ex99-1.htm

Wakefield, MA—August 4, 2009—Franklin Street Properties Corp. (the “Company” or “FSP”) (NYSE Amex: FSP), an investment firm specializing in real estate, announced today Funds From Operations (FFO) of $17.4 million or $0.25 per share for the second quarter ended June 30, 2009, which was sequentially flat compared to the first quarter of 2009. The Company also announced Net Income of $4.9 million and Earnings Per Share (EPS) of $0.07 for the second quarter ended June 30, 2009.

	Three Months Ended June 30,							Six Months Ended June 30,
(in 000's except per share data)	2009		2008		Increase (Decrease)			2009		2008		Increase (Decrease)

Net Income	$	4,865	$	10,534	$	(5,669	)	$	12,673	$	17,920	$	(5,247	)

FFO	$	17,409	$	20,283	$	(2,874	)	$	34,747	$	35,920	$	(1,173	)
GOS		-		-		-			-		-		-
FFO+GOS	$	17,409	$	20,283	$	(2,874	)	$	34,747	$	35,920	$	(1,173	)
Per Share Data:
EPS	$	0.07	$	0.15	$	(0.08	)	$	0.18	$	0.25	$	(0.07	)
FFO	$	0.25	$	0.29	$	(0.04	)	$	0.49	$	0.51	$	(0.02	)
GOS	$	-	$	-	$	-		$	-	$	-	$	-
FFO+GOS	$	0.25	$	0.29	$	(0.04	)	$	0.49	$	0.51	$	(0.02	)

Weighted average
shares (diluted)		70,481		70,481		-			70,481		70,481		-

Comparing results for the second quarter of 2009 to 2008, Net Income and EPS decreased $5.7 million or $0.08 per share; and FFO and FFO+GOS each decreased $2.9 million or $0.04 per share. The decrease in FFO was primarily from a decrease in investment banking FFO of $3.7 million and was partially offset by an increase in real estate FFO of $0.8 million. The decrease from investment banking was caused by lower sales of securities by our investment bank, which decreased $49.5 million to $375,000 for the second quarter of 2009 compared to the second quarter of 2008. Revenue from our investment bank is primarily based on the value of these securities sales. The increase in real estate FFO was primarily from contributions from two acquisitions made in December 2008. There was no GOS in the second quarter of 2009 or 2008.

Comparing results for the first half of 2009 to 2008, Net Income and EPS decreased $5.2 million or $0.07 per share; and FFO and FFO+GOS each decreased $1.2 million or $0.02 per share. The decrease in FFO was primarily from a decrease in investment banking FFO of $4.0 million and was partially offset by an increase in real estate FFO of $2.8 million. The decrease from investment banking was caused by lower sales of securities by our investment bank, which decreased $52.0 million to $550,000 for the six months ended June 30, 2009 compared to the six months ended June 30, 2008. Revenue from our investment bank is primarily based on the value of these securities sales. The increase in real estate FFO was primarily from contributions from two acquisitions made in December 2008. There was no GOS in the first half of 2009 or 2008.

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 is hard to predict. However, we continue to constantly evaluate property disposition opportunities.

During the second quarter of 2009, our investment banking group raised $375,000 of equity capital, an insignificant contribution similar to the first quarter of 2009. Concern 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 property markets before considering significant new investment purchases. The lack of equity raising activity resulted in our investment banking business segment operating at a loss for the second quarter totaling approximately $0.3 million, which is less than $0.01 per share. We anticipate business in this area to remain constrained as long as broader commercial real estate fundamentals continue to deteriorate.

During the last week of the second quarter of 2009, FSP purchased two additional office properties for our portfolio. The total purchase price for the two assets was approximately $51.6 million. Both acquisitions are in areas of the country where FSP or its affiliates have been active owners and managers of office property. Both properties are newly constructed within the last three years and are 100% net leased to excellent credit tenants. Considering cap rate, price per square foot, replacement cost and other metrics, we believe these acquisitions represent outstanding values. The acquisition dates of the assets did not allow them to contribute meaningfully to our second quarter results, but both properties will be owned for the full third quarter. These two property acquisitions are our first in 2009 and along with our three property acquisitions made during 2008, are now fully contributing to FSP’s rental revenue. Additionally, during the second quarter of 2009, FSP purchased approximately 27% of the preferred stock in FSP Grand Boulevard Corp. for a net cost of $15,049,125. FSP Grand Boulevard Corp. owns a 28-story, class-A, multi-tenant office tower containing approximately 532,000 square feet of rentable space and is located in the Crown Center section of downtown Kansas City, Missouri. Continued active property acquisition efforts are ongoing, and we would expect to acquire additional properties in 2009.

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.”

During June 2009 we acquired an office property in Chantilly, Virginia for approximately $29 million and an office property in Eden Prairie, Minnesota for approximately $22.6 million. Supplementary Schedules D & E provide property information for our continuing real estate portfolio of 31 properties and for three non-consolidated REITs that we have interests in as of June 30, 2009. The Company will also be filing a supplemental information package that will provide stockholders and the financial community with additional operating and financial data. The Company will file this supplemental information package with the SEC and make it available on its website at www.franklinstreetproperties.com.

A reconciliation of Net Income to FFO and FFO+GOS is shown below and definitions of FFO and FFO+GOS are provided on Supplementary Schedule H. We believe FFO is used broadly throughout the real estate investment trust (REIT) industry as a measurement of performance and is generally calculated in a similar manner to our calculation. We also believe that FFO+GOS is an important measure as it considers investment performance.

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(In thousands, except per share amounts)	2009			2008			2009			2008

Net income	$	4,865		$	10,534		$	12,673		$	17,920
(Gain) Loss on sale of properties		-			-			-			-
GAAP (income) loss from non-consolidated REITs		(443	)		(694	)		(1,235	)		(1,487	)
Distributions from non-consolidated REITs		1,523			1,731			3,137			2,277
Acquisition costs of new properties		248			-			248			-
Depreciation of real estate & intangible amortization		11,216			8,712			19,924			17,210
Funds From Operations (FFO)		17,409			20,283			34,747			35,920
Plus gains on sales of properties		-			-			-			-
FFO+GOS	$	17,409		$	20,283		$	34,747		$	35,920

Per Share Data
EPS	$	0.07		$	0.15		$	0.18		$	0.25
FFO	$	0.25		$	0.29		$	0.49		$	0.51
GOS	$	-		$	-		$	-		$	-
FFO+GOS	$	0.25		$	0.29		$	0.49		$	0.51

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

Today’s news release, along with other news about Franklin Street Properties Corp., is available on the Internet at www.franklinstreetproperties.com. We routinely post information that may be important to investors in the Investor Relations section of our website. We encourage investors to consult that section of our website regularly for important information about us and, if they are interested in automatically receiving news and information as soon as it is posted, to sign up for E-mail Alerts.

A conference call is scheduled for August 5, 2009 at 10:00 a.m. (ET) to discuss the second quarter 2009 results. The toll free number is 1-866-770-7051, passcode 12644681. Internationally, the call may be accessed by dialing 1- 617-213-8064, passcode 12644681. 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, economic conditions in the United States, disruptions in the debt markets, economic conditions in the markets in which we own properties, changes in the demand by investors for investment in Sponsored REITs (as defined in our Annual Report on Form 10-K for the year ended December 31, 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 June 30,					For the Six Months Ended June 30,
(in thousands, except per share amounts)	2009			2008		2009			2008

Revenue:
Rental	$	29,254		$	27,700	$	59,072		$	54,356
Related party revenue:
Syndication fees		29			3,257		39			3,462
Transaction fees		514			3,138		542			3,306
Management fees and interest income from loans		317			423		862			984
Other		18			19		36			39
Total revenue		30,132			34,537		60,551			62,147

Expenses:
Real estate operating expenses		7,144			7,116		14,424			13,815
Real estate taxes and insurance		4,686			4,505		9,515			8,784
Depreciation and amortization		10,225			7,591		18,139			14,950
Selling, general and administrative		2,127			2,621		4,135			4,630
Commissions		40			1,654		170			1,812
Interest		1,599			1,051		3,176			2,243

Total expenses		25,821			24,538		49,559			46,234

Income before interest income, equity in earnings of
non-consolidated REITs and taxes		4,311			9,999		10,992			15,913
Interest income		36			176		72			479
Equity in earnings of non-consolidated REITs		443			694		1,235			1,487

Income before taxes		4,790			10,869		12,299			17,879
Income tax expense (benefit)		(75	)		335		(374	)		(41	)


Net income	$	4,865		$	10,534	$	12,673		$	17,920

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

Net income per share, basic and diluted	$	0.07		$	0.15	$	0.18		$	0.25

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

(in thousands, except share and par value amounts)	June 30,			December 31,
	2009			2008
Assets:
Real estate assets, net	$	869,557		$	844,058
Acquired real estate leases, less accumulated amortization
of $32,930 and $29,200, respectively		38,996			28,518
Investment in non-consolidated REITs		94,579			83,046
Assets held for syndication, net		-			13,254
Cash and cash equivalents		24,542			29,244
Restricted cash		335			336
Tenant rent receivables, less allowance for doubtful accounts
of $620 and $509, respectively		720			1,329
Straight-line rent receivable, less allowance for doubtful accounts
of $100 and $261, respectively		9,219			8,816
Prepaid expenses		2,267			2,206
Related party mortgage loan receivable		12,115			1,125
Other assets		1,854			2,406
Office computers and furniture, net of accumulated depreciation
of $1,160 and $1,108, respectively		417			281
Deferred leasing commissions, net of accumulated amortization
of $4,221, and $3,416, respectively		10,895			10,814
Total assets	$	1,065,496		$	1,025,433

Liabilities and Stockholders’ Equity:
Liabilities:
Bank note payable	$	124,038		$	67,468
Term loan payable		75,000			75,000
Accounts payable and accrued expenses		21,252			22,297
Accrued compensation		500			1,654
Tenant security deposits		1,765			1,874
Other liabilities: derivative termination value		2,394			3,099
Acquired unfavorable real estate leases, less accumulated amortization
of $2,266, and $1,779, respectively		4,954			5,044
Total liabilities		229,903			176,436

Commitments and contingencies

Stockholders’ Equity:
Preferred stock, $.0001 par value, 20,000,000 shares authorized, none issued or outstanding		-			-
Common stock, $.0001 par value, 180,000,000 shares authorized, 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		(2,394	)		(3,099	)
Accumulated distributions in excess of accumulated earnings		(51,039	)		(36,930	)
Total stockholders’ equity		835,593			848,997
Total liabilities and stockholders’ equity	$	1,065,496		$	1,025,433

	For the Six Months Ended June 30,
(in thousands)	2009			2008
Cash flows from operating activities:
Net income	$	12,673		$	17,920
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		18,276			14,973
Amortization of above market lease		1,780			2,259
Equity in earnings of non-consolidated REITs		(1,235	)		(1,487	)
Distributions from non-consolidated REITs		3,137			2,277
Increase in bad debt reserve		111			79
Changes in operating assets and liabilities:
Restricted cash		1			1
Tenant rent receivables, net		498			404
Straight-line rents, net		(444	)		(507	)
Prepaid expenses and other assets, net		(943	)		160
Accounts payable, accrued expenses		482			(2,002	)
Accrued compensation		(1,154	)		281
Tenant security deposits		(109	)		(64	)
Payment of deferred leasing commissions		(1,557	)		(2,131	)
Net cash provided by operating activities		31,516			32,163
Cash flows from investing activities:
Purchase of real estate assets and office computers and furniture, capitalized merger costs		(56,135	)		(36,970	)
Changes in deposits on real estate assets		1,300			-
Investment in non-consolidated REITs		(13,198	)		(10	)
Investment in related party mortgage loan receivable		(10,990	)		(1,000	)
Investment in assets held for syndication		13,017			11,698
Net cash used in investing activities		(66,006	)		(26,282	)
Cash flows from financing activities:
Distributions to stockholders		(26,782	)		(43,698	)
Borrowings under bank note payable		56,570			25,245
Deferred financing costs		-			(30	)
Net cash provided by (used in) financing activities		29,788			(18,483	)
Net decrease in cash and cash equivalents		(4,702	)		(12,602	)
Cash and cash equivalents, beginning of period		29,244			46,988
Cash and cash equivalents, end of period	$	24,542		$	34,386

(In Thousands)	As of June 30, 2009
	# of		% of	Square	% of
State	Properties	Investment	Portfolio	Feet	Portfolio

Texas	7	$231,323	26.6%	1,489	26.2%
Colorado	4	129,691	14.9%	792	13.9%
Virginia	4	101,085	11.6%	680	12.0%
Georgia	1	76,711	8.8%	387	6.8%
Missouri	3	73,170	8.4%	477	8.4%
Maryland	2	62,273	7.1%	424	7.5%
Florida	1	48,685	5.6%	213	3.7%
Indiana	1	36,990	4.2%	205	3.6%
Illinois	1	30,750	3.5%	177	3.1%
California	2	21,631	2.5%	182	3.2%
Michigan	1	14,981	1.7%	215	3.8%
Washington	1	14,920	1.7%	117	2.1%
Minnesota	1	14,459	1.7%	153	2.7%
North Carolina	2	14,281	1.6%	172	3.0%
	31	$870,948	100.0%	5,682	100.0%

Square foot & leased percentages		June 30,	December 31,
		2009	2008

Owned portfolio of commercial real estate
	Number of properties	31	29
	Square feet	5,682,011	5,417,515
	Leased percentage	92%	93%

Investments in non-consolidated commercial real estate
	Number of properties	3	2
	Square feet	1,994,686	1,461,224
	Leased percentage	78%	80%

Single Asset REITs (SARs) managed
	Number of properties	9	10
	Square feet*	2,154,079	2,684,561
	Leased percentage*	87%	92%

Total owned, investments & managed properties
	Number of properties*	43	41
	Square feet*	9,830,776	9,563,300
	Leased percentage*	88%	93%

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

(in 000's)
		Q1			Q1			Q2			Q3			Q4
Revenue:		2009			2008			2008			2008			2008
Rental	$	29,818		$	26,656		$	27,700		$	27,927		$	28,915
Related party revenue:
Syndication fees		10			205			3,257			304			-
Transaction fees		28			168			3,138			300			35
Management fees and
interest income from loans		545			561			423			380			375
Other		18			20			19			13			20
Total revenue		30,419			27,610			34,537			28,924			29,345

Expenses:
Real estate operating expenses		7,280			6,698			7,116			7,159			8,026
Real estate taxes and insurance		4,829			4,279			4,505			4,590			4,366
Depreciation and amortization		7,914			7,359			7,591			7,666			7,744
Selling, general and administrative		2,008			2,009			2,621			1,927			1,711
Commissions		130			158			1,654			208			131
Interest		1,577			1,192			1,051			1,108			1,570
Total expenses		23,738			21,695			24,538			22,658			23,548

Income before interest income, equity
in earnings in non-consolidated REITs		6,681			5,915			9,999			6,266			5,797
Interest income		36			303			176			177			89
Equity in earnings in non-consolidated REITs		792			793			694			680			580

Income before taxes on income		7,509			7,011			10,869			7,123			6,466
Taxes on income		(299	)		(375	)		335			(297	)		(153	)

Income from continuing operations		7,808			7,386			10,534			7,420			6,619
Income from discontinued operations		-			-			-			-			-

Income before gain on sale of properties		7,808			7,386			10,534			7,420			6,619
Gain on sale of assets		-			-			-			-			-
Net income	$	7,808		$	7,386		$	10,534		$	7,420		$	6,619


FFO and FFO+GOS calculations:

Net income	$	7,808		$	7,386		$	10,534		$	7,420		$	6,619
(Gain) Loss on sale of assets		-			-			-			-			-
GAAP income from non-consolidated REITs		(792	)		(793	)		(694	)		(680	)		(580	)
Distributions from non-consolidated REITs		1,615			546			1,731			1,561			1,510
Acquisition costs		-			-			-			-			-
Depreciation & amortization		8,707			8,498			8,712			8,783			8,650
Funds From Operations (FFO)		17,338			15,637			20,283			17,084			16,199
Plus gains on sales of assets		-			-			-			-			-
FFO+GOS	$	17,338		$	15,637		$	20,283		$	17,084		$	16,199

			% of
Tenant	Sq Ft	SIC Code	Portfolio
Capital One Services, Inc. (1)	297,789	61	5.2%
Citgo Petroleum Corporation	248,399	29	4.4%
Tektronix Texas, LLC	241,372	73	4.1%
Burger King Corporation	212,619	58	3.7%
New Era of Networks, Inc. (Sybase)	199,077	73	3.5%
Citigroup Credit Services, Inc (2)	176,848	61	3.1%
RGA Reinsurance Company	171,120	63	3.0%
CH Robinson Worldwide, Inc.	153,028	47	2.7%
International Business Machines Corp. (3)	138,033	35	2.4%
Geisecke & Devrient	135,888	73	2.4%
Murphy Exploration & Production Company	133,786	13	2.3%
CACI Technologies, Inc.	132,896	73	2.3%
Monsanto	127,778	28	2.2%
Northrop Grumman Information Technology, Inc.	111,469	73	2.0%
Maines Paper & Food Service, Inc.	98,745	51	1.7%
Amdocs, Inc.	91,928	73	1.6%
County of Santa Clara	90,467	81	1.6%
Ober Kaler Grimes & Shriver	88,736	91	1.6%
Technip-Coflexip USA Holdings, Inc	86,059	13	1.5%
Vail Corp d/b/a Vail Resorts	83,620	79	1.5%
Total	3,019,657		53.1%

(1)

Capital One Services, Inc. (“CapOne”) sublets all of the space to LandAmerica Financial Group, Inc. (“LandAm”). Both the direct lease with CapOne and the sublease with LandAm expire on October 31, 2009. On November 26, 2008, LandAm filed a voluntary motion for relief under Chapter 11 of the United States Bankruptcy Code. Significantly, our direct lease with CapOne remains in effect and CapOne continues to be financially obligated to us for all payments of rent due thereunder.

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

FFO and FFO+GOS should not be considered as alternatives to net income (determined in accordance with GAAP), as indicators of the Company’s financial performance, nor as alternatives to cash flows from operating activities (determined in accordance with GAAP), nor as measures of the Company’s liquidity, nor are they necessarily indicative of sufficient cash flow to fund all of the Company’s needs. Other real estate companies may define these terms in a different manner. We believe that in order to facilitate a clear understanding of the results of the Company, FFO and FFO+GOS should be examined in connection with net income and cash flows from operating, investing and financing activities in the condensed 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
Quarterly 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	688,524	12.1%
2010	751,156	13.2%
2011	370,196	6.5%
2012	735,399	13.0%
2013	347,286	6.1%
2014	557,128	9.8%
Thereafter (2)	2,232,322	39.3%
	5,682,011	100.0%

Capital Expenditures
Owned Portfolio	Six Months Ended
(in thousands)	30-Jun-09		30-Jun-08

Tenant improvements	$	2,286	$	2,897
Deferred leasing costs		1,557		2,130
Building improvements		581		569
	$	4,424	$	5,596

			Square	% Leased	% Interest
Single Asset REIT name	City	State	Feet	30-Jun-09	Held
FSP 303 East Wacker Drive Corp.	Chicago	IL	843,726	75.27%	43.7%
FSP Grand Boulevard Corp.	Kansas City	MO	532,453	88.64%	27.0%
FSP Phoenix Tower Corp.	Houston	TX	618,507	72.11%	4.6%
			1,994,686	77.86%

Property by type:
(dollars & square feet	As of June 30, 2009
in 000's)	# of		% of	Square	% of
Type	Properties	Investment	Portfolio	Feet	Portfolio
Office	30	$865,863	99.4%	5,583	98.3%
Industrial	1	5,085	0.6%	99	1.7%
	31	$870,948	100.0%	5,682	100.0%