tenants.

- --------------------------------------------------------------------------------
VALUATION SERVICES                   55                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                  INCOME CAPITALIZATION APPROACH
================================================================================

A stated in the Market Analysis, R&D vacancy in Silicon Valley is approximately
24%. However this rate reflects a historic high given the recession and surge in
sublease offerings over the past few years.

Given the nature and size of the subject property, we estimated vacancy between
leases at 6 months and deducted a 1.0% annual credit loss factor. This
combination of these factors and a 65% renewal probability results in an average
vacancy and collection loss factor over the holding of approximately 5%. Since
the property will be 100% leased at reversion, we adjusted collection loss in
that year to 5%. This results in a reversion value based on 95% occupancy for
consistency.

As previously stated, Novellus is not expected to renew. Since the property is
currently unoccupied, it is reasonable to assume that the property owner would
begin marketing the property for lease well before Novellus' lease expires, thus
reducing downtime following the existing lease expiration. Therefore, we assumed
a total downtime between leases following Novellus' lease expiration in December
2006, of 3 months.

Operating Expenses

We were not provided with historical operating statements or an operating budget
for the subject property. Thus, we developed an opinion of the property's annual
operating expenses after reviewing the operating performance of similar
buildings in Silicon Valley, retained in our files. We also interviewed Cushman
& Wakefield Asset Services personnel to check the reasonableness of our
estimates.

Since utilities are typically billed directly to the tenant and since the
landlord would not incur significant utility expenses during periods of vacancy,
this expense item was not included as an expense in this analysis.

Our opinion of year one operating expenses are presented on the following page.

- --------------------------------------------------------------------------------
VALUATION SERVICES                   56                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                  INCOME CAPITALIZATION APPROACH
================================================================================

=======================================================================
OPERATING EXPENSE ANALYSIS
=======================================================================
                                                    C&W Forecast(1)
                                                    Total     Per SF
                                                 ----------------------
 OPERATING EXPENSES
   Real Estate Taxes                              $210,820    $1.44
   Direct Assessments                               13,318     0.09
   Repairs & Maintenance                            50,000     0.34
   Insurance                                        72,500     0.50
   Management Fees                                  89,375     0.61
                                                  --------    -----
 TOTAL EXPENSES                                   $436,013    $2.99
=======================================================================

(1)Fiscal Year Beginning:    7/1/2004

Conclusion of Operating Expenses

We analyzed each item of expense and developed an opinion of a level of expense
we believe a typical investor in a property like this would consider reasonable.
We made our projections on a fiscal year basis. Year 1 begins July 1, 2004.
Please refer to the following chart for our Year 1 forecast of expenses.

================================================================================
                          C&W
 Expense                Forecast   Per SF    Analysis
================================================================================
 Real Estate Taxes      $210,820   $1.44     In the discounted cash flow method,
                                             Real Estate Taxes are based on the
                                             "as is" value via that method and
                                             the subject's current tax rate.
- --------------------------------------------------------------------------------
 Direct Assessments     $13,318    $0.09     Based on the actual current direct
                                             assessments discussed in the Real
                                             Estate Taxes section.
- --------------------------------------------------------------------------------
 Repairs & Maintenance  $50,000    $0.34     Our estimate is based on the
                                             historical and budgeted expenses,
                                             plus expense levels at competing
                                             properties.
- --------------------------------------------------------------------------------
 Insurance              $72,500    $0.50     Our estimate is based on the
                                             historical and budgeted expenses,
                                             plus expense levels at competing
                                             properties.
- --------------------------------------------------------------------------------
 Management Fees        $89,375    $0.61     Management fees for this type of
                                             property typically range from 2.0
                                             to 3.0 percent of effective gross
                                             income. We have utilized a
                                             management fee of 2.0 percent of
                                             effective gross income, which we
                                             consider to be market oriented.
================================================================================

- --------------------------------------------------------------------------------
VALUATION SERVICES                   57                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                  INCOME CAPITALIZATION APPROACH
================================================================================

Discounted Cash Flow Method

In the Discounted Cash Flow Method, we employed Argus for Windows version 11.1
software to model the income characteristics of the property and to make a
variety of cash flow assumptions. We attempted to reflect the most likely
investment assumptions of typical buyers and sellers in this particular market
segment. The following table illustrates the assumptions used in the discounted
cash flow analysis.

Discounted Cash Flow Assumptions

================================================================================
 DISCOUNTED CASH FLOW
 MODELING ASSUMPTIONS
================================================================================
 Holding Period:                                              10 Years
 Projection Period:                                           11 Years
 Start Date:                                                  7/1/2004

 RESERVES FOR REPLACEMENT (PSF)                                  $0.20

 VACANCY & COLLECTION LOSS
 Global Vacancy:                                                 0.00%
 Collection Loss:                                                1.00%
                                                           ------------
 Total:                                                          1.00%

 GROWTH RATES
   Market Rent:                                              See Below
   Consumer Price Index (CPI):                                   3.00%
   Expenses:                                                     3.00%
   Real Estate Taxes:                                            2.00%

 RATES OF RETURN
   Internal Rate of Return:                                     10.00%
   Terminal Capitalization Rate:                                 9.00%
   Reversionary Sales Cost:                                      2.00%
================================================================================
0% yr. 1; 5% yr. 2, 10% yr. 3, 15% yr. 4; 10% in yr. 5, 5% yr. 6, 3% thereafter

- --------------------------------------------------------------------------------
VALUATION SERVICES                   58                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                  INCOME CAPITALIZATION APPROACH
================================================================================

<TABLE>
<CAPTION>
===========================================================================================

LEASING ASSUMPTIONS                             2730-60 Junction Ave.  404-10 Plumeria Dr.
===========================================================================================
<S>                                                 <C>                    <C>
Market Rent Per Square Foot/Mo.                       $0.65                  $0.75
Contract Rent Increase                              3% per annum           3% per annum

Lease Type                                           Triple Net             Triple Net
Lease Term (years)                                       5                     5

Free Rent on New Leases (months)                         0                     0
Free Rent on Renewals (months)                           0                     0

Downtime Following Novellus Lease Expiration             3                     3
Downtime Between All Other Speculative Leases            6                     6
Renewal Probability                                    65.00%                65.00%
===========================================================================================

<CAPTION>
===========================================================================================
TENANT IMPROVEMENTS (PSF)
===========================================================================================
<S>                                                  <C>                    <C>
New Leases                                           $10.00                 $10.00
Renewals                                              $5.00                  $5.00
First Generation (shell)                               N/A                    N/A
===========================================================================================
</TABLE>

Market Rent Growth:              The market rent growth rates presented
                                 on the previous page reflect downward
                                 spiral in rent levels and anticipated
                                 future rent spikes being modeled by
                                 acquisitions personnel with RREEF UBS
                                 Investors, JP Morgan, McMorgan & Company
                                 and Lend Lease.

Leasing Commissions:             $5.00 per square foot for new leases and
                                 $2.50 per square foot for renewals.

Market Rent Steps:               New leases are assumed to include 3% annual
                                 rent steps.

Expense Reimbursements:          Future tenants are assumed to be responsible
                                 for their pro rata share of all operating
                                 expenses including management fees while the
                                 landlord is responsible for capital
                                 expenditures.

Capital Expenditure:             The buildings were in average condition
                                 at the time of our inspection. We do not
                                 foresee any major capital expenditures,
                                 other than tenant improvement costs, in
                                 the near future.

Terminal Capitalization Rate Selection

A terminal capitalization rate was used to develop an opinion of the market
value of the property at the end of the assumed investment holding period. The
rate is applied to the net operating income following year 10 before making
deductions for leasing commissions, tenant improvement allowances and reserves
for replacement. We have developed an opinion of an appropriate terminal
capitalization rate based on indicated rates in a current investor survey.

================================================================================
                                                                 Terminal
                                            Terminal Cap Rate    Cap Rate
    Survey                       Date             Range          Average
================================================================================
Korpacz                        Q2-2004         7.5%-11.0%         9.25%

Korpacz - Refers to national Flex/R&D market regardless of class or occupancy
================================================================================

As a result, we have applied a 9.00 percent terminal capitalization rate in our
analysis.

- --------------------------------------------------------------------------------
VALUATION SERVICES                   59                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                  INCOME CAPITALIZATION APPROACH
================================================================================

Discount Rate Selection

We have developed an opinion of future cash flows, including property value at
reversion, and discounted that income stream at an internal rate of return
(yield rate) currently required by investors for similar-quality real property.
The yield rate (internal rate of return or IRR) is the single rate that
discounts all future equity benefits (cash flows and equity reversion) to an
opinion of net present value.

The Korpacz and Cushman & Wakefield investor surveys indicate the following
internal rates of return for competitive R&D properties:

================================================================================
                                                       IRR            IRR
        Survey                         Date           Range         Average
================================================================================
Korpacz                               Q2-2004        8.5%-12.0%      10.2%

Korpacz - Refers to national Flex/R&D market regardless of class or occupancy
================================================================================

The above table summarizes the investment parameters of some of the most
prominent investors currently acquiring similar investment properties in the
United States. We realize that this type of survey reflects target rather than
transactional rates. Transactional rates are usually difficult to obtain in the
verification process and are actually only target rates of the buyer at the time
of sale. The property's performance will ultimately determine the actual yield
at the time of sale after a specific holding period.

Though Novellus' corporate debt is not rated (as previously discussed)
conversations with investment sale brokers indicate that typical investors would
not place significant risk on the above-market portion of the contract rent or
lease payment default by Novellus Systems. Thus we discounted our cash flow and
reversionary value projections at an internal rate of return of 10.00%.

Discounted Cash Flow Method Conclusion

Based on the discount rate selected, market value is estimated at $19,400 000,
rounded. The reversion contributes 41.20 percent to this value estimate. Our
cash flow projections and valuation matrix are presented at the end of this
section.

- --------------------------------------------------------------------------------
VALUATION SERVICES                   60                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

Software      : ARGUS Ver. 11.0.04                              Date  : 07/14/04
File          : 2730-60 Junction                                Time  : 13:55
Property Type : Office/Industrial                               Ref # : ADM
Portfolio     :                                                 Page  : 1

                             2730-60 Junction Avenue
                            404-410 E. Plumeria Drive
                                  San Jose, CA

                       SCHEDULE OF PROSPECTIVE CASH FLOW
           In Inflated Dollars for the Fiscal Year Beginning 7/1/2004
<TABLE>
<CAPTION>
                                      Year 1       Year 2      Year 3       Year 4       Year 5        Year 6
For the Years Ending                 Jun-2005     Jun-2006    Jun-2007     Jun-2008     Jun-2009      Jun-2010
                                   ----------   ----------   ----------   ----------   ----------    ----------
<S>                                <C>          <C>          <C>          <C>          <C>           <C>
POTENTIAL GROSS REVENUE
  Base Rental Revenue              $4,077,871   $4,276,364   $2,549,362   $1,274,738   $1,312,980    $1,352,369
  Absorption & Turnover Vacancy
                                   ----------   ----------   ----------   ----------   ----------    ----------

  Scheduled Base Rental Revenue     4,077,871    4,276,364    2,549,362    1,274,738    1,312,980     1,352,369
  Expense Reimbursement Revenue       436,013      448,481      315,109      405,403      415,281       425,412
                                   ----------   ----------   ----------   ----------   ----------    ----------

TOTAL POTENTIAL GROSS REVENUE       4,513,884    4,724,845    2,864,471    1,680,141    1,728,261     1,777,781
  Collection Loss                     (45,139)     (47,248)     (28,645)     (16,801 )    (17,283)      (17,778)
                                   ----------   ----------   ----------   ----------   ----------    ----------

EFFECTIVE GROSS REVENUE             4,468,745    4,677,597    2,835,826    1,663,340    1,710,978     1,760,003
                                   ----------   ----------   ----------   ----------   ----------    ----------

OPERATING EXPENSES
  Real Estate Taxes                   210,820      215,036      219,337      223,724      228,198       232,762
  Direct Assessments                   13,318       13,718       14,129       14,553       14,990        15,439
  Insurance                            72,500       74,675       76,915       79,223       81,599        84,047
  Repairs & Maintenance                50,000       51,500       53,045       54,636       56,275        57,964
  Management Fees                      89,375       93,552       56,717       33,267       34,220        35,200
                                   ----------   ----------   ----------   ----------   ----------    ----------

TOTAL OPERATING EXPENSES              436,013      448,481      420,143      405,403      415,282       426,412
                                   ----------   ----------   ----------   ----------   ----------    ----------

NET OPERATING INCOME                4,032,732    4,229,116    2,415,683    1,257,937    1,295,696     1,334,591
                                   ----------   ----------   ----------   ----------   ----------    ----------

LEASING & CAPITAL COSTS
  Tenant Improvements                                         1,548,394
  Leasing Commissions                                           774,197
  Capital Reserves                     29,190       30,066       30,968       31,897       32,854        33,839
                                   ----------   ----------   ----------   ----------   ----------    ----------

TOTAL LEASING & CAPITAL COSTS          29,190       30,066    2,353,559       31,897       32,854        33,839
                                   ----------   ----------   ----------   ----------   ----------    ----------

CASH FLOW BEFORE DEBT SERVICE
  & INCOME TAX                     $4,003,542   $4,199,050      $62,124   $1,226,040   $1,262,842    $1,300,752
                                   ==========   ==========   ==========   ==========   ==========    ==========

<CAPTION>
                                     Year 7       Year 8       Year 9      Year 10       Year 11
For the Years Ending                Jun-2011     Jun-2012     Jun-2013     Jun-2014      Jun-2015
                                   ----------   ----------   ----------   ----------    ----------
<S>                                <C>          <C>          <C>          <C>           <C>
POTENTIAL GROSS REVENUE
  Base Rental Revenue              $1,392,941   $1,544,057   $1,908,842   $1,966,107    $2,025,090
  Absorption & Turnover Vacancy                   (317,347)
                                   ----------   ----------   ----------   ----------    ----------

  Scheduled Base Rental Revenue     1,392,941    1,226,710    1,908,842    1,966,107     2,025,090
  Expense Reimbursement Revenue       435,799      367,307      466,082      477,546       459,250
                                   ----------   ----------   ----------   ----------    ----------

TOTAL POTENTIAL GROSS REVENUE       1,828,740    1,594,017    2,374,924    2,443,653     2,484,340
  Collection Loss                     (18,287)     (15,940)     (23,749)     (24,437)     (124,217)
                                   ----------   ----------   ----------   ----------    ----------

EFFECTIVE GROSS REVENUE             1,810,453    1,578,077    2,351,176    2,419,216     2,360,123
                                   ----------   ----------   ----------   ----------    ----------

OPERATING EXPENSES
  Real Estate Taxes                   237,417      242,166      247,009      251,949       229,520
  Direct Assessments                   15,902       16,379       16,871       17,377        17,898
  Insurance                            86,569       89,166       91,841       94,596        97,434
  Repairs & Maintenance                59,703       61,494       63,339       65,239        67,196
  Management Fees                      36,209       31,562       47,024       48,384        47,202
                                   ----------   ----------   ----------   ----------    ----------

TOTAL OPERATING EXPENSES              435,800      440,767      466,084      477,545       459,250
                                   ----------   ----------   ----------   ----------    ----------

NET OPERATING INCOME                1,374,653    1,137,310    1,885,091    1,941,671     1,900,873
                                   ----------   ----------   ----------   ----------    ----------

LEASING & CAPITAL COSTS
  Tenant Improvements                            1,211,634
  Leasing Commissions                              605,817
  Capital Reserves                     34,855       35,900       36,977       38,087        39,229
                                   ----------   ----------   ----------   ----------    ----------

TOTAL LEASING & CAPITAL COSTS          34,855    1,853,351       36,977       38,087        39,229
                                   ----------   ----------   ----------   ----------    ----------

CASH FLOW BEFORE DEBT SERVICE
  & INCOME TAX                     $1,339,798   ($716,041)   $1,848,114   $1,903,584    $1,861,644
                                   ==========   ==========   ==========   ==========    ==========
</TABLE>
<PAGE>

Software      : ARGUS Ver. 11.0.04                              Date  : 07/14/04
File          : 2730-60 Junction                                Time  : 13:55
Property Type : Office/Industrial                               Ref # : ADM
Portfolio     :                                                 Page  : 3

                             2730-60 Junction Avenue
                            404-410 E. Plumeria Drive
                                  San Jose, CA

                            RESALE - CAP RATE MATRIX
     Cash Flow Before Debt Service plus Property Resale in Year 10, Jun-2014
              Discounted Annually (Endpoint on Cash Flow & Resale)
<TABLE>
<CAPTION>
                 Net           P.V. Of        P.V. of      P.V. of       P.V. of       P.V. of
 For the      Proceeds        Property       Property      Property      Property      Property
Cap Rates     From Sale        @ 9.00%        @ 9.50%      @ 10.00%      @ 10.50%      @ 11.00%
- ---------     ---------       --------       --------      --------      --------      --------

<S>          <C>            <C>            <C>           <C>           <C>           <C>
8.50%        $21,915,948    $21,006,225    $20,406,630   $19,833,047   $19,284,159   $18,758,722
9.00%         20,698,395     20,491,918     19,915,330    19,363,627    18,835,553    18,329,918
9.50%         19,609,006     20,031,748     19,475,746    18,943,621    18,434,169    17,946,252
</TABLE>
<PAGE>

                                          RECONCILIATION AND FINAL VALUE OPINION
================================================================================

Valuation Methodology Review and Reconciliation

This appraisal employs the Sales Comparison and Income Capitalization
Approaches. Based on our analysis and knowledge of the subject property type and
relevant investor profiles, it is our opinion that all approaches would be
considered meaningful and applicable in developing a credible value conclusion.
Given the age of the improvements and degree of external obsolescence currently
in the market, estimating depreciation is very subjective. Thus, the Cost
Approach was not considered a reliable value approach and therefore, was not
used in this analysis.

The approaches used indicated the following:

      ======================================================
      Cost Approach:                                    N/A

      Sales Comparison Approach:                $21,200,000

      Income Capitalization Approach:           $19,400,000
      ======================================================

We have given generally equal weight to the Sales Comparison and Income
Capitalization Approaches because they mirror the methodology most used by
purchasers of this property type.

Based on our Complete Appraisal as defined by the Uniform Standards of
Professional Appraisal Practice, we have developed an opinion that the "as is"
market value of the leased fee estate of the referenced property, subject to the
assumptions, limiting conditions, certifications, and definitions, on July 7,
2004 was:

                             TWENTY MILLION DOLLARS

                                   $20,000,000

- --------------------------------------------------------------------------------
VALUATION SERVICES                   63                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                             ASSUMPTIONS AND LIMITING CONDITIONS
================================================================================

"Appraisal" means the appraisal report and opinion of value stated therein, to
which these Assumptions and Limiting Conditions are annexed.

"Property" means the subject of the Appraisal.

"C&W" means Cushman & Wakefield, Inc. or its subsidiary which issued the
Appraisal.

"Appraiser" or "Appraisers" means the employee(s) of C&W who prepared and signed
the Appraisal.

General Assumptions

This appraisal is made subject to the following assumptions and limiting
conditions:

1.    No opinion is intended to be expressed and no responsibility is assumed
      for the legal description or for any matters which are legal in nature or
      require legal expertise or specialized knowledge beyond that of real
      estate appraiser. Title to the Property is assumed to be good and
      marketable and the Property is assumed to be free and clear of all liens
      unless otherwise stated. No survey of the Property was undertaken.

2.    The information contained in the Appraisal or upon which the Appraisal is
      based has been gathered from sources the Appraiser assumes to be reliable
      and accurate. Some of such information may have been provided by the owner
      of the Property. Neither the Appraiser nor C&W shall be responsible for
      the accuracy or completeness of such information, including the
      correctness of opinions, dimensions, sketches, exhibits and factual
      matters.

3.    The opinion of value is only as of the date stated in the Appraisal.
      Changes since that date in external and market factors or in the Property
      itself can significantly affect property value.

4.    The Appraisal is to be used in whole and not in part. No part of the
      Appraisal shall be used in conjunction with any other appraisal.
      Publication of the Appraisal or any portion thereof without the prior
      written consent of C&W is prohibited. Except as may be otherwise stated in
      the letter of engagement, the Appraisal may not be used by any person
      other than the party to whom it is addressed or for purposes other than
      that for which it was prepared. No part of the Appraisal shall be conveyed
      to the public through advertising, or used in any sales or promotional
      material without C&W's prior written consent. Reference to the Appraisal
      Institute or to the MAI designation is prohibited, except as it relates to
      the collaboration between C&W and the Appraisal Institute relative to the
      Real Estate Outlook publication.

5.    Except as may be otherwise stated in the letter of engagement, the
      Appraiser shall not be required to give testimony in any court or
      administrative proceeding relating to the Property or the Appraisal.

6.    The Appraisal assumes (a) responsible ownership and competent management
      of the Property; (b) there are no hidden or unapparent conditions of the
      Property, subsoil or structures that render the Property more or less
      valuable (no responsibility is assumed for such conditions or for
      arranging for engineering studies that may be required to discover them);
      (c) full compliance with all applicable federal, state and local zoning
      and environmental regulations and laws, unless noncompliance is stated,
      defined and analyzed in the Appraisal; and (d) all required licenses,
      certificates of occupancy and other governmental consents have been or can
      be obtained and renewed for any use on which the value opinion contained
      in the Appraisal is based.

7.    The physical condition of the improvements analyzed within the Appraisal
      is based on visual inspection by the Appraiser or other person identified
      in the Appraisal. C&W assumes no

- --------------------------------------------------------------------------------
VALUATION SERVICES                   64                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                             ASSUMPTIONS AND LIMITING CONDITIONS
================================================================================

      responsibility for the soundness of structural members nor for the
      condition of mechanical equipment, plumbing or electrical components.

8.    The projected potential gross income referred to in the Appraisal may be
      based on lease summaries provided by the owner or third parties. The
      Appraiser has not reviewed lease documents and assumes no responsibility
      for the authenticity or completeness of lease information provided by
      others. C&W recommends that legal advice be obtained regarding the
      interpretation of lease provisions and the contractual rights of parties.

9.    The projections of income and expenses are not predictions of the future.
      Rather, they are the Appraisers opinion of current market thinking on
      future income and expenses. The Appraiser and C&W make no warranty or
      representation that these projections will materialize. The real estate
      market is constantly fluctuating and changing. It is not the Appraiser's
      task to predict or in any way warrant the conditions of a future real
      estate market; the Appraiser can only reflect what the investment
      community, as of the date of the Appraisal, envisages for the future in
      terms of rental rates, expenses, supply and demand.

10.   Unless otherwise stated in the Appraisal, the existence of potentially
      hazardous or toxic materials which may have been used in the construction
      or maintenance of the improvements or may be located at or about the
      Property was not analyzed in arriving at the opinion of value. These
      materials (such as formaldehyde foam insulation, asbestos insulation and
      other potentially hazardous materials) may adversely affect the value of
      the Property. The Appraisers are not qualified to detect such substances.
      C&W recommends that an environmental expert be employed to determine the
      impact of these matters on the opinion of value.

11.   Unless otherwise stated in the Appraisal, compliance with the requirements
      of the Americans With Disabilities Act of 1990 (ADA) has not been analyzed
      in arriving at the opinion of value. Failure to comply with the
      requirements of the ADA may adversely affect the value of the property.
      C&W recommends that an expert in this field be employed.

12.   Additional work requested by the client beyond the scope of this
      assignment will be billed at our prevailing hourly rate. Preparation for
      court testimony, update valuations, additional research, depositions,
      travel or other proceedings will be billed at our prevailing hourly rate
      plus reimbursement of expenses.

13.   The reader acknowledges that Cushman & Wakefield of California has been
      retained hereunder as an independent contractor to perform the services
      described herein and nothing in this agreement shall be deemed to create
      any other relationship between us. This assignment shall be deemed
      concluded and the services hereunder completed upon delivery to you of the
      appraisal report discussed herein.

14.   This study has not been prepared for use in connection with litigation and
      this document is not suitable for use in a litigation action. Accordingly,
      no rights to expert testimony, pretrial or other conferences, deposition,
      or related services are included with this appraisal. If, as a result of
      this undertaking, C&W or any of its principals, its appraisers or
      consultants are requested or required to provide any litigation services,
      such shall be subject to the provisions of the C&W engagement letter or,
      if not specified therein, subject to the reasonable availability of C&W
      and/or said principals or appraisers at the time and shall further be
      subject to the party or parties requesting or requiring such services
      paying the then-applicable professional fees and expenses of C&W either in
      accordance with the provisions of the engagement letter or arrangements at
      the time, as the case may be.

- --------------------------------------------------------------------------------
VALUATION SERVICES                   65                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                             ASSUMPTIONS AND LIMITING CONDITIONS
================================================================================

Extraordinary Assumptions

An extraordinary assumption is defined as "an assumption, directly related to a
specific assignment, which, if found to be false, could alter the appraiser's
opinions or conclusions. Extraordinary assumptions presume as fact otherwise
uncertain information about physical, legal or economic characteristics of the
subject property or about conditions external to the property, such as market
conditions or trends, or the integrity of data used in an analysis" (USPAP).
This appraisal employs no extraordinary assumptions.

Hypothetical Conditions

A hypothetical condition is defined as "that which is contrary to what exists,
but is supposed for the purpose of analysis. Hypothetical conditions assume
conditions contrary to known facts about physical, legal, or economic
characteristics of the subject property or about conditions external to the
property, such as market conditions or trends, or the integrity of data used in
an analysis (USPAP).

This appraisal employs no hypothetical conditions.

- --------------------------------------------------------------------------------
VALUATION SERVICES                   66                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                      CERTIFICATION OF APPRAISAL
================================================================================

We certify that, to the best of our knowledge and belief:

1.    The statements of fact contained in this report are true and correct.

2.    The reported analyses, opinions, and conclusions are limited only by the
      reported assumptions and limiting conditions, and are our personal,
      impartial, and unbiased professional analyses, opinions, and conclusions.

3.    We have no present or prospective interest in the property that is the
      subject of this report and no personal interest with respect to the
      parties involved.

4.    We have no bias with respect to the property that is the subject of this
      report or to the parties involved with this assignment.

5.    Our engagement in this assignment was not contingent upon developing or
      reporting predetermined results.

6.    Our compensation for completing this assignment is not contingent upon the
      development or reporting of a predetermined value or direction in value
      that favors the cause of the client, the amount of the value opinion, the
      attainment of a stipulated result, or the occurrence of a subsequent event
      directly related to the intended use of this appraisal.

7.    Our analyses, opinions, and conclusions were developed, and this report
      has been prepared, in conformity with the Uniform Standards of
      Professional Appraisal Practice of the Appraisal Foundation and the Code
      of Professional Ethics and the Standards of Professional Appraisal
      Practice of the Appraisal Institute.

8.    Michael G. Davis, MAI made a personal inspection of the property that is
      the subject of this report.

9.    No one provided significant real property appraisal assistance to the
      person signing this report.

10.   The use of this report is subject to the requirements of the Appraisal
      Institute relating to review by its duly authorized representatives.

11.   As of the date of this report, Appraisal Institute continuing education
      for Michael G. Davis, MAI is current.


 /s/ Michael G. Davis
- -----------------------
 Michael G. Davis, MAI
 Director
 California Certified General Appraiser
 License No. AG001700

- --------------------------------------------------------------------------------
VALUATION SERVICES                   67                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                                                                         ADDENDA
================================================================================

=================================================================

 Addenda Contents

 ADDENDUM A:          Site Plan

 ADDENDUM B:          Discounted Cash Flow Data

 ADDENDUM C:          Comparable Improved Sale Photographs

 ADDENDUM D:          Qualifications of the Appraiser

=================================================================

- --------------------------------------------------------------------------------
VALUATION SERVICES                   68                           ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)
<PAGE>

                             ADDENDUM A: Site Plan
<PAGE>

                    [GRAPHIC OF PROPERTY LOT AND FLOOR PLAN]
<PAGE>

                     ADDENDUM B: Discounted Cash Flow Data

<PAGE>

Software      : ARGUS Ver. 11.0.04                              Date  : 07/14/04
File          : 2730-60 Junction                                Time  : 13:56
Property Type : Office/Industrial                               Ref # : ADM
Portfolio     :                                                 Page  : 1

                             2730-60 Junction Avenue
                            404-410 E. Plumeria Drive
                                  San Jose, CA

              PRESENTATION RENT ROLL & CURRENT TERM TENANT SUMMARY
                     As of Jul-2004 for 145,951 Square Feet
<TABLE>
<CAPTION>
DESCRIPTION                    AREA     BASE RENT           RENT ADJUSTMENTS & CATEGORIES       ABATEMENTS

   Tenant Name                Floor     Rate & Amount                         CPI & Current   Months    Pcnt
Type & Suite Number           SqFt        per Year      Changes   Changes     Porters' Wage     to       to
Lease Dates & Term          Bldg Share    per Month       on         to       Miscellaneous    Abate    Abate
- ------------------          ----------    ---------     -------   -------     -------------    -----    -----

<S>                          <C>        <C>            <C>         <C>            <C>           <C>      <C>
Novellus Systems                           $0.00       May-2004    $27.72         --            --       --
Industrial, Suite: 273       90,467           $0       May-2005    $29.04
Jul-2002 to Dec-2006          61.98%       $0.00       May-2006    $30.60
54 Months                                     $0

New Tenant                                 $8.19       Apr-2008     $8.44         --            --       --
Industrial, Suite: 273       90,467     $740,925       Apr-2009     $8.69
Apr-2007 to Mar-2012          61.98%       $0.68       Apr-2010     $8.95
60 Months                                $61,744       Apr-2011     $9.22

Novellus Systems                           $0.00       May-2004    $27.72         --            --       --
Industrial, Suite: 404      55,484            $0       May-2005    $29.04
Jul-2002 to Dec-2006         38.02%        $0.00       May-2006    $30.60
54 Months                                     $0

New Tenant                                 $9.45       Apr-2008     $9.73         --            --       --
Industrial, Suite: 404      55,484      $524,324       Apr-2009    $10.03
Apr-2007 to Mar-2012         38.02%        $0.79       Apr-2010    $10.33
60 Months                                $43,694       Apr-2011    $10.64

Total Occupied SqFt         291,902
Total Available SqFt       (145,951)

<CAPTION>
DESCRIPTION               REIMBURSEMENT         LEASING COSTS     RETAIL     UPON EXPIRATION

   Tenant Name            Description of      Imprvmnts   Commssns     Sales      Assumption about
Type & Suite Number       Operating Expense     Rate        Rate     Breakpoint   subsequent terms
Lease Dates & Term        Reimbursements       Amount      Amount     Overage %   for this tenant
- ------------------        --------------       ------      ------     ---------   ---------------

<S>                        <C>                <C>        <C>             <C>       <C>
Novellus Systems           See method:              --         --        --               ReAbsorb
Industrial, Suite: 273     NNN Reimb.                                              See assumption:
Jul-2002 to Dec-2006       reimbursement.                                          730-60 Junction
54 Months

New Tenant                 See method:          $10.61      $5.30        --                 Market
Industrial, Suite: 273     NNN Reimb.                      12.20%                  See assumption:
Apr-2007 to Mar-2012       reimbursement.     $959,764   $479,882                  730-60 Junction
60 Months

Novellus Systems           See method:              --         --        --               ReAbsorb
Industrial, Suite: 404     NNN Reimb.                                              See assumption:
Jul-2002 to Dec-2006       reimbursement.                                          404-10 Plumeria
54 Months

New Tenant                 see method           $10.61      $5.30        --                 Market
Industrial, Suite: 404     NNN Reimb.                      10.57%                  See assumption:
Apr-2007 to Mar-2012       reimbursement.     $588,630   $294,315                  404-10 Plumeria
60 Months

Total Occupied SqFt
Total Available SqFt
</TABLE>

<PAGE>

Software      : ARGUS Ver. 11.0.04                              Date  : 07/14/04
File          : 2730-60 Junction                                Time  : 13:56
Property Type : Office/Industrial                               Ref # : ADM
Portfolio     :                                                 Page  : 1

                             2730-60 Junction Avenue
                            404-410 E. Plumeria Drive
                                  San Jose, CA

                                Input Assumptions


PROPERTY DESCRIPTION
  Name:
  Address:                    2730-60 Junction Avenue
  Address2:                   404-410 E. Plumeria Drive
  City:                       San Jose
  State:                      CA
  Zip:
  Portfolio:
  Property Type:              Office/Industrial

PROPERTY TIMING
  Analysis Start Date:        7/04
  First Year Ends:            6/05
  Years of Analysis:          10

AREA MEASURES

  Label                                    Area
  -----------------------------------------------
  Property Size                      145.951 SqFt
  Alt. Prop. Size                          1 SqFt
  Area 1                                   1 SqFt


GENERAL INFLATION
  Inflation Method:           Fiscal
  Reimbursement Method:       Fiscal reimbursement using fiscal inflation

OVERALL INFLATION RATES

<TABLE>
<CAPTION>
                          Year 1  Year 2   Year 3   Year 4   Year 5   Year 6   Year 7   Year 8   Year 9   Year 10   Year 11  Year 12
<S>                       <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>       <C>       <C>      <C>
General Inflation                      3        3        3        3        3        3        3        3         3         3        3
Miscellaneous Revenues
Reimbursable Expenses
Non-Reimbursable Expenses
Capital Expenditures
CPI
Retail Sales Volume
Market Rent                            0        5      10         15       10       5        3        3         3         3        3
Leasing Costs
Land Costs
Hard Costs
Soft Costs
</TABLE>

REIMBURSABLE EXPENSES

<TABLE>
<CAPTION>
                                                                                                                      Ref
Name                             Acct Code   Actuals   Budgeted    Units     Area   Frequency   % Fixed   Inflation   Acct   Notes
- ----                             ---------   -------   --------    -----     ----   ---------   -------   ---------   ----   -----

<S>                              <C>         <C>         <C>       <C>       <C>       <C>         <C>          <C>   <C>    <C>
Real Estate Taxes                                        1.0867    Prop 13A                                     2
Direct Assessments                                       13,318    $Amount             /Year       100
Insurance                                                72,500    $Amount             /Year       100
Repairs & Maintenance                                    50,000    $Amount             /Year       100
Management Fees                                               2    % of EGR

Gross Up for Reimbursement: No
</TABLE>

CAPITAL EXPENDITURES

<TABLE>
<CAPTION>
                                                                                                                        Ref
Name                             Acct Code   Actuals    Budgeted   Units    Area         Frequency  % Fixed  Inflation  Acct   Notes
- ----                             ---------   -------    --------   -----    ----         ---------  -------  ---------  ----   -----

<S>                              <C>         <C>            <C>    <C>      <C>            <C>        <C>    <C>        <C>    <C>
Capital Reserves                                            0.2    $/Area   Property Size  /Year      100
</TABLE>

CREDIT & COLLECTION LOSS

<TABLE>
<CAPTION>
Method:                        Percent of Potential Gross Revenue

               Year 1    Year 2   Year 3   Year 4   Year 5   Year 6   Year 7   Year 8   Year 9   Year 10   Year 11  Year 12
<S>            <C>       <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>       <C>      <C>
Rate:               1         1        1        1        1        1        1        1        1         1         5        1
</TABLE>

                            (continued on next page)
<PAGE>

Software      : ARGUS Ver. 11.0.04                              Date  : 07/14/04
File          : 2730-60 Junction                                Time  : 13:56
Property Type : Office/Industrial                               Ref # : ADM
Portfolio     :                                                 Page  : 2

                             2730-60 Junction Avenue
                            404-410 E. Plumeria Drive
                                  San Jose, CA

                                Input Assumptions
                         (continued from previous page)

BUDGETING ACCOUNT CODES

Account Code     Actual  Report Line Label
- ------------     ------  -------------------------------------------------------
                         Base Rental Revenue
                         Absorption & Turnover Vacancy
                         Base Rent Abatements
                         Scheduled Base Rental Revenue
                         Base Rental Step Revenue
                         CPI & Other Adjustment Revenue
                         Porters' Wage Revenue
                         Miscellaneous Rental Revenue
                         Retail Sales Percent Revenue
                         Total Reimbursement Revenue

Account Code     Actual  Report Line Label
- ------------     ------  -------------------------------------------------------
                         Collection Loss
                         TOTAL REVENUE ADJUSTMENTS
                         EFFECTIVE GROSS REVENUE
                         TOTAL OPERATING EXPENSES
                         NET OPERATING INCOME
                         Tenant Improvements
                         Leasing Commissions
                         TOTAL LEASING & CAPITAL COSTS
                         TOTAL LAND/ACQUISITION COSTS
                         TOTAL HARD/CONSTRUCTION COSTS

Account Code     Actual  Report Line Label
- ------------     ------  -------------------------------------------------------
                         Additional Principal Payments
                         Paydowns
                         TOTAL DEBT SERVICE
                         CASH FLOW AFTER DEBT SERVICE
                         TOTAL VALUE ADDED TAXES
                         INCOME TAX
                         CASH FLOW AFTER INCOME TAX
                         Undistributed Cash
                         DISTRIBUTABLE CASH FLOW
                         CASH UNDISTRIBUTED

Account Code     Actual  Report Line Label
- ------------     ------  -------------------------------------------------------
                         LAND/ACQUISITION COSTS
                         HARD/CONSTRUCTION COSTS
                         SOFT/DEVELOPMENT COSTS
                         ESCROW CONTRIBUTIONS
                         ESCROW DISTRIBUTIONS
                         SOURCES & USES OF CAPITAL
                         PARTNER DISTRIBUTIONS
                         Total
                         VALUE ADDED TAXES & INCOME TAX

Account Code     Actual  Report Line Label
- ------------     ------  -------------------------------------------------------
                         Real Estate Taxes
                         Direct Assessments
                         Insurance
                         Repairs & Maintenance
                         Management Fees
                         Parking Revenue
                         Assigned Parking
                         Unassigned Parking
                         TOTAL POTENTIAL GROSS REVENUE
                         General Vacancy

Account Code     Actual  Report Line Label
- ------------     ------  -------------------------------------------------------
                         TOTAL SOFT/DEVELOPMENT COSTS
                         TOTAL DEVELOPMENT COSTS
                         TOTAL ESCROW CONTRIBUTIONS
                         TOTAL ESCROW DISTRIBUTIONS
                         CASH FLOW BEFORE DEBT SERVICE
                         Interest Payments
                         Principal Payments
                         Origination Points & Fees
                         Participation on Cash Flow
                         Accrued Interest Reduction

Account Code     Actual  Report Line Label
- ------------     ------  -------------------------------------------------------
                         Debt Funding Proceeds
                         Retirement & Penalties
                         Property Purchase Price
                         POTENTIAL GROSS REVENUE
                         Expense Reimbursement Revenue
                         REVENUE ADJUSTMENTS
                         OPERATING EXPENSES
                         DEBT SERVICE
                         LEASING & CAPITAL COSTS
                         DEVELOPMENT COSTS

Account Code     Actual  Report Line Label
- ------------     ------  -------------------------------------------------------
                         BUT BEFORE INCOME TAX
                         AND AFTER INCOME TAX

RENT ROLL

<TABLE>
<CAPTION>
      Tenant Name/                    Lease      Total     Start    Term/    Base/Min   Unit of    Rent     Rtl
No.   Description          Suite      Type       Area      Date     Expir      Rent     Measure    Chng     Sls
- ---   -----------          -----      ----       ----      ----     -----      ----     -------    ----     ---

<S>   <C>                  <C>        <C>       <C>         <C>     <C>       <C>       <C>        <C>      <C>
1     Novellus Systems     2730 J     Indstl    90,467      7/02    12/06     Detail
2     New Tenant           2730 J     Indstl    90,467      4/07        5     Detail
3     Novellus Systems     404 P      Indstl    55,484      7/02    12/06     Detail
4     New Tenant           404 P      Indstl    55,484      4/07        5     Detail

<CAPTION>
      Tenant Name/         Reimbur-     Rent     Leasing       Market        Upon      Rnwl   More/
No.   Description          sements    Abatement   Cost        Leasing      Expiration  Prob   Notes
- ---   -----------          -------    ---------   ----        -------      ----------  ----   -----

<S>   <C>                  <C>         <C>        <C>     <C>               <C>        <C>    <C>
1     Novellus Systems     NNN Reimb.                     MLA - 2730-60 J   ReAbsorb
2     New Tenant           NNN Reimb.             Yes     MLA - 2730-60 J   Market
3     Novellus Systems     NNN Reimb.                     MLA - 404-10 Pl   ReAbsorb
4     New Tenant           NNN Reimb.             Yes     MLA - 404-10 Pl   Market
</TABLE>

<PAGE>

Software      : ARGUS Ver. 11.0.04                              Date  : 07/14/04
File          : 2730-60 Junction                                Time  : 13:56
Property Type : Office/Industrial                               Ref # : ADM
Portfolio     :                                                 Page  : 3

                             2730-60 Junction Avenue
                            404-410 E. Plumeria Drive
                                  San Jose, CA

                                Input Assumptions
                         (continued from previous page)


         Detail Base Rent
         Novellus Systems

Date         Amount           Unit
- ----          ------           ----

5/04           2.31          $/SqFt/Mo
5/05           2.42          $/SqFt/Mo
5/06           2.55          $/SqFt/Mo

           Detail Base Rent
              New Tenant
   Date         Amount          Unit
   ----         ------          ----

      1            100     % Market
     13              3     % Inc, Annual

Leasing Cost
  New Tenant
  Tenant Improvements:      T.I.s
  Leasing Commissions:      Leasing Commiss

         Detail Base Rent
         Novellus Systems

Date         Amount           Unit
- ----         ------           ----

5/04           2.31          $/SqFt/Mo
5/05           2.42          $/SqFt/Mo
5/06           2.55          $/SqFt/Mo

           Detail Base Rent
              New Tenant
   Date         Amount          Unit
   ----         ------          ----

      1            100     % Market
     13              3     % Inc, Annual

Leasing Cost
  New Tenant
  Tenant Improvements:      T.I.s
  Leasing Commissions:      Leasing Commiss

DETAILED REIMBURSEMENT METHODS

Reimbursement Category: NNN Reimb.

Base Category on Another Method: No

<TABLE>
<CAPTION>
   Reimbursable        Reimbursement Method     Amount     Pro    Area Measure     Area     Reimburse After  Charg-
   Expenses                                               -rata                   Minimum                    able %
   ------------        --------------------     ------     ---    ------------    -------   ---------------  ------
   <S>                 <C>                      <C>        <C>    <C>             <C>       <C>              <C>
   Real Estate Taxes   Group Total, see below
   Direct Assessments  Group Total, see below
   Insurance           Group Total, see below
   Repairs & Maintena  Group Total, see below
   Management Fees     Group Total, see below
   Group               Not (Pays Pro Rata Share)           Natural Property Size                               100

   Number of terms to apply method: 1
   Gross up Expenses: Global

<CAPTION>
   Reimbursable            Reimb.    Min.     Reimb.     Max      % Rent
   Expenses               Minimum   Growth     Max     Growth     Offset
   ------------           --------  ------    ------   ------     ------
   <S>                     <C>      <C>       <C>      <C>        <C>
   Real Estate Taxes
   Direct Assessments
   Insurance
   Repairs & Maintena
   Management Fees
   Group

   Number of terms to apply method: 1
   Gross up Expenses: Global
</TABLE>

MARKET LEASING ASSUMPTIONS

Leasing Assumptions Category: MLA - 2730-60 Junction

<TABLE>
<CAPTION>
                                         New Market     Renewal Mkt      Term 2      Term 3     Term 4
<S>                                 <C>                          <C>        <C>        <C>        <C>
   Renewal Probability                                           65
   Market Rent                                 7.80
   Months Vacant                                  6               0
   Tenant Improvements                        T.I.s
   Leasing Commissions              Leasing Commiss
   Rent Abatements                                0
NON-WEIGHTED ITEMS
   Rent Changes                                 Yes                          No          No         No
   Retail Sales                                  No                          No          No         No
   Reimbursements                        NNN Reimb.
   Term Lengths                                   5
</TABLE>

                            (continued on next page)
<PAGE>

Software      : ARGUS Ver. 11.0.04                              Date  : 07/14/04
File          : 2730-60 Junction                                Time  : 13:56
Property Type : Office/Industrial                               Ref # : ADM
Portfolio     :                                                 Page  : 4

                             2730-60 Junction Avenue
                            404-410 E. Plumeria Drive
                                  San Jose, CA

                                Input Assumptions
                         (continued from previous page)


Rent Changes: MILA - 2730-60 Junction current term
   Changing Base:       Market Rent Sch  edu
   Step:
   Porters' Wage:
   Miscellaneous:
   CPI Rent
      Category:

Leasing Assumptions Category: MLA - 404-10 Plumeria

<TABLE>
<CAPTION>
                                          New Market        Renewal Mkt     Term 2       Term 3       Term 4
<S>                                  <C>                         <C>        <C>          <C>          <C>
   Renewal Probability                                           65
   Market Rent                                  9.00
   Months Vacant                                   6              0
   Tenant improvements                         T.I.s
   Leasing Commissions               Leasing Commiss
   Rent Abatements                                 0
NON-WEIGHTED ITEMS
   Rent Changes                                  Yes                          No           No           No
   Retail Sales                                   No                          No           No           No
   Reimbursements                         NNN Reimb.
   Term Lengths                                    5
</TABLE>

Rent Changes: MLA - 404-10 Plumeria, current term
   Changing Base:   Market Rent Sch edu
   Step:
   Porters' Wage:
   Miscellaneous:
   CPI Rent
      Category:

CHANGING BASE RENT

            Changing Base:
         Market Rent Schedule

   Date         Amount          Unit
   ----         ------          ----
      1            100      % Market
     13              3      % Inc, Annual

TENANT IMPROVEMENTS

  Tenant Improvements Category: T.I.s

  Payment Made: First Month

<TABLE>
<CAPTION>
                  Year 1    Year 2   Year 3   Year 4    Year 5   Year 6    Year 7   Year 8   Year 9   Year 10  Year 11   Year 12
  <S>                 <C>       <C>      <C>      <C>       <C>      <C>       <C>      <C>      <C>       <C>      <C>       <C>
  New                 10        10       10       10        10       10        10       10       10        10       10        10
  Renewal              5         5        5        5         5        5         5        5        5         5        5         5
  Inflation                      3        3        3         3        3         3        3        3         3        3         3
</TABLE>

                            (continued on next page)
<PAGE>


Software      : ARGUS Ver. 11.0.04                              Date  : 07/14/04
File          : 2730-60 Junction                                Time  : 13:56
Property Type : Office/Industrial                               Ref # : ADM
Portfolio     :                                                 Page  : 5

                             2730-60 Junction Avenue
                            404-410 E. Plumeria Drive
                                  San Jose, CA

                                Input Assumptions
                         (continued from previous page)


LEASING COMMISSIONS

Leasing Commissions Category: Leasing Commiss

  Payment Made: First Month
  Unit of Measure: Dollars/SqFt

<TABLE>
<CAPTION>
                    Year 1   Year 2   Year 3    Year 4   Year 5   Year 6    Year 7   Year 8    Year 9  Year 10  Year 11   Year 12
  <S>                  <C>      <C>      <C>       <C>      <C>      <C>       <C>      <C>       <C>      <C>      <C>       <C>
  New                    5        5        5         5        5        5         5        5         5        5        5         5
  Renewal              2.5      2.5      2.5       2.5      2.5      2.5       2.5      2.5       2.5      2.5      2.5       2.5
  Inflation                       3        3         3        3        3         3        3         3        3        3         3
</TABLE>

PROPERTY RESALE                                                 CAP RATE RANGE
  Initial Purchase Price:   19,400,000                            Low Rate: 8.5
  Option:                   Capitalize Net Operating Income       High Rate: 9.5
  Cap Rate:                 9                                     Increment: 0.5
  Resale Adjustment(s):     2
  Apply Rate to following year income: Yes
  Calculate Resale for All Years: No

PRESENT VALUE DISCOUNTING
  Unleveraged Discount Range
    Low Discount Rate:         9
    High Discount Rate:       11
    Increment:               0.5
  Discount Method: Annually (Endpoint on Cash Flow & Resale)

Calculation Switches

  RENT
  Inflate market rent monthly:                                         No
  Calculate only contract rent:                                        No
  Level selected components of rent:                                   No

  RENT COLLECTION
  Rent Collected:                                                     Monthly
  Rent Paid:                                                          In Advance
  Based On:                                                           Lease Year

  DETAILED REIMBURSEMENT METHODS
  Apply Chargeable Percent before Reimburse After Amount deducted:     No

  GENERAL
  Display Occupancy Warning:                                           Yes
  Net Effective Market:                                                No
  Rolling PV:                                                          No

  OTHER LOAN STATISTICS
  Ignore time offset between Analysis Start Date and Note Start Date:  No
  Calculate Interest based on a 360 day year:                          No

                            (continued on next page)

<PAGE>

Software      : ARGUS Ver. 11.0.04                              Date  : 07/14/04
File          : 2730-60 Junction                                Time  : 13:56
Property Type : Office/Industrial                               Ref # : ADM
Portfolio     :                                                 Page  : 6

                             2730-60 Junction Avenue
                            404-410 E. Plumeria Drive
                                  San Jose, CA

                                Input Assumptions
                         (continued from previous page)


PARTNERSHIPS
  Calculate Partnerships Monthly
  Return on Investment based only on selected preference level:           No

Input Switches

  Enable Budgeting (entry of actuals and variance reporting):     No
  Use advanced timing to control when data input begins:          No
  Use market rent abatement categories:                           No
  Use reimbursable reporting groups:                              No
  Display Term override columns in Market Leasing Assumptions:    Yes
  Use CPI index:                                                  No
  Use old input method for Present Value Discounting:             Yes
  Allow leases to start and end on specific dates:                No

  Auto Selection Defaults
    Rents Entered:                                                Annually
    Highest per SqFt Rent:                                        500
    Highest per SqFt Property expense/revenue:                    100

  This Property Uses:
    Development Costs                                             Yes
    Escrow                                                        Yes
    Porters Wage                                                  Yes
    Debt                                                          Yes
    Depreciation and Tax                                          Yes
    Partnerships                                                  Yes

  Analysis Region
    Standard ARGUS


<PAGE>

                ADDENDUM C: Comparable Improved Sale Photographs

<PAGE>

                         [PHOTO OF COMPARABLE SALES # 1]

        Comparable Sales # 1 2305 Mission College Boulevard, Santa Clara


                         [PHOTO OF COMPARABLE SALES # 2]

               Comparable Sales # 2 1110 Ringwood Court, San Jose
<PAGE>

                         [PHOTO OF COMPARABLE SALES # 3]

               Comparable Sales # 3 4275 Burton Drive, Santa Clara


                         [PHOTO OF COMPARABLE SALES # 4]

       Comparable Sales # 4 2300-2330 Central Expressway, 2770-2890 Scott
                  Boulevard and 2001 Walsh Avenue, Santa Clara
<PAGE>

                         [PHOTO OF COMPARABLE SALES # 5]

           Comparable Sales # 5 991-1225 Montague Expressway, Milpitas


                         [PHOTO OF COMPARABLE SALES # 6]

              Comparable Sales # 6 5400 Bayfront Plaza, Santa Clara
<PAGE>

                   ADDENDUM D: Qualifications of the Appraiser
<PAGE>

PROFESSIONAL QUALIFICATIONS

Michael G. Davis, MAI
Director, Valuation Services - Advisory Group
================================================================================

Michael G. Davis serves as the Director of the Valuation Services - Advisory
Group of Cushman & Wakefield's Northern California offices. The Cushman &
Wakefield Advisory Group comprises approximately 300 professionals nationwide
who provide strategic advice and execution of sophisticated transactions, with
particular emphasis on Analytics, Finance, Strategy and Valuation.

Experience

Since joining Cushman & Wakefield in 1987, Mr. Davis has been responsible for
appraisal and consulting services on all types of income producing properties
including industrial facilities, research and development and corporate
headquarter campuses, office complexes, hotels, apartments, theme parks,
residential subdivisions and assessment districts. Has provided appraisal and
consultation services for mortgage lending, synthetic lease financing, joint
venture, disposition, acquisition, internal audit, municipal condemnation
municipal bond issue, lease arbitration, litigation, feasibility study and tax
appeal proceedings.

Notable assignments completed include: Pebble Beach Resort in Pebble Beach;
Adobe Systems corporate headquarters in downtown San Jose; Chevron U.S.A.
corporate campus in San Ramon; Sgi corporate headquarters in Mountain View;
Symantec Corporation and Apple Computer corporate headquarters in Cupertino;
Network Appliance world headquarters in Sunnyvale; 3-Com corporate campus,
Extreme Networks corporate campus in Santa Clara; Lucent Technologies corporate
campuses in Alameda and Milpitas; Siebel Systems corporate headquarters in San
Mateo; Inktomi's corporate headquarters in Foster City; Genentech's corporate
campus in South San Francisco and its monoclonal antibody manufacturing facility
in Vacaville; Chiron's office/lab buildings in Emeryville; Novell, Novellus
Systems, Cisco Systems Hyundai Electronics, Lockheed Martin, Cypress
Semiconductor and Cadence Design Systems corporate headquarters in north San
Jose; and the Pacific Commons Community Facilities District (CFD) in Fremont. In
2003 alone, Mr. Davis personally prepared valuations on numerous properties
exceeding $2.5 billion in aggregate value.

Education

Mr. Davis received his Bachelor of Arts Degree in Economics from the University
of California at Los Angeles in 1984.

Appraisal Education

Mr. Davis has successfully completed all courses and experience requirements to
qualify for the MAI designation. Also, he has completed the requirements of the
continuing education program of the Appraisal Institute.

Memberships, Licenses and Professional Affiliations

Member Appraisal Institute (MAI No. 10329)
Certified General Real Estate Appraiser, State of California (No. AG001700)
Real Estate Sales Persons License, State of California

Special Awards

Mr. Davis was the recipient of the 1996 and 1998 Cushman & Wakefield Regional
Service Excellence Award and the recipient of the Cushman & Wakefield National
1996 Leo L. Majzels Award for overall professional excellence.


                                                                  ADVISORY GROUP
                                                             [LOGO] CUSHMAN &
                                                                    WAKEFIELD(R)


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.4
<SEQUENCE>12
<FILENAME>royalridge.txt
<DESCRIPTION>ROYAL RIDGE APPRAISAL
<TEXT>

                                                                    Exhibit 99.4


ROYAL RIDGE (2004)
11680 Great Oaks Way
Alpharetta, Fulton County, Georgia
CBRE File No. 04-341AT-0906


                                                          Complete Appraisal
[GRAPHIC]                                                 Self Contained Report


Prepared for:

Board of Directors of FSP Royal Ridge Corp.
FRANKLIN STREET PROPERTIES
401 Edgewater Place, Suite 200
Wakefield, Massachusetts  01880


                                                                            CBRE
VALUATION & ADVISORY SERVICES                                   CB RICHARD ELLIS
<PAGE>

VALUATION & ADVISORY SERVICES                                               CBRE
                                                                CB RICHARD ELLIS

                                                       3225 Cumberland Boulevard
                                                          Atlanta, Georgia 30339

                                                                    770-984-5003
                                                                    770-984-5001

                                                                    www.cbre.com


July 13, 2004


Board of Directors of FSP Royal Ridge Corp.
FRANKLIN STREET PROPERTIES
401 Edgewater Place, Suite 200
Wakefield, Massachusetts  01880


RE:   Appraisal of Royal Ridge (2004)
      11680 Great Oaks Way
      Alpharetta, Fulton County, Georgia
      CBRE File No 04-341AT-0906


Dear Board of Directors:

At your request and authorization, CBRE has prepared a Complete Appraisal of the
market value of the referenced property and presented our analysis in the
following Self Contained Appraisal Report.

The subject is a 161,366 square foot six-story suburban office building built in
2001 and situated on a 13.370-acre site in Alpharetta, Fulton County, Georgia.
Currently the facility is 88.8% occupied. The subject is more fully described,
legally and physically within the enclosed report.

Data, information, and calculations leading to the value conclusion are
incorporated in the report following this letter. The report, in its entirety,
including all assumptions and limiting conditions, is an integral part of, and
inseparable from, this letter.

Based on the analysis contained in the following report, the market value of the
subject is concluded as follows:

<TABLE>
<CAPTION>
================================================================================================
                                  MARKET VALUE CONCLUSION
- ------------------------------------------------------------------------------------------------
 Appraisal Premise      Interest Appraised     Exposure      Date of Value    Value Conclusion
- ------------------------------------------------------------------------------------------------
<S>                      <C>                   <C>           <C>                <C>
       As Is             Leased Fee Estate     6 Months      July 7, 2004       $26,075,000
- ------------------------------------------------------------------------------------------------
Compiled by CBRE
- ------------------------------------------------------------------------------------------------
</TABLE>

The following appraisal sets forth the most pertinent data gathered, the
techniques employed, and the reasoning leading to the opinion of value. The
analyses, opinions and conclusions were developed based on, and this report has
been prepared in conformance with, our interpretation of the guidelines and
recommendations set forth in the Uniform Standards of Professional Appraisal
Practice (USPAP), the requirements of the Code of Professional Ethics and
Standards of Professional Appraisal Practice of the Appraisal Institute, the
<PAGE>

Board of Directors of FSP Royal Ridge Corp.
July 13, 2004
Page 2


Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA),
Title XI Regulations and Franklin Street Properties's appraisal standards.

The report is for the sole use of the client; however, client may provide only
complete, final copies of the appraisal report in its entirety (but not
component parts) to third parties who shall review such reports in connection
with loan underwriting or securitization efforts. Appraiser is not required to
explain or testify as to appraisal results other than to respond to the client
for routine and customary questions. Please note that our consent to allow an
appraisal report prepared by CBRE or portions of such report, to become part of
or be referenced in any public offering, the granting of such consent will be at
our sole discretion and, if given, will be on condition that we will be provided
with an Indemnification Agreement and/or Non-Reliance letter, in a form and
content satisfactory to us, by a party satisfactory to us. We do consent to your
submission of the reports to rating agencies, loan participants or your auditors
in its entirety (but not component parts) without the need to provide us with an
Indemnification Agreement and/or Non-Reliance letter. Moreover, CBRE hereby
consents to a description and inclusion of the appraisal report in any document
required to be filed with the Securities and Exchange Commission and distributed
to the stockholders of the companies, which the client is considering acquiring.

"Moreover, CBRE hereby consents to a description and inclusioin of the appraisal
report in any document required to be filed with the Securities and Exchange
Commission and distributed to the stockholders of companies which the client is
considering acquiring."

It has been a pleasure to assist you in this assignment. If you have any
questions concerning the analysis, or if CBRE can be of further service, please
contact us.


Respectfully submitted,

CBRE - VALUATION & ADVISORY SERVICES

/s/ Richard A. Francis                          /s/ Ronald A. Neyhart
- -----------------------------------             --------------------------------
Richard A. Francis                              Ronald A. Neyhart, MAI
Senior Real Estate Analyst                      Managing Director
Georgia State Certification 3281                Georgia State Certification 0490

Phone:     770-984-5003                         Phone:     770-984-5020
Fax:       770-984-5001                         Fax:       770-984-5001
Email:     Richard.francis@cbre.com             Email:     Ron.neyhart@cbre.com

RAF/RAN


                                                                            CBRE
                                                                CB RICHARD ELLIS
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                CERTIFICATION OF THE APPRAISAL
- --------------------------------------------------------------------------------

                         CERTIFICATION OF THE APPRAISAL

We certify to the best of our knowledge and belief:

1.    The statements of fact contained in this report are true and correct.

2.    The reported analyses, opinions, and conclusions are limited only by the
      reported assumptions and limiting conditions and are our personal,
      impartial and unbiased professional analyses, opinions, and conclusions.

3.    We have no present or prospective interest in or bias with respect to the
      property that is the subject of this report and have no personal interest
      in or bias with respect to the parties involved with this assignment.

4.    Our engagement in this assignment was not contingent upon developing or
      reporting predetermined results.

5.    Our compensation for completing this assignment is not contingent upon the
      development or reporting of a predetermined value or direction in value
      that favors the cause of the client, the amount of the value opinion, the
      attainment of a stipulated result, or the occurrence of a subsequent event
      directly related to the intended use of this appraisal.

6.    This appraisal assignment was not based upon a requested minimum
      valuation, a specific valuation, or the approval of a loan.

7.    Our analyses, opinions, and conclusions were developed, and this report
      has been prepared, in conformity with the Uniform Standards of
      Professional Appraisal Practice of The Appraisal Foundation and the
      requirements of the Code of Professional Ethics and the Standards of
      Professional Appraisal Practice of the Appraisal Institute, as well as the
      requirements of the State of Georgia relating to review by its duly
      authorized representatives. This report also conforms to the requirements
      of the Financial Institutions Reform, Recovery, and Enforcement Act of
      1989 (FIRREA).

8.    The use of this report is subject to the requirements of the Appraisal
      Institute relating to review by its duly authorized representatives.

9.    Ronald A. Neyhart, MAI has completed the requirements of the continuing
      education program of the Appraisal Institute.

10.   Richard A. Francis has and Ronald A. Neyhart, MAI has not made a personal
      inspection of the property that is the subject of this report.

11.   No one provided significant real property appraisal assistance to the
      persons signing this report.

12.   Richard A. Francis and Ronald A. Neyhart, MAI have extensive experience in
      the appraisal/review of similar property types.

13.   Richard A. Francis and Ronald A. Neyhart, MAI are currently certified in
      the state where the subject is located.

14.   Valuation & Advisory Services operates as an independent economic entity
      within CBRE. Although employees of other CBRE divisions may be contacted
      as a part of our routine market research investigations, absolute client
      confidentiality and privacy are maintained at all times with regard to
      this assignment without conflict of interest.

/s/ Richard A. Francis                          /s/ Ronald A. Neyhart
- -----------------------------------             --------------------------------
Richard A. Francis                              Ronald A. Neyhart, MAI
Georgia State Certification 3281                Georgia State Certification 0490
- --------------------------------------------------------------------------------
                                        i

                                                                            CBRE
                                                                CB RICHARD ELLIS
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                           SUBJECT PHOTOGRAPHS
- --------------------------------------------------------------------------------


                               SUBJECT PHOTOGRAPHS


                    [PHOTOGRAPH OF OFFICE BUILDING EXTERIOR]


- --------------------------------------------------------------------------------
                           TYPICAL VIEW OF THE SUBJECT
- --------------------------------------------------------------------------------


                    [PHOTOGRAPH OF OFFICE BUILDING INTERIOR]

- --------------------------------------------------------------------------------
                                       ii
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                           SUBJECT PHOTOGRAPHS
- --------------------------------------------------------------------------------


- --------------------------------------------------------------------------------
                           TYPICAL VIEW OF THE SUBJECT
- --------------------------------------------------------------------------------



- --------------------------------------------------------------------------------
                                       iii
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                      SUMMARY OF SALIENT FACTS
- --------------------------------------------------------------------------------

                            SUMMARY OF SALIENT FACTS

Property Name                               Royal Ridge (2004)

Location                                    11680 Great Oaks Way,
                                            Alpharetta, Georgia

Assessor's Parcel Number                    12-2980-0857-046-2

Highest and Best Use
  As Though Vacant                          Office
  As Improved                               Office

Property Rights Appraised                   Leased Fee Estate

Land Area                                   13.37 AC                  582,397 SF

Improvements
  Property Type                             Office
  Number of Buildings                       2
  Number of Stories                         1
  Gross Building Area                       161,366 SF
  Net Rentable Area                         161,366 SF
  Year Built                                2001
  Condition                                 Excellent

Estimated Exposure Time                     6 Months

Financial Indicators
  Current Occupancy                         88.8%
  Stabilized Occupancy                      99.0%
  Overall Capitalization Rate               8.00%
  Discount Rate                             9.75%
  Terminal Capitalization Rate              8.50%

Pro Forma Operating Data                         Total                  Per SF
                                            --------------            ---------
  Effective Gross Income                       $3,200,082               $19.83
  Operating Expenses                           $1,114,782                $6.91
  Expense Ratio                                    34.84%
  Net Operating Income                         $2,085,300               $12.92

- --------------------------------------------------------------------------------
                                       iv
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                      SUMMARY OF SALIENT FACTS
- --------------------------------------------------------------------------------

VALUATION                                        Total                  Per SF
                                            --------------            ---------
  Land Value                                    $2,000,000                $3.43
  Cost Approach                                $22,070,000              $136.77
  Sales Comparison Approach                    $26,500,000              $164.22
  Income Capitalization Approach               $26,075,000              $161.59

  Insurable Value                              $16,600,000              $102.87

================================================================================
                             CONCLUDED MARKET VALUE
- --------------------------------------------------------------------------------
Appraisal Premise        Interest Appraised     Date of Value         Value
- --------------------------------------------------------------------------------
As Is                    Leased Fee Estate          July 7, 2004    $26,075,000
- --------------------------------------------------------------------------------
Compiled by CBRE
- --------------------------------------------------------------------------------


SPECIAL ASSUMPTIONS

None noted.

- --------------------------------------------------------------------------------
                                        v
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                             TABLE OF CONTENTS
- --------------------------------------------------------------------------------

                                TABLE OF CONTENTS


CERTIFICATION OF THE APPRAISAL.................................................I

SUBJECT PHOTOGRAPHS...........................................................II

SUMMARY OF SALIENT FACTS......................................................IV

TABLE OF CONTENTS.............................................................VI

INTRODUCTION...................................................................1

AREA ANALYSIS..................................................................6

NEIGHBORHOOD ANALYSIS.........................................................17

MARKET ANALYSIS...............................................................22

SITE ANALYSIS.................................................................39

IMPROVEMENT ANALYSIS..........................................................43

ZONING........................................................................48

TAX AND ASSESSMENT DATA.......................................................49

HIGHEST AND BEST USE..........................................................51

APPRAISAL METHODOLOGY.........................................................54

LAND VALUE....................................................................55

COST APPROACH.................................................................58

INSURABLE VALUE...............................................................61

SALES COMPARISON APPROACH.....................................................62

INCOME CAPITALIZATION APPROACH................................................67

RECONCILIATION OF VALUE.......................................................89

ASSUMPTIONS AND LIMITING CONDITIONS...........................................91

ADDENDA
A  Glossary of Terms
B  Photographs
C  Comparable Land Sales
D  Improved Comparable Sales
E  Rent Comparables
F  Operating Data
G  ARGUS Supporting Schedules
H  Legal Description
I  Precis METRO Report - Economy.com, Inc.
J  Engagement Letter
K  Qualifications

- --------------------------------------------------------------------------------
                                       vi
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                  INTRODUCTION
- --------------------------------------------------------------------------------

                                  INTRODUCTION


PROPERTY IDENTIFICATION

The subject's street address is 11680 Great Oaks Way, in Alpharetta, Fulton
County, Georgia.

OWNERSHIP AND PROPERTY HISTORY

Title to the property is currently vested in the name of FSP Royal Ridge Corp,
who acquired title to the property in January 2003 from CK Royal 400, L.L.C., as
improved for $24,250,000 cash, as recorded in Book 34131/Page 536 of the Fulton
County Deed Records. This most recent sale transaction of the subject appears to
have been arm's length and reasonable based upon analysis of the purchase price
relative to similar properties sold at approximately the same time. Other than
that noted herein, there has been no other ownership transfer of the property
during the previous three years. As of the date of value, the subject is not
being marketed for sale.

We note that the building was approximately 90% occupied at the time of the 2003
purchase and remains so as of the current date of value. The seller signed a
master lease on the property which provided for the following; provided for full
rent to the purchaser (FSP Royal Ridge Corp) from the date of closing while the
two existing tenants benefited from free rent until July 2003 including pro rata
reimbursement of all expenses; provided for full net rent at a rate of $12.50
per square foot for the vacant first floor space for a period of two years,
including a 2.5% annual increase with full rent being paid during any free rent
offered to a new tenant, and including pro rata reimbursement of all expenses.
In addition, any time during the two-year period, the seller (CK Royal 400,
L.L.C.) will pay the commissions and tenant improvements related to locating a
tenant(s) for the remaining space, or at the end of the two year period, if the
space remains unleased, will provide the purchaser (FSP Royal Ridge Corp) with a
cash payment equal to a full commission and tenant improvement allowance of $25
per square foot.

RELEVANT DATES

The following table illustrates the various dates associated with the valuation
of the subject property:

       ==============================================
                      RELEVANT DATES
       ----------------------------------------------
       Date of Report:         July 13, 2004
       Date of Inspection:     July 7, 2004
       Date of Value
       As Is:                  July 7, 2004
       ----------------------------------------------
       Compiled by CBRE
       ----------------------------------------------

- --------------------------------------------------------------------------------
                                       1
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                  INTRODUCTION
- --------------------------------------------------------------------------------

DATE OF REPORT

The date of report is the date indicated on the letter of transmittal.

PURPOSE OF THE APPRAISAL

The purpose of this appraisal is to estimate the market value of the subject
property. The current economic definition agreed upon by agencies that regulate
federal financial institutions in the U.S. (and used herein) is as follows:

The most probable price which a property should bring in a competitive and open
market under all conditions requisite to a fair sale, the buyer and seller each
acting prudently and knowledgeably, and assuming the price is not affected by
undue stimulus. Implicit in this definition is the consummation of a sale as of
a specified date and the passing of title from seller to buyer under conditions
whereby:

1.    buyer and seller are typically motivated;

2.    both parties are well informed or well advised, and acting in what they
      consider their own best interests;

3.    a reasonable time is allowed for exposure in the open market;

4.    payment is made in terms of cash in U.S. dollars or in terms of financial
      arrangements comparable thereto; and

5.    the price represents the normal consideration for the property sold
      unaffected by special or creative financing or sales concessions granted
      by anyone associated with the sale. (1)

PREMISE OF THE APPRAISAL

The premise of this appraisal valuation is "as is" on the date of value.

TERMS AND DEFINITIONS

The Glossary of Terms in the Addenda provides definitions for terms that are,
and may be used in this appraisal.

INTENDED USE AND USER OF REPORT

This appraisal is to be used for internal purposes by the client, Franklin
Street Properties and FSP Royal Ridge Corp.

- ----------
(1) Appraisal Standards Board of The Appraisal Foundation, Uniform Standards of
Professional Appraisal Practice, 2003 ed. (Washington, DC: The Appraisal
Foundation, 2003), 219; Appraisal Institute, The Dictionary of Real Estate
Appraisal, 4th ed. (Chicago: Appraisal Institute, 2002), 177-178. This
definition is also compatible with the OTS, OCC, RTC, FDIC, FRS and NCUA
definitions of market value.

- --------------------------------------------------------------------------------
                                       2
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                  INTRODUCTION
- --------------------------------------------------------------------------------

PROPERTY RIGHTS APPRAISED

The interest appraised represents the leased fee estate.

SCOPE OF WORK

The scope of the assignment relates to the extent and manner in which research
is conducted, data is gathered and analysis is applied, all based upon the
purpose of the appraisal and its intended use, as previously outlined.

CBRE completed the following steps for this assignment:

1.    physically identified and inspected both the interior and exterior of the
      subject property, as well as its surrounding environs; identified and
      considered those characteristics that may have a legal, economic or
      physical impact on the subject;

2.    physically inspected the micro and/or macro market environments with
      respect to physical and economic factors relevant to the valuation
      process; expanded this knowledge through interviews with regional and/or
      local market participants, available published data and other various
      resources;

3.    conducted regional and/or local research with respect to applicable tax
      data, zoning requirements, flood zone status, demographics, income and
      expense data, and comparable listing, sale and rental information;

4.    analyzed the data gathered through the use of appropriate and accepted
      appraisal methodology to arrive at a probable value indication via each
      applicable approach to value;

5.    correlated and reconciled the results into a reasonable and defensible
      value conclusion, as defined herein; and

6.    estimated a reasonable exposure time and marketing time associated with
      the value estimate presented.

To develop the opinion of value, CBRE performed a Complete Appraisal as defined
by the Uniform Standards of Professional Appraisal Practice (USPAP). This means
that no departures from Standard 1 were invoked. In this Complete Appraisal,
CBRE used all appropriate approaches to value. Furthermore, the value conclusion
reflects all known information about the subject, market conditions, and
available data.

This appraisal of the subject has been presented in the form of a Self-Contained
Appraisal Report, which is intended to comply with the reporting requirements
set forth under Standards Rule 2-2(a) of the USPAP. That is, this report
incorporates, to the fullest extent possible, practical explanation of the data,
reasoning and analysis that were used to develop the opinion of value. This
report also includes thorough descriptions of the subject and the market for the
property type.

SPECIAL APPRAISAL INSTRUCTIONS

There have been no special appraisal instructions for this assignment.

- --------------------------------------------------------------------------------
                                       3
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                  INTRODUCTION
- --------------------------------------------------------------------------------

EXPOSURE/MARKETING TIME

Current appraisal guidelines require an estimate of a reasonable time period in
which the subject property could be brought to market and sold. This reasonable
time frame can either be examined historically or prospectively. In a historic
analysis, this is referred to as exposure time. Exposure time always precedes
the date of value, with the underlying premise being the time a property would
have been on the market prior to the date of value, such that it would sell at
its appraised value as of the date of value. On a prospective basis, the term
marketing time is most often used. In reality, exposure and marketing time
overlap to some degree as marketing time estimates are based on an analysis of
historical trends, and effectively represent an extrapolation of exposure time
data. The exposure/marketing time is a function of price, time, and use. It is
not an isolated estimate of time alone. It is different for various types of
real estate and under various market conditions.

A discussion of an appropriate exposure/marketing time estimate for the subject
property is presented in the following sections.

In consideration of these factors, we have analyzed the following:

      o     exposure periods for comparable sales used in this appraisal;

      o     marketing time information from the CB Richard Ellis, Inc. National
            Investor Survey; and

      o     the opinions of market participants.

The following table presents the information derived from these sources.

================================================================================
                   EXPOSURE TIME INFORMATION
- --------------------------------------------------------------------------------
                                                      Exposure Time  (Months)
Investment Type                                           Range       Average
- --------------------------------------------------------------------------------
Suburban Office
  Class A                                              1.5 - 12.0      7.0
  Class B                                              2.5 - 12.0      6.9
  Class C                                              4.0 - 10.5      7.4
Local Market Professionals                             3.0 - 9.0
CBRE Estimate                                          6 Months
- --------------------------------------------------------------------------------
Source: CBRE National Investor Survey
- --------------------------------------------------------------------------------

In general, the improved sales indicate exposure times in the lower to middle
portion of the range indicated by the investor survey. In addition to the sales
and survey data, we have also reviewed the assumptions and conclusions reached
in the Valuation section of this report, particularly the income estimates and
rates of return. Based on these analyses, we have concluded an
exposure/marketing time of 6 months or less would be considered reasonable for
the subject property.

- --------------------------------------------------------------------------------
                                       4
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                  INTRODUCTION
- --------------------------------------------------------------------------------

This exposure/marketing time reflects current economic conditions, current real
estate investment market conditions, the terms and availability of financing for
real estate acquisitions, and property and market-specific factors. It assumes
that the subject property is (or has been) actively and professionally marketed.
The marketing/exposure time would apply to all valuation premises included in
this report.

- --------------------------------------------------------------------------------
                                       5
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                 AREA ANALYSIS
- --------------------------------------------------------------------------------

                                  AREA ANALYSIS


                 [MAP OF ATLANTA METROPOLITAN STATISTICAL AREA]

LOCATION

The subject property is located in the Atlanta metropolitan statistical area
(MSA). The 28-county MSA includes the state capital and the state's largest
city, Atlanta. It should be noted that after the 2000 Census, the U.S. Census
Bureau added eight counties to the defined MSA of Atlanta. Those counties that
were added are Butts, Dawson, Haralson, Heard, Jasper, Lamar, Meriwether, and
Pike.

POPULATION

The following table of population statistics shows changes in population from
the 1990 and 2000 censuses, estimates for the current year, and forward
projections for the MSA. As these data demonstrate, there has been a significant
increase in the area population during the last two decades and that growth is
projected to continue into the foreseeable future.

- --------------------------------------------------------------------------------
                                       6
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                 AREA ANALYSIS
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
=========================================================================================
                              POPULATION OF MSA BY COUNTY
- -----------------------------------------------------------------------------------------
                 1990        2000      Ann.   Percentage    2003         2008       Ann.
County          Census      Census    Growth    of MSA    Estimate    Projection   Growth
- -----------------------------------------------------------------------------------------
<S>           <C>         <C>          <C>        <C>    <C>           <C>          <C>
Barrow           29,721      46,144    4.6%        1%       51,606        60,404    3.4%
Bartow           55,897      76,019    3.0%        2%       82,677        93,354    2.6%
Butts            15,326      19,522    2.3%        0%       21,279        23,989    2.5%
Carroll          71,422      87,268    1.8%        2%       94,604       105,755    2.4%
Cherokee         90,204     141,903    4.8%        3%      160,826       190,894    3.7%
Clayton         182,052     236,517    2.5%        6%      255,859       286,438    2.4%
Cobb            447,745     607,751    3.0%       14%      657,583       738,269    2.5%
Coweta           53,853      89,215    5.5%        2%       98,713       114,655    3.2%
Dawson            9,429      15,999    5.8%        0%       18,125        21,574    3.8%
DeKalb          545,837     665,865    1.8%       15%      697,867       750,776    1.5%
Douglas          71,120      92,174    2.5%        2%       97,536       106,574    1.9%
Fayette          62,415      91,263    3.9%        2%       99,205       112,424    2.7%
Forsyth          44,083      98,407   10.3%        3%      115,815       144,162    4.9%
Fulton          648,951     816,006    2.1%       18%      850,703       910,875    1.4%
Gwinnett        352,910     588,448    5.6%       14%      658,514       773,589    3.5%
Haralson         21,966      25,690    1.4%        1%       27,069        29,223    1.6%
Heard             8,628      11,012    2.3%        0%       11,939        13,393    2.4%
Henry            58,741     119,341    8.6%        3%      140,241       173,864    4.8%
Jasper            8,453      11,426    2.9%        0%       12,358        13,871    2.4%
Lamar            13,038      15,912    1.8%        0%       17,032        18,728    2.0%
Meriwether       22,411      22,534    0.0%        0%       22,931        23,442    0.4%
Newton           41,808      62,001    4.0%        2%       70,426        83,525    3.7%
Paulding         41,611      81,678    8.0%        2%       96,142       119,225    4.8%
Pickens          14,432      22,983    4.9%        1%       26,297        31,519    4.0%
Pike             10,224      13,688    2.8%        0%       14,993        17,033    2.7%
Rockdale         54,091      70,111    2.5%        2%       73,749        79,984    1.7%
Spalding         54,457      58,417    0.6%        1%       59,731        61,763    0.7%
Walton           38,586      60,687    4.8%        1%       68,834        81,756    3.8%
- -----------------------------------------------------------------------------------------
Total MSA     3,069,411   4,247,981    3.2%              4,602,654     5,181,058    2.5%
- -----------------------------------------------------------------------------------------
Source: Claritas, Inc.
- -----------------------------------------------------------------------------------------
</TABLE>

The following list provides comparative metropolitan population gain for the top
10 MSA's plus other selected metropolitan areas in the southeast across the
previous decade. Atlanta has consistently ranked among the top 10.

- --------------------------------------------------------------------------------
                                       7
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                 AREA ANALYSIS
- --------------------------------------------------------------------------------

================================================================================
                POPULATION GROWTH IN SELECTED METROPOLITAN AREAS
- --------------------------------------------------------------------------------
Rank           Metropolitan Statistical Area                      %Gain
- --------------------------------------------------------------------------------
 1             Las Vegas, NV                                       83.3%
 2             McAllen-Edinburg-Mission, TX                        48.5%
 3             Austin-San Marcos, TX                               47.7%
 4             Phoenix-Mesa, AZ                                    45.3%
 5             Atlanta, GA                                         38.9%
 6             Raleigh-Durham-Chapel Hill, NC                      38.9%
 7             Orlando, FL                                         34.3%
 8             W Palm Beach-Boca Raton, FL                         31.0%
 9             Denver-Boulder-Greeley, CO                          30.4%
 10            Colorado Springs, CO                                30.2%
 12            Charlotte-Gastonia, NC                              29.0%
 16            Nashville, TN                                       25.0%
 27            Greensboro-Winston-Salem, NC                        19.2%
 28            Columbia, SC                                        18.4%
 29            Knoxville, TN                                       17.3%
 34            Greenville-Spartanburg, SC                          15.9%
 45            Memphis, Tennessee                                  12.7%
 54            Birmingham, AL                                       9.6%
 58            Charleston-North Charleston, SC                      8.3%
 59            Louisville, KY                                       8.1%
- --------------------------------------------------------------------------------
Population growth for 82 metropolitan areas with total population exceeding
500,000, ranked by percent change, based on total population estimates for 1990
to 2000.
- --------------------------------------------------------------------------------
Source: US Census Bureau; Compiled by CB Richard Ellis
- --------------------------------------------------------------------------------

The overall percentage gain for all metropolitan markets is 13.8%, representing
the addition of approximately 27.8 million people in metropolitan areas.

HOUSEHOLDS

The following table shows changes in demographic statistics by household based
on the 2000 Census.

- --------------------------------------------------------------------------------
                                       8
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                 AREA ANALYSIS
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
============================================================================================
                               MSA HOUSEHOLD PROFILES BY COUNTY
- --------------------------------------------------------------------------------------------
                            Households                    Housing           Median Income
              -----------------------------------   ------------------   -------------------
                 2000         2003        2008        Owner    Persons     Per         Per
County          Census      Estimate   Projection   Occupied   per HH    Household   Capita
- --------------------------------------------------------------------------------------------
<S>           <C>          <C>         <C>             <C>      <C>       <C>        <C>
Barrow           16,354       18,247      21,266       76%      2.80      $49,885    $20,324
Bartow           27,176       29,576      33,422       76%      2.76      $49,643    $21,449
Butts             6,455        7,215       8,444       77%      2.68      $44,165    $19,516
Carroll          31,568       34,503      39,054       71%      2.65      $42,943    $20,052
Cherokee         49,495       56,197      66,880       84%      2.84      $70,387    $29,487
Clayton          82,243       88,298      97,590       61%      2.86      $47,033    $19,659
Cobb            227,487      245,152     273,326       68%      2.65      $66,148    $31,495
Coweta           31,442       34,846      40,572       78%      2.81      $61,001    $25,676
Dawson            6,069        7,001       8,573       81%      2.58      $54,788    $26,099
DeKalb          249,339      260,073     277,534       59%      2.63      $54,945    $26,848
Douglas          32,822       35,184      39,291       75%      2.75      $55,771    $24,117
Fayette          31,524       34,567      39,746       86%      2.85      $80,722    $33,885
Forsyth          34,565       40,389      49,654       88%      2.85      $79,572    $33,947
Fulton          321,242      335,246     359,511       52%      2.44      $55,321    $34,162
Gwinnett        202,317      224,081     258,698       73%      2.91      $67,601    $27,797
Haralson          9,826       10,421      11,372       75%      2.57      $35,936    $17,849
Heard             4,043        4,412       5,001       78%      2.68      $36,443    $16,467
Henry            41,373       48,865      61,065       85%      2.85      $65,049    $26,257
Jasper            4,175        4,541       5,145       79%      2.70      $44,512    $19,785
Lamar             5,712        6,200       6,972       73%      2.61      $39,350    $17,713
Meriwether        8,248        8,549       8,992       74%      2.63      $36,859    $18,056
Newton           21,997       25,256      30,468       78%      2.75      $51,266    $22,623
Paulding         28,089       33,068      40,997       87%      2.89      $57,514    $21,995
Pickens           8,960       10,392      12,738       82%      2.51      $44,809    $22,042
Pike              4,755        5,248       6,033       82%      2.80      $48,433    $20,275
Rockdale         24,052       25,455      27,887       74%      2.85      $59,061    $24,938
Spalding         21,519       22,223      23,368       63%      2.65      $41,008    $19,213
Walton           21,307       24,252      28,960       77%      2.82      $51,048    $21,773
- --------------------------------------------------------------------------------------------
Total MSA     1,554,154    1,679,457   1,882,559       67%      2.69      $59,395    $28,257
- --------------------------------------------------------------------------------------------
Source: Claritas, Inc.
- --------------------------------------------------------------------------------------------
</TABLE>

EMPLOYMENT

The following chart presents the diversity of Atlanta's economic base. Compared
with employment distribution for the US, Atlanta is less dependent on services
but more dependent on retail trade, with resources being evenly distributed to
other sectors.

- --------------------------------------------------------------------------------
                                       9
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                 AREA ANALYSIS
- --------------------------------------------------------------------------------

        ================================================================
                              EMPLOYMENT BY SECTORS
        ----------------------------------------------------------------

                                   [PIE CHART]

        Services 33%

        Retail Trade 21%

        Manufacturing 11%

        Agriculture, Mining, Construction, Other 8%

        Finance, Insurance, Real Estate 8%

        Transport,/ Utility 7%

        Wholesale Trade 7%

        Government 5%

        ----------------------------------------------------------------
        Source:  Bureau of Economic Analysis
        ----------------------------------------------------------------

Georgia State University's (GSU) Economic Forecasting Center (EFC), in its
quarterly report on the local and regional economy, notes that Georgia's economy
seems to have turned the corner in mid-2003, lagging somewhat the national
trend. Georgia has recovered, returning to net positive job creation in 2003,
following net job losses in 2001 and 2002. The EFC notes that the rate of job
creation has been slower this time than that experienced in the 1990-91
recovery. The data indicate that the jobs being created in Georgia are also
different in composition during this recovery than those created in the 1990-91
recovery. Primarily, jobs are being created in education and health sectors
(which grow with population trends, as opposed to economic cycles), along with
business services, leisure, hospitality, and trade and other services. These
tend to be lower-wage jobs that do not foster a multiplier effect. The jobs that
were created in the 1990's in manufacturing, information, and professional
management services have not reappeared. These jobs are considered most
desirable because they bring substantial purchasing power that in turn creates
jobs in support services.

With particular respect to Atlanta, the EFC notes that poor job growth at the
beginning of 2001 was blamed on the burst of the dot-com bubble. In addition,
growth was further hindered by lower corporate profits plagued by rising energy
costs and increasing expenses for corporations to cover security measures. These
factors, along with other economic concerns, impeded growth in payroll
employment through 2002. For the first half of 2003, the war in Iraq continued
to prevent firms from making significant forward-looking commitments with regard
to capital expenditures and hiring. However, as the third and fourth quarters
are showing strong levels of increase in GDP, fueled by tax reductions,
increases in the stock market, and corresponding rises in consumer confidence,
the level of employment has followed with positive moves. Consequently, the EFC
projects that Atlanta will experience a net gain in employment in 2003, of
32,100 jobs. The employment recovery will strengthen in mid-2004 and employment

- --------------------------------------------------------------------------------
                                       10
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                 AREA ANALYSIS
- --------------------------------------------------------------------------------

is projected to increase by 55,400 jobs for the year, according to the EFC. The
trend will continue improving through 2005, when growth of 57,800 jobs is
forecast. The following table summarizes net changes in employment, according to
the quarterly economic forecast.

<TABLE>
<CAPTION>
=====================================================================================================================
                                            METRO ATLANTA JOB GROWTH
- ---------------------------------------------------------------------------------------------------------------------

                                                   [BAR CHART]

            1994     1995     1996     1997     1998     1999     2000     2001      2002      2003     2004     2005
<S>        <C>      <C>      <C>       <C>     <C>      <C>       <C>      <C>      <C>        <C>      <C>      <C>
Georgia    156.8    136.3    125.0     87.0    126.5    113.7     94.9     (5.8)    (35.4)     28.8     74.1     87.5
Atlanta     97.4     84.1     86.1     55.8     83.8     83.5     56.1      9.8     (16.0)     32.1     55.4     57.8
- ---------------------------------------------------------------------------------------------------------------------
Source: Georgia State University Economic Forecasting Center (November 2003)
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>

The following table shows the historic strength of the local employment market,
comparing the unemployment rate for the metropolitan area to that of the state
and country.

                    =============================================
                              ANNUAL UNEMPLOYMENT RATE
                    ---------------------------------------------
                                  MSA       State     US
                    ---------------------------------------------
                        1995      4.3%      4.9%      5.6%
                        1996      3.8%      4.6%      5.4%
                        1997      3.7%      4.5%      4.9%
                        1998      3.3%      4.2%      4.5%
                        1999      3.1%      4.0%      4.2%
                        2000      2.9%      3.7%      4.0%
                        2001      3.5%      4.0%      4.7%
                        2002      5.3%      5.1%      5.8%
                        2003      4.7%      4.6%      6.0%
                    ---------------------------------------------
                     Source: US Bureau of Labor Statistics
                    ---------------------------------------------

Finally, we note from our own observations that the Atlanta economy has
continued to outperform expectations year after year. While the prospects for
near-term expansion continue to be modest, in long-term projections, the Atlanta
metropolitan area is forecast to remain a national leader in job creation.

- --------------------------------------------------------------------------------
                                       11
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                 AREA ANALYSIS
- --------------------------------------------------------------------------------

The metropolitan area is home to operations for over 700 of the Fortune 1,000 -
24 of the Fortune 1,000 companies are headquartered in the metro area. The
largest corporate employers are listed in the following table.

================================================================================
                           LARGEST CORPORATE EMPLOYERS
- --------------------------------------------------------------------------------
   Company                  Industry              Scope of Operations  Employees
- --------------------------------------------------------------------------------
 1. Delta Air Lines         Transportation        Headquarters          23,400
 2. BellSouth               Telecommunication     Headquarters          20,000
 3. The Home Depot          Retail Merchandiser   Headquarters          10,000
 4. IBM                     Technology            Regional               7,300
 5. AT&T                    Telecommunication     Regional               7,300
 6. SunTrust Banks          Finance               Headquarters           7,200
 7. Cox Enterprises         Media                 Headquarters           5,900
 8. United Parcel Service   Transportation        Headquarters           5,900
 9. Bank of America         Finance               Regional               5,800
10. Kroger                  Retail Merchandiser   Regional                5,700
- --------------------------------------------------------------------------------
Source: Atlanta Business Chronicle Book of Lists, December 2003
- --------------------------------------------------------------------------------

COMMERCIAL PROPERTY PRICE AND RENT TRENDS

With growth in the population and employment, there have been corresponding
steady rises in prices for real estate. The following tables provide information
for various property types, comparing metro Atlanta with national averages.

<TABLE>
<CAPTION>
=========================================================================================
                           AVERAGE SALES PRICE COMPARISON
- -----------------------------------------------------------------------------------------
  Period     CBD Office   Suburban Office   Industrial       Retail        Apartment
(Year/Qtr)  Atlanta   US   Atlanta    US   Atlanta   US   Atlanta   US   Atlanta   US
- -----------------------------------------------------------------------------------------
<S>           <C>    <C>     <C>     <C>     <C>     <C>    <C>    <C>     <C>    <C>
1995 / 4      133    143     112     110     30      34     105    100     60      67
1996 / 4      137    148     125     123     33      36     116    105     67      74
1997 / 4      141    166     145     142     33      39     108    113     72      81
1998 / 4      138    190     142     152     36      42     112    117     77      89
1999 / 4      144    194     153     163     35      43     121    120     86      95
2000 / 4      159    216     170     180     38      45     122    122     85     104
2001 / 4      146    204     156     174     34      44     115    118     81     104
2002 / 4      139    210     151     179     36      44     115    123     81     106
- -----------------------------------------------------------------------------------------
Note: Prices are given in dollars per square foot, rounded, for Class A property sectors.
Source: CB Richard Ellis/National Real Estate Index Market Monitor, 415 733 5300
- -----------------------------------------------------------------------------------------
</TABLE>

- --------------------------------------------------------------------------------
                                       12
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                 AREA ANALYSIS
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
=========================================================================================
                          AVERAGE RENTAL RATE COMPARISON
- -----------------------------------------------------------------------------------------
  Period     CBD Office    Suburban Office   Industrial       Retail        Apartment
(Year/Qtr)  Atlanta   US    Atlanta   US   Atlanta   US   Atlanta   US   Atlanta   US
- -----------------------------------------------------------------------------------------
<S>          <C>     <C>    <C>     <C>     <C>     <C>    <C>     <C>    <C>      <C>
1995 / 4     23.57   22.49  19.27   19.30   3.80    4.69   14.99   14.72   9.94   11.10
1996 / 4     23.42   23.97  22.36   21.06   4.01    4.95   15.17   15.42  10.06   11.71
1997 / 4     24.58   27.12  23.75   23.19   4.09    5.14   15.50   16.33  10.24   12.21
1998 / 4     25.46   29.72  23.23   24.28   4.07    5.33   16.11   16.91  10.47   13.02
1999 / 4     25.90   31.50  22.75   24.89   4.28    5.57   17.00   17.31  10.62   13.58
2000 / 4     27.00   35.51  23.12   28.17   4.42    5.80   17.07   17.80  11.33   14.43
2001 / 4     25.80   32.63  21.36   25.47   4.26    5.61   16.60   17.49  10.94   14.54
2002 / 4     24.15   30.04  19.61   23.46   3.93    5.37   16.55   17.47  10.13   14.12
- -----------------------------------------------------------------------------------------
Note: Rents are presented in dollars per square foot for Class A properties. Office,
industrial, and apartment properties are given on an effective gross basis; retail
properties, on a triple net basis.
Source: CB Richard Ellis/National Real Estate Index Market Monitor, 415 733 5300
- -----------------------------------------------------------------------------------------

<CAPTION>
=========================================================================================
                         CAPITALIZATION RATE COMPARISON
- -----------------------------------------------------------------------------------------
  Period     CBD Office    Suburban Office   Industrial       Retail        Apartment
(Year/Qtr)  Atlanta   US    Atlanta   US   Atlanta   US   Atlanta   US   Atlanta   US
- -----------------------------------------------------------------------------------------
<S>          <C>     <C>      <C>    <C>     <C>    <C>     <C>    <C>     <C>     <C>
1995 / 4     8.3%    9.0%     9.3%   9.6%    9.1%   9.3%    8.6%   9.4%    8.3%    9.1%
1996 / 4     8.7%    9.0%     9.2%   9.2%    8.8%   9.2%    8.3%   9.3%    7.8%    8.9%
1997 / 4     8.9%    8.9%     9.2%   9.1%    9.1%   9.0%    9.4%   9.2%    8.5%    8.9%
1998 / 4     9.5%    8.6%     9.7%   9.0%    8.9%   8.9%    9.1%   9.1%    8.4%    8.8%
1999 / 4     9.2%    8.9%     8.9%   8.7%    9.3%   9.1%    8.7%   9.0%    8.1%    8.7%
2000 / 4     9.0%    8.7%     8.1%   8.6%    8.5%   9.0%    9.1%   9.1%    7.6%    8.4%
2001 / 4     9.6%    8.9%     8.5%   8.6%    9.5%   9.1%    9.4%   9.3%    8.3%    8.5%
2002 / 4     9.8%    7.6%     8.0%   7.4%    8.6%   8.7%    9.5%   8.9%    7.6%    7.9%
- -----------------------------------------------------------------------------------------
Note: Cap rates are determined from actual net operating income either from actual
sales or from representative prototypes for Class A property sectors.
Source: CB Richard Ellis/National Real Estate Index Market Monitor, 415 733 5300
- -----------------------------------------------------------------------------------------
</TABLE>

RESIDENTIAL HOME COSTS

The following chart compares the median home price for Atlanta and the nation.

- --------------------------------------------------------------------------------
                                       13
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                 AREA ANALYSIS
- --------------------------------------------------------------------------------

================================================================================
                         SINGLE FAMILY MEDIAN HOME PRICE
- --------------------------------------------------------------------------------

                                   [BAR CHART]

                  Atlanta               US
      1997        $108,400          $121,800
      1998        $115,400          $128,400
      1999        $123,700          $133,300
      2000        $131,200          $139,100
      2001        $138,800          $147,500
      2002        $146,500          $158,300
- --------------------------------------------------------------------------------
Source: National Association of Realtors
- --------------------------------------------------------------------------------

COST OF LIVING

The Cost of Living Index, published by the American Chamber of Commerce
Researchers Association, measures relative price levels for consumer goods and
services in participating areas. The average of all participating municipalities
equals 100, and the Atlanta index is read as a percentage against that national
measure, shown along with other Southeastern metropolitan areas in the table
below.

<TABLE>
<CAPTION>
========================================================================================
                                    COST OF LIVING
- ----------------------------------------------------------------------------------------
Location                    Total  Grocery   Housing  Utilities   Trans   Health   Misc.
- ----------------------------------------------------------------------------------------
<S>                         <C>     <C>       <C>       <C>       <C>     <C>     <C>
Memphis                      87.1    90.9      78.3      78.5      94.1    90.2    92.3
Knoxville                    89.1    95.4      78.3      91.8      86.1    88.1    95.7
Augusta-Aiken                91.0   104.4      71.9      91.2      99.8    94.3    97.5
Winston-Salem                91.7    94.7      85.9      91.9      92.3    85.6    95.7
Nashville-Franklin           91.7    99.1      81.7      80.4      93.3    82.9   100.3
Greenville                   94.7    96.7      78.3     103.7     100.8    91.9   104.0
Columbia                     95.1    99.2      85.4     114.7      88.8    89.7    99.2
Charlotte                    95.7    94.9      88.5      91.3     102.7    95.5   101.2
Birmingham                   97.6   107.1      84.4     102.8      97.4    87.1   104.7
Atlanta                      98.1   101.9      94.5      92.1     101.8   106.3    98.3
Charleston-N Charleston     100.7    98.9     100.9      96.8      99.3    97.7   103.3
Raleigh                     101.0   108.0      96.8      99.5      97.4   102.0   102.4
- ----------------------------------------------------------------------------------------
Source: ACCRA Cost of Living Index
- ----------------------------------------------------------------------------------------
</TABLE>

- --------------------------------------------------------------------------------
                                       14
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                 AREA ANALYSIS
- --------------------------------------------------------------------------------

RETAIL SALES

Atlanta has shown consistent, strong growth in retail sales, ranking in the top
10 national markets for retail sales over the past five years. Annual sales
volumes for the metropolitan area, prepared by Claritas are depicted in the
following chart. Note that data reported prior to 1999 are not comparable with
data in 2000 and following; the adoption of NAFTA required replacement of SIC
codes with NAICS codes.

================================================================================
                               RETAIL SALES GROWTH
- --------------------------------------------------------------------------------

                                   [BAR CHART]

       1995         $34.9
       1996         $37.6
       1997         $20.2
       1998         $43.7

       2000         $59.6
       2001         $64.6
       2002         $64.7
- --------------------------------------------------------------------------------
Numbers shown are $billion.
Source: Sales & Marketing Management (to 1998) and Claritas, Inc.
(2000 and following)
- --------------------------------------------------------------------------------

Based on population, current spending trends and total sales, and other
demographic factors, Claritas projects that total retail sales for the metro
area will reach $88.8 billion by the year 2007, a growth rate of 7.5% per annum.

TRANSPORTATION

Atlanta began in the nineteenth century as a railway and manufacturing center
and continues to maintain and improve its transportation systems, enhancing a
primary reason for the area's economic growth and development.

Air transportation continues to recover at Hartsfield-Jackson Atlanta
International Airport, which remains the world's busiest passenger airport.
Surpassing Chicago O'Hare (66.56 million passengers) and Los Angeles
International (56.22 million passengers), Atlanta Hartsfield-Jackson has
maintained its top ranking in measures of passenger traffic and aircraft
movement since 1998. More than 80% of the US population is reachable by air
within two hours of Atlanta.

- --------------------------------------------------------------------------------
                                       15
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                 AREA ANALYSIS
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
===================================================================================
                 ATLANTA HARTSFIELD-JACKSON INTERNATIONAL AIRPORT
- -----------------------------------------------------------------------------------
Activity                         1997     1998     1999     2000     2001     2002
- -----------------------------------------------------------------------------------
<S>                            <C>      <C>      <C>      <C>      <C>      <C>
Passengers (million)            68.21    73.47    78.09    80.16    75.86    76.88
Cargo (metric tons)            864,474  907,208  882,994  894,471  735,796  734,083
Movements (landing/takeoff)    794,447  846,881  909,911  915,454  890,494  889,966
- -----------------------------------------------------------------------------------
Source: Airports Council International
- -----------------------------------------------------------------------------------
</TABLE>

The airport has begun a 10-year facility expansion that will add a fifth runway
by June 2006. The new runway, which will measure 9,000 feet in length, is
projected to decrease the present average delay of 9:00 minutes per flight to
6:12 per flight. Additional enhancements will include a new rental car facility,
international terminal, control tower, and possibly third major terminal.

The economic impact of Hartsfield-Jackson International Airport has been
estimated at $16 billion annually for the metro Atlanta economy.

Seven interstates serve metro Atlanta, including Interstates 75, 85, and 20,
which run through the city, varying in width from four to fourteen lanes. In
addition, a number of US and state highways, including Georgia Highway 400 (a
primary north-south corridor, extending from the central business district
northward), provide excellent regional access. Georgia has a historically strong
commitment to maintaining its regional roads, and major interstate highway
construction continues to meet projected growth and future needs.

The Metropolitan Atlanta Rapid Transit Authority (MARTA) provides a 37-mile
rapid rail transit system and extensive connector bus routes. Other available
sources of commercially available ground transportation include Amtrak and
Greyhound.

CONCLUSION

The Atlanta metropolitan region has played a major role in the growth of Georgia
and the southeastern United States. A strong economic base has been shown in
steady increases in population, in the diversity of the work force, and in job
growth. Atlanta continues to gain new jobs faster and to maintain unemployment
levels lower than most areas of the US. These demographic and employment trends
indicate the primary drive for housing demand, retail sales, and commercial
construction, and Atlanta continues to experience an exceptionally high level of
economic prosperity. Atlanta has experienced tremendous growth in recent decades
and taken its place as an international city. Despite modest slowing indicated
by certain economic indicators, Atlanta's fundamentals remain strong and a
pattern of stable growth should continue well into the foreseeable future.

- --------------------------------------------------------------------------------
                                       16
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                         NEIGHBORHOOD ANALYSIS
- --------------------------------------------------------------------------------

                              NEIGHBORHOOD ANALYSIS

                         [MAP OF THE CITY OF ALPHARETTA]

LOCATION

The subject and its neighborhood are located in the city of Alpharetta and is
considered a suburban location. The city of Alpharetta is located in north
Fulton County, about 18 miles north of the Atlanta Central Business District.

BOUNDARIES

The neighborhood boundaries are detailed as follows:

- --------------------------------------------------------------------------------
                                       17
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                         NEIGHBORHOOD ANALYSIS
- --------------------------------------------------------------------------------

        North:          Fulton / Forsyth County Line
        South:          Mansell Road
        East:           Jones Bridge Road
        West:           Cumming Highway / Georgia Highway 9

LAND USE

Land uses within the subject neighborhood consist of a harmonious mixture of
residential and office development, with a small representation of commercial
and light industrial development. The immediate area surrounding the subject is
a newer area of development, consisting of the various uses as noted, over 60%
of which was developed since 1989. The majority of the single-family residential
development within a three-mile radius of the subject may be described as tract
homes in the $200,000 and above price range. The median home value within a
one-mile radius is approximately $225,000 while increasing to $260,000 within a
five-mile radius.

GROWTH PATTERNS

Growth patterns have occurred primarily along major thoroughfares such as North
Point Parkway, Old Milton Parkway (State Bridge Road), Windward Parkway farther
to the north, and Georgia Highway 9 to the west. The subject area including the
neighborhood has been one of the fastest growing areas of metropolitan Atlanta
during the past decade. With almost no Class A office space in 1992 the market
now contains over 10 million square feet. As well, retail development was
concentrated along Holcomb Bridge Road and Alpharetta Highway and consisted of
mostly strip retail, some neighborhood centers and only a couple of larger
community centers. However, with the growth of the area the major impetus for
increased development was North Point Mall. The development of the mall brought
significant supporting development. Being an area of above average household
income developers thus sought to take advantage of the retail potential and the
possibility business owners and major corporations would be attracted to the
area to reduce commuting time.

Thus development of almost every kind was rapidly constructed in the 1990's
including many new single-family developments, most being mastered planned
communities, as well as exclusive country club developments. The area also
attracted significant new multi-family developments virtually all being Class A
properties.

The residential development in the subject neighborhood is primarily oriented to
single-family homes, but the neighborhood does contain a minimum level of
apartment buildings. The single-family homes consist mostly of subdivisions that
were established in the late 1980's to the early 1990's. There are several
prestigious country clubs in the area including Country Club of the South,
Willow Springs Country Club, and St. Ives Country Club, all of which are located
within a three- to four-mile radius of the subject property. These properties

- --------------------------------------------------------------------------------
                                       18
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                         NEIGHBORHOOD ANALYSIS
- --------------------------------------------------------------------------------

are generally oriented to upper-middle and upper income groups. The multi-family
sector is a much smaller portion of the residential component of the
neighborhood. The multi-family uses consist almost exclusively of garden
apartment complexes that were constructed in the late 1980's. There have,
however, been several new apartment developments to occur in the North Fulton
area in recent years. These developments, however, are generally located outside
of the Windward development and to the south of Windward Parkway. Furthermore,
several additional apartment projects are planned for the North Fulton County
area.

The neighborhood has some industrial development, most being better quality
business park type development, but with some light distribution and
warehousing. This type development is mostly located in the extreme north and
south sections of the neighborhood. Otherwise the dominant development within
the neighborhood is high efficiency Class A and B office developments, some
stand alone, while others are part of planned parks such as Royal 400, Preston
Ridge, Sanctuary Park, Deer Park, etc. These parks vary in size, most containing
several buildings. The largest of these developments is Windward, a large
master-planned development.

The Windward development is a 3,400-acre self-contained planned community
composed of a mix of residential and commercial land uses conceived by Mobile
Land. The development is approximately 15 minutes north of Interstate-285 off of
Exit 11 on Georgia 400, just south of the Fulton-Forsyth county line. The master
plan includes an expansive business community divided between three centers for
a wide range of uses, a variety of distinct residential neighborhoods, and
various important community infrastructure including the Lake Windward
Elementary School, a fire station, and various recreational facilities.

The business community portion of Windward contains approximately 1,000 acres
and is located in the north and west sides of the Windward development.
Commercial office and industrial buildings are less than 10 years old, and
generally include multi-tenant buildings as well as free-standing facilities.
AT&T, UPS, Equifax, and Holiday Inn Worldwide are high-visibility resident
tenants, holding nearly 3 million square feet and employing a majority of
Windward's total workforce of 7,000 persons.

Fuji Development USA's The Golf Club of Georgia, a private membership 36-acre
golf course, and the various residential communities, take advantage of the
195-acre Lake Windward and the surrounding woods. In addition to the golf club,
the private Windward Lake Club provides sixteen tennis courts, an Olympic sized
swimming pool, docking and boat storage, and other recreational facilities.
Residential subdivisions vary in architectural style, quality, density, and
price. Approximately 1,400 households are established in the community, with
construction proceeding at a rapid pace. This large development was a major
impetus to and driver behind similar development in North Fulton.

- --------------------------------------------------------------------------------
                                       19
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                         NEIGHBORHOOD ANALYSIS
- --------------------------------------------------------------------------------

Outside of the Windward development, commercial construction has been focused
along major traffic arteries and consists of shopping centers, restaurants,
branch banks, and numerous other commercial uses. Most of the commercial
development was constructed in the 1990's, with a good level of new development
still occurring. These developments include grocery anchored neighborhood and
community shopping centers and numerous other complementary uses.

The most important commercial development in the area is the North Point
Regional Mall, serving the subject neighborhood since 1992. As is typical around
a regional mall, the surrounding developments are expected to be intense and
consist of numerous complementary commercial uses. The area surrounding the mall
is currently expanding at a rapid pace, with more development anticipated in the
near-term future.

There are also numerous corporate headquarters within a five-mile radius of the
subject property. These employers include AT&T, Comtel, Digital Communications,
Digital Equipment Corporation, Siemens, GE Capital, Ciba Vision, and State Farm
Insurance.

ACCESS

Accessibility to and throughout the neighborhood in general, and the subject
property in particular, is considered very good. Georgia Highway 400, a six to
eight lane controlled access highway, is the primary north-south feeder linking
the neighborhood to urban Atlanta employment, recreation, and higher education
centers. Old Milton Parkway/State Bridge Road/Highway 120, extends in a general
east-west direction connecting the neighborhood to Alpharetta commerce and
government facilities. Both of these highways provide convenient accessibility
throughout the metropolitan area. Haynes Bridge Road and Kimball Bridge Road
approximately parallel Old Milton Parkway to the south. North Point Parkway is a
secondary roadway paralleling Georgia Highway 400 along its east side from
Mansell Road to Windward Parkway. Other minor roadways extend in various
directions. Currently, at the intersection of Windward Parkway and Georgia
Highway 400 a major road project will result in improved entry/exit access,
including new ramps and a wider bridge.

The area also features a significant level of primary and secondary traffic
arteries extending in all directions further enhancing the overall
accessibility.

DEMOGRAPHICS

Selected neighborhood demographics in a one-, three-, and five-mile radius from
the subject are shown in the following table:

- --------------------------------------------------------------------------------
                                       20
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                         NEIGHBORHOOD ANALYSIS
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
=============================================================================================
                               SELECTED NEIGHBORHOOD DEMOGRAPHICS
- ---------------------------------------------------------------------------------------------
11680 GREAT OAKS WAY                            Radius 1.0       Radius 3.0      Radius 5.0
ALPHARETTA, GA 30022-2457                          Mile             Mile            Mile
- ---------------------------------------------------------------------------------------------
<S>                                               <C>             <C>             <C>
Population
  2008 Pop                                          3,199           66,440         192,952
  2003 Pop                                          2,621           56,171         165,368
  2000 Pop                                          2,262           49,817         148,423
  1990 Pop                                            903           21,586          68,602
  Growth 2003 - 2008                               22.05%           18.28%          16.68%
  Growth 2000 - 2003                               15.87%           12.75%          11.42%
  Growth 1990 - 2000                              150.50%          130.78%         116.35%
Households
  2008 HHs                                          1,380           25,040          69,468
  2003 HHs                                          1,142           21,304          60,123
  2000 HHs                                            992           18,961          54,339
  1990 HHs                                            396            8,215          26,306
  Growth 2003 - 2008                               20.84%           17.54%          15.54%
  Growth 2000 - 2003                               15.12%           12.36%          10.64%
  Growth 1990 - 2000                              150.51%          130.81%         106.57%
Income
  2003 Median Household Income                    $70,000          $92,586         $94,258
  2003 Avg HH Inc                                 $88,689         $119,505        $121,310
  2003 Per Capita Inc                             $38,738          $45,480         $44,223
Age 25+ College Graduates - 2003                      905           20,081          55,871
Age 25+ Percent College Graduates - 2003            51.0%            55.1%           52.5%
- ---------------------------------------------------------------------------------------------
Source: Claritas
- ---------------------------------------------------------------------------------------------
</TABLE>

CONCLUSION

The neighborhood continues to grow and is expected to continue this pattern for
the foreseeable future.

The subject property is a Class A office building that appears to conform well
to surrounding neighborhood infrastructure and support services. Recent growth
in the neighborhood has included all types of development, commercial/retail,
residential, and office, though office development has slowed significantly
compared to the other sectors. The growth of the residential base and the above
average income demographic in the area will continue to support the local area
development.

- --------------------------------------------------------------------------------
                                       21
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                               MARKET ANALYSIS
- --------------------------------------------------------------------------------

                                 MARKET ANALYSIS

The market analysis forms a basis for assessing market area boundaries, supply
and demand factors, and indications of financial feasibility. The primary data
source utilized for this analysis is The CoStar Office Report: The Atlanta
Office Market, Fourth Quarter 2003, published by CoStar Advisory Services Group,
Inc. Within the publication, CoStar Group divides the metropolitan office market
into 10 submarkets. The subject is located in the North Fulton / Forsyth
submarket.

The subject is located in the Alpharetta market and is considered a Class A
mid-rise office building. According to the Institute of Real Estate Management
(via Income/Expense Analysis: Office Buildings 2003), the following office
property definitions may be applicable towards the subject property:

      General: Multi-tenant building. Includes buildings with owner-occupied
      space if there are other tenants in the building.

THE METROPOLITAN ATLANTA OFFICE MARKET

Since 1996, Atlanta recorded ever-increasing levels of employment growth and
absorption of office inventory, coupled with strong levels of new construction.
This changed with the economic recession that began gathering force in mid-2000
and has continued to impact the office market negatively.

Atlanta's vacancy rate has continued to rise over the past two years to levels
not seen since the early 1990's, due mainly to the slowing of the national
economy and job reductions which were felt throughout the region, but also to
some additions of new space. The workforce reductions and the dissolution of
some businesses have resulted in the return of space to the market as sublease
inventory. The resulting competition due to decreased demand has placed upward
pressure on the vacancy rate and downward pressure on rates.

Quarterly vacancy rates over the recent past are summarized for metro Atlanta in
the following table.

================================================================================
                             QUARTERLY VACANCY RATES
- --------------------------------------------------------------------------------
                                2000      2001      2002      2003       2004
- --------------------------------------------------------------------------------
Period End First Quarter        11.4%     13.2%     19.0%     21.7%     22.40%
Period End Second Quarter        9.3%     13.9%     18.7%     21.2%      N/A
Period End Third Quarter        11.6%     15.8%     19.7%     21.6%      N/A
Period End Fourth Quarter       11.6%     17.7%     20.7%     21.7%      N/A
- --------------------------------------------------------------------------------
Source: CoStar Group, Inc.
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                                       22
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                               MARKET ANALYSIS
- --------------------------------------------------------------------------------

MARKET SUMMARY

The Atlanta office market ended the first quarter 2004 with a vacancy rate of
22.4%. This vacancy rate represented a 0.7 percentage point increase over the
previous quarter, when the rate was 21.7%. This increase in vacancy rate
occurred in a quarter where Atlanta saw (977,138) square feet in negative net
absorption and 83,000 square feet in deliveries. Quoted rental rates ended first
quarter 2004 at $18.57 per square foot down from $18.79 per square foot in the
fourth quarter 2003. At the end of first quarter 2004, there was 1,474,058
square feet under construction in the Atlanta office market.

Class A projects in Atlanta reported a first quarter 2004 vacancy rate of 24.7%,
up from the 25.1% reported at the end of fourth quarter 2003. Net absorption
within the Class A sector totaled negative 117,938 square feet for the quarter,
and there were no new deliveries. Quoted rental rates for available space within
the Class A sector averaged $20.80 at the end of the quarter, down from $20.82
in the fourth quarter 2003. There was 1,213,064 square feet under construction
at the end of first quarter 2004.

Class B projects reported negative net absorption of (764,898) square feet and
deliveries of 83,000 square feet in the first quarter of 2004. As a result, the
Atlanta Class B vacancy rate increased to 19.9% (from 18.5% at the end of the
fourth quarter 2003). Atlanta Class B quoted rental rates averaged $16.02, and
there was a total of 260,994 square feet under construction at the end of first
quarter 2004.

Atlanta Class C projects recorded 94,302 square feet of negative net absorption
in first quarter 2004. The Class C vacancy rate was 20.6% at the end of first
quarter 2004, and average quoted rental rates were $13.78 per square foot.

MARKET TRENDS

During the late 1990's, the absorption and deliveries were in relative
equilibrium. Strong levels of job creation supported new construction. Not until
the third quarter 2001, did Atlanta begin to experience some level of negative
net absorption. A historic perspective relative to inventory, occupancy, and
absorption is provided in the following table:

<TABLE>
<CAPTION>
====================================================================================================================================
                                       METROPOLITAN ATLANTA OFFICE MARKET - FIRST QUARTER 2004
                                                HISTORICAL SUMMARY - CLASS A, B, & C
- ------------------------------------------------------------------------------------------------------------------------------------
                                                         Net Absorp.  Buildings                Buildings        SF       Avg Quoted
Period    Buildings    NRA (SF)    Vacant SF   Vacancy      (SF)      Delivered  SF Delivered  U/Construc.  U/Construc.  Rate ($/SF)
- ------------------------------------------------------------------------------------------------------------------------------------
<S>         <C>      <C>          <C>            <C>    <C>              <C>     <C>              <C>        <C>           <C>
1-Q 2004    1,831    161,806,717  36,219,756     22.4%    (977,138)       3         83,000        14         1,474,058     $18.57
1-Q 2003    1,828    161,723,717  35,159,618     21.7%      96,165       21      2,510,172        16         1,541,058     $18.74
1-Q 2002    1,808    159,242,116  32,774,182     20.6%  (2,589,396)      24      2,747,824        20         2,476,172     $19.50
1-Q 2003    1,784    156,494,292  27,436,962     17.5%   2,711,341       72      7,437,450        28         4,066,773     $20.45
- ------------------------------------------------------------------------------------------------------------------------------------
Source: CoStar Group, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

- --------------------------------------------------------------------------------
                                       23
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                               MARKET ANALYSIS
- --------------------------------------------------------------------------------

The overall vacancy rate in the Atlanta office market ended first quarter 2004
at 22.4%, up from the previous quarter, when it was 21.7%, the same level as
first quarter 2003. At the end of the first quarter 2004 there was 36,219,756
square feet of vacant space in the Atlanta office market. In the fourth quarter
of 2003, 34,762580 square feet lay vacant, and in the first quarter of 2003,
35,159,618 square feet was vacant. The 1,060,138 square foot increase in vacant
square footage from first quarter 2003 to first quarter 2004 represents a 3%
increase in vacant space

Detailed market trends over the past year are provided by property class in the
following table.

- --------------------------------------------------------------------------------
                                       24
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                               MARKET ANALYSIS
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
============================================================================================================
                              THE METROPOLITAN ATLANTA SPECULATIVE OFFICE MARKET
- ------------------------------------------------------------------------------------------------------------
                                              FIRST QUARTER 2004
- ------------------------------------------------------------------------------------------------------------
<S>                             <C>             <C>             <C>              <C>              <C>
Class A Market                  1st Q 2003      2nd Q 2003      3rd Q 2003       4th Q 2003       1st Q 2004
- ------------------------------------------------------------------------------------------------------------
Number of Buildings                    366             368             370              372              371
Existing Sq. Ft                 80,795,761      80,898,161      81,594,161       81,630,161       82,509,537
Projects Delivered                       6               2               2                2                0
Delivered Sq. Ft                 1,381,882         102,400         696,000           36,000                0
Projects Under Construction              6               5               3                3                3
Under Construction Sq. Ft        1,316,400       1,232,000         536,000        1,250,000        1,213,064
Net Absorption                     (74,961)        556,276           3,490           37,916         (117,938)
Vacant Sq. Ft. (Total)          20,232,831      19,778,955      20,471,465       20,469,549       20,375,145
Vacancy Rate                         25.0%           24.4%            25.1%           25.1%            24.7%
Quoted Rate per Sq. Ft              $21.99          $21.45          $21.09           $20.97           $20.82
- ------------------------------------------------------------------------------------------------------------
Class B Market                  1st Q 2003      2nd Q 2003      3rd Q 2003       4th Q 2003       1st Q 2004
- ------------------------------------------------------------------------------------------------------------
Number of Projects                   1,196           1,199           1,200            1,199            1,216
Existing Sq. Ft                 69,621,193      69,696,193      69,746,193       69,717,622       70,426,324
Projects Delivered                       2               3               1                0                2
Delivered Sq. Ft                    88,000          75,000          50,000                0           83,000
Projects Under Construction              6               5               4               10                6
Under Construction Sq. Ft          209,000         195,200         145,200          482,857          260,994
Net Absorption                    (481,118)        290,928         (21,433)        (253,979)        (764,898)
Vacant Sq. Ft                   12,845,932      12,630,004      12,701,437       12,926,845       14,020,613
Vacancy Rate                         18.5%           18.1%           18.2%            18.5%            19.9%
Quoted Rate per Sq. Ft              $16.70          $16.45          $16.29           $16.27            16.02
- ------------------------------------------------------------------------------------------------------------
Class C Market                  1st Q 2003      2nd Q 2003      3rd Q 2003       4th Q 2003       1st Q 2004
- ------------------------------------------------------------------------------------------------------------
Number of Projects                     240             240             240              241              244
Existing Sq. Ft                  8,559,337       8,559,337       8,559,337        8,559,337        8,870,856
Projects Delivered                       0               0               0                0                0
Delivered Sq. Ft                         0               0               0                0                0
Projects Under Construction              0               0               0                0                0
Under Construction Sq. Ft                0               0               0                0                0
Net Absorption                      61,554           7,278             324           72,040          (94,302)
Vacant Sq. Ft                    1,376,672       1,369,394       1,369,070        1,366,186        1,823,998
Vacancy Rate                          16.1%           16.0%           16.0%            16.0%            20.6%
Quoted Rate per Sq. Ft              $14.66          $14.78          $14.17           $13.57           $13.78
- ------------------------------------------------------------------------------------------------------------
Total Market                    1st Q 2003      2nd Q 2003      3rd Q 2003       4th Q 2003       1st Q 2004
- ------------------------------------------------------------------------------------------------------------
Number of Projects                   1,802           1,807           1,810            1,812            1,831
Existing Sq. Ft                158,976,291     159,153,691     159,899,691      159,907,120      161,806,717
Projects Delivered                       8               5               3                2                2
Delivered Sq. Ft                 1,469,882         177,400         746,000           36,000           83,000
Projects Under Construction             12              10               7               13                9
Under Construction Sq. Ft        1,525,400       1,427,200         681,200        1,732,857        1,474,058
Net Absorption                    (494,525)        854,482         (17,619)        (144,023)        (977,138)
Vacant Sq. Ft                   34,455,435      33,778,353      34,541,972       34,762,580       36,219,756
Vacancy Rate                          21.7%           21.2%           21.6%            21.7%            22.4%
Quoted Rate per Sq. Ft              $19.65          $19.32          $18.92           $18.79           $18.57
- ------------------------------------------------------------------------------------------------------------
Source: CoStar Group, Inc.
- ------------------------------------------------------------------------------------------------------------
</TABLE>

- --------------------------------------------------------------------------------
                                       25
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                               MARKET ANALYSIS
- --------------------------------------------------------------------------------

Occupancy

The overall vacancy rate in the Atlanta office market ended fourth quarter 2003
at 21.7%, representing an increase from 20.6% one year previous indicating 2003
continued to experience a difficult operating environment. The overall vacancy
continued to increase throughout the first quarter 2004, ending at 22.4%.

Of the total vacancy, slightly over 15% is space available for sublet. As shown
in the following table, the percentage of vacant space available on a sublet
basis has continued to grow, contributing to the total vacancy rate in the
market. However, on a square foot basis the level has actually been declining
since first quarter 2001.

<TABLE>
<CAPTION>
=========================================================================================================================
                                 METROPOLITAN ATLANTA OFFICE MARKET - FIRST QUARTER 2004
                                      HISTORICAL VACANCY ANALYSIS - CLASS A, B, & C
- -------------------------------------------------------------------------------------------------------------------------
             Existing                           Vacant Space                             Occupied       Total      Quoted
Period      Inventory      Direct      %        Sublet      %       Total         %        Space      Occupancy     Rates
- -------------------------------------------------------------------------------------------------------------------------
<S>        <C>           <C>         <C>      <C>         <C>     <C>           <C>      <C>            <C>        <C>
2004 1q    161,806,717   30,745,097  19.0%    5,474,659   3.4%    36,219,756    22.4%    125,586,961    77.6%      $18.57
2003 4q    159,907,120   29,426,561  18.4%    5,336,019   3.3%    34,762,580    21.7%    125,144,540    78.3%      $18.79
2003 3q    158,500,294   28,862,474  18.2%    5,408,510   3.4%    34,270,984    21.6%    124,229,310    78.4%      $19.02
2003 2q    157,754,294   28,341,449  18.0%    5,171,377   3.3%    33,512,826    21.2%    124,241,468    78.8%      $19.39
2003 1q    157,576,894   28,189,665  17.9%    6,074,180   3.9%    34,263,845    21.7%    123,313,049    78.3%      $19.69
2002 4q    156,107,515   26,070,502  16.7%    6,172,996   4.0%    32,243,498    20.7%    123,864,017    79.3%      $19.51
2002 3q    155,834,015   24,675,565  15.8%    6,027,224   3.9%    30,702,789    19.7%    125,131,226    80.3%      $19.93
2002 2q    155,337,525   22,994,763  14.8%    6,083,262   3.9%    29,078,025    18.7%    126,259,500    81.3%      $19.93
2002 1q    155,099,511   23,226,075  15.0%    6,254,457   4.0%    29,480,532    19.0%    125,618,979    81.0%      $20.15
2001 4q    153,260,692   21,642,725  14.1%    5,554,122   3.6%    27,196,847    17.7%    126,063,845    82.3%      $20.47
2001 3q    151,053,611   18,967,708  12.6%    4,948,955   3.3%    23,916,663    15.8%    127,136,948    84.2%      $20.60
2001 2q    149,198,105   17,106,987  11.5%    3,691,678   2.5%    20,798,665    13.9%    128,399,440    86.1%      $20.72
2001 1q    148,227,293   16,282,975  11.0%    3,285,271   2.2%    19,568,246    13.2%    128,659,047    86.8%      $20.59
2000 4q    145,940,640   14,053,509   9.6%    2,928,713   2.0%    16,982,222    11.6%    128,958,418    88.4%      $20.42
2000 3q    143,067,934   13,857,311   9.7%    2,680,251   1.9%    16,537,562    11.6%    126,530,372    88.4%      $20.52
2000 2q    141,965,554   11,203,202   7.9%    1,978,945   1.4%    13,182,147     9.3%    128,783,407    90.7%      $20.57
- -------------------------------------------------------------------------------------------------------------------------
Source: CoStar Group, Inc.
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>

Over the time period presented, sublet space has ranged from approximately 10%
to current just over 18% of the total vacant space in the market. The volume of
space approximated 3 million square feet at the end of 2000, increased to over
6.2 million square feet in the first quarter of 2002. However, since that time
it has declined by approximately 1 million square feet.

Space available for sublet frequently competes directly with direct vacancies in
the market and often at lower rates. During the mid- to late-1990's users often
leased extra space to accommodate future growth. Companies anticipating growth
would lease significantly more space than they initially needed or occupied.
However, with the business climate experiencing a downturn corporate strategies
changed focus from growth to expense reduction forcing unneeded space onto the
market.

- --------------------------------------------------------------------------------
                                       26
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                               MARKET ANALYSIS
- --------------------------------------------------------------------------------

In a strong market, landlords could allow troubled tenants to buy out their
leases and then re-tenant the space. In the current environment, where demand is
weaker, landlords are not interested in buyouts as the contract rates are often
above market. Thus, users are left to market their space for sublease. Often the
primary motivation for sublease space is quick disposition. As mentioned this
competition with direct space has contributed to downward pressure on rental
rates. Sub-lessors will frequently offer the space for which they are directly
obligated at a substantial discount to offset their own expense. On the reverse
side, there are factors that can drive decisions that mitigate the attractive
economics of sub-lease space. Image, location, and design are factors that can
make sublease space less attractive, despite a heavily discounted rental rate.
In addition, the condition, remaining term, and other factors may provide to
make sublease space can cost users more than a direct lease.

Rental Rates

Quoted rental rates saw a $0.22 per square foot decrease from the fourth quarter
2003 to the first quarter 2004 in Atlanta. Rates stood at $18.79 per square foot
at the end of the fourth quarter 2003, and ended first quarter 2004 at $18.57
per square foot. At the end of first quarter 2003, quoted rental rates were
$18.74 per square foot. The first quarter 2004 saw quoted rental rates in
Atlanta decrease 1.17% over fourth quarter 2003 levels. Additionally, first
quarter 2003 rates were down 3.9% from first quarter 2002 levels, and down 8.36%
from first quarter 2001 levels. Rates were down 8.0% from their levels three
years earlier, and down 5.6% from five years earlier.

Class A quoted rental rates in Atlanta decreased $0.15 from the end of fourth
quarter 2003 to the end of first quarter 2004, ending the fourth quarter at
$20.82 per square foot. A year earlier, in first quarter 2003, quoted rates were
$20.97. The first quarter 2004 decrease in Class A quoted rental rates
represents a 0.7% decrease over first quarter 2003 levels. Additionally, quoted
rates were down 2.0% from first quarter 2002 to first quarter 2003, and down
8.1% from fourth quarter 2001. From first quarter 2000 to first quarter 2004,
quoted rates decreased 9.67% in Atlanta. Quoted rates are down 6.13% over the
previous five years.

Atlanta's Class B sector ended first quarter 2004 with quoted rental rates of
$16.02 per square foot. These rates are $0.25 per square foot lower than the
fourth quarter 2003, when they were $16.27 per square foot, and $0.20 per square
foot lower than first quarter 2003 rates (when they were $16.22 per square
foot). Class B quoted rental rates in Atlanta are lower 1.23% from first quarter
2003 to first quarter 2004, lower 4.3% over first quarter 2002 levels, lower
8.19% over fourth quarter 2001 levels, and lower 9% over first quarter 2000
levels.

Construction Activity

The Atlanta office market saw 83,000 square feet in new speculative projects
deliver to the market in fist quarter 2004. This compares to a total of 36,000
square feet that was completed in the fourth quarter 2004.

- --------------------------------------------------------------------------------
                                       27
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                               MARKET ANALYSIS
- --------------------------------------------------------------------------------

At the end of first quarter 2004 there was 1,474,058 square feet of speculative
space under construction in the Atlanta market. This compares to a total of
1,541,058 square feet that was underway at the end of first quarter 2003. A year
earlier, in first quarter 2002, there was 2,476,172 square feet underway in
Atlanta.

SUBMARKET SUMMARY

CoStar Group divides the metropolitan office market into 25 submarkets, which
are summarized in the following table.

<TABLE>
<CAPTION>
=================================================================================================================================
                                    METROPOLITAN ATLANTA OFFICE MARKET - FIRST QUARTER 2004
                                                     SUMMARY BY SUBMARKET
- ---------------------------------------------------------------------------------------------------------------------------------
                                                         % of                             Net                               Avg.
                                                       Overall                         Absorption      SF       SF Under   Quoted
Submarket                     # Bldgs.     SF (NRA)     Market   Vacant SF   Vacancy    (SF) YTD   Delivered      Const.    Rates
- ---------------------------------------------------------------------------------------------------------------------------------
<S>                             <C>     <C>            <C>      <C>            <C>     <C>           <C>      <C>          <C>
Central Perimeter                 257    27,862,205     17.2%    7,819,656     28.1%    (70,245)          0      39,000    $19.44
Chamblee/Dville                   159     7,340,266      4.5%      957,655     13.0%     16,032           0           0    $15.83
Cherokee County                    17       475,321      0.3%       81,442     17.1%    (15,746)     22,000           0    $19.09
Cumberland Galleria               193    22,380,628     13.8%    4,952,660     22.1%      97,901          0      36,000    $19.29
Decatur                            42     2,164,950      1.3%      114,824      5.3%    (13,655)          0           0    $19.12
Douglasville/Lithisa Springs       14       605,497      0.4%      110,208     18.2%       (102)          0           0    $11.31
Downtown Atlanta                  101    21,339,396     13.2%    3,764,385     17.6%   (257,868)          0      28,794    $20.13
Duluth/Suwanee/Buford              99     6,068,444      3.8%    1,373,328     22.6%    (72,889)          0      48,064    $16.74
East Cobb                          32     1,049,849      0.6%      172,494     16.4%    (21,220)          0           0    $15.71
Fayette/Coweta County              20       635,259      0.4%      144,576     22.8%    (19,020)          0           0    $16.82
Gainsville/Hall Co.                24       958,063      0.6%       81,293      8.5%      6,300           0           0     $8.60
I-20 East/Conyers                  20       711,406      0.4%       82,857     11.6%          0           0           0    $11.35
Kennesaw/Town Center               71     3,673,108      2.3%      676,908     18.4%    (61,759)     45,000           0    $17.56
Lawrenceville/Lilburn              36     1,450,484      0.9%      214,322     14.8%     29,723           0           0    $15.92
Lower Buckhead                     12     1,045,315      0.6%      125,614     12.0%    (45,902)          0           0    $15.87
Midtown/Pershing Point             80    14,141,624      8.7%    3,338,957     23.6%     76,551           0     665,000    $20.91
N. Fulton/Forsyth County          251    20,413,164     12.6%    5,930,132     29.1%   (727,141)     16,000      46,000    $16.76
Norcross/P'tree Corners           120     6,500,409      4.0%    1,490,588     22.9%      9,922           0           0    $14.53
North Clayton/Airport              77     3,685,421      2.3%      629,384     17.1%    (32,323)          0           0    $15.09
Northlake/Lavista                  57     3,765,933      2.3%      769,030     20.4%     10,136           0           0    $15.84
Northside Dr./Georgia Tech         34     1,491,742      0.9%      305,214     20.5%    (49,062)          0     515,000    $17.43
South Clayton/Henry Co.            17       470,968      0.3%      115,256     24.5%      4,300           0      96,200    $20.63
Stone Mountain                      7       336,117      0.2%       54,796     16.3%      4,489           0           0     $5.86
Upper Buckhead                     82    12,492,358      7.7%    2,643,009     21.2%    156,947           0           0    $22.82
West Atlanta                        9       748,790      0.5%      271,168     36.2%     (2,507)          0           0    $22.77
- ---------------------------------------------------------------------------------------------------------------------------------
                                1,831   161,806,717    100.0%   36,219,756     22.4%   (977,138)     83,000   1,474,058    $18.57
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

NORTH FULTON OFFICE SUBMARKET

The subject is located in the North Fulton submarket, which has rapidly become
the metropolitan area's fourth largest office market. The North Fulton submarket
has been the most volatile submarket in the past decade with tremendous growth
from little Class A office space in 1992 to over 10 million square feet today.
However, this attractive submarket, while benefiting from the growth of internet
and technology companies also was the benefactor of the impact when many of
these same companies failed, resulting in total closure or downsizing and
elimination of facilities. Market statistics for each property class for the
submarket are summarized in the following table.

- --------------------------------------------------------------------------------
                                       28
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                               MARKET ANALYSIS
- --------------------------------------------------------------------------------

================================================================================
                         THE NORTH FULTON OFFICE MARKET
                            AS OF FIRST QUARTER 2004
- --------------------------------------------------------------------------------
                                Class A      Class B     Class C          Total
- --------------------------------------------------------------------------------
Number of Projects                    83           153         15           251
Existing Sq. Ft               12,072,672     7,948,218    392,274    20,413,164
% of the Metro Total               14.80%        11.40%      4.58%
Projects Delivered                     0             1          0             1
Delivered Sq. Ft                       0        16,000          0        16,000
Projects Under Construction            0             2          0             2
Under Construction Sq. Ft              0        46,000          0        46,000
Net Absorption                  (678,625)      (50,816)     2,300      (727,141)
Vacant Sq. Ft. (Total)         3,793,401     2,086,960     49,771     5,930,132
Vacancy Rate                        31.4%         26.3%      12.7%         29.1%
Quoted Rate per Sq. Ft            $17.89        $15.25     $11.98        $16.76
- --------------------------------------------------------------------------------
Source: CoStar Group, Inc.
- --------------------------------------------------------------------------------

The North Fulton office market's class 'A' sector consisted of 83 projects with
12,072,672 square feet of office space at the end of first quarter 2004. The
class 'B' sector included 153 buildings totaling 7,948,218 square feet, and the
class 'C' market consisted of 15 projects with 392,274 square feet.
Additionally, there were 24 owner-occupied office buildings within this market
containing roughly 3,793,000 square feet of space (statistics reported
throughout this report are based on non-owner-occupied office inventory in
buildings 15,000 square feet and larger, unless otherwise noted).

Class 'A' projects within North Fulton reported a first quarter vacancy rate of
31.4%, up from the 25.8% reported at the end of fourth quarter 2003.
Year-to-date net absorption within the class 'A' sector totals negative
(678,625) square feet. Quoted rates f or available s pace within this sector of
the market averaged $17.89 per square foot.

Class 'B' projects reported negative net absorption of (50,816) square feet in
the first quarter of 2004. As a result, the North Fulton class 'B' vacancy rate
increased to 26.3% as of first quarter 2004 (from 25.5% at the end of fourth
quarter 2003). North Fulton class 'B' quoted rates averaged $15.25 at the end of
the quarter. North Fulton class 'C' projects have recorded positive 2,300 square
feet of year-to-date net absorption in 2004.

The class 'C' vacancy rate was 12.7% as of first quarter 2004. Average class 'C'
office rents averaged $11.98 per square foot. Net absorption for the overall
North Fulton class 'A, B, & C' office market was negative (727,141) square feet
in the first quarter of 2004. Overall vacancy within this market was 29.1% at
the end of the quarter. As of first quarter 2004, quoted rent for available
office space (all classes) averaged $16.76 within the North Fulton market. As of
first quarter 2004, there was 46,000 square feet of new office space under
construction within this market, with 16,000 square feet having been completed
and delivered year-to-date.

- --------------------------------------------------------------------------------
                                       29
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                               MARKET ANALYSIS
- --------------------------------------------------------------------------------

The following table provides data for the past 5 quarters in the North Fulton
submarket.

<TABLE>
<CAPTION>
====================================================================================================
                                   THE NORTH FULTON OFFICE MARKET
                                      AS OF FIRST QUARTER 2004
- ----------------------------------------------------------------------------------------------------
Total Market - Class A, B, C   1st Q 2003     2nd Q 2003     3rd Q 2003    4th Q 2003     1st Q 2004
- ----------------------------------------------------------------------------------------------------
<S>                            <C>            <C>            <C>           <C>            <C>
Number of Projects                    245            245            245           245            251
Existing Sq. Ft                19,620,887     19,620,887     19,620,887    19,620,887     20,413,164
Projects Delivered                      2              0              0             0              1
Delivered Sq. Ft                  425,000              0              0             0         16,000
Projects Under Construction             0              0              0             2              2
Under Construction Sq. Ft         440,000         55,000              0        30,000         46,000
Net Absorption                    169,258        (15,821)       296,720       437,821       (727,141)
Vacant Sq. Ft. (Total)          5,426,476      5,442,297      5,145,577     5,157,913      5,930,132
Vacancy Rate                         27.7%          27.7%          26.2%         26.3%          29.1%
Quoted Rate per Sq. Ft             $17.90         $17.34         $17.17        $17.00         $16.76
- ----------------------------------------------------------------------------------------------------
Source: CoStar Group, Inc.
- ----------------------------------------------------------------------------------------------------
</TABLE>

The following table provides a summary of the most recent, current, and future
potential development activity as of the 1st Quarter 2004. The list provides
only the major planned projects, which shows developers continue to have a
significant interest for future development in the North Fulton area.

- --------------------------------------------------------------------------------
                                       30
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                               MARKET ANALYSIS
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
=========================================================================================================================
                                            THE NORTH FULTON OFFICE MARKET
                                          CURRENT/FUTURE DEVELOPMENT SUMMARY
- -------------------------------------------------------------------------------------------------------------------------
Project                                                             Delivery    Class  Stories      RBA       Quoted Rate
- -------------------------------------------------------------------------------------------------------------------------
<S>                                                                <C>           <C>     <C>     <C>           <C>
Delivered
  4375 Johns Creek Pkwy                                            1st Q 2004     B       1       16,000 SF    $24.00 PSF
Under Construction
  Old Alabama Commons 600 (100% Leased)                            2nd Q 2004     B       2       15,000            -
  Old Alabama Commons 700 (100% Leased)                            2nd Q 2004     B       2       15,000            -
  The MacMaster Bldg                                               2nd Q 2004     B       1       16,000       $24.00 PSF
Proposed
  4170 Old Milton Parkway                                              TBD        A       4       72,000       $22.00 PSF
  100 Northwinds Tower, Haynes Bridge Road                             TBD        A      11      264,000       $20.00 PSF
  200 Milton Park, 11175 Cicero Drive                                  TBD        A       6      150,000       $24.00 PSF
  Brookside Conscourse - Brookside 200, 3700 Brookside Parkway     1st Qtr '06    A       5      130,622       $22.00 PSF
  Colonial Center 400, 600 Colonial Center Parway                      TBD        A       6      163,000            -
  Corporate Point at the Meadows, McFarland Road @ Shiloh Road         TBD        A       2      158,000            -
  Deerfield Commons II, 12700 Deerfield Parkway                    2nd Qtr '04    A       5      150,000       $22.50 PSF
  Georgia 400 Center IV, 2355 Lakeview Parkway                         TBD        A       7      135,000            -
  McGinnis Park - Building 3, 1730 Windward Concourse                  TBD        A       4      100,500       $20.50 PSF
  North Point Center West - Building 1, Haynes Bridge Road             TBD        A       5      225,000            -
  Opus Woods - Parkview II, North Point Parkway                        TBD        A       5      250,000            -
  Opus Woods - Parkview III, North Point Parkway                       TBD        A       6      300,000
  Parkway 400 - Building 3, Old Milton Parkway                         TBD        A       6      142,344       $22.00 PSF
  Parkway 400 - Building 4, Old Milton Parkway                         TBD        A       6      142,344       $22.00 PSF
  Preston Ridge Pointe, Morris Road @ Webb Bridge Road                 TBD        A       8      340,000
  Resurgens Park - Building 1, Mansell Road                            TBD        A      13      275,000
  Resurgens Park - Building 2, Mansell Road                            TBD        A      13      279,000
  The Paddocks - Building 2, Paddocks Parkway                          TBD        A       4       95,000       $19.95 PSF
- -------------------------------------------------------------------------------------------------------------------------
Source: CoStar Group, Inc.
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>

Within the subject submarket development activity shows a significant decline
with only 2 projects having delivered in 2003 and 1 so far in 2004. There are 3
under construction, but all are small Class B buildings. However, interest in
the submarket remains very high with 20 Class A, 16 Class B and 1 Class C
buildings planned. The total space planned is over 4.4 million, which if built,
would represent a 22% increase in the total space. However, as the recovery of
the need for office space remains muted, though improving, it is doubtful any
significant number of these properties will be built in the near-term. The
current submarket conditions and the overall economic conditions continue to
limit developers and lenders, forcing them to remain on the sidelines until more
significant improvement is evident.

The largest lease signings occurring in 2004 included one in the subject
submarket. The leases include: the 265,446-square-foot lease signed by BlueCross
BlueShield at One Capital City Plaza in the Buckhead market; the 130,000
square-foot deal signed by Southern Company, The at Southern Company Center at
One Cent in the Downtown Atlanta market; and the 100,000-square-foot lease
signed by Cingular Wireless at Northern Telecom in the North Fulton market.

- --------------------------------------------------------------------------------
                                       31
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                               MARKET ANALYSIS
- --------------------------------------------------------------------------------

Concessions

The North Fulton office submarket continues to experience a significant level of
concession offerings based on discussions with market participants. Reports
indicate free rent is very common and may be as low as one to three months, but
can be as high as 12 months of free rent. The greater number of months would be
associated with a larger tenant, and for a longer term lease. In addition,
tenant improvement allowances may be increased as an inducement to gain a
tenant.

Submarket Summary

The general outlook for the North Fulton submarket is for it to remain weak and
will require an extended period to absorb the existing space. Although the
market appears to show some activity, leasing agents indicate there continues to
be a contingent of larger tenants considering moves to different space in order
to adjust their space requirements and/or lock in lower rental rates. Therefore,
though there may be some leasing activity in the near-term, a good percentage of
it may be zero sum gain for the market. In addition, the increased activity of
the first part of 2004 has slowed recently.

The North Fulton area will continue to be an attractive location for business as
it continues to be one of the most desirable locations for office location. The
current economic environment will not produce significant growth and thus the
need for office space. Therefore, until a greater level of economic growth
occurs absorption of the vacant space will be slow. Given the current
conditions, we expect downward pressure to continue relative to rental rates
along with the possibility of increased vacancy as well as concession offerings
in the near-term. Going forward, the general perception is that the Atlanta area
and the North Fulton submarket will continue to grow.

Barriers to Entry

Given the accommodating terrain, extensive road system, and pro-growth
orientation exhibited by governing authorities, there are no physical or
governmental barriers, which significantly limit entry into the Atlanta office
market. Thus, barriers to entry are relegated to supply and demand levels, where
currently supply greatly exceeds demand.

Demand Generators

Demand for office space is predominately a function of job creation and
corporate expansion. Significant slowing in job creation occurred in metro
Atlanta, actually experiencing its first net job loss in 2002, or since the last
recession. During 2003 corporate downsizing and restructurings slowed. As there
are signs of continuing improvement within the economy and hiring appears to
have increased, continuation of these trends should result in the subsequent
increase in demand for office space. However, without significant continued job
growth it will still take a considerable amount of time to absorb the existing
supply. Demand for office product is still well below the existing supply with
projections for this condition to exist for a considerable amount of time.

- --------------------------------------------------------------------------------
                                       32
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                               MARKET ANALYSIS
- --------------------------------------------------------------------------------

Investment Trends

Investment trends for Class A suburban office product remain sanguine as this
product type has fallen significantly out of favor over the past two years.
Currently, the Atlanta suburban office market is not viewed favorably by the
majority of institutional buyers. Institutional buyers active in today's
marketplace seek properties that are well leased or totally leased to credit
tenant(s) evidenced by the recent sales of The Proscenium ($223 per square foot
and an 8% capitalization rate), Atlantic Center Plaza ($243 per square foot and
an 8.8% capitalization rate), and Glenridge Highlands Two ($203 per square foot
and an 8.05 % capitalization rate).

However, rate and return requirements remain at increased levels from one and
two years ago for buyers of suburban office product. Our discounted cash flow
model reflects current rate and return requirements as well as buyer
underwriting criteria. However, as interest rates have dropped significantly
during 2003, capitalization rates have been pressured lower. This is a two-fold
result of the increase in positive leverage available to investors due to lower
mortgage rates, but also due to investors' desire to obtain a superior return to
that found in the financial markets. As the signs of economic improvement
continue, especially increases in employment, then demand for real estate,
especially the office sector should increase.

COMPETITIVE PROPERTIES

Comparable properties have been surveyed in order to identify the occupancy
trends within the immediate submarket. The comparable data is summarized in the
following table:

- --------------------------------------------------------------------------------
                                       33
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                               MARKET ANALYSIS
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
==================================================================================================
                                SUMMARY OF COMPARABLE OFFICE RENTALS
- --------------------------------------------------------------------------------------------------
 Comp.
  No.      Name                                    Location                              Occupancy
- --------------------------------------------------------------------------------------------------
 <C>       <S>                                     <C>                                      <C>
  1        Royal Centre IV                         11700 Great Oaks Way,                    91%
                                                   Alpharetta, GA

  2        Parkview I at Opus Woods                925 North Point Parkway                  71%
                                                   NEC Of North Point and
                                                   Old Milton Parkways,
                                                   Alpharetta, GA

  3        Georgia 400 Center (I, II, and III)     2300-2400 Lakeview Parkway,              80%
                                                   Alpharetta, GA

  4        Northwinds Center/Northwinds            Haynes Bridge Road @                     69%
           Center West                             Northwinds Drive,
                                                   Alpharetta, GA

  5        Preston Ridge II and III                3460 - 3480 Preston Ridge Road           80%
                                                   North Point Parkway @ Preston
                                                   Ridge Road,
                                                   Alpharetta, GA

  6        North Point Center East 100, 200,       100, 200, 333, & 555                     59%
           333, & 555                              Northpoint Center East,
                                                   Alpharetta, GA

  7        The Falls at Sanctuary Park             1125 Sanctuary Parkway,                  67%
                                                   Alpharetta, GA
- --------------------------------------------------------------------------------------------------
Subject    Royal Ridge (2004)                      11680 Great Oaks Way,                    89%
                                                   Alpharetta, Georgia
- --------------------------------------------------------------------------------------------------
Compiled by CBRE
- --------------------------------------------------------------------------------------------------
</TABLE>

The comparable properties surveyed actually cover 15 individual buildings, and
which reported a wide ranging occupancy indicative of the difficult market
conditions in the North Fulton area. All of the comparables are currently in
good to excellent condition.

SUBJECT TRENDS AND PROJECTIONS

Occupancy

Occupancy rate is the relationship between the actual income received from a
property and the income that would be received if the entire space were
occupied. Consequently, the occupancy rate is a product of both (1) the
relationship between the amount of occupied space in a building or market
(physical) and (2) the relationship between the contract rent for the occupied
building or market space and the total rent estimated for all space in the
building or market (economic).

- --------------------------------------------------------------------------------
                                       34
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                               MARKET ANALYSIS
- --------------------------------------------------------------------------------

Subject's Historical Trends

The subject has exhibited a 100% economic occupancy due to the master lease in
place. However, considering the expiration of the master lease in early 2005 for
the space not leased to the two major credit tenants, we have included a small
vacancy estimate for this space resulting in a stabilized level slightly below
100%. The small vacancy deduction is considered reasonable based upon
discussions with market participants. Our reasoning for the amount of the small
deduction is based upon a reasonable market vacancy for the first floor space
which when divided over the entire building approximates 1% to 2%. Therefore,
based upon the current market, we have utilized only a 1% deduction to conclude
a stabilized level. The subject's occupancy is detailed in the following chart.

================================================================================
                                    OCCUPANCY
- --------------------------------------------------------------------------------
Year                                                                   % PGI
- --------------------------------------------------------------------------------
2003 Budget                                                               0%
2003                                                                    100%
2004 Annualized                                                         100%
2004 Budget                                                             100%
CBRE Estimate                                                            99%
- --------------------------------------------------------------------------------
Compiled by CBRE
- --------------------------------------------------------------------------------

Submarket Trends

Over the past two years, occupancy levels in the North Fulton market have ranged
between 70% and 75%, above the overall Atlanta market, which has been in the 80%
to 85% range. The lower submarket performance is generally attributable to the
more rapid increase in space as a percentage of the existing space due to the
Alpharetta area being a relatively new but very attractive submarket for new
development over the past decade. New product delivered to the submarket is
anticipated to be minimal over the next two years and net absorption should
increase as the economy continues to show improvement. However, the submarket
will likely continue to lag the overall market in terms of occupancy performance
for the near to mid term.

Conclusion

Based on the foregoing analysis, CBRE's conclusion of stabilized occupancy for
the subject is illustrated in the following table. This estimate considers both
the physical and economic factors of the market.

- --------------------------------------------------------------------------------
                                       35
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                               MARKET ANALYSIS
- --------------------------------------------------------------------------------

================================================================================
                              OCCUPANCY CONCLUSIONS
- --------------------------------------------------------------------------------
Alpharetta Area                                                        89.8%
Submarket                                                              89.2%
Rent Comparables                                                       73.9%
Subject's Current Occupancy                                            88.8%
- --------------------------------------------------------------------------------
Subject's Stabilized Occupancy                                         99.0%
- --------------------------------------------------------------------------------
Compiled by CBRE
- --------------------------------------------------------------------------------

Although our concluded stabilized occupancy is slightly higher than the overall
market and submarket, this premium appears reasonably justified for the
following reasons:

      o     The majority of the subject is leased to two major credit tenants
            with the vacant space being master-leased for approximately one year
            in the future providing for full rent and recoveries to the owner.
            Thus this allows for a virtual guarantee of a fully leased building
            through the term of the major tenant leases, with very limited
            downside risk. Additionally, any "market" vacancy for the small 1st
            floor space when divided by the total building results in a minimal
            vacancy deduction as previously noted.

Tenant Analysis

The subject is physically considered a Class A office building and has just
under 90% of the building leased to two tenants, Hagemeyer North America
Holdings, Inc. and Combined Specialty Insurance, both of which are considered to
represent credit tenants. The credit worthiness of the tenants is confirmed by
discussions with investors. In addition, the credit worthiness of the two
tenants is strengthened by letters of credit, one for $6.5 million (Hagemeyer,
N.A.) and one for $3.5 million (Combined Specialty Insurance).

Hagemeyer North America Holdings is a wholly owned subsidiary of Hagemeyer, N.A.
of the Netherlands. Hagemeyer is a value added business-to-business (B2B)
distribution services group focusing on the markets for electrical materials,
safety and other MRO (Maintenance Repair and Operations) products. The Group
co-ordinates product and information flows, adding value and providing
significant cost savings to both end-users and suppliers. Company sales in 2001
were approximately $8 billion euros with a net income of approximately $189
million euros. Over $1 billion in sales was generated from the company's North
and South American operations. The company has approximately 23,000 worldwide
employees. Sales declined slightly in 2003 to $8.3 billion euros and to $6.3
billion euros in 2003. The lower sales in 2003 resulted in a net loss of $284
million euros.

Combined Specialty Insurance is a wholly owned subsidiary of Aon Corporation.
Aon is a Fortune 500 company that is a world leader in risk management, retail,
reinsurance and wholesale brokerage, claims management, specialty services, and
human capital consulting services. The company grew rapidly beginning in 1982
when the Ryan Insurance Group merged with Combined International Corporation.

- --------------------------------------------------------------------------------
                                       36
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                               MARKET ANALYSIS
- --------------------------------------------------------------------------------

Additional companies were purchased. Aon operates in more than 120 countries
with over 53,000 employees in more than 550 offices and is ranked 248th in
revenue on the Fortune 500 and 239th in revenue among the Forbes 500. Aon does
business with 85 percent of the companies in the Fortune 500 and the Fortune
Global 500 and is the world's leading reinsurance broker, the largest captive
insurance company manager, second largest insurance brokerage; and sixth largest
employee benefits consultant. Revenue increased from $7.7 billion in 2001 to
$8.8 billion in 2002 and $9.8 billion in 2003. In 2001 it marked Aon's 50th
consecutive year of increasing its cash dividend to stockholders, approximately
one-fourth of which are Aon employees.

Both tenants signed 10-year leases. The Hagemeyer lease began in July 2002,
while the Combined Specialty lease began in December 2002. Both tenants received
free rent until July 2003 when full rental payments were then required.

As noted, the subject property is under a master lease to the purchaser (FSP
Royal Ridge Corp.), which provides for full rent and reimbursements for the
remaining vacant space for a period of two years as well as any tenant
improvements and commissions. If the first floor space is not leased by the end
of two years, the seller will write a check in an amount equal to an agreed upon
estimate for tenant improvements and commissions for FSP Royal Ridge to use
toward leasing the space. This will abrogate the seller from any further
financial responsibility.

Lease-up Discount

The cost estimates employed for this approach are reflective of a property
operating at a stabilized level. A stabilized occupancy for the subject has been
estimated to be 99.0% while the subject is currently operating at 88.8% but
under a master lease providing for full rent and expense reimbursements. As the
subject is and will likely continue to be effectively stabilized, even with the
1st floor space master lease expiring in 2005, consequently, an adjustment is
not warranted.

CONCLUSION

The area office market and the local submarket are exhibiting below average
occupancy levels and flat to slightly down trending rental rates. Absorption has
been negative over the past several quarters. Considering the recent trends in
absorption and the prospects for new construction, the local market will
continue to suffer an above average vacancy. Rent increases will not occur in
the near-term, though new construction will be limited which should allow for
positive absorption to take hold in the near future as economic conditions
continue to show growth. Though the market is operating at a below average
level, the long-term projection for the Atlanta area and especially the subject
submarket is for continued growth.

- --------------------------------------------------------------------------------
                                       37
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                               MARKET ANALYSIS
- --------------------------------------------------------------------------------

With respect to the subject property in particular, we believe the subject is
well located for an office project. The site is conveniently located with
respect to employment centers and major roadways. Though the surrounding office
developments are experiencing below average levels of demand, the area is
expected to continue to attract new growth and additional development for years
to come. Based upon our analysis, the subject property should continue to enjoy
good market acceptance.

- --------------------------------------------------------------------------------
                                       38
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                 SITE ANALYSIS
- --------------------------------------------------------------------------------

                                  SITE ANALYSIS

The following chart provides a summary of the salient features relating to the
subject site.

================================================================================
                                  SITE SUMMARY
- --------------------------------------------------------------------------------
Physical Description
  Gross Site Area                         13.37 Acres           582,397 Sq. Ft.
  Net Site Area                           13.37 Acres           582,397 Sq. Ft.
  Primary Road Frontage                   Great Oaks Way        800 Feet
  Excess Land Area                        None
  Surplus Land Area                       None
  Zoning District                         OI Office & Institutional
  Flood Map Panel No.                     13121 C 0067E June 22, 1998
  Flood Zone                              X
- --------------------------------------------------------------------------------
Source: Various sources compiled by CBRE
- --------------------------------------------------------------------------------

LOCATION

The subject is located along the north side Great Oaks Way just west of North
Point Parkway. The street address is 11680 Great Oaks Way. Ingress and egress is
available to the site via one curb cut along Great Oaks Way.

ASSESSOR'S PARCEL NUMBER

The Fulton County Tax Assessor's parcel number is 12-2980-0857-046-2.

LAND AREA

The site is considered adequate in terms of size and utility. There is no
unusable, excess or surplus land area.

SHAPE AND FRONTAGE

The site is irregular and has adequate frontage along one primary thoroughfare
within the neighborhood.

INGRESS/EGRESS

Ingress and egress is available to the site via an easement from Great Oaks Way.

- --------------------------------------------------------------------------------
                                       39
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                 SITE ANALYSIS
- --------------------------------------------------------------------------------

Great Oaks Way, at the subject property, is a minor street providing access to
several office buildings within an organized office park environment.

Please refer to the prior site/plat exhibit for the layout of the streets that
provide access to the subject property

TOPOGRAPHY AND DRAINAGE

The site is above street grade. The topography of the site is not seen as an
impediment to the development of the property. During our inspection of the
site, we observed no drainage problems and assume that none exist.

SOILS

A soil analysis for the site has not been provided for the preparation of this
appraisal. In the absence of a soil report, it is a specific assumption that the
site has adequate soils to support the highest and best use.

EASEMENTS AND ENCROACHMENTS

A title policy for the property has not been provided for the preparation of
this appraisal. Based on our visual inspection and review of the site plan, the
property does not appear to be adversely affected by any easements or
encroachments. It is recommended that the client/reader obtain a current title
policy outlining all easements and encroachments on the property, if any, prior
to making a business decision.

ACCESS AGREEMENTS

There are no known access agreements that may affect the subject's
marketability.

COVENANTS, CONDITIONS AND RESTRICTIONS

There are no known covenants, conditions and restrictions impacting the site
that are considered to affect the marketability or highest and best use, other
than zoning restrictions.

UTILITIES AND SERVICES

The site is within the jurisdiction of Fulton County or Alpharetta and is
provided all municipal services, including police, fire and refuse garbage
collection. All utilities are available to the site in adequate quality and
quantity to service the highest and best use as if vacant and as improved.

- --------------------------------------------------------------------------------
                                       40
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                 SITE ANALYSIS
- --------------------------------------------------------------------------------

FLOOD ZONE

According to flood hazard maps published by the Federal Emergency Management
Agency (FEMA), the site is within Zone X, as indicated on the indicated
Community Map Panel No. 13121 C 0067E June 22, 1998.

      FEMA Zone X: Areas determined to be outside the 500-year flood plain.

ENVIRONMENTAL ISSUES

CBRE has not observed, yet is not qualified to detect, the existence of
potentially hazardous material or underground storage tanks, which may be
present on or near the site. The existence of hazardous materials or underground
storage tanks may have an affect on the value of the property. For this
appraisal, CBRE has specifically assumed that the property is not affected by
any hazardous materials and/or underground storage tanks that may be present on
or near the property.

ADJACENT PROPERTIES

The adjacent land uses are as follows:

      North:          Vacant Land
      South:          Office
      East:           Office
      West:           Office

CONCLUSION

The site is well located and afforded average access and visibility from roadway
frontage. The size of the site is typical for the area and use, and there are no
known detrimental uses in the immediate vicinity. Overall, there are no known
factors that are considered to prevent the site from development to its highest
and best use, as if vacant, or adverse to the existing use of the site.

- --------------------------------------------------------------------------------
                                       41
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                          IMPROVEMENT ANALYSIS
- --------------------------------------------------------------------------------

                               IMPROVEMENT LAYOUT


- --------------------------------------------------------------------------------

                                   [SITE PLAN]

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                                       42
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                          IMPROVEMENT ANALYSIS
- --------------------------------------------------------------------------------

                              IMPROVEMENT ANALYSIS

The following chart depicts the subject's building area by component.

================================================================================
                               IMPROVEMENT SUMMARY
- --------------------------------------------------------------------------------
Number of Buildings                           2
Number of Stories                             1
Gross Building Area                           161,366 SF
Net Rentable Area                             161,366 SF
Site Coverage                                 27.7%
Land-to-Building Ratio                        3.61 : 1
Floor Area Ratio (FAR)                        0.3
Parking Improvements                          Open            Total Spaces: 650
Parking Ratio (per 1,000 SF NRA )             4.03
- --------------------------------------------------------------------------------
                                                                       Usable
Component                                     GBA (SF)    NRA (SF)    Area (SF)
- --------------------------------------------------------------------------------
6 Stories                                        N/A      161,366       N/A
- --------------------------------------------------------------------------------
 Total                                                    161,366
- --------------------------------------------------------------------------------
Source: Various sources compiled by CBRE
- --------------------------------------------------------------------------------

Building plans and specifications were not provided for the preparation of this
appraisal. The following is a description of the subject improvements and basic
construction features derived from CBRE's physical inspection.

YEAR BUILT

The subject property was built in 2001.

FOUNDATION

The foundation consists of a continuous monolithic slab poured on reinforced
concrete footings.

CONSTRUCTION COMPONENTS

The construction components include a fireproof steel frame with steel beams and
steel deck.

FLOOR STRUCTURE

The floor structure is summarized as follows:

      Ground Floor:    Concrete slab on compacted fill

      Other Floors:    Metal deck with light-weight concrete cover

- --------------------------------------------------------------------------------
                                       43
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                          IMPROVEMENT ANALYSIS
- --------------------------------------------------------------------------------

EXTERIOR WALLS

The exterior wall structure is reflective glass panels and polished steel
accents.

ROOF COVER

The roof is a single ply ballasted EPDM.

INTERIOR FINISHES - OFFICE AREAS

The interior office finish of the property is summarized as follows:

      Floor Coverings:      Commercial grade short loop carpeting over concrete.

      Walls:                Textured and painted sheetrock.

      Ceilings:             Combination textured and painted sheetrock and
                            suspended acoustical tile.

      Lighting:             Standard commercial florescent fixtures.

      Summary:              The interior office areas are typical building
                            standard office finish, and are commensurate with
                            competitors in the area.  The occupied space office
                            finish is in good condition, while vacant spaces
                            will require upfit prior to occupancy.

Interior Finishes - Common Areas

The interior common area finish of the property is summarized as follows:

      Floor Coverings:      Marble in the ground floor lobby and commercial
                            grade short loop carpeting over concrete in the
                            upper level corridors.

      Walls:                Textured and painted sheetrock.

      Ceilings:             Combination textured and painted sheetrock and
                            suspended acoustical tile.

      Lighting:             Standard commercial florescent and recessed
                            incandescent fixtures.

      Summary:              The interior common areas are attractive and appear
                            to be in good condition.  The subject's common
                            areas are commensurate with competitors in the
                            area.

- --------------------------------------------------------------------------------
                                       44
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                          IMPROVEMENT ANALYSIS
- --------------------------------------------------------------------------------

ELECTRICAL

The electrical system is 3,000 amp 277/480v three-phase, four wire, and is
assumed to be in good working order and adequate for the buildings.

ELEVATOR/STAIR SYSTEM

The building contains three passenger elevators, one over-sized to function as a
service elevator as needed. There are two stairwells providing access and
emergency escape routes.

PLUMBING

Plumbing components include a cast iron sanitary sewer system with copper
domestic water mains and distribution lines.

PARKING AND DRIVES

Based on review of a site plan there were approximately 620 surface parking
spaces provided originally. However, approximately 30 additional spaces were
added since the purchase by FSP Royal Ridge. There is no deck parking. All
parking spaces and vehicle drives are asphalt paved and considered to be in good
condition. Patron parking areas are located in front and along the eastern side
of the building. The number of parking spaces is assumed to be a legally
conforming for the existing use.

LANDSCAPING

The facility features combinations of landscaped areas that are considered to be
in good condition.

FIRE PROTECTION

The improvements are fire sprinklered, and the floors are equipped with smoke
detectors. It is assumed the improvements have adequate fire alarm systems, fire
exits, fire extinguishers, fire escapes and/or other fire protection measures to
meet local Fire Marshal requirements.

SECURITY

Security for the building includes closed circuit TV cameras and recorders,
limited access to the freight elevator, uniformed security personnel on-site,
and a card-key access system.

- --------------------------------------------------------------------------------
                                       45
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                          IMPROVEMENT ANALYSIS
- --------------------------------------------------------------------------------

HVAC

The buildings have roof-mounted HVAC units. The HVAC system is assumed to be in
good operating condition and adequate for the buildings.

QUALITY AND STRUCTURAL CONDITION

The overall quality of the facility is considered to be good for the
neighborhood and age. CB Richard Ellis, Inc. did not observe any evidence of
structural fatigue and the improvements appear structurally sound for occupancy.
However, CB Richard Ellis, Inc. is not qualified to determine structural
integrity and it is recommended that the client/reader retain the services of a
qualified, independent engineer or contractor to determine the structural
integrity of the improvements prior to making a business decision.

FUNCTIONAL UTILITY

The overall layout of the property is considered functional in utility. The
typical floor plate ranges from approximates 27,000 square feet, which is
commensurate with the market and is typically adequate to meet existing and
prospective tenant space requirements.

ADA COMPLIANCE

All common areas of the property appear to have handicap accessibility. The
client/reader's attention is directed to the specific limiting conditions
regarding ADA compliance.

FURNITURE, FIXTURES AND EQUIPMENT

The property is rented and would typically be sold on an unfurnished basis. Any
personal property items contained in the property are not considered to
contribute significantly to the overall value of the real estate.

ENVIRONMENTAL ISSUES

CBRE has not observed, yet is not qualified to detect, the existence of any
potentially hazardous materials such as lead paint, asbestos, urea formaldehyde
foam insulation, or other potentially hazardous construction materials on or in
the improvements. The existence of such substances may have an affect on the
value of the property. For the purpose of this assignment, we have specifically
assumed that any hazardous materials that would cause a loss in value do not
affect the subject.

- --------------------------------------------------------------------------------
                                       46
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                          IMPROVEMENT ANALYSIS
- --------------------------------------------------------------------------------

ANALYSIS OF SHELL SPACE

The subject has one uncommitted first generation space on the first floor. This
space will require tenant improvement work, i.e. floor coverings, interior
partitions and wall coverings, ceiling grid, electrical wiring and lighting, and
HVAC ductwork prior to occupancy. The cost of the tenant improvements will be
born by the seller, subject to the master lease.

DEFERRED MAINTENANCE

Our inspection of the property indicated no major items of deferred maintenance.
Therefore, no deduction is required from our final value conclusion.

ECONOMIC AGE AND LIFE

CBRE's estimate of the subject improvements effective age and remaining economic
life is depicted in the following chart:

================================================================================
                              ECONOMIC AGE AND LIFE
- --------------------------------------------------------------------------------
Actual Age                                                     3 Years
Effective Age                                                  3 Years
MVS Expected Life                                             45 Years
Remaining Economic Life                                       42 Years
Accrued Physical Incurable Depreciation                           6.7%
- --------------------------------------------------------------------------------
Compiled by CBRE
- --------------------------------------------------------------------------------

The overall life expectancy is based upon our on-site observations and a
comparative analysis of typical life expectancies reported for buildings of
similar construction as published by Marshall and Swift, LLC, in the Marshall
Valuation Service cost guide. While CBRE did not observe anything to suggest a
different economic life, a capital improvement program could extend the life
expectancy.

CONCLUSION

The improvements are considered to be in good overall condition and are
considered to be typical for the age and location in regard to improvement
design and layout, as well as interior and exterior amenities. Overall, there
are no known factors that could be considered to adversely impact the
marketability of the improvements.

- --------------------------------------------------------------------------------
                                       47
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                        ZONING
- --------------------------------------------------------------------------------

                                     ZONING

The following chart summarizes the zoning requirements applicable to the
subject:

================================================================================
                                 ZONING SUMMARY
- --------------------------------------------------------------------------------
Current Zoning                      OI Office & Institutional
Legally Conforming                  Yes
Uses Permitted                      Offices or commercial uses serving
                                    neighborhoods and community needs
Zoning Change                       Not likely
- --------------------------------------------------------------------------------
Source: Planning & Zoning Dept.
- --------------------------------------------------------------------------------

ANALYSIS AND CONCLUSION

The improvements represent a legally conforming use and, if damaged, may be
restored without special permit application. It is recommended that local
planning and zoning personnel be contacted regarding more specific information
that might be applicable to the subject.

- --------------------------------------------------------------------------------
                                       48
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                       TAX AND ASSESSMENT DATA
- --------------------------------------------------------------------------------

                             TAX AND ASSESSMENT DATA

The subject's market value, assessed value, and taxes are summarized below, and
do not include any furniture, fixtures and equipment.

================================================================================
                           AD VALOREM TAX INFORMATION
- --------------------------------------------------------------------------------
Assessor's Market Value                   2003           2004         Pro Forma
- -----------------------------------------------------------------   ------------
12-2980-0857-046-2                    $14,322,400    $18,905,400
                                     ----------------------------   ------------

Subtotal                              $14,322,400    $18,905,400    $18,905,400
Assessed Value @                              40%            40%            40%
                                     ----------------------------   ------------
                                       $5,728,960     $7,562,160     $7,562,160

General Tax Rate (per $1,000 A.V.)      39.057000      37.630000      37.630000

Total Taxes                              $223,756       $284,564       $284,564

- --------------------------------------------------------------------------------
Source: Assessor's Office
- --------------------------------------------------------------------------------

The local Assessor's methodology for valuation is the cost approach unlessere
is sufficient information for either sales or income to be utilized.

TAX COMPARABLES

As a crosscheck to the subject's applicable real estate taxes, CBRE has reviewed
the real estate tax information according to the Fulton County for comparable
properties in the immediate area. The following table summarizes the real estate
tax comparables employed for this assignment:

<TABLE>
<CAPTION>
==============================================================================================================================
                                                   AD VALOREM TAX COMPARABLES
- ------------------------------------------------------------------------------------------------------------------------------
                             Royal Centre IV    Preston Ridge IV    Parkview I at Opus Woods    Royal Centre III     Subject
- ------------------------------------------------------------------------------------------------------------------------------
<S>                            <C>                 <C>                     <C>                     <C>             <C>
Year Built                         2000               2000                    2000                    1998             2001
NRA (SF)                         301,436             150,320                 165,000                 165,527         161,366
Tax Year                           2001               2001                    2001                    2001             2001

Total Assessed Value           $46,405,400         $15,211,700             $19,816,000             $19,012,500     $18,905,400
Per SF                           $153.95             $101.20                 $120.10                 $114.86         $117.16

- ------------------------------------------------------------------------------------------------------------------------------
Source: Assessor's Office
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>

CONCLUSION

Based on the foregoing information, the subject's current tax value is supported
by the comparable properties shown. However, the tax values have changed
dramatically for some properties in the area due to fluctuations in occupancy.

- --------------------------------------------------------------------------------
                                       49
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                       TAX AND ASSESSMENT DATA
- --------------------------------------------------------------------------------

Based on the foregoing information, the total taxes for the subject have been
estimated as $284,564 for the base year of our analysis, based upon an assessed
value of $7,562,160 or $46.86 per square foot. For purposes of this analysis we
are assuming any outstanding property tax liability is paid. No deduction for
outstanding property tax delinquency has been made. CB Richard Ellis, Inc.
assumes that all taxes are current. If the subject sold for the value estimate
in this report, a reassessment at that value would most likely not occur.
However, it would be considered in a future revaluation relative to other sales
within the area and adjustments made according to the indicated trend.

- --------------------------------------------------------------------------------
                                       50
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                          HIGHEST AND BEST USE
- --------------------------------------------------------------------------------

                              HIGHEST AND BEST USE

In appraisal practice, the concept of highest and best use represents the
premise upon which value is based. The four criteria the highest and best use
must meet are:

      o      legal permissibility;
      o      physical possibility;
      o      financial feasibility; and
      o      maximum profitability.

Highest and best use analysis involves assessing the subject both as if vacant
and as improved.

AS VACANT

Legal Permissibility

The legally permissible uses were discussed in detail in the site analysis and
zoning sections of this report.

Physical Possibility

The subject is adequately served by utilities, has an adequate shape and size,
sufficient access, etc., to be a separately developable site. The subject site
would reasonably accept a site layout for any of the legally probable uses.
There are no known physical reasons why the subject site would not support any
legally probable development. The existence of the present development on the
site provides additional evidence for the physical possibility of development.

Financial Feasibility

The determination of financial feasibility is dependent primarily on the
relationship of supply and demand for the legally probable land uses versus the
cost to create the uses. As discussed in the Market Analysis section of this
report, the subject office market is generally stabilized. Development of new
office properties has occurred in the past few years. Further, within the
subject market, there are numerous proposed office projects in the competitive
market. These factors indicate that it would be financially feasible to complete
a new office project if the site acquisition cost was low enough to provide an
adequate developer's profit.

Maximum Profitability

The final test of highest and best use of the site as though vacant is that the
use be maximally productive, yielding the highest return to the land. In the
case of the subject as if vacant, the analysis has indicated that a new office
project would be most appropriate.

- --------------------------------------------------------------------------------
                                       51
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                          HIGHEST AND BEST USE
- --------------------------------------------------------------------------------

CONCLUSION: HIGHEST AND BEST USE AS VACANT

Based on the information presented above and upon information contained in the
Market and Neighborhood Analyses sections, we conclude that the highest and best
use of the subject as if vacant, would be the development an office property.
However, due to the current occupancy levels, it would most likely require a
holding period until market conditions improve unless a major percentage of the
space could be pre-leased to a credit tenant.

AS IMPROVED

Legal Permissibility

As discussed, the subject site's zoning and legal restrictions permit a variety
of land uses. The site has been improved with an office development that is a
legal, conforming use.

Physical Possibility

The physical characteristics of the subject improvements were discussed in
detail in the Improvement Analysis section. The layout and positioning of the
improvements is considered functional for office use. While it would be
physically possible for a wide variety of uses, based on the legal restrictions
and the design of the improvements, the continued use of the property for office
users would be the most functional use.

Financial Feasibility

The financial feasibility of an office property is based on the amount of rent
which can be generated, less operating expenses required to generate that
income; if a residual amount existing, then the land is being put to a
productive use. As will be indicated in the Income Capitalization Approach
section, the subject is producing a positive net cash flow and continued
utilization of the improvements for office purposes is considered financially
feasible.

Maximum Profitability

The maximum profitable use of the subject as improved should conform to
neighborhood trends and be consistent with existing land uses. Although several
uses may generate sufficient revenue to satisfy the required rate of return on
investment and provide a return on the land, the single use that produces the
highest price or value is typically the highest and best use. As shown in the
applicable valuation sections, buildings that are similar to the subject have
been acquired or continue to be used by office owners/tenants. None of the
comparable buildings have been acquired for conversion to an alternative use.
These comparables would indicate that the maximally productive use of the
property is consistent with the existing use as an office property.

- --------------------------------------------------------------------------------
                                       52
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                          HIGHEST AND BEST USE
- --------------------------------------------------------------------------------

CONCLUSION: HIGHEST AND BEST USE AS IMPROVED

Based on the foregoing, the highest and best use of the property as improved is
consistent with the existing use, as an office development.

- --------------------------------------------------------------------------------
                                       53
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                         APPRAISAL METHODOLOGY
- --------------------------------------------------------------------------------

                              APPRAISAL METHODOLOGY

In appraisal practice, an approach to value is included or omitted based on its
applicability to the property type being valued and the quality and quantity of
information available.

COST APPROACH

The cost approach is based upon the proposition that the informed purchaser
would pay no more for the subject than the cost to produce a substitute property
with equivalent utility. This approach is particularly applicable when the
property being appraised involves relatively new improvements that represent the
highest and best use of the land, or when relatively unique or specialized
improvements are located on the site and for which there exist few sales or
leases of comparable properties.

SALES COMPARISON APPROACH

The sales comparison approach utilizes sales of comparable properties, adjusted
for differences, to indicate a value for the subject. Valuation is typically
accomplished using physical units of comparison such as price per square foot,
price per unit, price per floor, etc., or economic units of comparison such as
gross rent multiplier. Adjustments are applied to the physical units of
comparison derived from the comparable sale. The unit of comparison chosen for
the subject is then used to yield a total value. Economic units of comparison
are not adjusted, but rather analyzed as to relevant differences, with the final
estimate derived based on the general comparisons.

INCOME CAPITALIZATION APPROACH

The income capitalization approach reflects the subject's income-producing
capabilities. This approach is based on the assumption that value is created by
the expectation of benefits to be derived in the future. Specifically estimated
is the amount an investor would be willing to pay to receive an income stream
plus reversion value from a property over a period of time. The two common
valuation techniques associated with the income capitalization approach are
direct capitalization and the discounted cash flow (DCF) analysis.

METHODOLOGY APPLICABLE TO THE SUBJECT

In valuing the subject, all three approaches are applicable and have been
utilized. In addition, the replacement cost has been utilized within the
analysis of insurable value.

- --------------------------------------------------------------------------------
                                       54
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                    LAND VALUE
- --------------------------------------------------------------------------------

                                   LAND VALUE

The following location map and table of sales summarizes the comparable data
used in the valuation of the subject site. A detailed description of each
transaction is included in the Addenda.


                              [MAP OF SUBJECT AREA]

- --------------------------------------------------------------------------------
                                       55
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                    LAND VALUE
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
====================================================================================================================================
                                                  SUMMARY OF COMPARABLE LAND SALES
- ------------------------------------------------------------------------------------------------------------------------------------
                                           Transaction                            Actual Sale   Adjusted Sale    Size     Price Per
 No.      Property Location              Type       Date        Zoning               Price         Price(1)     (Acres)     Acre
- ------------------------------------------------------------------------------------------------------------------------------------
<C>       <S>                            <C>       <C>       <C>                  <C>             <C>            <C>      <C>
  1       SS Windward, W of              Sale      Sep-01         OI              $1,440,000      $1,440,000      8.60    $167,442
          Westside Dr,
          Alpharetta, GA

  2       SWC Webb Bridge and            Sale      Mar-01    O-I, Office &        $2,229,000      $2,229,000     13.70    $162,701
          Morris Roads,                                      Institutional
          Alpharetta, GA

  3       S Side of Kimball              Sale      Jan-01    OI; Office &         $1,467,900      $1,467,900      6.92    $212,002
          Bridge Road, North of                               Instutional
          Murlie Drive, S of
          Ga Highway 120,
          Alpharetta, GA

  4       N/s of Great Oaks Way,         Sale      Sep-00         O&I             $1,671,625      $1,671,625     13.37    $125,001
          W of North Point Parkway,
          Alpharetta, GA

  5       NS Brookside Pkwy E of         Sale      Aug-00         O&I             $1,631,708      $1,631,708      9.89    $164,986
          Alexander Dr Along SS
          Old Milton Pkwy E of GA
          Hwy 400, Alpharetta, GA
- ------------------------------------------------------------------------------------------------------------------------------------
Subject   11680 Great Oaks Way,          ---        ---       OI Office &             ---            ---         13.37       ---
          Alpharetta, Georgia                                Institutional
- ------------------------------------------------------------------------------------------------------------------------------------
(1) Transaction amount adjusted for cash equivalency and/or development costs (where applicable)
Compiled by CBRE
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

The sales utilized represent the best data available for comparison with the
subject property and were selected from our research of comparable land sales
within the nearby area.

ANALYSIS OF LAND SALES

Land Sale One

This sale is located approximately two miles northwest of the subject property
along Windward Parkway west/northwest of Georgia Highway 400. The site was
purchased for the development of a 68,000 square foot data center for Cingular
Wireless. This sale warrants a downward adjustment to account for the weakened
market conditions since its date of sale, as compared to the subject's date of
appraisal. Otherwise this sale is considered to be similar to the subject
relative to location and topography with no other adjustments warranted to the
price per acre indication.

Land Sale Two

This sale is located north of the subject property just west of North Point
Parkway at Morris Road and Webb Bridge. The site was purchased for the
development of a mid-rise office building. This sale warrants an upward
adjustment for property rights conveyed as the broker indicated the sale was
negatively impacted by easements. A downward adjustment is required to account
for the weakened market conditions since its date of sale, as compared to the
subject's date of appraisal. Otherwise this sale is considered to be similar to
the subject relative to location and topography with no other adjustments
warranted to the price per acre indication.

- --------------------------------------------------------------------------------
                                       56
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                    LAND VALUE
- --------------------------------------------------------------------------------

Land Sale Three

This sale is located approximately two miles west/southwest of the subject
property along Kimball Bridge Road west of Georgia Highway 400. The site was
purchased for the development of low-rise office. This sale warrants a downward
adjustment to account for the weakened market conditions since its date of sale,
as compared to the subject's date of appraisal. Otherwise this sale is
considered to be similar to the subject relative to location and topography with
no other adjustments warranted to the price per acre indication.

Land Sale Four

This sale is the purchase of the land for development of the subject building.
This sale warrants a downward adjustment to account for the weakened market
conditions since its date of sale, as compared to the subject's date of
appraisal. Otherwise this sale is considered to be similar to the subject
relative to location and topography with no other adjustment being warranted to
the price per acre indication.

Land Sale Five

This sale is located approximately one mile north/northeast of the subject along
the south side of Old Milton Parkway at Brookside Parkway. The site was
purchased for the development of a 101,207 square foot Class A office building.
This sale warrants a downward adjustment to account for the weakened market
conditions since its date of sale, as compared to the subject's date of
appraisal. Otherwise, no additional adjustments are warranted to the price per
acre indication.

SUMMARY OF ADJUSTMENTS

Based on a comparative analysis, the following table summarizes the adjustments
warranted when comparing each sale to the subject.

- --------------------------------------------------------------------------------
                                       57
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                    LAND VALUE
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
================================================================================================================================
                                                    LAND SALES ADJUSTMENT GRID
- --------------------------------------------------------------------------------------------------------------------------------

<S>                               <C>            <C>              <C>               <C>             <C>            <C>
Comparable Number                      1               2                3                4               5            Subject
Transaction Type                     Sale             Sale            Sale             Sale            Sale             ---
Transaction Date                    Sep-01           Mar-01          Jan-01           Sep-00          Aug-00            ---
Zoning                                OI         O-I, Office &    OI; Office &          O&I             O&I        GR, Community
                                                 Institutional     Instutional                                      Commercial
Actual Sale Price                 $1,440,000       $2,229,000      $1,467,900       $1,671,625      $1,631,708          ---
Adjusted Sale Price(1)            $1,440,000       $2,229,000      $1,467,900       $1,671,625      $1,631,708          ---
Size (Acres)                         8.60            13.70            6.92             13.37           9.89            13.37
Size (SF)                           374,616         596,772          301,609          582,525         430,808         582,397
Price Per Acre                     $167,442         $162,701        $212,002         $125,001        $164,986           ---
Price Per SF                         $3.84           $3.74            $4.87            $2.87           $3.79            ---
Price Per Unit                        N/A             N/A              N/A              N/A             N/A             ---
- ------------------------------------------------------------------------------------------------------------------
Price ($ Per AC)                   $167,442         $162,701        $212,002         $125,001        $164,986
- ------------------------------------------------------------------------------------------------------------------
Property Rights Conveyed              0%               0%              0%               0%              0%
Financing Terms 1                     0%               0%              0%               0%              0%
Conditions of Sale                    0%               0%              0%               0%              0%
Market Conditions                    -10%             -10%            -10%             -15%            -15%
- ------------------------------------------------------------------------------------------------------------------
Subtotal                           $150,698         $146,431        $190,802         $106,251        $140,238
- ------------------------------------------------------------------------------------------------------------------
Size                                  0%               0%              0%               0%              0%
Shape                                 0%               0%              0%               0%              0%
Corner                                0%               0%              0%               0%              0%
Frontage                              0%               0%              0%               0%              0%
Topography                            0%               0%              0%               0%              0%
Location                              0%               0%              0%               0%              0%
Zoning/Density                        0%               0%              0%               0%              0%
Utilities                             0%               0%              0%               0%              0%
Highest & Best Use                    0%               0%              0%               0%              0%
- ------------------------------------------------------------------------------------------------------------------
Total Other Adjustments               0%               0%              0%               0%              0%
- ------------------------------------------------------------------------------------------------------------------
Value Indication for Subject       $150,698         $146,431        $190,802         $106,251        $140,238
- ------------------------------------------------------------------------------------------------------------------
(1) Transaction amount adjusted for cash equivalency and/or development costs (where applicable)
Compiled by CBRE
- ------------------------------------------------------------------------------------------------------------------
</TABLE>

CONCLUSION

Based on the preceding discussion a price per acre indication toward the middle
of the range indicated by these comparables is most appropriate for the subject.
The sales noted all have very similar access and location relative to the
transportation routes and proximity to the area's amenities, i.e. restaurants,
retail, hospitality. The following table presents the valuation conclusion:

================================================================================
                             CONCLUDED LAND VALUE
- --------------------------------------------------------------------------------
        $ Per AC                     Subject Acs.                  Total
- --------------------------------------------------------------------------------
        $150,000             x           13.37          =        $2,005,500
    Indicated Value:                                             $2,000,000
- --------------------------------------------------------------------------------
Compiled by CBRE
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                                       58
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                 COST APPROACH
- --------------------------------------------------------------------------------

                                  COST APPROACH

In estimating the replacement cost new for the subject, the following
methods/data source(s) have been utilized (where available):

o     the comparative unit method has been employed, utilizing the Marshall
      Valuation Service (MVS) cost guide, published by Marshall and Swift, LLC;

o     the subject's actual construction costs (where available); and

o     actual/budget construction cost figures available for comparable
      properties have been considered.

MARSHALL VALUATION SERVICE

Direct Cost

Salient details regarding the direct costs are summarized in the Cost Approach
Schedule that follows this section. The MVS cost estimates include the
following:

      1.    average architect's and engineer's fees for plans, plan check,
            building permits and survey(s) to establish building line;

      2.    normal interest in building funds during the period of construction
            plus a processing fee or service charge;

      3.    materials, sales taxes on materials, and labor costs;

      4.    normal site preparation including finish grading and excavation for
            foundation and backfill;

      5.    utilities from structure to lot line figured for typical setback;

      6.    contractor's overhead and profit, including job supervision,
            workmen's compensation, fire and liability insurance, unemployment
            insurance, equipment, temporary facilities, security, etc.;

      7.    site improvements (included as lump sum additions); and

      8.    initial tenant improvement costs are included in MVS cost estimate.
            However, additional lease-up costs such as advertising, marketing
            and leasing commissions are not included.

Base building costs (direct costs), indicated by the MVS cost guide, are
adjusted to reflect the physical characteristics of the subject. Making these
adjustments, including the appropriate local and current cost multipliers, the
Direct Building Cost is indicated.

Additions

Items not included in the direct building cost estimate include parking and
walks, signage, landscaping, and miscellaneous site improvements. The cost for
these items is estimated separately using the segregated cost sections of the
MVS cost guide.

Indirect Cost

Several indirect cost items are not included in the direct building cost figures
derived through the MVS cost guide. These items include developer overhead
(general and administrative costs), property taxes, legal and insurance costs,

- --------------------------------------------------------------------------------
                                       59
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                 COST APPROACH
- --------------------------------------------------------------------------------

local development fees and contingencies, lease-up and marketing costs and
miscellaneous costs. Research into these costs leads to the conclusion that an
average property requires an allowance for additional indirect costs of about 5%
to 15% of the total direct costs.

MVS Conclusion

The concluded direct and indirect building cost estimate obtained via the MVS
cost guide (Section 15, Page 17) is illustrated as follows:

<TABLE>
<CAPTION>
====================================================================================================================================
                                             MARSHALL VALUATION SERVICE COST SCHEDULE
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                                       <C>                                 <C>                                 <C>
Primary Building Type:                    Office                              Height per Story:                   12'
Effective Age:                            3 YRS                               Number of Buildings:                2
Quality/Condition:                        Excellent                           Gross Building Area:                161,366 SF
Exterior Wall:                            Stone and Glass                     Net Rentable Area:                  161,366 SF
Number of Stories:                        1                                   Average Floor Area:                 161,366 SF
- ------------------------------------------------------------------------------------------------------------------------------------

MVS Sec/Page/Class                                                                                                          15/17/B
Building Component                                                                                                           Office
Component Sq. Ft.                                                                                                        161,366 SF
Base Square Foot Cost                                                                                                       $117.00

Square Foot Refinements
  Heating and Cooling                                                                                                         $0.00
  Sprinklers                                                                                                                  $1.75
  Other                                                                                                                       $0.00
  Other                                                                                                                       $0.00
                                                                                                                  ------------------
  Subtotal                                                                                                                  $118.75

Height and Size Refinements
  Number of Stories Multiplier                                                                                                 1.00
  Height per Story Multiplier                                                                                                  1.00
  Floor Area Multiplier                                                                                                        0.90
                                                                                                                  ------------------
  Subtotal                                                                                                                  $106.87

Cost Multipliers
  Current Cost Multiplier                                                                                                      1.08
  Local Multiplier                                                                                                             0.99
                                                                                                                  ------------------
Final Square Foot Cost                                                                                                      $114.27

Base Component Cost                                                                                                     $18,439,266
- ------------------------------------------------------------------------------------------------------------------------------------

Base Building Cost                        (via Marshall Valuation Service cost data)                                    $18,439,266
Additions
  Signage, Landscaping & Misc. Site Improvements                                                                            $30,000
  Parking/Walks                                                                                                            $150,000
  Other                                                                                                                          $0
                                                                                                                  ------------------
Direct Building Cost                                                                                                    $18,619,266

Indirect Costs                                         5.0% of Direct Building Cost                                        $930,963
                                                                                                                  ------------------
Direct and Indirect Building Cost                                                                                       $19,550,230
Rounded                                                                                                                 $19,550,000

- ------------------------------------------------------------------------------------------------------------------------------------
Compiled by CBRE
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

- --------------------------------------------------------------------------------
                                       60
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                 COST APPROACH
- --------------------------------------------------------------------------------

DIRECT AND INDIRECT COST CONCLUSION

The indicated direct and indirect building costs for the subject are illustrated
as follows:

================================================================================
                       DIRECT AND INDIRECT COST CONCLUSION
- --------------------------------------------------------------------------------
Source                                             Total         Per SF
- --------------------------------------------------------------------------------
MVS Cost Guide                                  $19,550,000      $121.15
CBRE Estimate                                   $19,550,000      $121.15
- --------------------------------------------------------------------------------
Compiled by CBRE
- --------------------------------------------------------------------------------

ENTREPRENEURIAL PROFIT

Entrepreneurial profit represents the return to the developer, and is separate
from contractor's overhead and profit. This line item, which is a subjective
figure, tends to range from 5% to 15% of total direct and indirect costs for
this property type, based on discussions with developers active in this market.

ACCRUED DEPRECIATION

There are essentially three sources of accrued depreciation:

      1. physical deterioration, both curable and incurable;
      2. functional obsolescence, both curable and incurable; and
      3. external obsolescence.

Physical Deterioration

The subject's physical condition was detailed in the Improvement Analysis
section. Curable deterioration affecting the improvements results from deferred
maintenance and, if applicable, was previously discussed.

With regard to incurable deterioration, the subject improvements are considered
to have deteriorated due to normal wear and tear associated with natural aging.

================================================================================
                        ECONOMIC AGE AND LIFE
- --------------------------------------------------------------------------------

Actual Age                                                            3 Years
Effective Age                                                         3 Years
MVS Expected Life                                                    45 Years
Remaining Economic Life                                              42 Years
Accrued Physical Incurable Depreciation                                  6.7%
- --------------------------------------------------------------------------------
Compiled by CBRE
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                                       61
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                 COST APPROACH
- --------------------------------------------------------------------------------

Functional Obsolescence

Based on a review of the design and layout of the improvements, no forms of
curable functional obsolescence were noted. Because replacement cost considers
the construction of the subject improvements utilizing modern materials and
current standards, design and layout, functional incurable obsolescence is not
applicable.

External Obsolescence

Based on a review of the local market and neighborhood, no forms of external
obsolescence affect the subject.

COST APPROACH CONCLUSION

The value estimate is calculated on the Cost Approach Schedule that follows.

<TABLE>
<CAPTION>
====================================================================================================================================
                                                     COST APPROACH CONCLUSION
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                                       <C>                                 <C>                                 <C>
Building Type:                            Office                              Height per Story:                   12'
Effective Age:                            3 YRS                               Number of Buildings:                2
Quality/Condition:                        Excellent                           Gross Building Area:                161,366 SF
Exterior Wall:                            Stone and Glass                     Net Rentable Area:                  161,366 SF
Number of Stories:                        1                                   Average Floor Area:                 161,366 SF
- ------------------------------------------------------------------------------------------------------------------------------------

Direct and Indirect Building Cost                                                                                       $19,550,000

Entrepreneurial Profit                                10.0% of Total Building Cost                                       $1,955,000
                                                                                                                  ------------------

Replacement Cost New                                                                                                    $21,505,000
- ------------------------------------------------------------------------------------------------------------------------------------

Accrued Depreciation
  Unfinished Shell Space                                                                                       $0
  Incurable Physical Deterioration                     6.7% of Replacement Cost New less              ($1,433,667)
  Functional Obsolescence                                 Curable Physical Deterioration                       $0
  External Obsolescence                                                                                        $0
                                                                                                ------------------
  Total Accrued Depreciation                           6.7% of Replacement Cost New                                     ($1,433,667)
Depreciated Replacement Cost                                                                                            $20,071,333
- ------------------------------------------------------------------------------------------------------------------------------------

Land Value                                                                                                               $2,000,000
                                                                                                                  ------------------
Stabilized Value Indication                                                                                             $22,071,333
Curable Physical Deterioration                                                                                                   $0
Lease-Up Discount                                                                                                                $0
                                                                                                                  ------------------
"As Is" Value Indication                                                                                                $22,071,333
Rounded                                                                                                                 $22,070,000
Value Per SF                                                                                                                $136.77

- ------------------------------------------------------------------------------------------------------------------------------------
Compiled by CBRE
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

- --------------------------------------------------------------------------------
                                       62
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                               INSURABLE VALUE
- --------------------------------------------------------------------------------

                                 INSURABLE VALUE

The insurable value estimate is intended to reflect the value of the
destructible portions of the subject that approximates the amount of insurance
that may, or should, be carried to indemnify the owner in case of a loss.
Insurable value is based on the replacement of physical items that are subject
to loss from hazards and excludes indestructible items such as basement
excavation, foundation, site work, land value and indirect costs. In the case of
the subject, we have based the estimate on the base building costs (direct
costs) as obtained via Marshall Valuation Services, with appropriate deductions.
CBRE is not an expert to determine insurable value whereby it is recommended
that the client/reader retain the services of a qualified, independent insurance
adjuster to determine insurable value prior to making a business decision.

<TABLE>
<CAPTION>
====================================================================================================================================
                                                     INSURABLE VALUE SCHEDULE
- ------------------------------------------------------------------------------------------------------------------------------------

<S>                                       <C>                                 <C>                                 <C>
Building Type:                            Office                              Height per Story:                   12'
Effective Age:                            3 YRS                               Number of Buildings:                2
Quality/Condition:                        Excellent                           Gross Building Area:                161,366 SF
Exterior Wall:                            Stone and Glass                     Net Rentable Area:                  161,366 SF
Number of Stories:                        1                                   Average Floor Area:                 161,366 SF
- ------------------------------------------------------------------------------------------------------------------------------------

MVS Sec/Page/Class                                                                                                          15/17/B
Building Component                                                                                                           Office
Component Sq. Ft.                                                                                                        161,366 SF
Base Square Foot Cost                                                                                                       $117.00

Square Foot Refinements
  Heating and Cooling                                                                                                         $0.00
  Sprinklers                                                                                                                  $1.75
                                                                                                                  ------------------
  Subtotal                                                                                                                  $118.75

Height and Size Refinements
  Number of Stories Multiplier                                                                                                 1.00
  Height per Story Multiplier                                                                                                  1.00
  Floor Area Multiplier                                                                                                        0.90
                                                                                                                  ------------------
  Subtotal                                                                                                                  $106.87

Cost Multipliers
  Current Cost Multiplier                                                                                                      1.08
  Local Multiplier                                                                                                             0.99
                                                                                                                  ------------------
Final Square Foot Cost                                                                                                      $114.27
Base Component Cost                                                                                                     $18,439,266

- ------------------------------------------------------------------------------------------------------------------------------------

Base Building Cost                        (via Marshall Valuation Service cost data)                                    $18,439,266

Insurable Value Exclusions                            10.0% of Total Building Cost                                      ($1,843,927)
                                                                                                                  ------------------

Insurable Value Indication                                                                                              $16,595,340
Rounded                                                                                                                 $16,600,000
Value Per SF                                                                                                                $102.87

- ------------------------------------------------------------------------------------------------------------------------------------
Compiled by CBRE
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

- --------------------------------------------------------------------------------
                                       63
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                     SALES COMPARISON APPROACH
- --------------------------------------------------------------------------------

                            SALES COMPARISON APPROACH

The following location map and table of sales summarizes the comparable data
used in the valuation of the subject property. A detailed description of each
transaction is included in the Addenda.

                                  [MAP OF AREA]

- --------------------------------------------------------------------------------
                                       64
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                     SALES COMPARISON APPROACH
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
====================================================================================================================================
                                                  SUMMARY OF COMPARABLE OFFICE SALES
- ------------------------------------------------------------------------------------------------------------------------------------
                                Transaction     Year       NRA     Actual Sale      Adjusted        Price              NOI
 No.   Name                    Type     Date    Built     (SF)        Price       Sale Price(1)   Per SF(1)   Occ.   Per SF     OAR
- ------------------------------------------------------------------------------------------------------------------------------------
<C>    <S>                     <C>     <C>      <C>     <C>       <C>             <C>              <C>        <C>    <C>      <C>
  1    Preston Ridge IV,       Sale    Jun-04   2000    150,320   $20,050,000     $20,050,000      $133.38     89%   $13.96   10.47%
       Alpharetta, GA

  2    Parkside Terrace,       Sale    Apr-04   2000    252,960   $40,095,000     $38,595,000      $152.57     91%    $8.73    5.72%
       Alpharetta, GA

  3    Satellite Place 700,    Sale    Apr-04   2002    132,866   $22,000,000     $22,000,000      $165.58     98%   $14.31    8.64%
       Duluth, GA

  4    Windward Plaza 300,     Sale    Nov-03   1999    203,248   $31,500,000     $31,500,000      $154.98    100%   $11.48    7.41%
       Alpharetta, GA

  5    Windward Plaza 100,     Sale    Nov-03   1998    132,250   $19,835,000     $19,835,000      $149.98    100%   $16.51   11.01%
       Alpharetta, GA

  6    Royal Ridge,            Sale    Jan-03   2001    161,366   $24,250,000     $24,250,000      $150.28     90%   $13.31    8.86%
       Alpharetta, GA
- ------------------------------------------------------------------------------------------------------------------------------------
Subj.  Royal Ridge (2004),     ---      ---     2001    161,366       ---             ---            ---      99%    $12.92     ---
 Pro   Alpharetta, Georgia
Forma
- ------------------------------------------------------------------------------------------------------------------------------------
(1) Transaction amount adjusted for cash equivalency and/or deferred maintenance (where applicable)
Compiled by CBRE
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

The sales utilized represent the best data available for comparison with the
subject property. They were selected from our research of comparable improved
sales within the greater Atlanta area.

ANALYSIS OF IMPROVED SALES

Improved Sale One

Preston Ridge IV represents the acquisition of a six-story suburban office
building built in 2000 of glass and pre-cast panels located just west of North
Point Parkway along Preston Ridge Road, north/northeast of the subject. The
property was 89% occupied at the time of sale with a multi-tenant rent roll,
which has above market rents and some rollover in the next three years. The
property was in excellent condition at the time of sale.

The sale was considered an arm's-length transaction and required no adjustments
for property rights conveyed, financing terms or condition of sale. In
comparison to the subject, this sale is generally similar with respect to
location, construction quality, size, design appeal, and age/condition, while
inferior relative to the percentage of credit tenants under long-term lease.
Overall, this sale is similar in comparison to the subject but with an upward
adjustment warranted to its price per square foot indication for the impact of
long-term credit leases in place.

- --------------------------------------------------------------------------------
                                       65
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                     SALES COMPARISON APPROACH
- --------------------------------------------------------------------------------

Improved Sale Two

Parkside Terrace represents the acquisition of two five-story suburban office
buildings built in 2000 and 2002 of glass and masonry located south of the
subject near the intersection of Haynes Bridge Road and Mansell Road. The
property was 91% occupied at the time of sale with a multi-tenant rent roll. The
buildings were in excellent condition at the time of sale. The sales price was
adjusted downward for 6.82 acres of excess land.

The sale was considered an arm's-length transaction and required no adjustments
for property rights conveyed or financing terms. However, the seller reportedly
needed to place some 1031 exchange funds quickly and appears to have paid a
premium for the property. In comparison to the subject, this sale is generally
similar with respect to location, construction quality, size, design appeal, and
age/condition, while inferior relative to the percentage of credit tenants under
long-term lease. Overall, this sale is similar in comparison to the subject but
with a net upward adjustment warranted to its price per square foot indication
for the impact of conditions of sale and long-term credit leases in place.

Improved Sale Three

Satellite Place 700 This represents the purchase of a six-story, suburban office
building developed in 2002. The building is a glass and pre-cast panel design
and is located along Satellite Boulevard just north of Gwinnett Place Mall in
Gwinnett County southeast of the subject. The buyer was Franklin Street
Properties, a REIT, whose primary underwriting criteria is direct capitalization
based upon income in-place. The property was 98.2% leased to St. Paul Fire &
Marine Insurance through February 2009, effectively 5 years remaining. Utilizing
the budgeted net operating income results in an overall rate of 8.64%, based
upon the contract price of $22,000,000. As of the contract the property is in
excellent condition.

The sale was considered an arm's-length transaction and required no adjustments
for property rights conveyed, financing terms or condition of sale. It is noted
that the property is 98.2% leased to a credit tenant. In comparison to the
subject, this sale is generally similar with respect to location, construction
quality, size, design appeal, and age/condition, while inferior relative to the
percentage of credit tenants under long-term lease. Overall, this sale is
similar in comparison to the subject but with an upward adjustment warranted to
its price per square foot indication for the impact of long-term credit leases
in place.

Improved Sale Four

Windward Plaza 300 represented the acquisition of a five-story, suburban office
building. This property was developed in 1999 and is located north/northeast of
the subject in the Windward master planned community. The buyer was Georgia Wind

- --------------------------------------------------------------------------------
                                       66
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                     SALES COMPARISON APPROACH
- --------------------------------------------------------------------------------

I, LLC. The purchase was based upon the income in-place relative to the credit
of the tenant GE Capital. The lease extends through 2014, thus having
approximately 10 years remaining as of the date of sale. Based upon 100%
occupancy at sale the overall rate was 7.41%. This property was in excellent
condition at the time of sale.

The sale was considered an arm's-length transaction and required no adjustments
for property rights conveyed, financing terms or condition of sale. It is noted
that the property is 100% occupied by a credit tenant with a long-term lease. An
upward adjustment is warranted for the improved market conditions since this
comparable's date of sale, as compared to the subject's date of appraisal due to
the lower interest rate environment and demand for well leased properties such
as the subject. In further comparison to the subject, this sale was generally
similar with respect to location, age and condition characteristics, as well as
construction quality, while superior with respect to tenancy (credit). Overall,
this sale is similar in comparison to the subject, but with net adjustment which
indicates little price change.

Improved Sale Five

Windward Plaza 100 represented the acquisition of a five-story, suburban office
building adjacent to Improved Sale Four. This property was developed in 1998 and
is located north/northeast of the subject in the Windward master planned
community. The buyer was Georgia Wind I, LLC. The purchase was based upon pro
forma income relative to being 100% leased to E*Trade and Ashland APAC, which
have remaining terms of 5 and 7 years approximately. The indicated overall rate
was 11.01%. This property was in good to excellent condition at the time of
sale.

The sale was considered an arm's-length transaction and required no adjustments
for property rights conveyed, financing terms or condition of sale. It is noted
that the property was 100% occupied by two tenants with a medium length lease
term remaining. An upward adjustment is warranted for the improved market
conditions since this comparable's date of sale, as compared to the subject's
date of appraisal due to the lower interest rate environment and demand for well
leased properties such as the subject. In further comparison to the subject,
this sale is generally similar with respect to location, age and condition
characteristics, as well as construction quality, while inferior with respect to
tenancy (credit). Overall, this sale is similar in comparison to the subject,
but with an upward adjustment warranted to its price per square foot indication
due to the superior credit and term of the comparable's lease.

Improved Sale Six

Royal Ridge represents the acquisition of the subject, a six-story office
building built in 2001 and located along the north side of Great Oaks Way. The
building has a stone accented glass exterior. The office building was 90%
occupied at sale. However, the sale included certain inducements, including the

- --------------------------------------------------------------------------------
                                       67
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                     SALES COMPARISON APPROACH
- --------------------------------------------------------------------------------

vacant space being mastered leased for two years, and all associated expenses
with lease-up being the seller's responsibility. This effectively positioned the
building as a fully leased credit tenant sale. The building was in excellent
condition at sale.

The sale was considered an arm's-length transaction and required no adjustments
for property rights conveyed, financing terms or condition of sale. It is noted
that the building is approximately 90% leased to two large credit tenants under
long-term leases, though they would likely be considered slightly above market
if negotiated today. An upward adjustment is warranted for the improved market
conditions since this comparable's date of sale, as compared to the subject's
date of appraisal due to the lower interest rate environment and demand for well
leased properties such as the subject. No other adjustments are required.
Overall, only an upward adjustment for market conditions is required. to its
price per square foot indication.

SUMMARY OF ADJUSTMENTS

Based on the foregoing discussions, the following table summarizes the
adjustments warranted when comparing each sale to the subject.

<TABLE>
<CAPTION>
====================================================================================================================================
                                                OFFICE SALES ADJUSTMENT GRID
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                            <C>             <C>             <C>             <C>             <C>             <C>           <C>
                                                                                                                              Subj.
Comparable Number                   1               2               3               4               5               6          Pro
                                                                                                                              Forma
Transaction Type                   Sale           Sale             Sale           Sale             Sale           Sale         ---
Transaction Date                  Jun-04         Apr-04           Apr-04         Nov-03           Nov-03         Jan-03        ---
Year Built                         2000           2000             2002           1999             1998           2001         2001
NRA (SF)                         150,320         252,960         132,866         203,248         132,250         161,366     161,366
Actual Sale Price              $20,050,000     $40,095,000     $22,000,000     $31,500,000     $19,835,000     $24,250,000     ---
Adjusted Sale Price(1)         $20,050,000     $38,595,000     $22,000,000     $31,500,000     $19,835,000     $24,250,000     ---
Price Per SF(1)                  $133.38         $152.57         $165.58         $154.98         $149.98         $150.28       ---
Occupancy                          89%             91%             98%            100%             100%            90%         99%
NOI Per SF                        $13.96          $8.73           $14.31         $11.48           $16.51         $13.31       $12.92
OAR                               10.47%          5.72%           8.64%           7.41%           11.01%          8.86%        ---
- ----------------------------------------------------------------------------------------------------------------------------
Adj. Price Per SF                $133.38         $152.57         $165.58         $154.98         $149.98         $150.28
- ----------------------------------------------------------------------------------------------------------------------------
Property Rights Conveyed            0%             0%               0%             0%               0%             0%
Financing Terms(1)                  0%             0%               0%             0%               0%             0%
Conditions of Sale                  0%            -30%              0%             0%               0%             0%
Market Conditions (Time)            0%             0%               0%             10%             10%             10%
- ----------------------------------------------------------------------------------------------------------------------------
Subtotal                         $133.38         $106.80         $165.58         $170.48         $164.98         $165.31
- ----------------------------------------------------------------------------------------------------------------------------
Location                            0%             0%               0%             0%               0%             0%
Size                                0%             0%               0%             0%               0%             0%
Age/Condition                       0%             0%               0%             0%               0%             0%
Quality of Construction             0%             0%               0%             0%               0%             0%
Parking                             0%             0%               0%             0%               0%             0%
Tenancy                            20%             30%             10%            -10%             10%             0%
Other                               0%             0%               0%             0%               0%             0%
- ----------------------------------------------------------------------------------------------------------------------------
Total Other Adjustments            20%             30%             10%            -10%             10%             0%
- ----------------------------------------------------------------------------------------------------------------------------
Indicated Value Per SF           $160.06         $138.84         $182.14         $153.43         $181.48         $165.31
- ----------------------------------------------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------------------------------------
(1) Transaction amount adjusted for cash equivalency and/or deferred maintenance (where applicable)
Compiled by CBRE
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

- --------------------------------------------------------------------------------
                                       68
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                     SALES COMPARISON APPROACH
- --------------------------------------------------------------------------------

SALE PRICE PER SQUARE FOOT CONCLUSION

Based on the preceding discussions of each comparable and the foregoing
adjustment analysis, Comparables Three, Four and Six are the most representative
of the subject and warrant the greatest consideration because of their greater
similarity of percentage of the space leased to credit tenant(s) under a medium
to long-term lease. In conclusion, a price per square foot indication within the
range of these comparables is most appropriate for the subject. The following
table presents the valuation conclusion:

================================================================================
                              SALES COMPARISON APPROACH
- --------------------------------------------------------------------------------

    NRA (SF)            X          Value Per SF          =            Value
- --------------------------------------------------------------------------------
     161,366            X             $160.00            =          $25,818,560
     161,366            X             $170.00            =          $27,432,220

- --------------------------------------------------------------------------------

VALUE CONCLUSION
Indicated Stabilized Value                                          $26,500,000
Value Per SF                                                            $164.22

- --------------------------------------------------------------------------------
Compiled by CBRE
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                                       69
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                INCOME CAPITALIZATION APPROACH
- --------------------------------------------------------------------------------

                         INCOME CAPITALIZATION APPROACH

The following location map and table of rents summarizes the comparable data
used in the valuation of the subject property. A detailed description of each
transaction is included in the Addenda.

                                  [MAP OF AREA]

- --------------------------------------------------------------------------------
                                       70
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                INCOME CAPITALIZATION APPROACH
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
===========================================================================================================
                                            SUMMARY OF COMPARABLE OFFICE RENTALS
- -----------------------------------------------------------------------------------------------------------
 Comp.                                                                      Year
  No.    Property Name                      Location                        Built     Occ.       NRA (SF)
- -----------------------------------------------------------------------------------------------------------
<C>      <S>                                <C>                              <C>      <C>        <C>
   1     Royal Centre IV                    11700 Great Oaks Way,            2000     91%        301,436
                                            Alpharetta, GA

   2     Parkview I at Opus Woods           925 North Point Parkway          2001     71%        165,000
                                            NEC Of North Point and
                                            Old Milton Parkways,
                                            Alpharetta, GA

   3     Georgia 400 Center                 2300-2400 Lakeview               1998     80%        402,265
         (I, II, and III)                   Parkway,
                                            Alpharetta, GA

   4     Northwinds Center/Northwinds       Haynes Bridge Road @             1997     69%        892,001
         Center West                        Northwinds Drive,
                                            Alpharetta, GA

   5     Preston Ridge II and III           3460 - 3480 Preston              1998     80%        300,896
                                            Ridge Road North Point
                                            Parkway @ Preston
                                            Ridge Road,
                                            Alpharetta, GA

   6     North Point Center East            100, 200, 333, & 555             1995     59%        539,367
         100, 200, 333, & 555               Northpoint Center East,
                                            Alpharetta, GA

   7     The Falls at Sanctuary Park        1125 Sanctuary                   2003     67%        225,000
                                            Parkway,
                                            Alpharetta, GA

- -----------------------------------------------------------------------------------------------------------
 Subj.   Royal Ridge (2004)                 11680 Great Oaks Way,            2001     89%        161,366
  Pro                                       Alpharetta, Georgia
 Forma
- -----------------------------------------------------------------------------------------------------------
Compiled by CBRE
- -----------------------------------------------------------------------------------------------------------

<CAPTION>
====================================================================================================
                                            SUMMARY OF COMPARABLE OFFICE RENTALS
- ----------------------------------------------------------------------------------------------------
 Comp.                                            Quoted                              Pass Thru/
  No.    Property Name                          Rental Rate       Expense Basis        Stop Amt.
- ----------------------------------------------------------------------------------------------------
<C>      <S>                                <C>                    <C>              <C>
   1     Royal Centre IV                    $18.75 - $19.00 PSF    Full Service     BYr Stop $6.50


   2     Parkview I at Opus Woods               $17.50 PSF         Full Service           6.5




   3     Georgia 400 Center                 $17.50 - $19.50 PSF    Full Service     Base Year Stop
         (I, II, and III)


   4     Northwinds Center/Northwinds       $18.50 - 20.00 PSF      $6.00 PSF       Base Year Stop
         Center West


   5     Preston Ridge II and III           $18.00 - $18.50 PSF     Base Stop        Full Service





   6     North Point Center East                $19.50 PSF            Gross            $7.25 PSF
         100, 200, 333, & 555


   7     The Falls at Sanctuary Park          $21.75 - $22.50      Full Service     Base Year Stop



- ----------------------------------------------------------------------------------------------------
 Subj.   Royal Ridge (2004)                         ---                ---
  Pro
 Forma
- ----------------------------------------------------------------------------------------------------
Compiled by CBRE
- ----------------------------------------------------------------------------------------------------
</TABLE>

The rentals utilized represent the best data available for comparison with the
subject property. They were selected from our research of comparable rentals
within the immediate area. Due to the difficult market conditions, some
buildings have done little actual leasing over the past 12 to 24 months, often
being only renewal leases.

ANALYSIS OF RENT COMPARABLES

Rent Comparable One

Royal Center IV is a six-story office building adjacent to the subject in the
North Point Parkway corridor along Great Oaks Way. The building was developed in
2000 with a glass on stone exterior. The overall occupancy of the building is
91%, little changed for some time. The quoted rate is $18.75 to $19.00 per
square foot on a gross basis. Expenses are quoted at approximately $6.50 per
square foot utilizing the first year expenses as a base year stop. Escalations
are 2.5% to 3% annually. The agent indicated free rent would be offered at some
level based on tenant and length of term. The tenant improvement allowance was
quoted as $15 to $20 per square foot. The most recent lease was an
expansion/relocation within the building in late 2003, which was executed at $18
per square foot.

- --------------------------------------------------------------------------------
                                       71
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                INCOME CAPITALIZATION APPROACH
- --------------------------------------------------------------------------------

In comparison to the subject this building is generally similar with respect to
location, construction quality, condition, age and design appeal, though
slightly superior with respect to size. Overall, this building is similar in
comparison to the subject with no adjustment warranted to its quoted rental
rates.

Rent Comparable Two

Parkview I is a four-story office building in Opus Woods located in Opus Woods,
a two building development in the northeast quadrant of North Point and Old
Milton Parkways, near the subject. Built in 2001, the building contains 165,000
square feet and is 71% occupied, up approximately 5% greater than one year ago.
Quoted rental rates are $17.50 per square foot on a full service basis. Expenses
are quoted at $6.50 per square foot. The leasing agent noted the primary
concession was free rent. Leases are typically structured for five years or
longer and include 2.5% annual escalations on the net rent. Tenant allowance was
indicated to be $20 to $25 per square foot. No recent leases have been executed.

In comparison the subject this building is similar with respect to location,
construction quality, age/condition, size, and design appeal. Overall, this
project is similar to the subject with no adjustment to the indicated rental
rate range was warranted.

Rent Comparable Three

Georgia 400 Center is a three building development, built between 1998 and 2001,
and located northwest of Georgia Highway 400 along Haynes Bridge Road. The six-
and seven-story buildings are glass and precast panel. Occupancy in the three
buildings is 80%. Quoted rental rates are $17.50 to $19.50 per square foot on a
full service basis. Expenses are quoted at $6.50 per square foot. The leasing
agent noted a concession of free rent equal to one month per year of lease term,
would likely be offered. Leases are typically structured for five years or
longer and include 2.5% annual escalations on the net rent. Tenant allowance was
indicated to be $23 to $28 per square foot for first generation space.

In comparison the subject this building is similar with respect to location,
construction quality, age/condition, size, and design appeal. Overall, this
project is similar to the subject with no adjustment to the indicated rental
rate range was warranted.

Rent Comparable Four

Northwinds Center represents six buildings built between 1997 and 2000, and
located northwest of Georgia Highway 400 along Haynes Bridge Road. The six-story
buildings are glass and precast panel. Occupancy in the buildings is 69%. Quoted
rental rates are $18.50 to $20.00 per square foot on a full service basis.
Expenses are quoted at $6.00 per square foot. The leasing agent noted free rent

- --------------------------------------------------------------------------------
                                       72
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                INCOME CAPITALIZATION APPROACH
- --------------------------------------------------------------------------------

is negotiable. Leases are typically structured for five years or longer and
include 3% annual escalations on the net rent. Tenant allowance was indicated to
be $20 per square foot for first generation space, and $5 per square foot for
second generation space.

In comparison to the subject this property is generally similar with respect to
location, construction quality, condition, size, design appeal, and age.
Overall, this property is similar in comparison to the subject with no
adjustment warranted to its quoted rental rates.

Rent Comparable Five

Preston Ridge I & II are two buildings in a multi-building development located
just north of the subject. Each building contains approximately 150,000 square
feet, and were built in 1998 and 1999. The six-story buildings are glass and
precast panel. Occupancy in the buildings is 80%. Leases are written on a
full-service basis with increases over the base year passed through to the
tenants. Expenses are quoted in the $6.50 to $7.00 per square foot range. The
agent indicated free rent would be offered at approximately one month for each
year of the lease. The tenant improvement allowance would be $25 per square foot
range for 1st generation space remaining and $15 to $28 for new tenants.
Escalations are typically 2 to 3% annually. Several leases over the past year
have been executed in the $11 per square foot range on a net rent basis. Tenant
improvements varied from none to $12 per square foot.

In comparison to the subject this property is generally similar with respect to
location, construction quality, age/condition, size, and design appeal. Overall,
this comparable is similar in comparison to the subject with no adjustment
warranted to its quoted rental rates.

Rent Comparable Six

North Point Center East represents a four six- and seven-story office building,
located adjacent to the North Point Mall, between Mansell and Haynes Bridge
Roads. The buildings were built between 1995 and 1999. The buildings are glass
and precast panel and currently 59% occupied. Rates are quoted at $19.50 per
square foot on a full service basis. The leasing agent indicated free rent is
negotiable. Leases are typically structured for three to five years or longer
and annual escalations are negotiable, in addition to expenses over a base year
stop. Expenses are estimated at approximately $7.25 per square foot. Tenant
improvements for first generation space is quoted at $18 per square foot, while
second generation space is quoted at $10 to $15.

In comparison to the subject this property is generally similar with respect to
location, construction quality, age/condition, size, and design appeal. Overall,
these buildings are similar in comparison to the subject with no adjustment
warranted to its quoted rental rates.

- --------------------------------------------------------------------------------
                                       73
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                INCOME CAPITALIZATION APPROACH
- --------------------------------------------------------------------------------

Rent Comparable Seven

The Falls at Sanctuary Park represents a five-story office building, one of
several located within the 157-acre Sanctuary Park office park, off of Mansell
Road and Georgia 400, in the northern portion of metropolitan Atlanta. The
building was built in 2003 and is currently 67% occupied. Recent leases are in
the range of $21.50 to $22.00 per square foot on a full service basis. The
leasing agent indicated no free rent is offered. Leases are typically structured
for five to eight years with 2.5% annual escalations. Expenses are over a base
year stop. A 2004 lease to a credit tenant, a major multi-national firm, was
executed at $21.50 per square foot.

In comparison to the subject this property is generally similar with respect to
location, construction quality, age/condition, size, and design appeal. Overall,
this property is similar in comparison to the subject with no adjustment
warranted to its quoted rental rates.

Subject

Royal Ridge is located along Great Oaks Way. This building was constructed in
2001 and remained vacant until mid-2002. However, two leases for large spaces to
credit tenants on long-term leases were written and the building is now 89%
leased. Free rent of approximately one month for each year of the term was
provided as well as slightly above average tenant improvements. Expenses quoted
at approximately $7.00 per square foot.

SUBJECT RENTAL INFORMATION

The following table depicts the subject's rental rates.

<TABLE>
<CAPTION>
=================================================================================================================================
                                                 SUMMARY OF RECENT LEASES
- ---------------------------------------------------------------------------------------------------------------------------------
                                       New/      Term     Commence      Size            Rental Rate                    Expense
Tenant                               Renewal    (Mo.)       Date        (SF)      $/SF/Yr.      $/Yr.     Escalations   Reimb.
- ---------------------------------------------------------------------------------------------------------------------------------
<S>                                    <C>       <C>       <C>         <C>         <C>        <C>            <C>          <C>
Asking Rates
  Vacant Space                         New        60         ---        12,000     $12.00       $144,000     Nego         NNN
- ---------------------------------------------------------------------------------------------------------------------------------
Actual Leases
  Hagemeyer                            New       120       Jul-02       60,737     $12.50       $759,213      Yes         NNN
  Combined Specialty Insurance         New       120       Dec-02       82,487     $14.00     $1,154,818      Yes         NNN
- ---------------------------------------------------------------------------------------------------------------------------------
Subtotal Actual Leases                                                 143,224     $13.36     $1,914,031
- ---------------------------------------------------------------------------------------------------------------------------------
Compiled by CBRE
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

The best indication of market rent is any recent leasing activity. Based on the
comparables discussed the net rate for the area ranges from approximately $11.00
to $16.00 per square foot with most in the $11.50 to $12.50 per square foot
range. The average rate for the two large leases at the subject approximate
$13.35 per square foot. We also recognize the master lease accounts for a
current asking rate of $12.50 per square foot net rate for the unleased space.
Therefore, considering these various factors and recognizing the market
continues to be weak relative to leasing activity, we have chosen to utilize a
more conservative $11.50 per square foot net rate as the market rate.

- --------------------------------------------------------------------------------
                                       74
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                INCOME CAPITALIZATION APPROACH
- --------------------------------------------------------------------------------

MARKET RENT ESTIMATE

The most recently executed leases within the subject property are consistent
with leases written two years or more ago, and thus are slightly above market.
Considering the various types and quality of space in the property, only one
market rental rates is warranted.

Base Rental Rate

The estimate of base rental rates is shown in the following chart and represent
net rent, no first year expenses included. The rate varies based upon the size
of the potential space for a possible user.

================================================================================
                                BASE RENTAL RATES
- --------------------------------------------------------------------------------
                                                   Office
Category                                            Space
- --------------------------------------------------------------------------------
Subject's Quoted Terms                          $11.50-$14.50
Rent Comparable Data                            $11.00-$16.00
CBRE Estimate                                      $11.50
- --------------------------------------------------------------------------------
Compiled by CBRE
- --------------------------------------------------------------------------------

Concessions

The estimate of concessions is shown in the following chart.

================================================================================
                                   CONCESSIONS
- --------------------------------------------------------------------------------
                                                   Office
Category                                            Space
- --------------------------------------------------------------------------------
Subject's Quoted Terms                               Yes
Rent Comparable Data                                 Yes
CBRE Estimate                                        Yes
- --------------------------------------------------------------------------------
Compiled by CBRE
- --------------------------------------------------------------------------------

We note the level of concessions offered in the market vary widely. It appears
that currently an average may be approximately one month of free rent for every
year of lease term. However, due to the long-term nature of the subject's leases
and the possibility the currently vacant space could be leased before the master
lease runs out we have applied a lesser concession of 2 months free rent within
our analysis. Any impact of this concession will be experienced late in the
assumed holding period within the Discounted Cash Flow Analysis.

- --------------------------------------------------------------------------------
                                       75
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                INCOME CAPITALIZATION APPROACH
- --------------------------------------------------------------------------------

Reimbursements

The estimate of reimbursements is shown in the following chart.

================================================================================
                                 REIMBURSEMENTS
- --------------------------------------------------------------------------------
                                                   Office
Category                                            Space
- --------------------------------------------------------------------------------
Subject's Quoted Terms                               Net
Rent Comparable Data                              Base Year
CBRE Estimate                                        Net
- --------------------------------------------------------------------------------
Compiled by CBRE
- --------------------------------------------------------------------------------

The subject quotes a net rent and provides for reimbursement of expenses on a
net basis similar to a retail property, where all expenses are passed through to
the tenants, who pay their pro rata share of the recoverable expenses. This
varies slightly from the most common method where the landlord includes or adds
the estimated expenses of the first year of occupancy for a new tenant to the
net rent to get a "gross rent". This first year expense is called the base year
and doesn't change during the lease term. The tenant then pays the gross rent,
but if the expenses exceed the first year level, then pays a pro rata share of
the expense over the base year amount. Though slightly different, the end result
is virtually identical.

Escalations

At the present time, annual escalations in the range of 2% to 3% are common in
the local market. As such, we have concluded market rental escalations of 2.5%
annually over the term of the lease.

Tenant Improvements

The estimate of tenant improvements is shown in the following chart.

================================================================================
                               TENANT IMPROVEMENTS
- --------------------------------------------------------------------------------
                                                       Office
Category                                                Space
- --------------------------------------------------------------------------------
Subject's Quoted Terms
  New Tenants                                          $12.00
  Renewals                                              $5.00
Rent Comparable Data
  New Tenants                                       $10.00-$25.00
  Renewals                                           $5.00-$8.00
CBRE Estimate
  New Tenants                                          $12.00
  Renewals                                              $5.00
- --------------------------------------------------------------------------------
Compiled by CBRE
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                                       76
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                INCOME CAPITALIZATION APPROACH
- --------------------------------------------------------------------------------

Lease Term

The estimate of lease terms is shown in the following chart.

================================================================================
                                   LEASE TERM
- --------------------------------------------------------------------------------
                                                           Office
Category                                                    Space
- --------------------------------------------------------------------------------
Subject's Quoted Terms                                      5 YRS
Rent Comparable Data                                      3-10 Yrs
CBRE Estimate                                               5 YRS
- --------------------------------------------------------------------------------
Compiled by CBRE
- --------------------------------------------------------------------------------

MARKET RENT CONCLUSIONS

Based on the foregoing analysis and discussion, the following depicts the market
rent conclusions for the subject:

================================================================================
                             MARKET RENT CONCLUSIONS
- --------------------------------------------------------------------------------
                                                             Office
Category                                                      Space
- --------------------------------------------------------------------------------
NRA (SF)                                                     161,366
Percent of Total                                             100.0%
Market Rent ($/SF/Yr.)                                       $11.50
Concessions                                                    Yes
Reimbursements                                                 Net
Annual Escalation                                             None
Tenant Improvements (New Tenants)                            $12.00
Tenant Improvements (Renewals)                                $5.00
Average Lease Term                                           5 Years
- --------------------------------------------------------------------------------
Compiled by CBRE
- --------------------------------------------------------------------------------

RENT ROLL ANALYSIS

The subject's rent roll is illustrated as follows:

<TABLE>
<CAPTION>
====================================================================================================================================
                                                        RENT ROLL ANALYSIS
- ------------------------------------------------------------------------------------------------------------------------------------
Suite                                                      Lease       Lease      Term       Size (NRA)      Contract Rental Rate
No.                        Tenant                          Start    Expiration   (Mos.)     SF     % Total   $/SF/Yr.      $/Yr.
- ------------------------------------------------------------------------------------------------------------------------------------
<C>                        <C>                             <C>        <C>          <C>    <C>       <C>       <C>        <C>
100A, 200, 300             Hagemeyer                       Jul-02     Jun-12       119     60,737    37.6%    $12.50       $759,213
400, 500, 600              Combined Specialty Insurance    Dec-02     Nov-12       119     82,487    51.1%    $14.00     $1,154,818
- ------------------------------------------------------------------------------------------------------------------------------------
Occupied Subtotals                                                                        143,224    88.8%    $13.36     $1,914,031
- ------------------------------------------------------------------------------------------------------------------------------------
1                          Vacant                           ---                    ---     18,142    11.2%    $11.50       $208,633
- ------------------------------------------------------------------------------------------------------------------------------------
Property Totals - Contract Rent                                                           161,366   100.0%    $13.15     $2,122,664
Property Totals - Market Rent                                                             161,366   100.0%    $11.50     $1,855,709
- ------------------------------------------------------------------------------------------------------------------------------------
Compiled by CBRE
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

- --------------------------------------------------------------------------------
                                       77
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                INCOME CAPITALIZATION APPROACH
- --------------------------------------------------------------------------------

ANTICIPATED CHANGES/ROLLOVER TO RENT ROLL

There are no significant anticipated changes to the rent roll due to tenant
defaults and/or non-renewals or major new leasing activity. There are no pending
leases for the current vacant space.

POTENTIAL RENTAL INCOME CONCLUSION

Within this analysis, potential rental income is estimated based upon the actual
income in-place. This method of calculating rental income is most prevalent in
the local market and is consistent with the method used to derive overall
capitalization rates from the comparable sales data.

In estimating the subject's pro forma operating data, the actual operating
history and budgets have been analyzed. The following table presents the
available operating data history for the subject.

<TABLE>
<CAPTION>
===================================================================================================================================
                                                      OPERATING HISTORY
- -----------------------------------------------------------------------------------------------------------------------------------
                                                                                      2004
Year-Occupancy                2003 Budget                   2003                   Annualized                2004 Budget
                             ------------------------   -----------------------  -------------------------  -----------------------
                                 Total         $/SF         Total       $/SF          Total         $/SF        Total         $/SF
                             ------------------------   -----------------------  -------------------------  -----------------------
<S>                            <C>            <C>        <C>            <C>         <C>            <C>        <C>           <C>
Income
  Rental Income                $2,148,651     $13.32     $2,106,763     $13.06      $2,297,827     $14.24     $1,929,217    $11.96
  Parking Income                        -          -              -          -               -          -              -         -
  Other Income                          -          -          6,985       0.04           8,954       0.06          1,200      0.01
  Expense Reimbursements        1,141,471       7.07        578,376       3.58       1,284,029       7.96      1,187,420      7.36
                             ------------------------   -----------------------  -------------------------  -----------------------
  Effective Gross Income       $3,290,122     $20.39     $2,692,124     $16.68      $3,590,810     $22.25     $3,117,837    $19.32
Expenses
  Real Estate Taxes              $350,994      $2.18       $219,163      $1.36        $304,812      $1.89       $302,652     $1.88
  Property Insurance               10,892       0.07         35,738       0.22          34,994       0.22         44,160      0.27
  Utilities                       203,229       1.26        139,767       0.87         130,925       0.81        181,836      1.13
  Janitorial                      169,578       1.05        127,626       0.79         166,591       1.03        153,829      0.95
  Repair & Maintenance             91,735       0.57         63,825       0.40         119,436       0.74        128,500      0.80
  General Operating               113,374       0.70        174,954       1.08         138,722       0.86        145,980      0.90
  Landscaping & Security          102,970       0.64        126,728       0.79         127,279       0.79        131,989      0.82
  Management Fee                   98,704       0.61         52,814       0.33         101,974       0.63        102,481      0.64
  Reserves for Replacement              -          -              -          -               -          -              -         -
                             ------------------------   -----------------------  -------------------------  -----------------------
  Operating Expenses           $1,141,476      $7.07       $940,615      $5.83      $1,124,734      $6.97     $1,191,427     $7.38
                             ------------------------   -----------------------  -------------------------  -----------------------
Net Operating Income           $2,148,646     $13.32     $1,751,509     $10.85      $2,466,077     $15.28     $1,926,410    $11.94
  Annualized Amounts Represent 5 months
- -----------------------------------------------------------------------------------------------------------------------------------
Source: Operating statements
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

VACANCY

The subject's estimated stabilized occupancy rate was previously discussed in
the Market Analysis. The subject's economic vacancy is detailed as follows:

- --------------------------------------------------------------------------------
                                       78
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                INCOME CAPITALIZATION APPROACH
- --------------------------------------------------------------------------------

================================================================================
                                     VACANCY
- --------------------------------------------------------------------------------
Year                                                                      % PGI
- --------------------------------------------------------------------------------
2003                                                                         0%
2004 Annualized                                                              0%
2004 Budget                                                                  0%
Current                                                                      0%
CBRE Estimate                                                                1%
- --------------------------------------------------------------------------------
Compiled by CBRE
- --------------------------------------------------------------------------------

Again, we note the subject is physically 11% vacant. However, the vacant spac
is under a master lease with full rent and recoveries being paid to the owner
through the first of 2005. However, based upon the possible vacancy going
forward and following the expiration of the master lease, we have included a
small deduction for vacancy related to the currently vacant first floor space.

CREDIT LOSS

The credit loss estimate is an allowance for nonpayment of rent or other income.
Based upon the high percentage of credit related to the two main tenants, we
have not included a separate credit loss deduction, but allowed for any loss
within our vacancy estimate.

PARKING INCOME

Parking income is supplemental to that derived from standard rent and includes
collections from sources such as reserved covered parking. The subject does not
receive any parking income.

OTHER INCOME

Other income is supplemental to that derived from leasing of the improvements.
This includes categories such as forfeited deposits, antennae income, late
charges, after hour utility charges, et cetera. The subject's ancillary income
is detailed as follows:

================================================================================
                                  OTHER INCOME
- --------------------------------------------------------------------------------
Year                                                         Total         $/SF
- --------------------------------------------------------------------------------
2003 Budget                                                     $0        $0.00
2003                                                        $6,985        $0.04
2004 Annualized                                             $8,954        $0.06
2004 Budget                                                 $1,200        $0.01
CBRE Estimate                                                   $0        $0.00
- --------------------------------------------------------------------------------
Compiled by CBRE
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                                       79
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                INCOME CAPITALIZATION APPROACH
- --------------------------------------------------------------------------------

The subject's historical and budgeted amounts are minimal and vary widely. This
is not a typical source of income to a property such as the subject. Therefore,
we have not included any Other Income within our analysis.

EXPENSE REIMBURSEMENTS

The subject's leases are based on a net rent basis with expenses being passed
through to the tenants who pay a pro rata share of the property's operating
expenses, i.e. common area maintenance, real estate taxes, and property
insurance expenses. The subject's expense reimbursements are detailed as
follows:

================================================================================
                             EXPENSE REIMBURSEMENTS
- --------------------------------------------------------------------------------
Year                                                       Total          $/SF
- --------------------------------------------------------------------------------
2003 Budget                                              $1,141,471       $7.07
2003                                                       $578,376       $3.58
2004 Annualized                                          $1,284,029       $7.96
2004 Budget                                              $1,187,420       $7.36
CBRE Estimate                                            $1,098,645       $6.81
- --------------------------------------------------------------------------------
Compiled by CBRE
- --------------------------------------------------------------------------------

EFFECTIVE GROSS INCOME

The subject's effective gross income is detailed as follows:

================================================================================
                             EFFECTIVE GROSS INCOME
- --------------------------------------------------------------------------------
Year                                                     Total         % Change
- --------------------------------------------------------------------------------
2003 Budget                                            $3,290,122           --
2003                                                   $2,692,124          -18%
2004 Annualized                                        $3,590,810           33%
2004 Budget                                            $3,117,837          -13%
CBRE Estimate                                          $3,200,082            3%
- --------------------------------------------------------------------------------
Compiled by CBRE
- --------------------------------------------------------------------------------

Our pro forma estimate is approximately the same as the budget level, being
slightly different relative to the difference in expenses.

OPERATING EXPENSE ANALYSIS

The following subsections represent the analysis for the pro forma estimate of
each category of the subject's stabilized expenses.

- --------------------------------------------------------------------------------
                                       80
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                INCOME CAPITALIZATION APPROACH
- --------------------------------------------------------------------------------

Expense Comparables

The following table summarizes expenses obtained from recognized industry
publications and/or comparable properties.

<TABLE>
<CAPTION>
=======================================================================================================
                                    EXPENSE COMPARABLES
- -------------------------------------------------------------------------------------------------------
<S>                                             <C>            <C>            <C>          <C>
Comparable Number                                  1              2              3            IREM
                                              -----------    -----------    -----------    ----------
Location                                        N Fulton       N Fulton       N Fulton       Atlanta
NRA (SF)                                        259,980        301,436        147,028
Expense Year                                      2003           2003           2004          2003

Effective Gross Income                            $15.73         $19.84         $18.68             -
Expenses                                          $/SF           $/SF           $/SF          $/SF
                                              -----------    -----------    -----------    ----------

  Real Estate Taxes                                $1.76          $1.84          $1.91         $1.68
  Property Insurance                                   -           0.12           0.15          0.16
  Utilities                                         1.75           1.65           1.37          1.59
  Janitorial                                        0.84           0.78           0.96          0.76
  Repair & Maintenance                              1.27           0.77           0.54          1.20
  General Operating                                 0.30           0.10           1.01          0.76
  Landscaping & Security                            0.93           0.41           0.68          0.73
  Management Fee                                    0.44           0.50           0.32          0.62
     (as a % of EGI)                                2.8%           2.5%           1.7%
  Reserves for Replacement                             -              -              -             -
                                              -----------    -----------    -----------    ----------
Operating Expenses                                 $7.28          $6.16          $6.95         $7.83 *
     Operating Expense Ratio                       46.3%          31.0%          37.2%

   * The median total differs from the sum of the individual amounts.
- -------------------------------------------------------------------------------------------------------
Source: Individual Operating Statements
- -------------------------------------------------------------------------------------------------------
</TABLE>

Real Estate Taxes

The real estate taxes for the subject were previously discussed. The subject's
expense is detailed as follows:

================================================================================
                                REAL ESTATE TAXES
- --------------------------------------------------------------------------------
Year                                                       Total          $/SF
- --------------------------------------------------------------------------------
2003 Budget                                               $350,994        $2.18
2003                                                      $219,163        $1.36
2004 Annualized                                           $304,812        $1.89
2004 Budget                                               $302,652        $1.88
Expense Comparable 1                                           N/A        $1.76
Expense Comparable 2                                           N/A        $1.84
Expense Comparable 3                                           N/A        $1.91
IREM                                                           N/A        $1.68
CBRE Estimate                                             $284,564        $1.76
- --------------------------------------------------------------------------------
Compiled by CBRE
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                                       81
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                INCOME CAPITALIZATION APPROACH
- --------------------------------------------------------------------------------

The subject's actual taxes of approximately $225,000 were well below the
budgeted level. However, the expectation for 2004 was that taxes would increase.
Our estimate is considered to be reasonable based upon the current 2004 tax
value, but utilizing the 2003 tax rate. However, changes in this expense impact
the subject's value at a very minimal level as any increases over the base year
area passed through to the tenants on pro rata basis.

Property Insurance

Property insurance expenses typically include fire and extended coverage and
owner's liability coverage. The subject's expense is detailed as follows:

================================================================================
                               PROPERTY INSURANCE
- --------------------------------------------------------------------------------
Year                                                       Total          $/SF
- --------------------------------------------------------------------------------
2003 Budget                                               $10,892         $0.07
2003                                                      $35,738         $0.22
2004 Annualized                                           $34,994         $0.22
2004 Budget                                               $44,160         $0.27
Expense Comparable 1                                          N/A         $0.00
Expense Comparable 2                                          N/A         $0.12
Expense Comparable 3                                          N/A         $0.15
IREM                                                          N/A         $0.16
CBRE Estimate                                             $40,342         $0.25
- --------------------------------------------------------------------------------
Compiled by CBRE
- --------------------------------------------------------------------------------

Janitorial

Janitorial expenses typically include the outside service contract for cleaning.
The subject's expense is detailed as follows:

================================================================================
                                   JANITORIAL
- --------------------------------------------------------------------------------
Year                                                      Total           $/SF
- --------------------------------------------------------------------------------
2003 Budget                                              $169,578         $1.05
2003                                                     $127,626         $0.79
2004 Annualized                                          $166,591         $1.03
2004 Budget                                              $153,829         $0.95
Expense Comparable 1                                          N/A         $0.84
Expense Comparable 2                                          N/A         $0.78
Expense Comparable 3                                          N/A         $0.96
IREM                                                          N/A         $0.76
CBRE Estimate                                            $161,366         $1.00
- --------------------------------------------------------------------------------
Compiled by CBRE
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                                       82
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                INCOME CAPITALIZATION APPROACH
- --------------------------------------------------------------------------------

The available information for the subject's expense for 2004 is supported by
comparable information and is thus considered to be within a reasonable range.

Repairs and Maintenance

Repairs and maintenance expenses typically include all payroll and payroll
related items for all directly employed maintenance personnel. This expense
category also typically includes all outside maintenance service contracts and
the cost of maintenance and repairs supplies. The subject's expense is detailed
as follows:

================================================================================
                              REPAIR & MAINTENANCE
- --------------------------------------------------------------------------------
Year                                                       Total          $/SF
- --------------------------------------------------------------------------------
2003 Budget                                                $91,735        $0.57
2003                                                       $63,825        $0.40
2004 Annualized                                           $119,436        $0.74
2004 Budget                                               $128,500        $0.80
Expense Comparable 1                                           N/A        $1.27
Expense Comparable 2                                           N/A        $0.77
Expense Comparable 3                                           N/A        $0.54
IREM                                                           N/A        $1.20
CBRE Estimate                                             $121,025        $0.75
- --------------------------------------------------------------------------------
Compiled by CBRE
- --------------------------------------------------------------------------------

The available data for the subject is consistent with the expense comparables
and thus is considered to be within a reasonable range.

General Operating

General operating expenses typically include all payroll and payroll related
items for all directly-employed administrative personnel such as building
managers, secretaries, and bookkeepers. Leasing personnel are not included nor
are the salaries or fees for off-site management firm personnel and services.
This expense category also typically includes administrative expenses such as
legal costs pertaining to the operation of the building, telephone, supplies,
furniture, temporary help, etc. The subject's expense is detailed as follows:

- --------------------------------------------------------------------------------
                                       83
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                INCOME CAPITALIZATION APPROACH
- --------------------------------------------------------------------------------

================================================================================
                                GENERAL OPERATING
- --------------------------------------------------------------------------------
Year                                                      Total           $/SF
- --------------------------------------------------------------------------------
2003 Budget                                              $113,374         $0.70
2003                                                     $174,954         $1.08
2004 Annualized                                          $138,722         $0.86
2004 Budget                                              $145,980         $0.90
Expense Comparable 1                                          N/A         $0.30
Expense Comparable 2                                          N/A         $0.10
Expense Comparable 3                                          N/A         $1.01
IREM                                                          N/A         $0.76
CBRE Estimate                                            $121,025         $0.75
- --------------------------------------------------------------------------------
Compiled by CBRE
- --------------------------------------------------------------------------------

We have placed slightly greater weight on the subject's recent data and budget
level. However, we note that the budget and our estimate are within the range of
the comparables.

Utilities

Utilities expenses typically include electricity, natural gas, water, sewer and
trash removal. The subject's expense is detailed as follows:

================================================================================
                                    UTILITIES
- --------------------------------------------------------------------------------
Year                                                       Total          $/SF
- --------------------------------------------------------------------------------
2003 Budget                                               $203,229        $1.26
2003                                                      $139,767        $0.87
2004 Annualized                                           $130,925        $0.81
2004 Budget                                               $181,836        $1.13
Expense Comparable 1                                           N/A        $1.75
Expense Comparable 2                                           N/A        $1.65
Expense Comparable 3                                           N/A        $1.37
IREM                                                           N/A        $1.59
CBRE Estimate                                             $145,229        $0.90
- --------------------------------------------------------------------------------
Compiled by CBRE
- --------------------------------------------------------------------------------

The subject's utility expense is slightly below a typical level due to the
majority of the 1st floor being vacant and the entire 6th floor being vacant.
Though, these spaces are leased, they do not impact the total utility expense
being unoccupied. Therefore, a slightly higher expense will result when these
spaces are occupied. However, the increase will be passed through to the tenants
as the increase will be over a lower base year expense. Thus, our estimate is
slightly below a typical level, but with any increase being recoverable.
Therefore, the lower estimate currently is reasonable.

- --------------------------------------------------------------------------------
                                       84
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                INCOME CAPITALIZATION APPROACH
- --------------------------------------------------------------------------------

Landscaping and Security

Landscaping and security expenses are typically handled through outside service
contracts. The subject's expense is detailed as follows:

================================================================================
                             LANDSCAPING & SECURITY
- --------------------------------------------------------------------------------
Year                                                       Total          $/SF
- --------------------------------------------------------------------------------
2003 Budget                                               $102,970        $0.64
2003                                                      $126,728        $0.79
2004 Annualized                                           $127,279        $0.79
2004 Budget                                               $131,989        $0.82
Expense Comparable 1                                           N/A        $0.93
Expense Comparable 2                                           N/A        $0.41
Expense Comparable 3                                           N/A        $0.68
IREM                                                           N/A        $0.73
CBRE Estimate                                             $129,093        $0.80
- --------------------------------------------------------------------------------
Compiled by CBRE
- --------------------------------------------------------------------------------

The subject's budget and available expense data show this expense to be within
the range of the comparables. Therefore, we have estimated this expense at a
level approximating the budget and available year to date data.

Management Fee

Management expenses are typically negotiated as a percentage of collected
revenues (effective gross income). The subject's expense is detailed as follows:

================================================================================
                                 MANAGEMENT FEE
- --------------------------------------------------------------------------------
Year                                                        Total         % EGI
- --------------------------------------------------------------------------------
2003 Budget                                                $98,704         3.0%
2003                                                       $52,814         2.0%
2004 Annualized                                           $101,974         2.8%
2004 Budget                                               $102,481         3.3%
CBRE Estimate                                              $96,002         3.0%
- --------------------------------------------------------------------------------
Compiled by CBRE
- --------------------------------------------------------------------------------

Professional management fees in the local market range from 3.0% to 5.0% for
comparable properties or between $0.45 and $0.60 on a per square foot basis. We
have estimated the subject's management as shown, at a similar level to the
comparables.

- --------------------------------------------------------------------------------
                                       85
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                INCOME CAPITALIZATION APPROACH
- --------------------------------------------------------------------------------

Reserves for Replacement

Reserves for replacement have been estimated based on discussions with
knowledgeable market participants who indicate a range from $0.10 to $0.15 per
square foot for comparable properties. We have utilized $0.10 per square foot
within our analysis.

OPERATING EXPENSE CONCLUSION

The subject's expense is detailed as follows:

================================================================================
                               OPERATING EXPENSES
- --------------------------------------------------------------------------------
Year                                                      Total           $/SF
- --------------------------------------------------------------------------------
2003 Budget                                            $1,141,476         $7.07
2003                                                     $940,615         $5.83
2004 Annualized                                        $1,124,734         $6.97
2004 Budget                                            $1,191,427         $7.38
Expense Comparable 1                                          N/A         $7.28
Expense Comparable 2                                          N/A         $6.16
Expense Comparable 3                                          N/A         $6.95
IREM                                                          N/A         $7.83
CBRE Estimate                                          $1,114,782         $6.91
- --------------------------------------------------------------------------------
Compiled by CBRE
- --------------------------------------------------------------------------------

The subject's per square foot operating expense pro forma is in line with the
total per square foot operating expenses indicated by the expense comparables
and published data, and the subject estimate is supported by available actual
operating data.

NET OPERATING INCOME CONCLUSION

The subject's net operating income is detailed as follows:

================================================================================
                              NET OPERATING INCOME
- --------------------------------------------------------------------------------
Year                                                       Total          $/SF
- --------------------------------------------------------------------------------
2003 Budget                                             $2,148,646       $13.32
2003                                                    $1,751,509       $10.85
2004 Annualized                                         $2,466,077       $15.28
2004 Budget                                             $1,926,410       $11.94
CBRE Estimate                                           $2,085,300       $12.92
- --------------------------------------------------------------------------------
Compiled by CBRE
- --------------------------------------------------------------------------------

Our pro forma estimate approximates the previously projected levels by property
management. However, the actual income will vary predicated upon the assumed

- --------------------------------------------------------------------------------
                                       86
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                INCOME CAPITALIZATION APPROACH
- --------------------------------------------------------------------------------

income to be derived from the master leased space upon expiration of the master
lease in early 2005. However, based upon the limited historical expense data and
our assumptions as previously discussed, as well as the net reimbursement
structure of the subject leases, we believe our estimate is reasonable.

DIRECT CAPITALIZATION

Direct capitalization is a method used to convert a single year's estimated
stabilized net operating income into a value indication. The following
subsections represent different techniques for deriving an overall
capitalization rate for direct capitalization.

Comparable Sales

The OARs confirmed for the comparable sales analyzed in the Sales Comparison
Approach are as follows:

================================================================================
                         COMPARABLE CAPITALIZATION RATES
- --------------------------------------------------------------------------------
                      Sale        Sale Price                     Pro Forma
      Sale            Date           $/SF         Occupancy         OAR
- --------------------------------------------------------------------------------
       1             Jun-04        $133.38           89%           10.47%
       2             Apr-04        $152.57           91%            5.72%
       3             Apr-04        $165.58           98%            8.64%
       4             Nov-03        $154.98          100%            7.41%
       5             Nov-03        $149.98          100%           11.01%
       6             Jan-03        $150.28           90%            8.86%
- --------------------------------------------------------------------------------
Compiled by: CBRE
- --------------------------------------------------------------------------------

The overall capitalization rates for these sales were derived based upon the
actual or pro-forma income characteristics of the property. Sale Nos. One
through Three transpired within the past three months, while Sales Four and Five
occurred in late 2003. Sale Six represents the sale of the subject in early
2003. Therefore, primary emphasis has been placed upon the more recent data,
which is more reflective of current market trends, interest rates and buyer's
expectations and motivation in the market. However, emphasis is also directly to
those sales, which are more similar to the subject in leased characteristics,
i.e. credit tenant and remaining term. Sale Three, Four, and Six depict a
similar tenancy structure with regard to stability, credit rating and pulling
power. Overall, an OAR in the middle to lower part of the range indicated by
these comparables is considered appropriate.

Published Investor Surveys

The results of the most recent National Investor Survey, published by CBRE, are
summarized in the following table.

- --------------------------------------------------------------------------------
                                       87
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                INCOME CAPITALIZATION APPROACH
- --------------------------------------------------------------------------------

================================================================================
                          OVERALL CAPITALIZATION RATES
- --------------------------------------------------------------------------------
Investment Type                                      OAR Range           Average
- --------------------------------------------------------------------------------
Suburban Office
  Class A                                         7.00%  -  11.00%        8.50%
  Class B                                         8.25%  -  10.00%        9.08%
  Class C                                         9.00%  -  11.00%        9.79%
- --------------------------------------------------------------------------------
Source: CBRE National Investor Survey
- --------------------------------------------------------------------------------

The subject is considered to be a Class A property. Because of the subject's
location, credit tenants and remaining lease term, an OAR near the lower end of
the range indicated in the preceding table is considered appropriate.

Market Participants

The results of recent interviews with knowledgeable real estate professionals
are summarized in the following table.

================================================================================
                      OVERALL CAPITALIZATION RATES - OFFICE
- --------------------------------------------------------------------------------
Respondent                             Company            OAR    Date of Survey
- --------------------------------------------------------------------------------
Will Yowell                     CB Richard Ellis, Inc.    8.0%       Jun-04
- --------------------------------------------------------------------------------
Compiled by: CBRE
- --------------------------------------------------------------------------------

In deriving an appropriate overall capitalization rate for the subject,
discussions with market participants indicate there is significant demand for
properties such as the subject, having good locational characteristics in growth
areas, and with long-term leases in place to credit tenants. It was noted that
an overall rate in 8% range is reasonable in the current market environment.

Band of Investment

The band of the investment technique has been utilized as a crosscheck to the
foregoing techniques. The analysis is shown in the following table.

- --------------------------------------------------------------------------------
                                       88
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                INCOME CAPITALIZATION APPROACH
- --------------------------------------------------------------------------------

================================================================================
                               BAND OF INVESTMENT
- --------------------------------------------------------------------------------
Mortgage Interest Rate                         6.00%
Mortgage Term (Amortization Period)         25 Years
Mortgage Ratio (Loan-to-Value)                   75%
Mortgage Constant                            0.07732
Equity Dividend Rate (EDR)                        9%

Mortgage Requirement                             75%  x  0.07732  =    0.05799
Equity Requirement                               25%  x  0.08500  =    0.02125
                                           ----------                 ---------
                                                100%                   0.07924

Indicated OAR:                                                           7.90%
- --------------------------------------------------------------------------------
Compiled by: CBRE
- --------------------------------------------------------------------------------

Capitalization Rate Conclusion

The following table summarizes the OAR conclusions.

================================================================================
                    OVERALL CAPITALIZATION RATE - CONCLUSION
- --------------------------------------------------------------------------------
Source                                                           Indicated OAR
- --------------------------------------------------------------------------------
Comparable Sales                                                  7.41-11.04%
National Investor Survey                                            7.0-11.0%
Market Participants                                                     8.00%
Band of Investment                                                      7.90%
CBRE Estimate                                                           8.00%
- --------------------------------------------------------------------------------
Compiled by: CBRE
- --------------------------------------------------------------------------------

In concluding an overall capitalization rate for the subject, primary reliance
has been placed upon the data obtained from the comparable sales and interviews
with active market participants. This data tends to provide the most accurate
depiction of both buyer's and seller's expectations within the market and the
ranges indicated are relatively tight. Further secondary support for our
conclusion is noted via both the CBRE National Investor Survey and the band of
investment methodology. Considering the data presented, the concluded overall
capitalization rate appears to be well supported in the local market.

Direct Capitalization Summary

A summary of the direct capitalization of the subject at stabilized occupancy is
illustrated in the following table.

- --------------------------------------------------------------------------------
                                       89
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                INCOME CAPITALIZATION APPROACH
- --------------------------------------------------------------------------------

===============================================================================
                          DIRECT CAPITALIZATION SUMMARY
- -------------------------------------------------------------------------------

Income                                          $/SF/Yr               Total
                                          -------------------------------------
  Potential Rental Income                        $13.15             $2,122,664
  Vacancy                       1.00%             (0.13)               (21,227)
                                          -------------------------------------
Net Rental Income                                $13.02             $2,101,437

  Expense Reimbursements                           6.81              1,098,645
                                          -------------------------------------
Effective Gross Income                           $19.83             $3,200,082

Expenses
  Real Estate Taxes                               $1.76               $284,564
  Property Insurance                               0.25                 40,342
  Utilities                                        0.90                145,229
  Janitorial                                       1.00                161,366
  Repair & Maintenance                             0.75                121,025
  General Operating                                0.75                121,025
  Landscaping & Security                           0.80                129,093
  Management Fee                3.00%              0.59                 96,002
  Reserves for Replacement                         0.10                 16,137
                                          -------------------------------------
Operating Expenses                                $6.91             $1,114,782
                                          -------------------------------------
Operating Expense Ratio                                                 34.84%
Net Operating Income                             $12.92             $2,085,300
OAR                                                             /        8.00%
                                                        -----------------------
Indicated Stabilized Value                                         $26,070,000
  Deferred Maintenance                                                       -
  Lease-Up Discount                                                          -
                                                        -----------------------
Value Indication                                                   $26,070,000
Rounded                                                            $26,075,000
Value Per SF                                                           $161.59

                                          -------------------------------------
Matrix Analysis                            Cap Rate                  Value
                                          -------------------------------------
                                             7.75%                 $26,907,100
                                             8.00%                 $26,066,300
                                             8.25%                 $25,276,400

- -------------------------------------------------------------------------------
Compiled by CBRE
- -------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                                       90
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                INCOME CAPITALIZATION APPROACH
- --------------------------------------------------------------------------------

DISCOUNTED CASH FLOW ANALYSIS

The DCF assumptions concluded for the subject are summarized as follows:

================================================================================
                   SUMMARY OF DISCOUNTED CASH FLOW ASSUMPTIONS
- --------------------------------------------------------------------------------
General Assumptions
  Start Date                                                           Jul-04
  Terms of Analysis                                                   10 Years
  Software                                                              ARGUS

Growth Rate Assumptions
  Income Growth                                                         3.00%
  Expense Growth                                                        3.00%
  Inflation (CPI)                                                       3.00%
  Real Estate Tax Growth                                                3.00%

Market Rates - Year 1
  Market Rent PSF - Office Space                                       $11.50
  Total Operating Expenses ($/SF/Yr.)                                   $6.91

Market Leasing Assumptions
                                                                       Office
  Category                                                              Space
  Percentage Rent                                                       None
  Concessions                                                            Yes
  Reimbursements                                                         Net
  Annual Escalation                                                     None
  Tenant Improvements (New Tenants)                                    $12.00
  Tenant Improvements (Renewals)                                        $5.00
  Average Lease Term                                                   5 Years
  Renewal Probability                                                    60%
  Leasing Commissions (Cashed-Out)
    New Leases                                                          7.0%
    Renewal Leases                                                      3.0%
  Down Time Before New Tenant Leases                                  8 Months
  Blended Down Time Between Leases                                    3 Months

Occupancy Assumptions
  Current Occupancy                                                     88.8%
  Stabilized Occupancy                                                  99.0%
  Credit Loss                                                           0.00%
  Stabilized Occupancy (w/Credit Loss)                                  99.0%
  Estimated Lease-up Period                                           0 Months

Financial Assumptions
  Discount Rate                                                         9.75%
  Terminal Capitalization Rate                                          8.50%

Other Assumptions
  Cost of Sale                                                          1.50%
  Capital Expenses (Deferred Maintenance)                                $0
- --------------------------------------------------------------------------------
Compiled by CBRE
- --------------------------------------------------------------------------------

General Assumptions

The DCF analysis utilizes a 10-year projection period with fiscal year inflation
and discounting. This is consistent with current investor assumptions. The
analysis is done with Argus software.

- --------------------------------------------------------------------------------
                                       91
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                INCOME CAPITALIZATION APPROACH
- --------------------------------------------------------------------------------

Growth Rate Assumptions

The inflation and growth rates for the DCF analysis have been estimated by
analyzing the expectations typically used by buyers and sellers in the local
marketplace. Published investor surveys, an analysis of the Consumer Price Index
(CPI), as well as CBRE's survey of brokers and investors active in the local
market form the foundation for the selection of the appropriate growth rates.

================================================================================
                             SUMMARY OF GROWTH RATES
- --------------------------------------------------------------------------------
Investment Type                                     Rent    Expenses   Inflation
- --------------------------------------------------------------------------------
U.S. Bureau of Labor Statistics  (CPI-U)
  10-Year Snapshot Average as of May-04                                  2.52%
Suburban Office
  Class A - Average                                 2.67%     2.87%      2.84%
  Class B - Average                                 2.50%     2.75%      2.71%
  Class C - Average                                 2.80%     2.83%      2.79%
CBRE Estimate                                       3.00%     3.00%      3.00%
- --------------------------------------------------------------------------------
Source: CBRE National Investor Survey & www.bls.gov
- --------------------------------------------------------------------------------

Leasing Assumptions

The contract lease terms for the existing tenants are utilized within the DCF
analysis, with market leasing assumptions applied for renewals and absorption
tenants. The previously concluded pro forma income and expenses have been
utilized as the basis for market leasing projected in Year 1 of the holding
period. All subsequent years vary according to the growth rate assumptions
applied to the Year 1 estimate.

Leasing Commissions

The following table presents the leasing commissions quoted for the subject
property, those prevalent in the market as derived through the comparable
properties and our pro forma estimate.

- --------------------------------------------------------------------------------
                                       92
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                INCOME CAPITALIZATION APPROACH
- --------------------------------------------------------------------------------

================================================================================
                               LEASING COMMISSIONS
- --------------------------------------------------------------------------------
                                                         Office
Category                                                  Space
- --------------------------------------------------------------------------------
Subject's Quoted Terms
  New Tenants                                             5.0%
  Renewals                                                2.0%
Rent Comparable Data
  New Tenants                                           4% to 6%
  Renewals                                              2% to 3%
CBRE Estimate
  New Tenants                                             7.0%
  Renewals                                                3.0%
- --------------------------------------------------------------------------------
Compiled by CBRE
- --------------------------------------------------------------------------------

Renewal Probability

The renewal probability incorporated within the market leasing assumptions has
been estimated at 60%. This rate is considered reasonable based on the rent
comparable data, a survey of market participants, and our analysis of actual
leasing activity at the subject property.

Downtime Between Leases

The downtime estimate at lease rollover incorporated within the market leasing
assumptions has been estimated at 8 months. Though lower than the current actual
experience, this rate is considered reasonable based on the subject leases
expiring well into the future, which should provide for a more stable market and
typical downtime.

Specific Tenant Assumptions

All expense structures for tenant renewals are based upon a base year stop.

Occupancy Assumptions

The occupancy rate over the holding period is based on the subject's estimated
stabilized occupancy rate and estimated lease-up period to achieve a stabilized
occupancy position.

Vacancy, Credit Loss and Absorption

Please refer to the Market Analysis section of this report for a detailed
discussion of these elements.

- --------------------------------------------------------------------------------
                                       93
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                INCOME CAPITALIZATION APPROACH
- --------------------------------------------------------------------------------

Financial Assumptions

Discount Rate Analysis

The results of the most recent National Investor Survey, published by CBRE, are
summarized in the following table.

================================================================================
                                 DISCOUNT RATES
- --------------------------------------------------------------------------------
Investment Type                                    Rate Range           Average
- --------------------------------------------------------------------------------
Suburban Office
  Class A                                         8.00% - 11.50%        10.04%
  Class B                                        11.00% - 15.00%        12.00%
  Class C                                        11.25% - 13.50%        12.46%
CBRE Estimate                                                            9.75%
- --------------------------------------------------------------------------------
Source: CBRE National Investor Survey
- --------------------------------------------------------------------------------

The subject is considered to be a Class A property. Because of the subject's
longer term leases to credit tenants, a discount rate in the middle of the range
indicated in the preceding table is considered appropriate.

Terminal Capitalization Rate

The reversionary value of the subject is based on an assumed sale at the end of
the holding period based on capitalizing the Year 11 NOI at a terminal
capitalization rate. Typically, for properties similar to the subject, terminal
capitalization rates are 50 to 100 basis points higher than going-in
capitalization rates (OARs). This is a result of the uncertainty of future
economic conditions and the natural aging of the property.

================================================================================
                          TERMINAL CAPITALIZATION RATES
- --------------------------------------------------------------------------------
Investment Type                                       Rate Range         Average
- --------------------------------------------------------------------------------
Suburban Office
  Class A                                           8.00% -  9.50%        9.03%
  Class B                                           9.25% - 11.00%        9.94%
  Class C                                          10.00% - 11.50%       10.57%
CBRE Estimate                                                             8.50%
- --------------------------------------------------------------------------------
Source: CBRE National Investor Survey
- --------------------------------------------------------------------------------

Discounted Cash Flow Conclusion

The DCF schedule(s) and value conclusions are depicted on the following page(s).

- --------------------------------------------------------------------------------
                                       94
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                INCOME CAPITALIZATION APPROACH
- --------------------------------------------------------------------------------


CB [LOGO] Richard Ellis
ROYAL RIDGE
CASH FLOW REPORT BEGINNING JUNE 1, 2004

<TABLE>
<CAPTION>
                                        Year 1           Year 2           Year 3           Year 4           Year 5           Year 6
For the Years Ending                  May-2005         May-2006         May-2007         May-2008         May-2009         May-2010
                                    ----------       ----------       ----------       ----------       ----------       ----------

<S>                                 <C>              <C>              <C>              <C>              <C>              <C>
POTENTIAL GROSS REVENUE
  Base Rental Revenue               $2,215,238       $2,253,007       $2,304,116       $2,356,503       $2,410,200       $2,473,968
  Absorption & Turnover Vacancy                                                                                             -58,705
  Base Rent Abatements                 -34,772                                                                              -19,568
                                    ----------       ----------       ----------       ----------       ----------       ----------
  Scheduled Base Rental Revenue      2,180,466        2,253,007        2,304,116        2,356,503        2,410,200        2,395,695
                                    ----------       ----------       ----------       ----------       ----------       ----------
  CPI & Other Adjustment Revenue
  Expense Reimbursement Revenue      1,101,090        1,134,339        1,167,860        1,202,378        1,237,924        1,235,540
                                    ----------       ----------       ----------       ----------       ----------       ----------

TOTAL POTENTIAL GROSS REVENUE        3,281,556        3,387,346        3,471,976        3,558,881        3,648,124        3,631,235
                                    ----------       ----------       ----------       ----------       ----------       ----------

EFFECTIVE GROSS REVENUE              3,281,556        3,387,346        3,471,976        3,558,881        3,648,124        3,631,235
                                    ----------       ----------       ----------       ----------       ----------       ----------

OPERATING EXPENSES
  Real Estate Taxes                    284,564          293,101          301,894          310,951          320,279          329,888
  Insurance                             40,341           41,552           42,798           44,082           45,405           46,767
  Utilities                            145,229          149,586          154,074          158,696          163,457          168,361
  Janitorial                           161,366          166,207          171,193          176,329          181,619          187,067
  Repairs & Maintenance                121,025          124,655          128,395          132,247          136,214          140,301
  General Operating                    121,025          124,655          128,395          132,247          136,214          140,301
  Landscaping & Security               129,093          132,966          136,955          141,063          145,295          149,654
  Management Fee                        98,447          101,620          104,159          106,766          109,444          108,937
  Reserves                              16,137           16,621           17,119           17,633           18,162           18,707
                                    ----------       ----------       ----------       ----------       ----------       ----------
TOTAL OPERATING EXPENSES             1,117,227        1,150,963        1,184,982        1,220,014        1,256,089        1,289,983
                                    ----------       ----------       ----------       ----------       ----------       ----------

NET OPERATING INCOME                 2,164,329        2,236,383        2,286,994        2,338,867        2,392,035        2,341,252
                                    ----------       ----------       ----------       ----------       ----------       ----------

LEASING & CAPITAL COSTS
  Tenant Improvements                  326,556                                                                              164,046
  Leasing Commissions                   70,587                                                                               63,010
                                    ----------       ----------       ----------       ----------       ----------       ----------

TOTAL LEASING & CAPITAL COSTS          397,143                                                                              227,056
                                    ----------       ----------       ----------       ----------       ----------       ----------

CASH FLOW BEFORE DEBT SERVICE        1,767,186        2,236,383        2,286,994        2,338,867        2,392,035        2,114,196
                                     =========        =========        =========        =========        =========        =========

IMPLIED OVERALL RATE                      9.28%            9.59%            9.81%           10.03%           10.26%           10.04%
CASH ON CASH RETURN                       7.58%            9.59%            9.81%           10.03%           10.26%            9.07%

<CAPTION>
                                              Year 7           Year 8           Year 9          Year 10        Reversion
For the Years Ending                        May-2011         May-2012         May-2013         May-2014         May-2015
                                          ----------       ----------       ----------       ----------       ----------

<S>                                       <C>              <C>              <C>              <C>              <C>
POTENTIAL GROSS REVENUE
  Base Rental Revenue                     $2,547,840       $2,605,665       $2,443,322       $2,260,514       $2,260,514
  Absorption & Turnover Vacancy                                               -506,424
  Base Rent Abatements                       -19,568                          -337,616
                                          ----------       ----------       ----------       ----------       ----------
  Scheduled Base Rental Revenue            2,528,272        2,605,665        1,599,282        2,260,514        2,260,514
                                          ----------       ----------       ----------       ----------       ----------
  CPI & Other Adjustment Revenue                 489            6,372           12,402           33,033           90,371
  Expense Reimbursement Revenue            1,312,439        1,352,042        1,050,429        1,380,333        1,382,105
                                          ----------       ----------       ----------       ----------       ----------

TOTAL POTENTIAL GROSS REVENUE              3,841,200        3,964,079        2,662,113        3,673,880        3,732,990
                                          ----------       ----------       ----------       ----------       ----------

EFFECTIVE GROSS REVENUE                    3,841,200        3,964,079        2,662,113        3,673,880        3,732,990
                                          ----------       ----------       ----------       ----------       ----------

OPERATING EXPENSES
  Real Estate Taxes                          339,784          349,978          360,477          360,477          360,477
  Insurance                                   48,170           49,615           51,103           51,103           51,103
  Utilities                                  173,411          178,614          183,972          183,972          183,972
  Janitorial                                 192,679          198,460          204,414          204,414          204,414
  Repairs & Maintenance                      144,510          148,845          153,310          153,310          153,310
  General Operating                          144,510          148,845          153,310          153,310          153,310
  Landscaping & Security                     154,144          158,768          163,531          163,531          163,531
  Management Fee                             115,236          118,922           79,863          110,216          111,990
  Reserves                                    19,268           19,846           20,441           20,441           20,441
                                          ----------       ----------       ----------       ----------       ----------
TOTAL OPERATING EXPENSES                   1,331,712        1,371,893        1,370,421        1,400,774        1,402,548

                                          ----------       ----------       ----------       ----------       ----------
NET OPERATING INCOME                       2,509,488        2,592,186        1,291,692        2,273,106        2,330,442
                                          ----------       ----------       ----------       ----------       ----------

LEASING & CAPITAL COSTS
  Tenant Improvements                                                        1,415,169
  Leasing Commissions                                                          543,561
                                          ----------       ----------       ----------       ----------       ----------

TOTAL LEASING & CAPITAL COSTS                                                1,958,730
                                          ----------       ----------       ----------       ----------       ----------

CASH FLOW BEFORE DEBT SERVICE              2,509,488        2,592,186         -667,038        2,273,106        2,330,442
                                           =========        =========          =======        =========        =========

IMPLIED OVERALL RATE                           10.76%           11.12%            5.54%            9.75%
CASH ON CASH RETURN                            10.76%           11.12%          -2.86%             9.75%
</TABLE>

                             NOI and Cash Flow Trend

              [LINE GRAPH: NET OPERATING INCOME vs. NET CASH FLOW]

- --------------------------------------------------------------------------------
Sale / Yield                         Terminal Capitalization Rate
- --------------------------------------------------------------------------------
Discount Rate                 8.00%               8.50%              9.00%
- --------------------------------------------------------------------------------
9.25%                       $24,779,104         $24,082,283        $23,462,887
- --------------------------------------------------------------------------------
9.75%                       $23,985,989         $23,320,271        $22,728,522
- --------------------------------------------------------------------------------
10.25%                      $23,226,978         $22,590,843        $22,025,389
- --------------------------------------------------------------------------------

Cost of Sale at Reversion:                                                 1.50%
Building Size (SF):                                                      161,366
Percent Residual:                                                          45.7%

Reconciled Value Indication (Rounded):                               $23,325,000
Value Per Square Foot:                                                   $144.52


- --------------------------------------------------------------------------------
                                       95
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                INCOME CAPITALIZATION APPROACH
- --------------------------------------------------------------------------------

CONCLUSION OF INCOME CAPITALIZATION APPROACH

The conclusions via the valuation methods employed for this approach are as
follows:

================================================================================
                      INCOME CAPITALIZATION APPROACH VALUES
- --------------------------------------------------------------------------------
Direct Capitalization Method                                        $26,075,000
Discounted Cash Flow Analysis                                       $23,325,000
- --------------------------------------------------------------------------------
Reconciled Value                                                    $26,075,000
- --------------------------------------------------------------------------------
Compiled by CBRE
- --------------------------------------------------------------------------------

Primary emphasis has been placed on the Direct Capitalization Approach as this
method is considered to best reflect the actions of buyers and sellers currently
active in this market.

- --------------------------------------------------------------------------------
                                       96
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                       RECONCILIATION OF VALUE
- --------------------------------------------------------------------------------

                             RECONCILIATION OF VALUE

The value indications from the approaches to value are summarized as follows:

================================================================================
                          SUMMARY OF VALUE CONCLUSIONS
- --------------------------------------------------------------------------------
Cost Approach                                                      $22,070,000
Sales Comparison Approach                                          $26,500,000
Income Capitalization Approach                                     $26,075,000
- --------------------------------------------------------------------------------
Reconciled Value                                                   $26,075,000
- --------------------------------------------------------------------------------
Compiled by CBRE
- --------------------------------------------------------------------------------

The cost approach typically gives a reliable value indication when there is
evidence for the replacement cost estimate and when there is minimal
depreciation contributing to a loss in value, which must be estimated.
Considering the limited amount of depreciation present in the property, the
reliability of the cost approach is considered good. However, estimating a fair
entrepreneurial profit is difficult. Therefore, the cost approach is considered
less applicable to the subject and is used primarily as a test of reasonableness
against the other valuation techniques.

In the sales comparison approach, the subject property is compared to similar
properties that have been sold recently or for which listing prices or offers
are known. The sales used in this analysis are considered comparable to the
subject, and the required adjustments were based on reasonable and
well-supported rationale. In addition, market participants are currently
analyzing purchase prices on investment properties as they relate to available
substitutes in the market. Therefore, the sales comparison approach is
considered to provide a reliable value indication, although has been given
secondary emphasis in the final value reconciliation.

The income capitalization approach is applicable to the subject property since
it is an income producing property leased in the open market. Market
participants are primarily analyzing properties based on their income generating
capability. Therefore, the income capitalization approach is considered a
reasonable and substantiated value indicator and has been given greatest
emphasis in the final value estimate.

Based on the foregoing, the market value of the subject has been concluded as
follows:

<TABLE>
<CAPTION>
====================================================================================================================================
                                                      MARKET VALUE CONCLUSION
- ------------------------------------------------------------------------------------------------------------------------------------
           Appraisal Premise                Interest Appraised        Exposure          Date of Value          Value Conclusion
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>                      <C>               <C>                      <C>
                 As Is                       Leased Fee Estate        6 Months          July 7, 2004             $26,075,000
- ------------------------------------------------------------------------------------------------------------------------------------
Compiled by CBRE
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

- --------------------------------------------------------------------------------
                                       97
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                       RECONCILIATION OF VALUE
- --------------------------------------------------------------------------------

SPECIAL ASSUMPTIONS

None noted.

- --------------------------------------------------------------------------------
                                       98
<PAGE>

================================================================================
ROYAL RIDGE (2004)                           ASSUMPTIONS AND LIMITING CONDITIONS
- --------------------------------------------------------------------------------

                       ASSUMPTIONS AND LIMITING CONDITIONS

1.    Unless otherwise specifically noted in the body of the report, it is
      assumed that title to the property or properties appraised is clear and
      marketable and that there are no recorded or unrecorded matters or
      exceptions to title that would adversely affect marketability or value.
      CBRE is not aware of any title defects nor has it been advised of any
      unless such is specifically noted in the report. CBRE, however, has not
      examined title and makes no representations relative to the condition
      thereof. Documents dealing with liens, encumbrances, easements, deed
      restrictions, clouds and other conditions that may affect the quality of
      title have not been reviewed. Insurance against financial loss resulting
      in claims that may arise out of defects in the subject property's title
      should be sought from a qualified title company that issues or insures
      title to real property.

2.    Unless otherwise specifically noted in the body of this report, it is
      assumed: that the existing improvements on the property or properties
      being appraised are structurally sound, seismically safe and code
      conforming; that all building systems (mechanical/electrical, HVAC,
      elevator, plumbing, etc.) are in good working order with no major deferred
      maintenance or repair required; that the roof and exterior are in good
      condition and free from intrusion by the elements; that the property or
      properties have been engineered in such a manner that the improvements, as
      currently constituted, conform to all applicable local, state, and federal
      building codes and ordinances. CBRE professionals are not engineers and
      are not competent to judge matters of an engineering nature. CBRE has not
      retained independent structural, mechanical, electrical, or civil
      engineers in connection with this appraisal and, therefore, makes no
      representations relative to the condition of improvements. Unless
      otherwise specifically noted in the body of the report: no problems were
      brought to the attention of CBRE by ownership or management; CBRE
      inspected less than 100% of the entire interior and exterior portions of
      the improvements; and CBRE was not furnished any engineering studies by
      the owners or by the party requesting this appraisal. If questions in
      these areas are critical to the decision process of the reader, the advice
      of competent engineering consultants should be obtained and relied upon.
      It is specifically assumed that any knowledgeable and prudent purchaser
      would, as a precondition to closing a sale, obtain a satisfactory
      engineering report relative to the structural integrity of the property
      and the integrity of building systems. Structural problems and/or building
      system problems may not be visually detectable. If engineering consultants
      retained should report negative factors of a material nature, or if such
      are later discovered, relative to the condition of improvements, such
      information could have a substantial negative impact on the conclusions
      reported in this appraisal. Accordingly, if negative findings are reported
      by engineering consultants, CBRE reserves the right to amend the appraisal
      conclusions reported herein.

3.    Unless otherwise stated in this report, the existence of hazardous
      material, which may or may not be present on the property was not observed
      by the appraisers. CBRE has no knowledge of the existence of such
      materials on or in the property. CBRE, however, is not qualified to detect
      such substances. The presence of substances such as asbestos, urea
      formaldehyde foam insulation, contaminated groundwater or other
      potentially hazardous materials may affect the value of the property. The
      value estimate is predicated on the assumption that there is no such
      material on or in the property that would cause a loss in value. No
      responsibility is assumed for any such conditions, or for any expertise or
      engineering knowledge required to discover them. The client is urged to
      retain an expert in this field, if desired. We have inspected, as
      thoroughly as possible by observation, the land; however, it was
      impossible to personally inspect conditions beneath the soil. Therefore,
      no representation is made as to these matters unless specifically
      considered in the appraisal.

4.    All furnishings, equipment and business operations, except as specifically
      stated and typically considered as part of real property, have been
      disregarded with only real property being considered in the report unless
      otherwise stated. Any existing or proposed improvements, on or off-site,
      as well as any alterations or repairs considered, are assumed to be
      completed in a workmanlike manner according to standard practices based
      upon the information submitted to CBRE This report may be subject to
      amendment upon re-inspection of the subject property subsequent to
      repairs, modifications, alterations and completed new construction. Any
      estimate of Market Value is as of the date indicated; based upon the
      information, conditions and projected levels of operation.

5.    It is assumed that all factual data furnished by the client, property
      owner, owner's representative, or persons designated by the client or
      owner to supply said data are accurate and correct unless otherwise
      specifically noted in the appraisal report. Unless otherwise specifically
      noted in the appraisal report, CBRE has no reason to believe that any of
      the data furnished contain any material error. Information and data
      referred to in this paragraph include, without being limited to, numerical
      street addresses, lot and block numbers, Assessor's Parcel Numbers, land
      dimensions, square footage area of the land, dimensions of the
      improvements, gross building areas, net rentable areas, usable areas, unit
      count, room count, rent schedules, income data, historical operating
      expenses, budgets, and related data. Any material error in any of the

- --------------------------------------------------------------------------------
                                       99
<PAGE>

================================================================================
ROYAL RIDGE (2004)                           ASSUMPTIONS AND LIMITING CONDITIONS
- --------------------------------------------------------------------------------

      above data could have a substantial impact on the conclusions reported.
      Thus, CBRE reserves the right to amend conclusions reported if made aware
      of any such error. Accordingly, the client-addressee should carefully
      review all assumptions, data, relevant calculations, and conclusions
      within 30 days after the date of delivery of this report and should
      immediately notify CBRE of any questions or errors.

6.    The date of value to which any of the conclusions and opinions expressed
      in this report apply, is set forth in the Letter of Transmittal. Further,
      that the dollar amount of any value opinion herein rendered is based upon
      the purchasing power of the American Dollar on that date. This appraisal
      is based on market conditions existing as of the date of this appraisal.
      Under the terms of the engagement, we will have no obligation to revise
      this report to reflect events or conditions which occur subsequent to the
      date of the appraisal. However, CBRE will be available to discuss the
      necessity for revision resulting from changes in economic or market
      factors affecting the subject.

7.    CBRE assumes no private deed restrictions, limiting the use of the subject
      property in any way.

8.    Unless otherwise noted in the body of the report, it is assumed that there
      are no mineral deposit or subsurface rights of value involved in this
      appraisal, whether they be gas, liquid, or solid. Nor are the rights
      associated with extraction or exploration of such elements considered
      unless otherwise stated in this appraisal report. Unless otherwise stated
      it is also assumed that there are no air or development rights of value
      that may be transferred.

9.    CBRE is not aware of any contemplated public initiatives, governmental
      development controls, or rent controls that would significantly affect the
      value of the subject.

10.   The estimate of Market Value, which may be defined within the body of this
      report, is subject to change with market fluctuations over time. Market
      value is highly related to exposure, time promotion effort, terms,
      motivation, and conclusions surrounding the offering. The value
      estimate(s) consider the productivity and relative attractiveness of the
      property, both physically and economically, on the open market.

11.   Any cash flows included in the analysis are forecasts of estimated future
      operating characteristics are predicated on the information and
      assumptions contained within the report. Any projections of income,
      expenses and economic conditions utilized in this report are not
      predictions of the future. Rather, they are estimates of current market
      expectations of future income and expenses. The achievement of the
      financial projections will be affected by fluctuating economic conditions
      and is dependent upon other future occurrences that cannot be assured.
      Actual results may vary from the projections considered herein. CBRE does
      not warrant these forecasts will occur. Projections may be affected by
      circumstances beyond the current realm of knowledge or control of CBRE

12.   Unless specifically set forth in the body of the report, nothing contained
      herein shall be construed to represent any direct or indirect
      recommendation of CBRE to buy, sell, or hold the properties at the value
      stated. Such decisions involve substantial investment strategy questions
      and must be specifically addressed in consultation form.

13.   Also, unless otherwise noted in the body of this report, it is assumed
      that no changes in the present zoning ordinances or regulations governing
      use, density, or shape are being considered. The property is appraised
      assuming that all required licenses, certificates of occupancy, consents,
      or other legislative or administrative authority from any local, state,
      nor national government or private entity or organization have been or can
      be obtained or renewed for any use on which the value estimates contained
      in this report is based, unless otherwise stated.

14.   This study may not be duplicated in whole or in part without the specific
      written consent of CBRE nor may this report or copies hereof be
      transmitted to third parties without said consent, which consent CBRE
      reserves the right to deny. Exempt from this restriction is duplication
      for the internal use of the client-addressee and/or transmission to
      attorneys, accountants, or advisors of the client-addressee. Also exempt
      from this restriction is transmission of the report to any court,
      governmental authority, or regulatory agency having jurisdiction over the
      party/parties for whom this appraisal was prepared, provided that this
      report and/or its contents shall not be published, in whole or in part, in
      any public document without the express written consent of CBRE which
      consent CBRE reserves the right to deny. Finally, this report shall not be
      advertised to the public or otherwise used to induce a third party to
      purchase the property or to make a "sale" or "offer for sale" of any
      "security", as such terms are defined and used in the Securities Act of
      1933, as amended. Any third party, not covered by the exemptions herein,
      who may possess this report, is advised that they should rely on their own
      independently secured advice for any decision in connection with this
      property. CBRE shall have no accountability or responsibility to any such
      third party.

15.   Any value estimate provided in the report applies to the entire property,
      and any pro ration or division of the title into fractional interests will
      invalidate the value estimate, unless such pro ration or division of
      interests has been set forth in the report.

16.   The distribution of the total valuation in this report between land and
      improvements applies only under the existing program of utilization.
      Component values for land and/or buildings are not intended to be used in
      conjunction with any other property or appraisal and are invalid if so
      used.

- --------------------------------------------------------------------------------
                                      100
<PAGE>

================================================================================
ROYAL RIDGE (2004)                           ASSUMPTIONS AND LIMITING CONDITIONS
- --------------------------------------------------------------------------------

17.   The maps, plats, sketches, graphs, photographs and exhibits included in
      this report are for illustration purposes only and are to be utilized only
      to assist in visualizing matters discussed within this report. Except as
      specifically stated, data relative to size or area of the subject and
      comparable properties has been obtained from sources deemed accurate and
      reliable. None of the exhibits are to be removed, reproduced, or used
      apart from this report.

18.   No opinion is intended to be expressed on matters which may require legal
      expertise or specialized investigation or knowledge beyond that
      customarily employed by real estate appraisers. Values and opinions
      expressed presume that environmental and other governmental
      restrictions/conditions by applicable agencies have been met, including
      but not limited to seismic hazards, flight patterns, decibel levels/noise
      envelopes, fire hazards, hillside ordinances, density, allowable uses,
      building codes, permits, licenses, etc. No survey, engineering study or
      architectural analysis has been made known to CBRE unless otherwise stated
      within the body of this report. If the Consultant has not been supplied
      with a termite inspection, survey or occupancy permit, no responsibility
      or representation is assumed or made for any costs associated with
      obtaining same or for any deficiencies discovered before or after they are
      obtained. No representation or warranty is made concerning obtaining these
      items. CBRE assumes no responsibility for any costs or consequences
      arising due to the need, or the lack of need, for flood hazard insurance.
      An agent for the Federal Flood Insurance Program should be contacted to
      determine the actual need for Flood Hazard Insurance.

19.   Acceptance and/or use of this report constitutes full acceptance of the
      Contingent and Limiting Conditions and special assumptions set forth in
      this report. It is the responsibility of the Client, or client's
      designees, to read in full, comprehend and thus become aware of the
      aforementioned contingencies and limiting conditions. Neither the
      Appraiser nor CBRE assumes responsibility for any situation arising out of
      the Client's failure to become familiar with and understand the same. The
      Client is advised to retain experts in areas that fall outside the scope
      of the real estate appraisal/consulting profession if so desired.

20.   CBRE assumes that the subject property analyzed herein will be under
      prudent and competent management and ownership; neither inefficient or
      super-efficient.

21.   It is assumed that there is full compliance with all applicable federal,
      state, and local environmental regulations and laws unless noncompliance
      is stated, defined and considered in the appraisal report.

22.   No survey of the boundaries of the property was undertaken. All areas and
      dimensions furnished are presumed to be correct. It is further assumed
      that no encroachments to the realty exist.

23.   The Americans with Disabilities Act (ADA) became effective January 26,
      1992. Notwithstanding any discussion of possible readily achievable
      barrier removal construction items in this report, CBRE has not made a
      specific compliance survey and analysis of this property to determine
      whether it is in conformance with the various detailed requirements of the
      ADA. It is possible that a compliance survey of the property together with
      a detailed analysis of the requirements of the ADA could reveal that the
      property is not in compliance with one or more of the requirements of the
      ADA. If so, this fact could have a negative effect on the value estimated
      herein. Since CBRE has no specific information relating to this issue, nor
      is CBRE qualified to make such an assessment, the effect of any possible
      non-compliance with the requirements of the ADA was not considered in
      estimating the value of the subject property.

24.   Client shall not indemnify Appraiser or hold Appraiser harmless unless and
      only to the extent that the Client misrepresents, distorts, or provides
      incomplete or inaccurate appraisal results to others, which acts of the
      Client proximately result in damage to Appraiser. The Client shall
      indemnify and hold Appraiser harmless from any claims, expenses, judgments
      or other items or costs arising as a result of the Client's failure or the
      failure of any of the Client's agents to provide a complete copy of the
      appraisal report to any third party. In the event of any litigation
      between the parties, the prevailing party to such litigation shall be
      entitled to recover from the other reasonable attorney fees and costs.

25.   The report is for the sole use of the client; however, client may provide
      only complete, final copies of the appraisal report in its entirety (but
      not component parts) to third parties who shall review such reports in
      connection with loan underwriting or securitization efforts. Appraiser is
      not required to explain or testify as to appraisal results other than to
      respond to the client for routine and customary questions. Please note
      that our consent to allow an appraisal report prepared by CBRE or portions
      of such report, to become part of or be referenced in any public offering,
      the granting of such consent will be at our sole discretion and, if given,
      will be on condition that we will be provided with an Indemnification
      Agreement and/or Non-Reliance letter, in a form and content satisfactory
      to us, by a party satisfactory to us. We do consent to your submission of
      the reports to rating agencies, loan participants or your auditors in its
      entirety (but not component parts) without the need to provide us with an
      Indemnification Agreement and/or Non-Reliance letter.

- --------------------------------------------------------------------------------
                                      101
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                       ADDENDA
- --------------------------------------------------------------------------------


                                     ADDENDA


- --------------------------------------------------------------------------------
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                    ADDENDUM A
- --------------------------------------------------------------------------------


                                   ADDENDUM A

                                GLOSSARY OF TERMS


- --------------------------------------------------------------------------------
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                    ADDENDUM A
- --------------------------------------------------------------------------------

assessed value Assessed value applies in ad valorem taxation and refers to the
  value of a property according to the tax rolls. Assessed value may not conform
  to market value, but it is usually calculated in relation to a market value
  base. +

cash equivalency The procedure in which the sale prices of comparable properties
  sold with atypical financing are adjusted to reflect typical market terms.

contract, coupon, face, or nominal rent The nominal rent payment specified in
  the lease contract. It does not reflect any offsets for free rent, unusual
  tenant improvement conditions, or other factors that may modify the effective
  rent payment.

coupon rent
  See Contract, Coupon, Face, or Nominal Rent

effective rent 1) The rental rate net of financial concessions such as periods
  of no rent during a lease term; may be calculated on a discounted basis,
  reflecting the time value of money, or on a simple, straight-line basis. ++
  2) The economic rent paid by the lessee when normalized to account for
  financial concessions, such as escalation clauses, and other factors.
  Contract, or normal, rents must be converted to effective rents to form a
  consistent basis of comparison between comparables.

excess land In regard to an improved site, the land not needed to serve or
  support the existing improvement. In regard to a vacant site or a site
  considered as though vacant, the land no needed to accommodate the site's
  primary highest and best use. Such land may be separated from the larger site
  and have its own highest and best use, or it may allow for future expansion of
  the existing or anticipated improvement. See also surplus land. ++

face rent
  See Contract, Coupon, Face, or Nominal Rent

fee simple estate Absolute ownership unencumbered by any other interest or
  estate, subject only to the limitations imposed by the governmental powers of
  taxation, eminent domain, police power, and escheat. ++

floor area ratio (FAR) The relationship between the above-ground floor area of a
  building, as described by the building code, and the area of the plot on which
  it stands; in planning and zoning, often expressed as a decimal, e.g., a ratio
  of 2.0 indicates that the permissible floor area of a building is twice the
  total land area; also called building-to-land ratio. ++

full service lease A lease in which rent covers all operating expenses.
  Typically, full service leases are combined with an expense stop, the expense
  level covered by the contract lease payment. Increases in expenses above the
  expense stop level are passed through to the tenant and are known as expense
  pass-throughs.

going concern value Going concern value is the value of a proven property
  operation. It includes the incremental value associated with the business
  concern, which is distinct from the value of the real estate only. Going
  concern value includes an intangible enhancement of the value of an operating
  business enterprise which is produced by the assemblage of the land, building,
  labor, equipment, and marketing operation. This process creates an
  economically viable business that is expected to continue. Going concern value
  refers to the total value of a property, including both real property and
  intangible personal property attributed to the business value. +

gross building area (GBA) The sum of all areas at each floor as measured to the
exterior walls.

insurable value Insurable Value is based on the replacement and/or reproduction
  cost of physical items that are subject to loss from hazards. Insurable value
  is that portion of the value of an asset or asset group that is acknowledged
  or recognized under the provisions of an applicable loss insurance policy.
  This value is often controlled by state law and varies from state to state. +

investment value Investment value is the value of an investment to a particular
  investor based on his or her investment requirements. In contrast to market
  value, investment value is value to an individual, not value in the
  marketplace. Investment value reflects the subjective relationship between a
  particular investor and a given investment. When measured in dollars,
  investment value is the price an investor would pay for an investment in light
  of its perceived capacity to satisfy his or her desires, needs, or investment
  goals. To estimate investment value, specific investment criteria must be
  known. Criteria to evaluate a real estate investment are not necessarily set
  down by the individual investor; they may be established by an expert on real
  estate and its value, that is, an appraiser. +

- --------------------------------------------------------------------------------
                                      102
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                    ADDENDUM A
- --------------------------------------------------------------------------------

leased fee
  See leased fee estate

leased fee estate An ownership interest held by a landlord with the right of use
  and occupancy conveyed by lease to others. The rights of the lessor (the
  leased fee owner) and the leased fee are specified by contract terms contained
  within the lease.++

leasehold
  See leasehold estate

leasehold estate The interest held by the lessee (the tenant or renter) through
  a lease conveying the rights of use and occupancy for a stated term under
  certain conditions.++

load factor The amount added to usable area to calculate the rentable area. It
  is also referred to as a "rentable add-on factor" which, according to BOMA,
  "is computed by dividing the difference between the usable square footage and
  rentable square footage by the amount of the usable area. Convert the figure
  into a percentage by multiplying by 100.

market rent The most probable rent that a property should bring in a competitive
  and open market reflecting all conditions and restrictions of the specified
  lease agreement including term, rental adjustment and revaluation, permitted
  uses, use restrictions, and expense obligations. ++

market value "as if complete" on the appraisal date Market value as if complete
  on the appraisal date is an estimate of the market value of a property with
  all construction, conversion, or rehabilitation hypothetically completed, or
  under other specified hypothetical conditions as of the date of the appraisal.
  With regard to properties wherein anticipated market conditions indicate that
  stabilized occupancy is not likely as of the date of completion, this estimate
  of value should reflect the market value of the property as if complete and
  prepared for occupancy by tenants.

market value "as is" on the appraisal date Market value "as is" on the appraisal
  date is an estimate of the market value of a property in the condition
  observed upon inspection and as it physically and legally exists without
  hypothetical conditions, assumptions, or qualifications as of the date of
  appraisal.

market value Market value is one of the central concepts of the appraisal
  practice. Market value is differentiated from other types of value in that it
  is created by the collective patterns of the market. Market value means the
  most probable price which a property should bring in a competitive and open
  market under all conditions requisite to a fair sale, the buyer and seller
  each acting prudently and knowledgeably, and assuming the price is not
  affected by undue stimulus. Implicit in this definition is the consummation of
  a sale as of a specified date and the passing of title from seller to buyer
  under conditions whereby: 1) A reasonable time is allowed for exposure in the
  open market; 2) Both parties are well informed or well advised, and acting in
  what they consider their own best interests; 3) Buyer and seller are typically
  motivated; 4) Payment is made in terms of cash in U.S. dollars or in terms of
  financial arrangements comparable thereto; and 5) The price represents the
  normal consideration for the property sold unaffected by special or creative
  financing or sales concessions granted by anyone associated with the sale. ss.

marketing period The time it takes an interest in real property to sell on the
  market subsequent to the date of an appraisal. ++

net lease Lease in which all or some of the operating expenses are paid directly
  by the tenant. The landlord never takes possession of the expense payment. In
  a Triple Net Lease all operating expenses are the responsibility of the
  tenant, including property taxes, insurance, interior maintenance, and other
  miscellaneous expenses. However, management fees and exterior maintenance are
  often the responsibility of the lessor in a triple net lease. A modified net
  lease is one in which some expenses are paid separately by the tenant and some
  are included in the rent.

net rentable area (NRA) 1) The area on which rent is computed. 2) The Rentable
  Area of a floor shall be computed by measuring to the inside finished surface
  of the dominant portion of the permanent outer building walls, excluding any
  major vertical penetrations of the floor. No deductions shall be made for
  columns and projections necessary to the building. Include space such as
  mechanical room, janitorial room, restrooms, and lobby of the floor. *

nominal rent
  See Contract, Coupon, Face, or Nominal Rent

occupancy rate The relationship or ratio between the income received from the
  rented units in a property and the income that would be received if all the
  units were occupied.++

- --------------------------------------------------------------------------------
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                    ADDENDUM A
- --------------------------------------------------------------------------------

prospective future value "upon completion of construction" Prospective future
  value "upon completion of construction" is the prospective value of a property
  on the future date that construction is completed, based upon market
  conditions forecast to exist, as of that completion date. The value estimate
  at this stage is stated in current dollars unless otherwise indicated.

prospective future value "upon reaching stabilized occupancy" Prospective future
  value "upon reaching stabilized occupancy" is the prospective value of a
  property at a future point in time when all improvements have been physically
  constructed and the property has been leased to its optimum level of long-term
  occupancy. The value estimate at this stage is stated in current dollars
  unless otherwise indicated.

reasonable exposure time The estimated length of time the property interest
  being appraised would have been offered on the market prior to the
  hypothetical consummation of a sale at market value on the effective date of
  the appraisal; a retrospective estimate based upon an analysis of past events
  assuming a competitive and open market. #

rent
  See
  full service lease
  net lease
  market rent
  contract, coupon, face, or nominal rent
  effective rent

shell space Space which has not had any interior finishing installed, including
  even basic improvements such as ceilings and interior walls, as well as
  partitions, floor coverings, wall coverings, etc..

surplus land Land not necessary to support the highest and best use of the
  existing improvement but, because of physical limitations, building placement,
  or neighborhood norms, cannot be sold off separately. Such land may or may not
  contribute positively to value and may or may not accommodate future expansion
  of an existing or anticipated improvement. See also excess land. ++

usable area 1) The area actually used by individual tenants. 2) The Usable Area
  of an office building is computed by measuring to the finished surface of the
  office side of corridor and other permanent walls, to the center of partitions
  that separate the office from adjoining usable areas, and to the inside
  finished surface of the dominant portion of the permanent outer building
  walls. Excludes areas such as mechanical rooms, janitorial room, restrooms,
  lobby, and any major vertical penetrations of a multi-tenant floor. *

use value Use value is a concept based on the productivity of an economic good.
  Use value is the value a specific property has for a specific use. Use value
  focuses on the value the real estate contributes to the enterprise of which it
  is a part, without regard to the property's highest and best use or the
  monetary amount that might be realized upon its sale. +

value appraised During the real estate development process, a property typically
  progresses from a state of unimproved land to construction of improvements to
  stabilized occupancy. In general, the market value associated with the
  property increases during these stages of development. After reaching
  stabilized occupancy, ongoing forces affect the property during its life,
  including a physical wear and tear, changing market conditions, etc. These
  factors continually influence the property's market value at any given point
  in time.
  See also
  market value "as is" on the appraisal date
  market value "as if complete" on the appraisal date
  prospective future value "upon completion of construction"
  prospective future value "upon reaching stabilized occupancy"

- --------

+ The Appraisal of Real Estate, Twelfth Edition, Appraisal Institute, 2001.

++ The Dictionary of Real Estate Appraisal, Fourth Edition, 2002.

ss. The Office of the Comptroller of the Currency, 12 CFR Part 34, Subpart C,
(spade)34.42(f), August 24, 1990. This definition is compatible with the
definition of market value contained in The Dictionary of Real Estate Appraisal,
Third Edition, and the Uniform Standards of Professional Appraisal Practice
adopted by the Appraisal Standards Board of The Appraisal Foundation, 1992
edition. This definition is also compatible with the OTS, RTC, FDIC, NCUA, and
the Board of Governors of the Federal Reserve System definition of market value.

* 2000 BOMA Experience Exchange Report, Income/Expense Analysis for Office
Buildings (Building Owners and Managers Association, 2000)

# Statement on Appraisal Standard No. 6, Appraisal Standards Board of The
Appraisal Foundation, September 19, 1992.

- --------------------------------------------------------------------------------
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                    ADDENDUM B
- --------------------------------------------------------------------------------


                                   ADDENDUM B

                                   PHOTOGRAPHS


- --------------------------------------------------------------------------------
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                    ADDENDUM B
- --------------------------------------------------------------------------------


                          [PHOTO OF BUILDING EXTERIOR]

- --------------------------------------------------------------------------------
                          VIEW OF THE SUBJECT BUILDING
- --------------------------------------------------------------------------------


                          [PHOTO OF BUILDING EXTERIOR]

- --------------------------------------------------------------------------------
                          VIEW OF THE SUBJECT BUILDING
- --------------------------------------------------------------------------------
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                    ADDENDUM B
- --------------------------------------------------------------------------------


                          [PHOTO OF BUILDING EXTERIOR]

- --------------------------------------------------------------------------------
                            VIEW BEHIND THE BUILDING
- --------------------------------------------------------------------------------


                             [PHOTO OF PARKING LOT]

- --------------------------------------------------------------------------------
                     VIEW OF THE PARKING AREA FROM THE ROOF
- --------------------------------------------------------------------------------
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                    ADDENDUM B
- --------------------------------------------------------------------------------


                                 [PHOTO OF ROOF]

- --------------------------------------------------------------------------------
                                VIEW OF THE ROOF
- --------------------------------------------------------------------------------


                       [PHOTO OF BUILDING INTERRIOR AREA]

- --------------------------------------------------------------------------------
                     VIEW OF A TYPICAL OFFICE SPACE INTERIOR
- --------------------------------------------------------------------------------
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                    ADDENDUM B
- --------------------------------------------------------------------------------


                          [PHOTO OF OFFICE SPACE AREA]

- --------------------------------------------------------------------------------
                     VIEW OF A TYPICAL OFFICE SPACE INTERIOR
- --------------------------------------------------------------------------------


                              [PHOTO OF 6TH FLOOR]

- --------------------------------------------------------------------------------
               VIEW OF THE 6TH FLOOR, LEASED BUT NOT YET BUILT OUT
- --------------------------------------------------------------------------------
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                    ADDENDUM B
- --------------------------------------------------------------------------------


                            [PHOTO OF GREAT OAKS WAY]

- --------------------------------------------------------------------------------
                         VIEW SOUTH ALONG GREAT OAKS WAY
- --------------------------------------------------------------------------------


                            [PHOTO OF GREAT OAKS WAY]

- --------------------------------------------------------------------------------
                         VIEW NORTH ALONG GREAT OAKS WAY
- --------------------------------------------------------------------------------
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                    ADDENDUM C
- --------------------------------------------------------------------------------


                                   ADDENDUM C

                              COMPARABLE LAND SALES


- --------------------------------------------------------------------------------
<PAGE>

                                 LAND SALE No. 1
- --------------------------------------------------------------------------------
Cingular Data Center

Location Data

Location:                   SS Windward, W of Westside Dr
                            Alpharetta,GA
County:                     Fulton
Assessor's Parcel No:       N/A
Atlas Ref:                  N/A


Physical Data

Type:                       Office
Land Area:                  Gross            Usable
  Acres:                    8.6000           8.6000
  Square Feet:              374,616          374,616

Topography:                 Gently Rolling
Shape:                      Irregular
Utilities:                  Available
Zoning:                     OI
Allowable Bldg Area:        68,000
Floor Area Ratio:           0.18
No. of units:               N/A


Valuation

Use At Sale:                Vacant
Proposed Use or Dev.        Office
Price Per Acre:             $167,441
Price Per SF of Land:       $3.84
Price Per Unit:             N/A
Price Per SF of Bldg:       $21.18

Sale Data

Transaction Type:          Sale
Date:                      9/2001
Marketing Time:            N/A
Grantor:                   Norwinds Partners (Barry Real
Grantee:                   Bellsouth Mobility LLC
Document No.:              31041/0071
Sale Price:                $1,440,000
Financing:                 Cash to Seller
Cash Eq.Price:             $1,440,000
Onsite/Offsite Costs:      $0
Adj. Sale Price:           $1,440,000
Verification:              COMPS, Deed

Comments

This is the purchase of a site in the north Fulton County office market for
development by Cingular for a data center. The site is adjacent or near the
former Northern Telecom complex which Cingular leased the entire 370,000+/-
property in mid 2001.
<PAGE>

                                 LAND SALE No. 2
- --------------------------------------------------------------------------------
Mid-rise Office Site

Location Data

Location:                   SWC Webb Bridge and Morris Roads
                            Alpharetta,GA 30022
County:                     Fulton
Assessor's Parcel No:       12-3110-0909-023, 22-5460-1262
Atlas Ref:                  602 - G/9

Physical Data

Type:                       Office
Land Area:                  Gross            Usable
  Acres:                    13.7000          13.7000
  Square Feet:              596,772          596,772

Topography:                 Gently Rolling
Shape:                      Irregular
Utilities:                  All Available to Site
Zoning:                     O-I, Office & Institutional
Allowable Bldg Area:        N/A
Floor Area Ratio:           N/A
No. of units:               N/A

Valuation

Use At Sale:                Vacant
Proposed Use or Dev.        Office
Price Per Acre:             $162,700
Price Per SF of Land:       $3.74
Price Per Unit:             N/A
Price Per SF of Bldg:       N/A

Sale Data

Transaction Type:          Sale
Date:                      3/2001
Marketing Time:            N/A
Grantor:                   Carramerica Development
Grantee:                   Preston Ridge Pointe Partners,
Document No.:              30098-9692
Sale Price:                $2,229,000
Financing:                 Cash to Seller
Cash Eq.Price:             $2,229,000
Onsite/Offsite Costs:      $0
Adj. Sale Price:           $2,229,000
Verification:              Broker/Reliable Third Party

Comments

This property is bounded by Georgia Highway 400 on the west, Webb Bridge Road on
the north, and Morris Road on the east, in the Preston Ridge planned unit
development. The property was acquired for the construction of a 120,000 square
foot mid-rise office building. The broker reported the property and sale price
were negatively impacted by easements.
<PAGE>

                                 LAND SALE No. 3
- --------------------------------------------------------------------------------
Low rise Office Site

Location Data

Location:                   S Side of Kimball Bridge Road,
                            Alpharetta,GA 30004
County:                     Fulton
Assessor's Parcel No:       12-2842-0810-036 PT
Atlas Ref:                  N/A

Physical Data

Type:                       Office
Land Area:                  Gross         Usable
  Acres:                    6.9240        6.9240
  Square Feet:              301,609       301,609

Topography:                 Rolling
Shape:                      Irregular
Utilities:                  All Available To Site
Zoning:                     OI; Office & Instutional
Allowable Bldg Area:        N/A
Floor Area Ratio:           N/A
No. of units:               N/A

Valuation

Use At Sale:                Vacant
Proposed Use or Dev.        Office
Price Per Acre:             $212,001
Price Per SF of Land:       $4.87
Price Per Unit:             N/A
Price Per SF of Bldg:       N/A

Sale Data

Transaction Type:          Sale
Date:                      1/2001
Marketing Time:            6 months
Grantor:                   Kimball Bridge II, LP
Grantee:                   Parkway Aland, LLC (State Farm)
Document No.:              29883-0629
Sale Price:                $1,467,900
Financing:                 Cash to Seller
Cash Eq.Price:             $1,467,900
Onsite/Offsite Costs:      $0
Adj. Sale Price:           $1,467,900
Verification:              Reliable Third Party

Comments

This property was purchased for the development of an unspecified number
("several") low-rise office buidlings, just off Kimball Bridge Road, south of
Duluth Road (Georgia Highway 120) and west of Georgia Highway 400. The property
features good access and exposure.
<PAGE>

                                 LAND SALE No. 4
- --------------------------------------------------------------------------------
Oakridge At Royal 400

Location Data

Location:                   N/s of Great Oaks Way, W of North
                            Alpharetta,GA
County:                     Fulton
Assessor's Parcel No:       N/A
Atlas Ref:                  N/A

Physical Data

Type:                       Office
Land Area:                  Gross            Usable
  Acres:                    13.3729          13.3729
  Square Feet:              582,525          582,525

Topography:                 Gently Rolling
Shape:                      Irregular
Utilities:                  All Available
Zoning:                     O&I
Allowable Bldg Area:        153,684
Floor Area Ratio:           0.26
No. of units:               N/A

Valuation

Use At Sale:                Vacant
Proposed Use or Dev.        Office Building
Price Per Acre:             $125,000
Price Per SF of Land:       $2.87
Price Per Unit:             N/A
Price Per SF of Bldg:       $10.88

Sale Data

Transaction Type:          Sale
Date:                      9/2000
Marketing Time:            N/A
Grantor:                   Royal 400 Land Company I, LLC
Grantee:                   Wesley C. Duesenberg Jr.
Document No.:              N/A
Sale Price:                $1,671,625
Financing:                 Cash to Seller
Cash Eq.Price:             $1,671,625
Onsite/Offsite Costs:      $0
Adj. Sale Price:           $1,671,625
Verification:              Susan Davis- Grantee

Comments

This site is located along the north side of Great Oaks Way, just west of its
intersection with North Point Parkway. The site will be developed with a 153,684
square foot Class "A" suburban office building by Childress Klein. Construction
began following closing and completion forecasted for July 1, 2001.
<PAGE>

                                LAND SALE No. 5
- --------------------------------------------------------------------------------
Brookside Concourse 300

Location Data

Location:                   NS Brookside Pkwy E of Alexander
                            Alpharetta,GA 30022
County:                     Fulton
Assessor's Parcel No:       11-0140-0049-082-9
Atlas Ref:                  N/A

Physical Data

Type:                       Office
Land Area:                  Gross            Usable
  Acres:                    9.8900           9.8900
  Square Feet:              430,808          430,808

Topography:                 Moderate Slope
Shape:                      Irregular
Utilities:                  All Available
Zoning:                     O&I
Allowable Bldg Area:        101,207
Floor Area Ratio:           0.23
No. of units:               N/A

Valuation

Use At Sale:                Vacant
Proposed Use or Dev.        Office Building
Price Per Acre:             $164,985
Price Per SF of Land:       $3.79
Price Per Unit:             N/A
Price Per SF of Bldg:       $16.12

Sale Data

Transaction Type:          Sale
Date:                      8/2000
Marketing Time:            N/A
Grantor:                   Realty Corp 528, LLC
Grantee:                   The Alter Group
Document No.:              N/A
Sale Price:                $1,631,708
Financing:                 Cash to Seller
Cash Eq.Price:             $1,631,708
Onsite/Offsite Costs:      $0
Adj. Sale Price:           $1,631,708
Verification:              Buyer

Comments

This site is in the Brookside office development east of GA Hwy 400 and fronts
along the SS of Old Milton Parkway and the NS of Brookside Pkwy, just east of
Alexander Drive. The site was purchased for development of a two-story Class "A"
office builidng.

<PAGE>
================================================================================
ROYAL RIDGE (2004)                                                    ADDENDUM D
- --------------------------------------------------------------------------------


                                   ADDENDUM D

                            IMPROVED COMPARABLE SALES


- --------------------------------------------------------------------------------
<PAGE>

                                OFFICE SALE No. 1
- --------------------------------------------------------------------------------
Preston Ridge IV

Location Data

Location:                   3440 Preston Ridge Road
                            Alpharetta,GA 30005
County:                     Fulton
Assessor's Parcel No:       1-2-311-0-0909-059
Atlas Ref:                  N/A

Physical Data

Type:                       Multi Tenant
Land Area:                  13.0000 Acres
Gross Building Area:        N/A
Net Rentable Area:          150,320 SF
Usable Bldg Area:           N/A
Year Built:                 2000
No. of Stories:             6
Parking:                    Surface
Condition:                  Excellent
Exterior Walls:             Pre-Cast Aggregate &
Class:                      A
Amenities:                  Card Access, Daycare

Sale Data

Transaction Type:           Sale
Date:                       6/2004
Marketing Time:             N/A
Grantor:                    SSR Realty Advisors
Grantee:                    Duke Realty
Document No.:               N/A
Sale Price:                 $20,050,000
Financing:                  Not Available
Cash Eq.Price:              $20,050,000
Req.Capital Cost:           $0
Adj. Sale Price:            $20,050,000
Verification:               Broker

[PHOTO OF PRESTON RIDGE IV]

Financial Data
Source:                          Broker
Occupancy at Sale:               89%
Existing or ProForma Inc:        Pro Forma

                                 Total            Per SF
Potential Gross Income:          $3,396,613       $22.60
Vacancy and Credit Loss:         $169,831         $1.13
Effective Gross Income:          $3,226,782       $21.47
Expenses and Reserves:           $1,128,344       $7.51
Net Operating Income:            $2,098,438       $13.96

Analysis

Buyers Underwriting Criteria.:   Other
Overall Cap. Rate (OAR):         10.47 %
Projected IRR:                   N/A %
Eff. Gross Multiplier (EGIM):    6.21
Oper. Expense Ratio (OER):       34.97 %
Price Per Square Foot:           $133.38

Comments

This comparable represents the sale of a six-story suburban office building,
identified as Preston Ridge IV. The building is comprised of 150,320 net
rentable square feet, and is located along the north side of Preston Ridge Road,
just east of Morris Road and within the northeast quadrant of Georgia Highway
400 and Old Milton Parkway, in the northern portion of metro Atlanta. The
building was constructed in 2000 and is in excellent condition. Based on
discussions with the broker, the indicated capitalization rate is artificially
high and meaningless. The current rental rates are above market and will roll to
market in the next three years.
<PAGE>

                                OFFICE SALE No. 2
- --------------------------------------------------------------------------------
Parkside Terrace

Location Data

Location:                   3780 & 3820 Mansell Road
                            Alpharetta,GA 30022
County:                     Fulton
Assessor's Parcel No:       12-2740-0739-050-9 & 051-7
Atlas Ref:                  N/A

Physical Data

Type:                       Multi Tenant
Land Area:                  20.4600 Acres
Gross Building Area:        259,960 SF
Net Rentable Area:          252,960 SF
Usable Bldg Area:           N/A
Year Built:                 2000 & 2002
No. of Stories:             5
Parking:                    Surface & Deck
Condition:                  Excellent
Exterior Walls:             Brick & Glass
Class:                      A
Amenities:                  Courtyard w/ Waterfall

Sale Data

Transaction Type:           Sale
Date:                       4/2004
Marketing Time:             N/A
Grantor:                    K&K Holdings, LLC
Grantee:                    McLean Office Centre, Ltd.
Document No.:               N/A
Sale Price:                 $40,095,000
Financing:                  Cash to Seller
Cash Eq.Price:              $40,095,000
Req.Capital Cost:           $-1,500,000
Adj. Sale Price:            $38,595,000
Verification:               Seller, Contract, Databank

[PHOTO OF PARKSIDE TERRACE]

Financial Data

Source:                          Seller
Occupancy at Sale:               91%
Existing or ProForma Inc:        Existing

                                 Total            Per SF
Potential Gross Income:          $4,559,551       $18.02
Vacancy and Credit Loss:         $455,955         $1.80
Effective Gross Income:          $4,103,596       $16.22
Expenses and Reserves:           $1,894,081       $7.49
Net Operating Income:            $2,209,515       $8.73

Analysis

Buyers Underwriting Criteria.:   Other
Overall Cap. Rate (OAR):         5.72 %
Projected IRR:                   N/A %
Eff. Gross Multiplier (EGIM):    9.41
Oper. Expense Ratio (OER):       46.16 %
Price Per Square Foot:           $152.57

Comments

This comparable represents the sale of two five-story office buildings and the
adjacent parking deck, identified as the Parkside Terrace development. The
project is comprised of 252,960 net rentable square feet and is located along
the north side of Mansell Road at the Old Alabama Road Connector, in the
northern portion of metro Atlanta. The East building was constructed in 2000 and
the West building was added in 2002. The buildings were in excellent condition
and 91% occupied at the time of contract. The final sales price reflects that
the buyer was reportedly extremely motivated and faced substantial tax penalties
if they did not reinvest proceeds from a 1031 exchange. Thus, they appear to be
paying a significant premium for this property. In addition, there was 6.82
acres of excess land sold with this property. We have deducted $1,500,000 from
the sales price to account for this.
<PAGE>

                                OFFICE SALE No. 3
- --------------------------------------------------------------------------------
Satellite Place 700

Location Data

Location:                    3097 Satellite Blvd
                             Duluth,GA
County:                      Gwinnett
Assessor's Parcel No:        R6-206-064
Atlas Ref:                   N/A

Physical Data

Type:                        Single Tenan
Land Area:                   9.7000 Acres
Gross Building Area:         140,696 SF
Net Rentable Area:           132,866 SF
Usable Bldg Area:            N/A
Year Built:                  2002
No. of Stories:              6
Parking:                     644 Surface
Condition:                   Excellent
Exterior Walls:              Precast & Glass
Class:                       A
Amenities:                   Cafe, Picnic Area

Sale Data

Transaction Type:            Sale
Date:                        4/2004
Marketing Time:              4 months
Grantor:                     Crescent Brookdale Associates,
Grantee:                     FSP Satellite Place Corp
Document No.:                37828/258
Sale Price:                  $22,000,000
Financing:                   Cash to Seller
Cash Eq.Price:               $22,000,000
Req.Capital Cost:            $0
Adj. Sale Price:             $22,000,000
Verification:                Buyer

[PHOTO OF SATELLITE PLACE 700]

Financial Data
Source:                          Buyer
Occupancy at Sale:               98%
Existing or ProForma Inc:        N/A

                                     Total           Per SF
Potential Gross Income:              $2,721,206      $20.48
Vacancy and Credit Loss:             N/A             N/A
Effective Gross Income:              $2,721,206      $20.48
Expenses and Reserves:               $819,591        $6.17
Net Operating Income:                $1,901,615      $14.31

Analysis

Buyers Underwriting Criteria.:       Other
Overall Cap. Rate (OAR):             8.64 %
Projected IRR:                       N/A %
Eff. Gross Multiplier (EGIM):        8.08
Oper. Expense Ratio (OER):           30.12 %
Price Per Square Foot:               $165.58

Comments

This is the contract to purchase a recently completed Class A office bldg in NE
metro Atlanta in the NE Office Submkt. The bldg is located just north of
Gwinnett Place Mall in the multi-building Satellite Place office development.
The 2,339 SF cafe is vacant. The St. Paul Fire & Marine lease began in March of
2002 and ends in February 2009, a 7-year term. The beginning rate was $20 per
square foot with 2.5% annual escalations. The tax expense stop is $1.58 per
square foot while the remaining expenses stop is $4.21 per square foot. The
lease was written on a gross basis with a base year stop. The buyer is a cash
buyer REIT.
<PAGE>

                                OFFICE SALE No. 4
- --------------------------------------------------------------------------------
Windward Plaza 300

Location Data

Location:                   4125 Windward Plaza Drive
                            Alpharetta,GA 30005
County:                     Fulton
Assessor's Parcel No:       N/A
Atlas Ref:                  N/A

Physical Data

Type:                       Multi Tenant
Land Area:                  N/A
Gross Building Area:        N/A
Net Rentable Area:          203,248 SF
Usable Bldg Area:           N/A
Year Built:                 1999
No. of Stories:             5.0000
Parking:                    650 Surface Spaces
Condition:                  Excellent
Exterior Walls:             Glass/Masonry Panel
Class:                      A
Amenities:                  None

Sale Data

Transaction Type:           Sale
Date:                       11/2003
Marketing Time:             2 months
Grantor:                    Holder/Windward III, LLC
Grantee:                    Georgia Wind I, LLC (St. Joe
Document No.:               N/A
Sale Price:                 $31,500,000
Financing:                  Cash to Seller
Cash Eq.Price:              $31,500,000
Req.Capital Cost:           $0
Adj. Sale Price:            $31,500,000
Verification:               Broker & LJ Meoldy

[PHOTO OF WINDWARD PLAZA 300]

Financial Data

Source:                          Buyer
Occupancy at Sale:               100%
Existing or ProForma Inc:        Pro Forma

                                 Total            Per SF
Potential Gross Income:          $2,717,305       $13.37
Vacancy and Credit Loss:         N/A              N/A
Effective Gross Income:          $2,717,305       $13.37
Expenses and Reserves:           $384,546         $1.89
Net Operating Income:            $2,332,759       $11.48

Analysis

Buyers Underwriting Criteria.:   Direct Cap and DCF
Overall Cap. Rate (OAR):         7.41 %
Projected IRR:                   N/A %
Eff. Gross Multiplier (EGIM):    11.59
Oper. Expense Ratio (OER):       14.15 %
Price Per Square Foot:           $154.98

Comments

This comparable represents the sale of a five-story office building, identified
as Windward Plaza 300. The building comprises 203,248 net rentable square feet
and is located along the south side of Windward Parkway, east of Georgia 400, in
the North Fulton submarket of Atlanta. The building was constructed in 1999 and
was in excellent condition at the time of sale.

The property sold in a package with two other buildings (Windward Plaza 100 and
Windward Pointe 200), but each building was reportedly analyzed and acquired
seperately. This building is 100% leased to GE Capital, with the lease extending
through February 2014. Thus, our analysis of this sale recognizes the actual
income and expenses, with no vacancy loss.
<PAGE>

                                OFFICE SALE No. 5
- --------------------------------------------------------------------------------
Windward Plaza 100

Location Data

Location:                   4005 Windward Plaza Drive
                            Alpharetta,GA 30201
County:                     Fulton
Assessor's Parcel No:       N/A
Atlas Ref:                  N/A

Physical Data

Type:                       Multi Tenant
Land Area:                  N/A
Gross Building Area:        N/A
Net Rentable Area:          132,250 SF
Usable Bldg Area:           N/A
Year Built:                 1998
No. of Stories:             5.0000
Parking:                    582 Surface Spaces
Condition:                  Excellent
Exterior Walls:             Glass/Masonry Panel
Class:                      A
Amenities:                  None

Sale Data

Transaction Type:           Sale
Date:                       11/2003
Marketing Time:             2 months
Grantor:                    Holder/Windward III, LLC
Grantee:                    Georgia Wind I, LLC (St. Joe
Document No.:               N/A
Sale Price:                 $19,835,000
Financing:                  Cash to Seller
Cash Eq.Price:              $19,835,000
Req.Capital Cost:           $0
Adj. Sale Price:            $19,835,000
Verification:               Broker & LJ Meoldy

[PHOTO OF WINDWARD PLAZA 100]

Financial Data

Source:                          Buyer
Occupancy at Sale:               100%
Existing or ProForma Inc:        Pro Forma

                                 Total            Per SF
Potential Gross Income:          $3,398,800       $25.70
Vacancy and Credit Loss:         $169,940         $1.28
Effective Gross Income:          $3,228,860       $24.41
Expenses and Reserves:           $1,045,000       $7.90
Net Operating Income:            $2,183,860       $16.51

Analysis

Buyers Underwriting Criteria.:   Direct Cap and DCF
Overall Cap. Rate (OAR):         11.01 %
Projected IRR:                   N/A %
Eff. Gross Multiplier (EGIM):    6.14
Oper. Expense Ratio (OER):       32.36 %
Price Per Square Foot:           $149.98

Comments

This comparable represents the sale of a five-story office building, identified
as Windward Plaza 100. The building comprises 132,250 net rentable square feet
and is located along the south side of Windward Parkway, east of Georgia 400, in
the North Fulton submarket of Atlanta. The building was constructed in 1998 and
was in excellent condition at the time of sale.

The property sold in in a package with two other buildings (Windward Plaza 300
and Windward Pointe 200), but each building was reportedly analyzed and acquired
seperately. This building is 100% leased to E*Trade and Ashland/APAC, with
leases extending through July 2008 and June 2010, respectively. However, E*trade
has subleased the majority of their space. Our analysis of this sale recognizes
the actual income and expenses, with a 5% vacancy loss deduction.
<PAGE>

                                OFFICE SALE No. 6
- --------------------------------------------------------------------------------
Royal Ridge

Location Data

Location:                   11680 Great Oaks Way
                            Alpharetta,GA 30022
County:                     Fulton
Assessor's Parcel No:       12-2980-0857-046-2
Atlas Ref:                  N/A

Physical Data

Type:
Land Area:                  13.3700 Acres
Gross Building Area:        N/A
Net Rentable Area:          161,366 SF
Usable Bldg Area:           161,366 SF
Year Built:                 2001
No. of Stories:             6
Parking:                    619 Spaces
Condition:                  Excellent
Exterior Walls:             Stone & Glass
Class:                      A
Amenities:                  None

Sale Data

Transaction Type:           Sale
Date:                       1/2003
Marketing Time:             N/A
Grantor:                    CK Royal 400, L.L.C.
Grantee:                    Franklin Street Properties
Document No.:               N/A
Sale Price:                 $24,250,000
Financing:                  Cash to Seller
Cash Eq.Price:              $24,250,000
Req.Capital Cost:           $0
Adj. Sale Price:            $24,250,000
Verification:               Grantor & Grantee

[PHOTO OF ROYAL RIDGE]

Financial Data

Source:                          Buyer
Occupancy at Sale:               90.0%
Existing or ProForma Inc:        Existing

                                 Total             Per SF
Potential Gross Income:          $3,290,122        $20.39
Vacancy and Credit Loss:         N/A               N/A
Effective Gross Income:          $3,290,122        $20.39
Expenses and Reserves:           $1,141,476        $7.07
Net Operating Income:            $2,148,646        $13.32

Analysis

Buyers Underwriting Criteria.:   Direct Cap
Overall Cap. Rate (OAR):         8.86 %
Projected IRR:                   N/A %
Eff. Gross Multiplier (EGIM):    7.37
Oper. Expense Ratio (OER):       34.69 %
Price Per Square Foot:           $150.28

Comments

The building was 90% occupied at the time of sale. The seller has signed a
master lease on the property which provides for the following; provides for full
rent to the purchaser from the date of closing while the two existing tenants
are benefiting from free rent until July 2003 including pro rata reimbursement
of all expenses; provides for a full net rent at $12.50 per square foot for the
vacant space for a period of two years, including a 2.5% annual increase with
full rent being paid during any free rent offered to a new tenant, and including
pro rata reimbursement of all expenses. In addition, during the two-year period,
the seller will pay the commissions and tenant improvements related to locating
a tenant(s) for the remaining space, or at the end of the two year period, if
the space remains unleased, will provide the purchaser with a cash payment equal
to a full commission and tenant improvement allowance of $25 per square foot.
<PAGE>
================================================================================
ROYAL RIDGE (2004)                                                    ADDENDUM E
- --------------------------------------------------------------------------------


                                   ADDENDUM E

                                RENT COMPARABLES


- --------------------------------------------------------------------------------
<PAGE>

                             OFFICE COMPARABLE No. 1
- --------------------------------------------------------------------------------
Royal Centre IV

Location Data

Location:                   11700 Great Oaks Way
                            Alpharetta,GA
County:                     Fulton
Assessor's Parcel No:       12-3120-0907-040-4
Atlas Ref:                  N/A

Physical Data

Type:                       Multi Tenant
Gross Building Area:        N/A
Net Rentable Area:          301,436 SF
Usable Building             N/A
Loss Factor:                N/A
Year Built:                 2000
# of Stories:               6
Parking:                    Surface & Deck
Condition:                  Excellent
Exterior Walls:             Pre-Cast Aggregate
Class:                      A
Amenities:                  Jogging Trails, Cafeterias,
                            Conference Facilities

[PHOTO OF ROYAL CENTRE IV]

Occupancy / Lease Data

Occupancy:                 91%
Typical Size:              N/A
Term:                      3 - 6 Years
Base Rent PSF:             $18.75 - $19.00 PSF
Rent Escalations:          2.5% - 3%
Basis:                     Full Service
Expense Pass-Thru:         BYr Stop $6.50
Free Rent (months):        Nego
Tenant Improvement:        $15-$20/SF
Leasing Agent:             Greg Frankum CBRE
Phone No.:                 404-504-7892
Survey Date:               07/2004

Comments

This represents one of a group of three suburban Class "A" office buildings
constructed between 1998 and July 2000. The buildings are located along Great
Oaks Way at its intersection with North Point Boulevard. (Royal Centre II
consists of three stories with 149,711 SF. Royal Centre III has four stores with
165,527 SF. Royal Centre IV features six stories consisting of 301,386 SF.
Quoted rents have declined over the past couple of years. Escalations are
typically 2.5% to 3% (lower for larger tenants) annually with operating expenses
approximating $6.00 to $6.50 PSF. Bldg IV has a 27,000 SF space.
<PAGE>

                             OFFICE COMPARABLE No. 2
- --------------------------------------------------------------------------------
Parkview I at Opus Woods

Location Data

Location:                   925 North Point Parkway
                            Alpharetta,GA 30005
County:                     Fulton
Assessor's Parcel No:       N/A
Atlas Ref:                  N/A

Physical Data

Type:                       Multi Tenant
Gross Building Area:        N/A
Net Rentable Area:          165,000 SF
Usable Building             N/A
Loss Factor:                N/A
Year Built:                 2001
# of Stories:               4
Parking:                    Surface - 4.7/1,000 SF
Condition:                  Excellent
Exterior Walls:             Pre-Cast Aggregate
Class:                      A
Amenities:                  None

[PHOTO OF PARKVIEW I AT OPUS WOODS]

Occupancy / Lease Data

Occupancy:                 71%
Typical Size:              5,000 SF
Term:                      5 Years
Base Rent PSF:             $17.50 PSF
Rent Escalations:          2%-3% on Net
Basis:                     Full Service
Expense Pass-Thru:         $6.50
Free Rent (months):        Negotiable
Tenant Improvement:        S $25.00 N $20.00
Leasing Agent:             Corbet Woods - Opus
Phone No.:                 770-521-0045
Survey Date:               6/2004

<TABLE>
<CAPTION>
Recent Leases
- -----------------------------------------------------------------------------------------------------------
              Size                             Rent         TI         Free Rent                      Term
Date          (SF)         Tenant              (PSF)        (PSF)      (Months)     Escalations       (Yrs)
- -----------------------------------------------------------------------------------------------------------

<C>           <C>          <S>                 <C>        <C>        <C>          <C>                 <C>
09/01         69,176       Not Disclosed       $22.00                                                 10.00
- -----------------------------------------------------------------------------------------------------------
</TABLE>

Comments

This comparable represents Building I of the Parkview at Opus Woods office
development. The larger complex includes Building I (165,000 SF) completed in
February 2001, Building IV (302,000 SF), which was a build-to-suit leased to UPS
logistics, and two additional buildings that are proposed, with no near-term
commencement scheduled. Overall, the leasing agent indicated that there has been
interest, but the owner has not been interested in subdividing the full floors
represented by the current vacancy. The leasing agent indicated that it is not
currently possible to project lease-up.
<PAGE>

                             OFFICE COMPARABLE No. 3
- --------------------------------------------------------------------------------
Georgia 400 Center (I, II, and III)

Location Data

Location:                   2300-2400 Lakeview Parkway
                            Alpharetta,GA 30004
County:                     Fulton
Assessor's Parcel No:       N/A
Atlas Ref:                  N/A

Physical Data

Type:                       Multi Tenant
Gross Building Area:        N/A
Net Rentable Area:          402,265 SF
Usable Building             N/A
Loss Factor:                N/A
Year Built:                 1998
# of Stories:               6 & 7
Parking:                    4.5/1,000 RSF Surface
Condition:                  Excellent
Exterior Walls:             Pre-Cast Aggregate
Class:                      A
Amenities:                  Conference, Pond, Jogging Trail,
                            Restaurant

[PHOTO OF GEORGIA 400 CENTER (I, II, AND III)

Occupancy / Lease Data

Occupancy:                 80%
Typical Size:              5,000 SF
Term:                      5 - 10 Years
Base Rent PSF:             $17.50 - $19.50 PSF
Rent Escalations:          2.5% Annually
Basis:                     Full Service
Expense Pass-Thru:         Base Year Stop
Free Rent (months):        1 mo per yr.
Tenant Improvement:        $23-$28/SF 1st Gen.
Leasing Agent:             Ginger Martin - Taylor & Mathi
Phone No.:                 (770)232-9689
Survey Date:               6/2004

Comments

This comparable represents the Georgia 400 Center office development. The
property consists of three buildings, completed in September 1998 (I), December
1999 (II), and November 2001 (III). An additional 135,000 SF building is
proposed as Phase IV, with development depending on market conditions. Among the
existing buildings, Phase I/2400 Lakeview Parkway, is six stories and consists
of 124,800 square feet; Phase II/2325 Lakeview Parkway, is seven stories and
consists of 138,465 square feet; Phase III/2300 Lakeview Parkway is seven
stories and consists of 139,000 square feet. The property is located across
Haynes Bridge Road from the Northwinds development and northwest of North Point
Mall. According to the leasing agent, operating expenses are approximately $6.50
per square foot for both buildings.
<PAGE>

                             OFFICE COMPARABLE No. 4
- --------------------------------------------------------------------------------
Northwinds Center/Northwinds Center West

Location Data

Location:                   Haynes Bridge Road @ Northwinds
                            Alpharetta,GA
County:                     Fulton
Assessor's Parcel No:       N/A
Atlas Ref:                  N/A

Physical Data

Type:                       Multi Tenant
Gross Building Area:        892,001 SF
Net Rentable Area:          892,001 SF
Usable Building             N/A
Loss Factor:                N/A
Year Built:                 1997
# of Stories:               6
Parking:                    Surface
Condition:                  Excellent
Exterior Walls:             Pre-Cast Aggregate
Class:                      A
Amenities:                  None

[PHOTO OF NORTHWINDS CENTER/NORTHWINDS CENTER WEST]

Occupancy / Lease Data

Occupancy:                 69%
Typical Size:              N/A
Term:                      3 & 5 Years
Base Rent PSF:             $18.50 - 20.00 PSF
Rent Escalations:          3% on Net
Basis:                     $6.00 PSF
Expense Pass-Thru:         Base Year Stop
Free Rent (months):        Nego.
Tenant Improvement:        See Comments
Leasing Agent:             Jackie Gauthreaux - Pope Land
Phone No.:                 (770)980-0808
Survey Date:               6/2004

Comments

This comparable represents six, six-story office buildings identified as
Northwinds Center. The buildings comprise a total of 884,800 square feet (net
rentable area) and were completed in 1997, 1998, and 1999 with the sixth
building in 2000. The property is located northwest of North Point Mall along
Haynes Bridge Road. According to the leasing agent, operating expenses are
currently estimated at $6.00 per square foot with tenants responsible for
increases over a base year stop. Rental rates are quoted full service with
escalations of 3% applied to the net rent amount. Tenant build-out is offered at
$20.00 PSF for first generation space and $5.00 to $7.00 per square foot for
second generation space.
<PAGE>

                             OFFICE COMPARABLE No. 5
- --------------------------------------------------------------------------------
Preston Ridge II and III

Location Data

Location:                   3460 - 3480 Preston Ridge Road
                            Alpharetta,GA 30005
County:                     Fulton
Assessor's Parcel No:       N/A
Atlas Ref:                  N/A

Physical Data

Type:                       Multi Tenant
Gross Building Area:        N/A
Net Rentable Area:          300,896 SF
Usable Building             300,896 SF
Loss Factor:                N/A
Year Built:                 1998    - 1999
# of Stories:               6
Parking:                    Asphalt Surface
Condition:                  Excellent
Exterior Walls:             Pre-Cast Aggregate
Class:                      A
Amenities:                  None

[PHOTO OF PRESTON RIDGE II AND III]

Occupancy / Lease Data

Occupancy:                 80%
Typical Size:              N/A
Term:                      3 to 5 Years
Base Rent PSF:             $18.00 - $18.50 PSF
Rent Escalations:          2% - 3% Annual
Basis:                     Base Stop
Expense Pass-Thru:         Full Service
Free Rent (months):        6 - 7 mos.
Tenant Improvement:        See Comments
Leasing Agent:             Glenn Kolker - Childress Klein
Phone No.:                 (770)859-1205
Survey Date:               6/2004

Comments

This comparable represents two Class "A" suburban office buildings located just
north of the North Point Mall. The buildings include Preston Ridge II (149,280
SF built in 1998) and Preston Ridge III (151,616 SF built in 1999). Also in the
park, Preston Ridge I (143,941 SF) is now leased by CB Richard Ellis. In
addition, Preston Ridge IV (150,000 SF) was sold to Duke Realty in June 2004.
According to the leasing agent, build-out allowances of $25.00 PSF are quoted
for first-generation space with second generation tenant improvement allowances
of $15.00 to $18.00 PSF for new tenants in second-generation space.
<PAGE>

                             OFFICE COMPARABLE No. 6
- --------------------------------------------------------------------------------
North Point Center East 100, 200, 333, & 555

Location Data

Location:                   100, 200, 333, & 555 Northpoint
                            Alpharetta,GA 30022
County:                     Fulton
Assessor's Parcel No:       N/A
Atlas Ref:                  N/A

Physical Data

Type:                       Multi Tenant
Gross Building Area:        N/A
Net Rentable Area:          539,367 SF
Usable Building             N/A
Loss Factor:                N/A
Year Built:                 1995
# of Stories:               6 & 7
Parking:                    Surface - 4.2-5/1,000 RSF
Condition:                  Excellent
Exterior Walls:             Pre-Cast Aggregate
Class:                      A
Amenities:                  On-site Management, Proximity to
                            North Point Mall

[PHOTO OF NORTH POINT CENTER EAST 100, 200, 333, & 555]

Occupancy / Lease Data

Occupancy:                 59%
Typical Size:              3,500 SF
Term:                      3-5 Years
Base Rent PSF:             $19.50 PSF
Rent Escalations:          3% Annually
Basis:                     Gross
Expense Pass-Thru:         $7.25 PSF
Free Rent (months):        Nego.
Tenant Improvement:        $10-$15/ 2nd
Leasing Agent:             Penny W. - Cousins
Phone No.:                 (770)857-2539
Survey Date:               6/2004

Comments

This comparable represents the Northpoint Center East office development. The
property consists of four buildings. Building 100 (128,000 SF) was completed in
1995, 200 (130,000 SF) was completed in 1996, 333 (129,367 SF) was completed in
1997, and 555 (152,000 SF) in 1999. Tenant improvment allowances are negotiable,
but the remaining shell space in the newest property is quoted with a $18.00
finish. The property has converted to a gross basis for expenses.
<PAGE>

                             OFFICE COMPARABLE No. 7
- --------------------------------------------------------------------------------
The Falls at Sanctuary Park

Location Data

Location:                   1125 Sanctuary Parkway
                            Alpharetta,GA
County:                     Fulton
Assessor's Parcel No:       N/A
Atlas Ref:                  N/A

Physical Data

Type:                       Multi Tenant
Gross Building Area:        225,000 SF
Net Rentable Area:          225,000 SF
Usable Building             225,000 SF
Loss Factor:                N/A
Year Built:                 2003
# of Stories:               5
Parking:                    3-Story Parking Deck
Condition:                  Excellent
Exterior Walls:             Masonry
Class:                      A
Amenities:                  Fitness center, conference center,
                            walking trail, and pond.

[PHOTO OF THE FALLS AT SANCTUARY PARK]

Occupancy / Lease Data

Occupancy:                 67%
Typical Size:              6,157 SF
Term:                      5 - 8 Years
Base Rent PSF:             $21.75 - $22.50
Rent Escalations:          2.5%
Basis:                     Full Service
Expense Pass-Thru:         Base Year Stop
Free Rent (months):        None
Tenant Improvement:        $15 - $20 PSF
Leasing Agent:             Jones, Lang, Lasalle
Phone No.:                 N/A
Survey Date:               6/04

<TABLE>
<CAPTION>
Recent Leases
- -------------------------------------------------------------------------------------------------------
              Size                         Rent          TI         Free Rent                     Term
Date          (SF)         Tenant          (PSF)         (PSF)      (Months)     Escalations      (Yrs)
- -------------------------------------------------------------------------------------------------------

<C>           <C>          <S>             <C>           <C>        <C>          <C>              <C>
1/03          75,487       EDS             $21.90                   0            2.5%             8.20
- -------------------------------------------------------------------------------------------------------

3/04          47,420       Microsoft       $21.50                                2.5%             7.10
- -------------------------------------------------------------------------------------------------------
</TABLE>

Comments

This building is one of five located in the Sanctuary Park office development in
Alapharetta. This property was constructed in 2003 and is considered a Class A
office building in the north Fulton office market. The building has a three
story parking deck with approximately 900 spaces. At time of survey, the
building was about 67% occupied.
<PAGE>
================================================================================
ROYAL RIDGE (2004)                                                    ADDENDUM F
- --------------------------------------------------------------------------------


                                   ADDENDUM F

                                 OPERATING DATA


- --------------------------------------------------------------------------------
<PAGE>

                                   ROYAL RIDGE
                         INCOME/EXPENSE VARIANCE REPORT
                          PERIOD END DECEMBER 31, 2003

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
   FSP                 ACCOUNT                YR TO DATE      YR TO DATE                       % OF
ACCOUNT #            DESCRIPTION                ACTUAL          BUDGET         VARIANCE       BUDGET       VARIANCE EXPLANATION
- ------------------------------------------------------------------------------------------------------------------------------------
<S>        <C>                              <C>             <C>             <C>             <C>         <C>
4100.000   BASE RENT                         1,152,590.65    1,152,590.64            0.01        0.00%

                                                                                                        Unfavorable variance results
                                                                                                        from an adjustment which was
                                                                                                        made by accounting, per the
                                                                                                        instructions of FSP and
4190.000   S/L BASE RENT - GAAP                954,172.00      966,433.00      (12,261.00)      -1.27%  their auditors.

                                                                                                        Based on a projected
                                                                                                        reconciliation of year-end
4210.000   CAM BILLINGS - CURRENT YEAR         575,892.58      599,800.41      (23,907.83)      -3.99%  expenses.

4220.000   RECOVERY - OP EXPENSES                2,483.05        2,200.00          283.05       12.87%

                                                                                                        Because this was the first
                                                                                                        year the building was
                                                                                                        occupied, the budget number
4240.000   RECOVERY - UTILITIES                  5,457.23        4,400.00        1,057.23       24.03%  was purely speculative.

4360.000   LATE FEES                               205.05            0.00          205.05      100.00%

                                                                                                        No interest was budgeted
4951.000   INTEREST - CAPITAL RESERVE           26,357.21            0.00       26,357.21      100.00%  this year.

                                                                                                        Represents income for
                                                                                                        miscellaneous tenant
                                                                                                        billbacks. There was no
                                                                                                        historical information upon
                                                                                                        which to base the budget
                                                                                                        number, so no funds were
4990.000   OTHER INCOME                          1,322.22            0.00        1,322.22      100.00%  budgeted.

                                            ----------------------------------------------------------
           TOTAL INCOME                      2,718,479.99    2,725,424.05       (6,944.06)      -0.25%
                                            ==========================================================

                                                                                                        Night cleaning is paid on a
                                                                                                        square footage basis, and
                                                                                                        due to some unexpected
                                                                                                        vacancies, the year-end
                                                                                                        expenses were significantly
5220.000   CLEANING - SERVICE/INTERIOR        (106.739.97)    (142,249.06)      35,509.09       24.96%  less than budget.

                                                                                                        Window washing occurred
5222.000   CLEANING - SERVICE/WINDOWS           (4,620.00)      (3,320.00)      (1,308.00)     -39.16%  ahead of schedule.

                                                                                                        Budget figure estimated $.10
                                                                                                        psf, and due to the current
                                                                                                        vacancy on the sixth floor,
                                                                                                        the year-end expenses were
5224.000   CLEANING - SUPPLIES                 (11,728.81)     (14,117.03)       2,388.22       16.92%  less than budget.

5230.000   TRASH REMOVAL                        (4,537.10)      (5,034.35)         497.25        9.88%

                                            ----------------------------------------------------------
           TOTAL CLEANING                     (127,625.88)    (164,720.44)      37,094.56       22.52%
                                            ----------------------------------------------------------

5132.000   PAINT/SHEETROCK                      (6,484.31)      (6,835.00)         350.69        5.13%

5133.000   LOCKS                                  (475.48)        (550.00)          74.52       13.55%

5138.000   MAINTENANCE SUPPLIES                 (1,319.89)        (825.00)        (494.89)     -59.99%

                                                                                                        Unfavorable variance results
                                                                                                        from the replacement of four
                                                                                                        wallcovering drops on the
                                                                                                        first floor, as the
                                                                                                        wallcovering was worn from
                                                                                                        all of the move-ins and
                                                                                                        deliveries over the past 6-9
5142.000   MISC INTERIOR REPAIRS                (2,205.88)        (825.00)      (1,380.88)    -167.38%  months.

                                                                                                        Expenses for seasonal
                                                                                                        decorating $1,472 was
                                                                                                        erroneously coded to this
                                                                                                        account, but it was budgeted
5144.000   INTERIOR PLANT                       (6,011.37)      (4,348.35)      (1,663.02)     -38.24%  in account #5148.000.

5145.000   GENERAL MAINT - METAL                (2,940.95)      (2,940.95)           0.00        0.00%

5146.000   EXTERMINATING                        (1,276.42)      (1,567.42)         291.00       18.57%

5147.000   SIGNAGE                                (417.90)        (550.00)         132.10       24.02%

5148.000   SEASONAL DECORATING                  (1,500.00)      (1,500.00)           0.00        0.00%

                                                                                                        Funds were budgeted for the
                                                                                                        semi-annual inspection which
                                                                                                        was not performed by year-
5150.000   ROOF REPAIRS                           (165.00)      (1,325.00)       3,160.00       87.55%  end.
</TABLE>
<PAGE>

                                   ROYAL RIDGE
                         INCOME/EXPENSE VARIANCE REPORT
                          PERIOD END DECEMBER 31, 2003

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
   FSP                 ACCOUNT                YR TO DATE      YR TO DATE                       % OF
ACCOUNT #            DESCRIPTION                ACTUAL          BUDGET         VARIANCE       BUDGET       VARIANCE EXPLANATION
- ------------------------------------------------------------------------------------------------------------------------------------
<S>        <C>                              <C>             <C>             <C>             <C>         <C>
                                                                                                        Unfavorable variance results
                                                                                                        from the unbudgeted glass
                                                                                                        replacement on the fourth
5152.000   MISC. EXTERIOR REPAIRS               (2,140.45)        (550.00)      (1,590.45)    -289.17%  floor.

                                                                                                        $3,500 was budgeted in May
                                                                                                        for the picnic area, but
                                                                                                        this charge was coded to
                                                                                                        account #5260-000 which
                                                                                                        shows an unfavorable
5154.000   OTHER BLDG R&M                         (551.00)      (4,600.00)       4,049.00       88.02%  variance.

5156.000   R&M TO BE REIMBURSED                 (2,072.96)      (1,650.00)        (422.96)     -25.63%

5160.000   HVAC CONTRACT MAINTENANCE            (2,067.08)      (1,574.20)        (492.88)     -31.31%

5163.000   HVAC FILTERS                           (579.98)        (600.00)          20.02        3.34%

5166.000   HVAC - WATER TREATMENT               (2,876.77)      (3,856.77)         980.00       25.41%

5169.000   HVAC - OTHER                         (6,181.31)      (7,012.90)         831.59       11.86%

                                                                                                        Unfavorable variance results
                                                                                                        from several things: 1) the
                                                                                                        group relamping schedule is
                                                                                                        slightly ahead of schedule;
                                                                                                        2) numerous exit
                                                                                                        lights/ballasts failed due
                                                                                                        to a power surge and had to
                                                                                                        be replaced; and 3) the
                                                                                                        electrical GFI and
                                                                                                        switchgear test was
                                                                                                        mistakenly coded to this
                                                                                                        account ($1,500) but was
                                                                                                        budgeted for in account #
5172.000   ELEC. - LIGHT BULBS                  (6,549.48)      (2,010.00)      (4,539.48)    -225.84%  5179.000 (see below).

                                                                                                        See above. The switchgear
                                                                                                        test was below the budget
                                                                                                        figure, and no contingency
5179.000   ELEC. - OTHER                             0.00       (3,700.00)       3,700.00      100.00%  funds were used this year.

5189.000   PLUMBING - OTHER                     (1,400.18)      (1,375.00)         (25.18)      -1.83%

                                                                                                        Budget did not account for
                                                                                                        the light occupancy discount
                                                                                                        which the building is
                                                                                                        currently receiving due to
5190.000   ELEVATOR - CONTRACT                  (7,416.70)     (11,617.74)       4,201.04       36.16%  the vacancies.

5192.000   ELEVATOR - REPAIRS                     (648.00)        (940.00)         292.00       31.06%

5242.000   LIFE SAFETY                          (1,330.80)      (1,750.00)         419.20       23.95%

                                                                                                        Unfavorable variance results
                                                                                                        from several unbudgeted by
                                                                                                        necessary repairs to the
                                                                                                        fire alarm panel and the
5244.000   ALARM SYSTEMS                        (5,180.78)      (3,042.74)      (2,138.04)     -70.27%  subpanel.

5260.000   LANDSCAPING SERVICE                 (64,103.48)     (61,096.03)      (3,007.45)      -4.92%  See account #5154.000

                                                                                                        Not all of the contingency
                                                                                                        fees related to irrigation
5264.000   LANDSCAPING REPAIRS                  (2,850.00)      (3,900.00)       1,050.00       26.92%  were expended this year.

5266.000   ASSOCIATION FEES                     (5,360.26)      (5,169.80)        (190.46)      -3.68%

5271.000   PARKING LOT REPAIRS                  (2,032.04)      (2,500.00)         467.96       18.72%

                                            ----------------------------------------------------------
           TOTAL REPAIRS AND MAINT.           (136,138.47)    (138,211.90)       2,073.43        1.50%
                                            ----------------------------------------------------------

                                                                                                        Actual security coverage is
                                                                                                        slightly different from what
                                                                                                        the budget speculated. We
                                                                                                        are currently evaluating the
                                                                                                        existing coverage and may be
                                                                                                        making some changes to the
                                                                                                        program, as at the time the
                                                                                                        budget was being prepared,
                                                                                                        we were not sure yet what
                                                                                                        the demands of the building
5246.000   CONTRACT SECURITY                   (59,775.38)     (57,946.03)      (1,829.35)      -3.16%  would be.

                                            ----------------------------------------------------------
           TOTAL SECURITY                      (59,775.38)     (57,946.03)      (1,829.35)      -3.16%
                                            ----------------------------------------------------------
</TABLE>
<PAGE>

                                   ROYAL RIDGE
                         INCOME/EXPENSE VARIANCE REPORT
                          PERIOD END DECEMBER 31, 2003

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
   FSP                 ACCOUNT                YR TO DATE      YR TO DATE                       % OF
ACCOUNT #            DESCRIPTION                ACTUAL          BUDGET         VARIANCE       BUDGET       VARIANCE EXPLANATION
- ------------------------------------------------------------------------------------------------------------------------------------
<S>        <C>                              <C>             <C>             <C>             <C>         <C>
                                                                                                        Budget figure was based on
                                                                                                        the actual consumption of
                                                                                                        other buildings within the
                                                                                                        portfolio, as there was not
                                                                                                        historical data for Royal
                                                                                                        Ridge at the time the budget
                                                                                                        was prepared. The actual
                                                                                                        consumption is less at this
                                                                                                        building. Additionally,
                                                                                                        because the building is on
                                                                                                        an RTP plan, the expenses
                                                                                                        were unusually low due to
                                                                                                        the very mild summer this
5310.000   ELECTRICITY                        (113,332.79)    (135,485.00)      22,152.21       16.35%  year.

                                                                                                        Budget figure was based on
                                                                                                        the actual consumption of
                                                                                                        other buildings within the
                                                                                                        portfolio. The actual
                                                                                                        consumption is higher at
                                                                                                        this building because, up
                                                                                                        until several months ago,
                                                                                                        the irrigation water was
                                                                                                        tied into the domestic
                                                                                                        water, and the building had
                                                                                                        to pay sewage charges on the
                                                                                                        total expenses. It has only
                                                                                                        been in the past four months
                                                                                                        that Fulton County lifted
                                                                                                        the moratorium on irrigation
                                                                                                        meters, and one was
                                                                                                        installed in late fall. The
                                                                                                        cost of this meter $2,700
                                                                                                        was not budgeted but was
5340.000   WATER/SEWER                         (26,433.99)     (17,418.55)      (9,015.44)     -51.76%  pre-approved by FSP.

                                            ----------------------------------------------------------
           TOTAL UTILITIES                    (139,766.78)    (152,903.55)      13,136.77        8.59%
                                            ----------------------------------------------------------

                                                                                                        Insurance premiums went up
                                                                                                        in February, after the
5460.000   P&C/LIABILITY                       (35,738.33)     (30,078.40)      (5,659.93)     -18.82%  budget was prepared.

                                            ----------------------------------------------------------
           TOTAL INSURANCE                     (35,738.33)     (30,078.40)      (5,659.93)     -18.82%
                                            ----------------------------------------------------------

                                                                                                        Figure represents actual
                                                                                                        expense based on the Real
                                                                                                        Estate Tax billing. Royal
                                                                                                        Ridge received a favorable
5410.000   REAL ESTATE TAXES                  (219,163.23)    (297,853.23)      78,690.00       26.42%  reduction in value.

                                            ----------------------------------------------------------
           TOTAL REAL ESTATE TAXES            (219,163.23)    (297,853.23)      78,690.00       26.42%
                                            ----------------------------------------------------------

                                                                                                        Not all contingency funds
5530.000   TENANT RELATIONS                     (2,426.23)      (5,475.00)       3,048.77       55.69%  were utilized this year.

5610.000   MANAGEMENT FEE - LOCAL              (52,814.44)     (52,769.73)         (44.71)      -0.08%

                                                                                                        Due to the downsizing of the
                                                                                                        Suburban Alpharetta
                                                                                                        portfolio in July, the
                                                                                                        proportionate allocations
                                                                                                        increased at each of the
5129.000   SALARY REIMBURSEMENT               (101,615.47)     (97,268.23)      (4,347.24)      -4.47%  remaining buildings.

5724.000   TRAVEL                                 (494.28)        (550.00)          55.72       10.13%

5726.000   MEALS                                   (17.80)        (550.00)         532.20       96.76%
                                                                                                        Funds were budgeted to print
                                                                                                        more tenant and emergency
                                                                                                        evaluation manuals. We
                                                                                                        currently have plenty in
5732.000   OFFICE SUPPLIES/PRINTING               (819.30)      (1,650.00)         830.70       50.35%  stock.

                                                                                                        At the time the budget was
                                                                                                        prepared, there was no
                                                                                                        historical data upon which
                                                                                                        to base the projections,
                                                                                                        so the actual expenses are
                                                                                                        slightly higher than
5734.000   TELEPHONE/ANSWER/PAGE                (9,375.90)      (7,678.77)      (1,697.13)     -22.10%  expected.

                                                                                                        At the time the budget was
                                                                                                        prepared, there was no
                                                                                                        historical data upon which
                                                                                                        to base the projections, so
                                                                                                        the actual expenses are
                                                                                                        slightly higher than
5736.000   POSTAGE & DELIVERY                     (417.39)      (1,106.45)         689.06       62.28%  expected.

5740.000   MEETINGS/TRAINING/SUBS                    0.00         (500.00)         500.00      100.00%

5744.000   DATA PROCESSING                           0.00         (550.00)         550.00      100.00%

5760.000   PROF FEES - ACCTG/AUDIT             (19,999.00)     (19,998.00)          (1.00)      -0.01%

                                                                                                        None of the budgeted
                                                                                                        contingency funds were
5764.000   PROF FEES - OTHER                         0.00       (1,650.00)       1,650.00      100.00%  utilized this year.

                                                                                                        At the time the budget was
                                                                                                        prepared, there was no
                                                                                                        historical data upon which
5770.000   BANK CHARGES                         (1,007.41)           0.00       (1,007.41)    -100.00%  to base the projections.

6790.000   MISCELLANEOUS                        33,421.01      (27,810.84)      (5,610.17)     -20.17%
</TABLE>
<PAGE>

                                   ROYAL RIDGE
                         INCOME/EXPENSE VARIANCE REPORT
                          PERIOD END DECEMBER 31, 2003

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
   FSP                 ACCOUNT                YR TO DATE      YR TO DATE                       % OF
ACCOUNT #            DESCRIPTION                ACTUAL          BUDGET         VARIANCE       BUDGET       VARIANCE EXPLANATION
- ------------------------------------------------------------------------------------------------------------------------------------
<S>        <C>                              <C>             <C>             <C>             <C>         <C>
                                            ----------------------------------------------------------
           TOTAL ADMINISTRATIVE               (222,408.23)    (217,557.02)      (4,851.21)      -2.23%
                                            ----------------------------------------------------------

                                            ----------------------------------------------------------
           TOTAL REIMBURSABLE EXPENSES        (940,616.30)  (1,059,270.57)     118,654.27       11.20%
                                            ----------------------------------------------------------

                                                                                                        Not all contingency funds
6516.000   OTHER MARKETING                      (4,973.09)      (7,450.00)       2,476.91       33.25%  were expended this year.

6620.000   MANAGEMENT FEES - FSP               (17,604.81)     (17,589.95)         (14.86)      -0.08%

6742.000   PERMITS/FEES/DUES                      (391.48)           0.00         (391.48)    -100.00%

                                                                                                        None of the budgeted
                                                                                                        contingency funds were
6762.000   PROF FEES - LEGAL FEES                    0.00       (1,100.00)       1,100.00      100.00%  expended.

                                                                                                        At the time the budget was
                                                                                                        prepared, there was
                                                                                                        no historical information
                                                                                                        upon which to base the
6770.000   BANK SERVICE CHARGES - N/R           (1,943.64)           0.00       (1,943.64)    -100.00%  budget.

6860.000   FUNDED - ACCOUNTING & AUDIT          (7,000.00)           0.00       (7,000.00)    -100.00%

7120.000   DEPR EXP - BUILDING                (326,448.00)           0.00     (326,448.00)    -100.00%

7140.000   DEPR EXP - BLDG IMPROVEMENTS        (49,111.00)           0.00      (49,111.00)    -100.00%

6764.000   OTHER PROFESSIONAL FEES             (18,857.00)           0.00      (18,857.00)    -100.00%

7270.000   AMORT EXP-PPD COMMISSIONS           (20,370.76)           0.00      (20,370.76)    -100.00%

8770.000   INTEREST EXPENSE                          0.00            0.00            0.00     -100.00%

8780.000   COMMITMENT FEES                  (1,710,625.00)           0.00   (1,710,625.00)    -100.00%

7275.000   AMORT-AQUIRED LEASES               (143,057.00)           0.00     (143,057.00)    -100.00%

7276.000   AMORT-AQUIRED LEASES               (426,304.00)           0.00     (426,304.00)    -100.00%

8890.000   ORGANIZATION COSTS                   (8,974.60)           0.00       (8,974.60)    -100.00%

                                            ----------------------------------------------------------
           TOTAL NON-REIMBURSABLE EXPENSES  (2,735,660.38)     (26,139.95)  (2,709,520.43)  -10365.44%
                                            ----------------------------------------------------------

                                            ----------------------------------------------------------
           NET INCOME                         (957,796.69)   1,640,013.53   (2,597,810.22)    -158.40%
                                            ==========================================================
</TABLE>
<PAGE>

Database:  FRANKLINPROP                                         Page:          1
PROJ:      35-327                                               Date:  6/14/2004
                                                                Time:   08:46 AM
Accrual

                            Property Income Statement
                       Detail Income Statement - Property
                           Franklin Street Properties
                                   Royal Ridge

                                    May 2004
             Report includes an open period. Entries are not final.

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
                                               Current       Per          Current         Current
                                                Month       Square         Month           Month
                                                Actual       Foot          Budget        Variance
==================================================================================================
<S>                                       <C>            <C>        <C>             <C>
INCOME
   Base Rents                               182,860.47       0.00      182,860.00            0.47
   FASB 13 Revenue                            8,018.00       0.00        7,892.00          126.00
   Common Area Maintenance                  100,344.00       0.00      100,344.00            0.00
   P/Y CAM                                        0.00       0.00            0.00            0.00
   Utility Recovery                             464.61       0.00          400.00           64.61
   Work Order Billings                          100.00       0.00          200.00         (100.00)
   Late Fees                                      0.00       0.00            0.00            0.00
   Other Income                                   0.00       0.00          100.00         (100.00)
                                          ------------   --------   -------------   -------------
   Total Revenue                            291,787.08       0.00      291,796.00           (8.92)

EXPENSES
Recoverable:
   Salaries - Maintenance                     3,482.00       0.00        3,482.00            0.00
   Paint/Sheetrock                              181.36       0.00          285.00          103.64
   Locks                                          0.00       0.00           50.00           50.00
   Maintenance Supplies                         125.24       0.00           75.00          (50.24)
   Misc Interior Repairs                          0.00       0.00          100.00          100.00
   Interior Plants                              369.64       0.00          393.00           23.36
   General Maint - Metal                          0.00       0.00          266.00          266.00
   Exterminating                                119.00       0.00          115.00           (4.00)
   Signage                                        0.00       0.00           50.00           50.00
   Seasonal Decorations                           0.00       0.00            0.00            0.00
   Roof Repairs                                   0.00       0.00           75.00           75.00
   Misc. Exterior Repairs                         0.00       0.00           50.00           50.00
   Other Building R&M                             0.00       0.00          100.00          100.00
   R&M Uninsured Claims                           0.00       0.00            0.00            0.00
   HVAC - Contract Maint                          0.00       0.00            0.00            0.00
   HVAC - Filters                                97.95       0.00            0.00          (97.95)
   HVAC - Water Treatment                       591.28       0.00          260.00         (331.28)
   HVAC - Other                               1,438.90       0.00          200.00       (1,238.90)
   Electric - Light Bulbs                        31.07       0.00          100.00           68.93
   Electric - Other                           1,800.00       0.00          550.00       (1,250.00)
   Plumbing - Other                               0.00       0.00          125.00          125.00
   Elevator Contract                            685.25       0.00        1,197.00          511.75

<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
                                               Year to       Per           Year to          Year to      Variance          Total
                                                 Date       Square           Date             Date      per Square         Annual
                                                Actual       Foot           Budget         Variance        Foot            Budget
==================================================================================================================================
<S>                                     <C>              <C>        <C>              <C>              <C>          <C>
INCOME
   Base Rents                               914,302.35       0.00       914,300.00             2.35        0.00      1,834,512.29
   FASB 13 Revenue                           43,126.00       0.00        39,460.00         3,666.00        0.00         94,704.00
   Common Area Maintenance                  501,720.00       0.00       501,720.00             0.00        0.00      1,204,128.00
   P/Y CAM                                   33,292.06       0.00       (23,908.00)       57,200.06        0.00       (23.908.00)
   Utility Recovery                           2,056.08       0.00         2,000.00            56.08        0.00          4,800.00
   Work Order Billings                        1,585.37       0.00         1,000.00           585.37        0.00          2,400.00
   Late Fees                                     39.91       0.00             0.00            39.91        0.00              0.00
   Other Income                                  50.00       0.00           500.00          (450.00)       0.00          1,200.00
                                        --------------   --------   --------------   --------------   ---------    --------------
   Total Revenue                          1,496,171.77       0.00     1,435,072.00        61,099.77        0.00      3,117,836.29

EXPENSES
Recoverable:
   Salaries - Maintenance                    18,602.00       0.00        18,602.00             0.00        0.00         44,451.00
   Paint/Sheetrock                              992.56       0.00         2,025.00         1,032.44        0.00          8,052.00
   Locks                                         13.47       0.00           250.00           236.53        0.00            600.00
   Maintenance Supplies                         388.82       0.00           375.00           (13.82)       0.00            900.00
   Misc Interior Repairs                      1,859.40       0.00           500.00        (1,359.40)       0.00          1,200.00
   Interior Plants                            1,848.20       0.00         1,965.00           116.80        0.00          6,316.00
   General Maint - Metal                      1,410.00       0.00         1,330.00           (80.00)       0.00          3,192.00
   Exterminating                                595.00       0.00           575.00           (20.00)       0.00          1,675.00
   Signage                                      135.45       0.00           250.00           114.55        0.00            600.00
   Seasonal Decorations                      (1,500.00)      0.00             0.00         1,500.00        0.00              0.00
   Roof Repairs                                 800.00       0.00           625.00          (175.00)       0.00          1,400.00
   Misc. Exterior Repairs                         0.00       0.00         1,750.00         1,750.00        0.00          2,100.00
   Other Building R&M                             0.00       0.00           500.00           500.00        0.00          1,200.00
   R&M Uninsured Claims                         954.47       0.00             0.00          (954.47)       0.00              0.00
   HVAC - Contract Maint                      1,517.76       0.00         1,240.00          (277.76)       0.00          2,480.00
   HVAC - Filters                               649.76       0.00           600.00           (49.76)       0.00          1,200.00
   HVAC - Water Treatment                     1,631.28       0.00         1,300.00          (331.28)       0.00          4,220.00
   HVAC - Other                               4,727.41       0.00         4,700.00           (27.41)       0.00          6,100.00
   Electric - Light Bulbs                     2,218.14       0.00         3,413.00         1,194.86        0.00          5,474.00
   Electric - Other                           1,800.00       0.00         3,400.00         1,600.00        0.00          3,750.00
   Plumbing - Other                             853.05       0.00           625.00          (228.05)       0.00          1,500.00
   Elevator Contract                          3,426.25       0.00         5,985.00         2,558.75        0.00         14,364.00
</TABLE>
<PAGE>

Database:  FRANKLINPROP                                         Page:          2
PROJ:      35-327                                               Date:  6/14/2004
                                                                Time:   08:46 AM
Accrual

                            Property Income Statement
                       Detail Income Statement - Property
                           Franklin Street Properties
                                   Royal Ridge

                                    May 2004
             Report includes an open period. Entries are not final.

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
                                               Current       Per          Current         Current
                                                Month       Square         Month           Month
                                                Actual       Foot          Budget        Variance
==================================================================================================
<S>                                       <C>            <C>        <C>             <C>
   Elevator Repairs                               0.00       0.00           50.00           50.00
   Cleaning Service-Interior                 10,823.35       0.00       11,278.00          454.65
   Cleaning Service-Windows                       0.00       0.00            0.00            0.00
   Cleaning Supplies                          1,889.93       0.00        1,516.00         (373.93)
   Trash Removal                                355.00       0.00          455.00          100.00
   Life Safety                                1,968.75       0.00          650.00       (1,318.75)
   Alarm Systems                              4,858.89       0.00          100.00       (4,758.69)
   Contract Security                          5,161.25       0.00        4,176.00         (985.25)
   Landscaping Contract                       7,914.00       0.00        7,772.00         (142.00)
   Landscaping Repairs                          415.00       0.00          350.00          (65.00)
   Association Fees                               0.00       0.00            0.00            0.00
   Parking Lot Sweeping                         175.00       0.00            0.00         (175.00)
   Parking Lot Repairs                        1,750.76       0.00        2,195.00          444.24
   Parking Lot Painting                           0.00       0.00           25.00           25.00
   Electricity                                9,370.65       0.00       11,849.00        2,478.35
   Water/Sewer                                2,875.91       0.00        2,849.00          (26.91)
   Real Estate Taxes                         25,221.00       0.00       25,221.00            0.00
   P&C/Liability Insurance                    2,688.18       0.00        3,680.00          991.82
   Tenant Relations                              21.20       0.00          125.00          103.80
   Salaries                                   4,996.00       0.00        4,996.00            0.00
   Management Fee - Local                     8,441.39       0.00        8,517.00           75.61
   Accounting Services                            0.00       0.00            0.00            0.00
   Travel & Entertainment                         0.00       0.00           50.00           50.00
   Meals                                          0.00       0.00           50.00           50.00
   Computer/Copier/Fax                            0.00       0.00          285.00          285.00
   Office Supplies/Printing                       0.00       0.00          150.00          150.00
   Telephone/Answer/Page                        609.57       0.00          762.00          152.43
   Postage & Delivery                             0.00       0.00          100.00          100.00
   Prof Fees - Audit                          1,818.00       0.00        1,667.00         (151.00)
   Prof Fees - Legal                              0.00       0.00          100.00          100.00
   Prof Fees - Other                              0.00       0.00          100.00          100.00
   Bank Charges                                   0.00       0.00          126.00          126.00
   Misc Expense                               2,434.00       0.00        2,434.00            0.00

                                          ------------   --------   -------------   -------------
   Total Recoverable                        102,709.52       0.00       39,101.00       (3,608.52)

<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
                                               Year to       Per           Year to          Year to      Variance          Total
                                                 Date       Square           Date             Date      per Square         Annual
                                                Actual       Foot           Budget         Variance        Foot            Budget
==================================================================================================================================
<S>                                     <C>              <C>        <C>              <C>              <C>          <C>
   Elevator Repairs                             418.00       0.00         8,676.00         8,258.00        0.00          9,311.00
   Cleaning Service-Interior                 60,053.31       0.00        56,390.00        (3,663.31)       0.00        135,336.00
   Cleaning Service-Windows                     580.00       0.00            30.00          (550.00)       0.00          3,320.00
   Cleaning Supplies                          9,360.36       0.00         7,580.00        (1,780.36)       0.00         18,493.00
   Trash Removal                              1,815.00       0.00         2,275.00           460.00        0.00          5,460.00
   Life Safety                                2,265.45       0.00           850.00        (1,415.45)       0.00          2,400.00
   Alarm Systems                              4,892.23       0.00         2,571.00        (2,321.23)       0.00          4,886.00
   Contract Security                         27,464.10       0.00        23,654.00        (3,810.10)       0.00         54,910.00
   Landscaping Contract                      17,996.92       0.00        32,340.00        14,343.08        0.00         66,593.00
   Landscaping Repairs                          415.00       0.00         1,500.00         1,085.00        0.00          3,200.00
   Association Fees                           3,984.41       0.00         5,202.00         1,217.59        0.00          5,202.00
   Parking Lot Sweeping                         525.00       0.00           350.00          (175.00)       0.00            700.00
   Parking Lot Repairs                        2,026.82       0.00         3,395.00         1,368.18        0.00          4,095.00
   Parking Lot Painting                           0.00       0.00           125.00           125.00        0.00            300.00
   Electricity                               53,496.73       0.00        59,245.00         5,748.27        0.00        142,188.00
   Water/Sewer                                 (760.11)      0.00        14,245.00        15,005.11        0.00         34,188.00
   Real Estate Taxes                        127,005.00       0.00       126,105.00          (900.00)       0.00        302,652.00
   P&C/Liability Insurance                   14,580.50       0.00        18,400.00         3,819.50        0.00         44,160.00
   Tenant Relations                             777.48       0.00           625.00          (152.48)       0.00          1,500.00
   Salaries                                  27,162.00       0.00        27,162.00             0.00        0.00         65,130.00
   Management Fee - Local                    42,488.74       0.00        42,585.00            96.26        0.00        102,481.00
   Accounting Services                        3,291.52       0.00             0.00        (3,291.52)       0.00              0.00
   Travel & Entertainment                       140.97       0.00           250.00           109.03        0.00            600.00
   Meals                                        167.07       0.00           250.00            82.93        0.00            600.00
   Computer/Copier/Fax                            0.00       0.00         2,675.00         2,675.00        0.00          4,670.00
   Office Supplies/Printing                     165.44       0.00           750.00           584.56        0.00          1,800.00
   Telephone/Answer/Page                      3,073.04       0.00         3,810.00           736.96        0.00          9,144.00
   Postage & Delivery                           239.33       0.00           500.00           260.67        0.00          1,200.00
   Prof Fees - Audit                          9,205.50       0.00         8,335.00          (870.50)       0.00         20,004.00
   Prof Fees - Legal                              0.00       0.00           500.00           500.00        0.00          1,200.00
   Prof Fees - Other                              0.00       0.00           500.00           500.00        0.00          1,200.00
   Bank Charges                                   0.00       0.00           630.00           630.00        0.00          1,512.00
   Misc Expense                              12,887.00       0.00        12,887.00             0.00        0.00         32,218.00

                                        --------------   --------   --------------   --------------   ---------    --------------
   Total Recoverable                        468,639.83       0.00       514,402.00        45,762.17        0.00     (1,191,427.00)
</TABLE>
<PAGE>

Database:  FRANKLINPROP                                         Page:          3
PROJ:      35-327                                               Date:  6/14/2004
                                                                Time:   08:46 AM
Accrual

                            Property Income Statement
                       Detail Income Statement - Property
                           Franklin Street Properties
                                   Royal Ridge

                                    May 2004
             Report includes an open period. Entries are not final.

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
                                               Current       Per          Current         Current
                                                Month       Square         Month           Month
                                                Actual       Foot          Budget        Variance
==================================================================================================
<S>                                       <C>            <C>        <C>             <C>
Non Recoverable:
   Real Estate Taxes                              0.00       0.00            0.00            0.00
   Other Taxes                                    0.00       0.00            0.00            0.00
   Other Marketing                              150.00       0.00          400.00          250.00
   Management Fee - FSP                       2,813.78       0.00        2,839.00           25.22
   Postage & Delivery                             0.00       0.00            0.00            0.00
   Permits/Fees/Dues                              0.00       0.00            0.00            0.00
   Prof Fees - Legal                              0.00       0.00          100.00          100.00
   Bank Charges                                   0.00       0.00          164.00          164.00
   Tenant Work Orders                             0.00       0.00           80.00           80.00
                                          ------------   --------   -------------   -------------
                                              2,963.78       0.00        3,583.00          619.22
   Total Expenses                           105,673.30       0.00      102,684.00       (2,989.30)

                                          ------------   --------   -------------   -------------
   Net Operating Income                     186,113.78       0.00      189,112.00       (2,998.22)

      Depreciation & Amortization            86,428.00       0.00       43,059.00      (43,369.00)
                                          ------------   --------   -------------   -------------
   Income before Interest                    99,685.78       0.00      146,053.00      (46,367.22)

   Interest Income                            3,004.92       0.00        2,250.00          754.92
                                          ------------   --------   -------------   -------------
   Net Income                               102,690.70       0.00      148,303.00      (45,612.30)

Adjustments to Net Income:

      add: Depreciation & Amortization       86,428.00       0.00       43,059.00      (43,369.00)

      less: Step Rent Revenue                 8,018.00       0.00        7,892.00         (126.00)

                                          ------------   --------   -------------   -------------
   FFO                                        8,244.70       0.00       97,352.00      (89,107.30)

      (inc) decr in Intangibles (DLC)             0.00       0.00       (3,583.00)       3,583.00
      (inc) decr in Funded Reserves        (350,574.58)      0.00            0.00     (350,574.58)

<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
                                               Year to       Per           Year to          Year to      Variance          Total
                                                 Date       Square           Date             Date      per Square         Annual
                                                Actual       Foot           Budget         Variance        Foot            Budget
==================================================================================================================================
<S>                                     <C>              <C>        <C>              <C>              <C>          <C>
Non Recoverable:
   Real Estate Taxes                          5,000.00       0.00             0.00        (5,000.00)       0.00              0.00
   Other Taxes                                   60.00       0.00             0.00           (60.00)       0.00              0.00
   Other Marketing                            4,029.85       0.00         4,500.00           470.15        0.00          7,300.00
   Management Fee - FSP                      14,162.90       0.00        14,195.00            32.10        0.00         34,159.00
   Postage & Delivery                            90.65       0.00             0.00           (90.65)       0.00              0.00
   Permits/Fees/Dues                             30.00       0.00             0.00           (30.00)       0.00              0.00
   Prof Fees - Legal                              0.00       0.00           500.00           500.00        0.00          1,200.00
   Bank Charges                                   0.00       0.00           820.00           820.00        0.00          1,968.00
   Tenant Work Orders                             0.00       0.00           400.00           400.00        0.00            960.00
                                        --------------   --------   --------------   --------------   ---------    --------------
                                             23,373.40       0.00        20,415.00        (2,958.40)       0.00        (45,587.00)
   Total Expenses                           492,013.23       0.00       534,817.00        42,803.77        0.00     (1,237,014.00)

                                        --------------   --------   --------------   --------------   ---------    --------------
   Net Operating Income                   1,004,158.54       0.00       900,255.00       103,903.54        0.00      1,880,822.29

      Depreciation & Amortization           432,140.00       0.00       215,295.00      (216,845.00)       0.00        516,708.00
                                        --------------   --------   --------------   --------------   ---------    --------------
   Income before Interest                   572,018.54       0.00       684,960.00      (112,941.46)       0.00      1,364,114.29

   Interest Income                           15,142.96       0.00        11,250.00         3,892.96        0.00         27,000.00
                                        --------------   --------   --------------   --------------   ---------    --------------
   Net Income                               587,161.50       0.00       696,210.00      (109,048.50)       0.00      1,391,114.29

Adjustments to Net Income:

      add: Depreciation & Amortization      432,140.00       0.00       215,295.00      (216,845.00)       0.00        516,708.00

      less: Step Rent Revenue                43,126.00       0.00        39.460.00       (3.666.00)        0.00         94,704.00

                                        --------------   --------   --------------   --------------   ---------    --------------
   FFO                                      111,895.50       0.00       441,455.00      (329,559.50)       0.00        779,702.29

      (inc) decr in Intangibles (DLC)             0.00       0.00       (17,915.00)       17,915.00        0.00        (42,996.00)
      (inc) decr in Funded Reserves         111,402.09       0.00             0.00       111,402.09        0.00              0.00
</TABLE>
<PAGE>

Database:  FRANKLINPROP                                         Page:          4
PROJ:      35-327                                               Date:  6/14/2004
                                                                Time:   08:46 AM
Accrual

                            Property Income Statement
                       Detail Income Statement - Property
                           Franklin Street Properties
                                   Royal Ridge

                                    May 2004
             Report includes an open period. Entries are not final.

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
                                               Current       Per          Current         Current
                                                Month       Square         Month           Month
                                                Actual       Foot          Budget        Variance
==================================================================================================
<S>                                       <C>            <C>        <C>             <C>
                                          ------------   --------   -------------   -------------
CAD                                        (342,329.88)      0.00       93,769.00     (436,098.88)

<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
                                               Year to       Per           Year to          Year to      Variance          Total
                                                 Date       Square           Date             Date      per Square         Annual
                                                Actual       Foot           Budget         Variance        Foot            Budget
==================================================================================================================================
<S>                                     <C>              <C>        <C>              <C>              <C>          <C>
                                        --------------   --------   --------------   --------------   ---------    --------------
CAD                                         223,297.59       0.00       423,540.00      (200,242.41)       0.00        736,706.29
</TABLE>
<PAGE>

                                   ROYAL RIDGE
                         INCOME/EXPENSE VARIANCE REPORT
                             PERIOD END MAY 31, 2003

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
            ACCOUNT                YR TO DATE      YR TO DATE                      % OF
          DESCRIPTION                ACTUAL          BUDGET         VARIANCE      BUDGET             VARIANCE EXPLANATION
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                              <C>             <C>             <C>             <C>       <C>
BASE RENT                           914,302.35      914,300.00            2.35      0.00%

                                                                                           The Straight-Line Rent actual was
                                                                                           provided by an FSP auditor schedule after
                                                                                           the budget was approved. The audit
                                                                                           schedule amortizes the free rent
                                                                                           differently than was determined in the
FASB 13 REVENUE                      43,126.00       39,460.00        3,666.00      9.29%  budget.

COMMON AREA MAINTENANCE             501,720.00      501,720.00            0.00      0.00%

                                                                                           Original projections showed LL as owing
                                                                                           money back to tenants, but the actual
                                                                                           DOE resulted in tenants owing LL money,
P/Y CAM                              33,292.06      (23,908.00)      57,200.06   -239.25%  thus a favorable variance results

UTILITY RECOVERY                      2,056.08        2,000.00           56.08      2.80%

WORK ORDER BILLINGS                   1,585.37        1,000.00          585.37     58.54%

LATE FEES                                39.91            0.00           39.91      0.00%

OTHER INCOME                             50.00        5,000.00         (450.00)   -90.00%
                                 --------------------------------------------------------
TOTAL INCOME                      1,496,171.77    1,435,072.00       61,099.77      4.26%
                                 ========================================================

RECOVERABLE

SALARIES - MAINTENANCE              (18,602.00)     (18,602.00)           0.00      0.00%

                                                                                           Funds were budgeted in April to paint the
                                                                                           corridor walls. This will be scheduled
PAINT/SHEETROCK                        (992.56)      (2,025.00)       1,032.44     50.98%  for mid-summer.

LOCKS                                   (13.47)        (250.00)         236.53     94.61%

MAINTENANCE SUPPLIES                   (388.82)        (375.00)         (13.82)    -3.69%

                                                                                           Represents expense for wallcovering
MISC INTERIOR REPAIRS                (1,859.40)         500.00        1,359.40   -271.88%  repairs.

INTERIOR PLANT                       (1,848.20)      (1,965.00)         116.80      5.94%

GENERAL MAINT - METAL                (1,410.00)      (1,330.00)         (80.00)    -6.02%

EXTERMINATING                          (595.00)        (575.00)         (20.00)    -3.48%

SIGNAGE                                (135.45)        (250.00)         114.55     45.82%

                                                                                           Seasonal decorating was paid for last
                                                                                           year under another account but mistakenly
                                                                                           got accrued in this account in which it
                                                                                           was budgeted. This represents the accrual
SEASONAL DECORATING                   1,500.00            0.00        1,500.00    100.00%  reversal.

ROOF REPAIRS                           (800.00)        (625.00)        (175.00)   -28.00%

                                                                                           Funds were budgeted for exterior pressure
                                                                                           washing, etc., and this has not yet been
                                                                                           done. This will be performed in mid-
MISC. EXTERIOR REPAIRS                    0.00       (1,750.00)       1,750.00    100.00%  summer.
</TABLE>


                                     Page 1
<PAGE>

                                   ROYAL RIDGE
                         INCOME/EXPENSE VARIANCE REPORT
                             PERIOD END MAY 31, 2003

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
            ACCOUNT                YR TO DATE      YR TO DATE                      % OF
          DESCRIPTION                ACTUAL          BUDGET         VARIANCE      BUDGET             VARIANCE EXPLANATION
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                              <C>             <C>             <C>             <C>       <C>
OTHER BLDG R&M                            0.00         (500.00)         500.00    100.00%

R&M UNINSURED CLAIMS                   (954.47)           0.00         (954.47)  -100.00%

HVAC CONTRACT MAINTENANCE            (1,517.76)       1,240.00          277.76    -22.40%

HVAC FILTERS                           (649.76)         600.00          (49.76)    -8.29%

HVAC - WATER TREATMENT               (1,631.28)      (1,300.00)        (331.28)   -25.48%

HVAC - OTHER                         (4,727.41)      (4,700.00)         (27.41)    -0.58%

                                                                                           The lamps for the group relamping project
                                                                                           were purchased but came in under budget
                                                                                           (budgeted at $1,133 - with CKP discount
                                                                                           actual cost was $915). Also, very few
ELEC. - LIGHT BULBS                  (2,218.14)      (3,413.00)       1,194.86     35.01%  contingency funds have been expanded.

                                                                                           Funds were budgeted for the annual
                                                                                           switchgear test and inspection which
                                                                                           occurred the last day of April. With the
                                                                                           multiple building discount, the actual
                                                                                           expense was $800 less than budget.
                                                                                           Additionally, $500 was budgeted as
                                                                                           contingency funds in May to correct any
                                                                                           items found during April's inspections,
ELEC. - OTHER                        (1,800.00)      (3,400.00)       1,600.00     47.06%  but none were needed.

PLUMBING - OTHER                       (853.05)        (625.00)        (228.05)   -36.49%

                                                                                           Budget did not account for the Low
                                                                                           Occupancy Discount the building is
ELEVATOR - CONTRACT                  (3,426.25)      (5,985.00)       2,558.75     42.75%  currently receiving.

                                                                                           In January, funds were budgeted to
                                                                                           install card readers in all three of the
                                                                                           elevators ($8,321). The readers have been
                                                                                           installed, but some problems were found
                                                                                           with the circuit boards, and more had to
                                                                                           be ordered. This delayed the completion
                                                                                           date, but it is anticipated to be fully
ELEVATOR - REPAIRS                     (418.00)      (8,676.00)       8,258.00     95.18%  on-line by the end of June.

                                                                                           December 2003 night cleaning expense was
                                                                                           erroneously reclassed to a prepaid
CLEANING - SERVICE/INTERIOR         (60,053.31)     (56,390.00)      (3,663.31)    -6.50%  account and expensed in 2004.

CLEANING - SERVICE/WINDOWS             (580.00)         (30.00)        (550.00)     0.00%

                                                                                           A large supply order was placed in March,
                                                                                           resulting in the unfavorable variance.
                                                                                           This account is off due to the timing and
                                                                                           should be more consistent with budget
CLEANING - SUPPLIES                  (9,360.36)      (7,580.00)      (1,780.36)   -23.49%  next quarter.

TRASH REMOVAL                        (1,815.00)      (2,275.00)         460.00     20.22%

                                                                                           Represents the purchase of defribulators.
                                                                                           CKP had the opportunity to receive a
                                                                                           significant discount if a certain
                                                                                           quantity was ordered, and it was felt
LIFE SAFETY                          (2,265.45)        (850.00)      (1,415.45)  -166.52%  this would benefit the property.
</TABLE>


                                     Page 2
<PAGE>

                                   ROYAL RIDGE
                         INCOME/EXPENSE VARIANCE REPORT
                             PERIOD END MAY 31, 2003

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
            ACCOUNT                YR TO DATE      YR TO DATE                      % OF
          DESCRIPTION                ACTUAL          BUDGET         VARIANCE      BUDGET             VARIANCE EXPLANATION
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                              <C>             <C>             <C>             <C>       <C>
                                                                                           The semi-annual inspection occurred ahead
                                                                                           of schedule in December. This account
                                                                                           will remain unfavorable until June at
                                                                                           which time the semi-annual will be
ALARM SYSTEMS                        (4,892.23)       2,571.00        2,321.23    -90.29%  performed.

                                                                                           Unfavorable variance results from some
CONTRACT SECURITY                   (27,464.10)     (23,654.00)      (3,810.10)   -16.11%  2003 invoices rolling over into 2004.

                                                                                           Contingency funds of $3,000 were budgeted
                                                                                           in January to pinestraw the high profile
                                                                                           areas, but this was not needed. Also,
                                                                                           $4,612 was budgeted in April for the
                                                                                           Semi-annual pinestraw application, but
                                                                                           this was not done until the first week in
                                                                                           June. $3,000 was budgeted in May to
                                                                                           upgrade the picnic/smoking area, but no
                                                                                           funds have been spent in this area, as we
                                                                                           are still assessing what needs to be done
LANDSCAPING CONTRACT                (17,996.92)      32,340.00       14,343.08     44.35%  (if anything further).

LANDSCAPING REPAIRS                    (415.00)       1,500.00        1,085.00     72.33%  No contingency funds have been expended.

                                                                                           Royal 400 Association Fees were less than
                                                                                           budgeted (budget was based on the 2003
ASSOCIATION FEES                     (3,984.41)      (5,202.00)       1,217.59     23.41%  actual numbers).

PARKING LOT SWEEPING                   (525.00)        (350.00)        (175.00)   -50.00%

                                                                                           Funds were budgeted in May to repair
                                                                                           cracks in the parking lot, but this has
PARKING LOT REPAIRS                  (2,026.82)       3,395.00        1,368.18     40.30%  been delayed due to the rain.

PARKING LOT PAINTING                      0.00         (125.00)         125.00    100.00%

                                                                                           RTP rates have been less than
                                                                                           anticipated.  There was very little
                                                                                           historical data upon which to base the
ELECTRICITY                         (53,496.73)      59,245.00        5,748.27      9.70%  budget number.

                                                                                           Budget figure was based on an adjusted
                                                                                           2003 number which was slightly inflated
                                                                                           due to not having a separate irrigation
                                                                                           meter. Additionally, the actual water
                                                                                           billings for the end of 2003 were
                                                                                           considerably less than what was accrued,
                                                                                           due to the lack of prior history. Also,
                                                                                           in March, an accrual was reversed, as
                                                                                           Hagemeyer paid the water bill directly
                                                                                           for several months last year (their
                                                                                           mistake), and after numerous attempts by
                                                                                           us to rectify the situation, they never
                                                                                           provided us with the info. needed to
WATER/SEWER                             760.11      (14,245.00)      15,005.11    105.34%  reimburse this to them.

REAL ESTATE TAXES                  (127,005.00)    (126,105.00)        (900.00)    -0.71%  Tax accruals have been adjusted by FSP.

P&C/LIABILITY                       (14,580.50)     (18,400.00)       3,819.50     20.76%  Budget figure provided by FSP.
</TABLE>


                                     Page 3
<PAGE>

                                   ROYAL RIDGE
                         INCOME/EXPENSE VARIANCE REPORT
                             PERIOD END MAY 31, 2003

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
            ACCOUNT                YR TO DATE      YR TO DATE                      % OF
          DESCRIPTION                ACTUAL          BUDGET         VARIANCE      BUDGET             VARIANCE EXPLANATION
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                              <C>             <C>             <C>             <C>       <C>
TENANT RELATIONS                       (777.48)        (625.00)        (152.48)   -24.40%

SALARIES                            (27,162.00)     (27,162.00)           0.00      0.00%

MANAGEMENT FEE - LOCAL              (42,488.74)     (42,585.00)          96.26      0.23%

ACCOUNTING SERVICES                  (3,291.52)           0.00       (3,291.52)  -100.00%

TRAVEL & ENTERTAINMENT                 (140.97)        (250.00)         109.03     43.61%

MEALS                                  (167.07)        (250.00)          82.93     33.17%

                                                                                           $1,300 was budgeted in January for the
                                                                                           start-up of the I-Tendant automated
                                                                                           workorder system, but this is not going
                                                                                           on-line until late June. Additionally, no
                                                                                           contingency funds have been used
COMPUTER/COPIER/FAX                       0.00       (2,675.00)       2,675.00    100.00%  year-to-date.

OFFICE SUPPLIES/PRINTING               (165.44)        (750.00)         584.56     77.94%

TELEPHONE/ANSWER/PAGE                (3,073.04)       3,810.00          736.96     19.34%

POSTAGE & DELIVERY                     (239.33)        (500.00)         260.67     52.13%

PROF FEES - ACCTG/AUDIT              (9,205.50)      (8,335.00)        (870.50)   -10.44%

PROF FEES - LEGAL                         0.00         (500.00)         500.00    100.00%

PROF FEES - OTHER                         0.00         (500.00)         500.00    100.00%

BANK CHARGES                              0.00         (630.00)         630.00    100.00%

MISCELLANEOUS                       (12,887.00)     (12,887.00)           0.00      0.00%

NON-RECOVERABLE
                                                                                           Represents a payment made to Georgia
REAL ESTATE TAXES                    (5,000.00)           0.00       (5,000.00)  -100.00%  corporate tax - FSP entry.

OTHER TAXES                             (60.00)           0.00          (60.00)  -100.00%

OTHER MARKETING                      (4,029.85)      (4,500.00)         470.15     10.45%

MANAGEMENT FEES - FSP               (14,162.90)     (14,195.00)          32.10      0.23%

POSTAGE & DELIVERY                      (90.65)           0.00          (90.65)  -100.00%

PERMITS/FEES/DUES                       (30.00)           0.00          (30.00)  -100.00%

PROF FEES - LEGAL FEES                    0.00         (500.00)         500.00    100.00%

BANK SERVICE CHARGES - N/R                0.00         (820.00)         820.00    100.00%

TENANT WORK ORDERS                        0.00         (400.00)         400.00    100.00%

                                 --------------------------------------------------------
TOTAL EXPENSE                      (492,013.23)    (534,817.00)      42,803.77      8.00%
                                 --------------------------------------------------------

                                 --------------------------------------------------------
NET OPERATING INCOME              1,004,158.54      900,255.00      103,903.54     11.54%
                                 ========================================================
</TABLE>


                                     Page 4

<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                    ADDENDUM G
- --------------------------------------------------------------------------------


                                   ADDENDUM G

                           ARGUS SUPPORTING SCHEDULES


- --------------------------------------------------------------------------------
<PAGE>

Software         : ARGUS Ver. 11.0.04                         Date     : 7/13/04
File             : Royal Ridge Office Bldg 2004               Time     : 2:51 pm
Property Type    : Office & Retail                            Ref#     : AAS
Portfolio        :                                            Page     : 1
                             Royal Ridge Office Bldg
                              11680 Great Oaks Way
                            Alpharetta, Georgia 30022

                        SCHEDULE OF PROSPECTIVE CASH FLOW
           In Inflated Dollars for the Fiscal Year Beginning 6/1/2004

<TABLE>
<CAPTION>
                                      Year 1      Year 2      Year 3      Year 4      Year 5      Year 6
For the Years Ending                 May-2005    May-2006    May-2007    May-2008    May-2009    May-2010
                                     --------    --------    --------    --------    --------    --------
<S>                                 <C>         <C>         <C>         <C>         <C>         <C>
POTENTIAL GROSS REVENUE
  Base Rental Revenue               $2,215,238  $2,253,007  $2,304,116  $2,356,503  $2,410,200  $2,473,968
  Absorption & Turnover Vacancy                                                                    (58,705)
  Base Rent Abatements                 (34,772)                                                    (19,568)
                                    ----------  ----------  ----------  ----------  ----------  ----------
  Scheduled Base Rental Revenue      2,180,466   2,253,007   2,304,116   2,356,503   2,410,200   2,395,695
  CPI & Other Adjustment Revenue
  Expense Reimbursement Revenue      1,101,090   1,134,339   1,167,860   1,202,378   1,237,924   1,235,540
                                    ----------  ----------  ----------  ----------  ----------  ----------
TOTAL POTENTIAL GROSS REVENUE        3,281,556   3,387,346   3,471,976   3,558,881   3,648,124   3,631,235
                                    ----------  ----------  ----------  ----------  ----------  ----------
EFFECTIVE GROSS REVENUE              3,281,556   3,387,346   3,471,976   3,558,881   3,648,124   3,631,235
                                    ----------  ----------  ----------  ----------  ----------  ----------
OPERATING EXPENSES
  Real Estate Taxes                    284,564     293,101     301,894     310,951     320,279     329,888
  Insurance                             40,341      41,552      42,798      44,082      45,405      46,767
  Utilities                            145,229     149,586     154,074     158,696     163,457     168,361
  Janitorial                           161,366     166,207     171,193     176,329     181,619     187,067
  Repairs & Maintenance                121,025     124,655     128,395     132,247     136,214     140,301
  General Operating                    121,025     124,655     128,395     132,247     136,214     140,301
  Landscaping & Security               129,093     132,966     136,955     141,063     145,295     149,654
  Management Fee                        98,447     101,620     104,159     106,766     109,444     108,937
  Reserves                              16,137      16,621      17,119      17,633      18,162      18,707
                                    ----------  ----------  ----------  ----------  ----------  ----------
TOTAL OPERATING EXPENSES             1,117,227   1,150,963   1,184,982   1,220,014   1,256,089   1,289,983
                                    ----------  ----------  ----------  ----------  ----------  ----------
NET OPERATING INCOME                 2,164,329   2,236,383   2,286,994   2,338,867   2,392,035   2,341,252
                                    ----------  ----------  ----------  ----------  ----------  ----------
LEASING & CAPITAL COSTS
  Tenant Improvements                  326,556                                                     164,046
  Leasing Commissions                   70,587                                                      63,010
                                    ----------  ----------  ----------  ----------  ----------  ----------
TOTAL LEASING & CAPITAL COSTS          397,143                                                     227,056
                                    ----------  ----------  ----------  ----------  ----------  ----------
CASH FLOW BEFORE DEBT SERVICE       $1,767,186  $2,236,383  $2,286,994  $2,338,867  $2,392,035  $2,114,196
& TAXES                             ==========  ==========  ==========  ==========  ==========  ==========

<CAPTION>
                                      Year 7      Year 8      Year 9       Year 10     Year 11
For the Years Ending                 May-2011    May-2012    May-2013     May-2014    May-2015
                                     --------    --------    --------     --------    --------
<S>                                 <C>         <C>         <C>         <C>         <C>         <C>
POTENTIAL GROSS REVENUE
  Base Rental Revenue               $2,547,840  $2,605,665  $2,443,322   $2,260,514  $2,260,514
  Absorption & Turnover Vacancy                               (506,424)
  Base Rent Abatements                 (19,568)               (337,616)
                                    ----------  ----------   ---------   ----------  ----------
  Scheduled Base Rental Revenue      2,528,272   2,605,665   1,599,282    2,260,514   2,260,514
  CPI & Other Adjustment Revenue           489       6,372      12,402       33,033      90,371
  Expense Reimbursement Revenue      1,312,439   1,352,042   1,050,429    1,380,333   1,382,105
                                    ----------  ----------   ---------   ----------  ----------
TOTAL POTENTIAL GROSS REVENUE        3,841,200   3,964,079   2,662,113    3,673,880   3,732,990
                                    ----------  ----------   ---------   ----------  ----------
EFFECTIVE GROSS REVENUE              3,841,200   3,964,079   2,662,113    3,673,880   3,732,990
                                    ----------  ----------   ---------   ----------  ----------
OPERATING EXPENSES
  Real Estate Taxes                    339,784     349,978     360,477      360,477     360,477
  Insurance                             48,170      49,615      51,103       51,103      51,103
  Utilities                            173,411     178,614     183,972      183,972     183,972
  Janitorial                           192,679     198,460     204,414      204,414     204,414
  Repairs & Maintenance                144,510     148,845     153,310      153,310     153,310
  General Operating                    144,510     148,845     153,310      153,310     153,310
  Landscaping & Security               154,144     158,768     163,531      163,531     163,531
  Management Fee                       115,236     118,922      79,863      110,216     111,990
  Reserves                              19,268      19,846      20,441       20,441      20,441
                                    ----------  ----------   ---------   ----------  ----------
TOTAL OPERATING EXPENSES             1,331,712   1,371,893   1,370,421    1,400,774   1,402,548
                                    ----------  ----------   ---------   ----------  ----------
NET OPERATING INCOME                 2,509,488   2,592,186   1,291,692    2,273,106   2,330,442
                                    ----------  ----------   ---------   ----------  ----------
LEASING & CAPITAL COSTS
  Tenant Improvements                                        1,415,169
  Leasing Commissions                                          543,561
                                    ----------  ----------   ---------   ----------  ----------
TOTAL LEASING & CAPITAL COSTS                                1,958,730
                                    ----------  ----------   ---------   ----------  ----------
CASH FLOW BEFORE DEBT SERVICE       $2,509,488  $2,592,186   ($667,038)  $2,273,106  $2,330,442
& TAXES                             ==========  ==========  ==========   ==========  ==========
</TABLE>
<PAGE>

Software         : ARGUS Ver. 11.0.04                         Date     : 7/13/04
File             : Royal Ridge Office Bldg 2004               Time     : 2:51 pm
Property Type    : Office & Retail                            Ref#     : AAS
Portfolio        :                                            Page     : 2
                             Royal Ridge Office Bldg
                              11680 Great Oaks Way
                            Alpharetta, Georgia 30022

                      SCHEDULE OF SOURCES & USES OF CAPITAL
     Equity is Based on Property Value, Leverage and Operating Requirements

<TABLE>
<CAPTION>
                                      Year 1       Year 2     Year 3       Year 4     Year 5
For the Years Ending                 May-2005     May-2006   May-2007     May-2008   May-2009
                                     --------     --------   --------     --------   --------
<S>                                 <C>          <C>         <C>         <C>         <C>
SOURCES OF CAPITAL
  Net Operating Gains                $2,164,329  $2,236,383  $2,286,994  $2,338,867  $2,392,035
  Initial Equity Contribution        26,250,000
  Net Proceeds from Sale
                                    -----------  ----------  ----------  ----------  ----------
DEFINED SOURCES OF CAPITAL           28,414,329   2,236,383   2,286,994   2,338,867   2,392,035
                                    -----------  ----------  ----------  ----------  ----------
REQUIRED EQUITY CONTRIBUTIONS
TOTAL SOURCES OF CAPITAL            $28,414,329  $2,236,383  $2,286,994  $2,338,867  $2,392,035
                                    ===========  ==========  ==========  ==========  ==========

USES OF CAPITAL
  Property Purchase Price           $26,250,000
  Tenant Improvements                   326,556
  Leasing Commissions                    70,587
                                    -----------  ----------  ----------  ----------  ----------
DEFINED USES OF CAPITAL              26,647,143
                                    -----------  ----------  ----------  ----------  ----------
CASH FLOW DISTRIBUTIONS               1,767,186   2,236,383   2,286,994   2,338,867   2,392,035
                                    -----------  ----------  ----------  ----------  ----------
TOTAL USES OF CAPITAL               $28,414,329  $2,236,383  $2,286,994  $2,338,867  $2,392,035
                                    ===========  ==========  ==========  ==========  ==========

UNLEVERAGED CASH ON CASH RETURN
  Cash to Purchase Price                  6.73%       8.52%       8.71%       8.91%       9.11%
  NOI to Book Value                       8.12%       8.39%       8.58%       8.78%       8.98%
UNLEVERAGED ANNUAL IRR

<CAPTION>
                                      Year 6      Year 7     Year 8       Year 9       Year 10
For the Years Ending                 May-2010    May-2011   May-2012     May-2013     May-2014
                                     --------    --------   --------     --------     --------
<S>                                 <C>         <C>         <C>         <C>         <C>
SOURCES OF CAPITAL
  Net Operating Gains               $2,341,252  $2,509,488  $2,592,186  $1,291,692   $2,273,106
  Initial Equity Contribution
  Net Proceeds from Sale                                                             27,005,711
                                    ----------  ----------  ----------  ----------  -----------
DEFINED SOURCES OF CAPITAL           2,341,252   2,509,488   2,592,186   1,291,692   29,278,817
                                    ----------  ----------  ----------  ----------  -----------
REQUIRED EQUITY CONTRIBUTIONS                                              667,038
TOTAL SOURCES OF CAPITAL            $2,341,252  $2,509,488  $2,592,186  $1,958,730  $29,278,817
                                    ==========  ==========  ==========  ==========  ===========

USES OF CAPITAL
  Property Purchase Price
  Tenant Improvements                  164,046                           1,415,169
  Leasing Commissions                   63,010                             543,561
                                    ----------  ----------  ----------  ----------  -----------
DEFINED USES OF CAPITAL                227,056                           1,958,730
                                    ----------  ----------  ----------  ----------  -----------
CASH FLOW DISTRIBUTIONS              2,114,196   2,509,488   2,592,186               29,278,817
                                    ----------  ----------  ----------  ----------  -----------
TOTAL USES OF CAPITAL               $2,341,252  $2,509,488  $2,592,186  $1,958,730  $29,278,817
                                    ==========  ==========  ==========  ==========  ===========

UNLEVERAGED CASH ON CASH RETURN
  Cash to Purchase Price                 8.05%       9.56%       9.87%      (2.54%)       8.66%
  NOI to Book Value                      8.71%       9.34%       9.65%       4.48%        7.88%
UNLEVERAGED ANNUAL IRR                                                                    7.94%
</TABLE>
<PAGE>

Software         : ARGUS Ver. 11.0.04                         Date     : 7/13/04
File             : Royal Ridge Office Bldg 2004               Time     : 2:51 pm
Property Type    : Office & Retail                            Ref#     : AAS
Portfolio        :                                            Page     : 3
                             Royal Ridge Office Bldg
                              11680 Great Oaks Way
                            Alpharetta, Georgia 30022

                           PROSPECTIVE PROPERTY RESALE

<TABLE>
<CAPTION>
                                 Year 1        Year 2        Year 3        Year 4        Year 5
For the Years Ending            May-2005      May-2006      May-2007      May-2008      May-2009
<S>                             <C>           <C>           <C>           <C>           <C>
RESALE AMOUNT
  Gross Proceeds from Sale      $26,310,388   $26,905,812   $27,516,082   $28,141,588   $27,544,141
  Commissions & Adjustments        (394,656)     (403,587)     (412,741)     (422,124)     (413,162)
                                -----------   -----------   -----------   -----------   -----------
NET PROCEEDS FROM SALE          $25,915,732   $26,502,225   $27,103,341   $27,719,464   $27,130,979
                                ===========   ===========   ===========   ===========   ===========
UNLEVERAGED ANNUAL IRR                5.46%         8.05%         8.92%         9.36%         8.87%

<CAPTION>
                                 Year 6        Year 7        Year 8        Year 9        Year 10
For the Years Ending            May-2010      May-2011      May-2012      May-2013      May-2014
<S>                             <C>           <C>           <C>           <C>           <C>
RESALE AMOUNT
  Gross Proceeds from Sale      $29,523,388   $30,496,306   $15,196,376   $26,742,424   $27,416,965
  Commissions & Adjustments        (442,851)     (457,445)     (227,946)     (401,136)     (411,254)
                                -----------   -----------   -----------   -----------   -----------
NET PROCEEDS FROM SALE          $29,080,537   $30,038,861   $14,968,430   $26,341,288   $27,005,711
                                ===========   ===========   ===========   ===========   ===========
UNLEVERAGED ANNUAL IRR                9.68%         9.93%         3.95%         7.69%         7.94%
</TABLE>
<PAGE>

Software         : ARGUS Ver. 11.0.04                         Date     : 7/13/04
File             : Royal Ridge Office Bldg 2004               Time     : 2:51 pm
Property Type    : Office & Retail                            Ref#     : AAS
Portfolio        :                                            Page     : 4
                             Royal Ridge Office Bldg
                              11680 Great Oaks Way
                            Alpharetta, Georgia 30022

                            PROSPECTIVE PRESENT VALUE
               Cash Flow Before Debt Service plus Property Resale
   Discounted Annually (Endpoint on Cash Flow & Resale) over a 10-Year Period

<TABLE>
<CAPTION>
                                 For the     P.V. of       P.V. of       P.V. of       P.V. of
Analysis                          Year        Annual      Cash Flow     Cash Flow     Cash Flow
Period                           Ending     Cash Flow      @ 9.25%       @ 9.50%       @ 9.75%
- ------                           ------     ---------      -------       -------       -------

<S>                             <C>         <C>           <C>           <C>           <C>
1                               May-2005    $1,767,186    $1,617,562    $1,613,868    $1,610,192
2                               May-2006     2,236,383     1,873,714     1,865,168     1,856,681
3                               May-2007     2,286,994     1,753,883     1,741,898     1,730,021
4                               May-2008     2,338,867     1,641,798     1,626,856     1,612,083
5                               May-2009     2,392,035     1,536,952     1,519,487     1,502,259
6                               May-2010     2,114,196     1,243,416     1,226,480     1,209,813
7                               May-2011     2,509,488     1,350,937     1,329,494     1,308,438
8                               May-2012     2,592,186     1,277,305     1,254,160     1,231,488
9                               May-2013      (667,038)     (300,855)     (294,729)     (288,742)
Year 10                         May-2014     2,273,106       938,437       917,231       896,550
                                            ----------   -----------   -----------   -----------
  Total Cash Flow                           19,843,403    12,933,149    12,799,913    12,668,783
  Property Resale @ 8.50% Cap               27,005,711    11,149,135    10,897,188    10,651,489
                                                         -----------   -----------   -----------
  Total Property Present Value                           $24,082,284   $23,697,101   $23,320,272
                                                         ===========   ===========   ===========

  Rounded to Thousands                                   $24,082,000   $23,697,000   $23,320,000
                                                         ===========   ===========   ===========

  Per SqFt                                                    149.24        146.85        144.52

PERCENTAGE VALUE DISTRIBUTION
  Assured Income                                              51.26%        51.58%        51.90%
  Prospective Income                                           2.44%         2.43%         2.43%
  Prospective Property Resale                                 46.30%        45.99%        45.67%
                                                         ===========   ===========   ===========
                                                             100.00%       100.00%       100.00%

<CAPTION>
                                 For the      P.V. of       P.V. of       P.V. of
Analysis                          Year       Cash Flow     Cash Flow     Cash Flow     Cash Flow
Period                           Ending       @ 10.00%      @ 10.25%      @ 10.50%      @ 10.75%
- ------                           ------       --------      --------      --------      --------

<S>                             <C>          <C>           <C>           <C>           <C>
1                               May-2005     $1,606,533    $1,602,890    $1,599,263    $1,595,653
2                               May-2006      1,848,250     1,839,878     1,831,562     1,823,303
3                               May-2007      1,718,253     1,706,590     1,695,033     1,683,580
4                               May-2008      1,597,477     1,583,037     1,568,760     1,554,643
5                               May-2009      1,485,266     1,468,502     1,451,965     1,435,651
6                               May-2010      1,193,408     1,177,263     1,161,373     1,145,731
7                               May-2011      1,287,764     1,267,462     1,247,525     1,227,945
8                               May-2012      1,209,274     1,187,511     1,166,186     1,145,292
9                               May-2013       (282,889)     (277,168)     (271,575)     (266,107)
Year 10                         May-2014        876,381       856,709       837,523       818,808
                                            -----------   -----------   -----------   -----------
  Total Cash Flow                            12,539,717    12,412,674    12,287,615    12,164,499
  Property Resale @ 8.50% Cap                10,411,871    10,178,168     9,950,223     9,727,881
                                            -----------   -----------   -----------   -----------
  Total Property Present Value              $22,951,588   $22,590,842   $22,237,838   $21,892,380
                                            ===========   ===========   ===========   ===========

  Rounded to Thousands                      $22,952,000   $22,591,000   $22,238,000   $21,892,000
                                            ===========   ===========   ===========   ===========

  Per SqFt                                       142.23        140.00        137.81        135.67

PERCENTAGE VALUE DISTRIBUTION
  Assured Income                                 52.22%        52.54%        52.86%        53.19%
  Prospective Income                              2.42%         2.41%         2.40%         2.37%
  Prospective Property Resale                    45.36%        45.05%        44.74%        44.44%
                                            ===========   ===========   ===========   ===========
                                                100.00%       100.00%       100.00%       100.00%
</TABLE>
<PAGE>

Software         : ARGUS Ver. 11.0.04                         Date     : 7/13/04
File             : Royal Ridge Office Bldg 2004               Time     : 2:51 pm
Property Type    : Office & Retail                            Ref#     : AAS
Portfolio        :                                            Page     : 1
                             Royal Ridge Office Bldg
                              11680 Great Oaks Way
                            Alpharetta, Georgia 30022

                                Input Assumptions

PROPERTY DESCRIPTION
  Name:                         Royal Ridge Office Bldg
  Address:                      11680 Great Oaks Way
  Address2:
  City:                         Alpharetta
  State:                        Georgia
  Zip:                          30022
  Portfolio:
  Property Type:                Office & Retail

PROPERTY TIMING
  Analysis Start Date:    6/04
  First Year Ends:        5/05
  Years of Analysis:      10

AREA MEASURES

  Label                               Area
  ----------------------------------------
  Property Size                       161,366 SqFt
  Alt. Prop. Size                     1 SqFt
  Alt Prop Size 2                     305,480 SqFt
  Alt Prop Size 3                     300,592 SqFt

GENERAL INFLATION
  Inflation Method:        Fiscal
  Reimbursement Method:    Fiscal reimbursement using fiscal inflation

<TABLE>
<CAPTION>
OVERALL INFLATION RATES
                                Year 1  Year 2  Year 3  Year 4  Year 5  Year 6  Year 7  Year 8  Year 9  Year 10  Year 11  Year 12
<S>                             <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>      <C>      <C>
  General Inflation                          3       3       3       3       3       3       3       3        0        0        0
  Miscellaneous Revenues
  Reimbursable Expenses
  Non-Reimbursable Expenses
  Capital Expenditures
  CPI
  Retail Sales Volume
  Market Rent                                0       3       3       3       3       3       3       3
  Leasing Costs
  Land Costs
  Hard Costs
  Soft Costs
</TABLE>

<TABLE>
<CAPTION>
REIMBURSABLE EXPENSES

  Name                                    Acct Code     Actuals    Budgeted   Units      Area
  ----                                    ---------     -------    --------   -----      ----
<S>                                       <C>           <C>        <C>        <C>        <C>
  Real Estate Taxes                                                284,564    $Amount
  Insurance                                                        0.25       $/Area     Property Size
  Utilities                                                        0.9        $/Area     Property Size
  Janitorial                                                       1          $/Area     Property Size
  Repairs & Maintenance                                            0.75       $/Area     Property Size
  General Operating                                                0.75       $/Area     Property Size
  Landscaping & Security                                           0.8        $/Area     Property Size
  Management Fee                                                   3          % of EGR
  Gross Up for Reimbursement: Yes  95%    Occupancy

<CAPTION>
REIMBURSABLE EXPENSES

  Name                                    Frequency      % Fixed    Inflation   Ref Acct    Notes
  ----                                    ---------      -------    ---------   --------    -----
<S>                                       <C>              <C>
  Real Estate Taxes                       /Year            100
  Insurance                               /Year            100
  Utilities                               /Year            100
  Janitorial                              /Year            100
  Repairs & Maintenance                   /Year            100
  General Operating                       /Year            100
  Landscaping & Security                  /Year            100
  Management Fee
  Gross Up for Reimbursement: Yes  95%
</TABLE>

<TABLE>
<CAPTION>
NON-REIMBURSABLE EXPENSES

  Name                                    Acct Code     Actuals    Budgeted   Units      Area
  ----                                    ---------     -------    --------   -----      ----
<S>                                       <C>           <C>        <C>        <C>        <C>
  Reserves                                                         0.1        $/Area     Property Size

<CAPTION>
NON-REIMBURSABLE EXPENSES

  Name                                    Frequency      % Fixed    Inflation   Ref Acct    Notes
  ----                                    ---------      -------    ---------   --------    -----
<S>                                       <C>              <C>
  Reserves                                /Year            100
</TABLE>

CREDIT & COLLECTION LOSS
  Method:               Percent of All Rental Revenue
  Primary Rate:         0

                            (continued on next page)
<PAGE>

Software         : ARGUS Ver. 11.0.04                         Date     : 7/13/04
File             : Royal Ridge Office Bldg 2004               Time     : 2:51 pm
Property Type    : Office & Retail                            Ref#     : AAS
Portfolio        :                                            Page     : 2
                             Royal Ridge Office Bldg
                              11680 Great Oaks Way
                            Alpharetta, Georgia 30022

                                Input Assumptions
                         (continued from previous page)

<TABLE>
<CAPTION>
RENT ROLL

      Tenant Name/                    Lease    Total    Start  Term/   Base/Min   Unit of   Rent   Rtl
No.   Description             Suite   Type     Area     Date   Expir     Rent     Measure   Chng   Sls
- ---   -----------             -----   ----     ----     ----   -----   --------   -------   ----   ---
<C>   <S>                     <C>     <C>      <C>      <C>    <C>     <C>        <C>       <C>    <C>
1     Hagemeyer               200     Office   60,737    7/02  10/12   Detail
2     Combined Specialty In   300     Office   82,487   12/02  11/12   Detail
3     Spec Tenant 1           100B    Office   18,142    1/03   1/05     12.5     $/SqFt/Yr
4     Spec Tenant 1           100B    Office   18,142    2/05      5     11.5     $/SqFt/Yr

<CAPTION>
RENT ROLL

        Tenant Name/             Reimbur-                      Leasing                                   Rnwl    More/
  No.   Description              sements       Rent Abatement    Cost   Market Leasing  Upon Expiration  Prob    Notes
  ---   -----------              -------       --------------  -------  --------------  ---------------  ----    -----
  <C>   <S>                      <C>           <C>             <C>      <C>             <C>              <C>     <C>
  1     Hagemeyer                  Net                                    Spec TT         Market
  2     Combined Specialty In      Net                                    Spec TT         Market
  3     Spec Tenant 1              Net                                    Spec TT         ReAbsorb
  4     Spec Tenant 1              Net                      2  Yes        Spec TT         Market
  </TABLE>

          Detail Base Rent
             Hagemeyer

  Date       Amount         Unit
  ----       ----------------------------
  7/02         12.5         $/SqFt/Yr
  7/03          2.5         % Inc, Annual

           Detail Base Rent
        Combined Specialty In

  Date       Amount         Unit
  ----       ----------------------------
  12/02          14         $/SqFt/Yr
  12/03         2.5         % Inc, Annual

  Leasing Cost
    Spec Tenant 1
    Tenant Improvements: 18
    Leasing Commissions: 7

STEP RENT ADJUSTMENTS

            Step Adjustment:
             Ann Incr 2.5%

  Date          Amount      Unit
  ----         --------------------------
     1                1     % Market
    13              2.5     % Inc, Annual

CPI RENT ADJUSTMENTS

  CPI Category: CPI

    CPI Method:                Lease Year
    Inflation Rate/Index:      CPI Inflation
    Percent Paid:
    Minimum Increase:          3 % per Year
    Maximum Increase:          3 % per Year

  CPI Category: At 2.5%

    CPI Method:                Lease Year
    Inflation Rate/Index:      2.5
    Percent Paid:
    Minimum Increase:
    Maximum Increase:

MISCELLANEOUS RENT

  Miscellaneous Rent Category: At 2.5% Ann

    Overall Percent: 0

    Base Rent:
    Step Rent:
    Porters'Wage:
    CPI Rent:                        2.5
    Sales Percent Revenue:
    Reimbursements:
    (Base Rent Abatements):

                            (continued on next page)
<PAGE>

Software         : ARGUS Ver. 11.0.04                         Date     : 7/13/04
File             : Royal Ridge Office Bldg 2004               Time     : 2:51 pm
Property Type    : Office & Retail                            Ref#     : AAS
Portfolio        :                                            Page     : 3
                             Royal Ridge Office Bldg
                              11680 Great Oaks Way
                            Alpharetta, Georgia 30022

                                Input Assumptions
                         (continued from previous page)

MARKET LEASING ASSUMPTIONS

  Leasing Assumptions Category: MLA 1
                                                New Market           Renewal Mkt
    Renewal Probability                                                       75
    Market Rent                                      17.50                 18.00
    Months Vacant                                        6                     0
    Tenant Improvements                               TI 1
    Leasing Commissions                               LC 1
    Rent Abatements                                      0
  NON-WEIGHTED ITEMS
    Rent Changes                                       Yes
    Retail Sales                                        No
    Reimbursements                               Base Stop
    Term Lengths                                         5

  Rent Changes: MLA 1,current term
    Changing Base:
    Step:
    Porters' Wage:
    Miscellaneous:
    CPI Rent
    Category:     CPI

  Leasing Assumptions Category: Spec TT
                                                New Market           Renewal Mkt
    Renewal Probability                                                       60
    Market Rent                                   Mkt Rent
    Months Vacant                                        8                     0
    Tenant Improvements                              12.00                  5.00
    Leasing Commissions                                  7                     3
    Rent Abatements                                      2
  NON-WEIGHTED ITEMS
    Rent Changes                                       Yes
    Retail Sales                                        No
    Reimbursements                                     Net
    Term Lengths                                         6

  Rent Changes: Spec TT,current term
    Changing Base:
    Step:
    Porters' Wage:
    Miscellaneous:
    CPI Rent
    Category:     At 2.5%

MARKET RENT

  Market Rent Category: Mkt Rent

<TABLE>
<CAPTION>
    Unit of Measure: $/SqFt/Yr
                     Year 1  Year 2  Year 3  Year 4  Year 5  Year 6  Year 7  Year 8  Year 9  Year 10  Year 11  Year 12
<S>                  <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>      <C>      <C>
    New                11.5    11.5    11.5    11.5    11.5    11.5    11.5    11.5    11.5     11.5     11.5     11.5
    Renewal
    Inflation                     0
</TABLE>

                            (continued on next page)
<PAGE>

Software         : ARGUS Ver. 11.0.04                         Date     : 7/13/04
File             : Royal Ridge Office Bldg 2004               Time     : 2:51 pm
Property Type    : Office & Retail                            Ref#     : AAS
Portfolio        :                                            Page     : 4
                             Royal Ridge Office Bldg
                              11680 Great Oaks Way
                            Alpharetta, Georgia 30022

                                Input Assumptions
                         (continued from previous page)

TENANT IMPROVEMENTS

  Tenant Improvements Category: TI 1


<TABLE>
<CAPTION>
    Payment Made: First Month

                        Year 1  Year 2  Year 3  Year 4  Year 5  Year 6  Year 7  Year 8  Year 9  Year 10  Year 11  Year 12
<S>                     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>      <C>      <C>
    New                      5       5       5       5       5       5       5       5       5        5        5        5
    Renewal                  2       2       2       2       2       2       2       2       2        2        2        2
    Inflation
</TABLE>

LEASING COMMISSIONS

  Leasing Commissions Category: LC 1

<TABLE>
<CAPTION>
    Payment Made: First Month
    Unit of Measure: Percent

                        Year 1  Year 2  Year 3  Year 4  Year 5  Year 6  Year 7  Year 8  Year 9  Year 10  Year 11  Year 12
<S>                     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>      <C>      <C>
    New                      6       6       6       6       6       6       6       6       6        6        6        6
    Renewal                  2       2       2       2       2       2       2       2       2        2        2        2
    Inflation
</TABLE>

    Calculation includes:
      Base Rent:             Yes
      Free Rent:             Yes
      Step Rent:             Yes
      Reimbursements:        No
      Retail Sales:          No
      CPI Rent:              No

PROPERTY RESALE
  Initial Purchase Price:    26,250,000
  Option:                    Capitalize Net Operating Income
  Cap Rate:                  8.5
  Resale Adjustment(s):      1.5
  Apply Rate to following year income: Yes
  Calculate Resale for All Years: Yes

CAP RATE RANGE
  Low Rate:                8.5
  High Rate:               10.5
  Increment:               0.5

PRESENT VALUE DISCOUNTING
  Primary Discount Rate:             10
  Discount Rate Range
    Number of Rates:                  7
    Increment:                     0.25
  Discount Method: Annually (Endpoint on Cash Flow & Resale)
  Advanced
    Unleveraged Discount Range
      Cash Flow Rate:                  10
      Resale Rate:                     10
    Leveraged Discount Range
      Cash Flow Rate:                  10
      Resale Rate:                     10
<PAGE>
================================================================================
ROYAL RIDGE (2004)                                                    ADDENDUM H
- --------------------------------------------------------------------------------


                                   ADDENDUM H

                                LEGAL DESCRIPTION


- --------------------------------------------------------------------------------
<PAGE>

                                                          Deed Book 34131 pg 538

                      EXHIBIT "A" TO LIMITED WARRANTY DEED

                                LEGAL DESCRIPTION

ALL THAT TRACT or parcel of land lying and being in Land Lot 857 of the 1st
District, 2nd Section, Fulton County, Georgia, and being more particularly
described as follows:

COMMENCING from a flat iron found at the intersection of the land lot corners
856, 857, 907 and 908; from said point following said line of Land Lot 856 and
857 north 89 degrees 25 minutes 16 seconds west, 361.61 feet to a 1/2 inch rebar
found, said point being the TRUE POINT OF BEGINNING; thence leaving said land
lot line south 00 degrees 35 minutes 10 seconds west, 699.30 feet to a 1/2 inch
rebar found; said point being on the northern right of way of Great Oaks Way
(having a variable right of way); thence following said right of way along a
curve to the left, an arc distance of 245.48 feet, said curve having a radius of
1,072.35 feet and being subtended by a chord of 244.95 feet, at south 62 degrees
37 minutes 00 seconds west, to a point; thence along a curve to the right, an
arc distance of 342.23 feet, said curve having a radius of 781.77 feet and being
subtended by a chord of 339.50 feet, at south 74 degrees 22 minutes 35 seconds
west, to a point; thence south 86 degrees 55 minutes 11 seconds west, 27.53 feet
to a point; thence south 86 degrees 41 minutes 14 seconds west, 114.71 feet to a
point; thence along a curve to the left, an arc distance of 118.42 feet, said
curve having a radius of 406.97 feet and being subtended by a chord of 118.00
feet, at south 78 degrees 51 minutes 00 seconds west, to a 1/2 inch rebar set;
thence leaving said right of way north 13 degrees 30 minutes 45 seconds east,
966.98 feet to a 1/2 inch rebar found; said point being on land lot line 856 and
857; thence following said land lot line south 89 degrees 25 minutes 03 seconds
east, 583.48 feet to a 1/2 inch rebar found, said point being the TRUE POINT OF
BEGINNING.

Said property contains 13.373 acres, per ALTA/ACSM Survey for FSP Royal Ridge
Corp., Franklin Street Properties Corp. and Chicago Title Insurance Company,
made by Frontline Surveying & Mapping, Inc., certified by Thomas Edward Peay,
Jr., Ga. R.L.S. No. 2402, dated December 16, 2002, last revised January 3, 2003.

TOGETHER WITH all right, title and interest in and to the following:

a.    Lake Drainage Easement Agreement by Royal 400 Land Company I, LLC and
      Royal 400 Land Company II, LLC for the benefit of CK Royal 400, LLC, dated
      and filed September 6, 2000, recorded in Deed Book 29447, page 320, Fulton
      County Records; and

b.    Partial Assignment of Easement Rights by Royal 400 Land Company I, LLC and
      Royal 400 Land Company II, LLC for the benefit of CK Royal 400, LLC, dated
      and filed September 6, 2000, recorded in Deed Book 29447, page 326,
      aforesaid records.
<PAGE>
================================================================================
ROYAL RIDGE (2004)                                                    ADDENDUM I
- --------------------------------------------------------------------------------


                                   ADDENDUM I

                     PRECIS METRO REPORT - ECONOMY.COM, INC.


- --------------------------------------------------------------------------------
<PAGE>

- --------------------------------------------------------------------------------
                                    ATLANTA
- --------------------------------------------------------------------------------
               EMPLOYMENT                          LIFE CYCLE PHASE
               GROWTH RANK                           Growth/Mature
            Best=1 Worst=325                    ------------------------
                                                Best=1         Worst=325
                 2003-05                               VITALITY
              ------------                                 9
                   29                                1st quintile
              1st quintile                      ------------------------
              ------------                           COST OF DOING
                                                       BUSINESS
                 2003-08                                  94%
              ------------                            U.S. = 100%
                   32                           ------------------------
              1st quintile                              COST OF
              ------------                              LIVING
                                                         103%
                                                      U.S. = 100%
- --------------------------------------------------------------------------------
                   Relative Employment Performance (1991=100)

                          [LINE GRAPH; U.S. vs ATLANTA]

- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
    1997     1998     1999     2000     2001     2002     2003            Indicators
- ---------------------------------------------------------------------------------------------
 <C>      <C>      <C>      <C>      <C>      <C>      <C>       <S>
   146.9    159.4    173.0    185.5    187.4    191.3    192.8     Gross Metro Product, C$B
     6.9      8.5      8.6      7.2      1.0      2.1      0.8             % Change
 1,958.9  2,042.7  2,126.2  2,182.2  2,192.3  2,168.6  2,158.7      Total Employment (000)
     2.9      4.3      4.1      2.6      0.5     -1.1     -0.5             % Change
     3.7      3.3      3.1      2.9      3.5      5.3      4.7        Unemployment Rate
     7.5     10.6      8.3      9.9      3.9      2.2      3.4      Personal Income Growth
 3,748.4  3,877.5  4,009.8  4,148.9  4,278.4  4,386.3  4,490.5         Population (000)
  38,482   45,786   48,275   46,747   48,423   50,155   54,519      Single-Family Permits
  11,292   12,017   12,771   17,469   16,845   16,400   10,819       Multifamily Permits
   108.0    115.9    123.3    130.8    138.8    146.2    152.0    Existing Home Price ($Ths)
  15,742   27,799   24,191   21,785   46,232   57,978   72,911   Mortgage Originations ($Mil)
    82.8     92.2     94.6     96.7     80.9     59.0     56.0       Net Migration (000)
  27,602   26,743   25,541   25,715   30,550   34,188   38,193      Personal Bankruptcies
- ---------------------------------------------------------------------------------------------

<CAPTION>
- -------------------------------------------------------------------------
         Indicators              2004     2005     2006     2007     2008
- -------------------------------------------------------------------------
<S>                           <C>      <C>      <C>      <C>      <C>
  Gross Metro Product, C$B      200.3    209.9    219.7    229.4    239.1
          % Change                3.9      4.8      4.6      4.4      4.2
   Total Employment (000)     2,194.4  2,272.4  2,344.3  2,405.9  2,468.6
          % Change                1.7      3.6      3.2      2.6      2.6
     Unemployment Rate            4.3      4.1      3.9      3.7      3.6
   Personal Income Growth         5.2      6.3      6.4      6.5      6.5
      Population (000)        4,602.8  4,721.8  4,839.8  4,947.5  5,066.0
   Single-Family Permits       53,305   49,593   49,197   48,837   49,235
    Multifamily Permits        12,251   12,586   14,499   15,730   16,662
 Existing Home Price ($Ths)     156.1    160.8    165.3    171.5    177.2
Mortgage Originations ($Mil)   37,856   25,821   27,580   29,283   30,794
    Net Migration (000)          63.4     69.3     67.2     55.9     65.6
   Personal Bankruptcies       34,562   31,737   31,719   32,438   33,141
- -------------------------------------------------------------------------
</TABLE>

- --------------------------------------------------------------------------------
                             STRENGTHS & WEAKNESSES
- --------------------------------------------------------------------------------
                STRENGTHS
o      Diverse economy.
o      Above average per capita income.
o      Transportation, distribution and cultural center.
o      Strong in-migration and population growth.
o      Affordable housing.

               WEAKNESSES
o      Overtaxed infrastructure.
o      Weak educational system.
o      Mounting problems associated with suburban sprawl.
o      Dependence on travel-related industries.

- --------------------------------------------------------------------------------
                            CURRENT EMPLOYMENT TRENDS
- --------------------------------------------------------------------------------
                         January 2004 Employment Growth
                           % Change Year Ago, 3 mo. MA

                            [BAR CHART; VALUES BELOW]

                 Total                                  -0.1
                 Construction                            3.7
                 Manufacturing                           0.0
                 Trade                                  -2.6
                 Trans/Utilities                        -1.6
                 Information                            -2.2
                 Financial Activities                   -0.6
                 Prof & Business Svcs                   -3.4
                 Edu & Health Svcs                       1.5
                 Leisure & Hospitality                   5.1
                 Other Services                          5.6
                 Government                              0.9
- --------------------------------------------------------------------------------
                                 FORECAST RISKS
- --------------------------------------------------------------------------------
SHORT TERM (down arrow) LONG TERM (up arrow)  RISK-ADJUSTED RETURN, '03-08 1.59%

                     UPSIDE
o     Rapid in-migration resumes.
o     Commercial real estate market is stronger than expected.

                     DOWNSIDE
o     Congestion reduces attractiveness of ATL for expanding
      businesses and migrants.
o     Rapid rise in mortgage rates damages the residential real
      estate industry.
o     Weak U.S. recovery dampens business travel.

- --------------------------------------------------------------------------------
                                    ANALYSIS
- --------------------------------------------------------------------------------
      Recent Performance. Atlanta's economy continues to improve since bottoming
out in mid-2003. The March benchmark revisions to employment data show a
significant reduction in employment gains from the rapid growth indicated before
the annual revision. Nonetheless, employment gains have been consistent over the
last six months and continued growth is expected. There is presently less
momentum than previously thought, but a robust rebound is still expected.

      Fourth quarter numbers were essentially flat. Slow attrition in
manufacturing continued through the year. Most private service producing
industries held their ground through 2003, while leisure and hospitality
services remain the growth leader with steady monthly increases throughout 2003.

      Travel and tourism. Renewed vigor in travel-related industries is
essential for ATL's recovery. ATL's important transportation and tourism
industries are now in recovery mode, as evidenced by passenger counts at
Hartsfield-Jackson Airport that are now exceeding pre-9/11 highs. Although Delta
has yet to resume hiring, air transportation employment in ATL is expected to
begin improving in the coming months. One reason for this is the sleight of hand
taking place at Delta. The company is likely replacing some workers at its
flagship carrier, with those at its new low-cost carrier called Song.

      Defense. ATL, like many other metro areas, is benefiting from strong
defense spending by the Bush administration. As the purse strings tighten in
response to federal fiscal realities, ATL will likely feel the pinch. The U.S.
General Accounting Office has recently released a report critical of Lockheed
Martin's F/A-22 stealth fighter jet program, which is built in Marietta. The Air
Force had originally planned to purchase 750 of the aircraft and now can only
afford 218. The GAO report recommends that the Department of Defense re-evaluate
its need for the F/A-22.

      Housing. An expected late 2004 rise in mortgage rates poses a considerable
risk to ATL's economy, as residential construction accounts for an outsized
share of the local economy. Mul-tifamily activity in the metro area has already
slowed considerably. Prior overbuilding, the previously weak economy, and the
movement of households to single-family housing have been drivers of this
decline. The single-family market is faring better, with year-to-year starts up
30% in the fourth quarter of 2003. House-price appreciation has steadily
decelerated over the past two years, and it is now well below the national
average. A continued strong pace of household formation will support
homebuilding in ATL, but building activity is expected to slow considerably once
mortgage rates rise.

      The backup. Sewer capacity constraints are a potential bottleneck for many
ATL development projects. Recently announced plans for improvements to Buckhead
will allow developers to move ahead with projects there. The city's planned $3.2
billion overhaul of its sewer system must be completed no later than 2014. The
court-mandated time limit will undoubtedly add to traffic congestion, while the
fix is in progress. Rising sewer rates and property taxes needed to pay for the
overhaul will reduce ATL's cost advantage with other large metro areas.

      Atlanta's economy is emerging from the recession with job growth
concentrated in leisure and hospitality services. Job growth is expected for all
service industries in 2004, as the recovery gains momentum. ATL will return to
above average performance and is expected to remain there as its well-developed
communications and distribution network, concentration of headquarters
operations, strong demographic trends and relatively low business costs will
foster new business expansions. Long-term risks to ATL include competition for
business from other southeastern metro areas, congestion problems, and
infrastructure inadequacies. However, in the long run, ATL will be a top
performer.

      Robert A. Dye
      March 2004
- --------------------------------------------------------------------------------
                     Precis METRO (C) 2004 Economy.com, Inc.
                         600 Willowbrook Lane, Suite 600
                             West Chester, PA 19382
                                  610.696.8700
                                610.696.0875 fax
                                 www.economy.com

For the confidential use of subscribers. Although the information in this report
has been obtained from sources that Economy.com, Inc. believes to be reliable,
we do not guarantee its accuracy, and such information may be incomplete or
condensed. This publication is available through the Internet at Economy.com.
<PAGE>

- --------------------------------------------------------------------------------
                              EMPLOYMENT & INDUSTRY
- --------------------------------------------------------------------------------

                                  TOP EMPLOYERS
Headquarters, U.S. Army Garrison                                          11,085
AT&T Corporation                                                         >10,000
BellSouth Corporation                                                    >10,000
Delta Air Lines, Inc.                                                    >10,000
Emory University                                                         >10,000
Publix Supermarkets, Inc.                                                >10,000
Randstad Staffing Services                                               >10,000
The Home Depot, Inc.                                                     >10,000
The Kroger Company                                                       >10,000
United Parcel Service, Inc.                                              >10,000
Wal-Mart Stores, Inc.                                                    >10,000
Centers for Disease Control and Prevention                           8,000-9,999
IBM Corporation                                                      8,000-9,999
Promina Health System                                                8,000-9,999
Coca-Cola Company                                                    5,000-7,999
Columbia/HCA                                                         5,000-7,999
Cox Enterprises, Inc.                                                5,000-7,999
Fulton-DeKalb Hospital Authority                                     5,000-7,999
Georgia College & State University                                   5,000-7,999
Georgia Institute of Technology                                      5,000-7,999

Source: Metro Atlanta Chamber of Commerce, December 2003

                 Public
Federal .........................   46,664
State ...........................   57,694
Local ...........................  183,402
2003

                              INDUSTRIAL DIVERSITY

                                   [BAR CHART]

                     Most Diverse (U.S.)           1.00

                     ATL                           0.63

                     Least Diverse                 0.00

                              EMPLOYMENT VOLATILITY

                   DUE TO U.S.                  RELATIVE TO U.S.
                  FLUCTUATIONS                   FLUCTUATIONS

                  [BAR CHART]                    [BAR CHART]

                      ATL                        US     163
                                                 ATL    100
             Not due to US     100%
             Due to US          93%
- --------------------------------------------------------------------------------
                        COMPARATIVE EMPLOYMENT AND INCOME

                             % of Total Employment      Average Annual Earnings
Sector                         ATL      GA      US       ATL        GA        US

Construction                  5.4%    5.1%    5.2%   $42,693   $36,239   $39,845
Manufacturing                 7.9%   11.7%   11.2%   $51,420   $41,694   $48,756
Durable                      50.9%   44.0%   61.8%        nd   $43,690   $50,404
Nondurable                   49.1%   56.0%   38.2%        nd   $40,088   $45,969
Transport/Utilities           5.3%    4.5%    3.7%        nd   $51,300   $44,972
Wholesale Trade               6.3%    5.3%    4.3%   $64,395   $56,251   $51,842
Retail Trade                 11.2%   11.5%   11.5%   $25,653   $22,624   $22,635
Information                   4.5%    3.3%    2.5%   $91,170   $80,689   $69,569
Financial Activities          6.9%    5.6%    6.1%   $44,816   $37,838   $41,740
Prof. and Bus. Services      15.7%   12.8%   12.3%   $47,578   $41,383   $43,053
Educ. and Health Services     9.9%   10.0%   12.8%   $37,692   $35,407   $34,032
Leisure and Hosp. Services    9.3%    9.1%    9.3%   $21,177   $18,127   $19,135
Other Services                4.4%    4.7%    3.9%   $21,594   $18,881   $19,842
Government                   13.3%   16.4%   16.6%   $44,235   $40,741   $42,939

Source: Percent of total employment - BLS, 2003;
        Average annual earnings - BEA, 2001
- --------------------------------------------------------------------------------
                                  HOUSE PRICES
- --------------------------------------------------------------------------------

                          [LINE GRAPH; U.S. vs ATLANTA]

Source: OFHEO, 1987 Q1 = 100, NSA

- --------------------------------------------------------------------------------
                                 CREDIT QUALITY
- --------------------------------------------------------------------------------

              FITCH                                   MOODY'S

COUNTY         AA                         COUNTY       Aa3
- --------------------------------------------------------------------------------
                               LEADING INDUSTRIES
- --------------------------------------------------------------------------------
NAICS      Industry                                             Employees (000)

5613       Employment Svcs.                                          83.7
7222       Limited-Service Eating Places                             66.5
5511       Mgmt of Companies & Enterprises                           36.4
2382       Building Equipment Contractors                            34.7
5415       Computer Systems Design & Related Svcs.                   29.2
6113       Colleges, Univ., & Professional Schools                   28.4
5241       Insurance Carriers                                        28.0
5413       Architectural, Engineering, & Related Svcs.               25.5
5171       Wired Telecommunications Carriers                         24.8
8139       Bus., Prof., Labor, Political, & Similar Org.             22.5
5416       Mgmt., Scientific, & Tech. Consulting Svcs.               21.6
5411       Legal Svcs.                                               21.2
8134       Civic & Social Organizations                              20.5
4812       Nonscheduled Air Transportation                           19.4
4234       Prof. & Comm. Equip. & Supp. Merch. Whole.                19.3

           High-tech employment                                     116.8
           As % of total employment                                   5.3

Source: BLS, Economy.com, 2003
- --------------------------------------------------------------------------------
                                 MIGRATION FLOWS
- --------------------------------------------------------------------------------
Into Atlanta                                            Number            Median
                                                   of Migrants            Income

New York                                                 5,213            25,813
Chicago                                                  3,747            32,854
Washington, D.C                                          2,347            38,090
Fort Lauderdale                                          2,208            29,052
Tampa                                                    2,173            31,652
Los Angeles                                              2,067            24,648
Athens                                                   1,968            19,581
Dallas                                                   1,945            45,345
Orlando                                                  1,887            27,832
Birmingham                                               1,697            29,979
Total Inmigration                                      161,217            27,236

From Atlanta

Washington, D.C                                          2,648            37,562
Tampa                                                    2,558            33,233
Chicago                                                  2,094            32,928
New York                                                 1,825            25,729
Jacksonville                                             1,783            33,216
Orlando                                                  1,708            31,772
Athens                                                   1,615            15,983
Charlotte                                                1,594            40,005
Fort Lauderdale                                          1,521            29,772
Houston                                                  1,427            33,813
Total Outmigration                                     135,462            28,923

- --------------------------------------------------------------------------------
Net Migration                                           25,755            -1,687
- --------------------------------------------------------------------------------

                               Net Migration, ATL

                                   [BAR CHART]

            ----------------------------------------------
                        Domestic      Foreign       Total
            ----------------------------------------------
            1998        53,298        38,869        92,167
            ----------------------------------------------
            1999        54,301        40,307        94,608
            ----------------------------------------------
            2000        56,098        40,621        96,719
            ----------------------------------------------
            2001        48,244        32,656        80,900
            ----------------------------------------------
            2002        26,369        32,613        58,982
            ----------------------------------------------

Source: IRS (top), 2002; Census Bureau & Economy.com, 2002
- --------------------------------------------------------------------------------
                                PER CAPITA INCOME
- --------------------------------------------------------------------------------

                                   [BAR CHART]

                              ATL         33,769
                              GA          30,413
                              US          28,523

Source: Bureau of Economic Analysis,  2001
- --------------------------------------------------------------------------------
                     Precis METRO (C) 2004 Economy.com, Inc.
                         600 Willowbrook Lane, Suite 600
                             West Chester, PA 19382
                                  610.696.8700
                                610.696.0875 fax
                                 www.economy.com

For the confidential use of subscribers. Although the information in this report
has been obtained from sources that Economy.com, Inc. believes to be reliable,
we do not guarantee its accuracy, and such information may be incomplete or
condensed. This publication is available through the Internet at Economy.com.
<PAGE>

- --------------------------------------------------------------------------------
                                     ATLANTA
- --------------------------------------------------------------------------------
Atlanta's Travel Industry Continues to Struggle

                                   [BAR CHART]

                       Hotel occupancy, % change year ago
                        Source: Smith Travel Research -25

      ATL's hotel industry has yet to turn around. Vacancy rates fell in 2003
for the eighth consecutive year. The vacancy rate for the year was only 56.5%,
although this is only slightly below the national average of 57.3%. Vacancies
fell during the 1990s due to the excessive addition of rooms. Since then, ATL
has suffered through the recession with weakness in travel-related industries.
Room rates continue to fall. The coming year should bring the beginnings of a
recovery as business travel is strengthening. In addition, foreign tourists will
get a lift from the continued low value of the dollar relative to the euro.

Income May Be Painting a Clearer Picture

      Real per capita income, % change year ago

      Source: Economy.com

                         [LINE GRAPH; ATLANTA vs. U.S.]

      Rebenchmarked historical employment data show that ATL's perceived strong
economic rebound for 2003 was overstated. Significant negative revisions to
service sector employment show an economy that was weaker than previously
thought early in 2003, but gained momentum as the year progressed. In line with
the revised employment history, real per capita income numbers show that ATL is
emerging from the recession but has not yet gained significant momentum. Real
income growth began to accelerate in the second half of 2003 and will continue
to accelerate through 2004.

Atlanta Vacancy Rates Peaked in 2003

       [LINE GRAPH; OFFICE VACANCY RATE, % vs. INDUSTRIAL VACANCY RATE, %]

      Strong building activity leading up to the recession combined with a deep
cyclical downturn in business activity brought nonresidential vacancy rates in
ATL up to a peak in 2003. Renewed economic growth and court-mandated limits to
development will help to absorb the slack in nonresidential real estate. Office
space-using employment will expand strongly in ATL in 2004 generating a new wave
of office building evidenced by the recently announced plans to construct a
41-story office tower in Midtown, the tallest structure to be built in ATL since
1992.

Residential Construction on Pace with Household Formation

      Housing permits/household formation

                         [LINE GRAPH; ATLANTA vs. U.S.]

      In addition to personal income numbers, residential construction data
point to a more subdued ATL in 2003 than previously thought. The year ended with
more than 8,000 fewer construction jobs than the preliminary estimates had
indicated. The ratio of residential permits to household formations has stayed
close to the U.S. figure over the past few years, indicative of an economy that
is not accelerating much faster than average. As the economy begins to heat up
in 2004, builders may become more aggressive, pulling the ratio of permits to
household formations above the national average.
- --------------------------------------------------------------------------------
                     Precis METRO (C) 2004 Economy.com, Inc.
                         600 Willowbrook Lane, Suite 600
                             West Chester, PA 19382
                                  610.696.8700
                                610.696.0875 fax
                                 www.economy.com

For the confidential use of subscribers. Although the information in this report
has been obtained from sources that Economy.com, Inc. believes to be reliable,
we do not guarantee its accuracy, and such information may be incomplete or
condensed. This publication is available through the Internet at Economy.com.
<PAGE>
================================================================================
ROYAL RIDGE (2004)                                                    ADDENDUM J
- --------------------------------------------------------------------------------


                                   ADDENDUM J

                                ENGAGEMENT LETTER


- --------------------------------------------------------------------------------
<PAGE>

                                                                            CBRE
                                                                CB RICHARD ELLIS

Ronald A. Neyhart, MAI                                    CB Richard Ellis, Inc.
Senior Managing Director                        3225 Cumberland Blvd., Suite 450
Valuation & Advisory Services                                  Atlanta, GA 30339

                                                                  T 770 984 5020
                                                                  F 770 984 5001

                                                            ron.neyhart@cbre.com
                                                                        www.cbre
June 29, 2004

Ms. Janet Notopoulos
Franklin Street Properties
401 Edgewater Place, Ste. 200
Wakefield, MA 01880

RE:   Appraisal Agreement
      Royal Ridge
      11680 Great Oaks Way
      Alpharetta, GA 30001

Dear Ms Notopoulos:

We are pleased to submit this proposal and our Terms and Conditions for the
appraisal of the referenced real estate.

================================================================================
                             PROPOSAL SPECIFICATIONS
- --------------------------------------------------------------------------------

Purpose:                             To estimate the market value

Premise:                             As is, as of the date of inspection

Rights Appraised                     Leased fee
Intended Use:                        Internal decision making purposes

Appraisal Process:                   Complete appraisal

Report Type:                         Self-contained format

Appraisal Standards:                 Uniform Standards of Professional Appraisal
                                     Practice (USPAP) and Financial
                                     Institution Reform, Recovery, and
                                     Enforcement Act (FIRREA) Code of
                                     Professional Ethics and the of
                                     Professional Standards Appraisal
                                     Practice of the Appraisal Institute

Fee:                                 $ 4,500

Expenses:                            Fee quoted includes all expenses

Retainer:                            A retainer is not required for this
                                     assignment.

Report Copies:                       3 finals

Start Date:                          The appraisal process will start upon
                                     receipt of your signed agreement and the
                                     property specific data

Delivery Date:                       Two weeks after the start date

Acceptance Date:                     This proposal is subject to withdrawal
                                     and the delivery date is subject to
                                     modification if the Start Date is not
                                     within 2 business days
================================================================================
<PAGE>

June 29, 2004
Page 2

The attached Terms and Conditions and Specific Property Data Request are deemed
a part of this agreement as though set forth in full herein. If available, we
will need the following information to complete the assignment.

      o     Site plan/survey
      o     Legal description
      o     Property contact
      o     Current rent roll
      o     Engineering studies, environmental reports, etc.
      o     Current real estate tax bill
      o     Recent sale information (if sold within the past three years)

We appreciate this opportunity to be of service to you on this assignment. If
you have additional questions, please contact us.

CB RICHARD ELLIS, INC.
VALUATION & ADVISORY SERVICES


/s/ Ronald A. Neyhart
- ---------------------
Ronald A. Neyhart, MAI
Senior Managing Director

Phone: 770 984 5020
Fax: 770 984 5001
E-mail: ron.neyhart@cbre.com

                              AGREED AND ACCEPTED

FRANKLIN STREET PROPERTIES
By:


- -----------------------------------------   ------------------------------------
Signature                                   Date

Janet Notopoulos
- -----------------------------------------   ------------------------------------
Printed Name                                Title

781 557 1306
- -----------------------------------------   ------------------------------------
Telephone                                   Facsimile

jnotopoulos@franklinstreetproperties.com
- -----------------------------------------
E-mail
<PAGE>

                              TERMS AND CONDITIONS

1.    These Terms and Conditions, between CB Richard Ellis, Inc.-Valuation
      Services (Appraiser) and the Client for whom the referenced appraisal
      service will be performed, shall be deemed a part of such Agreement as
      though set forth in full therein. The Agreement shall be governed by the
      laws of the state of the CB Richard Ellis, Inc. office shown on the
      Agreement.

2.    Client is defined as the party signing the Agreement and shall be
      responsible for payment of the fees stipulated in the Agreement. Payment
      of the appraisal fee is not contingent upon any predetermined value or on
      an action or event resulting from the analyses, opinions, conclusions, or
      use of the appraisal report.

3.    Final payment is due and payable upon delivery of the final report or
      within thirty (30) days of your receipt of our draft report, whichever is
      sooner. If a draft report is requested, the fee is considered earned upon
      delivery of our draft report.

4.    If we are requested to give court testimony, an additional fee will be
      charged on an hourly basis at our then-prevailing hourly rate. The hourly
      billings pertain to court preparation, waiting and travel time, document
      review and preparation (excludes appraisal report) and all meetings
      related to court testimony.

5.    It is understood that the Client has the right to cancel this assignment
      at any time prior to delivery of the completed report. In such event, the
      Client is obligated only for the pro rated share of the fee based upon the
      work completed and expenses incurred.

6.    In the event Client fails to make payments when due and payable, then from
      the date due and payable until paid the amount due and payable, shall bear
      interest at the maximum rate permitted in the state in which the office of
      Appraiser executing the Agreement is located. If Appraiser is required to
      institute legal action against Client relating to the Agreement, Appraiser
      shall be entitled to recover reasonable attorney's fees and costs from
      Client.

7.    Appraiser assumes that there are no major or significant items that would
      require the expertise of a professional building contractor or engineer.
      If such items need to be considered in Appraiser's studies, such services
      are to be provided by others at a cost, which is not a part of the fee
      proposal.

8.    In the event of any dispute between Client and Appraiser relating to this
      Agreement, or Appraiser's or Client's performance hereunder, Appraiser and
      Client agree that such dispute shall be resolved by means of binding
      arbitration in accordance with the commercial arbitration rules of the
      American Arbitration Association, and judgment upon the award rendered by
      the arbitrator(s) may be entered in any court of competent jurisdiction.
      Depositions may be taken and other discovery obtained during such
      arbitration proceedings to the same extend as authorized in civil judicial
      proceedings in the state where the office of Appraiser executing this
      Agreement is located. The arbitrator(s) shall be limited to awarding
      compensatory damages and shall have no authority to award punitive,
      exemplary or similar type damages. The prevailing party in the arbitration
      proceeding shall be entitled to recover from the losing party its
      expenses, including the costs of arbitration proceeding, and reasonable
      attorney's fees.

9.    Client acknowledges that Appraiser is being retained hereunder as an
      independent contractor to perform the services described herein and
      nothing in this Agreement shall be deemed to create any other relationship
      between Client and Appraiser. This assignment shall be deemed concluded
      and the services hereunder completed upon delivery to Client of the
      appraisal report discussed herein.

10.   All statements of fact in the report which are used as the basis of the
      Appraiser's analyses, opinions, and conclusions will be true and correct
      to the best of the Appraiser's knowledge and belief. The Appraiser may
      rely upon the accuracy of information and material furnished to Appraiser
      by Client.

11.   Appraiser shall have no responsibility for legal matters, questions of
      survey or title, soil or subsoil conditions, engineering, or other similar
      technical matters. The report will not constitute a survey of the property
      analyzed.

12.   The data gathered in the course of the Assignment (except data furnished
      by Client) and the report prepared pursuant to the Agreement are, and will
      remain, the property of Appraiser. With respect to data provided by
      Client, Appraiser shall not violate the confidential nature of the
      appraiser-client relationship by improperly disclosing any confidential
      information furnished to Appraiser. Notwithstanding the foregoing,
      Appraiser is authorized by Client to disclose all or any portion of the
      report and the related data to appropriate representatives of the
      Appraisal Institute if such disclosure is required to enable Appraiser to
      comply with the Bylaws and Regulations of such Institute as now or
      hereafter in effect.

13.   Unless specifically noted in the appraisal, we will not be taking into
      consideration the possibility of the existence of asbestos, PCB
      transformers, or other toxic, hazardous, or contaminated substances and/or
      underground storage tanks (hazardous material), or the cost of
      encapsulation or removal thereof.

14.   Client shall not indemnify Appraiser or hold Appraiser harmless unless and
      only to the extent that the Client misrepresents, distorts, or provides
      incomplete or inaccurate appraisal results to others, which acts of the
      Client approximately result in damage to Appraiser. Client shall indemnify
      and hold Appraiser harmless from any claims, expenses, judgments or other
      items or costs arising as a result of the Client's failure or the failure
      of any of the Client's agents to provide a complete copy of the appraisal
      report to any third party. In the event of any litigation between the
      parties, the prevailing party to such litigation shall be entitled to
      recover, from the other, reasonable attorney fees and costs.

15.   The report is for the sole use of the client; however, client may provide
      only complete, final copies of the appraisal report in its entirety (but
      not component parts) to third parties who shall review such reports in
      connection with loan underwriting or securitization efforts. Appraiser is
      not required to explain or testify as to appraisal results other than to
      respond to the client for routine and customary questions. We do consent
      to your submission of the reports to rating agencies, loan participants or
      your auditors in its entirety (but not component parts) without the need
      to provide us with an Indemnification Agreement and/or Non-Reliance
      Letter.
<PAGE>

================================================================================
ROYAL RIDGE (2004)                                                    ADDENDUM L
- --------------------------------------------------------------------------------


                                   ADDENDUM L

                                 QUALIFICATIONS


- --------------------------------------------------------------------------------
<PAGE>

                                QUALIFICATIONS OF

                             RONALD A. NEYHART, MAI
                            Senior Managing Director

             CB Richard Ellis, Inc. - Valuation & Advisory Services
                        100 Galleria Parkway, Suite 550
                             Atlanta, Georgia 30339
                                 (770) 984-5020
                               (770) 984-5001 FAX
                            Email: rneyhart@cbre.com

                                   EDUCATIONAL

B.S. Finance and Real Estate - Florida State University

Appraisal Institute
     Course 1A-1, 1A-2, 1B-A, 1B-B, 2-1, 2-2, SPP

                           LICENSE(S)/CERTIFICATION(S)

Georgia Real Estate Appraisal Board - Certified General Real Estate Appraiser -
   C000490
Tennessee Real Estate Commission - Certified General Real Estate Appraiser -
   0002013
North Carolina Real Estate Appraisal Board - Certified General Real Estate
   Appraiser - A4051
Alabama Real Estate Appraisal Board - Certified General Real Estate Appraiser -
   G00484
South Carolina Real EstateAppraisers Board - Certified General Real Estate
   Appraiser - CG3429
Kentucky Real Estate Appraisal Board-Certified General Real Estate Appraiser -
   CG2780
Mississippi Real Estate Appraisal Board - Certified General Real Estate
   Appraiser - GA-575

                                  PROFESSIONAL

                              Appraisal Institute

Designated Member, (MAI), Certification No. 8484

                              EMPLOYMENT EXPERIENCE
<TABLE>
<S>                  <C>                                                        <C>
1979-1982            American Appraisal Associates,                             Atlanta, Georgia
                     Staff Appraiser
1982-1984            Johnson, Lane, Space, Smith & Co.,                         Atlanta, Georgia
                     Account Executive
1984 - 1992          CB Commercial Real Estate Group, Inc.,                     Atlanta, Georgia
                     Senior Real Estate Analyst
1992-Present         CB Richard Ellis, Inc. Valuation & Advisory Services,      Atlanta, Georgia
                     Senior Managing Director
</TABLE>
<PAGE>

                                QUALIFICATIONS OF

                               RICHARD A. FRANCIS
                               Real Estate Analyst

                   CB Richard Ellis, Inc. - Appraisal Services
                         100 Galleria Parkway, Suite 550
                             Atlanta, Georgia 30339
                                 (770) 951-7918

                                   EDUCATIONAL

B.B.A., University of Kentucky, Lexington, Kentucky

Appraisal Institute
     Courses: Capitalization A & B
              Standards of Professional Appraisal Practice
              Advanced Sale Comparison & Cost Approaches

                           LICENSE(S)/CERTIFICATION(S)

Certified Real Estate Appraiser: State of Georgia - Certification
   Number CG003281
Certified General Real Property Appraiser State of Alabama - Certification
   No:CG00556
Certified General Real Property Appraiser State of Tennessee - Certification
   No:CG002901
Certified General Real Property Appraiser State of Kentucky - Certification
   No:CG002827
Certified General Real Property Appraiser State of Mississippi - Certification
   No:GA-714

                              EMPLOYMENT EXPERIENCE

1985 - 1990        General Electric Company                Denver, Colorado
                   Area Sales Manager
1990 - 1991        GBR                                     Denver, Colorado
                   Owner
1991 - 1992        Market Power, Inc.                      Atlanta, Georgia
                   Sales Representative
1992 - 1996        Benton Advisory Group                   Atlanta, Georgia
                   Associate Appraiser
1996 - Present     CB Richard Ellis, Inc.                  Atlanta, Georgia
                   Real Estate Analyst



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.5
<SEQUENCE>13
<FILENAME>ex99-5.txt
<TEXT>

                                                                    Exhibit 99.5


               Written Consent of Stockholders in Lieu of Meeting

      The undersigned holder, acting in accordance with the Certificate of
Incorporation of the respective Target REIT(s) (as defined below) set forth
after the undersigned's name, and Sections 228 and 251 of the General
Corporation Law of the State of Delaware, does hereby consent to, ratify and
approve the following resolution as though consented to, ratified and approved
at a duly called and held meeting of the stockholders of the respective Target
REIT(s) set forth after the undersigned's name as of the date hereof:

RESOLVED:   That the Agreement and Plan of Merger (the "Merger Agreement") by
            and among Franklin Street Properties Corp., a Maryland corporation
            (the "Parent"), Montague Acquisition Corp., Addison Circle
            Acquisition Corp., Royal Ridge Acquisition Corp. and Collins
            Crossing Acquisition Corp., each a Delaware corporation
            (individually, an "Acquisition Sub" and collectively, the
            "Acquisition Subs") and FSP Montague Business Center Corp., FSP
            Addison Circle Corp., FSP Royal Ridge Corp. and FSP Collins Crossing
            Corp., each a Delaware corporation (individually, a "Target REIT,"
            and collectively, the "Target REITs"), dated August 13, 2004,
            providing, among other things, that each Target REIT will be merged
            with and into an Acquisition Sub, with the Acquisition Sub being the
            surviving entity (individually, a "Merger," and collectively, the
            "Mergers") is hereby adopted and the Merger of the Target REIT in
            which the undersigned is a stockholder is hereby approved.

      The failure to return a consent will have the effect of a vote against the
mergers. A Target REIT stockholder who signs and returns the consent without
indicating a vote will be deemed to have voted "YES" in favor of adoption of the
Merger Agreement and approval of the Merger of that Target REIT.


                  [Remainder of Page Intentionally Left Blank]

<PAGE>


                                        |X|     Please mark votes as in example.

      To consent to the adoption of the Merger Agreement and approval of the
Merger as described in the resolution above for the following Target REITs:

[List here appropriate Target REITs]



|_| For                  |_| Withheld

____________________________________

For all Target REITs, except as set forth above


                                              ___________________________
                                              Signature of Stockholder

                                              Date:_______________________


                                              ____________________________
                                              [Name of Stockholder]


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.6
<SEQUENCE>14
<FILENAME>ex99-6.txt
<TEXT>

                                                                    Exhibit 99.6


                      Consent of A.G. Edwards & Sons, Inc.


Board of Directors
FSP Montague Business Center Corp.
FSP Addison Circle Corp.
FSP Royal Ridge Corp.
FSP Collins Crossing Corp.

Member of the Boards:

We hereby consent to the use in the Registration Statement of Franklin Street
Properties Corp., on Form S-4 and in the Consent Solicitation/Prospectus of FSP
Montague Business Center Corp., FSP Addison Circle Corp., FSP Royal Ridge Corp.
and FSP Collins Crossing Corp., which is part of the Registration Statement, of
our opinion letters, each dated August 11, 2004 and appearing as Appendices C-1,
C-2, C-3, and C-4, respectively, to such Consent Solicitation/Prospectus, and to
the description of such opinion letters and to the references to our name
contained therein under the headings "Summary-Third Party Reports" and "Fairness
of the Mergers - Fairness of the Merger Consideration to the Target REIT
Stockholders." In giving the forgoing consent, we do not admit that we come
within the category of persons whose consent is required under, nor do we admit
that we are "experts" with respect to any part such Registration Statement for
purposes of, the Securities Act of 1933, amended, or the rules and regulations
promulgated thereunder.



                                                /s/ Brian Hansen
                                                Brian Hansen
                                                Director-Investment Banking

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.11
<SEQUENCE>15
<FILENAME>ex99-11.txt
<TEXT>

                                                                   Exhibit 99.11


                       FSP MONTAGUE BUSINESS CENTER CORP.

                  SUPPLEMENT TO CONSENT SOLICITATION/PROSPECTUS

      This Supplement is to supplement the Consent Solicitation/Prospectus being
furnished to holders of preferred stock in four real estate investment trusts,
FSP Montague Business Center Corp., FSP Addison Circle Corp., FSP Royal Ridge
Corp. and FSP Collins Crossing Corp., each of which is referred to as a target
REIT. The Consent Solicitation/Prospectus and this Supplement thereto are being
furnished in connection with the solicitation of votes to approve an agreement
and plan of merger, dated August 13, 2004, by and among Franklin Street
Properties Corp., referred to as FSP Corp., four wholly-owned acquisition
subsidiaries of FSP Corp., referred to as the acquisition subsidiaries, and the
target REITs. The merger agreement provides for the acquisition of the target
REITs by FSP Corp. by merging each of the four target REITs with and into a
related acquisition subsidiary.

      As the effects of the mergers may differ for stockholders in each of the
target REITs, a supplement similar to this Supplement has been prepared for each
of the target REITs. We are providing you and every stockholder in each of the
other target REITs with all the Supplements prepared for the target REITs.

Risk Factors

      In evaluating the mergers, you should carefully consider the following
factors, which are described in detail in the section of the Consent
Solicitation/Prospectus entitled "Risk Factors," in addition to other matters
set forth in the Consent Solicitation/Prospectus.

Risks Relating to the Mergers

      o     The nature of the target REIT stockholders' investment in their
            respective target REITs will change upon consummation of the
            mergers.

      o     The mergers may affect the level of dividends paid to target REIT
            stockholders.

      o     Target REIT stockholders will be foregoing the potential
            appreciation in the real property owned by their respective target
            REIT.

      o     The future price of FSP common stock may be lower than the price per
            share negotiated for purposes of the merger consideration.

      o     The mergers will require the target REIT stockholders to forgo
            alternatives to the mergers.

      o     Target REIT stockholders will experience a loss of relative voting
            power.

      o     The target REIT stockholders will experience greater risks relating
            to diversification of portfolios following the mergers.

<PAGE>

      o     The officers and directors of the target REITs have conflicts of
            interest that may have influenced them to support or adopt the
            merger agreement.

      o     The combined company may be liable for contingent or undisclosed
            liabilities of the target REITs.

      o     The shares of FSP common stock received by the target REIT
            stockholders are not tradable on a national stock market or other
            exchange.

      o     The target REIT stockholders may experience dilution of their
            respective holdings in FSP Corp.

      o     A majority vote of the target REIT stockholders of a target REIT
            will bind all the target REIT stockholders of that target REIT.

      o     Following consummation of the mergers, the combined company may no
            longer qualify as a REIT.

Real Estate and Business Risks of FSP Corp.

      o     If FSP Corp. is not able to collect sufficient rents from each of
            its owned real properties, FSP Corp. may suffer significant
            operating losses or a reduction in cash available for future
            dividends.

      o     FSP Corp. faces risks in continuing to attract investors for
            sponsored REITs.

      o     If FSP Corp. is unable to fully syndicate a sponsored REIT, it may
            be required to keep a balance outstanding on its line of credit or
            use its cash balance to repay the line of credit, which may reduce
            cash available for distribution to FSP stockholders.

      o     FSP Corp. may not be able to find properties that meet its criteria
            for purchase.

      o     FSP Corp. is dependent on key personnel.

      o     FSP Corp.'s level of dividends may fluctuate.

      o     The real properties held by FSP Corp. may significantly decrease in
            value.

      o     New acquisitions may fail to perform as expected.

      o     FSP Corp. faces risks in owning and operating real property.

      o     FSP Corp. faces risks from tenant defaults or bankruptcies.

      o     FSP Corp. may encounter significant delays in reletting vacant
            space, resulting in losses of income.

      o     FSP Corp. faces risks from geographic concentration.


                                      -2-
<PAGE>

      o     FSP Corp. competes with national, regional and local real estate
            operators and developers, which could adversely affect its cash
            flow.

      o     There is limited potential for an increase in leased space gains in
            FSP Corp.'s properties.

      o     FSP Corp. is subject to possible liability relating to environmental
            matters, and FSP Corp. cannot assure you that it has identified all
            possible liabilities.

      o     FSP Corp. is subject to compliance with the Americans With
            Disabilities Act and fire and safety regulations which could require
            FSP Corp. to make significant capital expenditures.

      o     There are significant conditions to FSP Corp.'s obligation to redeem
            shares of its common stock and any such redemption will result in
            the stockholders tendering shares receiving less than their fair
            market value.

      o     FSP Corp. may lose capital investment or anticipated profits if an
            uninsured event occurs.

      o     Contingent or unknown liabilities acquired in mergers or similar
            transactions could require FSP Corp. to make substantial payments.

      o     FSP Corp. would incur adverse tax consequences if FSP Corp. failed
            to qualify as a REIT.

      o     Provisions in FSP Corp.'s organizational documents may prevent
            changes in control.

      o     The trading price of FSP common stock following listing on the
            American Stock Exchange or other national security exchange is
            uncertain. The FSP common stock could trade at a lower price than
            anticipated.

Effects of the Mergers

      Pursuant to the merger agreement, FSP Montague Business Center Corp., or
Montague, will merge with and into a wholly-owned subsidiary of FSP Corp. called
Montague Acquisition Corp. and created for the sole purpose of the merger, with
the acquisition subsidiary as the surviving corporation. The stockholders of
Montague will be issued shares of FSP common stock which will be registered
under the Securities Act of 1933, as amended, on a registration statement on
Form S-4 to which this Supplement is an exhibit. As a result of the mergers,
Montague preferred stockholders will exchange their interests in Montague, a
real estate investment trust organized as a Delaware corporation, for interests
in FSP Corp., a real estate investment trust organized as a Maryland
corporation.

      There are significant differences between Montague and FSP Corp.,
including the following:

      o     FSP Corp.'s real estate portfolio will be substantially larger and
            more diverse geographically, by property type and by tenant
            business;


                                      -3-
<PAGE>

      o     FSP Corp.'s business will generate revenues from real estate
            investment banking/brokerage and property management activities and
            from a larger and more diversified real estate portfolio;

      o     The nature of each Montague preferred stockholder's investment will
            change from an interest in a corporation owning a specified property
            for a finite period in which the Montague preferred stockholder will
            receive a distribution upon liquidation based upon the net proceeds
            from the sale of the entity's assets, to an investment in an ongoing
            fully-integrated real estate company, which has a portfolio of
            properties that may be changed from time to time and conducts real
            estate investment banking operations, in which the equity owners are
            expected to recover the investment from the sale of their FSP common
            stock, which is currently illiquid, and not from liquidating
            distributions; and

      o     FSP Corp. will have substantial flexibility to raise equity capital,
            meaning that investors in FSP Corp. may be subject to dilution.

A comparison of the rights of stockholders of the target REITs and FSP Corp. may
be found in the section of the Consent Solicitation/Prospectus entitled
"Comparison of Stockholder Rights." In addition, selected pro forma consolidated
financial data may be found in the section of the Consent
Solicitation/Prospectus entitled "Selected Pro Forma Consolidated Data" and
selected comparative per share data may be found in the section of the Consent
Solicitation/Prospectus entitled "Comparative Per Share Data."

Tax Consequences of the Mergers

      The mergers are intended to qualify as reorganizations within the meaning
of Section 368(a) of the Internal Revenue Code of 1986, as amended. If the
mergers qualify as reorganizations, there will be no United States federal
income tax consequences to Montague preferred stockholders as a result of the
mergers. The material United States federal income tax considerations related to
the mergers are described in detail in the section of the Consent
Solicitation/Prospectus entitled "Material United States Federal Income Tax
Considerations."

Fairness of the Mergers

      The Board of Directors of Montague believes that the terms of the merger
agreement, when considered as a whole, are fair to the Montague preferred
stockholders and the merger consideration offered in exchange for the preferred
stock of Montague constitutes fair consideration for the interests of the
Montague preferred stockholders. The following provides a summary of the factors
upon which the Montague board based its conclusions as to the fairness of the
mergers and the merger consideration to the Montague preferred stockholders.
Such factors are described in detail in the section of the Consent
Solicitation/Prospectus entitled "Fairness of the Mergers." The Montague board
did not find it practicable to, and did not attempt to, quantify or otherwise
assign relative weight to these factors in reaching their respective
determination.


                                      -4-
<PAGE>

      o     The Montague board compared the potential benefits and detriments of
            the mergers with the potential benefits and detriments of several
            alternatives to the mergers, including continuation of Montague,
            liquidation of Montague and support of secondary markets for the
            Montague stock. Based on these comparisons, the Montague board
            believes the mergers are more attractive than other alternatives.

      o     The special committee of the Montague board, consisting of Messrs.
            R. Scott MacPhee and William W. Gribbell, each a member of the
            Montague board and an executive vice president of FSP Corp., engaged
            A.G. Edwards & Sons, Inc. to deliver a fairness opinion to the
            Montague board. On August 11, 2004, A.G. Edwards delivered a written
            opinion to the Montague board to the effect that the merger
            consideration was fair, from a financial point of view, to the
            Montague preferred stockholders. The fairness opinion is attached to
            the Consent Solicitation/Prospectus as Appendix C.

      o     The Montague board determined after consultation with A.G. Edwards,
            the financial advisor to Montague and its board, that the value of
            the FSP common stock to be distributed as merger consideration to
            the Montague preferred stockholders represented greater value than,
            or a premium above, the sum of the value of the real estate (as
            determined by an appraisal) and cash held by Montague.

      o     The Montague board determined after consultation with A.G. Edwards
            that the value of the FSP common stock to be distributed as merger
            consideration to the Montague preferred stockholders was greater
            than the value that was likely to be realized upon the continuation
            of Montague.

      o     Each target board obtained independent third-party appraisals of the
            real property owned by it, and the Montague board considered these
            appraisals in negotiating the merger consideration.

      o     The Montague board considered historical financial information
            concerning the real estate properties owned by FSP Corp. and the
            target REITs and the amount of cash held by FSP Corp. and each of
            the target REITs.

      o     Montague will have the right to declare dividends consistent with
            past practice in respect of the quarters or partial quarters
            preceding the effective date of the mergers. The combined company
            will have the obligation to pay any such dividends that have been
            declared but not paid as of the effective date.

      o     Certain merger expenses are considered individual expenses to be
            paid by the party incurring the expenses. The costs of A.G.
            Edwards's engagement and the fees of the target REITs' outside
            counsel and accountants will be apportioned among the target REITs
            based on the relative merger consideration received by each target
            REIT's stockholders, and each appraisal will be paid by the target
            REIT owning the property that is the subject of the appraisal. All
            other expenses, including consulting, legal, accounting and
            administrative, will be paid by FSP Corp.

      o     The members of the target boards have conflicts of interest in
            connection with the mergers. Each target board established a special
            committee consisting of Messrs. MacPhee and Gribbell, the only
            members of the target boards who are not also members of the FSP


                                      -5-
<PAGE>

            board. Messrs. MacPhee and Gribbell serve as executive vice
            presidents of FSP Corp. The special committees engaged A.G. Edwards
            to advise them in evaluating and negotiating the terms of the
            mergers, including the merger consideration, and to deliver a
            fairness opinion to each target board. No fees or other compensation
            will be payable to the members of the target boards (or the special
            committees) or to FSP Corp. or its affiliates in connection with the
            mergers.

Determination and Allocation of Merger Consideration

      The merger consideration was determined through arms-length negotiations
between the special committees of the target boards and FSP Corp. Each special
committee relied on advice from its financial advisor, A.G. Edwards, in its
negotiations with FSP Corp. Each special committee also considered the assets
and liabilities of its target REIT, the multiples of cash available for
distribution commonly used in valuing REITs and the limited liquidity of FSP
common stock. Each special committee was also made aware that FSP Corp. intends
to file an application to list the FSP common stock on the American Stock
Exchange. There can be no assurance that FSP Corp. will file such application,
or, in the event it does, that the American Stock Exchange will approve the
application or that a meaningful trading market will develop for the FSP common
stock. In concluding that the merger consideration is fair, the Montague board
relied in part on the recommendation of its special committee, the fairness
opinion delivered by A.G. Edwards for Montague and the appraisal it received for
the property held by Montague.

      In allocating the approximately $192,841,463 of merger consideration among
the target REITs, FSP Corp.'s management considered the appraised values of each
target REIT, the cash flow projected for each target REIT, the cash reserves
held by each target REIT, and the current market conditions for real estate
acquisitions in the various locations of the target REITs. The special
committees, management of FSP Corp., and A.G. Edwards held a telephonic meeting
on July 29, 2004 to discuss the allocation of the merger consideration,
including the allocation of the premiums to be paid by FSP Corp. for each target
REIT. During that call, after reaffirming with all the parties that the stock
price of $17.70 per share of FSP common stock was the negotiated price per share
to be paid as merger consideration, FSP Corp. stated that it was willing to make
an offer to each of the target REITs based, in part, on FSP Corp.'s specific
knowledge of the target REITs' properties which it had gained from the operation
of such properties by FSP Property Management, a wholly owned subsidiary of the
FSP Corp., prior to and following the syndication of the target REITs. FSP Corp.
then suggested a separate value for each target REIT based on its knowledge of
the real properties held by each target REIT, including among other things, the
tenants, the operating costs, current market conditions, FSP Corp.'s view of
future market rents, the likelihood of lease renewals, the costs of turnover,
and FSP Corp.'s experience with acquisitions for similar properties in the same
or similar markets. The negotiations between the parties resulted in agreement
on merger consideration for Addison Circle, Collins Crossing and Royal Ridge
that produced a premium, based on a value of $17.70 per share of FSP common
stock, to the sum of the appraised value of real estate and adjusted cash
balances that ranged from 17.9% to 20.0%. With respect to Montague, FSP Corp.
noted that Montague's property is leased to a single tenant through December 31,
2006 at a rate that is currently significantly above market. FSP Corp. further
noted that the appraised value of Montague's real estate was $20,000,000.
Montague's special committee noted that Montague's stockholders were receiving
significant current cash yields as a result of the above-mentioned lease and
that, in the absence of a significant premium to appraised value, those


                                      -6-
<PAGE>

stockholders might not be inclined to approve a merger. These negotiations
resulted in merger consideration for Montague that produced a premium, based on
the value of $17.70 per share of FSP common stock, of 51.6%.

         As a result of these negotiations, the merger agreement provides for
the Montague preferred stockholders to receive merger consideration valued at
$33,400,000. A summary of certain information considered in the determination of
the value of Montague by the Montague special committee and board for purposes
of the merger consideration follows:

- --------------------------------------------------------------------------------
Appraised value of real estate held by Montague                      $20,000,000
- --------------------------------------------------------------------------------
Dollar amount of any mortgages or liabilities to which appraised     None
real estate held by Montague is subject
- --------------------------------------------------------------------------------
Cash held by Montague as of June 30, 2004                            $3,611,924
- --------------------------------------------------------------------------------
Other assets held by Montague                                        None
- --------------------------------------------------------------------------------
Other liabilities of Montague                                        None
- --------------------------------------------------------------------------------
Value assigned to Montague                                           $33,400,000
- --------------------------------------------------------------------------------
Value assigned to Montague per share of Montague, of which           $100,000
there are 334 outstanding
- --------------------------------------------------------------------------------
Shares of stock in FSP Corp. to be issued as merger consideration    1,887,007
to Montague preferred stockholders
- --------------------------------------------------------------------------------
Percentage of FSP Corp., post-mergers, which the shares of           3.12%
stock in FSP Corp. issued as merger consideration represent
- --------------------------------------------------------------------------------
Value assigned to the holdings of FSP Corp. in Montague              None
- --------------------------------------------------------------------------------


                                      -7-
<PAGE>

Compensation Paid By Montague to FSP Corp. and its Affiliates

- --------------------------------------------------------------------------------
Compensation paid and cash distributions made from January 1, 2004   $23,652
to June 30, 2004
- --------------------------------------------------------------------------------
Compensation paid and cash distributions made from January 1, 2003   $45,000
to December 31, 2003
- --------------------------------------------------------------------------------
Compensation paid and cash distributions made from January 1, 2002   $5,023,680
to December 31, 2002
- --------------------------------------------------------------------------------
Compensation paid and cash distributions made from January 1, 2001   N/A*
to December 31, 2001
- --------------------------------------------------------------------------------
*N/A indicates a time period prior to the syndication of Montague.

         The compensation, including fees, paid to FSP Corp. and its affiliates
consists primarily of payments made in connection with the original syndication
of interests in Montague, and thereafter of asset management fees. If the
mergers had been reflected prior to such period, Montague would have been a
wholly-owned subsidiary of FSP Corp. and no compensation would have been paid.
The executive officers of FSP Corp. receive compensation from FSP Corp. as set
forth in the section of the Consent Solicitation/Prospectus entitled "Management
- - Management Compensation."

Cash Distributions Made to Montague Preferred Stockholders

- --------------------------------------------------------------------------------
Cash distributions made from January 1, 2004 to June 30, 2004        $1,939,705
- --------------------------------------------------------------------------------
Cash distributions made from January 1, 2003 to December 31, 2003    $3,713,746
- --------------------------------------------------------------------------------
Cash distributions made from January 1, 2002 to December 31, 2002    $287,490
- --------------------------------------------------------------------------------
Cash distributions made from January 1, 2001 to December 31, 2001    N/A*
- --------------------------------------------------------------------------------
Cash distributions made from January 1, 2000 to December 31, 2000    N/A*
- --------------------------------------------------------------------------------
Cash distributions made from January 1, 1999 to December 31, 1999    N/A*
- --------------------------------------------------------------------------------
*N/A indicates a time period prior to the syndication of Montague.

         You should note that, for the period beginning July 1, 2003 and ending
June 30, 2004 quarterly, non-special cash distributions for each share of
Montague preferred stock totaled $11,487.50. For that same period, FSP Corp.
paid quarterly, non-special dividends totaling $1.24 per share of FSP common
stock. Each share of Montague preferred stock will receive 5,649.72 shares of
FSP common stock upon consummation of the merger. Thus, on a pro forma basis,


                                      -8-
<PAGE>

you would have received quarterly, non-special dividends totaling $7,005.65 for
the same period if you had held the number of shares of FSP common stock which
you will receive in exchange for one share of Montague preferred stock, or
approximately 61% of the aggregate amount of quarterly, non-special cash
distributions you did receive as a Montague stockholder.

         Selected financial information concerning Montague may be found in the
section of the Consent Solicitation/Prospectus entitled "Selected Financial
Information of FSP Montague Business Center Corp." Selected pro forma
consolidated financial data may be found in the section of the Consent
Solicitation/Prospectus entitled "Selected Pro Forma Consolidated Data." Such
information should be read in conjunction with the financial statements of FSP
Corp. and the target REITs and related notes thereto included elsewhere in the
Consent Solicitation/ Prospectus or incorporated therein by reference.


                                      -9-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.12
<SEQUENCE>16
<FILENAME>ex99-12.txt
<TEXT>

                                                                   Exhibit 99.12


                            FSP ADDISON CIRCLE CORP.

                  SUPPLEMENT TO CONSENT SOLICITATION/PROSPECTUS

      This Supplement is to supplement the Consent Solicitation/Prospectus being
furnished to holders of preferred stock in four real estate investment trusts,
FSP Montague Business Center Corp., FSP Addison Circle Corp., FSP Royal Ridge
Corp. and FSP Collins Crossing Corp., each of which is referred to as a target
REIT. The Consent Solicitation/Prospectus and this Supplement thereto are being
furnished in connection with the solicitation of votes to approve an agreement
and plan of merger, dated August 13, 2004, by and among Franklin Street
Properties Corp., referred to as FSP Corp., four wholly-owned acquisition
subsidiaries of FSP Corp., referred to as the acquisition subsidiaries, and the
target REITs. The merger agreement provides for the acquisition of the target
REITs by FSP Corp. by merging each of the four target REITs with and into a
related acquisition subsidiary.

      As the effects of the mergers may differ for stockholders in each of the
target REITs, a supplement similar to this Supplement has been prepared for each
of the target REITs. We are providing you and every stockholder in each of the
other target REITs with all the Supplements prepared for the target REITs.

Risk Factors

      In evaluating the mergers, you should carefully consider the following
factors, which are described in detail in the section of the Consent
Solicitation/Prospectus entitled "Risk Factors," in addition to other matters
set forth in the Consent Solicitation/Prospectus.

Risks Relating to the Mergers

      o     The nature of the target REIT stockholders' investment in their
            respective target REITs will change upon consummation of the
            mergers.

      o     The mergers may affect the level of dividends paid to target REIT
            stockholders.

      o     Target REIT stockholders will be foregoing the potential
            appreciation in the real property owned by their respective target
            REIT.

      o     The future price of FSP common stock may be lower than the price per
            share negotiated for purposes of the merger consideration.

      o     The mergers will require the target REIT stockholders to forgo
            alternatives to the mergers.

      o     Target REIT stockholders will experience a loss of relative voting
            power.

      o     The target REIT stockholders will experience greater risks relating
            to diversification of portfolios following the mergers.

<PAGE>

      o     The officers and directors of the target REITs have conflicts of
            interest that may have influenced them to support or adopt the
            merger agreement.

      o     The combined company may be liable for contingent or undisclosed
            liabilities of the target REITs.

      o     The shares of FSP common stock received by the target REIT
            stockholders are not tradable on a national stock market or other
            exchange.

      o     The target REIT stockholders may experience dilution of their
            respective holdings in FSP Corp.

      o     A majority vote of the target REIT stockholders of a target REIT
            will bind all the target REIT stockholders of that target REIT.

      o     Following consummation of the mergers, the combined company may no
            longer qualify as a REIT

Real Estate and Business Risks of FSP Corp.

      o     If FSP Corp. is not able to collect sufficient rents from each of
            its owned real properties, FSP Corp. may suffer significant
            operating losses or a reduction in cash available for future
            dividends.

      o     FSP Corp. faces risks in continuing to attract investors for
            sponsored REITs.

      o     If FSP Corp. is unable to fully syndicate a sponsored REIT, it may
            be required to keep a balance outstanding on its line of credit or
            use its cash balance to repay the line of credit, which may reduce
            cash available for distribution to FSP stockholders.

      o     FSP Corp. may not be able to find properties that meet its criteria
            for purchase.

      o     FSP Corp. is dependent on key personnel.

      o     FSP Corp.'s level of dividends may fluctuate.

      o     The real properties held by FSP Corp. may significantly decrease in
            value.

      o     New acquisitions may fail to perform as expected.

      o     FSP Corp. faces risks in owning and operating real property.

      o     FSP Corp. faces risks from tenant defaults or bankruptcies.

      o     FSP Corp. may encounter significant delays in reletting vacant
            space, resulting in losses of income.

      o     FSP Corp. faces risks from geographic concentration.


                                       -2-
<PAGE>

      o     FSP Corp. competes with national, regional and local real estate
            operators and developers, which could adversely affect its cash
            flow.

      o     There is limited potential for an increase in leased space gains in
            FSP Corp.'s properties.

      o     FSP Corp. is subject to possible liability relating to environmental
            matters, and FSP Corp. cannot assure you that it has identified all
            possible liabilities.

      o     FSP Corp. is subject to compliance with the Americans With
            Disabilities Act and fire and safety regulations which could require
            FSP Corp. to make significant capital expenditures.

      o     There are significant conditions to FSP Corp.'s obligation to redeem
            shares of its common stock and any such redemption will result in
            the stockholders tendering shares receiving less than their fair
            market value.

      o     FSP Corp. may lose capital investment or anticipated profits if an
            uninsured event occurs.

      o     Contingent or unknown liabilities acquired in mergers or similar
            transactions could require FSP Corp. to make substantial payments.

      o     FSP Corp. would incur adverse tax consequences if FSP Corp. failed
            to qualify as a REIT.

      o     Provisions in FSP Corp.'s organizational documents may prevent
            changes in control.

      o     The trading price of FSP common stock following listing on the
            American Stock Exchange or other national security exchange is
            uncertain. The FSP common stock could trade at a lower price than
            anticipated.

Effects of the Mergers

      Pursuant to the merger agreement, FSP Addison Circle Corp., or Addison
Circle, will merge with and into a wholly-owned subsidiary of FSP Corp. called
Addison Circle Acquisition Corp. and created for the sole purpose of the merger,
with the acquisition subsidiary as the surviving corporation. The stockholders
of Addison Circle will be issued shares of FSP common stock which will be
registered under the Securities Act of 1933, as amended, on a registration
statement on Form S-4 to which this Supplement is an exhibit. As a result of the
mergers, Addison Circle preferred stockholders will exchange their interests in
Addison Circle, a real estate investment trust organized as a Delaware
corporation, for interests in FSP Corp., a real estate investment trust
organized as a Maryland corporation.

      There are significant differences between Addison Circle and FSP Corp.,
including the following:

      o     FSP Corp.'s real estate portfolio will be substantially larger and
            more diverse geographically, by property type and by tenant
            business;


                                       -3-
<PAGE>

      o     FSP Corp.'s business will generate revenues from real estate
            investment banking/brokerage and property management activities and
            from a larger and more diversified real estate portfolio;

      o     The nature of each Addison Circle preferred stockholder's investment
            will change from an interest in a corporation owning a specified
            property for a finite period in which the Addison Circle preferred
            stockholder will receive a distribution upon liquidation based upon
            the net proceeds from the sale of the entity's assets, to an
            investment in an ongoing fully-integrated real estate company, which
            has a portfolio of properties that may be changed from time to time
            and conducts real estate investment banking operations, in which the
            equity owners are expected to recover the investment from the sale
            of their FSP common stock, which is currently illiquid, and not from
            liquidating distributions; and

      o     FSP Corp. will have substantial flexibility to raise equity capital,
            meaning that investors in FSP Corp. may be subject to dilution.

A comparison of the rights of stockholders of the target REITs and FSP Corp. may
be found in the section of the Consent Solicitation/Prospectus entitled
"Comparison of Stockholder Rights." In addition, selected pro forma consolidated
financial data may be found in the section of the Consent
Solicitation/Prospectus entitled "Selected Pro Forma Consolidated Data" and
selected comparative per share data may be found in the section of the Consent
Solicitation/Prospectus entitled "Comparative Per Share Data."

Tax Consequences of the Mergers

      The mergers are intended to qualify as reorganizations within the meaning
of Section 368(a) of the Internal Revenue Code of 1986, as amended. If the
mergers qualify as reorganizations, there will be no United States federal
income tax consequences to Addison Circle preferred stockholders as a result of
the mergers. The material United States federal income tax considerations
related to the mergers are described in detail in the section of the Consent
Solicitation/Prospectus entitled "Material United States Federal Income Tax
Considerations."

Fairness of the Mergers

      The Board of Directors of Addison Circle believes that the terms of the
merger agreement, when considered as a whole, are fair to the Addison Circle
preferred stockholders and the merger consideration offered in exchange for the
preferred stock of Addison Circle constitutes fair consideration for the
interests of the Addison Circle preferred stockholders. The following provides a
summary of the factors upon which the Addison Circle board based its conclusions
as to the fairness of the mergers and the merger consideration to the Addison
Circle preferred stockholders. Such factors are described in detail in the
section of the Consent Solicitation/Prospectus entitled "Fairness of the
Mergers." The Addison Circle board did not find it practicable to, and did not
attempt to, quantify or otherwise assign relative weight to these factors in
reaching their respective determination.


                                       -4-
<PAGE>

      o     The Addison Circle board compared the potential benefits and
            detriments of the mergers with the potential benefits and detriments
            of several alternatives to the mergers, including continuation of
            Addison Circle, liquidation of Addison Circle and support of
            secondary markets for the Addison Circle stock. Based on these
            comparisons, the Addison Circle board believes the mergers are more
            attractive than other alternatives.

      o     The special committee of the Addison Circle board, consisting of
            Messrs. R. Scott MacPhee and William W. Gribbell, each a member of
            the Addison Circle board and an executive vice president of FSP
            Corp., engaged A.G. Edwards & Sons, Inc. to deliver a fairness
            opinion to the Addison Circle board. On August 11, 2004, A.G.
            Edwards delivered a written opinion to the Addison Circle board to
            the effect that the merger consideration was fair, from a financial
            point of view, to the Addison Circle preferred stockholders. The
            fairness opinion is attached to the Consent Solicitation/Prospectus
            as Appendix C.

      o     The Addison Circle board determined after consultation with A.G.
            Edwards, the financial advisor to Addison Circle and its board, that
            the value of the FSP common stock to be distributed as merger
            consideration to the Addison Circle preferred stockholders
            represented greater value than, or a premium above, the sum of the
            value of the real estate (as determined by an appraisal) and cash
            held by Addison Circle.

      o     The Addison Circle board determined after consultation with A.G.
            Edwards that the value of the FSP common stock to be distributed as
            merger consideration to the Addison Circle preferred stockholders
            was greater than the value that was likely to be realized upon the
            continuation of Addison Circle.

      o     Each target board obtained independent third-party appraisals of the
            real property owned by it, and the Addison Circle board considered
            these appraisals in negotiating the merger consideration.

      o     The Addison Circle board considered historical financial information
            concerning the real estate properties owned by FSP Corp. and the
            target REITs and the amount of cash held by FSP Corp. and each of
            the target REITs.

      o     Addison Circle will have the right to declare dividends consistent
            with past practice in respect of the quarters or partial quarters
            preceding the effective date of the mergers. The combined company
            will have the obligation to pay any such dividends that have been
            declared but not paid as of the effective date.

      o     Certain merger expenses are considered individual expenses to be
            paid by the party incurring the expenses. The costs of A.G.
            Edwards's engagement and the fees of the target REITs' outside
            counsel and accountants will be apportioned among the target REITs
            based on the relative merger consideration received by each target
            REIT's stockholders, and each appraisal will be paid by the target
            REIT owning the property that is the subject of the appraisal. All
            other expenses, including consulting, legal, accounting and
            administrative, will be paid by FSP Corp.


                                       -5-
<PAGE>

      o     The members of the target boards have conflicts of interest in
            connection with the mergers. Each target board established a special
            committee consisting of Messrs. MacPhee and Gribbell, the only
            members of the target boards who are not also members of the FSP
            board. Messrs. MacPhee and Gribbell serve as executive vice
            presidents of FSP Corp. The special committees engaged A.G. Edwards
            to advise them in evaluating and negotiating the terms of the
            mergers, including the merger consideration, and to deliver a
            fairness opinion to each target board. No fees or other compensation
            will be payable to the members of the target boards (or the special
            committees) or to FSP Corp. or its affiliates in connection with the
            mergers.

Determination and Allocation of Merger Consideration

      The merger consideration was determined through arms-length negotiations
between the special committees of the target boards and FSP Corp. Each special
committee relied on advice from its financial advisor, A.G. Edwards, in its
negotiations with FSP Corp. Each special committee also considered the assets
and liabilities of its target REIT, the multiples of cash available for
distribution commonly used in valuing REITs and the limited liquidity of FSP
common stock. Each special committee was also made aware that FSP Corp. intends
to file an application to list the FSP common stock on the American Stock
Exchange. There can be no assurance that FSP Corp. will file such application,
or, in the event it does, that the American Stock Exchange will approve the
application or that a meaningful trading market will develop for the FSP common
stock. In concluding that the merger consideration is fair, the Montague board
relied in part on the recommendation of its special committee, the fairness
opinion delivered by A.G. Edwards for Montague and the appraisal it received for
the property held by Montague.

      In allocating the approximately $192,841,463 of merger consideration among
the target REITs, FSP Corp.'s management considered the appraised values of each
target REIT, the cash flow projected for each target REIT, the cash reserves
held by each target REIT, and the current market conditions for real estate
acquisitions in the various locations of the target REITs. The special
committees, management of FSP Corp., and A.G. Edwards held a telephonic meeting
on July 29, 2004 to discuss the allocation of the merger consideration,
including the allocation of the premiums to be paid by FSP Corp. for each target
REIT. During that call, after reaffirming with all the parties that the stock
price of $17.70 per share of FSP common stock was the negotiated price per share
to be paid as merger consideration, FSP Corp. stated that it was willing to make
an offer to each of the target REITs based, in part, on FSP Corp.'s specific
knowledge of the target REITs' properties which it had gained from the operation
of such properties by FSP Property Management, a wholly owned subsidiary of the
FSP Corp., prior to and following the syndication of the target REITs. FSP Corp.
then suggested a separate value for each target REIT based on its knowledge of
the real properties held by each target REIT, including among other things, the
tenants, the operating costs, current market conditions, FSP Corp.'s view of
future market rents, the likelihood of lease renewals, the costs of turnover,
and FSP Corp.'s experience with acquisitions for similar properties in the same
or similar markets. The negotiations between the parties resulted in agreement
on merger consideration for Addison Circle, Collins Crossing and Royal Ridge
that produced a premium, based on a value of $17.70 per share of FSP common
stock, to the sum of the appraised value of real estate and adjusted cash
balances that ranged from 17.9% to 20.0%. With respect to Montague, FSP Corp.
noted that Montague's property is leased to a single tenant through December 31,
2006 at a rate that is currently significantly above market. FSP Corp. further


                                       -6-
<PAGE>

noted that the appraised value of Montague's real estate was $20,000,000.
Montague's special committee noted that Montague's stockholders were receiving
significant current cash yields as a result of the above-mentioned lease and
that, in the absence of a significant premium to appraised value, those
stockholders might not be inclined to approve a merger. These negotiations
resulted in merger consideration for Montague that produced a premium, based on
the value of $17.70 per share of FSP common stock, of 51.6%.

      As a result of these negotiations, the merger agreement provides for the
Addison Circle preferred stockholders to receive merger consideration valued at
$66,965,414. A summary of certain information considered in the determination of
the value of Addison Circle by the Addison Circle special committee and board
for purposes of the merger consideration follows:

- --------------------------------------------------------------------------------
Appraised value of real estate held by Addison Circle                $54,500,000
- --------------------------------------------------------------------------------
Dollar amount of any mortgages or liabilities to which                None
appraised real estate held by Addison Circle is subject
- --------------------------------------------------------------------------------
Cash held by Addison Circle as of June 30, 2004                      $5,611,989
- --------------------------------------------------------------------------------
Other assets held by Addison Circle                                  None
- --------------------------------------------------------------------------------
Other liabilities of Addison Circle                                  None
- --------------------------------------------------------------------------------
Value assigned to Addison Circle                                     $66,965,414
- --------------------------------------------------------------------------------
Value assigned to Addison Circle per share of Addison                $105,292
Circle, of which there are 636 outstanding
- --------------------------------------------------------------------------------
Shares of stock in FSP Corp. to be issued as merger                  3,783,354
consideration to Addison Circle preferred stockholders
- --------------------------------------------------------------------------------
Percentage of FSP Corp., post-mergers, which the shares              6.25%
of stock in FSP Corp. issued as merger consideration represent
- --------------------------------------------------------------------------------
Value assigned to the holdings of FSP Corp. in Addison Circle        None
- --------------------------------------------------------------------------------

Compensation Paid By Addison Circle to FSP Corp. and its Affiliates

- --------------------------------------------------------------------------------
Compensation paid and cash distributions made from                   $40,207
January 1, 2004 to June 30, 2004
- --------------------------------------------------------------------------------
Compensation paid and cash distributions made from                   $79,000
January 1, 2003 to December 31, 2003
- --------------------------------------------------------------------------------
Compensation paid and cash distributions made from                   $9,837,870
January 1, 2002 to December 31, 2002
- --------------------------------------------------------------------------------
Compensation paid and cash distributions made from                   N/A*
January 1, 2001 to December 31, 2001
- --------------------------------------------------------------------------------
*N/A indicates a time period prior to the syndication of Addison Circle.


                                      -7-
<PAGE>

      The compensation, including fees, paid to FSP Corp. and its affiliates
consists primarily of payments made in connection with the original syndication
of interests in Addison Circle, and thereafter of asset management fees. If the
mergers had been reflected prior to such period, Addison Circle would have been
a wholly-owned subsidiary of FSP Corp. and no compensation would have been paid.
The executive officers of FSP Corp. receive compensation from FSP Corp. as set
forth in the section of the Consent Solicitation/Prospectus entitled "Management
- - Management Compensation."

Cash Distributions Made to Addison Circle Preferred Stockholders

- --------------------------------------------------------------------------------
Cash distributions made from January 1, 2004 to June 30, 2004        $2,552,904
- --------------------------------------------------------------------------------
Cash distributions made from January 1, 2003 to December 31, 2003    $4,628,947
- --------------------------------------------------------------------------------
Cash distributions made from January 1, 2002 to December 31, 2002    N/A*
- --------------------------------------------------------------------------------
Cash distributions made from January 1, 2001 to December 31, 2001    N/A*
- --------------------------------------------------------------------------------
Cash distributions made from January 1, 2000 to December 31, 2000    N/A*
- --------------------------------------------------------------------------------
Cash distributions made from January 1, 1999 to December 31, 1999    N/A*
- --------------------------------------------------------------------------------
*N/A indicates a time period prior to the syndication of Addison Circle.

         You should note that, for the period beginning July 1, 2003 and ending
June 30, 2004 quarterly, non-special cash distributions for each share of
Addison Circle preferred stock totaled $8,078. For that same period, FSP Corp.
paid quarterly, non-special dividends totaling $1.24 per share of FSP common
stock. Each share of Addison Circle preferred stock will receive 5,948.67 shares
of FSP common stock upon consummation of the merger. Thus, on a pro forma basis,
you would have received quarterly, non-special dividends totaling $7,376.35 for
the same period if you had held the number of shares of FSP common stock which
you will receive in exchange for one share of Addison Circle preferred stock, or
approximately 91% of the aggregate amount of quarterly, non-special cash
distributions you did receive as an Addison Circle stockholder

         Selected financial information concerning Addison Circle may be found
in the section of the Consent Solicitation/Prospectus entitled "Selected
Financial Information of FSP Addison Circle Corp." Selected pro forma
consolidated financial data may be found in the section of the Consent
Solicitation/Prospectus entitled "Selected Pro Forma Consolidated Data." Such
information should be read in conjunction with the financial statements of FSP
Corp. and the target REITs and related notes thereto included elsewhere in the
Consent Solicitation/ Prospectus or incorporated therein by reference.


                                      -8-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.13
<SEQUENCE>17
<FILENAME>ex99-13.txt
<TEXT>

                                                                   Exhibit 99.13


                              FSP ROYAL RIDGE CORP.

                  SUPPLEMENT TO CONSENT SOLICITATION/PROSPECTUS

      This Supplement is to supplement the Consent Solicitation/Prospectus being
furnished to holders of preferred stock in four real estate investment trusts,
FSP Montague Business Center Corp., FSP Addison Circle Corp., FSP Royal Ridge
Corp. and FSP Collins Crossing Corp., each of which is referred to as a target
REIT. The Consent Solicitation/Prospectus and this Supplement thereto are being
furnished in connection with the solicitation of votes to approve an agreement
and plan of merger, dated August 13, 2004, by and among Franklin Street
Properties Corp., referred to as FSP Corp., four wholly-owned acquisition
subsidiaries of FSP Corp., referred to as the acquisition subsidiaries, and the
target REITs. The merger agreement provides for the acquisition of the target
REITs by FSP Corp. by merging each of the four target REITs with and into a
related acquisition subsidiary.

      As the effects of the mergers may differ for stockholders in each of the
target REITs, a supplement similar to this Supplement has been prepared for each
of the target REITs. We are providing you and every stockholder in each of the
other target REITs with all the Supplements prepared for the target REITs.

Risk Factors

      In evaluating the mergers, you should carefully consider the following
factors, which are described in detail in the section of the Consent
Solicitation/Prospectus entitled "Risk Factors," in addition to other matters
set forth in the Consent Solicitation/Prospectus.

Risks Relating to the Mergers

      o     The nature of the target REIT stockholders' investment in their
            respective target REITs will change upon consummation of the
            mergers.

      o     The mergers may affect the level of dividends paid to target REIT
            stockholders.

      o     Target REIT stockholders will be foregoing the potential
            appreciation in the real property owned by their respective target
            REIT.

      o     The future price of FSP common stock may be lower than the price per
            share negotiated for purposes of the merger consideration.

      o     The mergers will require the target REIT stockholders to forgo
            alternatives to the mergers.

      o     Target REIT stockholders will experience a loss of relative voting
            power.

      o     The target REIT stockholders will experience greater risks relating
            to diversification of portfolios following the mergers.
<PAGE>

      o     The officers and directors of the target REITs have conflicts of
            interest that may have influenced them to support or adopt the
            merger agreement.

      o     The combined company may be liable for contingent or undisclosed
            liabilities of the target REITs.

      o     The shares of FSP common stock received by the target REIT
            stockholders are not tradable on a national stock market or other
            exchange.

      o     The target REIT stockholders may experience dilution of their
            respective holdings in FSP Corp.

      o     A majority vote of the target REIT stockholders of a target REIT
            will bind all the target REIT stockholders of that target REIT.

      o     Following consummation of the mergers, the combined company may no
            longer qualify as a REIT.

Real Estate and Business Risks of FSP Corp.

      o     If FSP Corp. is not able to collect sufficient rents from each of
            its owned real properties, FSP Corp. may suffer significant
            operating losses or a reduction in cash available for future
            dividends.

      o     FSP Corp. faces risks in continuing to attract investors for
            sponsored REITs.

      o     If FSP Corp. is unable to fully syndicate a sponsored REIT, it may
            be required to keep a balance outstanding on its line of credit or
            use its cash balance to repay the line of credit, which may reduce
            cash available for distribution to FSP stockholders.

      o     FSP Corp. may not be able to find properties that meet its criteria
            for purchase.

      o     FSP Corp. is dependent on key personnel.

      o     FSP Corp.'s level of dividends may fluctuate.

      o     The real properties held by FSP Corp. may significantly decrease in
            value.

      o     New acquisitions may fail to perform as expected.

      o     FSP Corp. faces risks in owning and operating real property.

      o     FSP Corp. faces risks from tenant defaults or bankruptcies.

      o     FSP Corp. may encounter significant delays in reletting vacant
            space, resulting in losses of income.

      o     FSP Corp. faces risks from geographic concentration.


                                       -2-
<PAGE>

      o     FSP Corp. competes with national, regional and local real estate
            operators and developers, which could adversely affect its cash
            flow.

      o     There is limited potential for an increase in leased space gains in
            FSP Corp.'s properties.

      o     FSP Corp. is subject to possible liability relating to environmental
            matters, and FSP Corp. cannot assure you that it has identified all
            possible liabilities.

      o     FSP Corp. is subject to compliance with the Americans With
            Disabilities Act and fire and safety regulations which could require
            FSP Corp. to make significant capital expenditures.

      o     There are significant conditions to FSP Corp.'s obligation to redeem
            shares of its common stock and any such redemption will result in
            the stockholders tendering shares receiving less than their fair
            market value.

      o     FSP Corp. may lose capital investment or anticipated profits if an
            uninsured event occurs.

      o     Contingent or unknown liabilities acquired in mergers or similar
            transactions could require FSP Corp. to make substantial payments.

      o     FSP Corp. would incur adverse tax consequences if FSP Corp. failed
            to qualify as a REIT.

      o     Provisions in FSP Corp.'s organizational documents may prevent
            changes in control.

      o     The trading price of FSP common stock following listing on the
            American Stock Exchange or other national security exchange is
            uncertain. The FSP common stock could trade at a lower price than
            anticipated.

Effects of the Mergers

      Pursuant to the merger agreement, FSP Royal Ridge Corp., or Royal Ridge,
will merge with and into a wholly-owned subsidiary of FSP Corp. called Royal
Ridge Acquisition Corp. and created for the sole purpose of the merger, with the
acquisition subsidiary as the surviving corporation. The stockholders of Royal
Ridge will be issued shares of FSP common stock which will be registered under
the Securities Act of 1933, as amended, on a registration statement on Form S-4
to which this Supplement is an exhibit. As a result of the mergers, Royal Ridge
preferred stockholders will exchange their interests in Royal Ridge, a real
estate investment trust organized as a Delaware corporation, for interests in
FSP Corp., a real estate investment trust organized as a Maryland corporation.

      There are significant differences between Royal Ridge and FSP Corp.,
including the following:

      o     FSP Corp.'s real estate portfolio will be substantially larger and
            more diverse geographically, by property type and by tenant
            business;


                                       -3-
<PAGE>

      o     FSP Corp.'s business will generate revenues from real estate
            investment banking/brokerage and property management activities and
            from a larger and more diversified real estate portfolio;

      o     The nature of each Royal Ridge preferred stockholder's investment
            will change from an interest in a corporation owning a specified
            property for a finite period in which the Royal Ridge preferred
            stockholder will receive a distribution upon liquidation based upon
            the net proceeds from the sale of the entity's assets, to an
            investment in an ongoing fully-integrated real estate company, which
            has a portfolio of properties that may be changed from time to time
            and conducts real estate investment banking operations, in which the
            equity owners are expected to recover the investment from the sale
            of their FSP common stock, which is currently illiquid, and not from
            liquidating distributions; and

      o     FSP Corp. will have substantial flexibility to raise equity capital,
            meaning that investors in FSP Corp. may be subject to dilution.

A comparison of the rights of stockholders of the target REITs and FSP Corp. may
be found in the section of the Consent Solicitation/Prospectus entitled
"Comparison of Stockholder Rights." In addition, selected pro forma consolidated
financial data may be found in the section of the Consent
Solicitation/Prospectus entitled "Selected Pro Forma Consolidated Data" and
selected comparative per share data may be found in the section of the Consent
Solicitation/Prospectus entitled "Comparative Per Share Data."

Tax Consequences of the Mergers

      The mergers are intended to qualify as reorganizations within the meaning
of Section 368(a) of the Internal Revenue Code of 1986, as amended. If the
mergers qualify as reorganizations, there will be no United States federal
income tax consequences to Royal Ridge preferred stockholders as a result of the
mergers. The material United States federal income tax considerations related to
the mergers are described in detail in the section of the Consent
Solicitation/Prospectus entitled "Material United States Federal Income Tax
Considerations."

Fairness of the Mergers

      The Board of Directors of Royal Ridge believes that the terms of the
merger agreement, when considered as a whole, are fair to the Royal Ridge
preferred stockholders and the merger consideration offered in exchange for the
preferred stock of Royal Ridge constitutes fair consideration for the interests
of the Royal Ridge preferred stockholders. The following provides a summary of
the factors upon which the Royal Ridge board based its conclusions as to the
fairness of the mergers and the merger consideration to the Royal Ridge
preferred stockholders. Such factors are described in detail in the section of
the Consent Solicitation/Prospectus entitled "Fairness of the Mergers." The
Royal Ridge board did not find it practicable to, and did not attempt to,
quantify or otherwise assign relative weight to these factors in reaching their
respective determination.

      o     The Royal Ridge board compared the potential benefits and detriments
            of the mergers with the potential benefits and detriments of several
            alternatives to the mergers, including continuation of Royal Ridge,


                                       -4-
<PAGE>

            liquidation of Royal Ridge and support of secondary markets for the
            Royal Ridge stock. Based on these comparisons, the Royal Ridge board
            believes the mergers are more attractive than other alternatives.

      o     The special committee of the Royal Ridge board, consisting of
            Messrs. R. Scott MacPhee and William W. Gribbell, each a member of
            the Royal Ridge board and an executive vice president of FSP Corp.,
            engaged A.G. Edwards & Sons, Inc. to deliver a fairness opinion to
            the Royal Ridge board. On August 11, 2004, A.G. Edwards delivered a
            written opinion to the Royal Ridge board to the effect that the
            merger consideration was fair, from a financial point of view, to
            the Royal Ridge preferred stockholders. The fairness opinion is
            attached to the Consent Solicitation/Prospectus as Appendix C.

      o     The Royal Ridge board determined after consultation with A.G.
            Edwards, the financial advisor to Royal Ridge and its board, that
            the value of the FSP common stock to be distributed as merger
            consideration to the Royal Ridge preferred stockholders represented
            greater value than, or a premium above, the sum of the value of the
            real estate (as determined by an appraisal) and cash held by Royal
            Ridge.

      o     The Royal Ridge board determined after consultation with A.G.
            Edwards that the value of the FSP common stock to be distributed as
            merger consideration to the Royal Ridge preferred stockholders was
            greater than the value that was likely to be realized upon the
            continuation of Royal Ridge.

      o     Each target board obtained independent third-party appraisals of the
            real property owned by it, and the Royal Ridge board considered
            these appraisals in negotiating the merger consideration.

      o     The Royal Ridge board considered historical financial information
            concerning the real estate properties owned by FSP Corp. and the
            target REITs and the amount of cash held by FSP Corp. and each of
            the target REITs.

      o     Royal Ridge will have the right to declare dividends consistent with
            past practice in respect of the quarters or partial quarters
            preceding the effective date of the mergers. The combined company
            will have the obligation to pay any such dividends that have been
            declared but not paid as of the effective date.

      o     Certain merger expenses are considered individual expenses to be
            paid by the party incurring the expenses. The costs of A.G.
            Edwards's engagement and the fees of the target REITs' outside
            counsel and accountants will be apportioned among the target REITs
            based on the relative merger consideration received by each target
            REIT's stockholders, and each appraisal will be paid by the target
            REIT owning the property that is the subject of the appraisal. All
            other expenses, including consulting, legal, accounting and
            administrative, will be paid by FSP Corp.

      o     The members of the target boards have conflicts of interest in
            connection with the mergers. Each target board established a special
            committee consisting of Messrs. MacPhee and Gribbell, the only
            members of the target boards who are not also members of the FSP


                                       -5-
<PAGE>

            board. Messrs. MacPhee and Gribbell serve as executive vice
            presidents of FSP Corp. The special committees engaged A.G. Edwards
            to advise them in evaluating and negotiating the terms of the
            mergers, including the merger consideration, and to deliver a
            fairness opinion to each target board. No fees or other compensation
            will be payable to the members of the target boards (or the special
            committees) or to FSP Corp. or its affiliates in connection with the
            mergers.

Determination and Allocation of Merger Consideration

      The merger consideration was determined through arms-length negotiations
between the special committees of the target boards and FSP Corp. Each special
committee relied on advice from its financial advisor, A.G. Edwards, in its
negotiations with FSP Corp. Each special committee also considered the assets
and liabilities of its target REIT, the multiples of cash available for
distribution commonly used in valuing REITs and the limited liquidity of FSP
common stock. Each special committee was also made aware that FSP Corp. intends
to file an application to list the FSP common stock on the American Stock
Exchange. There can be no assurance that FSP Corp. will file such application,
or, in the event it does, that the American Stock Exchange will approve the
application or that a meaningful trading market will develop for the FSP common
stock. In concluding that the merger consideration is fair, the Montague board
relied in part on the recommendation of its special committee, the fairness
opinion delivered by A.G. Edwards for Montague and the appraisal it received for
the property held by Montague.

      In allocating the approximately $192,841,463 of merger consideration among
the target REITs, FSP Corp.'s management considered the appraised values of each
target REIT, the cash flow projected for each target REIT, the cash reserves
held by each target REIT, and the current market conditions for real estate
acquisitions in the various locations of the target REITs. The special
committees, management of FSP Corp., and A.G. Edwards held a telephonic meeting
on July 29, 2004 to discuss the allocation of the merger consideration,
including the allocation of the premiums to be paid by FSP Corp. for each target
REIT. During that call, after reaffirming with all the parties that the stock
price of $17.70 per share of FSP common stock was the negotiated price per share
to be paid as merger consideration, FSP Corp. stated that it was willing to make
an offer to each of the target REITs based, in part, on FSP Corp.'s specific
knowledge of the target REITs' properties which it had gained from the operation
of such properties by FSP Property Management, a wholly owned subsidiary of the
FSP Corp., prior to and following the syndication of the target REITs. FSP Corp.
then suggested a separate value for each target REIT based on its knowledge of
the real properties held by each target REIT, including among other things, the
tenants, the operating costs, current market conditions, FSP Corp.'s view of
future market rents, the likelihood of lease renewals, the costs of turnover,
and FSP Corp.'s experience with acquisitions for similar properties in the same
or similar markets. The negotiations between the parties resulted in agreement
on merger consideration for Addison Circle, Collins Crossing and Royal Ridge
that produced a premium, based on a value of $17.70 per share of FSP common
stock, to the sum of the appraised value of real estate and adjusted cash
balances that ranged from 17.9% to 20.0%. With respect to Montague, FSP Corp.
noted that Montague's property is leased to a single tenant through December 31,
2006 at a rate that is currently significantly above market. FSP Corp. further
noted that the appraised value of Montague's real estate was $20,000,000.
Montague's special committee noted that Montague's stockholders were receiving
significant current cash yields as a result of the above-mentioned lease and
that, in the absence of a significant premium to appraised value, those


                                       -6-
<PAGE>

stockholders might not be inclined to approve a merger. These negotiations
resulted in merger consideration for Montague that produced a premium, based on
the value of $17.70 per share of FSP common stock, of 51.6%.

      As a result of these negotiations, the merger agreement provides for the
Royal Ridge preferred stockholders to receive merger consideration valued at
$31,888,293. A summary of certain information considered in the determination of
the value of Royal Ridge by the Royal Ridge special committee and board for
purposes of the merger consideration follows:


                                       -7-
<PAGE>

- --------------------------------------------------------------------------------
Appraised value of real estate held by Royal Ridge                   $26,075,000
- --------------------------------------------------------------------------------
Dollar amount of any mortgages or liabilities to                     None
which appraised real estate held by Royal Ridge is subject
- --------------------------------------------------------------------------------
Cash held by Royal Ridge as of June 30, 2004                         $2,871,845
- --------------------------------------------------------------------------------
Other assets held by Royal Ridge                                     None
- --------------------------------------------------------------------------------
Other liabilities of Royal Ridge                                     None
- --------------------------------------------------------------------------------
Value assigned to Royal Ridge                                        $31,888,293
- --------------------------------------------------------------------------------
Value assigned to Royal Ridge per share of Royal Ridge,              $107,188
of which there are 297.5 outstanding
- --------------------------------------------------------------------------------
Shares of stock in FSP Corp. to be issued as merger                  1,801,598
consideration to Royal Ridge preferred stockholders
- --------------------------------------------------------------------------------
Percentage of FSP Corp., post-mergers, which the shares              2.98%
of stock in FSP Corp. issued as merger consideration represent
- --------------------------------------------------------------------------------
Value assigned to the holdings of FSP Corp. in Royal Ridge           None
- --------------------------------------------------------------------------------

Compensation Paid By Royal Ridge to FSP Corp. and its Affiliates

- --------------------------------------------------------------------------------
Compensation paid and cash distributions made from                   $17,006
January 1, 2004 to June 30, 2004
- --------------------------------------------------------------------------------
Compensation paid and cash distributions made from                   $4,402,465
January 1, 2003 to December 31, 2003
- --------------------------------------------------------------------------------
Compensation paid and cash distributions made from                   N/A*
January 1, 2002 to December 31, 2002
- --------------------------------------------------------------------------------
Compensation paid and cash distributions made from                   N/A*
January 1, 2001 to December 31, 2001
- --------------------------------------------------------------------------------
*N/A indicates a time period prior to the syndication of Royal Ridge.

      The compensation, including fees, paid to FSP Corp. and its affiliates
consists primarily of payments made in connection with the original syndication
of interests in Royal Ridge, and thereafter of asset management fees. If the
mergers had been reflected prior to such period, Royal Ridge would have been a
wholly-owned subsidiary of FSP Corp. and no compensation would have been paid.
The executive officers of FSP Corp. receive compensation from FSP Corp. as set
forth in the section of the Consent Solicitation/Prospectus entitled "Management
- - Management Compensation."


                                       -8-
<PAGE>


Cash Distributions Made to Royal Ridge Preferred Stockholders

- --------------------------------------------------------------------------------
Cash distributions made from January 1, 2004 to June 30, 2004        $1,071,298
- --------------------------------------------------------------------------------
Cash distributions made from January 1, 2003 to December 31, 2003    $1,375,195
- --------------------------------------------------------------------------------
Cash distributions made from January 1, 2002 to December 31, 2002    N/A*
- --------------------------------------------------------------------------------
Cash distributions made from January 1, 2001 to December 31, 2001    N/A*
- --------------------------------------------------------------------------------
Cash distributions made from January 1, 2000 to December 31, 2000    N/A*
- --------------------------------------------------------------------------------
Cash distributions made from January 1, 1999 to December 31, 1999    N/A*
- --------------------------------------------------------------------------------
*N/A indicates a time period prior to the syndication of Royal Ridge.

      You should note that, for the period beginning July 1, 2003 and ending
June 30, 2004 quarterly, non-special cash distributions for each share of Royal
Ridge preferred stock totaled $7,150. For that same period, FSP Corp. paid
quarterly, non-special dividends totaling $1.24 per share of FSP common stock.
Each share of Royal Ridge preferred stock will receive 6,055.79 shares of FSP
common stock upon consummation of the merger. Thus, on a pro forma basis, you
would have received quarterly, non-special dividends totaling $7,509.18 for the
same period if you had held the number of shares of FSP common stock which you
will receive in exchange for one share of Royal Ridge preferred stock, or
approximately 105% of the aggregate amount of quarterly, non-special cash
distributions you did receive as a Royal Ridge stockholder.

Selected financial information concerning Royal Ridge may be found in the
section of the Consent Solicitation/Prospectus entitled "Selected Financial
Information of FSP Royal Ridge Corp." Selected pro forma consolidated financial
data may be found in the section of the Consent Solicitation/Prospectus entitled
"Selected Pro Forma Consolidated Data." Such information should be read in
conjunction with the financial statements of FSP Corp. and the target REITs and
related notes thereto included elsewhere in the Consent Solicitation/ Prospectus
or incorporated therein by reference.


                                       -9-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.14
<SEQUENCE>18
<FILENAME>ex99-14.txt
<TEXT>

                                                                   Exhibit 99.14


                           FSP COLLINS CROSSING CORP.

                  SUPPLEMENT TO CONSENT SOLICITATION/PROSPECTUS

      This Supplement is to supplement the Consent Solicitation/Prospectus being
furnished to holders of preferred stock in four real estate investment trusts,
FSP Montague Business Center Corp., FSP Addison Circle Corp., FSP Royal Ridge
Corp. and FSP Collins Crossing Corp., each of which is referred to as a target
REIT. The Consent Solicitation/Prospectus and this Supplement thereto are being
furnished in connection with the solicitation of votes to approve an agreement
and plan of merger, dated August 13, 2004, by and among Franklin Street
Properties Corp., referred to as FSP Corp., four wholly-owned acquisition
subsidiaries of FSP Corp., referred to as the acquisition subsidiaries, and the
target REITs. The merger agreement provides for the acquisition of the target
REITs by FSP Corp. by merging each of the four target REITs with and into a
related acquisition subsidiary.

      As the effects of the mergers may differ for stockholders in each of the
target REITs, a supplement similar to this Supplement has been prepared for each
of the target REITs. We are providing you and every stockholder in each of the
other target REITs with all the Supplements prepared for the target REITs.

Risk Factors

      In evaluating the mergers, you should carefully consider the following
factors, which are described in detail in the section of the Consent
Solicitation/Prospectus entitled "Risk Factors," in addition to other matters
set forth in the Consent Solicitation/Prospectus.

Risks Relating to the Mergers

      o     The nature of the target REIT stockholders' investment in their
            respective target REITs will change upon consummation of the
            mergers.

      o     The mergers may affect the level of dividends paid to target REIT
            stockholders.

      o     Target REIT stockholders will be foregoing the potential
            appreciation in the real property owned by their respective target
            REIT.

      o     The future price of FSP common stock may be lower than the price per
            share negotiated for purposes of the merger consideration.

      o     The mergers will require the target REIT stockholders to forgo
            alternatives to the mergers.

      o     Target REIT stockholders will experience a loss of relative voting
            power.

      o     The target REIT stockholders will experience greater risks relating
            to diversification of portfolios following the mergers.
<PAGE>

      o     The officers and directors of the target REITs have conflicts of
            interest that may have influenced them to support or adopt the
            merger agreement.

      o     The combined company may be liable for contingent or undisclosed
            liabilities of the target REITs.

      o     The shares of FSP common stock received by the target REIT
            stockholders are not tradable on a national stock market or other
            exchange.

      o     The target REIT stockholders may experience dilution of their
            respective holdings in FSP Corp.

      o     A majority vote of the target REIT stockholders of a target REIT
            will bind all the target REIT stockholders of that target REIT.

      o     Following consummation of the mergers, the combined company may no
            longer qualify as a REIT..

Real Estate and Business Risks of FSP Corp.

      o     If FSP Corp. is not able to collect sufficient rents from each of
            its owned real properties, FSP Corp. may suffer significant
            operating losses or a reduction in cash available for future
            dividends.

      o     FSP Corp. faces risks in continuing to attract investors for
            sponsored REITs.

      o     If FSP Corp. is unable to fully syndicate a sponsored REIT, it may
            be required to keep a balance outstanding on its line of credit or
            use its cash balance to repay the line of credit, which may reduce
            cash available for distribution to FSP stockholders.

      o     FSP Corp. may not be able to find properties that meet its criteria
            for purchase.

      o     FSP Corp. is dependent on key personnel.

      o     FSP Corp.'s level of dividends may fluctuate.

      o     The real properties held by FSP Corp. may significantly decrease in
            value.

      o     New acquisitions may fail to perform as expected.

      o     FSP Corp. faces risks in owning and operating real property.

      o     FSP Corp. faces risks from tenant defaults or bankruptcies.

      o     FSP Corp. may encounter significant delays in reletting vacant
            space, resulting in losses of income.

      o     FSP Corp. faces risks from geographic concentration.


                                      -2-
<PAGE>

      o     FSP Corp. competes with national, regional and local real estate
            operators and developers, which could adversely affect its cash
            flow.

      o     There is limited potential for an increase in leased space gains in
            FSP Corp.'s properties.

      o     FSP Corp. is subject to possible liability relating to environmental
            matters, and FSP Corp. cannot assure you that it has identified all
            possible liabilities.

      o     FSP Corp. is subject to compliance with the Americans With
            Disabilities Act and fire and safety regulations which could require
            FSP Corp. to make significant capital expenditures.

      o     There are significant conditions to FSP Corp.'s obligation to redeem
            shares of its common stock and any such redemption will result in
            the stockholders tendering shares receiving less than their fair
            market value.

      o     FSP Corp. may lose capital investment or anticipated profits if an
            uninsured event occurs.

      o     Contingent or unknown liabilities acquired in mergers or similar
            transactions could require FSP Corp. to make substantial payments.

      o     FSP Corp. would incur adverse tax consequences if FSP Corp. failed
            to qualify as a REIT.

      o     Provisions in FSP Corp.'s organizational documents may prevent
            changes in control.

      o     The trading price of FSP common stock following listing on the
            American Stock Exchange or other national security exchange is
            uncertain. The FSP common stock could trade at a lower price than
            anticipated.

Effects of the Mergers

      Pursuant to the merger agreement, FSP Collins Crossing Corp., or Collins
Crossing, will merge with and into a wholly-owned subsidiary of FSP Corp. called
Collins Crossing Acquisition Corp. and created for the sole purpose of the
merger, with the acquisition subsidiary as the surviving corporation. The
stockholders of Collins Crossing will be issued shares of FSP common stock which
will be registered under the Securities Act of 1933, as amended, on a
registration statement on Form S-4 to which this Supplement is an exhibit. As a
result of the mergers, Collins Crossing preferred stockholders will exchange
their interests in Collins Crossing, a real estate investment trust organized as
a Delaware corporation, for interests in FSP Corp., a real estate investment
trust organized as a Maryland corporation.

      There are significant differences between Collins Crossing and FSP Corp.,
including the following:

      o     FSP Corp.'s real estate portfolio will be substantially larger and
            more diverse geographically, by property type and by tenant
            business;


                                      -3-
<PAGE>

      o     FSP Corp.'s business will generate revenues from real estate
            investment banking/brokerage and property management activities and
            from a larger and more diversified real estate portfolio;

      o     The nature of each Collins Crossing preferred stockholder's
            investment will change from an interest in a corporation owning a
            specified property for a finite period in which the Collins Crossing
            preferred stockholder will receive a distribution upon liquidation
            based upon the net proceeds from the sale of the entity's assets, to
            an investment in an ongoing fully-integrated real estate company,
            which has a portfolio of properties that may be changed from time to
            time and conducts real estate investment banking operations, in
            which the equity owners are expected to recover the investment from
            the sale of their FSP common stock, which is currently illiquid, and
            not from liquidating distributions; and

      o     FSP Corp. will have substantial flexibility to raise equity capital,
            meaning that investors in FSP Corp. may be subject to dilution.

A comparison of the rights of stockholders of the target REITs and FSP Corp. may
be found in the section of the Consent Solicitation/Prospectus entitled
"Comparison of Stockholder Rights." In addition, selected pro forma consolidated
financial data may be found in the section of the Consent
Solicitation/Prospectus entitled "Selected Pro Forma Consolidated Data" and
selected comparative per share data may be found in the section of the Consent
Solicitation/Prospectus entitled "Comparative Per Share Data."

Tax Consequences of the Mergers

      The mergers are intended to qualify as reorganizations within the meaning
of Section 368(a) of the Internal Revenue Code of 1986, as amended. If the
mergers qualify as reorganizations, there will be no United States federal
income tax consequences to Collins Crossing preferred stockholders as a result
of the mergers. The material United States federal income tax considerations
related to the mergers are described in detail in the section of the Consent
Solicitation/Prospectus entitled "Material United States Federal Income Tax
Considerations."

Fairness of the Mergers

      The Board of Directors of Collins Crossing believes that the terms of the
merger agreement, when considered as a whole, are fair to the Collins Crossing
preferred stockholders and the merger consideration offered in exchange for the
preferred stock of Collins Crossing constitutes fair consideration for the
interests of the Collins Crossing preferred stockholders. The following provides
a summary of the factors upon which the Collins Crossing board based its
conclusions as to the fairness of the mergers and the merger consideration to
the Collins Crossing preferred stockholders. Such factors are described in
detail in the section of the Consent Solicitation/Prospectus entitled "Fairness
of the Mergers." The Collins Crossing board did not find it practicable to, and
did not attempt to, quantify or otherwise assign relative weight to these
factors in reaching their respective determination.


                                      -4-
<PAGE>

      o     The Collins Crossing board compared the potential benefits and
            detriments of the mergers with the potential benefits and detriments
            of several alternatives to the mergers, including continuation of
            Collins Crossing, liquidation of Collins Crossing and support of
            secondary markets for the Collins Crossing stock. Based on these
            comparisons, the Collins Crossing board believes the mergers are
            more attractive than other alternatives.

      o     The special committee of the Collins Crossing board, consisting of
            Messrs. R. Scott MacPhee and William W. Gribbell, each a member of
            the Collins Crossing board and an executive vice president of FSP
            Corp., engaged A.G. Edwards & Sons, Inc. to deliver a fairness
            opinion to the Collins Crossing board. On August 11, 2004, A.G.
            Edwards delivered a written opinion to the Collins Crossing board to
            the effect that the merger consideration was fair, from a financial
            point of view, to the Collins Crossing preferred stockholders. The
            fairness opinion is attached to the Consent Solicitation/Prospectus
            as Appendix C.

      o     The Collins Crossing board determined after consultation with A.G.
            Edwards, the financial advisor to Collins Crossing and its board,
            that the value of the FSP common stock to be distributed as merger
            consideration to the Collins Crossing preferred stockholders
            represented greater value than, or a premium above, the sum of the
            value of the real estate (as determined by an appraisal) and cash
            held by Collins Crossing.

      o     The Collins Crossing board determined after consultation with A.G.
            Edwards that the value of the FSP common stock to be distributed as
            merger consideration to the Collins Crossing preferred stockholders
            was greater than the value that was likely to be realized upon the
            continuation of Collins Crossing.

      o     Each target board obtained independent third-party appraisals of the
            real property owned by it, and the Collins Crossing board considered
            these appraisals in negotiating the merger consideration.

      o     The Collins Crossing board considered historical financial
            information concerning the real estate properties owned by FSP Corp.
            and the target REITs and the amount of cash held by FSP Corp. and
            each of the target REITs.

      o     Collins Crossing will have the right to declare dividends consistent
            with past practice in respect of the quarters or partial quarters
            preceding the effective date of the mergers. The combined company
            will have the obligation to pay any such dividends that have been
            declared but not paid as of the effective date.

      o     Certain merger expenses are considered individual expenses to be
            paid by the party incurring the expenses. The costs of A.G.
            Edwards's engagement and the fees of the target REITs' outside
            counsel and accountants will be apportioned among the target REITs
            based on the relative merger consideration received by each target
            REIT's stockholders, and each appraisal will be paid by the target
            REIT owning the property that is the subject of the appraisal. All
            other expenses, including consulting, legal, accounting and
            administrative, will be paid by FSP Corp.


                                      -5-
<PAGE>

      o     The members of the target boards have conflicts of interest in
            connection with the mergers. Each target board established a special
            committee consisting of Messrs. MacPhee and Gribbell, the only
            members of the target boards who are not also members of the FSP
            board. Messrs. MacPhee and Gribbell serve as executive vice
            presidents of FSP Corp. The special committees engaged A.G. Edwards
            to advise them in evaluating and negotiating the terms of the
            mergers, including the merger consideration, and to deliver a
            fairness opinion to each target board. No fees or other compensation
            will be payable to the members of the target boards (or the special
            committees) or to FSP Corp. or its affiliates in connection with the
            mergers.

Determination and Allocation of Merger Consideration

         The merger consideration was determined through arms-length
negotiations between the special committees of the target boards and FSP Corp.
Each special committee relied on advice from its financial advisor, A.G.
Edwards, in its negotiations with FSP Corp. Each special committee also
considered the assets and liabilities of its target REIT, the multiples of cash
available for distribution commonly used in valuing REITs and the limited
liquidity of FSP common stock. Each special committee was also made aware that
FSP Corp. intends to file an application to list the FSP common stock on the
American Stock Exchange. There can be no assurance that FSP Corp. will file such
application, or, in the event it does, that the American Stock Exchange will
approve the application or that a meaningful trading market will develop for the
FSP common stock. In concluding that the merger consideration is fair, the
Montague board relied in part on the recommendation of its special committee,
the fairness opinion delivered by A.G. Edwards for Montague and the appraisal it
received for the property held by Montague.

         In allocating the approximately $192,841,463 of merger consideration
among the target REITs, FSP Corp.'s management considered the appraised values
of each target REIT, the cash flow projected for each target REIT, the cash
reserves held by each target REIT, and the current market conditions for real
estate acquisitions in the various locations of the target REITs. The special
committees, management of FSP Corp., and A.G. Edwards held a telephonic meeting
on July 29, 2004 to discuss the allocation of the merger consideration,
including the allocation of the premiums to be paid by FSP Corp. for each target
REIT. During that call, after reaffirming with all the parties that the stock
price of $17.70 per share of FSP common stock was the negotiated price per share
to be paid as merger consideration, FSP Corp. stated that it was willing to make
an offer to each of the target REITs based, in part, on FSP Corp.'s specific
knowledge of the target REITs' properties which it had gained from the operation
of such properties by FSP Property Management, a wholly owned subsidiary of the
FSP Corp., prior to and following the syndication of the target REITs. FSP Corp.
then suggested a separate value for each target REIT based on its knowledge of
the real properties held by each target REIT, including among other things, the
tenants, the operating costs, current market conditions, FSP Corp.'s view of
future market rents, the likelihood of lease renewals, the costs of turnover,
and FSP Corp.'s experience with acquisitions for similar properties in the same
or similar markets. The negotiations between the parties resulted in agreement
on merger consideration for Addison Circle, Collins Crossing and Royal Ridge
that produced a premium, based on a value of $17.70 per share of FSP common
stock, to the sum of the appraised value of real estate and adjusted cash
balances that ranged from 17.9% to 20.0%. With respect to Montague, FSP Corp.
noted that Montague's property is leased to a single tenant through December 31,
2006 at a rate that is currently significantly above market. FSP Corp. further


                                      -6-
<PAGE>

noted that the appraised value of Montague's real estate was $20,000,000.
Montague's special committee noted that Montague's stockholders were receiving
significant current cash yields as a result of the above-mentioned lease and
that, in the absence of a significant premium to appraised value, those
stockholders might not be inclined to approve a merger. These negotiations
resulted in merger consideration for Montague that produced a premium, based on
the value of $17.70 per share of FSP common stock, of 51.6%.

         As a result of these negotiations, the merger agreement provides for
the Collins Crossing preferred stockholders to receive merger consideration
valued at $60,587,756. A summary of certain information considered in the
determination of the value of Collins Crossing by the Collins Crossing special
committee and board for purposes of the merger consideration follows:

- --------------------------------------------------------------------------------
Appraised value of real estate held by Collins Crossing              $48,500,000
- --------------------------------------------------------------------------------
Dollar amount of any mortgages or liabilities to which appraised     None
real estate held by Collins Crossing is subject
- --------------------------------------------------------------------------------
Cash held by Collins Crossing as of June 30, 2004                    $4,737,170
- --------------------------------------------------------------------------------
Other assets held by Collins Crossing                                None
- --------------------------------------------------------------------------------
Other liabilities of Collins Crossing                                None
- --------------------------------------------------------------------------------
Value assigned to Collins Crossing                                   $60,587,756
- --------------------------------------------------------------------------------
Value assigned to Collins Crossing per share of Collins Crossing,    $109,167
of which there are 555 outstanding
- --------------------------------------------------------------------------------
Shares of stock in FSP Corp. to be issued as merger consideration    3,423,035
to Collins Crossing preferred stockholders
- --------------------------------------------------------------------------------
Percentage of FSP Corp., post-mergers, which the shares of stock     5.66%
in FSP Corp. issued as merger consideration represent
- --------------------------------------------------------------------------------
Value assigned to the holdings of FSP Corp. in Collins Crossing      None
- --------------------------------------------------------------------------------

Compensation Paid By Collins Crossing to FSP Corp. and its Affiliates

- --------------------------------------------------------------------------------
Compensation paid and cash distributions made from January 1, 2004   $37,551
to June 30, 2004
- --------------------------------------------------------------------------------
Compensation paid and cash distributions made from January 1, 2003   $8,768,270
to December 31, 2003
- --------------------------------------------------------------------------------
Compensation paid and cash distributions made from January 1,        N/A*
2002 to December 31, 2002
- --------------------------------------------------------------------------------
Compensation paid and cash distributions made from January 1, 2001   N/A*
to December 31, 2001
- --------------------------------------------------------------------------------
*N/A indicates a time period prior to the syndication of Collins Crossing.


                                      -7-
<PAGE>

      The compensation, including fees, paid to FSP Corp. and its affiliates
consists primarily of payments made in connection with the original syndication
of interests in Collins Crossing, and thereafter of asset management fees. If
the mergers had been reflected prior to such period, Collins Crossing would have
been a wholly-owned subsidiary of FSP Corp. and no compensation would have been
paid. The executive officers of FSP Corp. receive compensation from FSP Corp. as
set forth in the section of the Consent Solicitation/Prospectus entitled
"Management - Management Compensation."

Cash Distributions Made to Collins Crossing Preferred Stockholders

- --------------------------------------------------------------------------------
Cash distributions made from January 1, 2004 to June 30, 2004        $2,565,210
- --------------------------------------------------------------------------------
Cash distributions made from January 1, 2003 to December 31, 2003    $2,018,214
- --------------------------------------------------------------------------------
Cash distributions made from January 1, 2002 to December 31, 2002    N/A*
- --------------------------------------------------------------------------------
Cash distributions made from January 1, 2001 to December 31, 2001    N/A*
- --------------------------------------------------------------------------------
Cash distributions made from January 1, 2000 to December 31, 2000    N/A*
- --------------------------------------------------------------------------------
Cash distributions made from January 1, 1999 to December 31, 1999    N/A*
- --------------------------------------------------------------------------------
*N/A indicates a time period prior to the syndication of Collins Crossing.

      You should note that, for the period beginning July 1, 2003 and ending
June 30, 2004 quarterly, non-special cash distributions for each share of
Collins Crossing preferred stock totaled $8,160.64. For that same period, FSP
Corp. paid quarterly, non-special dividends totaling $1.24 per share of FSP
common stock. Each share of Collins Crossing preferred stock will receive
6,167.63 shares of FSP common stock upon consummation of the merger. Thus, on a
pro forma basis, you would have received quarterly, non-special dividends
totaling $7,647.86 for the same period if you had held the number of shares of
FSP common stock which you will receive in exchange for one share of Collins
Crossing preferred stock, or approximately 93% of the aggregate amount of
quarterly, non-special cash distributions you did receive as a Collins Crossing
stockholder.

      Selected financial information concerning Collins Crossing may be found in
the section of the Consent Solicitation/Prospectus entitled "Selected Financial
Information of FSP Collins Crossing Corp." Selected pro forma consolidated
financial data may be found in the section of the Consent
Solicitation/Prospectus entitled "Selected Pro Forma Consolidated Data." Such
information should be read in conjunction with the financial statements of FSP
Corp. and the target REITs and related notes thereto included elsewhere in the
Consent Solicitation/ Prospectus or incorporated therein by reference.


                                      -8-

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