EX-99.1 2 ex99-1.htm

Exhibit 99.1

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

FRANKLIN STREET PROPERTIES CORP. ANNOUNCES

FOURTH QUARTER 2010 RESULTS

Wakefield, MA—February 23, 2011—Franklin Street Properties Corp. (the “Company”, “FSP”, “we” or “our”) (NYSE Amex: FSP), an investment firm specializing in real estate, announced today Funds From Operations (FFO) of $17.5 million and $66.9 million or $0.22 and $0.84 per share for the fourth quarter and year ended December 31, 2010, respectively. The Company also announced Net Income of $5.8 million and $22.1 million and Earnings Per Share (EPS) of $0.07 and $0.28 for the fourth quarter and year ended December 31, 2010, respectively, and provided an update on other activities.

The Company evaluates its performance based on Net Income, EPS, FFO, Gains on Sales (GOS) and FFO+GOS, and believes each is an important measure. A reconciliation of Net Income to FFO and FFO+GOS, which are non-GAAP financial measures, is provided on page 4 of this press release.

|  | Three Months Ended December 31, |  | Year Ended December 31,
(in 000's except per share data) |  | 2010 |  | 2009 |  | Increase (Decrease) |  | 2010 |  | 2009 |  | Increase (Decrease)
Net Income |  | $ | 5,820 |  |  | $ | 8,257 |  |  | $ | (2,437 | ) |  | $ | 22,093 |  |  | $ | 27,872 |  |  | $ | (5,779 | )
FFO |  | $ | 17,519 |  |  | $ | 19,075 |  |  | $ | (1,556 | ) |  | $ | 66,922 |  |  | $ | 71,359 |  |  | $ | (4,437 | )
GOS |  |  | — |  |  |  | 424 |  |  |  | (424 | ) |  |  | — |  |  |  | 424 |  |  |  | (424 | )
FFO+GOS |  | $ | 17,519 |  |  | $ | 19,499 |  |  | $ | (1,980 | ) |  | $ | 66,922 |  |  | $ | 71,783 |  |  | $ | (4,861 | )
Per Share Data: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
EPS |  | $ | 0.07 |  |  | $ | 0.10 |  |  | $ | (0.03 | ) |  | $ | 0.28 |  |  | $ | 0.38 |  |  | $ | (0.10 | )
FFO |  | $ | 0.22 |  |  | $ | 0.24 |  |  | $ | (0.02 | ) |  | $ | 0.84 |  |  | $ | 0.98 |  |  | $ | (0.14 | )
GOS |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
FFO+GOS |  | $ | 0.22 |  |  | $ | 0.24 |  |  | $ | (0.02 | ) |  | $ | 0.84 |  |  | $ | 0.98 |  |  | $ | (0.14 | )
Weighted average |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
shares (diluted) |  |  | 80,187 |  |  |  | 79,681 |  |  |  | 507 |  |  |  | 79,826 |  |  |  | 73,001 |  |  |  | 6,825 |

Comparing results for the fourth quarter of 2010 to the same period in 2009, Net Income and EPS decreased by $2.4 million or $.03 per share; and FFO decreased by $1.6 million or $0.02 per share. The decrease in FFO was primarily attributable to a decrease in real estate FFO of $1.8 million and was partially offset by an increase in investment banking FFO of $0.2 million. The decrease in real estate FFO was primarily a result of decreased occupancy in the real estate portfolio and increased administrative expenses during the fourth quarter of 2010 compared to the fourth quarter of 2009. There was no GOS during the fourth quarter of 2010 compared to $424,000 in the fourth quarter of 2009, which resulted from a gain recognized on a small piece of land as a result of a land taking.

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Comparing results for the year ended December 31, 2010 to 2009, Net Income and EPS decreased by $5.8 million or $0.10 per share; and FFO decreased by $4.4 million or $0.14 per share. The decrease in FFO was primarily attributable to a decrease in real estate FFO of $5.8 million and was partially offset by an increase in investment banking FFO of $1.4 million. The decrease in real estate FFO was primarily a result of decreased occupancy in the real estate portfolio and increased administrative expenses during the year ended December 31, 2010 compared to the year ended December 31, 2009. The increase in investment banking FFO resulted primarily from increased revenues from syndication and transaction fees and a decrease in commission and administrative expenses, which were partially offset by an increase to income taxes, for the year ended December 31, 2010 compared to the year ended December 31, 2009. There was no GOS during the year ended December 31, 2010 compared to the $424,000 in the year ended December 31, 2009, which resulted from a gain recognized on a small piece of land as a result of a land taking.

George J. Carter, President and CEO, commented as follows:

“For the fourth quarter of 2010, FSP's profits as represented by FFO + GOS totaled approximately $17.5 million or $0.22 per share, an increase of $0.02 per share compared to the third quarter of 2010. Dividend distributions declared for the fourth quarter of 2010, which are payable on February 18, 2011, will be approximately $15.4 million or $0.19 per share.

For 2010, FSP's profit results were under pressure primarily from increasing vacancy in the property portfolio created by large amounts of tenant lease expirations within a generally weak office market. Adding to this situation were continuing low levels of investment banking underwritings. The Company anticipated and planned for the levels of business activity and financial results it experienced in 2010. Looking forward to full-year 2011, we believe profit results will primarily be affected by the success and timing of our leasing efforts of existing vacancy and lease-roll in the portfolio, additional property portfolio acquisitions and capital closings of private placement offerings through our investment bank.

Our directly-owned real estate portfolio of 33 properties was approximately 85.6% leased as of December 31, 2010 up from approximately 82.4% leased as of September 30, 2010. Several of our properties experienced significant lease-roll in 2010. As a result, we have experienced lower levels of rental income from these properties. However, assuming some level of continuing stability in the broader U.S. economic and employment picture, we believe that the third quarter of 2010 was likely to mark the bottom of FSP's portfolio occupancy levels in this cycle. While the first quarter of 2011 will see significant increased vacancy in our East Baltimore property, other large leases are being executed at properties such as Greenwood Plaza in Englewood, Colorado, Timberlake in Chesterfield, Missouri and Park Ten in Houston, Texas. We are optimistic that overall property portfolio occupancy will climb during full-year 2011.

There were no new property acquisitions completed in the fourth quarter of 2010. The Company continues to work on additional property acquisitions for both direct purchase into the FSP portfolio and syndication through our Investment Banking Group. Efforts in this area have been productive as we start 2011 and we anticipate significant additional property acquisitions during the course of the year as we utilize our expanded credit facility and its structural flexibility to help grow FSP.

During the fourth quarter of 2010, our Investment Banking Group began a new $30-million private placement syndication. Approximately $25 million of that offering was completed in the fourth quarter. The Investment Banking business operated at a profit for the quarter of about $1.4 million, or $0.02 per share. Currently we are working on completing that private placement as well as actively pursuing the possibility of a larger new underwriting/syndication opportunity. While we continue to see general investor confidence and interest in commercial real estate investing slowly improving, capital raising efforts over any specific period of time are likely to remain unpredictable.

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FSP did not have any of its properties listed for sale during the fourth quarter of 2010. Generally speaking, we continue to find the property sales environment challenged relative to both liquidity and pricing. However, we continue to witness improving pricing and liquidity in certain markets, extending a trend that began in the second half of 2009. An illustration of this dynamic is the sale of our Fairview Park property located in Falls Church, Virginia in January 2011 via an "unsolicited" offer from a buyer who was very focused in their desire to invest capital in the property's specific submarket. Nationwide, the number of completed commercial real estate transactions still remains low by historical standards. We believe that both improving office property fundamentals as well as plentiful and attractive financing availability will likely be required to more meaningfully improve the market place for property dispositions. Since gain on sale (GOS) is an important part of our total return strategy, we intend to be active in property dispositions once the real estate cycle more fully establishes a pattern of improvement.

We believe FSP continues to be in an excellent environment to position itself for meaningful future growth in profits and dividends. Our company will continue to use its capabilities, conservative financial structure, and expanded credit facility to take advantage of competitive tenant leasing requirements, attractive real estate investment opportunities and opportunistic investment banking situations that are presenting themselves as a result of the current cyclical downturn in the economy and commercial property market. Since the fourth quarter of 2007 we have viewed 2010 as likely our most challenging year in dealing with a broad, financially-precipitated, cyclical, economic downturn. As we begin 2011, we are optimistic that FSP has managed its major challenges, while taking advantage of positioning opportunities that traditionally only present themselves during severe economic downturns. We are very much looking forward to our future growth potential.”

Asset Sale & Financing Update

On January 21, 2011, the Company completed the sale of an office property in Falls Church, Virginia and received proceeds of approximately $90 million.

On February 22, 2011, the Company closed a new credit facility with a group of banks (the “New Revolver”). The total availability under the New Revolver is $500 million. The New Revolver includes an accordion feature that allows for up to $100 million of additional borrowing capacity subject to receipt of lender commitments and satisfaction of certain customary conditions. As part of the closing, our $250 million line of credit and $75 million term loan (and interest rate swap) were repaid from the proceeds of the New Revolver and terminated. The New Revolver has an initial term that matures February 22, 2014 and also has a one-year extension option. The New Revolver is more fully described in our Annual Report on Form 10-K for the year ended December 31, 2010.

Dividend Announcement

On January 14, 2011, the Company announced that its Board of Directors declared a regular quarterly dividend for the three months ended December 31, 2010 of $0.19 per share of common stock payable on February 18, 2011 to stockholders of record on January 28, 2011.

Real Estate Update

Supplementary Schedules D & E provide property information for our real estate portfolio of 33 properties held at December 31, 2010 and for three non-consolidated REITs that we have interests in as of December 31, 2010. 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.

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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.

Reconciliation of Net Income to FFO and FFO+GOS: |  | Three Months Ended |  | Year Ended
|  | December 31, |  | December 31,
(In thousands, except per share amounts) |  | 2010 |  | 2009 |  | 2010 |  | 2009
Net income |  | $ | 5,820 |  |  | $ | 8,257 |  |  | $ | 22,093 |  |  | $ | 27,872 |
(Gain) Loss on sale of properties |  |  | — |  |  |  | (424 | ) |  |  | — |  |  |  | (424 | )
GAAP income from non-consolidated REITs |  |  | (153 | ) |  |  | (301 | ) |  |  | (1,190 | ) |  |  | (2,012 | )
Distributions from non-consolidated REITs |  |  | 1,247 |  |  |  | 1,371 |  |  |  | 5,170 |  |  |  | 5,628 |
Acquisition costs of new properties |  |  | — |  |  |  | 4 |  |  |  | 125 |  |  |  | 643 |
Depreciation of real estate & intangible amortization |  |  | 10,605 |  |  |  | 10,168 |  |  |  | 40,724 |  |  |  | 39,652 |
Funds From Operations (FFO) |  |  | 17,519 |  |  |  | 19,075 |  |  |  | 66,922 |  |  |  | 71,359 |
Plus gains on sales of properties |  |  | — |  |  |  | 424 |  |  |  | — |  |  |  | 424 |
FFO+GOS |  | $ | 17,519 |  |  | $ | 19,499 |  |  | $ | 66,922 |  |  | $ | 71,783 |
Per Share Data |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
EPS |  | $ | 0.07 |  |  | $ | 0.10 |  |  | $ | 0.28 |  |  | $ | 0.38 |
FFO |  | $ | 0.22 |  |  | $ | 0.24 |  |  | $ | 0.84 |  |  | $ | 0.98 |
GOS |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
FFO+GOS |  | $ | 0.22 |  |  | $ | 0.24 |  |  | $ | 0.84 |  |  | $ | 0.98 |
Weighted average shares (basic and diluted) |  |  | 80,187 |  |  |  | 79,681 |  |  |  | 79,826 |  |  |  | 73,001 |

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 February 24, 2011 at 10:00 a.m. (ET) to discuss the fourth quarter and full year 2010 results. To access the call, please dial 1-800-561-2693, passcode 55957004. Internationally, the call may be accessed by dialing 1-617-614-3523, passcode 55957004. 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.

About Franklin Street Properties Corp.

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.

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Forward-Looking Statements

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, 2010), 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, 2010, 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.

Franklin Street Properties Corp.

Earnings Release

Supplementary information

Table of Contents

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

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Franklin Street Properties Corp. Financial Results

Supplementary Schedule A

Condensed Consolidated Income Statements

(Unaudited)

|  | For the Three Months Ended December 31, |  | For the Year Ended December 31,
(in thousands, except per share amounts) |  | 2010 |  | 2009 |  | 2010 |  | 2009
Revenue: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Rental |  | $ | 29,953 |  |  | $ | 29,260 |  |  | $ | 115,320 |  |  | $ | 120,013 |
Related party revenue: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Syndication fees |  |  | 1,862 |  |  |  | 2,389 |  |  |  | 2,544 |  |  |  | 2,428 |
Transaction fees |  |  | 1,582 |  |  |  | 1,537 |  |  |  | 2,727 |  |  |  | 2,080 |
Management fees and interest income from loans |  |  | 718 |  |  |  | 508 |  |  |  | 2,439 |  |  |  | 1,740 |
Other |  |  | 54 |  |  |  | 6 |  |  |  | 89 |  |  |  | 61 |
Total revenue |  |  | 34,169 |  |  |  | 33,700 |  |  |  | 123,119 |  |  |  | 126,322 |
Expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate operating expenses |  |  | 9,604 |  |  |  | 8,634 |  |  |  | 33,609 |  |  |  | 30,810 |
Real estate taxes and insurance |  |  | 4,454 |  |  |  | 4,102 |  |  |  | 18,170 |  |  |  | 18,981 |
Depreciation and amortization |  |  | 9,764 |  |  |  | 8,630 |  |  |  | 36,472 |  |  |  | 35,570 |
Selling, general and administrative |  |  | 2,482 |  |  |  | 2,510 |  |  |  | 9,286 |  |  |  | 8,514 |
Commissions |  |  | 1,011 |  |  |  | 1,622 |  |  |  | 1,477 |  |  |  | 1,801 |
Interest |  |  | 2,004 |  |  |  | 1,650 |  |  |  | 7,283 |  |  |  | 6,570 |
Total expenses |  |  | 29,319 |  |  |  | 27,148 |  |  |  | 106,297 |  |  |  | 102,246 |
Income before interest income, equity in earnings of |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
non-consolidated REITs and taxes |  |  | 4,850 |  |  |  | 6,552 |  |  |  | 16,822 |  |  |  | 24,076 |
Interest income |  |  | 4 |  |  |  | 8 |  |  |  | 25 |  |  |  | 96 |
Equity in earnings of non-consolidated REITs |  |  | 229 |  |  |  | 283 |  |  |  | 1,266 |  |  |  | 1,994 |
Income before taxes on income |  |  | 5,083 |  |  |  | 6,843 |  |  |  | 18,113 |  |  |  | 26,166 |
Income tax expense (benefit) |  |  | 317 |  |  |  | 64 |  |  |  | 217 |  |  |  | (579 | )
Income from continuing operations |  |  | 4,766 |  |  |  | 6,779 |  |  |  | 17,896 |  |  |  | 26,745 |
Discontinued operations: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Income from discontinued operations |  |  | 1,054 |  |  |  | 1,055 |  |  |  | 4,197 |  |  |  | 703 |
Gain on sale of of land in 2009, less applicable income tax |  |  | — |  |  |  | 424 |  |  |  | — |  |  |  | 424 |
Total discontinued operations |  |  | 1,054 |  |  |  | 1,479 |  |  |  | 4,197 |  |  |  | 1,127 |
Net income |  | $ | 5,820 |  |  | $ | 8,258 |  |  | $ | 22,093 |  |  | $ | 27,872 |

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Franklin Street Properties Corp. Financial Results

Supplementary Schedule B

Condensed Consolidated Balance Sheets

(Unaudited)

|  | December 31,
(in thousands, except share and par value amounts) |  | 2010 |  | 2009
Assets: |  |  |  |  |  |  |  |
Real estate assets, net |  | $ | 867,608 |  |  | $ | 860,218 |
Acquired real estate leases, less accumulated amortization |  |  |  |  |  |  |  |
of $19,294 and $34,191, respectively |  |  | 40,578 |  |  |  | 33,395 |
Investment in non-consolidated REITs |  |  | 89,327 |  |  |  | 92,910 |
Assets held for syndication, net |  |  | 2,976 |  |  |  | 4,827 |
Asset held for sale |  |  | 69,790 |  |  |  | 72,182 |
Cash and cash equivalents |  |  | 68,213 |  |  |  | 27,404 |
Restricted cash |  |  | 420 |  |  |  | 334 |
Tenant rent receivables, less allowance for doubtful accounts |  |  |  |  |  |  |  |
of $1,600 and $620, respectively |  |  | 1,922 |  |  |  | 1,782 |
Straight-line rent receivable, less allowance for doubtful accounts |  |  |  |  |  |  |  |
of $700 and $100, respectively |  |  | 18,752 |  |  |  | 10,633 |
Prepaid expenses |  |  | 1,654 |  |  |  | 2,594 |
Related party mortgage loan receivable |  |  | 57,684 |  |  |  | 36,535 |
Other assets |  |  | 853 |  |  |  | 844 |
Office computers and furniture, net of accumulated depreciation |  |  |  |  |  |  |  |
of $493 and $1,233, respectively |  |  | 503 |  |  |  | 384 |
Deferred leasing commissions, net of accumulated amortization |  |  |  |  |  |  |  |
of $7,173 and $4,995, respectively |  |  | 18,455 |  |  |  | 10,808 |
Total assets |  | $ | 1,238,735 |  |  | $ | 1,154,850 |
Liabilities and Stockholders’ Equity: |  |  |  |  |  |  |  |
Liabilities: |  |  |  |  |  |  |  |
Bank note payable |  | $ | 209,968 |  |  | $ | 109,008 |
Term loan payable |  |  | 74,850 |  |  |  | 75,000 |
Accounts payable and accrued expenses |  |  | 22,435 |  |  |  | 23,787 |
Accrued compensation |  |  | 1,803 |  |  |  | 1,416 |
Tenant security deposits |  |  | 1,930 |  |  |  | 1,808 |
Other liabilities: derivative termination value |  |  | 1,077 |  |  |  | 2,076 |
Acquired unfavorable real estate leases, less accumulated |  |  |  |  |  |  |  |
amortization of $2,744 and $2,460, respectively |  |  | 5,114 |  |  |  | 4,481 |
Total liabilities |  |  | 317,177 |  |  |  | 217,576 |
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, 81,437,405 and 79,680,705 shares issued and outstanding, respectively |  |  | 8 |  |  |  | 8 |
Additional paid-in capital |  |  | 1,025,491 |  |  |  | 1,003,713 |
Accumulated other comprehensive loss |  |  | (1,077 | ) |  |  | (2,076 | )
Accumulated distributions in excess of accumulated earnings |  |  | (102,864 | ) |  |  | (64,371 | )
Total stockholders’ equity |  |  | 921,558 |  |  |  | 937,274 |
Total liabilities and stockholders’ equity |  | $ | 1,238,735 |  |  | $ | 1,154,850 |

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Franklin Street Properties Corp. Financial Results

Supplementary Schedule C

Condensed Consolidated Statements of Cash Flows

(Unaudited)

|  | For the Year Ended December 31,
(in thousands) |  | 2010 |  | 2009
Cash flows from operating activities: |  |  |  |  |  |  |  |
Net income |  | $ | 22,093 |  |  | $ | 27,872 |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |  |  |  |  |  |
Depreciation and amortization expense |  |  | 39,627 |  |  |  | 36,561 |
Amortization of above market lease |  |  | 1,362 |  |  |  | 3,359 |
Gain on sale of real estate assets |  |  | — |  |  |  | (424 | )
Equity in earnings (losses) of non-consolidated REITs |  |  | (1,183 | ) |  |  | (2,012 | )
Distributions from non-consolidated REITs |  |  | 5,170 |  |  |  | 5,628 |
Increase (decrease) in bad debt reserve |  |  | 980 |  |  |  | 111 |
Changes in operating assets and liabilities: |  |  |  |  |  |  |  |
Restricted cash |  |  | (86 | ) |  |  | 2 |
Tenant rent receivables |  |  | (1,120 | ) |  |  | (564 | )
Straight-line rents |  |  | (4,249 | ) |  |  | (1,879 | )
Prepaid expenses and other assets |  |  | 865 |  |  |  | 907 |
Accounts payable, accrued expenses and other items |  |  | (351 | ) |  |  | 2,760 |
Accrued compensation |  |  | 387 |  |  |  | (238 | )
Tenant security deposits |  |  | 122 |  |  |  | (66 | )
Payment of deferred leasing commissions |  |  | (10,515 | ) |  |  | (2,659 | )
Net cash provided by operating activities |  |  | 53,102 |  |  |  | 69,358 |
Cash flows from investing activities: |  |  |  |  |  |  |  |
Purchase of real estate assets and office computers and furniture, capitalized merger costs |  |  | (38,781 | ) |  |  | (104,544 | )
Acquired real estate leases |  |  | (15,563 | ) |  |  | (27,779 | )
Investment in non-consolidated REITs |  |  | (11 | ) |  |  | (13,218 | )
Investment in related party mortgage loan receivable |  |  | (21,149 | ) |  |  | (35,410 | )
Changes in deposits on real estate assets |  |  | (200 | ) |  |  | — |
Investment in assets held for syndication |  |  | 1,319 |  |  |  | 8,159 |
Proceeds received on sales of real estate assets |  |  | — |  |  |  | 672 |
Net cash used in investing activities |  |  | (74,385 | ) |  |  | (172,120 | )
Cash flows from financing activities: |  |  |  |  |  |  |  |
Distributions to stockholders |  |  | (60,586 | ) |  |  | (55,313 | )
Proceeds from equity offering |  |  | 22,701 |  |  |  | 119,600 |
Offering costs |  |  | (833 | ) |  |  | (4,905 | )
Borrowings under bank note payable |  |  | 100,960 |  |  |  | 41,540 |
Borrowings (principal repayment) under term loan payable |  |  | (150 | ) |  |  | — |
Net cash provided by financing activities |  |  | 62,092 |  |  |  | 100,922 |
Net increase (decrease) in cash and cash equivalents |  |  | 40,809 |  |  |  | (1,840 | )
Cash and cash equivalents, beginning of year |  |  | 27,404 |  |  |  | 29,244 |
Cash and cash equivalents, end of year |  | $ | 68,213 |  |  | $ | 27,404 |

-9-

Franklin Street Properties Corp. Earnings Release

Supplementary Schedule D

Real Estate Portfolio Summary Information

Including asset held for sale

(Unaudited & Approximated)

Commercial portfolio lease expirations (1)
As of December 31, 2010
|  | Total | % of
Year |  | Square Feet | Portfolio
2011 (2) |  | 655,783 | 10.2%
2012 |  | 399,528 | 6.2%
2013 |  | 543,235 | 8.4%
2014 |  | 595,886 | 9.3%
2015 |  | 813,023 | 12.7%
Thereafter (3) |  | 3,414,902 | 53.2%
|  | 6,422,357 | 100.0%

(1) |  | Percentages are determined based upon square footage of expiring commercial leases and includes one asset held for sale.

(2) |  | Includes 1.3% of month-to-month leases and 0.5% that expired January 1, 2011.

(3) |  | Includes 924,120 square feet of current vacancies.

(dollars & square feet in 000's) | As of December 31, 2010
| # of |  | % of |  | Square | % of
State | Properties | Investment | Portfolio |  | Feet | Portfolio
Texas | 7 | $ 221,569 | 23.9% |  | 1,489 | 23.2%
Virginia | 5 | 161,679 | 17.4% |  | 947 | 14.8%
Colorado | 4 | 126,201 | 13.6% |  | 789 | 12.3%
Minnesota | 2 | 38,237 | 4.1% |  | 628 | 9.8%
Missouri | 3 | 70,336 | 7.6% |  | 477 | 7.4%
Maryland | 2 | 60,598 | 6.4% |  | 424 | 6.6%
Georgia | 1 | 73,867 | 8.0% |  | 387 | 6.0%
Michigan | 1 | 14,658 | 1.6% |  | 215 | 3.3%
Florida | 1 | 46,986 | 5.1% |  | 213 | 3.3%
Indiana | 1 | 35,761 | 3.9% |  | 205 | 3.2%
Illinois | 1 | 28,794 | 3.1% |  | 177 | 2.8%
California | 2 | 21,058 | 2.3% |  | 182 | 2.8%
North Carolina | 2 | 13,780 | 1.5% |  | 172 | 2.7%
Washington | 1 | 14,412 | 1.5% |  | 117 | 1.8%
| 33 | $ 927,936 | 100.0% |  | 6,422 | 100.0%

Property by type: |  |  |  |  |  |
(dollars & square feet | As of December 31, 2010
in 000's) | # of |  | % of |  | Square | % of
Type | Properties | Investment | Portfolio |  | Feet | Portfolio
Office | 32 | $ 923,026 | 99.5% |  | 6,323 | 98.5%
Industrial | 1 | 4,910 | 0.5% |  | 99 | 1.5%
| 33 | $ 927,936 | 100.0% |  | 6,422 | 100.0%

-10-

Franklin Street Properties Corp. Earnings Release

Supplementary Schedule E

Portfolio and Other Supplementary Information

(Unaudited & Approximated)

Capital Expenditures |  |  |
Owned Portfolio | Year Ended
(in thousands) | 31-Dec-10 |  | 31-Dec-09
Tenant improvements | $ | 7,000 |  |  | $ | 4,744 |
Deferred leasing costs |  | 10,515 |  |  |  | 2,659 |
Building improvements |  | 2,602 |  |  |  | 1,466 |
| $ | 20,117 |  |  | $ | 8,869 |

Square foot & leased percentages | December 31, |  | December 31,
|  | 2010 |  | 2009
Owned portfolio of commercial real estate |  |  |
| Number of properties (1) | 33 |  | 32
| Square feet | 6,422,357 |  | 5,942,414
| Leased percentage | 86% |  | 84%
Investments in non-consolidated REITs |  |  |
| Number of properties | 3 |  | 3
| Square feet | 1,995,913 |  | 1,995,041
| Leased percentage | 77% |  | 78%
Single Asset REITs (SARs) managed |  |  |
| Number of properties | 12 |  | 11
| Square feet (2) | 2,915,896 |  | 2,406,370
| Leased percentage | 75% |  | 91%
Total owned, investments & managed properties |  |  |
| Number of properties | 48 |  | 46
| Square feet (2) | 11,334,166 |  | 10,343,825
| Leased percentage | 81% |  | 85%

(1) Includes asset held for sale
(2) December 31, 2009 excludes a managed property that completed construction on July 9, 2010 with approximately 295,891 square feet.

The following table shows property information for our investments in non-consolidated REITs:

|  |  | Square | % Leased | % Interest
Non-consolidated REIT | City | State | Feet | 31-Dec-10 | Held
FSP 303 East Wacker Drive Corp. | Chicago | IL | 844,953 | 74.54% | 43.7%
FSP Grand Boulevard Corp. | Kansas City | MO | 532,453 | 89.50% | 27.0%
FSP Phoenix Tower Corp. | Houston | TX | 618,507 | 68.31% | 4.6%
|  |  | 1,995,913 | 76.60% |

-11-

Franklin Street Properties Corp. Earnings Release

Supplementary Schedule F: Quarterly Information

(Unaudited)

(in 000's) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | Q1 |  |  |  | Q2 |  |  |  | Q3 |  |  |  | Q4 |
Revenue: |  |  | 2010 |  |  |  | 2010 |  |  |  | 2010 |  |  |  | 2010 |
Rental |  | $ | 28,757 |  |  | $ | 27,219 |  |  | $ | 29,391 |  |  | $ | 29,953 |
Related party revenue: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Syndication fees |  |  | 121 |  |  |  | 541 |  |  |  | 20 |  |  |  | 1,862 |
Transaction fees |  |  | 146 |  |  |  | 753 |  |  |  | 246 |  |  |  | 1,582 |
Management fees and |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
interest income from loans |  |  | 533 |  |  |  | 558 |  |  |  | 630 |  |  |  | 718 |
Other |  |  | 9 |  |  |  | 6 |  |  |  | 20 |  |  |  | 54 |
Total revenue |  |  | 29,566 |  |  |  | 29,077 |  |  |  | 30,307 |  |  |  | 34,169 |
Expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate operating expenses |  |  | 7,955 |  |  |  | 7,335 |  |  |  | 8,715 |  |  |  | 9,604 |
Real estate taxes and insurance |  |  | 4,996 |  |  |  | 4,061 |  |  |  | 4,659 |  |  |  | 4,454 |
Depreciation and amortization |  |  | 8,496 |  |  |  | 8,521 |  |  |  | 9,691 |  |  |  | 9,764 |
Selling, general and administrative |  |  | 2,171 |  |  |  | 2,559 |  |  |  | 2,074 |  |  |  | 2,482 |
Commissions |  |  | 114 |  |  |  | 336 |  |  |  | 16 |  |  |  | 1,011 |
Interest |  |  | 1,652 |  |  |  | 1,735 |  |  |  | 1,892 |  |  |  | 2,004 |
Total expenses |  |  | 25,384 |  |  |  | 24,547 |  |  |  | 27,047 |  |  |  | 29,319 |
Income before interest income, equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
in earnings in non-consolidated REITs |  |  | 4,182 |  |  |  | 4,530 |  |  |  | 3,260 |  |  |  | 4,850 |
Interest income |  |  | 8 |  |  |  | 9 |  |  |  | 4 |  |  |  | 4 |
Equity in earnings in non-consolidated REITs |  |  | 253 |  |  |  | 380 |  |  |  | 404 |  |  |  | 229 |
Income before taxes on income |  |  | 4,443 |  |  |  | 4,919 |  |  |  | 3,668 |  |  |  | 5,083 |
Taxes on income |  |  | (68 | ) |  |  | 5 |  |  |  | (37 | ) |  |  | 317 |
Income from continuing operations |  |  | 4,511 |  |  |  | 4,914 |  |  |  | 3,705 |  |  |  | 4,766 |
Income from discontinued operations |  |  | 1,051 |  |  |  | 1,040 |  |  |  | 1,052 |  |  |  | 1,054 |
Income before gain on sale of properties |  |  | 5,562 |  |  |  | 5,954 |  |  |  | 4,757 |  |  |  | 5,820 |
Gain on sale of assets |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Net income |  | $ | 5,562 |  |  | $ | 5,954 |  |  | $ | 4,757 |  |  | $ | 5,820 |
FFO and FFO+GOS calculations: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net income |  | $ | 5,562 |  |  | $ | 5,954 |  |  | $ | 4,757 |  |  | $ | 5,820 |
(Gain) Loss on sale of assets |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
GAAP income from non-consolidated REITs |  |  | (253 | ) |  |  | (380 | ) |  |  | (404 | ) |  |  | (153 | )
Distributions from non-consolidated REITs |  |  | 1,407 |  |  |  | 1,324 |  |  |  | 1,192 |  |  |  | 1,247 |
Acquisition costs of new properties |  |  | — |  |  |  | 129 |  |  |  | (4 | ) |  |  | — |
Depreciation of real estate and intangible amortization |  |  | 9,934 |  |  |  | 9,675 |  |  |  | 10,510 |  |  |  | 10,605 |
Funds From Operations (FFO) |  |  | 16,650 |  |  |  | 16,702 |  |  |  | 16,051 |  |  |  | 17,519 |
Plus gains on sales of assets |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
FFO+GOS |  | $ | 16,650 |  |  | $ | 16,702 |  |  | $ | 16,051 |  |  | $ | 17,519 |

-12-

Franklin Street Properties Corp. Earnings Release

Supplementary Schedule G

Percentage of Leased Space

(Unaudited & Estimated)

| Property Name | Location | Square Feet |  | % Leased as of 9/30/10 (1) | Third Quarter Average % Leased (2) |  | % Leased as of 12/31/10 (1) | Fourth Quarter Average % Leased (2)
|  |  |  |  |  |  |  | Dec-10 |
1 | PARK SENECA | Charlotte, NC | 109,550 |  | 84.0% | 84.3% |  | 81.0% | 82.9%
2 | HILLVIEW CENTER | Milpitas, CA | 36,288 |  | 100.0% | 100.0% |  | 100.0% | 100.0%
3 | SOUTHFIELD | Southfield, MI | 214,697 |  | 58.6% | 57.6% |  | 58.6% | 58.6%
4 | BOLLMAN PLACE | Savage, MD | 98,745 |  | 100.0% | 100.0% |  | 100.0% | 100.0%
5 | FOREST PARK | Charlotte, NC | 62,212 |  | 100.0% | 100.0% |  | 100.0% | 100.0%
6 | CENTENNIAL | Colorado Springs, CO | 110,730 |  | 66.9% | 66.9% |  | 66.9% | 66.9%
7 | MEADOW POINT | Chantilly, VA | 138,537 |  | 97.9% | 96.1% |  | 97.9% | 97.9%
8 | TIMBERLAKE | Chesterfield, MO | 232,766 |  | 99.0% | 99.0% |  | 99.0% | 99.0%
9 | FEDERAL WAY | Federal Way, WA | 117,010 |  | 28.3% | 28.3% |  | 33.6% | 31.8%
10 | NORTHWEST POINT | Elk Grove Village, IL | 176,848 |  | 100.0% | 100.0% |  | 100.0% | 100.0%
11 | TIMBERLAKE EAST | Chesterfield, MO | 116,197 |  | 100.0% | 100.0% |  | 100.0% | 100.0%
12 | PARK TEN | Houston, TX | 155,715 |  | 48.2% | 48.2% |  | 48.2% | 48.2%
13 | MONTAGUE | San Jose, CA | 145,951 |  | 100.0% | 100.0% |  | 100.0% | 100.0%
14 | ADDISON | Addison, TX | 293,787 |  | 95.8% | 93.7% |  | 95.8% | 95.8%
15 | COLLINS CROSSING | Richardson, TX | 298,766 |  | 28.8% | 28.8% |  | 79.1% | 58.3%
16 | GREENWOOD PLAZA | Englewood, CO | 197,527 |  | 26.6% | 23.6% |  | 26.6% | 26.6%
17 | RIVER CROSSING | Indianapolis, IN | 205,059 |  | 97.5% | 97.5% |  | 97.5% | 97.7%
18 | LIBERTY PLAZA | Addison, TX | 218,934 |  | 76.9% | 77.6% |  | 73.7% | 73.7%
19 | INNSBROOK | Glen Allen, VA | 308,803 |  | 31.3% | 31.3% |  | 61.4% | 41.9%
20 | 380 INTERLOCKEN | Broomfield, CO | 240,184 |  | 85.1% | 85.1% |  | 85.1% | 85.1%
21 | BLUE LAGOON | Miami, FLA | 212,619 |  | 100.0% | 100.0% |  | 100.0% | 100.0%
22 | ELDRIDGE GREEN | Houston, TX | 248,399 |  | 100.0% | 100.0% |  | 100.0% | 100.0%
23 | WILLOW BEND | Plano, TX | 116,622 |  | 55.5% | 53.6% |  | 55.5% | 55.5%
24 | ONE OVERTON PARK | Atlanta, GA | 387,267 |  | 92.4% | 92.5% |  | 92.4% | 92.4%
25 | 390 INTERLOCKEN | Broomfield, CO | 241,516 |  | 98.3% | 98.3% |  | 98.3% | 98.3%
26 | EAST BALTIMORE | Baltimore, MD | 325,445 |  | 94.8% | 95.1% |  | 84.5% | 91.4%
27 | PARK TEN PHASE II | Houston, TX | 156,746 |  | 97.8% | 97.8% |  | 97.8% | 97.8%
28 | LAKESIDE CROSSING I | Maryland Heights, MO | 127,778 |  | 100.0% | 100.0% |  | 100.0% | 100.0%
29 | LOUDOUN TECH | Dulles, VA | 135,888 |  | 100.0% | 100.0% |  | 100.0% | 100.0%
30 | 4807 STONECROFT | Chantilly, VA | 111,469 |  | 100.0% | 100.0% |  | 100.0% | 100.0%
31 | EDEN BLUFF | Eden Prairie, MN | 153,028 |  | 100.0% | 100.0% |  | 100.0% | 100.0%
32 | 3150 FAIRVIEW PARK DRIVE | Falls Church, VA | 252,613 |  | 100.0% | 100.0% |  | 100.0% | 100.0%
33 | 121 SOUTH EIGHTH STREET | Minneapolis, MN | 474,661 |  | 92.1% | 91.3% |  | 92.1% | 92.1%
| TOTAL WEIGHTED AVERAGE | 6,422,357 |  | 82.4% | 82.1% |  | 85.6% | 84.1%

(1) |  | % Leased as of month's end includes all leases that expire on the last day of the quarter.

(2) |  | Average quarterly percentage is the average of the end of the month leased percentage for each of the 3 months during the quarter.

-13-

Franklin Street Properties Corp. Earnings Release

Supplementary Schedule H

Largest 20 Tenants – FSP Owned Portfolio

(Unaudited & Estimated)

The following table includes the largest 20 tenants in FSP’s owned portfolio based on leased square feet:

| As of December 31, 2010 |  |  |  |
|  |  |  |  | % of
| Tenant |  | Sq Ft | SIC Code | Portfolio
1 | TCF National Bank | (1) | 266,495 | 60 | 4.2%
2 | Noblis, Inc. | (2) | 252,613 | 54 | 3.9%
3 | CITGO Petroleum Corporation | (3) | 248,399 | 29 | 3.9%
4 | Burger King Corporation |  | 212,619 | 58 | 3.3%
5 | RGA Reinsurance Company |  | 185,501 | 63 | 2.9%
6 | Citicorp Credit Services, Inc | (4) | 176,848 | 61 | 2.8%
7 | C.H. Robinson Worldwide, Inc. |  | 153,028 | 47 | 2.4%
8 | SunTrust Bank | (5) | 145,204 | 60 | 2.3%
9 | Geisecke & Devrient America, Inc. |  | 135,888 | 73 | 2.1%
10 | Murphy Exploration & Production Company |  | 133,786 | 13 | 2.1%
11 | Monsanto Company |  | 127,778 | 28 | 2.0%
12 | Vail Holding, Inc. | (6) | 121,913 | 79 | 1.9%
13 | Northrop Grumman Information Technology, Inc. |  | 111,469 | 73 | 1.7%
14 | Maines Paper & Food Service, Inc. |  | 98,745 | 51 | 1.5%
15 | Federal National Mortgage Association | (7) | 92,358 | 61 | 1.4%
16 | Amdocs, Inc. |  | 91,928 | 73 | 1.4%
17 | County of Santa Clara |  | 90,467 | 91 | 1.4%
18 | Ober Kaler Grimes & Shriver |  | 88,736 | 81 | 1.4%
19 | VCE Company, LLC | (8) | 85,650 | 73 | 1.3%
20 | ARGO Data Resource Corporation |  | 83,944 | 73 | 1.3%
| Total |  | 2,903,369 |  | 45.2%

(1) |  | Property was acquired on June 29, 2010.

(2) |  | Property was sold January 21, 2011.

(3) |  | On January 20, 2010, the Company signed a new lease at a Houston, Texas property, for approximately 248,000 square feet of space with one of its tenants, CITGO Petroleum Corporation, effectively extending the lease expiration from February 29, 2012 to February 28, 2022.

(4) |  | The lease with Citicorp Credit Services, Inc. is guaranteed by Citigroup.

(5) |  | On December 22, 2010, the Company signed a lease for approximately 90,000 square feet at a Glen Allen, Virginia property. The lease expires on September 30, 2021. The tenant also leases approximately 55,000 square feet at a Baltimore, Maryland property. The lease in Baltimore expires on October 31, 2016.

(6) |  | On March 22, 2010, the Company signed a lease for approximate 38,000 square feet of space with one of its tenants, Vail Holdings, Inc. through March 2019. The remaining space of approximately 84,000 square feet is leased through March 2023.

(7) |  | On June 7, 2010, Federal National Mortgage Association commenced a lease for approximately 92,000 square feet of space at an Addison, Texas property. The lease expires September 6, 2013.

(8) |  | On December 20, 2010, the Company signed a lease for approximately 86,000 square feet of space at a Richardson, Texas property. The lease expires on September 30, 2019 and is guaranteed by EMC Corporation.

-14-

Franklin Street Properties Corp. Earnings Release

Supplementary Schedule I

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”) 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 consolidated financial statements.