ex99-1.htm


(in 000's except per share data)	Three Months Ended June 30,							Six Months Ended June 30,
	2008		2007		Increase (Decrease)			2008		2007		Increase (Decrease)

Net Income	$	10,534	$	32,476	$	(21,942	)	$	17,920	$	42,208	$	(24,288	)

FFO	$	20,283	$	19,969	$	314		$	35,920	$	39,555	$	(3,635	)
GOS		-		21,590		(21,590	)		-		21,590		(21,590	)
FFO+GOS	$	20,283	$	41,559	$	(21,276	)	$	35,920	$	61,145	$	(25,225	)
Per Share Data:
EPS	$	0.15	$	0.46	$	(0.31	)	$	0.25	$	0.60	$	(0.35	)
FFO	$	0.29	$	0.28	$	0.01		$	0.51	$	0.56	$	(0.05	)
GOS	$	-	$	0.31	$	(0.31	)	$	-	$	0.31	$	(0.31	)
FFO+GOS	$	0.29	$	0.59	$	(0.30	)	$	0.51	$	0.86	$	(0.35	)

Weighted ave shares (diluted)		70,481		70,766		(286	)		70,481		70,766		(286	)

Comparing results for the second quarter of 2008 to 2007, Net Income and EPS decreased $21.9 million or $0.31 per share, and FFO increased $0.3 million or $0.01 per share. There was no GOS in the second quarter of 2008 compared to $21.6 million or $0.31 per share in the second quarter of 2007. The FFO increase was primarily a result of increases in real estate rental income net of operating expenses from property acquisitions and the benefit of increases in leasing made over the last twelve months. Primarily as a result of these changes, FFO+GOS decreased $21.3 million or $0.30 per share comparing the first quarter of 2008 to 2007.

Comparing results for the first half of 2008 to 2007, Net Income and EPS decreased $24.3 million or $0.35 per share, and FFO decreased $3.6 million or $0.05 per share. There was no GOS in the first half of 2008 compared to $21.6 million or $0.31 per share in the first half of 2007. The FFO decrease was primarily because of lower sales of securities by our investment bank, which decreased $56.7 million to $52.5 million for the first half of 2008 compared to $109.2 million in the first half of 2007. Revenue from our investment bank is primarily based on the value of these securities sales. As a result of these changes, FFO+GOS decreased $25.2 million or $0.35 per share comparing the first half of 2008 to 2007.

Significant portions of our real estate investment business are transactional. Beginning in the third quarter of 2007, those transactional businesses became materially impacted by external financial, mortgage/debt and investment market problems that have arisen from the “credit crunch”. FSP has certain properties in its portfolio that we may contemplate selling but have not put up for sale because of market conditions. Consequently, the second quarter of 2008 produced no GOS profit contribution. Changes in mortgage loan availability and changes in the cost of those loans continue to restrict many potential sales of commercial office buildings around the country. Rather than sell in this negative environment, FSP continues to postpone consideration of the sale of some properties until a more attractive environment establishes itself, particularly within the mortgage/debt markets. A time frame for improvement in these markets is hard to predict, especially with the uncertainty of how significant an impact the current financial market turmoil will have on broader U.S. economic activity. We are constantly evaluating property disposition opportunities, as well as potential new property acquisition opportunities that may present themselves at attractive prices.

Additionally as a result of the turmoil in the financial, mortgage/debt and investment markets, the investor appetite for our real estate private placement business has suffered and continues to negatively affect our Investment Banking equity-raising efforts. During the second quarter of 2008, we raised $49.9 million of equity capital, up substantially from the $2.7 million volume achieved in the first quarter of 2008, but far short of the $109.2 million level of business done during the first half of 2007. Uncertainty continues to surround the potential impact on commercial real estate emanating from the financial, mortgage/debt crisis and has caused a “wait-and-see” attitude to prevail among many of our established investor clients. We anticipate business in this area to remain very volatile quarter-to-quarter as long as broader investment market activity and financial events continue to meaningfully sway investor confidence and sentiment.

While profits continued to suffer in the second quarter of 2008 from our transactional businesses being negatively impacted by the broader capital market credit crunch, our real estate portfolio of 27 properties maintained its overall 93% occupancy and provided steady rental income. FFO for the second quarter of 2008 was $0.29 per share, consisting of $0.24 per share from real estate operations and $0.05 from investment banking. During the second quarter of 2008, the Company used its balance sheet strength to complete the approximately $35.4 million cash purchase of FSP Park Ten Development Corp., which owns a recently-built approximately 157,000 square foot office building in Houston, Texas. FSP managed the spec-development of the project on behalf of FSP Park Ten Development Corp. The property, which was completed in late 2006, is now approximately 98% leased and is adjacent to a look-alike sister building also owned by FSP.

As the capital markets and U.S. economy work through the current real estate mortgage/debt crunch, we will continue to pursue additional property investment opportunities. It will be FSP’s objective to continue to grow its property portfolio and rental income business during this period of liquidity-constrained capital markets by using its balance sheet strength to help finance and fund new acquisitions. We continue to be very optimistic about FSP’s position in the current commercial real estate investment market and the opportunities that may present themselves as a result of the current distress surrounding some aspects of those markets.”

On July 21, 2008, the Company announced that its Board of Directors declared a regularly quarterly dividend for the three months ended June 30, 2008 of $0.19 per share of common stock payable on August 20, 2008 to stockholders of record on July 31, 2008. This represents a reduction of $0.12 per share of common stock from the $0.31 per share of common stock regular quarterly dividend that the Company has paid since its common stock began trading publicly in June 2005. The Company’s July 21, 2008 announcement noted that the Company had experienced a significant slowing of activity in, and lower profit contribution from, two transactional components of its business, investment banking/investment services and property dispositions, since the onset of the current debt market conditions. Because the Company's transactional businesses can be volatile, the Company’s Board of Directors believed that it was prudent to better align the Company’s regular quarterly dividends to a level more closely related to the Company’s current real estate operations alone. The reduction of the Company’s regular quarterly dividend reflects the Company’s uncertainty about the ultimate duration and severity of the current debt market conditions and the associated turmoil in the capital markets and their impact on the Company’s transactional businesses.

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(In thousands, except per share amounts)	2008			2007			2008			2007

Net income	$	10,534		$	32,476		$	17,920		$	42,208
(Gain) Loss on sale of properties		-			(21,590	)		-			(21,590	)
GAAP (income) loss from non-consolidated REITs		(694	)		142			(1,487	)		725
Distributions from non-consolidated REITs		1,731			442			2,277			723
Depreciation of real estate & intangible amortization		8,712			8,499			17,210			17,489
Funds From Operations (FFO)		20,283			19,969			35,920			39,555
Plus gains on sales of properties		-			21,590			-			21,590
FFO+GOS	$	20,283		$	41,559		$	35,920		$	61,145

Per Share Data
EPS	$	0.15		$	0.46		$	0.25		$	0.60
FFO	$	0.29		$	0.28		$	0.51		$	0.56
GOS	$	-		$	0.31		$	-		$	0.31
FFO+GOS	$	0.29		$	0.59		$	0.51		$	0.86

Weighted average shares (basic and diluted)		70,481			70,766			70,481			70,766

A conference call is scheduled for July 30, 2008 at 9:30 a.m. (ET) to discuss the second quarter 2008 results. The toll free number is 1-800-573-4752, passcode 92548197. Internationally, the call may be accessed by dialing 1-617-224-4324, passcode 92548197. To listen via live audio webcast, please visit the Webcasts & Presentations section in the Investor Relations section of the Company's website, www.franklinstreetproperties.com at least ten minutes prior to the start of the call and follow the posted directions. The webcast will also be available via replay from the above location starting one hour after the call is finished.

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

Statements made in this press release that state FSP’s or management’s intentions, beliefs, expectations, or predictions for the future may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. This press release may also contain forward-looking statements based on current judgments and current knowledge of management, which are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those indicated in such forward looking statements. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements. Investors are cautioned that our forward-looking statements involve risks and uncertainty, including without limitation the current disruptions in the credit markets, changes in economic conditions in the markets in which we own properties, changes in the demand by investors for investment in Sponsored REITs (as defined in our Annual Report on Form 10-K for the year ended December 31, 2007), risks of a lessening of demand for the types of real estate owned by us, changes in government regulations, and expenditures that cannot be anticipated such as utility rate and usage increases, unanticipated repairs, additional staffing, insurance increases and real estate tax valuation reassessments. See the “Risk Factors” set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2007, as the same may be updated from time to time in subsequent filings with the United States Securities and Exchange Commission. Although we believe the expectations reflected in the forward looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. We will not update any of the forward looking statements after the date of this press release to conform them to actual results or to changes in our expectations that occur after such date, other than as required by law.

	For the Three Months Ended June 30,					For the Six Months Ended June 30,
(in thousands, except per share amounts)	2008		2007			2008			2007

Revenue:
Rental	$	27,700	$	22,896		$	54,356		$	48,001
Related party revenue:
Syndication fees		3,257		3,448			3,462			6,403
Transaction fees		3,138		3,761			3,306			6,842
Management fees and interest income from loans		423		1,862			984			3,679
Other		19		9			39			47
Total revenue		34,537		31,976			62,147			64,972

Expenses:
Real estate operating expenses		7,116		5,668			13,815			11,875
Real estate taxes and insurance		4,505		3,923			8,784			8,092
Depreciation and amortization		7,591		6,778			14,950			13,954
Selling, general and administrative		2,621		2,000			4,630			3,888
Commissions		1,654		1,754			1,812			3,313
Interest		1,051		1,622			2,243			4,298

Total expenses		24,538		21,745			46,234			45,420

Income before interest income, equity in earnings (losses) of
non-consolidated REITs and taxes		9,999		10,231			15,913			19,552
Interest income		176		560			479			1,213
Equity in earnings (losses) of non-consolidated REITs		694		(142	)		1,487			(758	)

Income before taxes		10,869		10,649			17,879			20,007
Income tax expense (benefit)		335		425			(41	)		721

Income from continuing operations		10,534		10,224			17,920			19,286
Income from discontinued operations		-		662			-			1,331
Gain on sale of assets		-		21,590			-			21,590

Net income	$	10,534	$	32,476		$	17,920		$	42,207

Weighted average number of shares outstanding,
basic and diluted		70,481		70,766			70,481			70,766

Earnings per share, basic and diluted, attributable to:
Continuing operations	$	0.15	$	0.14		$	0.25		$	0.27
Discontinued operations		-		0.01			-			0.02
Gains on sales of assets		-		0.31			-			0.31
Net income per share, basic and diluted	$	0.15	$	0.46		$	0.25		$	0.60


(in thousands, except share and par value amounts)	June 30,			December 31,
	2008			2007
Assets:
Real estate assets, net	$	815,710		$	790,319
Acquired real estate leases, less accumulated amortization
of $28,213 and $23,401, respectively		30,905			33,695
Investment in non-consolidated REITs		84,609			85,663
Assets held for syndication, net		14,039			26,310
Cash and cash equivalents		34,386			46,988
Restricted cash		336			336
Tenant rent receivables, less allowance for doubtful accounts
of $509 and $430, respectively		989			1,472
Straight-line rent receivable, less allowance for doubtful accounts
of $261 and $261, respectively		7,894			7,387
Prepaid expenses		1,061			1,395
Other assets		1,588			406
Office computers and furniture, net of accumulated depreciation
of $1,038 and $968, respectively		331			309
Deferred leasing commissions, net of accumulated amortization
of $2,574, and $1,975, respectively		10,509			9,186
Total assets	$	1,002,357		$	1,003,466

Liabilities and Stockholders’ Equity:
Liabilities:
Bank note payable	$	109,995		$	84,750
Accounts payable and accrued expenses		18,984			20,255
Accrued compensation		1,845			1,564
Tenant security deposits		1,810			1,874
Acquired unfavorable real estate leases, less accumulated amortization
of $1,455, and $1,226, respectively		4,883			4,405
Total liabilities		137,517			112,848

Commitments and contingencies

Stockholders’ Equity:
Preferred stock, $.0001 par value, 20,000,000 shares authorized, none issued or outstanding		-			-
Common stock, $.0001 par value, 180,000,000 shares authorized, 70,480,705 and 70,480,705 shares issued and outstanding, respectively		7			7
Additional paid-in capital		889,019			889,019
Earnings (distributions) in excess of accumulated earnings/distributions		(24,186	)		1,592
Total stockholders’ equity		864,840			890,618
Total liabilities and stockholders’ equity	$	1,002,357		$	1,003,466

	For the Six Months Ended June 30,
(in thousands)	2008			2007
Cash flows from operating activities:
Net income	$	17,920		$	42,208
Adjustments to reconcile net income to net cash provided by operating activities:
Gains on assets sold		-			(21,590	)
Depreciation and amortization expense		14,973			14,938
Amortization of above market lease		2,259			2,569
Equity in earnings (losses) from non-consolidated REITs		(1,487	)		725
Distributions from non-consolidated REITs		2,277			723
Increase in bad debt reserve		79			-
Changes in operating assets and liabilities:
Restricted cash		1			79
Tenant rent receivables, net		404			334
Straight-line rents, net		(507	)		(2,049	)
Prepaid expenses and other assets, net		160			861
Accounts payable and accrued expenses		(2,002	)		(2,074	)
Accrued compensation		281			(1,726	)
Tenant security deposits		(64	)		39
Payment of deferred leasing commissions		(2,131	)		(2,669	)

Net cash provided by operating activities		32,163			32,368

Cash flows from investing activities:
Purchase of real estate assets, office computers and furniture, capitalized merger costs		(34,903	)		(72,416	)
Purchase of acquired favorable and unfavorable leases		(2,067	)		(3,726	)
Investment in non-consolidated REITs		(10	)		(9	)
Investment in loan receivable		(1,000	)		-
Redemption of certificate of deposit		-			5,143
Investment in assets held for syndication, net		11,698			(74,420	)
Proceeds received on sales of real estate assets		-			74,812

Net cash used in investing activities		(26,282	)		(70,616	)

Cash flows from financing activities:
Distributions to stockholders		(43,698	)		(43,875	)
Repayments under bank note payable		25,245			119,750
Deferred financing costs		(30	)		-

Net cash (used in) provided by financing activities		(18,483	)		75,875

Net increase (decrease) in cash and cash equivalents		(12,602	)		37,627

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

Cash and cash equivalents, end of period	$	34,386		$	107,600

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

(Dollars and square feet in 000's)	As of June 30, 2008
	# of				% of			Square		% of
State	Properties		Investment		Portfolio			Feet		Portfolio

Texas		7	$	235,473		28.9	%		1,488		28.8	%
Colorado		4		132,141		16.2	%		791		15.4	%
Georgia		1		78,017		9.6	%		387		7.5	%
Maryland		2		63,547		7.8	%		424		8.2	%
Virginia		2		63,040		7.6	%		433		8.4	%
Missouri		2		57,190		7.0	%		349		6.8	%
Florida		1		49,867		6.1	%		213		4.1	%
Indiana		1		37,865		4.6	%		205		4.0	%
Illinois		1		32,054		3.9	%		177		3.5	%
California		2		21,492		2.6	%		182		3.5	%
Michigan		1		15,327		1.9	%		215		4.2	%
Washington		1		15,176		1.9	%		117		2.3	%
North Carolina		2		14,521		1.9	%		172		3.3	%
Total		27	$	815,710		100.0	%		5,153		100.0	%

Square foot & leased percentages		June 30,	December 31,
		2008	2007

Owned portfolio of commercial real estate
	Number of properties	27	26
	Square feet	5,153,396	4,998,280
	Leased percentage	93%	93%

Investments in non-consolidated commercial real estate
	Number of properties	2	3
	Square feet	1,459,420	1,614,380
	Leased percentage	78%	92%

Single Asset REITs (SARs) managed
	Number of properties	10	9
	Square feet*	2,682,931	2,682,770
	Leased percentage*	93%	92%

Total owned, investments & managed properties
	Number of properties*	39	38
	Square feet*	9,295,747	9,295,430
	Leased percentage*	91%	93%

*Excludes a property to be constructed with approximately 285,000 square feet.

(in thousands)
	Q2			Q3			Q4			Q1
Revenue:	2007			2007			2007			2008
Rental	$	23,201		$	27,431		$	25,851		$	26,656
Related party revenue:
Syndication fees		3,448			687			1,896			205
Transaction fees		3,761			604			2,452			168
Management fees and
interest income from loans		1,862			1,497			1,854			561
Other		9			37			34			20
Total revenue		32,281			30,256			32,087			27,610

Expenses:
Real estate operating expenses		5,771			7,263			7,145			6,699
Real estate taxes and insurance		4,039			4,565			4,110			4,279
Depreciation and amortization		6,889			7,870			7,624			7,359
Selling, general and administrative		2,000			1,787			1,790			2,009
Commissions		1,754			406			1,017			158
Interest		1,622			1,823			1,563			1,192
Total expenses		22,075			23,714			23,249			21,696

Income before interest income, equity in earnings
(losses) in non-consolidated REITs and taxes		10,206			6,542			8,838			5,914
Interest income		560			650			514			303
Equity in earnings (losses) in non-consolidated REITs		(142	)		147			147			793

Income before taxes		10,624			7,339			9,499			7,010
Income tax expense (benefit)		373			(261	)		295			(376	)

Income from continuing operations		10,251			7,600			9,204			7,386
Income from discontinued operations		635			(56	)		(70	)		-

Income before gain on sale of properties		10,886			7,544			9,134			7,386
Gain on sale of assets		21,590			1,942			257			-
Net income	$	32,476		$	9,486		$	9,391		$	7,386


FFO and FFO+GOS calculations:

Net income	$	32,476		$	9,486		$	9,391		$	7,386
(Gain) loss on sale of assets		(21,590	)		(1,942	)		(257	)		-
GAAP (income) loss from non-consolidated REITs		142			(106	)		(147	)		(793	)
Distributions from non-consolidated REITs		442			476			607			546
Depreciation & amortization		8,508			9,016			8,978			8,498
Funds From Operations (FFO)		19,978			16,930			18,572			15,637
Plus gains on sales of assets		21,590			1,942			257
FFO+GOS	$	41,568		$	18,872		$	18,829		$	15,637

				% of
	Tenant	Sq Ft	SIC Code	Portfolio
1	Capital One Services, Inc.* (1)	297,789	61	6.0%
2	Citgo Petroleum Corporation	248,399	29	5.0%
3	Tektronix Texas, LLC	241,372	38	4.8%
4	Burger King Corporation	212,619	58	4.3%
5	New Era of Networks, Inc. (Sybase)	199,077	42	4.0%
6	Citgroup Credit Services, Inc.	176,848	61	3.5%
7	RGA Reinsurance Company	171,120	63	3.4%
8	International Business Machines Corp.	138,033	73	2.8%
9	Murphy Exploration & Production Company	133,786	13	2.7%
10	CACI Technologies, Inc.	132,896	73	2.7%
11	Maines Paper and Food Service, Inc.	98,745	42	2.0%
12	The Staubach Company	92,827	87	1.9%
13	AMDOCS, Inc.	91,928	73	1.8%
14	Ober Kaler Grimes	90,811	81	1.8%
15	County of Santa Clara	90,467	91	1.8%
16	Vail Corp, dba Vail Resorts	83,620	79	1.7%
17	Corporate Holdings, LLC	81,818	67	1.6%
18	Technip-Coflexip USA Holdings, Inc	79,496	73	1.6%
19	Noble Royalties, Inc.	78,344	67	1.6%
20	Cooley Godward LLP	72,850	81	1.5%
	Total	2,812,845		56.3%

(1)	Capital One subleases all of its space to LandAmerica Financial Group.

The Company evaluates the performance of its reportable segments based on several measures including, Funds From Operations (“FFO”) and FFO plus Gains on Sales (“FFO+GOS”) as management believes they represent important measures of activity and are an important consideration in determining distributions paid to equity holders. The Company defines FFO as net income (computed in accordance with generally accepted accounting principles, or GAAP), excluding gains (or losses) from sales of property, plus depreciation and amortization, and after adjustments to exclude non-cash income (or losses) from non-consolidated or Sponsored REITs, plus distributions received from non-consolidated or Sponsored REITs. The Company defines FFO+GOS as FFO as defined above, plus gains (or losses) from sales of properties and provisions for assets held for sale, if applicable.

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

PRESS RELEASE	Franklin Street Properties Corp..
401 Edgewater Place · Suite 200 · Wakefield, Massachusetts 01880-6210 · (781) 557-1300 · www.franklinstreetproperties.com
Contact: Donna Brownell 877-686-9496		FOR IMMEDIATE RELEASE


Franklin Street Properties Corp. Financial Results	A-C
Real Estate Portfolio Summary Information	D
Portfolio and Other Supplementary Information	E
Prior 4 Quarters Information	F
Largest 20 Tenants – FSP Owned Portfolio	G
Definition of Funds From Operations (FFO) and FFO+GOS	H

Commercial portfolio lease expirations (1)

	Total		% of
Year	Square Feet		Portfolio
2008		146,483		2.8	%
2009		588,793		11.4	%
2010		768,906		14.9	%
2011		365,771		7.1	%
2012		739,705		14.4	%
2013		333,278		6.5	%
Thereafter (2)		2,210,460		42.9	%
		5,153,396		100.0	%

Capital Expenditures
Owned Portfolio	Six Months Ended
(in thousands)	30-Jun-08		30-Jun-07

Tenant improvements	$	2,897	$	869
Deferred leasing costs		2,130		2,008
Building improvements		569		1,324
	$	5,596	$	4,201

			Square	% Leased	% Interest
Single Asset REIT Name	City	State	Feet	30-Jun-08	Held
FSP 303 East Wacker Drive Corp.	Chicago	IL	840,913	90.3%	43.7%
FSP Phoenix Tower Corp.	Houston	TX	618,507	62.4%	4.6%
			1,459,420	78.4%

Property by type:
(dollars & square feet in 000's)	As of June 30, 2008
	# of				% of			Square		% of
Type	Properties		Investment		Portfolio			Feet		Portfolio
Office		26		810,509		99.4	%		5,054		98.1	%
Industrial		1		5,201		0.6	%		99		1.9	%
Total		27	$	815,710		100.0	%		5,153		100.0	%