EX-99.2 3 ex-99d2.htm EX-99.2

Exhibit 99.2

| Table of Contents

| Page |  |  | Page
Company Information | 3 |  | Tenant Analysis and Leasing Activity |
|  |  | Tenants by Industry | 18
Key Financial Data |  |  | 20 Largest Tenants with Annualized Rent and Remaining Term | 19
Financial Highlights | 4 |  | Leasing Activity | 20
Income Statements | 5 |  | Lease Expirations by Square Feet | 21
Balance Sheets | 6 |  | Lease Expirations with Annualized Rent per Square Foot | 22
Cash Flow Statements | 7 |  | Redevelopment Activity | 23
Property Net Operating Income (NOI) | 8 |  | Capital Expenditures | 24
Reconciliation |  |  | Transaction Activity | 25
FFO & AFFO | 9 |  |  |
EBITDA | 10 |  | Loan Portfolio of Secured Real Estate | 26
Property NOI | 11 |  |  |
|  |  | Net Asset Value Components | 27
Debt Summary | 12 |  |  |
|  |  | Appendix: Definitions of Non-GAAP Measures |
Capital Analysis | 13 |  | FFO | 28
|  |  | EBITDA and NOI | 29
Owned and Managed Portfolio Overview | 14-17 |  | AFFO | 30

All financial information contained in this supplemental information package is unaudited. In addition, certain statements contained in this supplemental information package may be deemed to be forward-looking statements within the meaning of the federal securities laws. Although FSP believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. Factors that could cause actual results to differ materially from FSP’s current expectations include general economic conditions, uncertainties relating to fiscal policy, changes in government regulations, regulatory uncertainty, geopolitical events, local real estate conditions, the performance of properties that FSP has acquired or may acquire, the timely lease-up of properties and other risks, which are detailed from time to time in FSP’s reports filed with the Securities and Exchange Commission. FSP assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events. |  |
|  | Dominion Tower, Denver, CO

March 31, 2019| Page 2

| Company Information

Overview |  |  |  |  | Snapshot (as of March 31, 2019)
Franklin Street Properties Corp., based in Wakefield, Massachusetts, is focused on infill and central business district (CBD) office properties in the U.S. Sunbelt and Mountain West, as well as select opportunistic markets. 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. FSP’s real estate operations include property acquisitions and dispositions, short-term financing, leasing, development and asset management. |  |  |  |  | Corporate Headquarters | Wakefield, MA
|  |  |  | Fiscal Year-End | 31-Dec
|  |  |  | Total Properties | 35 (1)
|  |  |  | Total Square Feet | 9.9 Million (1)
|  |  |  | Trading Symbol | FSP
|  |  |  | Exchange | NYSE American
|  |  |  | Common Shares Outstanding | 107,231,155
|  |  |  | Quarterly Dividend | $0.09
Our Business |  |  |  |  | Dividend Yield | 5.0%
As of March 31, 2019, the Company owned and operated a portfolio of real estate consisting of 32 operating properties, three redevelopment properties and three managed Sponsored REITs. From time-to-time, the Company may acquire, develop or redevelop real estate, make additional secured loans or acquire one of its Sponsored REITs. The Company may also pursue, on a selective basis, the sale of its properties in order to take advantage of the value creation and demand for its properties, or for geographic or property specific reasons. |  |  |  |  | Total Market Capitalization | $1.8 Billion (2)
|  |  |  | Insider Holdings | 4.0%
Management Team |  |  |  |  |
George J. Carter | Jeffrey B. Carter |  |  |  |
Chief Executive Officer and | President and Chief Investment |  |  |  |
Chairman of the Board | Officer |  |  |  |
John G. Demeritt | Scott H. Carter |  |  |  |
Executive Vice President, Chief | Executive Vice President, General |  |  |  |
Financial Officer and Treasurer | Counsel and Secretary |  |  |  |
John F. Donahue | Eriel Anchondo |  |  |  |
Executive Vice President | Executive Vice President and Chief Operating Officer |  |  |  |  | 999 Peachtree, Atlanta, GA
Inquiries |  |  |  |  |  |
Inquiries should be directed to: Georgia Touma |  |  |  |  |  |
877.686.9496 or InvestorRelations@fspreit.com (1) Includes both operating and redevelopment properties. (2) Total Market Capitalization is the closing share price multiplied by the number of shares outstanding plus total debt outstanding. |  |  |  |  |  |

March 31, 2019| Page 3

| Summary of Financial Highlights

(in thousands except per share amounts, SF & number of properties) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | 31-Mar-19 |  | 31-Dec-18 |  | 30-Sep-18 |  | 30-Jun-18 |  | 31-Mar-18 |
Income Items: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Rental revenue |  | $ | 63,359 |  | $ | 65,304 |  | $ | 67,436 |  | $ | 65,409 |  | $ | 65,628 |
Total revenue |  |  | 64,716 |  |  | 66,578 |  |  | 68,705 |  |  | 66,694 |  |  | 66,893 |
Net income (loss) |  |  | (1,205) |  |  | 1,371 |  |  | 9,608 |  |  | 665 |  |  | 1,425 |
Adjusted EBITDA* |  |  | 31,267 |  |  | 33,875 |  |  | 35,636 |  |  | 34,270 |  |  | 34,943 |
FFO* |  |  | 22,110 |  |  | 24,546 |  |  | 26,158 |  |  | 25,393 |  |  | 26,364 |
AFFO* |  |  | 6,717 |  |  | 10,840 |  |  | 13,024 |  |  | 9,658 |  |  | 16,930 |
Per Share Data: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
EPS |  | $ | (0.01) |  | $ | 0.01 |  | $ | 0.09 |  | $ | 0.01 |  | $ | 0.01 |
FFO* |  | $ | 0.21 |  | $ | 0.23 |  | $ | 0.24 |  | $ | 0.24 |  | $ | 0.25 |
AFFO* |  | $ | 0.06 |  | $ | 0.10 |  | $ | 0.12 |  | $ | 0.09 |  | $ | 0.16 |
Weighted Average Shares (diluted) |  |  | 107,231 |  |  | 107,231 |  |  | 107,231 |  |  | 107,231 |  |  | 107,231 |
Closing share price |  | $ | 7.19 |  | $ | 6.23 |  | $ | 7.99 |  | $ | 8.56 |  | $ | 8.41 |
Dividend declared |  | $ | 0.09 |  | $ | 0.09 |  | $ | 0.09 |  | $ | 0.09 |  | $ | 0.09 |
Balance Sheet Items: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate, net |  | $ | 1,624,833 |  | $ | 1,625,773 |  | $ | 1,628,036 |  | $ | 1,627,498 |  | $ | 1,627,941 |
Other assets, net |  |  | 266,412 |  |  | 272,329 |  |  | 280,523 |  |  | 352,029 |  |  | 358,254 |
Total assets, net |  |  | 1,891,245 |  |  | 1,898,102 |  |  | 1,908,559 |  |  | 1,979,527 |  |  | 1,986,195 |
Total liabilities, net |  |  | 1,071,258 |  |  | 1,060,468 |  |  | 1,055,146 |  |  | 1,127,140 |  |  | 1,127,277 |
Shareholders' equity |  |  | 819,987 |  |  | 837,634 |  |  | 853,413 |  |  | 852,387 |  |  | 858,918 |
Market Capitalization and Debt: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total Market Capitalization (a) |  | $ | 1,780,992 |  | $ | 1,663,050 |  | $ | 1,843,777 |  | $ | 1,985,899 |  | $ | 1,969,814 |
Total debt outstanding (excluding unamortized financing costs) |  |  | 1,010,000 |  |  | 995,000 |  |  | 987,000 |  |  | 1,068,000 |  |  | 1,068,000 |
Debt to Total Market Capitalization |  |  | 56.7% |  |  | 59.8% |  |  | 53.5% |  |  | 53.8% |  |  | 54.2% |
Net Debt to Adjusted EBITDA* |  |  | 8.0 |  |  | 7.3 |  |  | 6.9 |  |  | 7.7 |  |  | 7.5 |
Operating Properties Leasing Statistics (b): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Operating properties assets |  |  | 32 |  |  | 32 |  |  | 34 |  |  | 34 |  |  | 34 |
Operating properties total SF |  |  | 9,495,118 |  |  | 9,486,650 |  |  | 9,760,699 |  |  | 9,760,699 |  |  | 9,760,657 |
Operating properties % leased |  |  | 88.5% |  |  | 89.0% |  |  | 90.5% |  |  | 89.0% |  |  | 88.5% |

| (a) |  | Total Market Capitalization is the closing share price multiplied by the number of shares outstanding plus total debt outstanding on that date.

| (b) |  | For periods in 2019 and 2018, excludes redevelopment properties.

*See pages 9 & 10 for reconciliations of Net income or loss to FFO, AFFO and Adjusted EBITDA, respectively, and the Appendix for Definitions of these Non-GAAP Measures beginning on page 28.

March 31, 2019| Page 4

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

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | For the
|  | For the Three Months Ended |  | For the Three Months Ended |  | Year Ended
|  | 31-Mar-19 |  | 31-Mar-18 |  | 30-Jun-18 |  | 30-Sep-18 |  | 31-Dec-18 |  | 31-Dec-18
Revenue: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Rental |  | $ | 63,359 |  | $ | 65,628 |  | $ | 65,409 |  | $ | 67,436 |  | $ | 65,304 |  | $ | 263,777
Related party revenue: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Management fees and interest income from loans |  |  | 1,352 |  |  | 1,256 |  |  | 1,276 |  |  | 1,261 |  |  | 1,268 |  |  | 5,061
Other |  |  | 5 |  |  | 9 |  |  | 9 |  |  | 8 |  |  | 6 |  |  | 32
Total revenue |  |  | 64,716 |  |  | 66,893 |  |  | 66,694 |  |  | 68,705 |  |  | 66,578 |  |  | 268,870
Expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate operating expenses |  |  | 17,726 |  |  | 17,151 |  |  | 16,954 |  |  | 17,946 |  |  | 18,652 |  |  | 70,703
Real estate taxes and insurance |  |  | 12,102 |  |  | 11,177 |  |  | 12,292 |  |  | 11,651 |  |  | 10,737 |  |  | 45,857
Depreciation and amortization |  |  | 23,245 |  |  | 24,035 |  |  | 23,591 |  |  | 23,277 |  |  | 23,327 |  |  | 94,230
General and administrative |  |  | 3,509 |  |  | 3,432 |  |  | 3,082 |  |  | 3,394 |  |  | 3,162 |  |  | 13,070
Interest |  |  | 9,368 |  |  | 9,486 |  |  | 9,753 |  |  | 9,935 |  |  | 9,200 |  |  | 38,374
Total expenses |  |  | 65,950 |  |  | 65,281 |  |  | 65,672 |  |  | 66,203 |  |  | 65,078 |  |  | 262,234
Income (loss) before taxes on income and equity in income (loss) of non-consolidated REITs |  |  | (1,234) |  |  | 1,612 |  |  | 1,022 |  |  | 2,502 |  |  | 1,500 |  |  | 6,636
Taxes on income |  |  | (29) |  |  | 82 |  |  | 75 |  |  | 74 |  |  | 129 |  |  | 360
Equity in income (loss) of non-consolidated REITs |  |  | — |  |  | (105) |  |  | (282) |  |  | 7,180 |  |  | — |  |  | 6,793
Net income (loss) |  | $ | (1,205) |  | $ | 1,425 |  | $ | 665 |  | $ | 9,608 |  | $ | 1,371 |  | $ | 13,069
Weighted average number of shares outstanding, basic and diluted |  |  | 107,231 |  |  | 107,231 |  |  | 107,231 |  |  | 107,231 |  |  | 107,231 |  |  | 107,231
Net income (loss) per share, basic and diluted |  | $ | (0.01) |  | $ | 0.01 |  | $ | 0.01 |  | $ | 0.09 |  | $ | 0.01 |  | $ | 0.12

March 31, 2019| Page 5

| $ in thousands, except per share amounts)
| Condensed Consolidated Balance Sheets (in thousands)

|  | March 31, |  |  | March 31, |  | June 30, |  | September 30, |  | December 31, |
|  | 2019 |  |  | 2018 |  | 2018 |  | 2018 |  | 2018 |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Land |  | $ | 191,578 |  |  | $ | 191,578 |  | $ | 191,578 |  | $ | 191,578 |  | $ | 191,578 |
Buildings and improvements |  |  | 1,872,082 |  |  |  | 1,821,035 |  |  | 1,833,470 |  |  | 1,848,362 |  |  | 1,857,935 |
Fixtures and equipment |  |  | 9,153 |  |  |  | 5,909 |  |  | 7,565 |  |  | 7,842 |  |  | 8,839 |
|  |  | 2,072,813 |  |  |  | 2,018,522 |  |  | 2,032,613 |  |  | 2,047,782 |  |  | 2,058,352 |
Less accumulated depreciation |  |  | 447,980 |  |  |  | 390,581 |  |  | 405,115 |  |  | 419,746 |  |  | 432,579 |
Real estate assets, net |  |  | 1,624,833 |  |  |  | 1,627,941 |  |  | 1,627,498 |  |  | 1,628,036 |  |  | 1,625,773 |
Acquired real estate leases, net |  |  | 53,948 |  |  |  | 78,729 |  |  | 71,861 |  |  | 65,687 |  |  | 59,595 |
Investment in non-consolidated REITs |  |  | — |  |  |  | 69,703 |  |  | 69,067 |  |  | — |  |  | — |
Cash, cash equivalents and restricted cash |  |  | 8,832 |  |  |  | 14,355 |  |  | 10,448 |  |  | 10,434 |  |  | 11,177 |
Tenant rent receivables, net |  |  | 4,489 |  |  |  | 3,411 |  |  | 4,039 |  |  | 3,206 |  |  | 3,938 |
Straight-line rent receivable, net |  |  | 55,836 |  |  |  | 53,430 |  |  | 53,294 |  |  | 53,056 |  |  | 54,006 |
Prepaid expenses and other assets |  |  | 10,469 |  |  |  | 8,355 |  |  | 7,444 |  |  | 9,259 |  |  | 10,400 |
Related party mortgage loan receivable |  |  | 72,795 |  |  |  | 71,455 |  |  | 71,190 |  |  | 70,925 |  |  | 70,660 |
Other assets: derivative asset |  |  | 10,469 |  |  |  | 18,740 |  |  | 21,196 |  |  | 22,265 |  |  | 14,765 |
Office computers and furniture, net of accumulated depreciation |  |  | 166 |  |  |  | 261 |  |  | 236 |  |  | 216 |  |  | 197 |
Deferred leasing commissions, net |  |  | 49,408 |  |  |  | 39,815 |  |  | 43,254 |  |  | 45,475 |  |  | 47,591 |
Total assets |  | $ | 1,891,245 |  |  | $ | 1,986,195 |  | $ | 1,979,527 |  | $ | 1,908,559 |  | $ | 1,898,102 |
Liabilities and Stockholders’ Equity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Bank note payable |  | $ | 40,000 |  |  | $ | 98,000 |  | $ | 98,000 |  | $ | 17,000 |  | $ | 25,000 |
Term loan payable, net of unamortized financing costs |  |  | 764,642 |  |  |  | 765,259 |  |  | 765,618 |  |  | 763,914 |  |  | 764,278 |
Series A & Series B Senior Notes |  |  | 198,892 |  |  |  | 198,727 |  |  | 198,768 |  |  | 198,809 |  |  | 198,850 |
Accounts payable and accrued expenses |  |  | 52,248 |  |  |  | 53,327 |  |  | 52,651 |  |  | 62,699 |  |  | 59,183 |
Accrued compensation |  |  | 1,073 |  |  |  | 1,112 |  |  | 1,778 |  |  | 2,844 |  |  | 3,043 |
Tenant security deposits |  |  | 6,352 |  |  |  | 5,588 |  |  | 5,576 |  |  | 5,619 |  |  | 6,319 |
Lease liability |  |  | 2,141 |  |  |  | — |  |  | — |  |  | — |  |  | — |
Other liabilities: derivative liabilities |  |  | 2,496 |  |  |  | — |  |  | — |  |  | — |  |  | — |
Acquired unfavorable real estate leases, net |  |  | 3,414 |  |  |  | 5,264 |  |  | 4,749 |  |  | 4,261 |  |  | 3,795 |
Total liabilities |  |  | 1,071,258 |  |  |  | 1,127,277 |  |  | 1,127,140 |  |  | 1,055,146 |  |  | 1,060,468 |
Commitments and contingencies |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Stockholders’ Equity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Preferred stock |  |  | - |  |  |  | - |  |  | — |  |  | — |  |  | — |
Common stock |  |  | 11 |  |  |  | 11 |  |  | 11 |  |  | 11 |  |  | 11 |
Additional paid-in capital |  |  | 1,356,457 |  |  |  | 1,356,457 |  |  | 1,356,457 |  |  | 1,356,457 |  |  | 1,356,457 |
Accumulated other comprehensive income (loss) |  |  | 7,973 |  |  |  | 18,740 |  |  | 21,196 |  |  | 22,265 |  |  | 14,765 |
Accumulated distributions in excess of accumulated earnings |  |  | (544,454) |  |  |  | (516,290) |  |  | (525,277) |  |  | (525,320) |  |  | (533,599) |
Total stockholders’ equity |  |  | 819,987 |  |  |  | 858,918 |  |  | 852,387 |  |  | 853,413 |  |  | 837,634 |
Total liabilities and stockholders’ equity |  | $ | 1,891,245 |  |  | $ | 1,986,195 |  | $ | 1,979,527 |  | $ | 1,908,559 |  | $ | 1,898,102 |

March 31, 2019| Page 6

| Condensed Consolidated Statements of Cash Flows (in thousands)

|  | Three Months ended March 31, |  |  | Twelve Months Ended December 31, |
|  | 2019 |  | 2018 |  |  | 2018 |  | 2017 |
Cash flows from operating activities: |  |  |  |  |  |  |  |  |  |  |  |
Net income (loss) | $ | (1,205) | $ | 1,425 |  |  | $ | 13,069 |  | $ | (15,944) |
Adjustments to reconcile net income or loss to net cash provided by operating activities: |  |  |  |  |  |  |  |  |  |  |  |
Depreciation and amortization expense |  | 23,962 |  | 24,748 |  |  |  | 97,171 |  |  | 103,743 |
Amortization of above and below market leases |  | (112) |  | (85) |  |  |  | (556) |  |  | (1,031) |
Hedge ineffectiveness |  | — |  | — |  |  |  | — |  |  | 1,878 |
Loss on sale of properties and properties held for sale |  | — |  | — |  |  |  | — |  |  | 18,481 |
Equity in (income) loss from non-consolidated REITs |  | — |  | 105 |  |  |  | (6,793) |  |  | 3,604 |
Increase (decrease) in allowance for doubtful accounts and write-off of accounts receivable |  | (60) |  | 75 |  |  |  | (50) |  |  | 150 |
Changes in operating assets and liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Tenant rent receivables |  | (491) |  | (363) |  |  |  | (765) |  |  | (160) |
Straight-line rents |  | (1,140) |  | 40 |  |  |  | 381 |  |  | (1,767) |
Lease acquisition costs |  | (689) |  | (276) |  |  |  | (1,193) |  |  | (2,052) |
Prepaid expenses and other assets |  | 1,497 |  | (274) |  |  |  | (1,940) |  |  | (403) |
Accounts payable and accrued expenses |  | (6,101) |  | (6,911) |  |  |  | (4,077) |  |  | 3,870 |
Accrued compensation |  | (1,970) |  | (2,529) |  |  |  | (598) |  |  | (143) |
Tenant security deposits |  | 33 |  | 205 |  |  |  | 936 |  |  | 28 |
Payment of deferred leasing commissions |  | (4,242) |  | (1,082) |  |  |  | (15,383) |  |  | (14,309) |
Net cash provided by operating activities |  | 9,482 |  | 15,078 |  |  |  | 80,202 |  |  | 95,945 |
Cash flows from investing activities: |  |  |  |  |  |  |  |  |  |  |  |
Property improvements, fixtures and equipment |  | (15,223) |  | (10,774) |  |  |  | (51,057) |  |  | (54,306) |
Investments in non-consolidated REITs |  | — |  | — |  |  |  | 74,931 |  |  | — |
Distributions in excess of earnings from non-consolidated REITs |  | — |  | 355 |  |  |  | 710 |  |  | 1,396 |
Investment in related party mortgage loan receivable |  | (2,400) |  | — |  |  |  | — |  |  | — |
Repayment of related party mortgage loan receivable |  | 265 |  | 265 |  |  |  | 1,060 |  |  | 10,060 |
Proceeds received from liquidating trust |  | 263 |  | — |  |  |  | — |  |  | — |
Proceeds received on sales of real estate assets |  | — |  | — |  |  |  | — |  |  | 37,756 |
Net cash provided by (used in) investing activities |  | (17,095) |  | (10,154) |  |  |  | 25,644 |  |  | (5,094) |
Cash flows from financing activities: |  |  |  |  |  |  |  |  |  |  |  |
Distributions to stockholders |  | (9,651) |  | (20,374) |  |  |  | (49,326) |  |  | (81,496) |
Borrowings under bank note payable |  | 30,000 |  | 30,000 |  |  |  | 38,000 |  |  | 75,000 |
Repayments of bank note payable |  | (15,000) |  | (10,000) |  |  |  | (91,000) |  |  | (277,000) |
Borrowing from Series A & Series B Senior Notes |  | — |  | — |  |  |  | — |  |  | 200,000 |
Deferred Financing Costs |  | (81) |  | (14) |  |  |  | (2,162) |  |  | (6,902) |
Net cash provided by (used in) financing activities |  | 5,268 |  | (388) |  |  |  | (104,488) |  |  | (90,398) |
Net increase (decrease) in cash, cash equivalents and restricted cash |  | (2,345) |  | 4,536 |  |  |  | 1,358 |  |  | 453 |
Cash, cash equivalents and restricted cash, beginning of period |  | 11,177 |  | 9,819 |  |  |  | 9,819 |  |  | 9,366 |
Cash, cash equivalents and restricted cash, end of period | $ | 8,832 | $ | 14,355 |  |  | $ | 11,177 |  | $ | 9,819 |

March 31, 2019| Page 7

| Property Net Operating Income (NOI)* with Same Store Comparison (in thousands)

|  | Rentable |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Square Feet |  | Three Months Ended | Three Months Ended |  | Inc |  | % |
(in thousands) |  | or RSF |  | 31-Mar-19 |  | 31-Mar-18 |  |  | (Dec) |  | Change |
Region |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
East |  | 945 |  | $ | 3,185 |  | $ | 3,802 |  |  | $ | (617) |  | (16.2) | %
MidWest |  | 1,549 |  |  | 5,163 |  |  | 6,257 |  |  |  | (1,094) |  | (17.5) | %
South |  | 4,382 |  |  | 14,272 |  |  | 14,449 |  |  |  | (177) |  | (1.2) | %
West |  | 2,619 |  |  | 10,559 |  |  | 10,958 |  |  |  | (399) |  | (3.6) | %
Property NOI* from Operating Properties |  | 9,495 |  |  | 33,179 |  |  | 35,466 |  |  |  | (2,287) |  | (6.4) | %
Dispositions and Redevelopment Properties |  | 405 |  |  | (205) |  |  | 1,250 |  |  |  | (1,455) |  | (3.8) | %
Property NOI* |  | 9,900 |  | $ | 32,974 |  | $ | 36,716 |  |  | $ | (3,742) |  | (10.2) | %
Same Store |  |  |  | $ | 33,179 |  | $ | 35,466 |  |  | $ | (2,287) |  | (6.4) | %
Less Nonrecurring |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Items in NOI* (a) |  |  |  |  | 35 |  |  | 761 |  |  |  | (726) |  | 1.9 | %
Comparative |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Same Store |  |  |  | $ | 33,144 |  | $ | 34,705 |  |  | $ | (1,561) |  | (4.5) | %

| (a) |  | Nonrecurring items in NOI include proceeds from bankruptcies, lease termination fees or other significant nonrecurring income or expenses, which may affect comparability.

*See the Appendix for Definition of Non-GAAP Measures beginning on page 28.

March 31, 2019| Page 8

| FFO* & AFFO* Reconciliation (in thousands, except per share amounts)

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Year |
|  | Three Months Ended |  | Three Months Ended |  | Ended |
|  | 31-Mar-19 |  | 31-Mar-18 |  | 30-Jun-18 |  | 30-Sep-18 |  | 31-Dec-18 |  | 31-Dec-18 |
Net income (loss) |  | $ | (1,205) |  | $ | 1,425 |  | $ | 665 |  | $ | 9,608 |  | $ | 1,371 |  | $ | 13,069 |
GAAP (income) loss from non-consolidated REITs |  |  | — |  |  | 105 |  |  | 282 |  |  | (7,180) |  |  | — |  |  | (6,793) |
FFO from non-consolidated REITs |  |  | — |  |  | 884 |  |  | 978 |  |  | 649 |  |  | — |  |  | 2,511 |
Depreciation & amortization |  |  | 23,133 |  |  | 23,950 |  |  | 23,468 |  |  | 23,081 |  |  | 23,175 |  |  | 93,674 |
NAREIT FFO* |  |  | 21,928 |  |  | 26,364 |  |  | 25,393 |  |  | 26,158 |  |  | 24,546 |  |  | 102,461 |
Lease Acquisition costs |  |  | 182 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Funds From Operations (FFO)* |  | $ | 22,110 |  | $ | 26,364 |  | $ | 25,393 |  | $ | 26,158 |  | $ | 24,546 |  | $ | 102,461 |
Adjusted Funds From Operations (AFFO)* |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Funds From Operations (FFO)* |  | $ | 22,110 |  | $ | 26,364 |  | $ | 25,393 |  | $ | 26,158 |  | $ | 24,546 |  | $ | 102,461 |
Reverse FFO from non-consolidated REITs |  |  | — |  |  | (884) |  |  | (978) |  |  | (649) |  |  | — |  |  | (2,511) |
Distributions from non-consolidated REITs |  |  | — |  |  | 355 |  |  | 355 |  |  | — |  |  | — |  |  | 710 |
Amortization of deferred financing costs |  |  | 717 |  |  | 711 |  |  | 713 |  |  | 799 |  |  | 717 |  |  | 2,940 |
Straight-line rent |  |  | (1,140) |  |  | 40 |  |  | 259 |  |  | 522 |  |  | (440) |  |  | 381 |
Tenant improvements |  |  | (8,318) |  |  | (6,777) |  |  | (8,212) |  |  | (7,084) |  |  | (6,895) |  |  | (28,968) |
Leasing commissions |  |  | (4,239) |  |  | (1,021) |  |  | (5,314) |  |  | (4,394) |  |  | (3,746) |  |  | (14,475) |
Non-investment capex |  |  | (2,413) |  |  | (1,858) |  |  | (2,558) |  |  | (2,328) |  |  | (3,342) |  |  | (10,086) |
Adjusted Funds From Operations (AFFO)* |  | $ | 6,717 |  | $ | 16,930 |  | $ | 9,658 |  | $ | 13,024 |  | $ | 10,840 |  | $ | 50,452 |
Per Share Data: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
EPS |  | $ | (0.01) |  | $ | 0.01 |  | $ | 0.01 |  | $ | 0.09 |  | $ | 0.01 |  | $ | 0.12 |
FFO* |  |  | 0.21 |  |  | 0.25 |  |  | 0.24 |  |  | 0.24 |  |  | 0.23 |  |  | 0.96 |
AFFO* |  |  | 0.06 |  |  | 0.16 |  |  | 0.09 |  |  | 0.12 |  |  | 0.10 |  |  | 0.47 |
Weighted Average Shares (basic and diluted) |  |  | 107,231 |  |  | 107,231 |  |  | 107,231 |  |  | 107,231 |  |  | 107,231 |  |  | 107,231 |

*See the Appendix for Definitions of these Non-GAAP Measures beginning on page 28.

March 31, 2019| Page 9

| EBITDA* & Adjusted EBITDA* Reconciliation (in thousands, except ratio amounts)

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Year
|  | Three Months Ended |  |  | Three Months Ended |  | Ended
|  | 31-Mar-19 |  |  |  | 31-Mar-18 |  | 30-Jun-18 |  | 30-Sep-18 |  | 31-Dec-18 |  | 31-Dec-18
Net income (loss) |  | $ | (1,205) |  |  |  | $ | 1,425 |  | $ | 665 |  | $ | 9,608 |  | $ | 1,371 |  | $ | 13,069
Interest expense |  |  | 9,368 |  |  |  |  | 9,486 |  |  | 9,753 |  |  | 9,935 |  |  | 9,200 |  |  | 38,374
Depreciation and amortization |  |  | 23,133 |  |  |  |  | 23,950 |  |  | 23,468 |  |  | 23,081 |  |  | 23,175 |  |  | 93,674
Income taxes |  |  | (29) |  |  |  |  | 82 |  |  | 75 |  |  | 74 |  |  | 129 |  |  | 360
EBITDA* |  | $ | 31,267 |  |  |  | $ | 34,943 |  | $ | 33,961 |  | $ | 42,698 |  | $ | 33,875 |  | $ | 145,477
(Gain) loss on sale of properties and provisions for loss on properties held for sale or equity investments |  |  | — |  |  |  |  | — |  |  | 309 |  |  | (7,062) |  |  | — |  |  | (6,753)
Adjusted EBITDA* |  | $ | 31,267 |  |  |  | $ | 34,943 |  | $ | 34,270 |  | $ | 35,636 |  | $ | 33,875 |  | $ | 138,724
Interest expense |  | $ | 9,368 |  |  |  | $ | 9,486 |  | $ | 9,753 |  | $ | 9,935 |  | $ | 9,200 |  | $ | 38,374
Scheduled principal payments |  |  | — |  |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
Interest and scheduled principal payments |  | $ | 9,368 |  |  |  | $ | 9,486 |  | $ | 9,753 |  | $ | 9,935 |  | $ | 9,200 |  | $ | 38,374
Interest coverage ratio |  |  | 3.34 |  |  |  |  | 3.68 |  |  | 3.51 |  |  | 3.59 |  |  | 3.68 |  |  | 3.62
Debt service coverage ratio |  |  | 3.34 |  |  |  |  | 3.68 |  |  | 3.51 |  |  | 3.59 |  |  | 3.68 |  |  | 3.62
Debt excluding unamortized financing costs |  | $ | 1,010,000 |  |  |  | $ | 1,068,000 |  | $ | 1,068,000 |  | $ | 987,000 |  | $ | 995,000 |  |  |
Cash, cash equivalents and restricted cash |  |  | 8,832 |  |  |  |  | 14,355 |  |  | 10,448 |  |  | 10,434 |  |  | 11,177 |  |  |
Net Debt (Debt less Cash, cash equivalents and restricted cash) |  | $ | 1,001,168 |  |  |  | $ | 1,053,645 |  | $ | 1,057,552 |  | $ | 976,566 |  | $ | 983,823 |  |  |
Adjusted EBITDA* |  | $ | 31,267 |  |  |  | $ | 34,943 |  | $ | 34,270 |  | $ | 35,636 |  | $ | 33,875 |  |  |
Annualized |  | $ | 125,068 |  |  |  | $ | 139,772 |  | $ | 137,080 |  | $ | 142,544 |  | $ | 135,500 |  |  |
Net Debt-to-Adjusted EBITDA* |  |  | 8.0 |  |  |  |  | 7.5 |  |  | 7.7 |  |  | 6.9 |  |  | 7.3 |  |  |

*See the Appendix for Definitions of these Non-GAAP Measures beginning on page 28. Amounts in the EBITDA and Adjusted EBITDA reconciliation do not reflect our proportionate share of interest expense, depreciation, amortization, income taxes, gains or losses on sales and debt from our investments in non-consolidated REITs, which are accounted for under the equity method.

March 31, 2019| Page 10

| Reconciliation of Net Income (Loss) to Property NOI* (in thousands)

Reconciliation of Net income to Property NOI* |  |  |  |  |  |  |
|  | Three Months Ended |  | Three Months Ended |
|  | 31-Mar-19 |  | 31-Mar-18 |
Net income (loss) |  | $ | (1,205) |  | $ | 1,425 |
Add (deduct): |  |  |  |  |  |  |
Management fee income |  |  | (677) |  |  | (746) |
Depreciation and amortization |  |  | 23,245 |  |  | 24,035 |
Amortization of above/below market leases |  |  | (112) |  |  | (85) |
General and administrative |  |  | 3,509 |  |  | 3,432 |
Interest expense |  |  | 9,368 |  |  | 9,486 |
Interest income |  |  | (1,294) |  |  | (1,120) |
Equity in (income) loss of non-consolidated REITs |  |  | — |  |  | 105 |
Non-property specific items, net |  |  | 140 |  |  | 184 |
Property NOI* |  | $ | 32,974 |  | $ | 36,716 |

*See the Appendix for Definition of Non-GAAP Measures beginning on page 28.

March 31, 2019| Page 11

| Debt Summary (in thousands)

|  |  |  | Maximum |  | Amount |  | Interest |  | Interest |  |  |
|  | Maturity |  | Amount |  | Drawn at |  | Rate (a) |  | Rate at |  | Facility |
|  | Date |  | of Loan |  | 31-Mar-19 |  | Components |  | 31-Mar-19 |  | Fee |
BAML Revolver |  | 12-Jan-22 |  | $ | 600,000 |  | $ | 40,000 |  | L | + | 1.20% |  | 3.69% |  | 0.25% |
JPM Term Loan (b) |  | 30-Nov-21 |  |  | 150,000 |  |  | 150,000 |  | L | + | 1.25% |  | 3.71% |  |  |
BAML Term Loan |  | 12-Jan-23 |  |  | 400,000 |  |  | 400,000 |  | 1.12% | + | 1.35% |  | 2.47% |  |  |
BMO Term Loan Tranche A |  | 30-Nov-21 |  |  | 55,000 |  |  | 55,000 |  | 2.32% | + | 1.25% |  | 3.57% |  |  |
BMO Term Loan Tranche B |  | 31-Jan-24 |  |  | 165,000 |  |  | 165,000 |  | 2.32% | + | 1.25% |  | 3.57% |  |  |
Series A Senior Notes |  | 20-Dec-24 |  |  | 116,000 |  |  | 116,000 |  |  |  |  |  | 3.99% |  |  |
Series B Senior Notes |  | 20-Dec-27 |  |  | 84,000 |  |  | 84,000 |  |  |  |  |  | 4.26% |  |  |
|  |  |  | $ | 1,570,000 |  | $ | 1,010,000 |  |  |  |  |  | 3.27% |  |  |

| · |  | On August 2, 2018, we entered into an Amended and Restated Credit Agreement with respect to the JPM Term Loan, which extended the maturity of the JPM Term Loan to November 30, 2021 and reduced the number of basis points over the LIBOR-based rate used to determine the interest rate. On March 7, 2019, we entered into interest rate swap transactions for a $100 million portion of the $150 million JPM Term Loan that fixed the LIBOR-based rate at 2.44% from March 29, 2019 and until the loan matures on November 30, 2021. Accordingly, the interest rate on the $100 million portion was 3.69% and the interest rate on the remaining $50 million portion was 3.75% at quarter end. The weighted average rate at March 31, 2019 was 3.71% on the JPM Term Loan.

| · |  | On September 27, 2018, we entered into a Second Amended and Restated Credit Agreement with respect to the BMO Term Loan, which consists of a $55 million tranche A term loan and a $165 million tranche B term loan. The tranche A term loan matures on November 30, 2021 and the tranche B term loan matures on January 31, 2024. The number of basis points over LIBOR used to determine the interest rate was reduced.

| · |  | The BAML Revolver is subject to a 25 basis point facility fee based on our credit rating and, when applied to our availability of $600 million, would be $1.5 million annually.

| · |  | On October 24, 2017, we entered into a note purchase agreement relating to a private placement of $200 million in aggregate principal amount of unsecured senior notes, consisting of $116 million in aggregate principal amount of 3.99% Series A Senior Notes with a 7-year maturity and $84 million in aggregate principal amount of 4.26% Series B Senior Notes with a 10-year maturity. On December 20, 2017, we drew the proceeds from the private placement and reduced the outstanding balance on our revolving line of credit.

| · |  | We incurred financing costs, some of which are deferred and amortized into interest expense during the terms of the loans we execute. We estimate the annualized rate for this amortization to interest expense will be approximately $2.9 million.

| · |  | Additional information on these transactions can be found in Current Reports on Form 8-K that the Company filed with the U.S. Securities and Exchange Commission on October 24, 2017, August 2, 2018 and September 27, 2018.

| (a) |  | Interest rate excludes amortization of deferred financing costs and facility fees, which is discussed in the notes above.

| (b) |  | The interest rate is calculated as $100 million at the fixed rate of 3.69% and the remaining $50 million at 3.75%.

March 31, 2019| Page 12

| Capital Analysis (in thousands, except per share amounts)

|  | 31-Mar-19 |  |  | 31-Mar-18 |  | 30-Jun-18 |  | 30-Sep-18 |  | 31-Dec-18 |
Market Data: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Shares Outstanding |  |  | 107,231 |  |  |  | 107,231 |  |  | 107,231 |  |  | 107,231 |  |  | 107,231 |
Closing market price per share |  | $ | 7.19 |  |  | $ | 8.41 |  | $ | 8.56 |  | $ | 7.99 |  | $ | 6.23 |
Market capitalization |  | $ | 770,992 |  |  | $ | 901,814 |  | $ | 917,899 |  | $ | 856,777 |  | $ | 668,050 |
Total debt outstanding excluding unamortized financing costs |  |  | 1,010,000 |  |  |  | 1,068,000 |  |  | 1,068,000 |  |  | 987,000 |  |  | 995,000 |
Total Market Capitalization |  | $ | 1,780,992 |  |  | $ | 1,969,814 |  | $ | 1,985,899 |  | $ | 1,843,777 |  | $ | 1,663,050 |
Dividend Data: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total dividends declared for the quarter |  | $ | 9,651 |  |  | $ | 9,651 |  | $ | 9,651 |  | $ | 9,651 |  | $ | 9,650 |
Common dividend declared per share |  | $ | 0.09 |  |  | $ | 0.09 |  | $ | 0.09 |  | $ | 0.09 |  | $ | 0.09 |
Declared dividend as a % of Net income (loss) per share |  |  | -801% |  |  |  | 677% |  |  | 1449% |  |  | 100% |  |  | 704% |
Declared dividend as a % of AFFO* per share |  |  | 144% |  |  |  | 57% |  |  | 100% |  |  | 74% |  |  | 89% |
Liquidity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash, cash equivalents and restricted cash |  | $ | 8,832 |  |  | $ | 14,355 |  | $ | 10,448 |  | $ | 10,434 |  | $ | 11,177 |
Revolver: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gross potential available under the BAML Revolver |  |  | 600,000 |  |  |  | 600,000 |  |  | 600,000 |  |  | 600,000 |  |  | 600,000 |
Less: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Outstanding balance |  |  | (40,000) |  |  |  | (98,000) |  |  | (98,000) |  |  | (17,000) |  |  | (25,000) |
Total Liquidity |  | $ | 568,832 |  |  | $ | 516,355 |  | $ | 512,448 |  | $ | 593,434 |  | $ | 586,177 |

*See page 9 for a reconciliation of Net Income (Loss) to AFFO and the Appendix for Definitions of Non-GAAP Measures beginning on page 28.

March 31, 2019| Page 13

| Owned Portfolio Overview

|  | As of the Quarter Ended |
|  | 31-Mar-19 |  | 31-Dec-18 |  | 30-Sep-18 |  | 30-Jun-18 |  | 31-Mar-18 |
Operating Properties: |  |  |  |  |  |  |  |  |  |  |
Number of properties |  | 32 |  | 32 |  | 34 |  | 34 |  | 34 |
Square feet |  | 9,495,118 |  | 9,486,650 |  | 9,760,699 |  | 9,760,699 |  | 9,760,657 |
Leased percentage |  | 88.5% |  | 89.0% |  | 90.5% |  | 89.0% |  | 88.5% |
Redevelopment Properties (a): |  |  |  |  |  |  |  |  |  |  |
Number of properties |  | 3 |  | 3 |  | 1 |  | 1 |  | 1 |
Square feet |  | 404,652 |  | 404,652 |  | 129,821 |  | 129,821 |  | 129,821 |
Leased percentage |  | 11.9% |  | 27.2% |  | 15.8% |  | 15.8% |  | 1.9% |
Managed Properties - Single Asset REITs (SARs): |  |  |  |  |  |  |  |  |  |  |
Number of properties |  | 3 |  | 3 |  | 3 |  | 3 |  | 4 |
Square feet |  | 674,342 |  | 674,342 |  | 674,342 |  | 674,342 |  | 810,278 |
Total Operating, Redevelopment and Managed Properties: |  |  |  |  |  |  |  |  |  |  |
Number of properties |  | 38 |  | 38 |  | 38 |  | 38 |  | 39 |
Square feet |  | 10,574,112 |  | 10,565,644 |  | 10,564,862 |  | 10,564,862 |  | 10,700,756 |

| (a) |  | We define redevelopment properties as properties being developed, redeveloped or where redevelopment is complete, but are in lease-up and that are not stabilized.

March 31, 2019| Page 14

| Owned Portfolio Overview

|  |  |  |  |  |  |  | Percent |  | Wtd Occupied |  | GAAP |  |  |  |  |  |  |  |  |  |  | Percent |  | Wtd Occupied |  | GAAP |
MSA / Property Name |  | City |  | State |  | Square Feet |  | Leased |  | Percentage (a) |  | Rent (b) |  |  | MSA / Property Name |  | City |  | State |  | Square Feet |  | Leased |  | Percentage (a) |  | Rent (b) |
Operating Properties: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
East Region |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Midwest Region |  |  |  |  |  |  |  |  |  |  |  |  |  |
Washington, D.C. |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Chicago |  |  |  |  |  |  |  |  |  |  |  |  |  |
Meadow Point |  | Chantilly |  | VA |  | 138,537 |  | 100.0% |  | 100.0% |  | $ | 26.33 |  |  | Northwest Point |  | Elk Grove Village |  | IL |  | 177,095 |  | 100.0% |  | 100.0% |  | $ | 32.38 |
Stonecroft |  | Chantilly |  | VA |  | 111,469 |  | 100.0% |  | 100.0% |  | $ | 33.06 |  |  | 909 Davis Street |  | Evanston |  | IL |  | 195,098 |  | 91.2% |  | 88.2% |  | $ | 35.85 |
Loudoun Tech Center |  | Dulles |  | VA |  | 136,658 |  | 95.7% |  | 95.8% |  | $ | 19.48 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Indianapolis |  |  |  |  |  |  |  |  |  |  |  |  |  |
Richmond |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | River Crossing |  | Indianapolis |  | IN |  | 205,059 |  | 95.0% |  | 94.2% |  | $ | 23.80 |
Innsbrook |  | Glen Allen |  | VA |  | 298,456 |  | 57.3% |  | 57.3% |  | $ | 18.66 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | St. Louis |  |  |  |  |  |  |  |  |  |  |  |  |  |
Raleigh-Durham |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Timberlake |  | Chesterfield |  | MO |  | 234,496 |  | 100.0% |  | 100.0% |  | $ | 26.64 |
Emperor Boulevard |  | Durham |  | NC |  | 259,531 |  | 100.0% |  | 100.0% |  | $ | 34.80 |  |  | Timberlake East |  | Chesterfield |  | MO |  | 117,036 |  | 100.0% |  | 100.0% |  | $ | 25.93 |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Minneapolis |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 121 South 8th Street |  | Minneapolis |  | MN |  | 293,460 |  | 80.9% |  | 80.0% |  | $ | 24.35 |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Plaza Seven |  | Minneapolis |  | MN |  | 326,757 |  | 87.4% |  | 87.3% |  | $ | 35.35 |
East Region Total |  |  |  |  |  | 944,651 |  | 85.9% |  | 85.9% |  | $ | 27.24 |  |  | Midwest Region Total |  |  |  |  |  | 1,549,001 |  | 91.9% |  | 91.3% |  | $ | 29.41 |

| (a) |  | Weighted Occupied Percentage for the three months ended March 31, 2019.

| (b) |  | Weighted Average GAAP Rent per Occupied Square Foot.

March 31, 2019| Page 15

| Owned Portfolio Overview

|  |  |  |  |  |  |  | Percent |  | Wtd Occupied |  | GAAP |  |  |  |  |  |  |  |  |  |  | Percent |  | Wtd Occupied |  | GAAP |
MSA / Property Name |  | City |  | State |  | Square Feet |  | Leased |  | Percentage (a) |  | Rent (b) |  |  | MSA / Property Name |  | City |  | State |  | Square Feet |  | Leased |  | Percentage (a) |  | Rent (b) |
South Region |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | West Region |  |  |  |  |  |  |  |  |  |  |  |  |  |
Dallas-Fort Worth |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Denver |  |  |  |  |  |  |  |  |  |  |  |  |  |
Legacy Tennyson Center |  | Plano |  | TX |  | 202,049 |  | 91.6% |  | 86.5% |  | $ | 22.96 |  |  | 380 Interlocken |  | Broomfield |  | CO |  | 240,358 |  | 90.5% |  | 91.5% |  | $ | 29.85 |
One Legacy Circle |  | Plano |  | TX |  | 214,110 |  | 100.0% |  | 100.0% |  | $ | 38.13 |  |  | 1999 Broadway |  | Denver |  | CO |  | 677,378 |  | 77.1% |  | 72.3% |  | $ | 32.55 |
Addison Circle |  | Addison |  | TX |  | 289,302 |  | 89.3% |  | 75.1% |  | $ | 31.36 |  |  | Greenwood Plaza |  | Englewood |  | CO |  | 196,236 |  | 100.0% |  | 100.0% |  | $ | 26.58 |
Collins Crossing |  | Richardson |  | TX |  | 300,887 |  | 99.4% |  | 99.4% |  | $ | 25.61 |  |  | 390 Interlocken |  | Broomfield |  | CO |  | 241,512 |  | 98.2% |  | 98.2% |  | $ | 32.69 |
Liberty Plaza |  | Addison |  | TX |  | 216,851 |  | 74.5% |  | 78.7% |  | $ | 22.52 |  |  | 1001 17th Street |  | Denver |  | CO |  | 655,413 |  | 98.5% |  | 96.2% |  | $ | 35.17 |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 600 17th Street |  | Denver |  | CO |  | 608,733 |  | 86.7% |  | 85.4% |  | $ | 33.03 |
Houston |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | West Region Total |  |  |  |  |  | 2,619,630 |  | 89.6% |  | 87.5% |  | $ | 32.62 |
Park Ten |  | Houston |  | TX |  | 157,460 |  | 96.4% |  | 89.5% |  | $ | 28.60 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Eldridge Green |  | Houston |  | TX |  | 248,399 |  | 100.0% |  | 100.0% |  | $ | 30.27 |  |  | Total Operating Properties |  |  |  |  |  | 9,495,118 |  | 88.5% |  | 86.2% |  | $ | 29.63 |
Park Ten Phase II |  | Houston |  | TX |  | 156,746 |  | 65.5% |  | 28.5% |  | $ | 23.25 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Westchase I & II |  | Houston |  | TX |  | 629,025 |  | 80.1% |  | 81.3% |  | $ | 28.90 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Redevelopment Properties (c) |  |  |  |  |  |  |  |  |  |  |  |  |  |
Atlanta |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Forest Park |  | Charlotte |  | NC |  | 62,212 |  | 0.0% |  | 0.0% |  | $ | — |
One Overton Park |  | Atlanta |  | GA |  | 387,267 |  | 80.1% |  | 76.9% |  | $ | 21.98 |  |  | Blue Lagoon Drive |  | Miami |  | FL |  | 212,619 |  | 0.0% |  | 0.0% |  | $ | — |
One Ravinia |  | Atlanta |  | GA |  | 386,602 |  | 89.7% |  | 90.7% |  | $ | 25.78 |  |  | 801 Marquette Ave |  | Minneapolis |  | MN |  | 129,821 |  | 37.0% |  | 15.8% |  | $ | 16.45 |
Two Ravinia |  | Atlanta |  | GA |  | 411,047 |  | 78.4% |  | 75.4% |  | $ | 27.07 |  |  | Total Redevelopment Properties |  |  |  |  |  | 404,652 |  | 11.9% |  | 5.1% |  | $ | 16.45 |
Pershing Plaza |  | Atlanta |  | GA |  | 160,145 |  | 97.4% |  | 97.4% |  | $ | 36.40 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
999 Peachtree |  | Atlanta |  | GA |  | 621,946 |  | 90.7% |  | 84.7% |  | $ | 31.09 |  |  | Total Owned Portfolio |  |  |  |  |  | 9,899,770 |  | 85.4% |  | 82.8% |  | $ | 29.60 |
South Region Total |  |  |  |  |  | 4,381,836 |  | 87.3% |  | 83.6% |  | $ | 28.37 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

| (a) |  | Weighted Occupied Percentage for the three months ended March 31, 2019.

| (b) |  | Weighted Average GAAP Rent per Occupied Square Foot.

| (c) |  | We define Redevelopment Properties as properties being developed, redeveloped or where redevelopment is complete,but are in lease-up and that are not stabilized.

March 31, 2019| Page 16

| Managed Portfolio Overview

MSA / Property Name |  | City |  | State |  | Square Feet |  |  |  | MSA / Property Name |  | City |  | State |  | Square Feet |
Southeast Region |  |  |  |  |  |  |  |  |  | Midwest Region |  |  |  |  |  |  |
Atlanta |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Satellite Place |  | Duluth |  | GA |  | 134,785 |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  | Indianapolis |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  | Monument Circle |  | Indianapolis |  | IN |  | 213,760 |
Southeast Region Total |  |  |  |  |  | 134,785 |  |  |  |  |  |  |  |  |  |  |
Southwest Region |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Houston |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Energy Tower I |  | Houston |  | TX |  | 325,797 |  |  |  |  |  |  |  |  |  |  |
Southwest Region Total |  |  |  |  |  | 325,797 |  |  |  | Midwest Region Total |  |  |  |  |  | 213,760 |
|  |  |  |  |  |  |  |  |  | Total Managed |  |  |  |  |  | 674,342 |
|  |  |  |  |  |  |  |  |  | Total Operating & Managed |  |  |  |  |  | 10,574,112 |

March 31, 2019| Page 17

| Tenants by Industry (By Square Feet)

March 31, 2019| Page 18

| 20 Largest Tenants with Annualized Rent and Remaining Term

|  |  |  |  |  | Remaining |  | Aggregate |  |  |  |  |  | % of Aggregate |
|  | Tenant |  | Number of |  | Lease Term |  | Leased |  | % of Total |  | Annualized |  | Leased |
|  | Name |  | Leases |  | in Months |  | Square Feet |  | Square Feet |  | Rent |  | Annualized Rent |
1 |  | IQVIA Holdings Inc. |  | 1 |  | 86 |  | 259,531 |  | 2.6% |  | $ | 9,192,073 |  | 3.9% |
2 |  | CITGO Petroleum Corporation |  | 1 |  | 35 |  | 248,399 |  | 2.5% |  |  | 8,219,523 |  | 3.5% |
3 |  | Newfield Exploration Company |  | 1 |  | 35 |  | 234,495 |  | 2.4% |  |  | 9,371,129 |  | 4.0% |
4 |  | US Government (a) |  | 4 |  | 5, 18, 22, 134 |  | 223,641 |  | 2.3% |  |  | 7,236,135 |  | 3.1% |
5 |  | Centene Management Company, LLC |  | 3 |  | 51, 51, 51 |  | 216,879 |  | 2.2% |  |  | 5,820,347 |  | 2.5% |
6 |  | Eversheds Sutherland (US) LLP |  | 1 |  | 85 |  | 179,868 |  | 1.8% |  |  | 5,341,329 |  | 2.2% |
7 |  | EOG Resources, Inc. |  | 1 |  | 93 |  | 169,167 |  | 1.7% |  |  | 5,803,264 |  | 2.4% |
8 |  | The Vail Corporation |  | 1 |  | 132 |  | 164,636 |  | 1.7% |  |  | 4,270,463 |  | 1.8% |
9 |  | T-Mobile South, LLC dba T-Mobile (b) |  | 1 |  | 77 |  | 151,792 |  | 1.5% |  |  | — |  | 0.0% |
10 |  | Citicorp Credit Services, Inc. |  | 1 |  | 101 |  | 146,260 |  | 1.5% |  |  | 4,839,743 |  | 2.0% |
11 |  | Petrobras America, Inc. |  | 1 |  | 8 |  | 144,813 |  | 1.5% |  |  | 5,460,898 |  | 2.3% |
12 |  | Jones Day |  | 1 |  | 20 |  | 140,342 |  | 1.4% |  |  | 4,952,119 |  | 2.1% |
13 |  | Argo Data Resource Corporation (c) |  | 1 |  | 137 |  | 140,246 |  | 1.4% |  |  | 4,026,463 |  | 1.7% |
14 |  | Worldventures Holdings, LLC (d) |  | 2 |  | 130, 136 |  | 129,998 |  | 1.3% |  |  | 779,938 |  | 0.3% |
15 |  | Kaiser Foundation Health Plan |  | 1 |  | 62 |  | 120,979 |  | 1.2% |  |  | 3,636,330 |  | 1.5% |
16 |  | VMWare, Inc. (e) |  | 1 |  | 86 |  | 119,558 |  | 1.2% |  |  | 1,352,201 |  | 0.6% |
17 |  | Giesecke & Devrient America |  | 1 |  | 69 |  | 112,110 |  | 1.1% |  |  | 2,097,578 |  | 0.9% |
18 |  | Northrop Grumman Systems Corp. |  | 1 |  | 9 |  | 111,469 |  | 1.1% |  |  | 3,357,446 |  | 1.4% |
19 |  | Randstad General Partner (US) (f) |  | 1 |  | 62 |  | 109,638 |  | 1.1% |  |  | 2,418,816 |  | 1.0% |
20 |  | ADS Alliance Data Systems, Inc. |  | 1 |  | 87 |  | 107,698 |  | 1.1% |  |  | 4,054,664 |  | 1.7% |
|  |  |  |  |  | Total |  | 3,231,519 |  | 32.6% |  | $ | 92,230,459 |  | 38.9% |

(a)Includes 27,398 square feet, which expire in 2019, 34,330 square feet, which expire in 2020, and 36,913 square feet, which expire in 2021. The remaining 125,000 square feet expire in 2030.

(b)Rent commencing on renewal of 151,792 square feet in September 2019.

(c)Includes 26,046 square feet, which expire in 2020 and 28,550 square feet, which expire in 2023. The remaining 85,650 square feet expire in 2030.

(d)Includes 100,000 square feet leased by Denbury Onshore LLC expiring in July 2019, which is 100% leased by WorldVentures Holdings LLC commencing in August 2019 and expiring in 2030, and 24,998 square feet that commenced in August 2018 and expire in 2030.

(e)Includes 23,804 square feet, which expire in 2019, and 95,754 square feet, which expire in 2026.

(f)Includes 98,695 square feet, which expire in 2021, and 10,943 square feet commencing on 3/1/19, which expire in 2024

March 31, 2019| Page 19

| Leasing Activity (Owned Portfolio)

|  |  |  |  |  |  | Year |  | Year
|  | Three Months Ended |  |  | Ended |  | Ended
Leasing Activity (a) |  |  | 31-Mar-19 |  |  | 31-Mar-18 |  |  |  | 31-Dec-18 |  |  | 31-Dec-17
(in Square Feet - SF) |  |  |  |  |  |  |  |  |  |  |  |  |
New leasing |  |  | 95,000 |  |  | 25,000 |  |  |  | 397,000 |  |  | 460,000
Renewals and expansions |  |  | 365,000 |  |  | 84,000 |  |  |  | 1,284,000 |  |  | 1,011,000
|  |  | 460,000 |  |  | 109,000 |  |  |  | 1,681,000 |  |  | 1,471,000
Other information per SF |  |  |  |  |  |  |  |  |  |  |  |  |
(Activity on a year-to-date basis) |  |  |  |  |  |  |  |  |  |  |  |  |
GAAP Rents on leasing |  | $ | 32.32 |  | $ | 30.42 |  |  | $ | 31.02 |  | $ | 30.43
Weighted average lease term |  |  | 9.0 Years |  |  | 5.9 Years |  |  |  | 7.2 Years |  |  | 6.8 Years
Increase or decrease over average GAAP rents in prior year (b) |  |  | 9.9% |  |  | -2.9% |  |  |  | 7.3% |  |  | 12.3%
Average free rent |  |  | 3 Months |  |  | 2 Months |  |  |  | 4 Months |  |  | 4 Months
Tenant Improvements |  | $ | 28.76 |  | $ | 26.35 |  |  | $ | 29.13 |  | $ | 22.22
Leasing Costs |  | $ | 13.41 |  | $ | 8.18 |  |  | $ | 8.99 |  | $ | 9.92

(a) Leasing activity includes leasing at redevelopment properties. We define redevelopment properties as properties being developed, redeveloped or where redevelopment is complete, but are in lease-up and that are not stabilized.

(b) The increase or decrease percentage is calculated by comparing average GAAP rents at properties that had leasing activity in the current year to average GAAP rents at the same properties in the prior year.

March 31, 2019| Page 20

| Lease Expirations by Square Feet (a) (Owned Portfolio)

| (a) |  | Lease expirations include leases in redevelopment properties. We define redevelopment properties as properties being developed, redeveloped or where redevelopment is complete, but are in lease-up and that are not stabilized.

March 31, 2019| Page 21

| Lease Expirations with Annualized Rent per Square Foot (Owned Portfolio)

|  |  |  | Rentable |  |  |  |  | Annualized |  | Percentage |  |
|  | Number of |  | Square |  |  |  |  | Rent |  | of Total |  |
Year of |  | Leases |  | Footage |  | Annualized |  | Per Square |  | Annualized |  |
Lease |  | Expiring |  | Subject to |  | Rent Under |  | Foot Under |  | Rent Under |  |
Expiration |  | Within the |  | Expiring |  | Expiring |  | Expiring |  | Expiring | Cumulative |
December 31, |  | Year (a) |  | Leases |  | Leases (b) |  | Leases |  | Leases | Total |
2019 |  | 36 | (c) | 638,664 |  | $ | 21,128,266 |  | $ | 33.08 |  | 8.9% | 8.9% |
2020 |  | 72 |  | 922,396 |  |  | 29,884,961 |  |  | 32.40 |  | 12.6% | 21.5% |
2021 |  | 64 |  | 674,792 |  |  | 19,253,633 |  |  | 28.53 |  | 8.1% | 29.6% |
2022 |  | 74 |  | 1,200,710 |  |  | 37,986,266 |  |  | 31.64 |  | 16.0% | 45.6% |
2023 |  | 58 |  | 664,600 |  |  | 19,797,352 |  |  | 29.79 |  | 8.3% | 53.9% |
2024 |  | 58 |  | 792,751 |  |  | 18,029,124 |  |  | 22.74 |  | 7.6% | 61.5% |
2025 |  | 28 |  | 620,096 |  |  | 12,298,268 |  |  | 19.83 |  | 5.2% | 66.7% |
2026 |  | 19 |  | 856,280 |  |  | 26,053,108 |  |  | 30.43 |  | 11.0% | 77.7% |
2027 |  | 10 |  | 543,910 |  |  | 17,053,948 |  |  | 31.35 |  | 7.2% | 84.9% |
2028 |  | 10 |  | 317,523 |  |  | 7,943,354 |  |  | 25.02 |  | 3.3% | 88.2% |
2029 and thereafter |  | 82 |  | 1,222,388 | (d) |  | 27,912,916 |  |  | 22.83 |  | 11.8% | 100.0% |
|  | 511 |  | 8,454,110 |  | $ | 237,341,196 |  | $ | 28.07 |  | 100.0% |  |
Vacancies as of 3/31/19 |  |  |  | 1,089,027 |  |  |  |  |  |  |  |  |  |
Redevelopment properties (e) |  |  |  | 356,633 |  |  |  |  |  |  |  |  |  |
Total Portfolio Square Footage |  |  |  | 9,899,770 |  |  |  |  |  |  |  |  |  |

| (a) |  | The number of leases approximates the number of tenants. Tenants with lease maturities in different years are included in annual totals for each lease. Tenants may have multiple leases in the same year. Includes annualized rent from redevelopment properties. We define redevelopment properties as properties being developed, redeveloped or where redevelopment is complete, but are in lease-up and that are not stabilized.

| (b) |  | Annualized rent represents the monthly rent charged, including tenant reimbursements, for each lease in effect at March 31, 2019 multiplied by 12. Tenant reimbursements generally include payment of real estate taxes, operating expenses and common area maintenance and utility charges.

| (c) |  | Includes 5 leases that are month-to-month.

| (d) |  | Includes 111,918 square feet that are non-revenue producing building amenities.

| (e) |  | Redevelopment properties include properties being developed, redeveloped, or where redevelopment is complete, but are in lease-up and that are not stabilized.

March 31, 2019| Page 22

| Redevelopment Activity

(in 000's except square feet) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Estimated |  | Estimated
|  |  |  |  |  |  |  |  |  | Incurred |  | Percent |  | Estimated |  | Leased |  | Occupied
|  |  |  |  |  |  |  | Anticipated |  | Through |  | Leased |  | Completion |  | Stabilization |  | Stabilization
Property Name |  | City |  | State |  | Square Feet |  | Investment (1) |  | 31-Mar-19 |  | 31-Mar-19 |  | Date |  | Date |  | Date
Redevelopment Activity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Redevelopment in Process |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Forest Park |  | Charlotte |  | NC |  | 62,212 |  | $ | 3,670 |  | $ | 132 |  | 0.0% |  | 30-Sep-19 |  | 31-Dec-19 |  | 31-Mar-20
Blue Lagoon Drive |  | Miami |  | FL |  | 212,619 |  |  | 23,625 |  |  | 2,834 |  | 0.0% |  | 31-Dec-19 |  | 30-Jun-20 |  | 31-Dec-20
Total Office in Process |  |  |  |  |  | 274,831 |  |  | 27,295 |  |  | 2,966 |  |  |  |  |  |  |  |
Redevelopment Complete But Not Stabilized |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
801 Marquette Ave |  | Minneapolis |  | MN |  | 129,821 |  | $ | 28,443 |  | $ | 19,906 |  | 37.0% |  | 30-Jun-17 |  | 30-Sep-19 |  | 31-Mar-20
Total |  |  |  |  |  | 404,652 |  | $ | 55,738 |  | $ | 22,872 |  |  |  |  |  |  |  |

(1) Anticipated Investment includes capitalized redevelopment costs, capitalized interest and lease-up costs.

March 31, 2019| Page 23

| Capital Expenditures

(in thousands) |  |
|  | For the Three Months Ended
|  | 31-Mar-19
Tenant improvements |  | $ | 8,318
Deferred leasing costs |  |  | 4,239
Non-investment capex |  |  | 2,413
Total Capital Expenditures |  | $ | 14,970

|  | For the Three Months Ended |  | Year Ended
|  | 31-Mar-18 |  | 30-Jun-18 |  | 30-Sep-18 |  | 31-Dec-18 |  | 31-Dec-18
Tenant improvements |  | $ | 6,777 |  | $ | 8,212 |  | $ | 7,084 |  | $ | 6,895 |  | $ | 28,968
Deferred leasing costs |  |  | 1,021 |  |  | 5,314 |  |  | 4,394 |  |  | 3,746 |  |  | 14,475
Non-investment capex |  |  | 1,858 |  |  | 2,558 |  |  | 2,328 |  |  | 3,342 |  |  | 10,086
Total Capital Expenditures |  | $ | 9,656 |  | $ | 16,084 |  | $ | 13,806 |  | $ | 13,983 |  | $ | 53,529

First generation leasing and investment capital was $3.7 million for the three months ended March 31, 2019 and $15.1 million for the year ended December 31, 2018.

March 31, 2019| Page 24

| Transaction Activity (in thousands except for Square Feet)

Recent Acquisitions: |  | City |  | State |  | Square Feet |  | Date Acquired |  | Purchase Price |
2016 |  |  |  |  |  |  |  |  |  |  |  |
Plaza Seven |  | Minneapolis |  | MN |  | 325,796 |  | 6/6/16 |  | $ | 82,000 |
Pershing Plaza |  | Atlanta |  | GA |  | 160,145 |  | 8/10/16 |  |  | 45,450 |
600 17th Street |  | Denver |  | CO |  | 613,527 |  | 12/1/16 |  |  | 154,260 |
2015 |  |  |  |  |  |  |  |  |  |  |  |
Two Ravinia |  | Atlanta |  | GA |  | 442,130 |  | 4/8/15 |  | $ | 78,000 |

Recent Dispositions: |  |  |  |  |  |  |  |  |  | Gross Sale |  | Gain (loss) |
|  | City |  | State |  | Square Feet |  | Date Sold |  | Proceeds |  | on Sale |
2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Hillview |  | Milpitas |  | CA |  | 36,288 |  | 1/6/17 |  | $ | 6,342 |  | $ | 2,289 |
East Baltimore |  | Baltimore |  | MD |  | 325,445 |  | 10/20/17 |  |  | 32,547 |  |  | (20,770) |
2016 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Lakeside I |  | Maryland Heights |  | MO |  | 127,778 |  | 4/5/16 |  | $ | 20,189 |  | $ | 4,154 |
Federal Way |  | Federal Way |  | WA |  | 117,010 |  | 12/16/16 |  |  | 7,500 |  |  | (7,092) |
2015 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Willow Bend |  | Plano |  | TX |  | 117,050 |  | 2/23/15 |  | $ | 20,750 |  | $ | 1,462 |
Eden Bluff |  | Eden Prairie |  | MN |  | 153,028 |  | 3/31/15 |  |  | 28,000 |  |  | 9,000 |
Park Seneca |  | Charlotte |  | NC |  | 109,699 |  | 5/13/15 |  |  | 8,150 |  |  | 949 |
Montague |  | San Jose |  | CA |  | 145,561 |  | 12/9/15 |  |  | 30,250 |  |  | 12,251 |

March 31, 2019| Page 25

| Loan Portfolio of Secured Real Estate (in thousands)

(dollars in thousands, except footnotes) |  |  |  |  |  | Maximum |  | Amount |  |  |  |  |  |  |  | Interest |
|  |  |  | Maturity |  | Amount |  | Drawn at |  | Interest |  | Draw |  | Rate at |
Sponsored REIT |  | Location |  | Date |  | of Loan |  | 31-Mar-19 |  | Rate (1) |  | Fee (2) |  | 31-Mar-19 |
Secured revolving lines of credit |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
FSP Satellite Place Corp. |  | Duluth, GA |  | 31-Dec-19 |  | $ | 5,500 |  | $ | 795 |  | L | + | 4.40% |  | 0.5% |  | 6.88% |
FSP Energy Tower I Corp. |  | Houston, TX |  | 30-Jun-19 |  |  | 20,000 |  |  | 18,000 |  | L | + | 5.00% |  | 0.5% |  | 7.48% |
Mortgage loan secured by property |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
FSP Monument Circle LLC (3) |  | Indianapolis, IN |  | 6-Dec-20 |  |  | 21,000 |  |  | 21,000 |  |  |  | 7.19% |  | n/a |  | 7.19% |
FSP Energy Tower I Corp. (4) |  | Houston, TX |  | 30-Jun-19 |  |  | 33,000 |  |  | 33,000 |  |  |  | 6.41% |  | n/a |  | 6.41% |
|  |  |  |  |  | $ | 79,500 |  | $ | 72,795 |  |  |  |  |  |  |  |  |

| (1) |  | The interest rate is 30-day LIBOR rate plus the additional rate indicated, otherwise a fixed rate.

| (2) |  | The draw fee is a percentage of each new advance, and is paid at the time of each new draw.

| (3) |  | Includes an origination fee of $164,000 and an exit fee of $38,000 when repaid by the borrower.

| (4) |  | This mortgage includes an annual extension fee of $108,900 paid by the borrower.

March 31, 2019| Page 26

| Net Asset Value Components

(in thousands except per share data) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | As of |  |  | Assets: |  |  |  |  |  | Other information: |  |  |
|  | 31-Mar-19 |  |  | Loans outstanding on secured RE |  | $ | 72,795 |  |  | Leased SF to be FFO producing |  |  |
Total Market Capitalization Values |  |  |  |  |  | Investments in SARs (book basis) |  |  | — |  |  | Over the next twelve months (in 000's) |  |  | 216
Shares outstanding |  |  | 107,231.2 |  |  | Straight-line rent receivable |  |  | 55,836 |  |  |  |  |  |
Closing price |  | $ | 7.19 |  |  | Asset held for sale |  |  | — |  |  | Straight-line rental revenue current quarter |  | $ | 1,140
Market capitalization |  | $ | 770,992 |  |  | Cash, cash equivalents and restricted cash |  |  | 8,832 |  |  |  |  |  |
Debt |  |  | 1,010,000 |  |  | Tenant rent receivables |  |  | 4,489 |  |  | Management fee income current quarter |  | $ | 58
Total Market Capitalization |  | $ | 1,780,992 |  |  | Prepaid expenses |  |  | 4,844 |  |  | Interest income from secured loans |  |  | 1,294
|  |  |  |  |  | Office computers and furniture |  |  | 166 |  |  | Management fees and interest income from loans |  | $ | 1,352
|  |  |  |  |  | Other assets: |  |  |  |  |  |  |  |  |
|  | 3 Months |  |  | Deferred financing costs, net |  |  | 10,032 |  |  |  |  |  |
|  | Ended |  |  | Other assets: Derivative Market Value |  |  | 10,469 |  |  |  |  |  |
NOI Components |  | 31-Mar-19 |  |  | Other assets - Right-to-Use Asset |  |  | 2,059 |  |  |  |  |  |
|  |  |  |  |  |  |  | $ | 169,522 |  |  |  |  |  |
Same Store NOI (1) |  | $ | 33,179 |  |  |  |  |  |  |  |  |  |  |  |
Acquisitions (1) (2) |  |  | — |  |  | Liabilities: |  |  |  |  |  | Footnotes to the components |  |  |
Property NOI (1) |  |  | 33,179 |  |  | Debt (excluding contra for unamortized financing costs) |  | $ | 1,010,000 |  |  |  |  |  |
Full quarter adjustment (3) |  |  | — |  |  | Accounts payable & accrued expenses |  |  | 53,321 |  |  | (1) See pages 11 & 28 for definitions and reconciliations.
Stabilized portfolio |  | $ | 33,179 |  |  | Tenant security deposits |  |  | 6,352 |  |  |
|  |  |  |  |  | Other liabilities: lease liability |  |  | 2,141 |  |  | (2) Includes NOI from acquisitions not in Same Store.
|  |  |  |  |  | Other liabilities: derivative liability |  |  | 2,496 |  |  |
Financial Statement Reconciliation: |  |  |  |  |  |  |  | $ | 1,074,310 |  |  | (3) Adjustment to reflect property NOI for a full quarter in the quarter acquired, if necessary.
Rental Revenue |  | $ | 63,359 |  |  |  |  |  |  |  |  |
Rental operating expenses |  |  | (17,726) |  |  |  |  |  |  |  |  | (4) HB3 Tax in Texas is classified as an income tax, though we treat it as a real estate tax in Property NOI.
Real estate taxes and insurance |  |  | (12,102) |  |  |  |  |  |  |  |  |
NOI on assets sold |  |  | — |  |  |  |  |  |  |  |  | (5) Management & other fees are eliminated in consolidation but included in Property NOI.
Taxes (4) |  |  | 29 |  |  |  |  |  |  |  |  |
Management fees & other (5) |  |  | (381) |  |  |  |  |  |  |  |  |
Property NOI (1) |  | $ | 33,179 |  |  |  |  |  |  |  |  |  |  |  |

March 31, 2019| Page 27

| Appendix: Non-GAAP Financial Measure Definitions

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 or loss (computed in accordance with GAAP), excluding gains (or losses) from sales of property, hedge ineffectiveness, acquisition costs of newly acquired properties that are not capitalized and lease acquisition costs that are not capitalized plus depreciation and amortization, including amortization of acquired above and below market lease intangibles and impairment charges on properties or investments in non-consolidated REITs, and after adjustments to exclude equity in income or losses from, and, to include the proportionate share of FFO from, non-consolidated REITs.

FFO should not be considered as an alternative to net income or loss (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 as of May 17, 2016 in the table on page 9 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 or loss and cash flows from operating, investing and financing activities in the consolidated financial statements.

March 31, 2019| Page 28

| Appendix: Non-GAAP Financial Measure Definitions

Definition of Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA)
and Adjusted EBITDA

EBITDA is defined as net income or loss plus interest expense, income tax expense and depreciation and amortization expense. Adjusted EBITDA is defined as EBITDA excluding hedge ineffectiveness, gains and losses on sales of properties or shares of equity investments or provisions for losses on assets held for sale or equity investments. EBITDA and Adjusted EBITDA are not intended to represent cash flow for the period, are not presented as an alternative to operating income as an indicator of operating performance, should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP and are not indicative of operating income or cash provided by operating activities as determined under GAAP. EBITDA and Adjusted EBITDA are presented solely as a supplemental disclosure with respect to liquidity because the Company believes it provides useful information regarding the Company's ability to service or incur debt. Because all companies do not calculate EBITDA or Adjusted EBITDA the same way, this presentation may not be comparable to similarly titled measures of other companies. The Company believes that net income or loss is the financial measure calculated and presented in accordance with GAAP that is most directly comparable to EBITDA and Adjusted EBITDA.

Definition of Property Net Operating Income (Property NOI)

The Company provides property performance based on Net Operating Income, which we refer to as NOI. Management believes that investors are interested in this information. NOI is a non-GAAP financial measure that the Company defines as net income or loss (the most directly comparable GAAP financial measure) plus general and administrative expenses, depreciation and amortization, including amortization of acquired above and below market lease intangibles and impairment charges, interest expense, less equity in earnings of nonconsolidated REITs, interest income, management fee income, hedge ineffectiveness, gains or losses on the sale of assets and excludes non-property specific income and expenses. The information presented includes footnotes and the data is shown by region with properties owned in the periods presented, which we call Same Store. The comparative Same Store results include properties held for the periods presented and exclude properties that are redevelopment properties, dispositions and significant nonrecurring income such as bankruptcy settlements and lease termination fees. We define redevelopment properties as properties being developed, redeveloped or where redevelopment is complete, but are in lease-up and that are not stabilized. NOI, as defined by the Company, may not be comparable to NOI reported by other REITs that define NOI differently. NOI should not be considered an alternative to net income or loss as an indication of our performance or to cash flows as a measure of the Company's liquidity or its ability to make distributions.

March 31, 2019| Page 29

| Appendix: Non-GAAP Financial Measure Definitions

Definition of Adjusted Funds From Operations (AFFO)

The Company also evaluates performance based on Adjusted Funds From Operations, which we refer to as AFFO. The Company defines AFFO as (1) FFO, (2) excluding our proportionate share of FFO and including distributions received, from non-consolidated REITs, (3) excluding the effect of straight-line rent, (4) plus the amortization of deferred financing costs and (5) less recurring capital expenditures that are generally for maintenance of properties, which we call non-investment capex or are second generation capital expenditures. Second generation costs include re-tenanting space after a tenant vacates, which include tenant improvements and leasing commissions.

We exclude development/redevelopment activities, capital expenditures planned at acquisition and costs to reposition a property. We also exclude first generation leasing costs, which are generally to fill vacant space in properties we acquire or were planned for at acquisition.

AFFO should not be considered as an alternative to net income or loss (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 may define this term in a different manner. We believe that in order to facilitate a clear understanding of the results of the Company, AFFO should be examined in connection with net income or loss and cash flows from operating, investing and financing activities in the consolidated financial statements.

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