ex99-1.htm

Wakefield, MA—February 24, 2009—Franklin Street Properties Corp. (the “Company” or “FSP”) (NYSE Alternext US: FSP), an investment firm specializing in real estate, announced today Net Income of $6.6 million and $32.0 million and Earnings Per Share (EPS) of $0.09 and $0.45 for the fourth quarter and year ended December 31, 2008, respectively. The Company also announced Funds From Operations (FFO) of $16.2 million and $69.2 million or $0.23 and $0.98 per share for the fourth quarter and year ended December 31, 2008, respectively, and provided an update on other activities.

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

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

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

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

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

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

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

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

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

On December 11, 2008, the Company acquired an office property in Missouri for approximately $20.0 million and on December 23, 2008 the Company acquired an office property in Virginia for approximately $18.6 million. Supplementary Schedules D & E provide property information for our continuing real estate portfolio of 29 properties and for two non-consolidated REITs that we have interests in as of December 31, 2008. The Company will also be filing a supplemental information package that will provide stockholders and the financial community with additional operating and financial data. The Company will file this supplemental information package with the SEC and make it available on its website at www.franklinstreetproperties.com in the next week.

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

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

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

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

A conference call is scheduled for February 25, 2009 at 9:30 a.m. (ET) to discuss 2008 results. The toll free number is 1-800-597-1967, passcode 61563278. Internationally, the call may be accessed by dialing 1-617-597-5526, passcode 61563278. To listen via live audio webcast, please visit the Webcasts & Presentations section in the Investor Relations section of the Company's website, www.franklinstreetproperties.com at least ten minutes prior to the start of the call and follow the posted directions. The webcast will also be available via replay from the above location starting one hour after the call is finished.

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, changes in economic conditions in the United States, disruptions in the debt markets, changes in economic conditions in the markets in which we own properties, changes in the demand by investors for investment in Sponsored REITs (as defined in our Annual Report on Form 10-K for the year ended December 31, 2008), risks of a lessening of demand for the types of real estate owned by us, changes in government regulations, and expenditures that cannot be anticipated such as utility rate and usage increases, unanticipated repairs, additional staffing, insurance increases and real estate tax valuation reassessments. See the “Risk Factors” set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2008, as the same may be updated from time to time in subsequent filings with the United States Securities and Exchange Commission. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. We will not update any of the forward-looking statements after the date of this press release to conform them to actual results or to changes in our expectations that occur after such date, other than as required by law.

	For the Three Months Ended December 31,						For the Year Ended December 31,
(in thousands, except per share amounts)	2008			2007			2008			2007

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

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

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

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

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

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

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

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

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

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

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

Commitments and contingencies

Stockholders’ Equity:
Preferred stock, $.0001 par value, 20,000,000 shares authorized, none issued or outstanding		-			-
Common stock, $.0001 par value, 180,000,000 shares authorized, 70,480,705 and 70,480,705 shares issued and outstanding, respectively		7			7
Additional paid-in capital		889,019			889,019
Accumulated other comprehensive loss		(3,099	)		-
Earnings (distributions) in excess of accumulated earnings/distributions		(36,930	)		1,592
Total stockholders’ equity		848,997			890,618
Total liabilities and stockholders’ equity	$	1,025,433		$	1,003,466

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

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

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

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

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

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

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

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

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

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

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

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

Square foot & leased percentages		December 31,
		2008	2007

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

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

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

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

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

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

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

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

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

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


FFO and FFO+GOS calculations:

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

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

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

The Company evaluates the performance of its reportable segments based on several measures including, Funds From Operations (“FFO”) and FFO plus Gains on Sales (“FFO+GOS”) as management believes they represent important measures of activity and are an important consideration in determining distributions paid to equity holders. The Company defines FFO as net income (computed in accordance with generally accepted accounting principles), excluding gains (or losses) from sales of property and acquisition costs of newly acquired properties that are not capitalized, plus depreciation and amortization, and after adjustments to exclude non-cash income (or losses) from non-consolidated or Sponsored REITs, plus distributions received from non-consolidated or Sponsored REITs. The Company defines FFO+GOS as FFO as defined above, plus gains (or losses) from sales of properties and provisions for assets held for sale, if applicable.

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

PRESS RELEASE	Franklin Street Properties Corp.
401 Edgewater Place · Suite 200 · Wakefield, Massachusetts 01880-6210 · (781) 557-1300 · www.franklinstreetproperties.com
Contact: John Demeritt 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
2009	612,905	11.3%
2010	752,508	13.9%
2011	376,047	6.9%
2012	755,752	14.0%
2013	342,809	6.3%
2014	477,836	8.8%
Thereafter (2)	2,099,658	38.8%
	5,417,515	100.0%

Capital Expenditures
Owned Portfolio	Three Months Ended		Twelve Months Ended
(in thousands)	31-Dec-08	31-Dec-07	31-Dec-08	31-Dec-07

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

			Square	% Leased	% Interest
Single Asset REIT Name	City	State	Feet	31-Dec-08	Held
FSP 303 East Wacker Drive Corp.	Chicago	IL	842,717	87.9%	43.7%
FSP Phoenix Tower Corp.	Houston	TX	618,507	68.9%	4.6%
			1,461,224	79.9%

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