EX-99.1 2 ex99-1.htm
Exhibit 99.1
Supplemental Operating and Financial Data
For the Quarter Ending September 30, 2008
Third Quarter 2008
Franklin Street Properties Corp.
401 Edgewater Place
Suite 200
Wakefield, MA 01880
781-557-1300
www.franklinstreetproperties.com
Franklin Street Properties Corp. Third Quarter 2008

Table of Contents
Third Quarter 2008

Company Overview | pg 3
Key Financial Data |
Financial Highlights | pg 6
Management’s Key Operating Measures | pg 7
EPS, FFO, GOS and FFO+GOS | pg 8
Income Statements | pg 9
Balance Sheet | pg 10
Cash Flow Statements | pg 11
Segment Information | pg 12
Cash and GAAP NOI | pg 13
Capital Analysis | pg 14
Capital Expenditures | pg 14
Portfolio Overview |
Property by Form of FSP Participation | pg 15
Regional Analysis, Map | pg 16
Owned Property List | pg 17
Tenant Analysis |
Twenty Largest Tenants, Industry Profile | pg 18
Lease Expirations by Square Feet | pg 19
Transactional Drivers |
Acquisition and Disposition Detail | pg 20
Investment Banking Performance | pg 21
FFO and FFO+GOS Reconciliations and Definitions | pg 22
NOI Reconciliation | pg 23

All financial information contained in this supplemental information package is unaudited. In addition, certain statements contained in this supplemental information package may be deemed to be forward-looking statements within the meaning of the federal security laws. Although FSP believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. Factors that could cause actual results to differ materially from FSP’s current expectations include general economic conditions, local real estate conditions, the performance of properties that FSP has acquired or may acquire, the timely lease-up of properties and other risks, detailed from time to time in FSP’s SEC reports. FSP assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.
Franklin Street Properties Corp. Third Quarter 2008
2

Company Overview
Overview
Franklin Street Properties Corp. (“FSP”) (NYSE Alternext US: FSP) is an investment firm focused on achieving current income and long-term growth through investments in commercial properties. FSP’s portfolio of real estate assets consists primarily of suburban office buildings and includes select investments in central business district (CBD) properties. FSP’s real estate operations include property acquisitions and dispositions, interim acquisition and short-term financing, leasing, development and asset management. FSP’s subsidiary, FSP Investments LLC (member, FINRA and SIPC), is a real estate investment banking firm and registered broker/dealer.
Our Business
FSP operates in two business segments and has two principal sources of revenue; real estate operations and investment banking/investment services. Real estate operations include rental income from real estate leasing, interest income from loans made for interim acquisition or other purposes, and fee income from asset management. Investment banking/investment services generate brokerage commissions, loan origination fees, development services and other fees related to the organization of single-purpose entities that own real estate and the private placement of equity in those entities.
Strategy
FSP’s investment strategy is to make selective acquisitions based on market and/or property specific criteria, actively manage the property to maximize its value and dispose of the property when the ideal time or situation arises. Proceeds from property sales are redeployed into other specific real estate assets, used for other corporate purposes and/or paid out to stockholders as special dividends. Unlike many real estate investment companies, which have utilized significant leverage in an attempt to enhance their real estate portfolio’s returns, FSP has used very moderate leverage to date. FSP’s historical growth has been achieved without the use of permanent mortgage debt on any of our properties. This model has significantly reduced FSP’s risk profile by reducing foreclosure, financing and refinancing risk. The Company has recently adjusted its strategy and plans to employ modest leverage to accelerate its growth and capitalize on current market conditions and opportunities. In addition, FSP believes that it can lower investment risk while enhancing current income and long-term appreciation potential by owning properties in diversified geographic locations that have sound long-term economic growth potential.
Snapshot
(as of September 30, 2008)

Corporate Headquarters | Wakefield, MA
Fiscal Year-End | December 31
Total Properties | 27
Total Square Feet | 5.2 million
Common Shares Outstanding | 70.5 million
Quarterly Dividend | $0.19
Dividend Yield | 5.8%
Total Market Capitalization | $916.2 million
Insider Holdings | 16%

Franklin Street Properties Corp. Third Quarter 2008
3

Company Overview
Structure of the Company
FSP has elected to be taxed as a Real Estate Investment Trust (REIT) under the Internal Revenue Code. To qualify as a REIT, we must meet a number of organizational and operational requirements, including a requirement to distribute at least 90% of our adjusted taxable income to our shareholders. Management intends to continue to adhere to these requirements and to maintain our REIT status. As a REIT we are entitled to a tax deduction for some or all of the dividends we pay to shareholders. Accordingly, we generally will not be subject to federal income taxes as long as we distribute an amount equal to or in excess of our taxable income to shareholders.
Dividend Philosophy
FSP has been able to offer shareholders high-quality, risk-adjusted returns. The ongoing and recurring rental revenue stream provides stability to our regular quarterly dividend. In addition, the possibility exists for the payment of annual special dividends resulting from the sale of properties in the portfolio and FSP’s investment banking business.

Board of Directors and Management

George J. Carter | Georgia Murray
President, Chief Executive Officer | Director
Chairman of the Board | Chair, Compensation Committee
| Member, Audit Committee
Barbara J. Fournier |
Executive Vice President, Chief Operating Officer, | Barry Silverstein
Treasurer, Secretary and Director | Director
| Member, Audit Committee
Janet Notopoulos | Member, Compensation Committee
Executive Vice President and Director |
| John G. Demeritt
John N. Burke | Executive Vice President and
Director | Chief Financial Officer
Chair, Audit Committee |
Member, Compensation Committee | Scott H. Carter
| Executive Vice President, General Counsel
Dennis J. McGillicuddy | and Assistant Secretary
Director |
Member, Audit Committee |
Member, Compensation Committee |

Franklin Street Properties Corp. Third Quarter 2008
4

Company Overview

Corporate Headquarters |  | Trading Symbol |  | Inquires
401 Edgewater Place, Suite 200 |  | Stock Exchange Listing: |  | Inquires should be directed to
Wakefield, MA 01880 |  | NYSE Alternext US |  | Donna Brownell, VP Investor Relations
(t) 781-557-1300 |  | Symbol: FSP |  | 781-557-1308 or
(f) 781-246-2807 |  |  |  | dbrownell@franklinstreetproperties.com
www.franklinstreetproperties.com |  |  |  |

Common Stock Data (NYSE Alternext US: FSP)

|  | For the Three Months Ended
| 9/30/08 | 6/30/08 | 3/31/08 | 12/31/07 | 9/30/07
High Price |  | 14.80 |  | 16.09 |  | 15.38 |  | 18.52 |  | 18.18
Low Price |  | 11.25 |  | 12.50 |  | 11.50 |  | 14.45 |  | 14.74
Closing Price, at the end of the quarter |  | 13.00 |  | 12.64 |  | 14.32 |  | 14.80 |  | 17.25
Dividends paid per share – quarterly |  | 0.19 |  | 0.31 |  | 0.31 |  | 0.31 |  | 0.31
Closing dividend yield – annualized |  | 5.8% |  | 9.8% |  | 8.7% |  | 8.4% |  | 7.2%
Common shares outstanding (millions) |  | 70.48 |  | 70.48 |  | 70.48 |  | 70.48 |  | 70.48

Timing
Quarterly results are expected to be announced according to the following schedule:

First Quarter: | Late April |  | Third Quarter: | Early November
Second Quarter: | Early August |  | Fourth Quarter: | Late February

Franklin Street Properties Corp. Third Quarter 2008
5

Financial Highlights
(in thousands, except per share data)

|  | Twelve Months Ended |  |  | Three Months Ended |
|  | 12/31/07 |  |  | 12/31/06 |  |  | 9/30/08 |  |  | 6/30/08 |  |  | 3/31/08 |  |  | 12/31/07 |  |  | 9/30/07 |
Income Items: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenue: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Rental |  | $ | 100,961 |  |  | $ | 83,147 |  |  | $ | 27,927 |  |  | $ | 27,700 |  |  | $ | 26,656 |  |  | $ | 25,851 |  |  | $ | 27,109 |
Related party revenue |  |  | 25,914 |  |  |  | 24,038 |  |  |  | 984 |  |  |  | 6,818 |  |  |  | 934 |  |  |  | 6,202 |  |  |  | 2,788 |
Other |  |  | 118 |  |  |  | 60 |  |  |  | 13 |  |  |  | 19 |  |  |  | 20 |  |  |  | 34 |  |  |  | 37 |
Total revenue |  |  | 126,993 |  |  |  | 107,245 |  |  |  | 28,924 |  |  |  | 34,537 |  |  |  | 27,610 |  |  |  | 32,087 |  |  |  | 29,934 |
Total expenses |  |  | 92,153 |  |  |  | 68,709 |  |  |  | 22,658 |  |  |  | 24,538 |  |  |  | 21,695 |  |  |  | 23,185 |  |  |  | 23,321 |
Income before interest income, equity in earnings (losses) in non-consolidated REITs and taxes |  |  | 34,840 |  |  |  | 38,536 |  |  |  | 6,266 |  |  |  | 9,999 |  |  |  | 5,915 |  |  |  | 8,902 |  |  |  | 6,613 |
Interest income |  |  | 2,377 |  |  |  | 2,998 |  |  |  | 177 |  |  |  | 176 |  |  |  | 303 |  |  |  | 514 |  |  |  | 650 |
Equity in earnings (losses) in non-consolidated REITs |  |  | (464 | ) |  |  | 845 |  |  |  | 679 |  |  |  | 694 |  |  |  | 793 |  |  |  | 147 |  |  |  | 147 |
Income before taxes |  |  | 36,753 |  |  |  | 42,379 |  |  |  | 7,122 |  |  |  | 10,869 |  |  |  | 7,011 |  |  |  | 9,563 |  |  |  | 7,410 |
Income tax expense (benefit) |  |  | 647 |  |  |  | 839 |  |  |  | (297 | ) |  |  | 335 |  |  |  | (375 | ) |  |  | 359 |  |  |  | ( 206 | )
Income from continuing operations |  |  | 36,106 |  |  |  | 41,540 |  |  |  | 7,419 |  |  |  | 10,534 |  |  |  | 7,386 |  |  |  | 9,204 |  |  |  | 7,616 |
Income from discontinued operations |  |  | 1,190 |  |  |  | 7,951 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (70 | ) |  |  | ( 72 | )
Gain on sale of assets |  |  | 23,789 |  |  |  | 61,438 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 257 |  |  |  | 1,942 |
Net income |  | $ | 61,085 |  |  | $ | 110,929 |  |  | $ | 7,419 |  |  | $ | 10,534 |  |  | $ | 7,386 |  |  | $ | 9,391 |  |  | $ | 9,486 |
FFO+GOS*: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
FFO |  | $ | 75,049 |  |  | $ | 81,278 |  |  | $ | 17,084 |  |  | $ | 20,283 |  |  | $ | 15,637 |  |  | $ | 18,572 |  |  | $ | 16,922 |
GOS |  |  | 23,789 |  |  |  | 61,438 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 257 |  |  |  | 1,942 |
FFO+GOS |  | $ | 98,838 |  |  | $ | 142,716 |  |  | $ | 17,084 |  |  | $ | 20,283 |  |  | $ | 15,637 |  |  | $ | 18,829 |  |  | $ | 18,864 |
Per Share Data: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
EPS |  | $ | 0.86 |  |  | $ | 1.65 |  |  | $ | 0.11 |  |  | $ | 0.15 |  |  | $ | 0.10 |  |  | $ | 0.13 |  |  | $ | 0.13 |
FFO |  |  | 1.06 |  |  |  | 1.21 |  |  |  | 0.24 |  |  |  | 0.29 |  |  |  | 0.22 |  |  |  | 0.27 |  |  |  | 0.24 |
GOS |  |  | 0.34 |  |  |  | 0.91 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 0.03 |
FFO+GOS |  |  | 1.40 |  |  |  | 2.13 |  |  |  | 0.24 |  |  |  | 0.29 |  |  |  | 0.22 |  |  |  | 0.27 |  |  |  | 0.27 |
Weighted Average Shares (diluted) |  |  | 70,651 |  |  |  | 67,159 |  |  |  | 70,481 |  |  |  | 70,481 |  |  |  | 70,481 |  |  |  | 70,481 |  |  |  | 70,596 |
Balance Sheet Items: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate, net |  | $ | 790,319 |  |  | $ | 739,886 |  |  | $ | 812,438 |  |  | $ | 815,710 |  |  | $ | 787,398 |  |  | $ | 790,319 |  |  | $ | 803,780 |
Other assets, net |  |  | 213,147 |  |  |  | 215,431 |  |  |  | 184,622 |  |  |  | 186,647 |  |  |  | 196,664 |  |  |  | 213,147 |  |  |  | 230,813 |
Total assets, net |  |  | 1,003,466 |  |  |  | 955,317 |  |  |  | 997,060 |  |  |  | 1,002,357 |  |  |  | 984,062 |  |  |  | 1,003,466 |  |  |  | 1,034,593 |
Total liabilities, net |  |  | 112,848 |  |  |  | 33,355 |  |  |  | 138,192 |  |  |  | 137,517 |  |  |  | 107,907 |  |  |  | 112,848 |  |  |  | 131,517 |
Shareholders' equity |  |  | 890,618 |  |  |  | 921,962 |  |  |  | 858,868 |  |  |  | 864,840 |  |  |  | 876,155 |  |  |  | 890,618 |  |  |  | 903,076 |
* See page 22 for a reconciliation of Net Income to FFO and FFO+GOS and definitions of FFO and FFO+GOS |

Franklin Street Properties Corp. Third Quarter 2008
6

Management’s Key Operating Measures
* See page 22 for a reconciliation of Net Income to FFO and FFO+GOS (Total Profits) and definitions of FFO and FFO+GOS (Total Profits)
Franklin Street Properties Corp. Third Quarter 2008
7

EPS, FFO, GOS and FFO+GOS*
*See page 22 for a reconciliation of Net Income to FFO and FFO+GOS and definitions of FFO and FFO+GOS
Franklin Street Properties Corp. Third Quarter 2008
8

Condensed Consolidated Income Statements
($ in thousands, except per share amounts)

|  | Twelve Months Ended |  |  | Three Months Ended |
|  | 12/31/07 |  |  | 12/31/06 |  |  | 9/30/08 |  |  | 6/30/08 |  |  | 3/31/08 |  |  | 12/31/07 |  |  | 9/30/07 |
Revenue: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Rental |  | $ | 100,961 |  |  | $ | 83,147 |  |  | $ | 27,927 |  |  | $ | 27,700 |  |  | $ | 26,656 |  |  | $ | 25,851 |  |  | $ | 27,109 |
Related party revenue: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Syndication fees |  |  | 8,986 |  |  |  | 10,693 |  |  |  | 304 |  |  |  | 3,257 |  |  |  | 205 |  |  |  | 1,896 |  |  |  | 687 |
Transaction fees |  |  | 9,898 |  |  |  | 11,262 |  |  |  | 300 |  |  |  | 3,138 |  |  |  | 168 |  |  |  | 2,452 |  |  |  | 604 |
Management fees and interest income from loans |  |  | 7,030 |  |  |  | 2,083 |  |  |  | 380 |  |  |  | 423 |  |  |  | 561 |  |  |  | 1,854 |  |  |  | 1,497 |
Other |  |  | 118 |  |  |  | 60 |  |  |  | 13 |  |  |  | 19 |  |  |  | 20 |  |  |  | 34 |  |  |  | 37 |
Total revenue |  |  | 126,993 |  |  |  | 107,245 |  |  |  | 28,924 |  |  |  | 34,537 |  |  |  | 27,610 |  |  |  | 32,087 |  |  |  | 29,934 |
Expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate operating expenses |  |  | 26,171 |  |  |  | 19,045 |  |  |  | 7,159 |  |  |  | 7,116 |  |  |  | 6,698 |  |  |  | 7,145 |  |  |  | 7,151 |
Real estate taxes and insurance |  |  | 16,761 |  |  |  | 12,282 |  |  |  | 4,590 |  |  |  | 4,505 |  |  |  | 4,279 |  |  |  | 4,046 |  |  |  | 4,398 |
Depreciation and amortization |  |  | 29,334 |  |  |  | 20,893 |  |  |  | 7,666 |  |  |  | 7,591 |  |  |  | 7,359 |  |  |  | 7,624 |  |  |  | 7,756 |
Selling, general and administrative |  |  | 7,466 |  |  |  | 8,518 |  |  |  | 1,927 |  |  |  | 2,621 |  |  |  | 2,009 |  |  |  | - |  |  |  | 1,787 |
Commissions |  |  | 4,737 |  |  |  | 5,522 |  |  |  | 208 |  |  |  | 1,654 |  |  |  | 158 |  |  |  | 1,017 |  |  |  | 406 |
Interest |  |  | 7,684 |  |  |  | 2,449 |  |  |  | 1,108 |  |  |  | 1,051 |  |  |  | 1,192 |  |  |  | 1,563 |  |  |  | 1,823 |
Total expenses |  |  | 92,153 |  |  |  | 68,709 |  |  |  | 22,658 |  |  |  | 24,538 |  |  |  | 21,695 |  |  |  | 23,185 |  |  |  | 23,321 |
Income before interest income, equity in earnings (losses) of non-consolidated REITs and taxes |  |  | 34,840 |  |  |  | 38,536 |  |  |  | 6,266 |  |  |  | 9,999 |  |  |  | 5,915 |  |  |  | 8,902 |  |  |  | 6,613 |
Interest income |  |  | 2,377 |  |  |  | 2,998 |  |  |  | 177 |  |  |  | 176 |  |  |  | 303 |  |  |  | 514 |  |  |  | 650 |
Equity in earnings (losses) of non-consolidated REITs |  |  | (464 | ) |  |  | 845 |  |  |  | 679 |  |  |  | 694 |  |  |  | 793 |  |  |  | 147 |  |  |  | 147 |
|  |  | 36,753 |  |  |  | 42,379 |  |  |  | 7,122 |  |  |  | 10,869 |  |  |  | 7,011 |  |  |  | 9,563 |  |  |  | 7,410 |
Income tax expense (benefit) |  |  | 647 |  |  |  | 839 |  |  |  | (297 | ) |  |  | 335 |  |  |  | (375 | ) |  |  | 359 |  |  |  | (206 | )
Income from continuing operations |  |  | 36,106 |  |  |  | 41,540 |  |  |  | 7,419 |  |  |  | 10,534 |  |  |  | 7,386 |  |  |  | 9,204 |  |  |  | 7,616 |
Income from discontinued operations |  |  | 1,190 |  |  |  | 7,951 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (70 | ) |  |  | (72 | )
Gain on sale of assets |  |  | 23,789 |  |  |  | 61,438 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 257 |  |  |  | 1,942 |
Net income |  | $ | 61,085 |  |  | $ | 110,929 |  |  | $ | 7,419 |  |  | $ | 10,534 |  |  | $ | 7,386 |  |  | $ | 9,391 |  |  | $ | 9,486 |
Weighted average number of shares outstanding, basic and diluted |  |  | 70,651 |  |  |  | 67,159 |  |  |  | 70,481 |  |  |  | 70,481 |  |  |  | 70,481 |  |  |  | 70,481 |  |  |  | 70,596 |
Earnings per share, basic and diluted, attributable to: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Continuing operations |  | $ | 0.51 |  |  | $ | 0.62 |  |  | $ | 0.11 |  |  | $ | 0.15 |  |  | $ | 0.10 |  |  | $ | 0.13 |  |  | $ | 0.11 |
Discontinued operations |  |  | 0.01 |  |  |  | 0.12 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  |  |  |  |  | - |
Gains on sales of assets |  |  | 0.34 |  |  |  | 0.91 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 0.02 |
Net income per share, basic and diluted |  | $ | 0.86 |  |  | $ | 1.65 |  |  | $ | 0.11 |  |  | $ | 0.15 |  |  | $ | 0.10 |  |  | $ | 0.13 |  |  | $ | 0.13 |

Franklin Street Properties Corp. Third Quarter 2008
9

Condensed Consolidated Balance Sheet
(in thousands)

|  | September 30, |  |  | June 30, |  |  | March 31, |  |  | December 31, |
|  | 2008 |  |  | 2008 |  |  | 2008 |  |  | 2007 |
Assets: |  |  |  |  |  |  |  |  |  |  |  |
Real estate assets: |  |  |  |  |  |  |  |  |  |  |  |
Land |  | $ | 100,440 |  |  | $ | 100,440 |  |  | $ | 99,140 |  |  | $ | 99,140 |
Buildings and improvements |  |  | 780,276 |  |  |  | 778,107 |  |  |  | 745,488 |  |  |  | 743,027 |
Fixtures and equipment |  |  | 301 |  |  |  | 219 |  |  |  | 219 |  |  |  | 212 |
|  |  | 881,017 |  |  |  | 878,766 |  |  |  | 844,847 |  |  |  | 842,379 |
Less accumulated depreciation |  |  | 68,579 |  |  |  | 63,056 |  |  |  | 57,449 |  |  |  | 52,060 |
Real estate assets, net |  |  | 812,438 |  |  |  | 815,710 |  |  |  | 787,398 |  |  |  | 790,319 |
Acquired real estate leases, net |  |  | 28,024 |  |  |  | 30,905 |  |  |  | 30,826 |  |  |  | 33,695 |
Investment in non-consolidated REITs |  |  | 83,896 |  |  |  | 84,609 |  |  |  | 86,235 |  |  |  | 85,663 |
Assets held for syndication, net |  |  | 13,335 |  |  |  | 14,039 |  |  |  | 24,593 |  |  |  | 26,310 |
Cash and cash equivalents |  |  | 34,527 |  |  |  | 34,386 |  |  |  | 32,227 |  |  |  | 46,988 |
Restricted cash |  |  | 336 |  |  |  | 336 |  |  |  | 336 |  |  |  | 336 |
Tenant rent receivables, net |  |  | 1,174 |  |  |  | 989 |  |  |  | 1,694 |  |  |  | 1,472 |
Straight-line rent receivable, net |  |  | 8,255 |  |  |  | 7,894 |  |  |  | 7,638 |  |  |  | 7,387 |
Prepaid expenses |  |  | 2,922 |  |  |  | 1,061 |  |  |  | 1,654 |  |  |  | 1,395 |
Other assets |  |  | 1,475 |  |  |  | 1,588 |  |  |  | 1,540 |  |  |  | 406 |
Office computers and furniture, net |  |  | 313 |  |  |  | 331 |  |  |  | 340 |  |  |  | 309 |
Deferred leasing commissions, net |  |  | 10,365 |  |  |  | 10,509 |  |  |  | 9,581 |  |  |  | 9,186 |
Total assets |  | $ | 997,060 |  |  | $ | 1,002,357 |  |  | $ | 984,062 |  |  | $ | 1,003,466 |
Liabilities and Stockholders’ Equity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Bank note payable |  | $ | 105,118 |  |  | $ | 109,995 |  |  | $ | 84,750 |  |  | $ | 84,750 |
Accounts payable and accrued expenses |  |  | 24,945 |  |  |  | 18,984 |  |  |  | 16,633 |  |  |  | 20,255 |
Accrued compensation |  |  | 1,652 |  |  |  | 1,845 |  |  |  | 415 |  |  |  | 1,564 |
Tenant security deposits |  |  | 1,823 |  |  |  | 1,810 |  |  |  | 1,923 |  |  |  | 1,874 |
Acquired unfavorable real estate leases, net |  |  | 4,654 |  |  |  | 4,883 |  |  |  | 4,186 |  |  |  | 4,405 |
Total liabilities |  |  | 138,192 |  |  |  | 137,517 |  |  |  | 107,907 |  |  |  | 112,848 |
Commitments and contingencies |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Stockholders’ Equity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Preferred stock |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Common stock |  |  | 7 |  |  |  | 7 |  |  |  | 7 |  |  |  | 7 |
Additional paid-in capital |  |  | 889,019 |  |  |  | 889,019 |  |  |  | 889,019 |  |  |  | 889,019 |
Earnings (distributions) in excess of accumulated earnings/distributions |  |  | (30,158 | ) |  |  | (24,186 | ) |  |  | (12,871 | ) |  |  | 1,592 |
Total stockholders’ equity |  |  | 858,868 |  |  |  | 864,840 |  |  |  | 876,155 |  |  |  | 890,618 |
Total liabilities and stockholders’ equity |  | $ | 997,060 |  |  | $ | 1,002,357 |  |  | $ | 984,062 |  |  | $ | 1,003,466 |

Franklin Street Properties Corp. Third Quarter 2008
10

Condensed Consolidated Statement of Cash Flows
(in thousands)

|  | Nine Months ended September 30 |  |  | Twelve Months ended December 31 |
|  | 2008 |  |  | 2007 |  |  | 2007 |  |  | 2006 |
Cash flows from operating activities: |  |  |  |  |  |  |  |  |  |  |  |
Net income |  | $ | 25,340 |  |  | $ | 51,694 |  |  | $ | 61,085 |  |  | $ | 110,929 |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gains on assets sold |  |  | - |  |  |  | (23,532 | ) |  |  | (23,789 | ) |  |  | (61,438 | )
Depreciation and amortization expense |  |  | 22,649 |  |  |  | 22,818 |  |  |  | 30,563 |  |  |  | 24,951 |
Amortization of above market lease |  |  | 3,376 |  |  |  | 3,706 |  |  |  | 4,948 |  |  |  | 7,138 |
Equity in earnings (losses) from non-consolidated REITs |  |  | (2,167 | ) |  |  | 619 |  |  |  | 472 |  |  |  | (1,043 | )
Distributions from non-consolidated REITs |  |  | 3,838 |  |  |  | 1,199 |  |  |  | 1,806 |  |  |  | 783 |
Increase in bad debt reserve |  |  | 79 |  |  |  | - |  |  |  | (3 | ) |  |  | 83 |
Shares issued as compensation |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Changes in operating assets and liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Restricted cash |  |  | - |  |  |  | 425 |  |  |  | 425 |  |  |  | (300 | )
Tenant rent receivables, net |  |  | 219 |  |  |  | 1,053 |  |  |  | 971 |  |  |  | (1,076 | )
Straight-line rents, net |  |  | (854 | ) |  |  | (2,924 | ) |  |  | (3,359 | ) |  |  | (1,334 | )
Prepaid expenses and other assets, net |  |  | (1,474 | ) |  |  | (717 | ) |  |  | 374 |  |  |  | (327 | )
Accounts payable and accrued expenses |  |  | 3,862 |  |  |  | 572 |  |  |  | 1,884 |  |  |  | 1,174 |
Accrued compensation |  |  | 88 |  |  |  | (1,273 | ) |  |  | (1,079 | ) |  |  | 752 |
Tenant security deposits |  |  | (51 | ) |  |  | 179 |  |  |  | 130 |  |  |  | 451 |
Payment of deferred leasing commissions |  |  | 2,434 |  |  |  | (2,905 | ) |  |  | (4,314 | ) |  |  | (5,880 | )
Net cash provided by operating activities |  |  | 52,471 |  |  |  | 50,914 |  |  |  | 70,114 |  |  |  | 74,863 |
Cash flows from investing activities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash acquired through issuance of common stock in merger transaction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 13,849 |
Purchase of real estate assets, office computers and furniture, capitalized merger costs |  |  | (37,214 | ) |  |  | (75,887 | ) |  |  | (77,894 | ) |  |  | (159,351 | )
Purchase of acquired favorable and unfavorable leases |  |  | (2,067 | ) |  |  | (3,726 | ) |  |  | (3,726 | ) |  |  | (6,801 | )
Investment in non-consolidated REITs |  |  | (10 | ) |  |  | (18 | ) |  |  | (82,831 | ) |  |  | (4,137 | )
Investment in loan receivable |  |  | (1,125 | ) |  |  | - |  |  |  | - |  |  |  | - |
Redemption of certificate of deposit |  |  | - |  |  |  | 5,143 |  |  |  | 5,143 |  |  |  | (5,143 | )
Merger costs paid |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (838 | )
Changes in deposits on real estate assets |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (4,300 | )
Investment in assets held for syndication, net |  |  | 12,235 |  |  |  | (112,618 | ) |  |  | (22,093 | ) |  |  | - |
Proceeds received on sales of real estate assets |  |  | - |  |  |  | 85,673 |  |  |  | 93,102 |  |  |  | 173,183 |
Net cash used in investing activities |  |  | (28,181 | ) |  |  | 101,433 |  |  |  | (85,299 | ) |  |  | 6,462 |
Cash flows from financing activities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Distributions to stockholders |  |  | (57,089 | ) |  |  | (65,813 | ) |  |  | (87,662 | ) |  |  | (80,948 | )
Purchase of treasury shares |  |  | - |  |  |  | (4,767 | ) |  |  | (4,767 | ) |  |  | - |
Offering costs |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (119 | )
Borrowings (repayments) under bank note payable, net |  |  | 20,368 |  |  |  | 104,550 |  |  |  | 84,750 |  |  |  | - |
Deferred financing costs |  |  | (30 | ) |  |  | (7 | ) |  |  | (121 | ) |  |  | - |
Net cash (used in) provided by financing activities |  |  | (36,751 | ) |  |  | 33,963 |  |  |  | (7,800 | ) |  |  | (81,067 | )
Net increase (decrease) in cash and cash equivalents |  |  | (12,461 | ) |  |  | (16,556 | ) |  |  | (22,985 | ) |  |  | 258 |
Cash and cash equivalents, beginning of period |  |  | 46,988 |  |  |  | 69,973 |  |  |  | 69,973 |  |  |  | 69,715 |
Cash and cash equivalents, end of period |  | $ | 34,527 |  |  | $ | 53,417 |  |  | $ | 46,988 |  |  | $ | 69,973 |

Franklin Street Properties Corp. Third Quarter 2008
11

Segment Information*
($ in thousands except per share amounts)

|  | Three Months Ended September 30, 2008 |  |  | Three Months Ended September 30, 2007 |  |  | Nine Months Ended September 30, 2008 |  |  | Nine Months Ended September 30, 2007 |
|  | Real Estate |  |  | Investment Banking |  |  | Total |  |  | Real Estate |  |  | Investment Banking |  |  | Total |  |  | Real Estate |  |  | Investment Banking |  |  | Total |  |  | Real Estate |  |  | Investment Banking |  |  | Total |
Revenue: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Rental Income |  | $ | 27,927 |  |  | $ | - |  |  | $ | 27,927 |  |  | $ | 27,109 |  |  | $ | - |  |  | $ | 27,109 |  |  | $ | 82,283 |  |  | $ | - |  |  | $ | 82,283 |  |  | $ | 75,109 |  |  | $ | - |  |  | $ | 75,109 |
Syndication Fees |  |  | - |  |  |  | 304 |  |  |  | 304 |  |  |  | - |  |  |  | 687 |  |  |  | 687 |  |  |  | - |  |  |  | 3,766 |  |  |  | 3,766 |  |  |  | - |  |  |  | 7,090 |  |  |  | 7,090 |
Transaction Fees |  |  | - |  |  |  | 300 |  |  |  | 300 |  |  |  | - |  |  |  | 604 |  |  |  | 604 |  |  |  | - |  |  |  | 3,606 |  |  |  | 3,606 |  |  |  | - |  |  |  | 7,446 |  |  |  | 7,446 |
Management Fees & Interest Income |  |  | 380 |  |  |  | - |  |  |  | 380 |  |  |  | 1,497 |  |  |  | - |  |  |  | 1,497 |  |  |  | 1,364 |  |  |  | - |  |  |  | 1,364 |  |  |  | 5,176 |  |  |  | - |  |  |  | 5,176 |
Other Income |  |  | 13 |  |  |  | - |  |  |  | 13 |  |  |  | 2 |  |  |  | 35 |  |  |  | 37 |  |  |  | 52 |  |  |  | - |  |  |  | 52 |  |  |  | 49 |  |  |  | 35 |  |  |  | 84 |
Total Revenue |  |  | 28,320 |  |  |  | 604 |  |  |  | 28,924 |  |  |  | 28,608 |  |  |  | 1,326 |  |  |  | 29,934 |  |  |  | 83,699 |  |  |  | 7,372 |  |  |  | 91,071 |  |  |  | 80,334 |  |  |  | 14,571 |  |  |  | 94,906 |
Expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Rental Operating Expenses |  |  | 7,159 |  |  |  | - |  |  |  | 7,159 |  |  |  | 7,151 |  |  |  | - |  |  |  | 7,151 |  |  |  | 20,973 |  |  |  | - |  |  |  | 20,973 |  |  |  | 19,026 |  |  |  | - |  |  |  | 19,026 |
Real Estate Taxes and Insurance |  |  | 4,590 |  |  |  | - |  |  |  | 4,590 |  |  |  | 4,398 |  |  |  | - |  |  |  | 4,398 |  |  |  | 13,374 |  |  |  | - |  |  |  | 13,374 |  |  |  | 12,490 |  |  |  | - |  |  |  | 12,490 |
Depreciaton and Amortization |  |  | 7,628 |  |  |  | 37 |  |  |  | 7,665 |  |  |  | 7,726 |  |  |  | 30 |  |  |  | 7,756 |  |  |  | 22,510 |  |  |  | 106 |  |  |  | 22,616 |  |  |  | 21,619 |  |  |  | 91 |  |  |  | 21,710 |
Selling, general and administrative |  |  | 945 |  |  |  | 982 |  |  |  | 1,927 |  |  |  | 800 |  |  |  | 987 |  |  |  | 1,787 |  |  |  | 3,375 |  |  |  | 3,183 |  |  |  | 6,558 |  |  |  | 2,598 |  |  |  | 3,077 |  |  |  | 5,675 |
Commissions and Broker Expenses |  |  | (1 | ) |  |  | 209 |  |  |  | 208 |  |  |  | - |  |  |  | 406 |  |  |  | 406 |  |  |  | - |  |  |  | 2,020 |  |  |  | 2,020 |  |  |  | - |  |  |  | 3,720 |  |  |  | 3,720 |
Interest & Commitment Fees |  |  | 1,108 |  |  |  | - |  |  |  | 1,108 |  |  |  | 1,823 |  |  |  | - |  |  |  | 1,823 |  |  |  | 3,351 |  |  |  | - |  |  |  | 3,351 |  |  |  | 6,121 |  |  |  | - |  |  |  | 6,121 |
Total Expenses |  |  | 21,429 |  |  |  | 1,228 |  |  |  | 22,657 |  |  |  | 21,898 |  |  |  | 1,423 |  |  |  | 23,321 |  |  |  | 63,583 |  |  |  | 5,309 |  |  |  | 68,892 |  |  |  | 61,854 |  |  |  | 6,888 |  |  |  | 68,742 |
Income before Equity, Interest and Taxes |  |  | 6,890 |  |  |  | (624 | ) |  |  | 6,266 |  |  |  | 6,710 |  |  |  | (98 | ) |  |  | 6,612 |  |  |  | 20,115 |  |  |  | 2,064 |  |  |  | 22,179 |  |  |  | 18,481 |  |  |  | 7,683 |  |  |  | 26,164 |
Interest Income |  |  | 167 |  |  |  | 10 |  |  |  | 177 |  |  |  | 634 |  |  |  | 16 |  |  |  | 650 |  |  |  | 629 |  |  |  | 28 |  |  |  | 657 |  |  |  | 1,818 |  |  |  | 45 |  |  |  | 1,863 |
Equity Income SAR's |  |  | 680 |  |  |  | - |  |  |  | 680 |  |  |  | 147 |  |  |  | - |  |  |  | 147 |  |  |  | 2,167 |  |  |  | - |  |  |  | 2,167 |  |  |  | (611 | ) |  |  | - |  |  |  | (611 | )
Income before Taxes |  |  | 7,737 |  |  |  | (614 | ) |  |  | 7,123 |  |  |  | 7,491 |  |  |  | (81 | ) |  |  | 7,409 |  |  |  | 22,911 |  |  |  | 2,092 |  |  |  | 25,003 |  |  |  | 19,689 |  |  |  | 7,728 |  |  |  | 27,417 |
Income Taxes |  |  | 64 |  |  |  | (361 | ) |  |  | (297 | ) |  |  | 55 |  |  |  | (261 | ) |  |  | (207 | ) |  |  | 182 |  |  |  | (519 | ) |  |  | (337 | ) |  |  | 162 |  |  |  | 352 |  |  |  | 514 |
Income from continuing operations |  |  | 7,673 |  |  |  | (253 | ) |  |  | 7,420 |  |  |  | 7,436 |  |  |  | 180 |  |  |  | 7,616 |  |  |  | 22,729 |  |  |  | 2,611 |  |  |  | 25,340 |  |  |  | 19,527 |  |  |  | 7,376 |  |  |  | 26,903 |
Income from discontinued operations |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (72 | ) |  |  | - |  |  |  | (72 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,259 |  |  |  | - |  |  |  | 1,259 |
Gain on sale of assets |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,942 |  |  |  | - |  |  |  | 1,942 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 23,532 |  |  |  | - |  |  |  | 23,532 |
Net Income |  | $ | 7,673 |  |  | $ | (253 | ) |  | $ | 7,420 |  |  | $ | 9,306 |  |  | $ | 180 |  |  | $ | 9,486 |  |  | $ | 22,729 |  |  | $ | 2,611 |  |  | $ | 25,340 |  |  | $ | 44,318 |  |  | $ | 7,376 |  |  | $ | 51,694 |
Funds from Operations (FFO)* |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net income |  | $ | 7,673 |  |  | $ | (253 | ) |  | $ | 7,420 |  |  | $ | 9,306 |  |  | $ | 180 |  |  | $ | 9,486 |  |  | $ | 22,729 |  |  | $ | 2,611 |  |  | $ | 25,340 |  |  | $ | 44,318 |  |  | $ | 7,376 |  |  | $ | 51,694 |
Gain on sale of assets, net |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (1,942 | ) |  |  | - |  |  |  | (1,942 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (23,532 | ) |  |  | - |  |  |  | (23,532 | )
Equity in income of SARs |  |  | (680 | ) |  |  | - |  |  |  | (680 | ) |  |  | (106 | ) |  |  | - |  |  |  | (106 | ) |  |  | (2,167 | ) |  |  | - |  |  |  | (2,167 | ) |  |  | 619 |  |  |  | - |  |  |  | 619 |
Cash received from SARs |  |  | 1,561 |  |  |  | - |  |  |  | 1,561 |  |  |  | 476 |  |  |  | - |  |  |  | 476 |  |  |  | 3,838 |  |  |  | - |  |  |  | 3,838 |  |  |  | 1,199 |  |  |  | - |  |  |  | 1,199 |
Depreciation and amortization |  |  | 8,747 |  |  |  | 37 |  |  |  | 8,784 |  |  |  | 8,977 |  |  |  | 30 |  |  |  | 9,007 |  |  |  | 25,888 |  |  |  | 106 |  |  |  | 25,994 |  |  |  | 26,405 |  |  |  | 91 |  |  |  | 26,496 |
Funds From Operations (FFO)* |  |  | 17,301 |  |  |  | (216 | ) |  |  | 17,085 |  |  |  | 16,712 |  |  |  | 210 |  |  |  | 16,922 |  |  |  | 50,288 |  |  |  | 2,717 |  |  |  | 53,005 |  |  |  | 49,009 |  |  |  | 7,467 |  |  |  | 56,476 |
EPS |  | $ | 0.11 |  |  | $ | (0.00 | ) |  | $ | 0.11 |  |  | $ | 0.13 |  |  | $ | 0.00 |  |  | $ | 0.13 |  |  | $ | 0.32 |  |  | $ | 0.04 |  |  | $ | 0.36 |  |  | $ | 0.63 |  |  | $ | 0.10 |  |  | $ | 0.73 |
FFO per Share* |  | $ | 0.25 |  |  | $ | (0.00 | ) |  | $ | 0.24 |  |  | $ | 0.24 |  |  | $ | 0.00 |  |  | $ | 0.24 |  |  | $ | 0.71 |  |  | $ | 0.04 |  |  | $ | 0.75 |  |  | $ | 0.69 |  |  | $ | 0.11 |  |  | $ | 0.80 |
Weighted Average Shares |  |  |  |  |  |  |  |  |  |  | 70,481 |  |  |  |  |  |  |  |  |  |  |  | 70,596 |  |  |  |  |  |  |  |  |  |  |  | 70,481 |  |  |  |  |  |  |  |  |  |  |  | 70,709 |

*See page 22 for a reconciliation of Net Income to FFO and FFO+GOS and definitions of FFO and FFO+GOS
Franklin Street Properties Corp. Third Quarter 2008
12

Cash and GAAP NOI*
(in thousands)

Property NOI Cash |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  | Three Months Ended |  |  | Nine Months Ended |  |  | Three Months Ended |  |  | Twelve Months Ended |
Region | Division |  | S.F. |  |  | 3/31/08 |  |  | 6/30/08 |  |  | 9/30/08 |  |  | 9/30/08 |  |  | 3/31/07 |  |  | 6/30/07 |  |  | 9/30/07 |  |  | 12/31/07 |  |  | 2007 Total |
Eastern | Mideast |  | 1,028 |  |  | $ | 3,321 |  |  | $ | 3,230 |  |  | $ | 3,059 |  |  | $ | 9,610 |  |  | $ | 2,000 |  |  | $ | 2,324 |  |  | $ | 3,191 |  |  | $ | 3,047 |  |  | $ | 10,562 |
Midwest | East North Central |  | 597 |  |  |  | 1,536 |  |  |  | 1,443 |  |  |  | 1,400 |  |  |  | 4,379 |  |  |  | 1,446 |  |  |  | 1,355 |  |  |  | 1,405 |  |  |  | 1,617 |  |  |  | 5,823 |
| West North Central |  | 349 |  |  |  | 1,132 |  |  |  | 1,228 |  |  |  | 1,381 |  |  |  | 3,741 |  |  |  | 1,077 |  |  |  | 1,083 |  |  |  | 1,115 |  |  |  | 1,125 |  |  |  | 4,400 |
|  |  | 946 |  |  |  | 2,668 |  |  |  | 2,671 |  |  |  | 2,781 |  |  |  | 8,120 |  |  |  | 2,523 |  |  |  | 2,438 |  |  |  | 2,520 |  |  |  | 2,742 |  |  |  | 10,223 |
South | Southeast |  | 600 |  |  |  | 2,403 |  |  |  | 2,507 |  |  |  | 2,370 |  |  |  | 7,280 |  |  |  | 2,365 |  |  |  | 2,399 |  |  |  | 2,428 |  |  |  | 2,406 |  |  |  | 9,598 |
| Southwest |  | 1,489 |  |  |  | 4,574 |  |  |  | 4,850 |  |  |  | 4,954 |  |  |  | 14,378 |  |  |  | 4,343 |  |  |  | 3,881 |  |  |  | 3,842 |  |  |  | 4,465 |  |  |  | 16,531 |
|  |  | 2,089 |  |  |  | 6,977 |  |  |  | 7,357 |  |  |  | 7,324 |  |  |  | 21,658 |  |  |  | 6,708 |  |  |  | 6,280 |  |  |  | 6,270 |  |  |  | 6,871 |  |  |  | 26,129 |
West | Mountain |  | 792 |  |  |  | 2,996 |  |  |  | 2,969 |  |  |  | 3,019 |  |  |  | 8,984 |  |  |  | 2,173 |  |  |  | 2,356 |  |  |  | 2,770 |  |  |  | 2,389 |  |  |  | 9,688 |
| Pacific |  | 299 |  |  |  | 322 |  |  |  | 359 |  |  |  | 313 |  |  |  | 994 |  |  |  | (72 | ) |  |  | (64 | ) |  |  | (56 | ) |  |  | (38 | ) |  |  | (230 | )
|  |  | 1,091 |  |  |  | 3,318 |  |  |  | 3,328 |  |  |  | 3,332 |  |  |  | 9,978 |  |  |  | 2,101 |  |  |  | 2,292 |  |  |  | 2,714 |  |  |  | 2,351 |  |  |  | 9,458 |
Total |  |  | 5,154 |  |  | $ | 16,284 |  |  | $ | 16,586 |  |  | $ | 16,496 |  |  | $ | 49,366 |  |  | $ | 13,332 |  |  | $ | 13,334 |  |  | $ | 14,695 |  |  | $ | 15,011 |  |  | $ | 56,372 |

Property NOI GAAP |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  | Three Months Ended |  |  | Nine Months Ended |  |  | Three Months Ended |  |  | Twelve Months Ended |
Region | Division |  | S.F. |  |  | 3/31/08 |  |  | 6/30/08 |  |  | 9/30/08 |  |  | 9/30/08 |  |  | 3/31/07 |  |  | 6/30/07 |  |  | 9/30/07 |  |  | 12/31/07 |  |  | 2007 Total |
Eastern | Mideast |  | 1,028 |  |  | $ | 3,339 |  |  | $ | 3,289 |  |  | $ | 3,131 |  |  | $ | 9,759 |  |  | $ | 2,089 |  |  | $ | 2,334 |  |  | $ | 3,289 |  |  | $ | 3,139 |  |  | $ | 10,851 |
Midwest | East North Central |  | 597 |  |  |  | 1,619 |  |  |  | 1,479 |  |  |  | 1,496 |  |  |  | 4,594 |  |  |  | 1,562 |  |  |  | 1,501 |  |  |  | 1,520 |  |  |  | 1,725 |  |  |  | 6,308 |
| West North Central |  | 349 |  |  |  | 1,043 |  |  |  | 1,157 |  |  |  | 1,279 |  |  |  | 3,479 |  |  |  | 952 |  |  |  | 981 |  |  |  | 1,157 |  |  |  | 1,148 |  |  |  | 4,238 |
|  |  | 946 |  |  |  | 2,662 |  |  |  | 2,636 |  |  |  | 2,775 |  |  |  | 8,073 |  |  |  | 2,514 |  |  |  | 2,482 |  |  |  | 2,677 |  |  |  | 2,873 |  |  |  | 10,546 |
South | Southeast |  | 600 |  |  |  | 2,342 |  |  |  | 2,410 |  |  |  | 2,263 |  |  |  | 7,015 |  |  |  | 2,622 |  |  |  | 2,637 |  |  |  | 2,621 |  |  |  | 2,284 |  |  |  | 10,164 |
| Southwest |  | 1,489 |  |  |  | 4,708 |  |  |  | 4,933 |  |  |  | 5,095 |  |  |  | 14,736 |  |  |  | 4,797 |  |  |  | 4,096 |  |  |  | 4,008 |  |  |  | 4,574 |  |  |  | 17,475 |
|  |  | 2,089 |  |  |  | 7,050 |  |  |  | 7,343 |  |  |  | 7,358 |  |  |  | 21,751 |  |  |  | 7,419 |  |  |  | 6,733 |  |  |  | 6,629 |  |  |  | 6,858 |  |  |  | 27,639 |
West | Mountain |  | 792 |  |  |  | 3,139 |  |  |  | 3,190 |  |  |  | 3,231 |  |  |  | 9,560 |  |  |  | 2,549 |  |  |  | 2,613 |  |  |  | 2,952 |  |  |  | 2,542 |  |  |  | 10,656 |
| Pacific |  | 299 |  |  |  | 345 |  |  |  | 385 |  |  |  | 347 |  |  |  | 1,077 |  |  |  | (68 | ) |  |  | (47 | ) |  |  | (14 | ) |  |  | (22 | ) |  |  | (151 | )
|  |  | 1,091 |  |  |  | 3,484 |  |  |  | 3,755 |  |  |  | 3,578 |  |  |  | 10,637 |  |  |  | 2,481 |  |  |  | 2,566 |  |  |  | 2,938 |  |  |  | 2,520 |  |  |  | 10,504 |
Total |  |  | 5,154 |  |  | $ | 16,535 |  |  | $ | 16,843 |  |  | $ | 16,842 |  |  | $ | 50,220 |  |  | $ | 14,503 |  |  | $ | 14,115 |  |  | $ | 15,533 |  |  | $ | 15,390 |  |  | $ | 59,541 |

*See page 23 for a reconciliation of Net Income to NOI.
Franklin Street Properties Corp. Third Quarter 2008
13

Capital Analysis and Capital Expenditures
(in thousands, except per share amounts)

|  | September 30, |  |  | June 30, |  |  | March 31, |  |  | December 31, |  |  | September 30, |
|  | 2008 |  |  | 2008 |  |  | 2008 |  |  | 2007 |  |  | 2007 |
Market Data: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Shares Outstanding |  |  | 70,481 |  |  |  | 70,481 |  |  |  | 70,481 |  |  |  | 70,481 |  |  |  | 70,481 |
Closing market price per share |  | $ | 13.00 |  |  | $ | 12.64 |  |  | $ | 14.32 |  |  | $ | 14.80 |  |  | $ | 17.25 |
Market capitalization |  | $ | 916,249 |  |  | $ | 890,876 |  |  | $ | 1,009,284 |  |  | $ | 1,043,114 |  |  | $ | 1,215,792 |
Dividend Data: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total dividends paid |  | $ | 13,391 |  |  | $ | 21,849 |  |  | $ | 21,849 |  |  | $ | 21,849 |  |  | $ | 21,938 |
Common dividend per share |  | $ | 0.19 |  |  | $ | 0.31 |  |  | $ | 0.31 |  |  | $ | 0.31 |  |  | $ | 0.31 |
Quarterly dividend as a % of FFO* |  |  | 78.4 | % |  |  | 107.7 | % |  |  | 139.7 | % |  |  | 117.6 | % |  |  | 129.7 | %
Liquidity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 34,527 |  |  | $ | 34,386 |  |  | $ | 32,227 |  |  | $ | 46,988 |  |  | $ | 53,417 |
Revolving credit facilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gross potential available under current credit facilities |  |  | 250,000 |  |  |  | 250,000 |  |  |  | 250,000 |  |  |  | 250,000 |  |  |  | 150,000 |
Less: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Outstanding balance |  |  | (105,118 | ) |  |  | (109,955 | ) |  |  | (84,750 | ) |  |  | (84,750 | ) |  |  | (104,550 | )
Total Liquidity |  | $ | 179,409 |  |  | $ | 174,431 |  |  | $ | 197,477 |  |  | $ | 212,238 |  |  | $ | 98,867 |

Owned Property Capital Expenditures
Tenant Improvement Costs and Leasing Commissions

|  | Twelve Months Ended |  |  | Three Months Ended |
|  | 12/31/07 |  |  | 12/31/06 |  |  | 9/30/08 |  |  | 6/30/08 |  |  | 3/31/08 |  |  | 12/31/07 |
Tenant improvements |  | $ | 6,596 |  |  | $ | 13,471 |  |  | $ | 1,667 |  |  | $ | 560 |  |  | $ | 2,337 |  |  | $ | 998 |
Deferred leasing costs |  |  | 4,314 |  |  |  | 5,881 |  |  |  | 305 |  |  |  | 1,313 |  |  |  | 817 |  |  |  | 1,409 |
Building improvements |  |  | 4,504 |  |  |  | 1,308 |  |  |  | 740 |  |  |  | 372 |  |  |  | 197 |  |  |  | 908 |
Increase to investments in building |  |  | - |  |  |  | 1,220 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total |  | $ | 15,414 |  |  | $ | 21,880 |  |  | $ | 2,712 |  |  | $ | 2,245 |  |  | $ | 3,351 |  |  | $ | 3,315 |

Franklin Street Properties Corp. Third Quarter 2008
14

Portfolio Overview

| 9/30/08 | 6/30/08 | 3/31/08 | 12/31/07 | 9/30/07
Owned portfolio of commercial real estate: |  |  |  |  |
Number of properties | 27 | 27 | 26 | 26 | 27
Square feet | 5,153,737 | 5,153,396 | 4,997,128 | 4,998,280 | 5,066,813
Leased percentage | 93% | 93% | 93% | 93% | 91%
Investments in non-consolidated commercial real estate: |  |  |  |  |
Number of properties | 2 | 2 | 3 | 3 | 3
Square feet | 1,461,224 | 1,459,420 | 1,615,395 | 1,614,380 | 1,614,267
Leased percentage | 79% | 78% | 80% | 92% | 90%
Single Asset REITs (SARs) managed: |  |  |  |  |
Number of properties | 10 | 10 | 9 | 9 | 9
Square feet | 2,683,105 | 2,682,931 | 2,682,770 | 2,682,770 | 2,341,274
Leased percentage | 92% | 93% | 93% | 92% | 89%
Total owned, investments and managed properties: |  |  |  |  |
Number of properties | 39 | 39 | 38 | 38 | 39
Square feet | 9,298,066 | 9,295,747 | 9,295,293 | 9,295,430 | 9,022,354
Leased percentage | 90% | 91% | 91% | 93% | 90%

Franklin Street Properties Corp. Third Quarter 2008
15

Portfolio Overview
(as of September 30, 2008)

Owned: |  |  |  |
Name | City | State | Region | S.F.
Park Seneca | Charlotte | NC | East | 109,550
Forest Park | Charlotte | NC | East | 62,212
Meadow Point | Chantilly | VA | East | 134,850
Innsbrook | Glen Allen | VA | East | 297,789
East Baltimore | Baltimore | MD | East | 325,298
Bollman Place (1) | Savage | MD | East | 98,745
Southfield Centre | Southfield | MI | MidWest | 214,697
Northwest Point | Elk Grove Village | IL | MidWest | 176,848
River Crossing | Indianapolis | IN | MidWest | 205,059
Timberlake | Chesterfield | MO | MidWest | 232,766
Timberlake East | Chesterfield | MO | MidWest | 116,312
Blue Lagoon Drive | Miami | FL | South | 212,619
One Overton Place | Atlanta | GA | South | 387,267
Willow Bend Office Center | Plano | TX | South | 116,622
Park Ten LP | Houston | TX | South | 155,715
Addison Circle | Addison | TX | South | 293,787
Collins Crossing | Richardson | TX | South | 298,766
Eldridge Green | Houston | TX | South | 248,399
Park Ten Phase II | Houston | TX | South | 156,746
Liberty Plaza | Addison | TX | South | 218,934
Centennial Technology Center | Colorado Springs | CO | West | 110,730
380 Interlocken | Broomfield | CO | West | 240,184
Greenwood Plaza | Englewood | CO | West | 199,077
390 Interlocken | Broomfield | CO | West | 241,516
Hillview Center | Milpitas | CA | West | 36,288
Federal Way | Federal Way | WA | West | 117,010
Montague Business Center | San Jose | CA | West | 145,951
Total |  |  |  | 5,153,737
Managed: |  |  |  |
Name | City | State | Region | S.F.
1441 Main Street | Columbia | SC | East | 267,549
303 East Wacker Drive | Chicago | IL | MidWest | 842,717
505 Waterford | Plymouth | MN | MidWest | 256,348
50 South Tenth Street | Minneapolis | MN | MidWest | 498,768
Grand Boulevard | Kansas City | MO | MidWest | 532,371
Satellite Place | Duluth | GA | South | 132,866
5601 Executive Drive | Irving | TX | South | 152,121
Galleria North | Dallas | TX | South | 379,518
Energy Tower I | Houston | TX | South | 325,796
Phoenix Tower | Houston | TX | South | 618,507
Highland Place I | Centennial | CO | West | 137,768
Total (2) |  |  |  | 4,144,329

(1) Industrial property, all others are office properties
(2) Excludes property under construction in Broomfield, Co of approximately 285,000 square feet

Properties by Division/Region
($ in thousands)
|  |  |  |  |  |  | NBV (1) |  | % Leased
| # of Properties |  | Square Feet |  | % of Portfolio |  | 9/30/2008 |  | 9/30/2008
East Region Total | 6 |  | 1,028,444 |  | 20.0 |  | $140,263 |  | 97.56
East North Central Division | 3 |  | 596,604 |  | 11.6 |  | 84,624 |  | 95.02
West North Central | 2 |  | 349,078 |  | 6.8 |  | 56,832 |  | 100.00
Midwest Region Total | 5 |  | 945,682 |  | 18.4 |  | 141,456 |  | 97.00
Southeast | 2 |  | 599,886 |  | 11.6 |  | 127,443 |  | 94.69
Southwest | 7 |  | 1,488,969 |  | 28.9 |  | 235,445 |  | 91.22
South Region Total | 9 |  | 2,088,855 |  | 40.5 |  | 362,888 |  | 92.21
Mountain | 4 |  | 791,507 |  | 15.4 |  | 131,340 |  | 95.64
Pacific | 3 |  | 299,249 |  | 5.8 |  | 36,490 |  | 57.24
West Region Total | 7 |  | 1,090,756 |  | 21.2 |  | 167,830 |  | 85.10
Grand Total | 27 |  | 5,153,737 |  | 100 |  | 812,438 |  | 92.63
(1) NBV is for real estate assets, excluding intangibles |  |  |  |  |  |

Franklin Street Properties Corp. Third Quarter 2008
16

Owned Portfolio Property List

(in thousands) |  |  |  |  | NBV (1) | % Leased
Region | Division | Name | City | State | S.F. | 9/30/08 | 9/30/08
West | Pacific | Hillview Center | Milpitas | CA | 36 | $ 4,336 | 100.0%
West | Pacific | Montague Business Center | San Jose | CA | 146 | 17,081 | 81.1%
West | Mountain | Centennial Technology Center | Colorado Springs | CO | 111 | 12,510 | 94.3%
West | Mountain | 380 Interlocken | Broomfield | CO | 240 | 43,673 | 88.3%
West | Mountain | Greenwood Plaza | Englewood | CO | 199 | 30,526 | 100.0%
West | Mountain | 390 Interlocken | Broomfield | CO | 242 | 44,631 | 100.0%
South | Southeast | Blue Lagoon Drive | Miami | FL | 213 | 49,572 | 100.0%
South | Southeast | One Overton Place | Atlanta | GA | 387 | 77,872 | 91.8%
MidWest | East North Central | Northwest Point | Elk Grove Village | IL | 177 | 31,728 | 100.0%
MidWest | East North Central | River Crossing | Indianapolis | IN | 205 | 37,622 | 98.2%
East | Mideast | East Baltimore | Baltimore | MD | 325 | 58,027 | 96.1%
East | Mideast | Bollman Place | Savage | MD | 99 | 5,172 | 100.0%
MidWest | East North Central | Southfield Centre | Southfield | MI | 215 | 15,274 | 87.9%
MidWest | West North Central | Timberlake | Chesterfield | MO | 233 | 37,617 | 100.0%
MidWest | West North Central | Timberlake East | Chesterfield | MO | 116 | 19,215 | 100.0%
East | Mideast | Park Seneca | Charlotte | NC | 110 | 7,956 | 88.8%
East | Mideast | Forest Park | Charlotte | NC | 62 | 6,477 | 100.0%
South | Southwest | Willow Bend Office Center | Plano | TX | 117 | 18,206 | 61.2%
South | Southwest | Park Ten LP | Houston | TX | 156 | 19,444 | 91.6%
South | Southwest | Addison Circle | Addison | TX | 294 | 49,267 | 89.5%
South | Southwest | Collins Crossing | Richardson | TX | 299 | 44,348 | 100.0%
South | Southwest | Eldridge Green | Houston | TX | 248 | 45,032 | 100.0%
South | Southwest | Park Ten Phase II | Houston | TX | 157 | 32,698 | 97.8%
South | Southwest | Liberty Plaza | Addison | TX | 219 | 26,450 | 82.5%
East | Mideast | Meadow Point | Chantilly | VA | 135 | 18,959 | 100.0%
East | Mideast | Innsbrook | Glen Allen | VA | 298 | 43,672 | 100.0%
West | Pacific | Federal Way | Federal Way | WA | 117 | 15,073 | 14.2%
|  |  |  |  | 5,154 | $ 812,438 | 92.60%
(1) NBV is for real estate assets, excluding intangibles

Franklin Street Properties Corp. Third Quarter 2008
17

Twenty Largest Tenants
(as of September 30, 2008)

|  | Tenant Name |  | Type of Industry |  | Square Feet |  | % of Total Sq. Feet
1 |  | Capital One Services, Inc.* |  | Financial Services/Credit card/Finance |  | 297,789 |  | 6.0%
2 |  | Citgo Petroleum Corporation |  | Oil and Gas |  | 248,399 |  | 5.0%
3 |  | Tektronix Texas, LLC |  | Systems Technology |  | 241,372 |  | 4.8%
4 |  | Burger King Corporation |  | Restaurant/Food |  | 212,619 |  | 4.3%
5 |  | New Era of Networks, Inc. (Sybase) |  | Technology |  | 199,077 |  | 4.0%
6 |  | Citigroup Credit Services, Inc.** |  | Banking/Credit Card/Finance |  | 176,848 |  | 3.5%
7 |  | RGA Reinsurance Company |  | Reinsurance |  | 171,120 |  | 3.4%
8 |  | International Business Machines Corp. |  | Computer Consulting |  | 138,033 |  | 2.8%
9 |  | Murphy Exploration & Production Company |  | Crude Oil and Natural Gas Exploration |  | 133,786 |  | 2.7%
10 |  | CACI Technologies, Inc. |  | Defense Consulting |  | 132,896 |  | 2.7%
11 |  | Maines Paper and Food Service, Inc. |  | Food Distribution |  | 98,745 |  | 2.0%
12 |  | Jones Lang Lasalle |  | Real Estate Services |  | 92,827 |  | 1.9%
13 |  | AMDOCS, Inc. |  | Telephone Technology |  | 91,928 |  | 1.8%
14 |  | Ober Kaler Grimes |  | Law Firm |  | 90,811 |  | 1.8%
15 |  | County of Santa Clara |  | Executive Legislature and General Government |  | 90,467 |  | 1.8%
16 |  | Vail Corp, dba Vail Resorts |  | Ski Area Operator |  | 83,620 |  | 1.7%
17 |  | Corporate Holdings, LLC |  | Real Estate Holding Company |  | 81,818 |  | 1.6%
18 |  | Technip-Coflexip USA Holdings, Inc. |  | Oil Engineering/Construction Services |  | 79,496 |  | 1.6%
19 |  | Noble Royalties, Inc. |  | Oil Royalty Traders |  | 78,344 |  | 1.6%
20 |  | Cooley Godward LLP |  | Law Firm |  | 72,850 |  | 1.5%
|  |  |  | Total Square Footage |  | 2,812,845 |  | 56.3%

* Capital One sublet all of its space to LandAmerica Financial Group until 2009, and LandAmerica has a direct lease thereafter until 2016. LandAmerica provides title insurance and other financial products.
** The lease with Citicorp Credit Services, Inc. is guaranteed by Citigroup.
Franklin Street Properties Corp. Third Quarter 2008
18

Commercial Portfolio Lease Expirations by Square Feet
(as of September 30, 2008)

Year |  | Total Square Feet |  | % of Square Feet Commercial
2008 |  | 91,653 |  | 1.8%
2009 |  | 555,808 |  | 10.8%
2010 |  | 770,393 |  | 15.0%
2011 |  | 372,518 |  | 7.2%
2012 |  | 748,427 |  | 14.5%
2013 |  | 346,513 |  | 6.7%
2014 |  | 476,093 |  | 9.2%
2015 |  | 146,487 |  | 2.8%
2016 |  | 744,255 |  | 14.4%
2017 |  | 160,794 |  | 3.1%
2018 |  | 276,844 |  | 5.5%
2019 |  | 83,620 |  | 1.6%
Vacant 9/30/08 |  | 380,332 |  | 7.4%
Total Commercial |  | 5,153,737 |  | 100.0%

Franklin Street Properties Corp. Third Quarter 2008
19

Acquisition and Disposition Detail
($ in thousands)

Acquisitions: |  |  |  |  |  |  |  |  |  |
|  | State/Region |  | Property Type |  | Square Feet |  | Date Acquired |  | Purchase Price
2008 |  |  |  |  |  |  |  |  |  |
Park Ten Phase II |  | TX/South |  | Office |  | 156,746 |  | 5/15/08 |  | $35,079
2007 |  |  |  |  |  |  |  |  |  |
East Baltimore |  | MD/East |  | Office |  | 325,298 |  | 6/13/07 |  | 63,592
2006 |  |  |  |  |  |  |  |  |  |
Liberty Plaza |  | TX/South |  | Office |  | 218,934 |  | 2/24/06 |  | 26,472
Innsbrook |  | VA/East |  | Office |  | 297,789 |  | 5/1/05 |  | 48,240
380 Interlocken |  | CO/West |  | Office |  | 240,184 |  | 5/1/06 |  | 47,587
Blue Lagoon Drive |  | FL/South |  | Office |  | 212,619 |  | 5/1/06 |  | 56,051
Eldridge Green |  | TX/South |  | Office |  | 248,399 |  | 5/1/06 |  | 53,435
Willow Bend Office Center |  | TX/South |  | Office |  | 116,622 |  | 5/1/06 |  | 19,713
One Overton Place |  | GA/South |  | Office |  | 387,267 |  | 6/27/06 |  | 85,284
390 Interlocken |  | CO/West |  | Office |  | 241,516 |  | 12/21/06 |  | 46,459
2005 |  |  |  |  |  |  |  |  |  |
Greenwood Plaza |  | CO/West |  | Office |  | 199,077 |  | 2/24/05 |  | 44,116
Addison Circle |  | TX/South |  | Office |  | 293,787 |  | 5/1/05 |  | 56,295
Royal Ridge |  | GA |  | Office |  | 161,366 |  | 5/1/05 |  | 27,391
Collins Crossing |  | TX/South |  | Office |  | 298,766 |  | 5/1/05 |  | 53,667
Montague Business Center |  | CA/West |  | Office |  | 145,951 |  | 5/1/05 |  | 20,147
River Crossing |  | IN/Midwest |  | Office |  | 205,059 |  | 7/6/05 |  | 42,016

Dispositions: |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  | Date |  | Net Sales |  | Gain (Loss)
2007 |  | State/Region |  | Property Type |  | Square Feet |  | Acquired |  | Proceeds |  | on Sale
Piedmont Center |  | SC/East |  | Office |  | 144,029 |  | 1/31/07 |  | $5,830 |  | ($4,849)
Royal Ridge |  | GA/South |  | Office |  | 161,366 |  | 6/21/07 |  | 32,535 |  | 6,601
Goldentop Technology Center |  | CA/West |  | Office |  | 141,405 |  | 6/27/07 |  | 36,199 |  | 14,741
Lyberty Way |  | MA/East |  | Office |  | 104,711 |  | 7/16/07 |  | 10,861 |  | 1,942
Austin N.W. (Canyon Hills) |  | TX/South |  | Office |  | 68,533 |  | 12/20/07 |  | 10,429 |  | 257
2006 |  |  |  |  |  |  |  |  |  |  |  |
Merrywood Apartments |  | TX/South |  | Apt |  | 231,363 |  | 5/24/06 |  | 18,204 |  | 2,373
Santa Clara |  | CA/West |  | Office |  | 40,280 |  | 5/31/06 |  | 8,188 |  | 1,557
Fair Lakes |  | VA/East |  | Office |  | 210,613 |  | 5/31/06 |  | 61,412 |  | 24,240
One Technology Drive |  | MA/East |  | Industrial |  | 188,000 |  | 8/10/06 |  | 15,995 |  | 6,366
Plaza Ridge |  | VA/East |  | Office |  | 158,016 |  | 11/16/06 |  | 58,022 |  | 27,941
North Andover Office Park |  | MA/East |  | Office |  | 92,913 |  | 11/21/06 |  | 11,362 |  | 3,810
2005 |  |  |  |  |  |  |  |  |  |  |  |
Blue Ravine |  | CA/West |  | Office |  | 47,058 |  | 7/13/05 |  | 4,764 |  | (1,124)
Silverside Plantation |  | LA/South |  | Apt |  | 223,812 |  | 9/19/05 |  | 22,280 |  | 7,265
Gateway Crossing |  | MD/East |  | Office |  | 188,819 |  | 9/20/05 |  | 25,949 |  | 6,807
Essex Lane Associates |  | TX/South |  | Apt |  | 118,798 |  | 10/5/05 |  | 13,752 |  | 5,112
Gael Apartments |  | TX/South |  | Apt |  | 187,338 |  | 10/5/05 |  | 22,715 |  | 5,151
Telecom Business Center |  | CA/West |  | Office |  | 101,726 |  | 12/8/05 |  | 22,570 |  | 6,943

Franklin Street Properties Corp. Third Quarter 2008
20

Investment Banking Performance
Franklin Street Properties Corp. Third Quarter 2008
21

FFO and FFO+GOS Reconciliations and Definitions
(in thousands except per share amounts)

|  | Twelve Months Ended |  |  | Three Months Ended |
|  | 12/31/07 |  |  | 12/31/06 |  |  | 9/30/08 |  |  | 6/30/08 |  |  | 3/31/08 |  |  | 12/31/07 |  |  | 9/30/07 |
Net Income |  | $ | 61,085 |  |  | $ | 110,929 |  |  | $ | 7,419 |  |  | $ | 10,534 |  |  | $ | 7,386 |  |  | $ | 9,391 |  |  | $ | 9,486 |
(Gain) Loss on sale of properties |  |  | (23,789 | ) |  |  | (61,438 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (257 | ) |  |  | (1,942 | )
GAAP (income) loss from non-consolidated REITs |  |  | 472 |  |  |  | (1,043 | ) |  |  | (680 | ) |  |  | (694 | ) |  |  | (793 | ) |  |  | (148 | ) |  |  | (105 | )
Distributions from non-consolidated REITs |  |  | 1,806 |  |  |  | 783 |  |  |  | 1,561 |  |  |  | 1,731 |  |  |  | 546 |  |  |  | 607 |  |  |  | 476 |
Depreciation of real estate & intangible amortization |  |  | 35,475 |  |  |  | 32,047 |  |  |  | 8,784 |  |  |  | 8,712 |  |  |  | 8,498 |  |  |  | 8,979 |  |  |  | 9,007 |
Funds from Operations (FFO) |  |  | 75,049 |  |  |  | 81,278 |  |  |  | 17,084 |  |  |  | 20,283 |  |  |  | 15,637 |  |  |  | 18,572 |  |  |  | 16,922 |
Plus gains on sales of properties (GOS) |  |  | 23,789 |  |  |  | 61,438 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 257 |  |  |  | 1,942 |
FFO+GOS (Total Profits) |  | $ | 98,838 |  |  | $ | 142,716 |  |  | $ | 17,084 |  |  | $ | 20,283 |  |  | $ | 15,637 |  |  | $ | 18,829 |  |  | $ | 18,864 |
Per Share Data: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
EPS |  | $ | 0.86 |  |  | $ | 1.65 |  |  | $ | 0.11 |  |  | $ | 0.15 |  |  | $ | 0.10 |  |  | $ | 0.13 |  |  | $ | 0.13 |
FFO |  |  | 1.06 |  |  |  | 1.21 |  |  |  | 0.24 |  |  |  | 0.29 |  |  |  | 0.22 |  |  |  | 0.27 |  |  |  | 0.24 |
GOS |  |  | 0.34 |  |  |  | 0.91 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 0.03 |
FFO+GOS |  |  | 1.40 |  |  |  | 2.13 |  |  |  | 0.24 |  |  |  | 0.29 |  |  |  | 0.22 |  |  |  | 0.27 |  |  |  | 0.27 |
Weighted Average Shares (basic and diluted) |  |  | 70,651 |  |  |  | 67,159 |  |  |  | 70,481 |  |  |  | 70,481 |  |  |  | 70,481 |  |  |  | 70,481 |  |  |  | 70,596 |

Definition of Funds From Operations (“FFO”), and FFO plus Gains on Sales (“FFO+GOS”)
The Company evaluates the performance of its reportable segments based on several measures including, Funds From Operations (“FFO”) and FFO plus Gains on Sales (“FFO+GOS or Total Profits*”) 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.
Franklin Street Properties Corp. Third Quarter 2008
22

Reconciliation of Net Income to NOI
(in thousands)

|  |  |  |  |  |  |  |  |  |  | Nine Months |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 2007 |
|  | 31-Mar-08 |  |  | 30-Jun-08 |  |  | 30-Sep-08 |  |  | 30-Sep-08 |  |  | 31-Mar-07 |  |  | 30-Jun-07 |  |  | 30-Sep-07 |  |  | 31-Dec-07 |  |  | Total |
Property NOI Reconciliation |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net Income |  | $ | 7,386 |  |  | $ | 10,535 |  |  | $ | 7,420 |  |  | $ | 25,340 |  |  | $ | 9,732 |  |  | $ | 32,476 |  |  | $ | 9,486 |  |  | $ | 9,391 |  |  | $ | 61,085 |
Add (deduct): |  |  | - |  |  |  | - |  |  |  | - |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investment banking segment net income |  |  | 488 |  |  |  | (3,352 | ) |  |  | 253 |  |  |  | (2,611 | ) |  |  | (3,184 | ) |  |  | (4,012 | ) |  |  | (180 | ) |  |  | (2,063 | ) |  |  | (9,439 | )
Management fees (before elimination) |  |  | (545 | ) |  |  | (533 | ) |  |  | (549 | ) |  |  | (1,627 | ) |  |  | (610 | ) |  |  | (490 | ) |  |  | (438 | ) |  |  | (586 | ) |  |  | (2,124 | )
Depreciation and Amortization |  |  | 7,326 |  |  |  | 7,556 |  |  |  | 7,628 |  |  |  | 22,510 |  |  |  | 7,147 |  |  |  | 6,747 |  |  |  | 7,726 |  |  |  | 7,581 |  |  |  | 29,200 |
Amortization of favorable leases |  |  | 1,139 |  |  |  | 1,120 |  |  |  | 1,118 |  |  |  | 3,378 |  |  |  | 1,271 |  |  |  | 1,173 |  |  |  | 1,137 |  |  |  | 1,242 |  |  |  | 4,823 |
Selling, general and administrative |  |  | 895 |  |  |  | 1,534 |  |  |  | 945 |  |  |  | 3,375 |  |  |  | 857 |  |  |  | 941 |  |  |  | 800 |  |  |  | 841 |  |  |  | 3,440 |
Interest expense |  |  | 1,192 |  |  |  | 1,051 |  |  |  | 1,108 |  |  |  | 3,351 |  |  |  | 2,676 |  |  |  | 1,622 |  |  |  | 1,823 |  |  |  | 1,563 |  |  |  | 7,684 |
Interest income |  |  | (612 | ) |  |  | (360 | ) |  |  | (314 | ) |  |  | (1,287 | ) |  |  | (2,234 | ) |  |  | (2,152 | ) |  |  | (1,971 | ) |  |  | (2,118 | ) |  |  | (8,476 | )
Equity in earnings of nonconsolidated REITs |  |  | (793 | ) |  |  | (694 | ) |  |  | (680 | ) |  |  | (2,167 | ) |  |  | 616 |  |  |  | 142 |  |  |  | (147 | ) |  |  | (147 | ) |  |  | 464 |
Income from discontinued operations |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (669 | ) |  |  | (662 | ) |  |  | 72 |  |  |  | 70 |  |  |  | (1,190 | )
Gain on sale of assets |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (21,590 | ) |  |  | (1,942 | ) |  |  | (257 | ) |  |  | (23,789 | )
Non-property specific income and expenses, net |  |  | 59 |  |  |  | (14 | ) |  |  | (87 | ) |  |  | (42 | ) |  |  | (1,099 | ) |  |  | (77 | ) |  |  | (833 | ) |  |  | (127 | ) |  |  | (2,136 | )
GAAP Property NOI |  |  | 16,535 |  |  |  | 16,843 |  |  |  | 16,842 |  |  |  | 50,220 |  |  |  | 14,503 |  |  |  | 14,115 |  |  |  | 15,533 |  |  |  | 15,390 |  |  |  | 59,541 |
Straight-line rent |  |  | (250 | ) |  |  | (257 | ) |  |  | (346 | ) |  |  | (853 | ) |  |  | (1,171 | ) |  |  | (781 | ) |  |  | (838 | ) |  |  | (379 | ) |  |  | (3,169 | )
Cash Property NOI |  | $ | 16,285 |  |  | $ | 16,586 |  |  | $ | 16,496 |  |  | $ | 49,367 |  |  | $ | 13,332 |  |  | $ | 13,334 |  |  | $ | 14,695 |  |  | $ | 15,011 |  |  | $ | 56,372 |

Franklin Street Properties Corp. Third Quarter 2008
23