Franklin Street Properties Corp. Announces First Quarter 2012 Results

WAKEFIELD, MA--(Marketwire -05/01/12)- Franklin Street Properties Corp. (the "Company," "FSP," "we" or "our") (FSP - News), an investment firm specializing in real estate, announced today Funds From Operations (FFO) of $19.6 million or $0.24 per share for the first quarter ended March 31, 2012. The Company also announced Net Income of $5.7 million and Earnings Per Share (EPS) of $0.07 for the first quarter and provided an update on other activities.

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

  (in thousands except per share data) Three Months Ended March 31, ----------------------------------------- Increase 2012 2011 (Decrease) ------------- ------------- ------------- Net Income $ 5,738 $ 24,767 $ (19,029) ============= ============= ============= FFO $ 19,571 $ 16,250 $ 3,321 ============= ============= ============= Per Share Data: EPS $ 0.07 $ 0.30 $ (0.23) FFO $ 0.24 $ 0.20 $ 0.04 Weighted ave shares (diluted) 82,937 81,437 1,500 ------------- ------------- -------------

Comparing results for the first quarter of 2012 to 2011, Net Income and EPS decreased $19.0 million or $0.23 per share and FFO increased $2.9 million or $0.04 per share. The decrease in Net Income and EPS was primarily from the gain on sale of a property in Falls Church, Virginia in January 2011, which contributed $19.6 million or $0.24 per share to the first quarter of 2011. We did not sell any properties during the first quarter of 2012. The increase in FFO was primarily from the benefits of five property acquisitions made in 2011 (including three acquisitions made in March 2011), all of which we had for the full first quarter of 2012. We also had the benefit of interest income from a real estate loan investment as of March 31, 2012 that was made initially in December 2011 and was increased during the first quarter of 2012 to $106.2 million outstanding and had the benefit of increased occupancy in the real estate portfolio at March 31, 2012, which was 89.0% compared to 88.4% at March 31, 2011.

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

"For the first quarter of 2012, FSP's profits as represented by FFO totaled approximately $19.6 million or $0.24 per share, an increase of approximately $1.1 million or $0.02 per share compared to the fourth quarter of 2011. Dividend distributions declared for the first quarter of 2012, which are payable on May 17, 2012, will be approximately $15.8 million or $0.19 per share.

"Our directly-owned real estate portfolio of 36 properties totaling 7,052,068 square feet was approximately 89.0% leased as of March 31, 2012, up from approximately 88.7% leased as of December 31, 2011. Our property portfolio is primarily suburban office assets. Most of the rental/leasing markets where our properties are located remained stable during the first quarter, with some markets showing moderate improvement in occupancy and rental rate levels. Within this environment, we continue to make steady leasing progress. Our property portfolio has relatively modest lease expirations over the next three years and we have as our objective to move overall occupancy levels to the 90+% range during 2012.

"There was one additional real estate investment completed in the first quarter of 2012 for a total capital contribution of approximately $30 million. The investment was made as an additional funding amount to our original $76.2 million two-year bridge loan on a central business district office/retail property in Minneapolis, Minnesota. The total loan provided to this property by FSP now totals $106.2 million and is secured by a first mortgage. The property is owned by FSP 50 South Tenth Street Corp., a single-asset REIT affiliate of FSP. The property is a 12-story Class A multi-tenant office/retail property, built in 2001, containing approximately 498,768 rentable square feet of which approximately 90% is office space. The additional funding amount was used primarily to help secure a lease with Target Corporation for effectively 100% of the property's office space for 18 years through March 2030. As of March 31, 2012, the property was approximately 99% leased, and is located between and connected by a sky bridge directly to the Target Corporation and U.S. Bancorp corporate headquarters buildings in downtown Minneapolis. FSP has four office properties in the greater Minneapolis area, either owned directly or through affiliates, totaling approximately 1.4 million square feet. Now that the 50 South Tenth Street property is stabilized by a long term lease with a credit tenant, FSP 50 South Tenth Street Corp. is exploring the opportunities available for a possible sale of the property and/or third party permanent financing which, among other things, if consummated could repay or replace FSP's existing bridge loan. Additional real estate investments during 2012 are a major objective of FSP.

"There were no property sales in the first quarter of 2012, although we continuously review and evaluate our directly-owned portfolio of 36 properties for potentially advantageous disposition opportunities. In addition, certain properties owned by some of our single-asset REIT affiliates, and in which FSP may have a financial interest, could become possible candidates for sale as they stabilize their occupancies and the markets in which they are located become more attractive to potential acquirers. FSP Phoenix Tower Corp., a single-asset REIT affiliate of FSP, owns a 34-story multi-tenant, Class A office building containing approximately 629,054 square feet located in Houston, Texas that is currently being offered for sale. FSP has both an equity and first mortgage debt investment in FSP Phoenix Tower Corp.

"We are very much looking forward to the balance of 2012 and beyond."

Dividend Announcement

On April 13, 2012, the Company announced that its Board of Directors declared a regular quarterly dividend for the three months ended March 31, 2012 of $0.19 per share of common stock payable on May 17, 2012 to stockholders of record on April 27, 2012.

Real Estate Update

Supplementary Schedules D and E provide property information for our continuing real estate portfolio of 36 properties and for three non-consolidated REITs that we had preferred stock interests in as of March 31, 2012. The Company will also be filing a supplemental information package that will provide stockholders and the financial community with additional operating and financial data. The Company will file this supplemental information package with the SEC and make it available on its website at www.franklinstreetproperties.com.

A reconciliation of Net Income to FFO is shown below and a definition of FFO is provided on Supplementary Schedule I. We believe FFO is used broadly throughout the real estate investment trust (REIT) industry as a measurement of performance. Our 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 March 31, ------------------------ (In thousands, except per share amounts) 2012 2011 ----------- ----------- Net Income $ 5,738 $ 24,767 Less gain on sale of property - (19,592) GAAP (income) loss from non-consolidated REITs (391) (1,773) Distributions from non-consolidated REITs 929 1,767 Acquisitions costs - 269 Depreciation of real estate & intangible amortization 13,295 10,812 ----------- ----------- Funds From Operations (FFO) $ 19,571 $ 16,250 =========== =========== Per Share Data EPS $ 0.07 $ 0.30 FFO $ 0.24 $ 0.20 Weighted average shares (basic and diluted) 82,937 81,437 ----------- -----------

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

A conference call is scheduled for May 2, 2012 at 10:00 a.m. (ET) to discuss the first quarter 2012 results. To access the call, please dial 1-877-317-6789. Internationally, the call may be accessed by dialing 1-412-317-6789. To listen via live audio webcast, please visit the Webcasts & Presentations section in the Investor Relations section of the Company's website (www.franklinstreetproperties.com) at least ten minutes prior to the start of the call and follow the posted directions. The webcast will also be available via replay from the above location starting one hour after the call is finished.

About Franklin Street Properties Corp.

Franklin Street Properties Corp., based in Wakefield, Massachusetts, is focused on achieving current income and long-term growth through investments in commercial properties. The majority of FSP's property portfolio is suburban office buildings, with select investments in certain central business district properties. 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, 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, 2011, as the same may be updated from time to time in subsequent filings with the United States Securities and Exchange Commission. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. We will not update any of the forward-looking statements after the date of this press release to conform them to actual results or to changes in our expectations that occur after such date, other than as required by law.

  Franklin Street Properties Corp. Earnings Release Supplementary Information Table of Contents Franklin Street Properties Corp. Financial Results A-C Real Estate Portfolio Summary Information D Portfolio and Other Supplementary Information E Quarterly Information F Percentage of Leased Space G Largest 20 Tenants - FSP Owned Portfolio H Definition of Funds From Operations (FFO) and FFO+GOS I Franklin Street Properties Corp. Financial Results Supplementary Schedule A Condensed Consolidated Income Statements (Unaudited) For the Three Months Ended March 31, ----------------------- (in thousands, except per share amounts) 2012 2011 ----------- ----------- Revenue: Rental $ 36,668 $ 31,099 Related party revenue: Management fees and interest income from loans 2,616 808 Other 34 7 ----------- ----------- Total revenue 39,318 31,914 ----------- ----------- Expenses: Real estate operating expenses 9,077 8,732 Real estate taxes and insurance 5,813 4,759 Depreciation and amortization 13,256 10,745 Selling, general and administrative 2,077 1,644 Interest 3,677 2,408 ----------- ----------- Total expenses 33,900 28,288 ----------- ----------- Income before interest income, equity in earnings of non-consolidated REITs and taxes 5,418 3,626 Interest income 8 11 Equity in earnings of non-consolidated REITs 391 968 ----------- ----------- Income before taxes on income 5,817 4,605 Taxes on income 79 50 ----------- ----------- Income from continuing operations 5,738 4,555 ----------- ----------- Discontinued operations: Income from discontinued operations, net of income tax - 620 Gain on sale of property less applicable income tax - 19,592 ----------- ----------- Total discontinued operations - 20,212 ----------- ----------- Net income $ 5,738 $ 24,767 ----------- ----------- Weighted average number of shares outstanding, basic and diluted 82,937 81,437 ----------- ----------- Earnings per share, basic and diluted, attributable to: Continuing operations $ 0.07 $ 0.05 Discontinued operations - 0.25 ----------- ----------- Net income per share, basic and diluted $ 0.07 $ 0.30 ----------- ----------- Franklin Street Properties Corp. Financial Results Supplementary Schedule B Condensed Consolidated Balance Sheets (Unaudited) (in thousands, except share and par value March 31, December 31, amounts) 2012 2011 ------------- ------------- Assets: Real estate assets, net $ 1,001,863 $ 1,006,221 Acquired real estate leases, less accumulated amortization of $29,303 and $31,189, respectively 87,073 91,613 Investment in non-consolidated REITs 87,061 87,598 Cash and cash equivalents 29,283 23,813 Restricted cash 511 493 Tenant rent receivables, less allowance for doubtful accounts of $1,300 and $1,235, respectively 1,090 1,460 Straight-line rent receivable, less allowance for doubtful accounts of $135 and $135, respectively 31,932 28,545 Prepaid expenses 1,164 1,223 Related party mortgage loan receivable 172,286 140,516 Other assets 3,528 4,070 Office computers and furniture, net of accumulated depreciation of $470 and $428, respectively 478 468 Deferred leasing commissions, net of accumulated amortization of $10,174 and $9,220, respectively 22,259 22,641 ------------- ------------- Total assets $ 1,438,528 $ 1,408,661 ============= ============= Liabilities and Stockholders' Equity: Liabilities: Bank note payable $ 494,000 $ 449,000 Accounts payable and accrued expenses 23,311 26,446 Accrued compensation 446 2,222 Tenant security deposits 2,181 2,008 Acquired unfavorable real estate leases, less accumulated amortization of $4,069 and $3,759, respectively 7,243 7,618 ------------- ------------- Total liabilities 527,181 487,294 ------------- ------------- Commitments and contingencies Stockholders' Equity: Preferred stock, $.0001 par value, 20,000,000 sharesauthorized, none issued or outstanding - - Common stock, $.0001 par value, 180,000,000 shares authorized,82,937,405 and 82,937,405 shares issued and outstanding, respectively 8 8 Additional paid-in capital 1,042,876 1,042,876 Accumulated distributions in excess of accumulated earnings (131,537) (121,517) ------------- ------------- Total stockholders' equity 911,347 921,367 ------------- ------------- Total liabilities and stockholders' equity $ 1,438,528 $ 1,408,661 ============= ============= Franklin Street Properties Corp. Financial Results Supplementary Schedule C Condensed Consolidated Statements of Cash Flows (Unaudited) For the Three Months Ended March 31, ---------------------------- (in thousands) 2012 2011 ------------- ------------- Cash flows from operating activities: Net income $ 5,738 $ 24,767 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization expense 13,763 11,109 Amortization of above market lease 40 (6) Gain on sale of real estate assets - (19,592) Equity in earnings of non-consolidated REITs (391) (1,066) Distributions from non-consolidated REITs 487 1,283 Increase (decrease) in bad debt reserve 65 (375) Changes in operating assets and liabilities: Restricted cash (18) (20) Tenant rent receivables, net 305 609 Straight-line rents, net (1,517) (2,303) Prepaid expenses and other assets, net 93 88 Accounts payable and accrued expenses (3,388) (1,212) Accrued compensation (1,776) (1,200) Tenant security deposits 173 603 Payment of deferred leasing commissions (641) (2,819) ------------- ------------- Net cash provided by operating activities 12,933 9,866 ------------- ------------- Cash flows from investing activities: Purchase of real estate assets, office computers and furniture (5,376) (124,307) Acquired real estate leases - (45,032) Investments in non-consolidated REITs (1) (9) Distributions in excess of earnings from non-consolidated REITs 442 484 Investment in related party mortgage loan receivable (31,770) (2,432) Changes in deposits on real estate assets - 200 Investment in assets held for syndication, net - (45,186) Proceeds received on sales of real estate assets - 89,382 ------------- ------------- Net cash used in investing activities (36,705) (126,900) ------------- ------------- Cash flows from financing activities: Distributions to stockholders (15,758) (15,473) Proceeds from equity offering, net - (90) Borrowings under bank note payable 45,000 404,000 Repayment of bank note payable - (209,968) Repayment of term loan payable - (74,850) Deferred financing costs - (4,328) Swap termination payment - (982) ------------- ------------- Net cash provided by financing activities 29,242 98,309 ------------- ------------- Net decrease in cash and cash equivalents 5,470 (18,725) Cash and cash equivalents, beginning of period 23,813 68,213 ------------- ------------- Cash and cash equivalents, end of period $ 29,283 $ 49,488 ============= ============= Franklin Street Properties Corp. Earnings Release Supplementary Schedule D Real Estate Portfolio Summary Information (Unaudited & Approximated) Commercial portfolio lease expirations (1) As of March 31, 2012 Total % of Year Square Feet Portfolio --------------- ------------ 2012 221,088 3.1% 2013 474,097 6.7% 2014 428,487 6.1% 2015 802,138 11.4% 2016 923,880 13.1% Thereafter (2) 4,202,378 59.6% --------------- ------------ 7,052,068 100.0% =============== ============

(1) Percentages are determined based upon square footage of expiring commercial leases.
(2) Includes 774,565 square feet of current vacancies.

  (dollars & square feet in thousands) As of March 31, 2012 ---------------------------------------------------- # of % of Square % of State Properties Investment Portfolio Feet Portfolio ---------- ----------- --------- -------- --------- Texas 10 $ 292,871 29.2% 2,028 28.8% Colorado 4 125,152 12.5% 789 11.2% Virginia 4 102,008 10.2% 685 9.7% Minnesota 2 38,067 3.8% 626 8.9% Missouri 3 67,510 6.7% 477 6.8% North Carolina 3 68,290 6.8% 431 6.1% Georgia 1 71,307 7.1% 387 5.5% Illinois 2 50,593 5.1% 372 5.2% Maryland 1 54,135 5.4% 325 4.6% Michigan 1 14,859 1.5% 215 3.0% Florida 1 46,581 4.7% 213 3.0% Indiana 1 34,403 3.4% 205 2.9% California 2 21,843 2.2% 182 2.6% Washington 1 14,244 1.4% 117 1.7% ---------- ----------- --------- -------- --------- 36 $ 1,001,863 100.0% 7,052 100.0% ========== =========== ========= ======== ========= Franklin Street Properties Corp. Earnings Release Supplementary Schedule E Portfolio and Other Supplementary Information (Unaudited & Approximated) Capital Expenditures Owned Portfolio Three Months Ended --------------------------- (in thousands) 31-Mar-12 31-Mar-11 ------------- ------------- Tenant improvements $ 3,014 $ 2,506 Deferred leasing costs 2,196 2,819 Building improvements 746 449 ------------- ------------- $ 5,956 $ 5,774 ============= ============= Square foot & leased percentages March 31, December 31, 2012 2011 ------------ ------------ Owned portfolio of commercial real estate Number of properties 36 36 Square feet 7,052,068 7,052,068 Leased percentage 89% 89% Investments in non-consolidated REITs Number of properties 3 3 Square feet 2,004,953 2,001,542 Leased percentage 90% 87% Single Asset REITs (SARs) managed Number of properties 13 13 Square feet 3,322,570 3,322,639 Leased percentage 84% 80% Total owned, investments & managed properties Number of properties 52 52 Square feet 12,379,591 12,376,249 Leased percentage 88% 86%

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

  % Square % Leased Interest Single Asset REIT name City State Feet 31-Mar-12 Held ----------- ----- --------- --------- --------- FSP 303 East Wacker Drive Corp.

Chicago IL 844,953 93.8% 43.7% FSP Grand Boulevard Corp. Kansas City MO 536,056 82.2% 27.0% FSP Phoenix Tower Corp.

Houston TX 623,944 90.8% 4.6% --------- --------- 2,004,953 89.8% --------- --------- Franklin Street Properties Corp. Earnings Release Supplementary Schedule F: Quarterly Information (Unaudited) (in thousands) Q1 Q2 Q3 Q4 Revenue: 2011 2011 2011 2011 --------- --------- --------- --------- Rental $ 31,099 $ 33,606 $ 33,672 $ 37,014 Related party revenue: Management fees and interest income from loans 808 1,150 1,037 1,051 Other 6 7 7 29 --------- --------- --------- --------- Total revenues 31,913 34,763 34,716 38,094 --------- --------- --------- --------- Expenses: Real estate operating expenses 8,730 8,765 9,328 9,862 Real estate taxes and insurance 4,759 5,228 5,020 5,426 Depreciation and amortization 10,745 12,029 12,351 13,124 Selling, general and administrative 1,645 1,602 1,654 2,012 Interest 2,408 3,578 3,419 3,261 --------- --------- --------- --------- Total expenses 28,287 31,202 31,772 33,685 --------- --------- --------- --------- Income before interest income, equity in earnings of non- consolidated REITs and taxes on income 3,626 3,561 2,944 4,409 Interest income 11 5 3 3 Equity in earnings of non- consolidated REITs 968 1,166 573 978 --------- --------- --------- --------- Income before taxes on income 4,605 4,732 3,520 5,390 Taxes on income 50 68 67 82 --------- --------- --------- --------- Income from continuing operations 4,555 4,664 3,453 5,308 --------- --------- --------- --------- Discontinued operations: Income (loss) from discontinued operations, net of tax 619 3,371 (139) (246) Gain on sale of properties, less applicable income tax 19,593 2,346 - - --------- --------- --------- --------- Total discontinued operations 20,212 5,717 (139) (246) --------- --------- --------- --------- Net income $ 24,767 $ 10,381 $ 3,314 $ 5,062 ========= ========= ========= ========= FFO and FFO+GOS calculations: Net income $ 24,767 $ 10,381 $ 3,314 $ 5,062 --------- --------- --------- --------- (Gain) Loss on sale of assets (19,593) (2,346) - - GAAP income from non- consolidated REITs (1,773) (1,166) (573) (978) Distributions from non- consolidated REITs 1,767 1,215 1,104 970 Acquisition costs 269 9 185 157 Depreciation of real estate & intangible amortization 10,812 12,047 12,332 13,248 --------- --------- --------- --------- Funds From Operations (FFO) 16,249 20,140 16,362 18,459 Plus gains on sales of assets 19,593 2,346 - - --------- --------- --------- --------- FFO+GOS $ 35,842 $ 22,486 $ 16,362 $ 18,459 ========= ========= ========= ========= Franklin Street Properties Corp. Earnings Release Supplementary Schedule G Percentage of Leased Space (Unaudited & Estimated) Fourth First Quarter Quarter % Leased Average % Leased Average (1) % (1) % Property Square as of Leased as of Leased Name Location Feet 31-Dec-11 (2) 31-Mar-12 (2) ------------ ------------- --------- --------- ------- --------- ------- 1 PARK SENECA Charlotte, NC 109,550 80.6% 80.6% 80.5% 79.9% 2 HILLVIEW CENTER Milpitas, CA 36,288 100.0% 100.0% 100.0% 100.0% 3 SOUTHFIELD Southfield, MI 214,697 39.2% 39.2% 39.2% 39.2% 4 FOREST PARK Charlotte, NC 62,212 100.0% 100.0% 100.0% 100.0% 5 CENTENNIAL Colorado Springs, CO 110,405 85.4% 73.0% 85.4% 85.4% 6 MEADOW POINT Chantilly, VA 138,537 100.0% 100.0% 100.0% 100.0% 7 TIMBERLAKE Chesterfield, MO 232,766 97.7% 97.7% 97.7% 97.7% 8 FEDERAL WAY Federal Way, WA 117,010 47.0% 44.3% 47.0% 47.0% 9 NORTHWEST Elk Grove POINT Village, IL 176,848 100.0% 100.0% 100.0% 100.0% 10 TIMBERLAKE Chesterfield, EAST MO 116,197 85.9% 85.9% 85.9% 85.9% 11 PARK TEN Houston, TX 155,715 81.2% 81.2% 81.2% 81.2% 12 MONTAGUE San Jose, CA 145,951 100.0% 100.0% 100.0% 100.0% 13 ADDISON Addison, TX 293,787 95.8% 95.8% 95.8% 95.8% 14 COLLINS Richardson, CROSSING TX 298,766 88.4% 88.4% 87.8% 87.8% 15 GREENWOOD PLAZA Englewood, CO 197,527 48.9% 48.4% 48.9% 48.9% 16 RIVER Indianapolis, CROSSING IN 205,059 93.5% 93.5% 93.9% 93.1% 17 LIBERTY PLAZA Addison, TX 218,934 77.9% 74.8% 76.4% 77.4% 18 INNSBROOK Glen Allen, VA 298,456 98.3% 90.7% 98.3% 98.3% 19 380 Broomfield, INTERLOCKEN CO 240,184 85.1% 85.1% 89.5% 86.5% 20 BLUE LAGOON Miami, FL 212,619 100.0% 100.0% 100.0% 100.0% 21 ELDRIDGE GREEN Houston, TX 248,399 100.0% 100.0% 100.0% 100.0% 22 WILLOW BEND Plano, TX 116,622 83.1% 83.1% 77.4% 77.4% 23 ONE OVERTON PARK Atlanta, GA 387,267 89.3% 90.0% 91.7% 90.9% 24 390 Broomfield, INTERLOCKEN CO 241,516 93.4% 94.3% 96.4% 94.6% 25 EAST BALTIMORE Baltimore, MD 325,445 55.7% 55.7% 56.2% 55.9% 26 PARK TEN PHASE II Houston, TX 156,746 100.0% 100.0% 100.0% 100.0% 27 LAKESIDE Maryland CROSSING I Heights, MO 127,778 100.0% 100.0% 100.0% 100.0% 28 LOUDOUN TECH Dulles, VA 135,888 100.0% 100.0% 100.0% 100.0% 29 4807 STONECROFT Chantilly, VA 111,469 100.0% 100.0% 100.0% 100.0% 30 EDEN BLUFF Eden Prairie, MN 153,028 100.0% 100.0% 100.0% 100.0% 31 121 SOUTH Minneapolis, EIGHTH ST MN 472,616 93.6% 93.6% 93.8% 93.8% 32 EMPEROR BOULEVARD Durham, NC 259,531 100.0% 100.0% 100.0% 100.0% 33 LEGACY TENNYSON CTR Plano, TX 202,600 100.0% 100.0% 100.0% 100.0% 34 ONE LEGACY Plano, TX 214,110 100.0% 100.0% 100.0% 100.0% 35 909 DAVIS Evanston, IL 195,245 94.8% 94.8% 94.8% 94.8% 36 1410 EAST Richardson, RENNER TX 122,300 100.0% 100.0% 100.0% 100.0% --------- --------- ------- --------- ------- TOTAL WEIGHTED AVERAGE 7,052,068 88.7% 88.1% 89.0% 88.8% --------- --------- ------- --------- -------

(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.

  Franklin Street Properties Corp. Earnings Release Supplementary Schedule H Largest 20 Tenants - FSP Owned Portfolio (Unaudited & Estimated) The following table includes the largest 20 tenants in FSP's owned portfolio based on leased square feet: As of March 31, 2012 % of Tenant Sq Ft SIC Code Portfolio --------- -------- --------- 1 TCF National Bank 267,470 60 3.8% 2 Quintiles Transnational Corp 259,531 87 3.7% 3 CITGO Petroleum Corporation 248,399 29 3.5% 4 Burger King Corporation 212,619 58 3.0% 5 Denbury Onshore LLC 202,600 13 2.9% 6 RGA Reinsurance Company 185,501 63 2.6% 7 SunTrust Bank 182,888 60 2.6% 8 Citicorp Credit Services, Inc 176,848 61 2.5% 9 C.H. Robinson Worldwide, Inc 153,028 47 2.2% 10 Houghton Mifflin Harcourt Publishing Company 150,050 27 2.1% 11 Murphy Exploration & Production Company 144,677 13 2.1% 12 Giesecke & Devrient America, Inc.

135,888 73 1.9% 13 Monsanto Company 127,778 28 1.8% 14 AT&T Services, Inc.

122,300 48 1.7% 15 Vail Holdings, Inc.

122,232 79 1.7% 16 Northrop Grumman Systems Corporation 111,469 73 1.6% 17 Argo Data Resource Corporation 109,990 73 1.6% 18 Alliance Data Systems 96,749 73 1.4% 19 Federal National Mortgage Association 92,358 61 1.3% 20 Amdocs, Inc 91,928 73 1.3% --------- --------- Total 3,194,303 45.3% --------- --------- Franklin Street Properties Corp. Earnings Release Supplementary Schedule I Definition of Funds From Operations ("FFO"),

The Company evaluates the performance based on several measures, including Funds From Operations, or FFO, because 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 (determined 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 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.