Franklin Street Properties Corp. Announces Second Quarter 2012 Results

Marketwired

WAKEFIELD, MA--(Marketwire -08/01/12)- Franklin Street Properties Corp. (the "Company," "FSP," "we" or "our") (FSP), an investment firm specializing in real estate, announced today Funds From Operations (FFO) of $19.0 million or $0.23 per share for the second quarter ended June 30, 2012. The Company also announced Net Income of $5.4 million and Earnings Per Share (EPS) of $0.07 for the second 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 measure, is provided on page 3 of this press release.

 

Three Months Ended June 30, Six Months Ended June 30,
---------------------------- ----------------------------
(in 000's except Increase Increase
per share data) 2012 2011 (Decrease) 2012 2011 (Decrease)
-------- -------- ---------- -------- -------- ----------

Net Income $ 5,434 $ 10,381 $ (4,947) $ 11,172 $ 35,148 $ (23,976)
======== ======== ========== ======== ======== ==========

FFO $ 19,041 $ 20,140 $ (1,099) $ 38,612 $ 36,390 $ 2,222
======== ======== ========== ======== ======== ==========
Per Share Data:
EPS $ 0.07 $ 0.13 $ (0.06) $ 0.13 $ 0.43 $ (0.30)
FFO $ 0.23 $ 0.25 $ (0.02) $ 0.47 $ 0.45 $ 0.02

Comparing results for the second quarter of 2012 to 2011, Net Income and EPS decreased $4.9 million or $0.06 per share and FFO decreased $1.1 million or $0.02 per share. The decrease in Net Income and EPS was primarily because in the second quarter of 2011 our investment bank contributed about $3.3 million and we realized a gain on sale of a property in Savage, Maryland in June of 2011, which contributed $2.3 million, neither of which was a factor in the second quarter of 2012. These decreases were partially offset by the benefits of real estate investments made over the last 12 months discussed further below. The decrease in FFO was also because of the investment banking segment, which was discontinued during 2011, and was partially offset by increases from the benefit of increased interest income from real estate loan investments, five property acquisitions made in 2011 (including three acquisitions made in March 2011), all of which we had for the full second quarter of 2012 and leasing activity.

Comparing results for the first half of 2012 to 2011, Net Income and EPS decreased $24.0 million or $0.30 per share and FFO increased $2.2 million or $0.02 per share. The decrease in Net Income and EPS was primarily from the gains on sale of properties in January and June of 2011, which contributed $21.9 million or $0.27 per share to the first half of 2011. We did not sell any properties during the first half of 2012. In addition, during the six months ended June 30, 2011 our investment bank contributed about $3.4 million, which was not a factor during the six months ended June 30, 2012. These decreases were partially offset by the benefits of real estate investments made over the last 12 months discussed further below. The increase in FFO was primarily from the benefits of increased interest income from real estate loan investments, five property acquisitions made in 2011 (including three acquisitions made in March 2011), all of which we had for the full first half of 2012. We also had the benefit of increased leasing activity that increased occupancy in the real estate portfolio at June 30, 2012 to 90.0% compared to 86.9% at June 30, 2011.

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

"For the second quarter of 2012, FSP's profits as represented by FFO totaled approximately $19.0 million or $0.23 per share, a decrease of approximately $529,000 or $0.01 per share compared to the first quarter of 2012. Dividend distributions declared for the second quarter of 2012, which are payable on August 16, 2012, will be approximately $15.8 million or $0.19 per share.

"Our directly-owned real estate portfolio of 36 properties, totaling 7,052,592 square feet, was approximately 90% leased as of June 30, 2012, up from approximately 89% leased as of March 31, 2012. Our property portfolio is primarily suburban office assets. Most of the rental/leasing markets where our properties are located remained stable during the second quarter, both in terms of occupancy and rental rate levels. Within this environment, we continue to make slow but steady leasing progress. Our property portfolio has relatively modest lease expirations over the next two and a half years and, along with our improving occupancy levels, should allow overall tenant improvement expenditures and leasing costs to moderate in relation to the level of rental revenues being achieved. We are beginning to see the early signs of that trend.

"There were no additional real estate investments completed in the second quarter of 2012. However, on July 5, 2012, FSP made a $33 million two-year bridge loan on a suburban office property located in the I-10 energy corridor of Houston, Texas. The property is a 14-story, multi-tenant Class A office building containing approximately 325,796 rentable square feet. The property is owned by FSP Energy Tower I Corp., a single-asset REIT affiliate of FSP, and is approximately 100% leased. The loan is secured by a first mortgage on the property. On July 31, 2012, FSP purchased a Class A suburban office property in Atlanta, Georgia known as 'One Ravinia Drive' for $52.8 million. The property is 17 stories, contains approximately 386,603 rentable square feet, is approximately 82% leased to numerous tenants and is located in the 'Central Perimeter' submarket of Atlanta. FSP and its affiliates have been investing in the suburban Atlanta office market since 2003 and currently own three properties there totaling approximately 907,000 square feet.

"There were no property sales in the second 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 623,944 square feet located in Houston, Texas that is currently being offered for sale. FSP has both an equity and first mortgage loan investment in FSP Phoenix Tower Corp. On July 27, 2012, FSP's $106.2 million two-year bridge loan to its single-asset REIT affiliate, FSP 50 South Tenth Street Corp., was repaid in full from the proceeds of an institutional third-party first mortgage loan secured by the Minneapolis, Minnesota CBD property. Additional potential real estate investment opportunities are actively being explored and we anticipate further real estate investments this year.

"We continue looking forward to the balance of 2012 and beyond."

Dividend Announcement

On July 13, 2012, the Company announced that its Board of Directors declared a regular quarterly dividend for the three months ended June 30, 2012 of $0.19 per share of common stock payable on August 16, 2012 to stockholders of record on July 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 June 30, 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. We have included the NAREIT FFO definition in our table and note that other REITs may not define FFO in accordance with the current NAREIT definition or may interpret the current NAREIT definition differently than we do. 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 Six Months Ended
June 30, June 30,
-------------------- --------------------
(In thousands, except per share
amounts) 2012 2011 2012 2011
--------- --------- --------- ---------

Net income $ 5,434 $ 10,381 $ 11,172 $ 35,148
Less gain on sale of
properties - (2,346) - (21,939)
GAAP (income) loss from non-
consolidated REITs (494) (1,166) (885) (2,938)
Distributions from non-
consolidated REITs 898 1,215 1,827 2,982
Depreciation & amortization 13,203 12,047 26,498 22,859
--------- --------- --------- ---------
NAREIT FFO 19,041 20,131 38,612 36,112
Acquisition costs of new
properties - 9 - 278
--------- --------- --------- ---------
Funds From Operations (FFO) $ 19,041 $ 20,140 $ 38,612 $ 36,390
========= ========= ========= =========

Per Share Data
EPS $ 0.07 $ 0.13 $ 0.13 $ 0.43
FFO $ 0.23 $ 0.25 $ 0.47 $ 0.45

Weighted average shares (basic
and diluted) 82,937 81,437 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 August 2, 2012 at 10:00 a.m. (ET) to discuss the second 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, uncertainty about governmental fiscal policy, geopolitical events and expenditures that cannot be anticipated such as utility rate and usage increases, unanticipated repairs, additional staffing, insurance increases and real estate tax valuation reassessments. See the "Risk Factors" set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 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 - Prior Four Quarters F
Percentage of Leased Space G
Largest 20 Tenants - FSP Owned Portfolio H
Definition of Funds From Operations (FFO) I


Franklin Street Properties Corp. Financial Results
Supplementary Schedule A
Condensed Consolidated Income Statements
(Unaudited)

For the For the
Three Months Ended Six Months Ended
June 30, June 30,
--------------------- ---------------------
(in thousands, except per share
amounts) 2012 2011 2012 2011
---------- ---------- ---------- ----------

Revenue:
Rental $ 35,830 $ 33,606 $ 72,498 $ 64,705
Related party revenue:
Management fees and interest
income from loans 3,045 1,150 5,661 1,958
Other 39 7 73 13
---------- ---------- ---------- ----------
Total revenue 38,914 34,763 78,232 66,676
---------- ---------- ---------- ----------

Expenses:
Real estate operating expenses 8,828 8,765 17,905 17,495
Real estate taxes and
insurance 5,576 5,228 11,389 9,987
Depreciation and amortization 13,224 12,029 26,480 22,774
Selling, general and
administrative 2,236 1,602 4,313 3,247
Interest 4,037 3,578 7,714 5,986
---------- ---------- ---------- ----------

Total expenses 33,901 31,202 67,801 59,489
---------- ---------- ---------- ----------

Income before interest income,
equity in earnings of non-
consolidated REITs and taxes 5,013 3,561 10,431 7,187
Interest income 4 5 12 16
Equity in earnings of non-
consolidated REITs 494 1,166 885 2,134
---------- ---------- ---------- ----------

Income before taxes on income 5,511 4,732 11,328 9,337
Taxes on income 77 68 156 118
---------- ---------- ---------- ----------

Income from continuing
operations 5,434 4,664 11,172 9,219
---------- ---------- ---------- ----------

Discontinued operations:
Income from discontinued
operations, net of income tax - 3,371 - 3,990
Gain on sale of property less
applicable income tax - 2,346 - 21,939
---------- ---------- ---------- ----------
Total discontinued operations - 5,717 - 25,929
---------- ---------- ---------- ----------

Net income $ 5,434 $ 10,381 $ 11,172 $ 35,148
========== ========== ========== ==========

Weighted average number of
shares outstanding, basic and
diluted 82,937 81,437 82,937 81,437
========== ========== ========== ==========

Earnings per share, basic and
diluted, attributable to:
Continuing operations $ 0.07 $ 0.06 $ 0.13 $ 0.11
Discontinued operations - 0.07 - 0.32
---------- ---------- ---------- ----------
Net income per share, basic and
diluted $ 0.07 $ 0.13 $ 0.13 $ 0.43
========== ========== ========== ==========



Franklin Street Properties Corp. Financial Results
Supplementary Schedule B
Condensed Consolidated Balance Sheets
(Unaudited)

(in thousands, except share and par value June 30, December 31,
amounts) 2012 2011
------------ ------------
Assets:
Real estate assets, net $ 997,345 $ 1,006,221
Acquired real estate leases, less accumulated
amortization of $32,337 and $31,189,
respectively 82,769 91,613
Investment in non-consolidated REITs 86,658 87,598
Cash and cash equivalents 22,620 23,813
Restricted cash 533 493
Tenant rent receivables, less allowance for
doubtful accounts of $1,300 and $1,235,
respectively 1,403 1,460
Straight-line rent receivable, less allowance
for doubtful accounts of $135 and $135,
respectively 33,142 28,545
Prepaid expenses 2,605 1,223
Related party mortgage loan receivables 177,536 140,516
Other assets 3,184 4,070
Office computers and furniture, net of
accumulated depreciation of $500 and $428,
respectively 456 468
Deferred leasing commissions, net of accumulated
amortization of $10,706 and $9,220,
respectively 22,112 22,641
------------ ------------
Total assets $ 1,430,363 $ 1,408,661
============ ============

Liabilities and Stockholders' Equity:
Liabilities:
Bank note payable $ 494,000 $ 449,000
Accounts payable and accrued expenses 25,408 26,446
Accrued compensation 944 2,222
Tenant security deposits 2,113 2,008
Acquired unfavorable real estate leases, less
accumulated amortization of $4,203 and
$3,759, respectively 6,875 7,618
------------ ------------
Total liabilities 529,340 487,294
------------ ------------

Commitments and contingencies

Stockholders' Equity:
Preferred stock, $.0001 par value, 20,000,000
shares authorized, none issued or outstanding - -
Common stock, $.0001 par value, 180,000,000
shares authorized, 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 (141,861) (121,517)
------------ ------------
Total stockholders' equity 901,023 921,367
------------ ------------
Total liabilities and stockholders' equity $ 1,430,363 $ 1,408,661
============ ============



Franklin Street Properties Corp. Financial Results
Supplementary Schedule C
Condensed Consolidated Statements of Cash Flows
(Unaudited)
For the
Six Months Ended
June 30,
--------------------------
(in thousands) 2012 2011
------------ ------------
Cash flows from operating activities:
Net income $ 11,172 $ 35,148

Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization expense 27,495 23,670
Amortization of above market lease 20 (62)
Gain on sale of real estate assets - (21,939)
Equity in earnings of non-consolidated REITs (885) (2,844)
Distributions from non-consolidated REITs 993 2,318
Increase (decrease) in bad debt reserve 65 (365)
Changes in operating assets and liabilities:
Restricted cash (40) (39)
Tenant rent receivables, net (8) 441
Straight-line rents, net (2,571) (5,176)
Lease acquisition costs (2,026) (55)
Prepaid expenses and other assets, net (1,512) 914
Accounts payable and accrued expenses (1,395) (726)
Accrued compensation (1,278) (733)
Tenant security deposits 105 546
Payment of deferred leasing commissions (1,513) (5,386)
------------ ------------
Net cash provided by operating
activities 28,622 25,712
------------ ------------
Cash flows from investing activities:
Purchase of real estate assets, office
computers and furniture (7,112) (127,999)
Acquired real estate leases - (45,032)
Investments in non-consolidated REITs (1) (10)
Distributions in excess of earnings from non-
consolidated REITs 834 664
Investment in related party mortgage loan
receivable (37,020) (4,232)
Changes in deposits on real estate assets - 200
Investment in assets held for syndication, net - (8,200)
Proceeds received on sales of real estate
assets - 96,790
------------ ------------
Net cash used in investing activities (43,299) (87,819)
------------ ------------
Cash flows from financing activities:
Distributions to stockholders (31,516) (30,946)
Proceeds from equity offering, net - (90)
Borrowings under bank note payable 45,000 345,000
Repayment of bank note payable - (209,968)
Repayment of term loan payable - (74,850)
Deferred financing costs - (5,389)
Swap termination payment - (982)
------------ ------------
Net cash provided by financing
activities 13,484 22,775
------------ ------------
Net decrease in cash and cash equivalents (1,193) (39,332)
Cash and cash equivalents, beginning of period 23,813 68,213
------------ ------------
Cash and cash equivalents, end of period $ 22,620 $ 28,881
============ ============



Franklin Street Properties Corp. Earnings Release
Supplementary Schedule D
Real Estate Portfolio Summary Information
(Unaudited & Approximated)


Commercial portfolio lease expirations (1)
Total % of
Year Square Feet Portfolio
-------------------- ----------- ---------------
2012 155,148 2.2%
2013 450,290 6.4%
2014 415,284 5.9%
2015 812,702 11.5%
2016 921,681 13.1%
Thereafter (2) 4,297,487 60.9%
----------- ---------------
7,052,592 100.0%
=========== ===============

(1) Percentages are determined based upon square footage of expiring commercial leases.
(2) Includes 705,090 square feet of current vacancies.

 


(dollars & square feet
in thousands) As of June 30, 2012
---------------------------------------------------
# of % of Square % of
State Properties Investment Portfolio Feet Portfolio
----------- ---------- --------- ------- ---------

Texas 10 $ 291,915 29.4% 2,029 28.7%
Colorado 4 124,153 12.4% 789 11.2%
Virginia 4 101,082 10.1% 684 9.7%
Minnesota 2 38,814 3.9% 626 8.9%
Missouri 3 66,949 6.7% 477 6.8%
North Carolina 3 67,834 6.8% 431 6.1%
Georgia 1 70,932 7.1% 387 5.5%
Illinois 2 50,283 5.0% 372 5.3%
Maryland 1 53,776 5.4% 325 4.6%
Michigan 1 14,659 1.5% 215 3.0%
Florida 1 46,244 4.6% 213 3.0%
Indiana 1 34,886 3.5% 205 2.9%
California 2 21,716 2.2% 182 2.6%
Washington 1 14,102 1.4% 117 1.7%
----------- ---------- --------- ------- ---------
36 $ 997,345 100.0% 7,052 100.0%
=========== ========== ========= ======= =========



Franklin Street Properties Corp. Earnings Release
Supplementary Schedule E
Portfolio and Other Supplementary Information
(Unaudited & Approximated)


Three Months Three Months
Ended Ended Six Months Ended
----------------- ----------------- -----------------
Capital Expenditures
Owned Portfolio 31-Mar- 31-Mar- 30-Jun- 30-Jun- 30-Jun- 30-Jun-
(in thousands) 12 11 12 11 12 11
-------- -------- -------- -------- -------- --------

Tenant improvements $ 3,014 $ 2,506 $ 2,705 $ 3,215 $ 5,719 $ 5,721
Deferred leasing costs 2,196 2,819 1,343 2,567 3,539 5,386
Building improvements 746 449 1,003 876 1,749 1,325
-------- -------- -------- -------- -------- --------
$ 5,956 $ 5,774 $ 5,051 $ 6,658 $ 11,007 $ 12,432
======== ======== ======== ======== ======== ========



Square foot & leased percentages June 30, December 31,
2012 2011
------------ ------------

Owned portfolio of commercial real estate
Number of properties 36 36
Square feet 7,052,592 7,052,068
Leased percentage 90% 89%

Investments in non-consolidated REITs
Number of properties 3 3
Square feet 2,003,968 2,001,542
Leased percentage 89% 87%

Single Asset REITs (SARs) managed
Number of properties 13 13
Square feet 3,322,589 3,322,639
Leased percentage 85% 80%

Total owned, investments & managed properties
Number of properties 52 52
Square feet 12,379,149 12,376,249
Leased percentage 89% 86%



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

 


%
Square % Leased Interest
Single Asset REIT name City State Feet 30-Jun-12 Held
-------------------------- ----------- ----- --------- ---------- --------
FSP 303 East Wacker Drive
Corp.     Chicago IL 844,953 93.8% 43.7%
FSP Grand Boulevard Corp. Kansas City MO 535,071 79.9% 27.0%
FSP Phoenix Tower Corp.    Houston TX 623,944 91.8% 4.6%
--------- ----------
2,003,968 89.5%
--------- ----------



Franklin Street Properties Corp. Earnings Release
Supplementary Schedule F: Quarterly Information
(Unaudited)
(in thousands)
Q2 Q3 Q4 Q1
Revenue: 2011 2011 2011 2012
--------- --------- --------- ---------
Rental $ 33,606 $ 33,672 $ 37,014 $ 36,668
Related party revenue:
Management fees and interest
income from loans 1,150 1,037 1,051 2,616
Other 7 7 29 34
--------- --------- --------- ---------
Total revenues 34,763 34,716 38,094 39,318
--------- --------- --------- ---------
Expenses:
Real estate operating expenses 8,765 9,328 9,862 9,077
Real estate taxes and
insurance 5,228 5,020 5,426 5,813
Depreciation and amortization 12,029 12,351 13,124 13,256
Selling, general and
administrative 1,602 1,654 2,012 2,077
Interest 3,578 3,419 3,261 3,677
--------- --------- --------- ---------
Total expenses 31,202 31,772 33,685 33,900
--------- --------- --------- ---------

Income before interest income,
equity in earnings of non-
consolidated REITs and taxes
on income 3,561 2,944 4,409 5,418
Interest income 5 3 3 8
Equity in earnings of non-
consolidated REITs 1,166 573 978 391
--------- --------- --------- ---------

Income before taxes on income 4,732 3,520 5,390 5,817
Taxes on income 68 67 82 79
--------- --------- --------- ---------

Income from continuing
operations 4,664 3,453 5,308 5,738
--------- --------- --------- ---------
Discontinued operations:
Income (loss) from
discontinued operations, net
of tax 3,371 (139) (246) -
Gain on sale of properties,
less applicable income tax 2,346 - - -
--------- --------- --------- ---------
Total discontinued operations 5,717 (139) (246) -
--------- --------- --------- ---------

Net income $ 10,381 $ 3,314 $ 5,062 $ 5,738
========= ========= ========= =========


FFO calculations:

Net income $ 10,381 $ 3,314 $ 5,062 $ 5,738
--------- --------- --------- ---------
(Gain) Loss on sale of assets (2,346) - - -
GAAP income from non-
consolidated REITs (1,166) (573) (978) (391)
Distributions from non-
consolidated REITs 1,215 1,104 970 929
Acquisition costs 9 185 157 -
Depreciation of real estate &
intangible amortization 12,047 12,332 13,248 13,295

--------- --------- --------- ---------
Funds From Operations (FFO) $ 20,140 $ 16,362 $ 18,459 $ 19,571
========= ========= ========= =========



Franklin Street Properties Corp. Earnings Release
Supplementary Schedule G
Percentage of Leased Space
(Unaudited & Estimated)

First Second
% Quarter % Quarter
Leased Average Leased Average
(1) as % (1) as %
Square of 31- Leased of 30- Leased
Property Name Location Feet Mar-12 (2) Jun-12 (2)
--------------- --------------- --------- ------- ------- ------- -------

1 PARK SENECA Charlotte, NC 109,550 80.5% 79.9% 81.5% 80.9%
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% 39.6% 38.5%
4 FOREST PARK Charlotte, NC 62,212 100.0% 100.0% 100.0% 100.0%
Colorado
5 CENTENNIAL Springs, CO 110,405 85.4% 85.4% 85.4% 85.4%
6 MEADOW POINT Chantilly, VA 138,537 100.0% 100.0% 100.0% 100.0%
Chesterfield,
7 TIMBERLAKE MO 232,766 97.7% 97.7% 93.2% 96.2%
8 FEDERAL WAY Federal Way, WA 117,010 47.0% 47.0% 47.0% 47.0%
Elk Grove
9 NORTHWEST POINT Village, IL 176,848 100.0% 100.0% 100.0% 100.0%
Chesterfield,
10 TIMBERLAKE EAST MO 116,197 85.9% 85.9% 97.0% 89.6%
11 PARK TEN Houston, TX 155,715 81.2% 81.2% 96.1% 91.1%
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%
COLLINS
14 CROSSING Richardson, TX 298,766 87.8% 87.8% 87.8% 87.8%
15 GREENWOOD PLAZA Englewood, CO 197,527 48.9% 48.9% 48.9% 48.9%
Indianapolis,
16 RIVER CROSSING IN 205,059 93.9% 93.1% 96.1% 94.6%
17 LIBERTY PLAZA Addison, TX 218,934 76.4% 77.4% 84.1% 78.9%
18 INNSBROOK Glen Allen, VA 298,456 98.3% 98.3% 98.3% 98.3%
19 380 INTERLOCKEN Broomfield, CO 240,184 89.5% 86.5% 89.5% 89.5%
20 BLUE LAGOON Miami, FLA 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 117,050 77.4% 77.4% 77.8% 77.8%
ONE OVERTON
23 PARK Atlanta, GA 387,267 91.7% 90.9% 92.6% 92.3%
24 390 INTERLOCKEN Broomfield, CO 241,516 96.4% 94.6% 97.2% 96.9%
25 EAST BALTIMORE Baltimore, MD 325,445 56.2% 55.9% 58.2% 57.5%
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
EIGHTH ST Minneapolis, MN 472,712 93.8% 93.8% 95.6% 94.4%
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
RENNER Richardson, TX 122,300 100.0% 100.0% 100.0% 100.0%

--------- ------- ------- ------- -------
TOTAL WEIGHTED AVERAGE 7,052,592 89.0% 88.8% 90.0% 89.5%
--------- ------- ------- ------- -------

(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 June 30, 2012

SIC % of
Tenant Sq Ft Code Portfolio
--------------------------------------------- --------- ------ ---------
1 TCF National Bank 268,984 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 County of Santa Clara 90,467 91 1.3%
--------- ---------
Total 3,194,356 45.3%
--------- ---------



Franklin Street Properties Corp. Earnings Release
Supplementary Schedule I
Definition of Funds From Operations ("FFO"),

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

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

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

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

Contact:

John Demeritt
(877) 686-9496

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