EX-99.1 CHARTER 2 ex99-1.htm

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

Third Quarter 2013 Results

Wakefield, MA—October 29, 2013—Franklin Street Properties Corp. (the “Company”, “FSP”, “we” or “our”) (NYSE MKT: FSP), a real estate investment trust (REIT), announced today Funds From Operations (FFO) of $27.1 million or $0.27 per share for the third quarter ended September 30, 2013. Net income was $4.1 million or $0.04 per share for the third quarter ended September 30, 2013.

The Company evaluates its performance based on FFO, Net Income and EPS and believes each is an important measure. A reconciliation of Net Income to FFO, which is a non-GAAP financial measure, is provided on page 3 of this press release.

|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
(in 000's except per share data) |  | 2013 |  | 2012 |  | Increase (Decrease) |  | 2013 |  | 2012 |  | Increase (Decrease)
Net Income |  | $ | 4,094 |  |  | $ | (8,998 | ) |  | $ | 13,092 |  |  | $ | 13,236 |  |  | $ | 2,174 |  |  | $ | 11,062 |
FFO |  | $ | 27,134 |  |  | $ | 19,913 |  |  | $ | 7,221 |  |  | $ | 69,892 |  |  | $ | 58,526 |  |  | $ | 11,366 |
Per Share Data: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
EPS |  | $ | 0.04 |  |  | $ | (0.11 | ) |  | $ | 0.15 |  |  | $ | 0.14 |  |  | $ | 0.03 |  |  | $ | 0.11 |
FFO |  | $ | 0.27 |  |  | $ | 0.24 |  |  | $ | 0.03 |  |  | $ | 0.76 |  |  | $ | 0.71 |  |  | $ | 0.05 |
Weighted average shares (diluted) |  |  | 100,187 |  |  |  | 82,937 |  |  |  | 17,250 |  |  |  | 91,720 |  |  |  | 82,937 |  |  |  | 8,783 |

Comparing results for the third quarter of 2013 to the same period in 2012, FFO increased $7.2 million or $0.03 per share. The FFO increase was primarily from higher property income due to five acquisitions completed since July 2012 and improved occupancy in our portfolio, which was partially offset by decreased interest income as a result of repayment of secured real estate loans and by higher G&A. Net Income and EPS was $4.1 million or $0.04 per share for the third quarter of 2013 compared to a net loss of $9.0 million or $0.11 per share for the third quarter of 2012.

Comparing results for the nine months ended September 30, 2013 to 2012, FFO increased $11.4 million or $0.05 per share. The FFO increase was primarily from higher property income due to five acquisitions completed since July 2012 and improved occupancy in our portfolio, which was partially offset by decreased interest income as a result of repayment of secured real estate loans and by higher G&A. Net Income and EPS was $13.2 million and $0.14 per share, respectively, for the nine months ended September 30, 2013 compared to net income of $2.2 million and $0.03 per share for the same period in 2012.

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

“For the third quarter of 2013, FSP's profits as represented by FFO rose approximately $5.0 million to $27.1 million or $0.27 per share compared to $22.1 million or $0.24 per share in the second quarter of 2013. Dividend distributions declared for the third quarter of 2013, which are payable on November 14, 2013, will be approximately $19.1 million or $0.19 per share.

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Our directly-owned real estate portfolio of 40 properties, totaling 9,807,339 square feet, was approximately 93.8% leased as of September 30, 2013, a decrease from 94.4% as of June 30, 2013. The drop in leased percentage for the third quarter was primarily attributable to the acquisition of a 655,420 square foot office building in Denver Colorado that was 88.5% leased at the time of acquisition. We believe this property offers an excellent opportunity to increase occupancy and rental income stream within a vibrant and growing Denver CBD office market, creating incremental value for the company. Our portfolio has a relatively modest lease expiration schedule for the balance of 2013 and 2014 and we continue to proactively address future years scheduled expirations where it is financially advantageous to do early lease renewals.

Growth in FSP's real estate asset base and balance sheet continued in the third quarter of 2013. On July 1, 2013, we acquired a 621,946 rentable square foot office building at 999 Peachtree Street in the mid-town submarket of Atlanta Georgia, for $157.9 million. On August 28, 2013, we acquired a 655,420 rentable square foot office building at 1001 17th Street in Denver Colorado's central business district, for $217.0 million. Both Atlanta Georgia and Denver Colorado are core markets for FSP, and we believe both markets have strong, sustainable, macro-economic growth drivers that offer the potential to drive leasing demand and rental increases above average levels that are likely to be achieved for the broader U.S. office markets. In addition, on August 26, 2013 we closed a new $220 million, seven year, unsecured term loan with certain members of our bank group to lock in attractive long-term interest rates, and improve the financial flexibility of our balance sheet as we continue to pursue potential opportunities.

As the fourth quarter of 2013 begins, our property portfolio is well stabilized, with a balanced lease expiration schedule. Most of our largest property markets are now experiencing positive trends in both occupancies and rental rates. Our simple and flexible balance sheet provides access to a variety of capital sources to support our ongoing growth objectives. As we approach 2014, we continue to see numerous potential opportunities for consideration. We are very optimistic about our future growth potential.”

Dividend Announcement

On October 11, 2013, the Company announced that its Board of Directors declared a regular quarterly dividend for the three months ended September 30, 2013 of $0.19 per share of common stock payable on November 14, 2013 to stockholders of record on October 25, 2013.

Real Estate Update

Supplementary schedules provide property information for the Company’s owned real estate portfolio and for two non-consolidated REITs in which the Company holds preferred stock interests as of September 30, 2013. The Company will also be filing an updated 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.

Earnings Call

A conference call is scheduled for October 30, 2013 at 10:00 a.m. (ET) to discuss the third quarter 2013 results. To access the call, please dial 1-888-317-6016. Internationally, the call may be accessed by dialing 1-412-317-6016. 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.

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Funds From Operations (FFO)

A reconciliation of Net Income to FFO is shown below and a definition of FFO is provided on Supplementary Schedule H. Management believes FFO is used broadly throughout the real estate investment trust (REIT) industry as a measurement of performance. The Company has included the NAREIT FFO definition in the table and notes that other REITs may not define FFO in accordance with the current NAREIT definition or may interpret the current NAREIT definition differently. The Company’s computation of FFO may not be comparable to FFO reported by other REITs or real estate companies that define FFO differently.

Reconciliation of Net Income to FFO: |  | Three Months Ended |  | Nine Months Ended
|  | September 30, |  | September 30,
(In thousands, except per share amounts) |  | 2013 |  | 2012 |  | 2013 |  | 2012
Net income (loss) |  | $ | 4,094 |  |  | $ | (8,998 | ) |  | $ | 13,236 |  |  | $ | 2,174 |
Provision for loss on property held for sale |  |  | — |  |  |  | 14,300 |  |  |  | — |  |  |  | 14,300 |
GAAP (income) loss from non-consolidated REITs |  |  | 431 |  |  |  | (176 | ) |  |  | 814 |  |  |  | (1,061 | )
Distributions from non-consolidated REITs |  |  | 27 |  |  |  | 907 |  |  |  | 81 |  |  |  | 2,733 |
Depreciation & amortization |  |  | 22,176 |  |  |  | 13,779 |  |  |  | 55,205 |  |  |  | 40,279 |
NAREIT FFO |  |  | 26,728 |  |  |  | 19,812 |  |  |  | 69,336 |  |  |  | 58,425 |
Acquisition costs of new properties |  |  | 406 |  |  |  | 101 |  |  |  | 556 |  |  |  | 101 |
Funds From Operations (FFO) |  | $ | 27,134 |  |  | $ | 19,913 |  |  | $ | 69,892 |  |  | $ | 58,526 |
Per Share Data |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
EPS |  | $ | 0.04 |  |  | $ | (0.11 | ) |  | $ | 0.14 |  |  | $ | 0.03 |
FFO |  | $ | 0.27 |  |  | $ | 0.24 |  |  | $ | 0.76 |  |  | $ | 0.71 |
Weighted average shares (basic and diluted) |  |  | 100,187 |  |  |  | 82,937 |  |  |  | 91,720 |  |  |  | 82,937 |

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.

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About Franklin Street Properties Corp.

Franklin Street Properties Corp., based in Wakefield, Massachusetts, is focused on investing in institutional-quality office properties in the U.S. FSP’s strategy is to invest in select urban infill and central business district (CBD) properties, with primary emphasis on our top five markets of Atlanta, Dallas, Denver, Houston, and Minneapolis. FSP seeks value-oriented investments with an eye towards long-term growth and appreciation, as well as current income. 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.

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, risks of a lessening of demand for the types of real estate owned by us, changes in government regulations and regulatory uncertainty, uncertainty about governmental fiscal policy, geopolitical events 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, 2012, 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
Percentage of Leased Space | F
Largest 20 Tenants – FSP Owned Portfolio | G
Definition of Funds From Operations (FFO) | H

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Franklin Street Properties Corp. Financial Results

Supplementary Schedule A

Condensed Consolidated Income (Loss) Statements

(Unaudited)

|  | For the Three Months Ended September 30, |  | For the Nine Months Ended September 30,
(in thousands, except per share amounts) |  | 2013 |  | 2012 |  | 2013 |  | 2012
Revenue: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Rental |  | $ | 56,760 |  |  | $ | 37,944 |  |  | $ | 145,618 |  |  | $ | 109,207 |
Related party revenue: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Management fees and interest income from loans |  |  | 1,665 |  |  |  | 3,485 |  |  |  | 4,929 |  |  |  | 9,146 |
Other |  |  | 21 |  |  |  | 39 |  |  |  | 64 |  |  |  | 112 |
Total revenue |  |  | 58,446 |  |  |  | 41,468 |  |  |  | 150,611 |  |  |  | 118,465 |
Expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate operating expenses |  |  | 13,991 |  |  |  | 9,642 |  |  |  | 35,877 |  |  |  | 26,938 |
Real estate taxes and insurance |  |  | 8,801 |  |  |  | 5,761 |  |  |  | 22,704 |  |  |  | 16,946 |
Depreciation and amortization |  |  | 22,163 |  |  |  | 13,367 |  |  |  | 54,863 |  |  |  | 39,031 |
Selling, general and administrative |  |  | 3,477 |  |  |  | 3,141 |  |  |  | 9,213 |  |  |  | 7,454 |
Interest |  |  | 5,474 |  |  |  | 4,187 |  |  |  | 13,856 |  |  |  | 11,901 |
Total expenses |  |  | 53,906 |  |  |  | 36,098 |  |  |  | 136,513 |  |  |  | 102,270 |
Income before interest income, equity in earnings (losses) of non-consolidated REITs and taxes |  |  | 4,540 |  |  |  | 5,370 |  |  |  | 14,098 |  |  |  | 16,195 |
Interest income |  |  | 5 |  |  |  | 5 |  |  |  | 10 |  |  |  | 17 |
Equity in earnings (losses) of non-consolidated REITs |  |  | (431 | ) |  |  | 176 |  |  |  | (814 | ) |  |  | 1,061 |
Income before taxes on income |  |  | 4,114 |  |  |  | 5,551 |  |  |  | 13,294 |  |  |  | 17,273 |
Taxes on income |  |  | 118 |  |  |  | 80 |  |  |  | 352 |  |  |  | 236 |
Income from continuing operations |  |  | 3,996 |  |  |  | 5,471 |  |  |  | 12,942 |  |  |  | 17,037 |
Discontinued operations: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Income (loss) from discontinued operations, net of income tax |  |  | 98 |  |  |  | (169 | ) |  |  | 294 |  |  |  | (563 | )
Provision for loss on property held for sale of $14,300 less applicable income tax |  |  | — |  |  |  | (14,300 | ) |  |  | — |  |  |  | (14,300 | )
Total discontinued operations |  |  | 98 |  |  |  | (14,469 | ) |  |  | 294 |  |  |  | (14,863 | )
Net income (loss) |  | $ | 4,094 |  |  | $ | (8,998 | ) |  | $ | 13,236 |  |  | $ | 2,174 |
Weighted average number of shares outstanding, basic and diluted |  |  | 100,187 |  |  |  | 82,937 |  |  |  | 91,720 |  |  |  | 82,937 |
Earnings per share, basic and diluted, attributable to: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Continuing operations |  | $ | 0.04 |  |  | $ | 0.07 |  |  | $ | 0.14 |  |  | $ | 0.21 |
Discontinued operations |  |  | — |  |  |  | (0.18 | ) |  |  | — |  |  |  | (0.18 | )
Net income (loss) per share, basic and diluted |  | $ | 0.04 |  |  | $ | (0.11 | ) |  | $ | 0.14 |  |  | $ | 0.03 |

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Franklin Street Properties Corp. Financial Results

Supplementary Schedule B

Condensed Consolidated Balance Sheets

(Unaudited)

|  | September 30, |  | December 31,
(in thousands, except share and par value amounts) |  | 2013 |  | 2012
Assets: |  |  |  |  |  |  |  |
Real estate assets: |  |  |  |  |  |  |  |
Land |  | $ | 185,479 |  |  | $ | 141,545 |
Buildings and improvements |  |  | 1,599,519 |  |  |  | 1,172,928 |
Fixtures and equipment |  |  | 985 |  |  |  | 904 |
|  |  | 1,785,983 |  |  |  | 1,315,377 |
Less accumulated depreciation |  |  | 210,293 |  |  |  | 180,589 |
Real estate assets, net |  |  | 1,575,690 |  |  |  | 1,134,788 |
Acquired real estate leases, less accumulated amortization of $60,589 and $39,203, respectively |  |  | 194,893 |  |  |  | 108,203 |
Investment in non-consolidated REITs |  |  | 81,065 |  |  |  | 81,960 |
Asset held for sale |  |  | 10,143 |  |  |  | 10,575 |
Cash and cash equivalents |  |  | 25,539 |  |  |  | 21,267 |
Restricted cash |  |  | 623 |  |  |  | 575 |
Tenant rent receivables, less allowance for doubtful accounts of $80 and $1,300, respectively |  |  | 6,029 |  |  |  | 1,749 |
Straight-line rent receivable, less allowance for doubtful accounts of $135 and $135, respectively |  |  | 40,086 |  |  |  | 35,374 |
Related party mortgage loan receivables |  |  | 98,846 |  |  |  | 93,896 |
Prepaid expenses and other assets |  |  | 11,303 |  |  |  | 13,761 |
Other assets: derivative asset |  |  | 4,365 |  |  |  | — |
Office computers and furniture, net of accumulated depreciation of $694 and $584, respectively |  |  | 543 |  |  |  | 544 |
Deferred leasing commissions, net of accumulated amortization of $14,402 and $11,812, respectively |  |  | 27,504 |  |  |  | 23,376 |
Total assets |  | $ | 2,076,629 |  |  | $ | 1,526,068 |
Liabilities and Stockholders’ Equity: |  |  |  |  |  |  |  |
Liabilities: |  |  |  |  |  |  |  |
Bank note payable |  | $ | 331,500 |  |  | $ | 216,750 |
Term loans payable |  |  | 620,000 |  |  |  | 400,000 |
Accounts payable and accrued expenses |  |  | 39,907 |  |  |  | 31,122 |
Accrued compensation |  |  | 2,432 |  |  |  | 2,540 |
Tenant security deposits |  |  | 3,891 |  |  |  | 2,489 |
Other liabilities: derivative liability |  |  | 4,579 |  |  |  | 1,219 |
Acquired unfavorable real estate leases, less accumulated amortization of $5,936 and $4,618, respectively |  |  | 15,171 |  |  |  | 7,199 |
Total liabilities |  |  | 1,017,480 |  |  |  | 661,319 |
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, 100,187,405 and 82,937,405 shares issued and outstanding, respectively |  |  | 10 |  |  |  | 8 |
Additional paid-in capital |  |  | 1,273,585 |  |  |  | 1,042,876 |
Accumulated other comprehensive loss |  |  | (214 | ) |  |  | (1,219 | )
Accumulated distributions in excess of accumulated earnings |  |  | (214,232 | ) |  |  | (176,916 | )
Total stockholders’ equity |  |  | 1,059,149 |  |  |  | 864,749 |
Total liabilities and stockholders’ equity |  | $ | 2,076,629 |  |  | $ | 1,526,068 |

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

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Franklin Street Properties Corp. Financial Results

Supplementary Schedule C

Condensed Consolidated Statements of Cash Flows

(Unaudited)

|  | For the Nine Months Ended September 30,
(in thousands) |  | 2013 |  | 2012
Cash flows from operating activities: |  |  |  |  |  |  |  |
Net income |  | $ | 13,236 |  |  | $ | 2,174 |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |  |  |  |  |  |
Depreciation and amortization expense |  |  | 56,796 |  |  |  | 41,846 |
Amortization of above market lease |  |  | (277 | ) |  |  | 56 |
Provision for loss on property held for sale of $14,300 less applicable income tax |  |  | — |  |  |  | 14,300 |
Equity in (earnings) losses of non-consolidated REITs |  |  | 814 |  |  |  | (1,061 | )
Distributions from non-consolidated REITs |  |  | — |  |  |  | 1,246 |
Increase (decrease) in bad debt reserve |  |  | (1,220 | ) |  |  | 105 |
Changes in operating assets and liabilities: |  |  |  |  |  |  |  |
Restricted cash |  |  | (48 | ) |  |  | (53 | )
Tenant rent receivables, net |  |  | (3,060 | ) |  |  | 173 |
Straight-line rents, net |  |  | (3,920 | ) |  |  | (3,498 | )
Lease acquisition costs |  |  | (820 | ) |  |  | (2,235 | )
Prepaid expenses and other assets, net |  |  | (1,845 | ) |  |  | (1,278 | )
Accounts payable and accrued expenses |  |  | 6,860 |  |  |  | (25 | )
Accrued compensation |  |  | (108 | ) |  |  | (28 | )
Tenant security deposits |  |  | 1,402 |  |  |  | 273 |
Payment of deferred leasing commissions |  |  | (7,532 | ) |  |  | (2,425 | )
Net cash provided by operating activities |  |  | 60,278 |  |  |  | 49,570 |
Cash flows from investing activities: |  |  |  |  |  |  |  |
Purchase of real estate assets, office computers and furniture |  |  | (468,893 | ) |  |  | (49,209 | )
Acquired real estate leases |  |  | (100,143 | ) |  |  | (14,376 | )
Investments in non-consolidated REITs |  |  | 4,858 |  |  |  | (1 | )
Distributions in excess of earnings from non-consolidated REITs |  |  | 81 |  |  |  | 1,487 |
Investment in related party mortgage loan receivable |  |  | (4,950 | ) |  |  | (73,920 | )
Repayment of related party mortgage loan receivable |  |  | — |  |  |  | 106,200 |
Changes in deposits on real estate assets |  |  | — |  |  |  | — |
Net cash used in investing activities |  |  | (569,047 | ) |  |  | (29,819 | )
Cash flows from financing activities: |  |  |  |  |  |  |  |
Proceeds from stock offering |  |  | 241,500 |  |  |  | — |
Offering costs |  |  | (10,789 | ) |  |  | — |
Distributions to stockholders |  |  | (50,552 | ) |  |  | (47,274 | )
Borrowings under bank note payable |  |  | 160,000 |  |  |  | 160,000 |
Repayment of bank note payable |  |  | (45,250 | ) |  |  | (527,000 | )
Borrowing from term loan payable |  |  | 220,000 |  |  |  | 400,000 |
Deferred financing costs |  |  | (1,868 | ) |  |  | (5,328 | )
Net cash provided by (used in) financing activities |  |  | 513,041 |  |  |  | (19,602 | )
Net increase in cash and cash equivalents |  |  | 4,272 |  |  |  | 149 |
Cash and cash equivalents, beginning of period |  |  | 21,267 |  |  |  | 23,813 |
Cash and cash equivalents, end of period |  | $ | 25,539 |  |  | $ | 23,962 |

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Franklin Street Properties Corp. Earnings Release

Supplementary Schedule D

Real Estate Portfolio Summary Information

(Unaudited & Approximated)

Commercial portfolio lease expirations (1) |  |
|  |  |  | Total |  |  |  | % of |
Year |  |  |  | Square Feet |  |  |  | Portfolio |
2013 |  |  |  | 60,908 |  |  |  | 0.6 | %
2014 |  |  |  | 474,667 |  |  |  | 4.9 | %
2015 |  |  |  | 1,065,576 |  |  |  | 11.0 | %
2016 |  |  |  | 968,158 |  |  |  | 10.0 | %
2017 |  |  |  | 1,069,533 |  |  |  | 11.0 | %
Thereafter (2) |  |  |  | 6,046,197 |  |  |  | 62.5 | %
|  |  |  | 9,685,039 |  |  |  | 100.0 | %

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

| (2) | Includes 604,944 square feet of current vacancies.

(dollars & square feet in 000's) | As of September 30, 2013 (1)
|  | # of |  |  |  | % of |  | Square |  | % of
State |  |  | Properties |  |  |  | Investment |  |  |  | Portfolio |  |  |  | Feet |  |  |  | Portfolio |
Texas |  |  | 10 |  |  | $ | 406,681 |  |  |  | 25.8 | % |  |  | 2,537 |  |  |  | 26.2 | %
Colorado |  |  | 6 |  |  |  | 459,386 |  |  |  | 29.2 | % |  |  | 2,118 |  |  |  | 21.9 | %
Georgia |  |  | 3 |  |  |  | 225,829 |  |  |  | 14.3 | % |  |  | 1,396 |  |  |  | 14.4 | %
Virginia |  |  | 4 |  |  |  | 96,705 |  |  |  | 6.1 | % |  |  | 684 |  |  |  | 7.1 | %
Minnesota |  |  | 2 |  |  |  | 41,875 |  |  |  | 2.7 | % |  |  | 628 |  |  |  | 6.5 | %
Missouri |  |  | 3 |  |  |  | 64,598 |  |  |  | 4.1 | % |  |  | 477 |  |  |  | 4.9 | %
North Carolina |  |  | 3 |  |  |  | 65,808 |  |  |  | 4.1 | % |  |  | 431 |  |  |  | 4.4 | %
Illinois |  |  | 2 |  |  |  | 48,494 |  |  |  | 3.1 | % |  |  | 372 |  |  |  | 3.8 | %
Maryland |  |  | 1 |  |  |  | 53,129 |  |  |  | 3.4 | % |  |  | 325 |  |  |  | 3.4 | %
Florida |  |  | 1 |  |  |  | 44,632 |  |  |  | 2.8 | % |  |  | 213 |  |  |  | 2.2 | %
Indiana |  |  | 1 |  |  |  | 34,097 |  |  |  | 2.2 | % |  |  | 205 |  |  |  | 2.1 | %
California |  |  | 2 |  |  |  | 21,029 |  |  |  | 1.3 | % |  |  | 182 |  |  |  | 1.9 | %
Washington |  |  | 1 |  |  |  | 13,427 |  |  |  | 0.9 | % |  |  | 117 |  |  |  | 1.2 | %
|  |  | 39 |  |  | $ | 1,575,690 |  |  |  | 100.0 | % |  |  | 9,685 |  |  |  | 100.0 | %

| (1) | Excludes asset held for sale

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Franklin Street Properties Corp. Earnings Release

Supplementary Schedule E

Portfolio and Other Supplementary Information

(Unaudited & Approximated)

Capital Expenditures |  |  |  |  |  |  |  |
Owned Portfolio |  | Three Months Ended |  | Nine Months Ended
(in thousands) |  | 30-Sep-13 |  | 30-Sep-12 |  | 30-Sep-13 |  | 30-Sep-12
Tenant improvements |  | $ | 4,596 |  |  | $ | 2,854 |  |  | $ | 12,079 |  |  | $ | 8,573 |
Deferred leasing costs |  |  | 3,821 |  |  |  | 1,104 |  |  |  | 7,721 |  |  |  | 4,643 |
Building improvements |  |  | 1,552 |  |  |  | 711 |  |  |  | 4,292 |  |  |  | 2,460 |
|  | $ | 9,969 |  |  | $ | 4,669 |  |  | $ | 24,092 |  |  | $ | 15,676 |

Square foot & leased percentages |  | September 30 |  | December 31,
|  | 2013 |  | 2012
Owned portfolio of commercial real estate (1) |  |  |  |
Number of properties |  |  | 40 |  |  |  | 37 |
Square feet |  |  | 9,807,339 |  |  |  | 7,854,679 |
Leased percentage |  |  | 93.8 | % |  |  | 94.0 | %
Investments in non-consolidated REITs |  |  |  |  |  |  |  |
Number of properties |  |  | 2 |  |  |  | 2 |
Square feet |  |  | 1,395,500 |  |  |  | 1,392,316 |
Leased percentage |  |  | 61.5 | % |  |  | 65.2 | %
Single Asset REITs (SARs) managed |  |  |  |  |  |  |  |
Number of properties |  |  | 13 |  |  |  | 13 |
Square feet |  |  | 3,323,198 |  |  |  | 3,323,566 |
Leased percentage |  |  | 86.6 | % |  |  | 87.2 | %
Total owned, investments & managed properties (1) |  |  |  |  |  |  |  |
Number of properties |  |  | 55 |  |  |  | 52 |
Square feet |  |  | 14,526,037 |  |  |  | 12,570,561 |
Leased percentage |  |  | 89.1 | % |  |  | 89.0 | %

| (1) | Includes asset held for sale

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

|  |  | Square | % Leased | % Interest
Single Asset REIT name | City | State | Feet | 30-Sep-13 | Held
FSP 303 East Wacker Drive Corp. | Chicago | IL | 860,429 | 50.1% | 43.7%
FSP Grand Boulevard Corp. | Kansas City | MO | 535,071 | 79.9% | 27.0%
|  |  | 1,395,500 | 61.5% |

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Franklin Street Properties Corp. Earnings Release

Supplementary Schedule F

Percentage of Leased Space

(Unaudited & Estimated)

|  |  |  |  | Second |  | Third
|  |  |  | % Leased (1) | Quarter | % Leased (1) | Quarter
|  |  |  | as of | Average % | as of | Average %
| Property Name | Location | Square Feet | 30-Jun-13 | Leased (2) | 30-Sep-13 | Leased (2)
1 | PARK SENECA | Charlotte, NC | 109,674 | 79.3% | 79.1% | 80.7% | 79.6%
2 | HILLVIEW CENTER | Milpitas, CA | 36,288 | 100.0% | 100.0% | 100.0% | 100.0%
3 | FOREST PARK | Charlotte, NC | 62,212 | 100.0% | 100.0% | 100.0% | 100.0%
4 | CENTENNIAL | Colorado Springs, CO | 110,405 | 85.4% | 85.4% | 85.4% | 85.4%
5 | MEADOW POINT | Chantilly, VA | 138,537 | 92.6% | 92.6% | 92.6% | 92.6%
6 | TIMBERLAKE | Chesterfield, MO | 232,766 | 98.3% | 98.3% | 98.3% | 98.3%
7 | FEDERAL WAY | Federal Way, WA | 117,010 | 48.4% | 48.4% | 51.5% | 51.5%
8 | NORTHWEST POINT | Elk Grove Village, IL | 176,848 | 100.0% | 100.0% | 100.0% | 100.0%
9 | TIMBERLAKE EAST | Chesterfield, MO | 116,197 | 94.6% | 95.4% | 94.6% | 94.6%
10 | PARK TEN | Houston, TX | 157,460 | 100.0% | 100.0% | 100.0% | 100.0%
11 | MONTAGUE | San Jose, CA | 145,951 | 100.0% | 100.0% | 100.0% | 100.0%
12 | ADDISON | Addison, TX | 293,787 | 95.4% | 95.4% | 94.3% | 94.3%
13 | COLLINS CROSSING | Richardson, TX | 298,766 | 99.5% | 99.5% | 99.5% | 99.5%
14 | GREENWOOD PLAZA | Englewood, CO | 196,236 | 100.0% | 100.0% | 100.0% | 100.0%
15 | RIVER CROSSING | Indianapolis, IN | 205,059 | 98.2% | 97.6% | 99.1% | 98.8%
16 | LIBERTY PLAZA | Addison, TX | 218,934 | 84.6% | 83.2% | 86.0% | 85.5%
17 | INNSBROOK | Glen Allen, VA | 298,456 | 99.0% | 99.0% | 99.9% | 99.6%
18 | 380 INTERLOCKEN | Broomfield, CO | 240,184 | 87.6% | 86.7% | 86.1% | 86.1%
19 | BLUE LAGOON | Miami, FLA | 212,619 | 100.0% | 100.0% | 100.0% | 100.0%
20 | ELDRIDGE GREEN | Houston, TX | 248,399 | 100.0% | 100.0% | 100.0% | 100.0%
21 | WILLOW BEND | Plano, TX | 117,050 | 92.3% | 94.8% | 92.3% | 92.3%
22 | ONE OVERTON PARK | Atlanta, GA | 387,267 | 98.8% | 98.2% | 98.9% | 98.8%
23 | 390 INTERLOCKEN | Broomfield, CO | 241,516 | 79.8% | 80.0% | 69.4% | 76.3%
24 | EAST BALTIMORE | Baltimore, MD | 325,445 | 76.8% | 76.3% | 76.8% | 76.8%
25 | PARK TEN PHASE II | Houston, TX | 156,746 | 100.0% | 100.0% | 100.0% | 100.0%
26 | LAKESIDE CROSSING I | Maryland Heights, MO | 127,778 | 100.0% | 100.0% | 100.0% | 100.0%
27 | LOUDOUN TECH | Dulles, VA | 135,888 | 100.0% | 100.0% | 100.0% | 100.0%
28 | 4807 STONECROFT | Chantilly, VA | 111,469 | 100.0% | 100.0% | 100.0% | 100.0%
29 | EDEN BLUFF | Eden Prairie, MN | 153,028 | 100.0% | 100.0% | 100.0% | 100.0%
30 | 121 SOUTH EIGHTH ST | Minneapolis, MN | 474,791 | 90.7% | 90.7% | 90.2% | 90.2%
31 | EMPEROR BOULEVARD | Durham, NC | 259,531 | 100.0% | 100.0% | 100.0% | 100.0%
32 | LEGACY TENNYSON CTR | Plano, TX | 202,600 | 100.0% | 100.0% | 100.0% | 100.0%
33 | ONE LEGACY | Plano, TX | 214,110 | 100.0% | 100.0% | 100.0% | 100.0%
34 | 909 DAVIS | Evanston, IL | 195,245 | 97.9% | 97.9% | 97.9% | 97.9%
35 | 1410 EAST RENNER (3) | Richardson, TX | 122,300 | 100.0% | 100.0% | 100.0% | 100.0%
36 | ONE RAVINIA DRIVE | Atlanta, GA | 386,603 | 91.0% | 91.0% | 91.0% | 91.0%
37 | WESTCHASE I & II | Houston, TX | 629,025 | 96.6% | 96.6% | 97.1% | 97.1%
38 | 1999 BROADWAY | Denver, CO | 673,793 | 95.9% | 95.8% | 95.8% | 95.9%
39 | 999 PEACHTREE | Atlanta, GA | 621,946 | N/A | N/A | 94.3% | 94.6%
40 | 1001 17th STREET | Denver, CO | 655,420 | N/A | N/A | 88.5% | 88.5%
| TOTAL WEIGHTED AVERAGE |  | 9,807,339 | 94.4% | 94.3% | 93.8% | 94.1%

(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.

(3) Asset held for sale at September 30, 2013.

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Franklin Street Properties Corp. Earnings Release

Supplementary Schedule G

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 September 30, 2013 |  |  |
|  |  |  | % of
| Tenant | Sq Ft | SIC Code | Portfolio
1 | TCF National Bank | 263,111 | 60 | 2.7%
2 | Quintiles Transnational Corp | 259,531 | 87 | 2.7%
3 | CITGO Petroleum Corporation | 248,399 | 29 | 2.6%
4 | Sutherland Asbill Brennan LLP | 243,839 | 81 | 2.5%
5 | Newfield Exploration Company | 234,495 | 13 | 2.4%
6 | US Government (a) | 229,752 | 92 | 2.4%
7 | Burger King Corporation | 212,619 | 58 | 2.2%
8 | Denbury Onshore, LLC | 202,600 | 13 | 2.1%
9 | RGA Reinsurance Company | 197,354 | 63 | 2.0%
10 | SunTrust Bank (b) | 182,888 | 60 | 1.9%
11 | Citicorp Credit Services, Inc | 176,848 | 61 | 1.8%
12 | C.H. Robinson Worldwide, Inc | 153,028 | 47 | 1.6%
13 | T-Mobile South, LLC dba T-Mobile | 151,792 | 48 | 1.6%
14 | Houghton Mifflin Harcourt Publishing Company | 150,050 | 27 | 1.5%
15 | Petrobras America, Inc. | 144,813 | 13 | 1.5%
16 | Murphy Exploration & Production Company | 144,677 | 13 | 1.5%
17 | Argo Data Resource Corporation | 138,540 | 57 | 1.4%
18 | Giesecke & Devrient America, Inc. (c) | 135,888 | 73 | 1.4%
19 | Monsanto Company | 127,778 | 28 | 1.3%
20 | Federal National Mortgage Association | 123,144 | 61 | 1.3%
| Total | 3,721,146 |  | 38.4%

| (a) | Includes 180,444 and 37,813 square feet which expire in 2018 & 2014, respectively. The remaining 11,495 square feet expire between 2015 - 2020.
| (b) | Includes 55,388 square feet which expires October 31, 2016..
| (c) | Includes 23,778 square feet which expires December 31, 2013.

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Franklin Street Properties Corp. Earnings Release

Supplementary Schedule H

Definition of Funds From Operations (“FFO”),

The Company evaluates performance based on Funds From Operations, which we refer to as FFO, as management believes that FFO represents the most accurate measure of activity and is the basis for distributions paid to equity holders. The Company defines FFO as net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property and acquisition costs of newly acquired properties that are not capitalized, plus depreciation and amortization, including amortization of acquired above and below market lease intangibles and impairment charges, 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.

FFO should not be considered as an alternative to net income (determined in accordance with GAAP), nor as an indicator of the Company’s financial performance, nor as an alternative to cash flows from operating activities (determined in accordance with GAAP), nor as a measure of the Company’s liquidity, nor is it necessarily indicative of sufficient cash flow to fund all of the Company’s needs.

Other real estate companies and the National Association of Real Estate Investment Trusts, or NAREIT, may define this term in a different manner. We have included the NAREIT FFO definition in our table and note that other REITs may not define FFO in accordance with the current NAREIT definition or may interpret the current NAREIT definition differently than we do.

We believe that in order to facilitate a clear understanding of the results of the Company, FFO should be examined in connection with net income and cash flows from operating, investing and financing activities in the consolidated financial statements.