Franklin Street Properties (FSP) 8-K Results of Operations and Financial Condition

Exhibit 99.2

   

Supplemental Operating and Financial Data

Second Quarter 2010

Franklin Street Properties Corp.  ●  401 Edgewater Place  ●  Wakefield, MA 01880  ●  (781) 557-1300

www.franklinstreetproperties.com

   Table of Contents

	Page		Page
Company Overview	3-5	Tenant Analysis
		20 Largest tenants with annualized rent and remaining term	21
Key Financial Data		20 Largest Tenants, Industry Profile	22
Financial Highlights	6	Lease Expirations by Square Feet	23
Management’s Key Operating Measures	7	Lease Expirations with annualized rent per square foot	24
Income Statements	8
EPS, FFO, GOS and FFO+GOS	9	Transactional Drivers
Balance Sheets	10	Capital Recycling: Acquisitions and Dispositions	25
Cash Flow Statements	11	Investment Banking Performance	26
Segment Information	12-13
Property Net Operating Income (NOI): Cash and GAAP Basis	14	FFO and FFO+GOS Reconciliations	27
Capital Analysis	15	FFO and FFO+GOS Definitions	28
		FAD Reconciliation and Definition	29
Portfolio Overview		EBITDA Reconciliation and Definition	30
Property by Form of FSP Participation	16	NOI Reconciliation and Definition	31
Regional Analysis, Map	17
Owned Property List	18
Properties with annualized rent per square foot	19
Capital Expenditures	20

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, local real estate conditions, the performance of properties that FSP has acquired or may acquire, the timely lease-up of properties and other risks, detailed from time to time in FSP’s SEC reports.  FSP assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

June 30, 2010  2

   Company Overview

Overview

Franklin Street Properties Corp. (FSP) (NYSE Amex: FSP) is an investment firm focused on achieving current income and long-term growth through investments in commercial properties. FSP’s portfolio of real estate assets consists primarily of suburban office buildings and includes select investments in central business district (CBD) properties. FSP’s real estate operations include property acquisitions and dispositions, interim acquisition and short-term financing, leasing, development and asset management. FSP’s subsidiary, FSP Investments LLC (member, FINRA and SIPC), is a real estate investment banking firm and registered broker/dealer.

Our Business

FSP operates in two business segments and has two principal sources of revenue; real estate operations and investment banking/investment services. Real estate operations include rental income from real estate leasing, interest income from loans made for interim acquisition or other purposes, and fee income from asset management. Investment banking/investment services generate brokerage commissions, loan origination fees, development services and other fees related to the organization of single-purpose entities that own real estate and the private placement of equity in those entities.

Strategy

FSP’s investment strategy is to make selective acquisitions based on market and/or property specific criteria, actively manage the property to maximize its value and dispose of the property when the ideal time or situation arises. Proceeds from property sales are redeployed into other specific real estate assets, used for other corporate purposes and/or paid out to shareholders as special dividends. Unlike many real estate investment companies, which have utilized significant leverage in an attempt to enhance their real estate portfolio’s returns, FSP has used very moderate leverage. FSP’s historical growth has been achieved without the use of permanent mortgage debt on any of our properties. This model has significantly reduced FSP’s risk profile by reducing foreclosure, financing and refina ncing risk. The Company’s strategy is to employ modest leverage to accelerate its growth and capitalize on market conditions and opportunities as they arise. In addition, FSP believes that it can lower investment risk while enhancing current income and long-term appreciation potential by owning properties in diversified geographic locations that have sound long-term economic growth potential.

Snapshot
(as of June 30, 2010)
Corporate Headquarters	Wakefield, MA
Fiscal Year-End	31-Dec
Total Properties	33
Total Square Feet	6.4 Million
Common Shares Outstanding	79,680,705
Quarterly Dividend	$0.19
Dividend Yield	6.44%
Total Market Capitalization	$941 Million
Insider Holdings	13.0%

June 30, 2010 3

   Company Overview

Structure of the Company

FSP has elected to be taxed as a Real Estate Investment Trust (REIT) under the Internal Revenue Code. To qualify as a REIT, we must meet a number of organizational and operational requirements, including a requirement to distribute at least 90% of our adjusted taxable income to our shareholders. Management intends to continue to adhere to these requirements and to maintain our REIT status. As a REIT we are entitled to a tax deduction for some or all of the dividends we pay to shareholders. Accordingly, we generally will not be subject to federal income taxes as long as we distribute an amount equal to or in excess of our taxable income to shareholders.

Dividend Philosophy

FSP has been able to offer shareholders high-quality, risk-adjusted returns. The ongoing and recurring rental revenue stream provides stability to our regular quarterly dividend. In addition, the possibility exists for the payment of annual special dividends resulting from the sale of properties in the portfolio and the income from FSP’s investment banking business.

Board of Directors and Management
George J. Carter	Dennis J. McGillicuddy	Scott H. Carter
President, Chief Executive Officer	Director	Executive Vice President, General
Chairman of the Board	Member, Audit Committee	Counsel and Assistant Secretary
	Member, Compensation Committee
Barbara J. Fournier		John G. Demeritt
Executive Vice President, Chief Operating Officer,	Georgia Murray	Executive Vice President and
Treasurer, Secretary and Director	Director	Chief Financial Officer
	Chair, Compensation Committee
Janet Notopoulos	Member, Audit Committee	William W. Gribbell
Executive Vice President and Director		Executive Vice President
	Barry Silverstein
John N. Burke	Director	R. Scott MacPhee
Director	Member, Audit Committee	Executive Vice President
Chair, Audit Committee	Member, Compensation Committee
Member, Compensation Committee

June 30, 2010 4

   Company Overview

Corporate Headquarters	Trading Symbol	Inquiries
401 Edgewater Place, Suite 200	NYSE Amex	Inquires should be directed to:
Wakefield, MA 01880	Symbol: FSP	John Demeritt, CFO
(t) 781-557-1300		877-686-9496 or InvestorRelations@
(f) 781-246-2807		franklinstreetproperties.com
www.franklinstreetproperties.com

Common Stock Data (NYSE Amex: FSP)
	For the Three Months Ended
	30-Jun-10	31-Mar-10	31-Dec-09	30-Sep-09	30-Jun-09	31-Mar-09
High Price	15.70	15.01	15.36	15.20	14.84	14.88
Low Price	11.04	11.64	10.35	12.00	11.43	9.57
Closing Price, at the end of the quarter	11.81	14.43	14.61	13.10	13.25	12.30
Dividends paid per share – quarterly	0.19	0.19	0.19	0.19	0.19	0.19
Closing dividend yield – annualized	6.44%	5.27%	5.20%	5.80%	5.74%	6.18%
Common shares outstanding (millions)	79.68	79.68	79.68	79.68	70.48	70.48

Timing Quarterly results are expected to be announced during the week ending on these dates:
First Quarter:	6-May-11	Third Quarter:	5-Nov-10
Second Quarter:	5-Aug-11	Fourth Quarter:	25-Feb-11

June 30, 2010  5

   Financial Highlights (in thousands, except per share data)

																	For the Year
	For the Three Months Ended																Ended
	31-Mar-10			30-Jun-10		31-Mar-09			30-Jun-09			30-Sep-09			31-Dec-09		31-Dec-09
Income Items:
Revenue:
Rental	$	30,799		$	29,261	$	29,818		$	29,254		$	31,702		$	31,300	$	122,074
Related party revenue		800			1,852		583			860			371			4,434		6,248
Other		9			6		18			18			19			6		61
Total revenue		31,608			31,119		30,419			30,132			32,092			35,740		128,383
Total expenses		26,375			25,550		23,738			25,821			25,912			28,134		103,605
Income before interest income, equity in earnings in non-consolidated REITs and taxes		5,233			5,569		6,681			4,311			6,180			7,606		24,778
Interest income		8			9		36			36			16			9		97
Equity in earnings in non-consolidated REITs		253			380		792			443			475			284		1,994
Income before taxes		5,494			5,958		7,509			4,790			6,671			7,899		26,869
Income tax expense (benefit)		(68	)		4		(299	)		(75	)		(270	)		65		(579	)
Income from continuing operations		5,562			5,954		7,808			4,865			6,941			7,834		27,448
Income from discontinued operations		-			-		-			-			-			-		-
Gain on sale of assets		-			-		-			-			-			424		424
Net income	$	5,562		$	5,954	$	7,808		$	4,865		$	6,941		$	8,258	$	27,872

FFO+GOS*:
FFO	$	16,650	$	16,702	$	17,338	$	17,409	$	17,537	$	19,075	$	71,359
GOS		-		-		-		-		-		424		424
FFO+GOS	$	16,650	$	16,702	$	17,338	$	17,409	$	17,537	$	19,499	$	71,783
Per Share Data:
EPS	$	0.07	$	0.07	$	0.11	$	0.07	$	0.10	$	0.10	$	0.38
FFO		0.21		0.21		0.25		0.25		0.25		0.24		0.98
GOS		-		-		-		-		-		-		-
FFO+GOS		0.21		0.21		0.25		0.25		0.25		0.24		0.98
Weighted Aveage Shares (diluted)		79,681		79,681		70,481		70,481		71,281		79,681		73,001
Balance Sheet Items:
Real estate, net	$	916,955	$	935,530	$	839,826	$	869,557	$	926,555	$	921,833	$	921,833
Other assets, net		235,359		251,371		178,682		195,939		219,220		233,933		233,933
Total assets, net		1,152,314		1,186,901		1,018,508		1,065,496		1,145,775		1,155,766		1,155,766
Total liabilities, net		224,537		268,049		175,075		229,903		201,796		218,492		218,492
Shareholders' equity		927,777		918,852		843,433		835,593		943,979		937,274		937,274

* See page 27 for a reconciliation of Net Income to FFO and FFO+GOS and page 28 for definitions of FFO and FFO+GOS

June 30, 2010 6

   Management’s Key Operating Measures

* See page 27 for a reconciliation of Net Income to FFO and FFO+GOS (Total Profits) and page 28 for definitions of FFO and FFO+GOS

June 30, 2010 7

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

																	For the
	For the Three Months Ended																Year Ended
	31-Mar-10			30-Jun-10		31-Mar-09			30-Jun-09			30-Sep-09			31-Dec-09		31-Dec-09
Revenue:
Rental	$	30,799		$	29,261	$	29,818		$	29,254		$	31,702		$	31,300	$	122,074
Related party revenue:
Syndication fees		122			540		10			29			-			2,389		2,428
Transaction fees		146			753		28			514			1			1,537		2,080
Management fees and interest income from loans		532			559		545			317			370			508		1,740
Other		9			6		18			18			19			6		61
Total revenue		31,608			31,119		30,419			30,132			32,092			35,740		128,383
Expenses:
Real estate operating expenses		7,973			7,358		7,280			7,144			7,752			8,646		30,822
Real estate taxes and insurance		5,246			4,318		4,829			4,686			5,364			4,349		19,228
Depreciation and amortization		9,219			9,243		7,914			10,225			8,801			9,353		36,293
Selling, general and administrative		2,171			2,559		2,008			2,127			2,243			2,513		8,891
Commissions		114			336		130			40			8			1,623		1,801
Interest		1,652			1,736		1,577			1,599			1,744			1,650		6,570
Total expenses		26,375			25,550		23,738			25,821			25,912			28,134		103,605
Income before interest income, equity in earnings of non-consolidated REITs and taxes		5,233			5,569		6,681			4,311			6,180			7,606		24,778
Interest income		8			9		36			36			16			9		97
Equity in earnings of non-consolidated REITs		253			380		792			443			475			284		1,994
		5,494			5,958		7,509			4,790			6,671			7,899		26,869
Income tax expense (benefit)		(68	)		4		(299	)		(75	)		(270	)		65		(579	)
Income from continuing operations		5,562			5,954		7,808			4,865			6,941			7,834		27,448
Gain on sale of assets		-					-			-			-			424		424
Net income	$	5,562		$	5,954	$	7,808		$	4,865		$	6,941		$	8,258	$	27,872
Weighted average number of shares outstanding, basic and diluted		79,681			79,681		70,481			70,481			71,281			79,681		73,001
Earnings per share, basic and diluted, attributable to:
Continuing operations	$	0.07		$	0.07	$	0.11		$	0.07		$	0.10		$	0.10	$	0.38
Gains on sales of assets		-			-		-			-			-			-		-
Net income per share, basic and diluted	$	0.07		$	0.07	$	0.11		$	0.07		$	0.10		$	0.10	$	0.38

June 30, 2010 8

   EPS, FFO, GOS and FFO+GOS*

*See page 27 for a reconciliation of Net Income to FFO and FFO+GOS and page 28 for definitions of FFO and FFO+GOS

June 30, 2010 9

   Condensed Consolidated Balance Sheets (in thousands)

	March 31,			June 30,			March 31,			June 30,			September 30,			December 31,
	2010			2010			2009			2009			2009			2009
Assets:
Real estate assets:
Land	$	126,447			135,075		$	107,153		$	114,677		$	126,695		$	126,447
Buildings and improvements		895,671			912,153			812,470			840,605			891,918			894,012
Fixtures and equipment		354			458			299			310			310			328
		1,022,472			1,047,686			919,922			955,592			1,018,923			1,020,787
Less accumulated depreciation		105,517			112,156			80,096			86,035			92,368			98,954
Real estate assets, net		916,955			935,530			839,826			869,557			926,555			921,833
Acquired real estate leases, net		41,783			56,431			26,042			38,996			48,003			44,757
Investment in non-consolidated REITs		91,787			90,782			82,388			94,579			93,936			92,910
Assets held for syndication, net		2,791			-			13,004			-			-			4,827
Cash and cash equivalents		22,815			21,487			27,650			24,542			26,385			27,404
Restricted cash		50			59			336			335			331			334
Tenant rent receivables, net		1,385			900			1,084			720			1,400			1,782
Straight-line rent receivable, net		14,215			14,955			9,190			9,219			9,724			10,754
Prepaid expenses		2,236			2,280			2,253			2,267			3,430			2,594
Related party mortgage loan receivable		41,325			46,270			4,725			12,115			23,264			36,535
Other assets		1,220			1,620			1,517			2,271			1,860			1,228
Deferred leasing commissions, net		15,752			16,587			10,493			10,895			10,887			10,808
Total assets	$	1,152,314		$	1,186,901		$	1,018,508		$	1,065,496		$	1,145,775		$	1,155,766
Liabilities and Stockholders’ Equity:
Liabilities:
Bank note payable	$	119,968			162,968		$	72,468		$	124,038		$	91,008		$	109,008
Term loan payable		75,000			75,000			75,000			75,000			75,000			75,000
Accounts payable and accrued expenses		20,467			18,766			17,687			21,252			25,351			23,787
Accrued compensation		274			1,040			250			500			750			1,416
Tenant security deposits		1,696			2,004			1,795			1,765			1,757			1,808
Other liabilities: derivative termination value		1,995			1,735			3,080			2,394			2,269			2,076
Acquired unfavorable real estate leases, net		5,137			6,536			4,795			4,954			5,661			5,397
Total liabilities		224,537			268,049			175,075			229,903			201,796			218,492
Commitments and contingencies
Stockholders’ Equity:
Preferred stock		-			-			-			-			-			-
Common stock		8			8			7			7			8			8
Additional paid-in capital		1,003,712			1,003,712			889,019			889,019			1,003,729			1,003,713
Accumulated other comprehensive loss		(1,995	)		(1,735	)		(3,080	)		(2,394	)		(2,269	)		(2,076	)
Accumulated distributions in excess of accumulated earnings		(73,948	)		(83,133	)		(42,513	)		(51,039	)		(57,489	)		(64,371	)
Total stockholders’ equity		927,777			918,852			843,433			835,593			943,979			937,274
Total liabilities and stockholders’ equity	$	1,152,314		$	1,186,901		$	1,018,508		$	1,065,496		$	1,145,775		$	1,155,766

June 30, 2010  10

   Condensed Consolidated Statements of Cash Flows (in thousands)

	Six Months ended June 30						Twelve Months ended December 31
	2010			2009			2009			2008
Cash flows from operating activities:
Net income	$	11,516		$	12,673		$	27,872		$	31,959
Adjustments to reconcile net income to net cash         provided by  operating activities:
Gains on assets sold		-			-			(424	)		-
Depreciation and amortization expense		18,597			18,276			36,561			30,444
Amortization of above market lease		1,147			1,780			3,359			4,283
Equity in earnings (losses) from non-consolidated REITs		(633	)		(1,235	)		(2,012	)		(2,747	)
Distributions from non-consolidated REITs		2,731			3,137			5,628			5,348
Increase in bad debt reserve		480			111			111			79
Changes in operating assets and liabilities:
Restricted cash		275			1			2			-
Tenant rent receivables		402			498			(564	)		64
Straight-line rents		(1,759	)		(444	)		(1,879	)		(1,406	)
Prepaid expenses and other assets		(224	)		(943	)		907			(901	)
Accounts payable and accrued expenses		(4,139	)		482			2,760			448
Accrued compensation		(376	)		(1,154	)		(238	)		90
Tenant security deposits		196			(109	)		(66	)		-
Payment of deferred leasing commissions		(7,085	)		(1,557	)		(2,659	)		(3,353	)
Net cash provided by operating activities		21,128			31,516			69,358			64,308
Cash flows from investing activities:
Purchase of real estate assets, office computers and           furniture, capitalized merger costs and acquired real estate leases		(45,848	)		(56,135	)		(132,323	)		(78,396	)
Investment in non-consolidated REITs		-			(13,198	)		(13,218	)		(10	)
Investment in related party mortgage loan receivable		(9,735	)		(10,990	)		(35,410	)		(1,125	)
Changes in deposits on real estate assets		-			1,300			-			(1,300	)
Investment in assets held for syndication, net		4,858			13,017			8,159			12,236
Proceeds received on sales of real estate assets		-			-			672			-
Net cash used in investing activities		(50,725	)		(66,006	)		(172,120	)		(68,595	)
Cash flows from financing activities:
Distributions to stockholders		(30,279	)		(26,782	)		(55,313	)		(70,481	)
Proceeds from equity offering, net		(1	)		-			114,695			-
Borrowings under bank note payable, net		53,960			56,570			41,540			(17,282	)
Borrowings under term note payable		-			-			-			75,000
Deferred financing costs		-			-			-			(694	)
Net cash (used in) provided by financing activities		23,680			29,788			100,922			(13,457	)
Net decreases in cash and cash equivalents		(5,917	)		(4,702	)		(1,840	)		(17,744	)
Cash and cash equivalents, beginning of period		27,404			29,244			29,244			46,988
Cash and cash equivalents, end of period	$	21,487		$	24,542		$	27,404		$	29,244

June 30, 2010  11

   Segment Information* ($ in thousands except per share amounts)

	Three Months Ended June 30, 2010									Six Months Ended June 30, 2010									Three Months Ended June 30, 2009									Six Months Ended June 30, 2009
	Real			Investment						Real			Investment						Real			Investment						Real			Investment
	Estate			Banking			Total			Estate			Banking			Total			Estate			Banking			Total			Estate			Banking			Total
Revenue:
Rental Income	$	29,261		$	-		$	29,261		$	60,060		$	-		$	60,060		$	29,254		$	-		$	29,254		$	59,072		$	-		$	59,072
Syndication Fees		-			541			541			-			662			662			-			28			28			-			39			39
Transaction Fees		-			753			753			-			899			899			-			514			514			-			542			542
Management Fees & Interest Income		558			-			558			1,091			-			1,091			317			-			317			862			-			862
Other Income		6			-			6			15			-			15			18			-			18			36			-			36
Total Revenue		29,825			1,294			31,119			61,166			1,561			62,727			29,589			542			30,131			59,970			581			60,551
Expenses
Rental Operating Expenses		7,356			2			7,358			15,328			3			15,331			7,144			-			7,144			14,424			-			14,424
Real Estate Taxes and Insurance		4,318			-			4,318			9,564			-			9,564			4,686			-			4,686			9,515			-			9,515
Depreciaton and Amortization		9,204			39			9,243			18,390			72			18,462			10,200			25			10,225			18,088			51			18,139
Selling, general  and administrative		1,853			706			2,559			3,301			1,429			4,730			1,163			964			2,127			2,146			1,989			4,135
Commissions and  Broker Expenses		-			336			336			-			450			450			-			40			40			-			170			170
Interest & Commitment Fees		1,736			-			1,736			3,388			-			3,388			1,598			-			1,598			3,176			-			3,176
Total Expenses		24,467			1,083			25,550			49,971			1,954			51,925			24,791			1,029			25,820			47,349			2,210			49,559
Income before Equity, Interest and Taxes		5,358			211			5,569			11,195			(393	)		10,802			4,798			(487	)		4,311			12,621			(1,629	)		10,992
Interest Income		9			-			9			17			-			17			34			2			36			69			3			72
Equity Income SARs		380			-			380			633			-			633			443			-			443			1,235			-			1,235
Income before Taxes		5,747			211			5,958			11,845			(393	)		11,452			5,275			(485	)		4,790			13,925			(1,626	)		12,299
Income Taxes		56			(52	)		4			113			(177	)		(64	)		63			(138	)		(75	)		128			(502	)		(374	)
Net Income (loss)	$	5,691		$	263		$	5,954		$	11,732		$	(216	)	$	11,516		$	5,212		$	(347	)	$	4,865		$	13,797		$	(1,124	)	$	12,673
Funds From Operations (FFO)*
Net Income	$	5,691		$	263		$	5,954		$	11,732		$	(216	)	$	11,516		$	5,212		$	(347	)	$	4,865		$	13,797		$	(1,124	)	$	12,673
Gain on sale of assets, net		-			-			-			-			-			-			-			-			-			-			-			-
Equity in income of SARs		(380	)		-			(380	)		(633	)		-			(633	)		(443	)		-			(443	)		(1,235	)		-			(1,235	)
Cash received from SARs		1,324			-			1,324			2,731			-			2,731			1,523			-			1,523			3,138			-			3,138
Acquisition costs		129			-			129			129			-			129			248			-			248			248			-			248
Depreciation and amortization		9,636			39			9,675			19,537			72			19,609			11,191			25			11,216			19,872			51			19,923
Funds From Operations (FFO)*		16,400			302			16,702			33,496			(144	)		33,352			17,731			(322	)		17,409			35,820			(1,073	)		34,747
EPS	$	0.07		$	0.00		$	0.07		$	0.15		$	(0.00	)	$	0.14		$	0.07		$	(0.00	)	$	0.07		$	0.20		$	(0.02	)	$	0.18
FFO per Share*	$	0.21		$	0.00		$	0.21		$	0.42		$	(0.00	)	$	0.42		$	0.25		$	(0.00	)	$	0.25		$	0.51		$	(0.02	)	$	0.49
Weighted Average Shares								79,681									79,681									70,481									70,481

*See page 27 for a reconciliation of Net Income to FFO and FFO+GOS and page 28 for definitions of FFO and FFO+GOS

June 30, 2010  12

   Segment Information* ($ in thousands except per share amounts)

	Year Ended December 31, 2009									Year Ended December 31, 2008									Year Ended December 31, 2007
	Real			Investment						Real			Investment						Real			Investment
	Estate			Banking			Total			Estate			Banking			Total			Estate			Banking		Total
Revenue:
Rental Income	$	122,074		$	-		$	122,074		$	111,198		$	-		$	111,198		$	100,961		$	-	$	100,961
Syndication Fees		-			2,428			2,428			-			3,766			3,766			-			8,986		8,986
Transaction Fees		-			2,080			2,080			-			3,641			3,641			-			9,898		9,898
Management Fees & Interest Income		1,740			-			1,740			1,739			-			1,739			7,026			4		7,030
Other Income		61			-			61			72			-			72			83			35		118
Total Revenue		123,875			4,508			128,383			113,009			7,407			120,416			108,070			18,923		126,993
Expenses
Rental Operating Expenses		30,822			-			30,822			28,999			-			28,999			26,171			-		26,171
Real Estate Taxes and Insurance		19,228			-			19,228			17,740			-			17,740			16,535			-		16,535
Depreciaton and Amortization		36,170			123			36,293			30,222			138			30,360			29,200			134		29,334
Selling, general  and administrative		4,828			4,063			8,891			4,229			4,039			8,268			3,440			4,026		7,466
Commissions and  Broker Expenses		-			1,801			1,801			100			2,051			2,151			-			4,737		4,737
Interest & Commitment Fees		6,570			-			6,570			4,921			-			4,921			7,684			-		7,684
Total Expenses		97,618			5,987			103,605			86,211			6,228			92,439			83,030			8,897		91,927
Income before Equity, Interest and Taxes		26,257			(1,479	)		24,778			26,798			1,179			27,977			25,040			10,026		35,066
Interest Income		93			4			97			709			36			745			2,317			60		2,377
Equity Income SARs		1,994			-			1,994			2,747			-			2,747			(464	)		-		(464	)
Income before Taxes		28,344			(1,475	)		26,869			30,254			1,215			31,469			26,893			10,086		36,979
Income Taxes		249			(828	)		(579	)		246			(736	)		(490	)		226			647		873
Income from continuing operations		28,095			(647	)		27,448			30,008			1,951			31,959			26,667			9,439		36,106
Income from discontinued operations		-			-			-			-			-			-			1,190			-		1,190
Gain on sale of assets		424			-			424			-			-			-			23,789			-		23,789
Net Income	$	28,519		$	(647	)	$	27,872		$	30,008		$	1,951		$	31,959		$	51,646		$	9,439	$	61,085
Funds From Operations (FFO)*
Net Income	$	28,519		$	(647	)	$	27,872		$	30,008		$	1,951		$	31,959		$	51,646		$	9,439	$	61,085
Gain on sale of assets, net		(424	)		-			(424	)		-			-			-			(23,789	)		-		(23,789	)
Equity in income of SARs		(2,012	)		-			(2,012	)		(2,747	)		-			(2,747	)		472			-		472
Cash received from SARs		5,628			-			5,628			5,348			-			5,348			1,806			-		1,806
		643			-			643			-			-			-			-			-		-
Depreciation and amortization		39,529			123			39,652			34,505			138			34,643			35,340			135		35,475
Funds From Operations (FFO)*		71,883			(524	)		71,359			67,114			2,089			69,203			65,475			9,574		75,049
EPS	$	0.39		$	(0.01	)	$	0.38		$	0.43		$	0.03		$	0.45		$	0.73		$	0.13	$	0.86
FFO per Share*	$	0.98		$	-		$	0.98		$	0.95		$	0.03		$	0.98		$	0.93		$	0.14	$	1.06
Weighted Average Shares								73,001									70,481								70,651

*See page 27 for a reconciliation of Net Income to FFO and FFO+GOS and page 28 for definitions of FFO and FFO+GOS

June 30, 2010 13

   Property Net Operating Income (NOI):
Cash and GAAP Basis (in thousands)

Property NOI Cash*
			Three Months Ended				Year to date 2010		Three Months Ended								Year Ended
		30-Jun-10
Region	Division	Sq Feet	31-Mar-10		30-Jun-10		2010 Total		31-Mar-09		30-Jun-09		30-Sep-09		31-Dec-09		2009 Total
Eastern	Mideast	1,538	$	4,031	$	4,390	$	8,421	$	3,740	$	3,803	$	4,401	$	4,839	$	16,783
Midwest	East North Central	597		1,103		1,574		2,677		1,524		1,578		1,108		1,129		5,339
	West North Central	1,104		2,034		2,000		4,034		1,689		1,758		2,653		1,867		7,967
		1,701		3,137		3,574		6,711		3,213		3,336		3,761		2,996		13,306
South	Southeast	600		2,307		2,251		4,558		2,220		2,213		2,353		2,138		8,924
	Southwest	1,489		4,234		4,238		8,472		5,203		4,953		4,718		4,370		19,244
		2,089		6,541		6,489		13,030		7,423		7,166		7,071		6,508		28,168
West	Mountain	792		3,254		2,212		5,466		3,194		3,519		3,003		3,126		12,842
	Pacific	299		443		491		934		375		311		460		364		1,510
		1,091		3,697		2,703		6,400		3,569		3,830		3,463		3,490		14,352
Total		6,419	$	17,406	$	17,156	$	34,562	$	17,945	$	18,135	$	18,696	$	17,833	$	72,609
Property NOI GAAP*
			Three Months Ended				Year to date 2010		Three Months Ended								Year Ended
		30-Jun-10
Region	Division	Sq Feet	31-Mar-10		30-Jun-10		2010 Total		31-Mar-09		30-Jun-09		30-Sep-09		31-Dec-09		2009 Total
Eastern	Mideast	1,538	$	4,666	$	5,002	$	9,668	$	3,749	$	3,726	$	4,483	$	5,232	$	17,190
Midwest	East North Central	597		1,110		1,602		2,712		1,570		1,592		1,161		1,191		5,514
	West North Central	1,104		2,164		2,106		4,270		1,606		1,667		2,626		2,016		7,915
		1,701		3,274		3,708		6,982		3,176		3,259		3,787		3,207		13,429
South	Southeast	600		2,356		2,355		4,711		2,391		2,343		2,477		2,245		9,456
	Southwest	1,489		4,404		4,395		8,799		5,265		4,828		4,820		4,643		19,556
		2,089		6,760		6,750		13,510		7,656		7,171		7,297		6,888		29,012
West	Mountain	792		3,229		2,502		5,731		3,334		3,548		3,019		3,114		13,015
	Pacific	299		497		533		1,030		404		339		515		425		1,683
		1,091		3,726		3,035		6,761		3,738		3,887		3,534		3,539		14,698
Total		6,419	$	18,426	$	18,495	$	36,921	$	18,319	$	18,043	$	19,101	$	18,866	$	74,329

*See page 31 for a reconciliation and definition of Net Income to Property NOI cash and Property NOI GAAP.

June 30, 2010  14

   Capital Analysis (in thousands, except per share amounts)

	31-Mar-10			30-Jun-10			31-Mar-09			30-Jun-09			30-Sep-09			31-Dec-09
Market Data:
Shares Outstanding		79,681			79,681			70,481			70,481			79,681			79,681
Closing market price per share	$	14.43		$	11.81		$	12.30		$	13.25		$	13.10		$	14.61
Market capitalization	$	1,149,793		$	941,029		$	866,913		$	933,869		$	1,043,817		$	1,164,135
Dividend Data:
Total dividends paid	$	15,139		$	15,140		$	13,391		$	13,391		$	13,391		$	15,140
Common dividend per share	$	0.19		$	0.19		$	0.19		$	0.19		$	0.19		$	0.19
Quarterly dividend as a % of FFO*		91	%		91	%		76	%		76	%		76	%		79	%
Liquidity:
Cash and cash equivalents	$	22,815		$	21,487		$	27,650		$	24,542		$	26,385		$	27,404
Revolving credit facilities:
Gross potential available under current credit facilities		250,000			250,000			250,000			250,000			250,000			250,000
Less:
Outstanding balance		(119,968	)		(162,968	)		(72,468	)		(124,038	)		(91,008	)		(109,008	)
Total Liquidity	$	152,847		$	108,519		$	205,182		$	150,504		$	185,377		$	168,396

*See page 27 for a reconciliation of Net Income to FFO and FFO+GOS and page 28 for definitions of FFO and FFO+GOS

June 30, 2010  15

   Portfolio Overview

	30-Jun-10	31-Mar-10	31-Dec-09	30-Sep-09	30-Jun-09	31-Mar-09
Owned portfolio of commercial real estate:
Number of properties	33	32	32	32	31	29
Square feet	6,418,835	5,942,299	5,942,414	5,934,624	5,682,011	5,417,515
Leased percentage	85%	85%	84%	90%	92%	93%
Investments in non-consolidated commercial real estate:
Number of properties	3	3	3	3	3	2
Square feet	1,998,519	1,995,041	1,995,041	1,995,041	1,994,686	1,461,224
Leased percentage	77%	78%	78%	78%	78%	79%
Single Asset REITs (SARs) managed:
Number of properties	11	11	11	9	9	10
Square feet *	2,406,370	2,406,370	2,406,370	2,155,201	2,154,079	2,684,561
Leased percentage*	76%	76%	91%	90%	87%	88%
Total owned, investments and managed properties:
Number of properties	47	46	46	44	43	41
Square feet *	10,823,724	10,343,710	10,343,825	10,084,866	9,830,776	9,563,300
Leased percentage*	82%	82%	85%	88%	88%	90%

*Excludes a property to be constructed with approximately 285,000 square feet

June 30, 2010  16

   Regional Analysis and Map (as of June 30, 2010)

Owned:
Name	City	State	Region	Square Feet
Park Seneca	Charlotte	NC	East	109,550
Forest Park	Charlotte	NC	East	62,212
Meadow Point	Chantilly	VA	East	138,538
Stonecroft	Chantilly	VA	East	111,469
Fairview	Falls Church	VA	East	252,613
Innsbrook	Glen Allen	VA	East	303,745
East Baltimore	Baltimore	MD	East	325,445
Loudoun Tech Center	Dulles	VA	East	135,888
Bollman Place (1)	Savage	MD	East	98,745
Southfield Centre	Southfield	MI	MidWest	214,697
Northwest Point	Elk Grove Village	IL	MidWest	176,848
River Crossing	Indianapolis	IN	MidWest	205,059
Timberlake	Chesterfield	MO	MidWest	232,766
Timberlake East	Chesterfield	MO	MidWest	116,197
Lakeside Crossing	Maryland Heights	MO	MidWest	127,778
Eden Bluff	Eden Prairie	MN	MidWest	153,028
121 South 8th Street	Minneapolis	MN	MidWest	474,646
Blue Lagoon Drive	Miami	FL	South	212,619
One Overton Place	Atlanta	GA	South	387,267
Willow Bend Office Center	Plano	TX	South	116,622
Park Ten	Houston	TX	South	155,715
Addison Circle	Addison	TX	South	293,787
Collins Crossing	Richardson	TX	South	298,766
Eldridge Green	Houston	TX	South	248,399
Park Ten Phase II	Houston	TX	South	156,746
Liberty Plaza	Addison	TX	South	218,934
Centennial Technology Center	Colorado Springs	CO	West	110,730
380 Interlocken	Broomfield	CO	West	240,184
Greenwood Plaza	Englewood	CO	West	199,077
390 Interlocken	Broomfield	CO	West	241,516
Hillview Center	Milpitas	CA	West	36,288
Federal Way	Federal Way	WA	West	117,010
Montague Business Center	San Jose	CA	West	145,951
Total				6,418,835
Managed:
Name	City	State	Region	Square Feet
1441 Main Street	Columbia	SC	East	267,956
303 East Wacker Drive	Chicago	IL	MidWest	847,559
505 Waterford	Plymouth	MN	MidWest	256,348
50 South Tenth Street	Minneapolis	MN	MidWest	498,768
Grand Boulevard	Kansas City	MO	MidWest	532,453
Lakeside Crossing II	Maryland Heights	MO	MidWest	116,000
Centre Pointe V	West Chester	OH	MidWest	135,936
Satellite Place	Duluth	GA	South	134,785
5601 Executive Drive	Irving	TX	South	152,121
Galleria North	Dallas	TX	South	379,518
Energy Tower I	Houston	TX	South	325,796
Phoenix Tower	Houston	TX	South	618,507
Highland Place I	Centennial	CO	West	139,142
Total (2)				4,404,889

(1) Industrial property, all others are office properties

(2) Excludes property under construction in Broomfield, Co of approximately 285,000 square feet

Properties by Division/Region
($ in thousands)
				NBV (a)	% Leased
	# of Properties	Square Feet	% of Portfolio	31-Mar-10	30-Jun-10
East Region Total	9	1,538,205	24.0	$  235,582	82.6%
East North Central Division	3	596,604	9.3	80,256	82.5%
West North Central	5	1,104,415	17.2	109,544	95.4%
Midwest Region Total	8	1,701,019	26.5	189,800	90.9%
Southeast	2	599,886	9.3	122,063	94.5%
Southwest	7	1,488,969	23.2	225,711	85.9%
South Region Total	9	2,088,855	32.5	347,774	88.4%
Mountain	4	791,507	12.3	126,577	75.9%
Pacific	3	299,249	4.7	35,797	72.0%
West Region Total	7	1,090,756	17.0	162,374	74.8%
Grand Total	33	6,418,835	100.0	$  935,530	85.3%

(a) NBV is for real estate assets, excluding intangibles

June 30, 2010  17

   Owned Property List (in thousands)

		(in thousands)				NBV (1)	% Leased
Region	Division	Name	City	State	S.F.	30-Jun-10	30-Jun-10
West	Pacific	Hillview Center	Milpitas	CA	36	4,210	100.0%
West	Pacific	Montague	San Jose	CA	146	17,053	100.0%
West	Mountain	380 Interlocken	Broomfield	CO	240	42,718	89.7%
West	Mountain	390 Interlocken	Broomfield	CO	241	42,949	98.3%
West	Mountain	Centennial Technology Center	Colorado Springs	CO	111	11,696	78.5%
West	Mountain	Greenwood Plaza	Englewood	CO	199	29,214	30.6%
South	Southeast	Blue Lagoon Drive	Miami	FL	213	47,588	100.0%
South	Southeast	One Overton Place	Atlanta	GA	387	74,475	91.5%
MidWest	East North Central	Northwest Point	Elk Grove Village	IL	177	29,446	100.0%
MidWest	East North Central	River Crossing	Indianapolis	IN	205	36,136	94.7%
East	Mideast	East Baltimore	Baltimore	MD	325	55,889	95.3%
East	Mideast	Bollman Place	Savage	MD	99	4,969	100.0%
MidWest	East North Central	Southfield Centre	Southfield	MI	215	14,674	56.4%
MidWest	West North Central	Eden Bluff - Eden Prairie	Eden Prairie	MN	153	14,478	100.0%
MidWest	West North Central	121 South 8th Street	Minneapolis	MN	474	23,842	89.8%
MidWest	West North Central	Timberlake	Chesterfield	MO	233	35,718	99.0%
MidWest	West North Central	Timberlake East	Chesterfield	MO	116	18,069	100.0%
MidWest	West North Central	Lakeside Crossing	Maryland Heights	MO	128	17,437	100.0%
East	Mideast	Park Seneca	Charlotte	NC	110	7,623	84.4%
East	Mideast	Forest Park	Charlotte	NC	62	6,322	100.0%
South	Southwest	Addison Circle	Addison	TX	294	47,509	92.7%
South	Southwest	Liberty Plaza	Addison	TX	219	25,029	78.0%
South	Southwest	Park Ten	Houston	TX	156	18,710	49.8%
South	Southwest	Eldridge Green	Houston	TX	248	43,060	100.0%
South	Southwest	Park Ten Phase II	Houston	TX	157	31,310	97.8%
South	Southwest	Willow Bend Office Center	Plano	TX	117	17,858	49.8%
South	Southwest	Collins Crossing	Richardson	TX	299	42,235	100.0%
East	Mideast	Meadow Point	Chantilly	VA	138	20,901	80.6%
East	Mideast	Stonecroft	Chantilly	VA	111	19,643	100.0%
East	Mideast	Loudoun Tech Center	Dulles	VA	136	17,587	100.0%
East	Mideast	Fairview	Falls Church	VA	253	60,972	100.0%
East	Mideast	Innsbrook	Glen Allen	VA	304	41,678	31.3%
West	Pacific	Federal Way	Federal Way	WA	117	14,535	28.3%
					6,419	$   935,530	85.3%
		(1) NBV is for real estate assets, excluding intangibles

June 30, 2010  18

   Properties with Annualized Rent per Square Foot

							Percentage		Average
				Year Built			Leased	Annualized Rent	Annualized
				or	Net Rentable	Leased	as of June 30,	as of June 30,	Rent per Leased
Property Name	City	State	Type	Renovated	Square Feet	Sq. Ft.	2010 (a)	2010 (b)	Square Feet (c)
Park Seneca	Charlotte	NC	Office	1969	109,550	92,445	84.4%	1,520,961	$   16.45
Forest Park	Charlotte	NC	Office	1999	62,212	62,212	100.0%	987,940	15.88
Meadow Point	Chantilly	VA	Office	1999	138,538	111,646	80.6%	1,670,411	14.96
Innsbrook	Glen Allen	VA	Office	1999	303,745	95,102	31.3%	1,581,537	16.63
East Baltimore	Baltimore	MD	Office	1989	325,445	310,028	95.3%	8,116,512	26.18
Loudoun Tech Center	Dulles	VA	Office	1999	135,888	135,888	100.0%	1,736,340	12.78
Bollman Place	Savage	MD	Industrial	1984	98,745	98,745	100.0%	611,232	6.19
Stonecroft	Chantilly	VA	Office	2008	111,469	111,469	100.0%	4,043,600	36.28
Fairview Park	Falls Church	VA		2001	252,613	252,613	100.0%	6,644,676	26.30
East total					1,538,205	1,270,148	82.6%	26,913,208	21.19
Southfield Centre	Southfield	MI	Office	1977	214,697	121,156	56.4%	1,310,319	10.82
Northwest Point	Elk Grove Village	IL	Office	1999	176,848	176,848	100.0%	3,334,487	18.86
River Crossing	Indianapolis	IN	Office	1998	205,059	194,246	94.7%	4,895,756	25.20
Timberlake	Chesterfield	MO	Office	1999	232,766	230,347	99.0%	4,695,332	20.38
Timberlake East	Chesterfield	MO	Office	2000	116,197	116,197	100.0%	2,688,502	23.14
Lakeside Crossing	Sl. Louis	MO	Office	2008	127,778	127,778	100.0%	3,011,727	23.57
Eden Bluff	Eden Praire	MN	Office	2006	153,028	153,028	100.0%	3,977,266	25.99
121 South 8th Street	Minneapolis	MN	Office	1974	474,646	426,152	89.8%	6,393,830	15.00
Midwest total					1,701,019	1,545,752	90.9%	30,307,219	19.61
Blue Lagoon Drive	Miami	FL	Office	2002	212,619	212,619	100.0%	4,505,691	21.19
One Overton Place	Atlanta	GA	Office	2002	387,267	354,214	91.5%	9,065,401	25.59
Willow Bend Office Center	Plano	TX	Office	1999	116,622	58,071	49.8%	1,247,052	21.47
Park Ten	Houston	TX	Office	1999	155,715	77,478	49.8%	1,911,977	24.68
Addison Circle	Addison	TX	Office	1999	293,787	272,364	92.7%	5,270,510	19.35
Collins Crossing	Richardson	TX	Office	1999	298,766	298,766	100.0%	7,603,669	25.45
Eldridge Green	Houston	TX	Office	1999	248,399	248,399	100.0%	7,075,482	28.48
Park Ten Phase II	Houston	TX	Office	2006	156,746	153,326	97.8%	4,000,102	26.09
Liberty Plaza	Addison	TX	Office	1985	218,934	170,776	78.0%	3,305,972	19.36
South Total					2,088,855	1,846,013	88.4%	43,985,855	23.83
Centennial Technology Center	Colorado Springs	CO	Office	1999	110,730	86,910	78.5%	1,382,703	15.91
380 Interlocken	Broomfield	CO	Office	2000	240,184	215,423	89.7%	6,713,714	31.17
Greenwood Plaza	Englewood	CO	Office	2000	199,077	60,899	30.6%	852,947	14.01
390 Interlocken	Broomfield	CO	Office	2002	241,516	237,518	98.3%	4,872,731	20.52
Hillview Center	Milpitas	CA	Office	1984	36,288	36,288	100.0%	544,262	15.00
Federal Way	Federal Way	WA	Office	1982	117,010	33,165	28.3%	592,507	17.87
Montague Business Center	San Jose	CA	Office	1982	145,951	145,951	100.0%	2,184,672	14.97
West Total					1,090,756	816,154	74.8%	17,143,536	21.01
Grand Total					6,418,835	5,478,067	85.3%	$  118,349,818	$   21.60

(a) Based on all leases in effect, including month-to-month tenants, divided by the Property's net rentable square footage.

(b) Represents gross rental charges for the month of June 2010 (including month-to-month leases) multiplied by 12, which can result in unusual per square foot amounts calculated when there are free rent periods (usually with new leases).

(c) Represents the annualized rent as of June 2010 divided by leased square feet.

June 30, 2010  19

   Owned Property Capital Expenditures (in thousands)

													Year
	For the Three Months Ended												Ended
	31-Mar-10		30-Jun-10		31-Mar-09		30-Jun-09		30-Sep-09		31-Dec-09		31-Dec-09
Tenant improvements	$	1,305	$	935	$	1,373	$	912	$	931	$	1,528	$	4,744
Deferred leasing costs		5,566		1,519		162		1,395		645		457		2,659
Building improvements		380		498		466		116		265		619		1,466
Total	$	7,251	$	2,952	$	2,001	$	2,423	$	1,841	$	2,604	$	8,869

June 30, 2010 20

   20 Largest Tenants with Annualized Rent
and Remaining Term

			Remaining	Aggregate	% of Aggregate	Annualized	% of
	Tenant	Number of	Lease Term	Leased	Leased	Rent (a)	Aggregate
	Name	Leases	in Months	Square Feet	Square Feet	(in 000's)	Annualized Rent
1	TCF National Bank (1)	2	66	254,771	4.0%	$   2,628	2.2%
2	Noblis, Inc.	1	79	252,613	3.9%	6,645	5.6%
3	CITGO Petroleum Corporation (2)	1	140	248,399	3.9%	7,075	6.0%
4	Tektronix Texas, LLC (3)	1	-	241,372	3.8%	6,277	5.3%
5	Burger King Corporation	1	99	212,619	3.3%	4,506	3.8%
6	Citicorp Credit Services, Inc.	1	78	176,848	2.8%	3,334	2.8%
7	RGA Reinsurance Company	1	54	185,501	2.9%	3,645	3.1%
8	C.H. Robinson Worldwide, Inc.	1	132	153,028	2.4%	3,977	3.4%
9	Geisecke & Devrient America, Inc.	1	56	135,888	2.1%	1,736	1.5%
10	Murphy Exploration & Production Company	1	82	133,786	2.1%	3,515	3.0%
11	Monsanto Company	1	55	127,778	2.0%	3,012	2.5%
12	Vail Holdings, Inc. (4)	1	153	121,913	1.9%	1,718	1.5%
13	Northrop Grumman Information Technology, Inc.	1	94	111,469	1.7%	4,044	3.4%
14	Maines Paper & Food Service, Inc.	1	41	98,745	1.5%	611	0.5%
15	Federal Nation Mortgage Association (5)	1	38	92,358	1.4%	585	0.5%
16	Amdocs, Inc.	1	11	91,928	1.4%	2,139	1.8%
17	County of Santa Clara	1	90	90,467	1.4%	1,347	1.1%
18	Ober, Kaler, Grimes & Shriver	1	9	88,736	1.4%	2,470	2.1%
19	International Business Machines Corp.	1	25	83,209	1.3%	978	0.8%
20	Corporate Holdings, LLC	1	45	81,818	1.3%	2,201	1.9%
	Total Square Footage			2,983,246	46.5%	$ 62,443	52.8%

(a) Annualized rent represents the monthly rent, including tenant reimbursements, for each lease in effect at June 30, 2010 multiplied by 12.  Tenant reimbursements generally include payment of real estate taxes, operating expenses and common area maintenance and utility charges.

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

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

(3) Tektronix vacated this space on June 30, 2010.  Approximately 29,000 square feet had been subleased to ARGO Data Resource Corporation (ARGO), which went direct with FSP.  As of July 1, 2010 ARGO has an aggregate of approximately 84,000 square feet leased through August 31, 2016.

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

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

June 30, 2010 21

   Tenant Analysis – 20 Largest Tenants, Industry Profile (as a % of square feet at June 30, 2010)

June 30, 2010 22

   Lease Expirations by Square Feet (as of June 30, 2010)

Year	Total Square Feet	% of Square Feet Commercial
2010	534,650	8.3%
2011	474,992	7.4%
2012	499,704	7.8%
2013	519,238	8.1%
2014	587,387	9.1%
2015	776,152	12.1%
2016	505,561	7.9%
2017	523,658	8.2%
2018	394,913	6.1%
2019	43,392	0.7%
2020	92,253	1.4%
2021	194,148	3.0%
2022	248,399	3.9%
2023	83,620	1.3%
Vacant	940,768	14.7%
Total	6,418,835	100.0%

June 30, 2010 23

   Lease Expirations with Annualized Rent per Square Foot

			Rentable			Annualized	Percentage
	Number of		Square			Rent	of Total Final
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		Leases		Leases (a)	Leases	Leases	Total
2010	68	(b)		534,650	12,632,425	23.63	10.7%	10.7%
2011	53			474,992	10,895,990	22.94	9.2%	19.9%
2012	55			499,704	10,805,508	21.62	9.1%	29.0%
2013	45			519,238	8,120,153	15.64	6.9%	35.9%
2014	29			587,387	13,258,266	22.57	11.2%	47.1%
2015	25			776,152	12,763,430	16.44	10.8%	57.9%
2016	10			505,561	11,804,159	23.35	10.0%	67.8%
2017	6			523,658	12,560,759	23.99	10.6%	78.4%
2018	5			394,913	10,429,443	26.41	8.8%	87.3%
2019	2			43,392	865,374	19.94	0.7%	88.0%
2020 and thereafter	9			618,420	14,214,312	22.98	12.0%	100.0%
	307			5,478,067	118,349,818	21.60	100.0%
Vacancies as of 6/30/10				940,768
Total Portfolio Square Footage				6,418,835

(a) Annualized rent represents the monthly rent, including tenant reimbursements, for each lease in effect at June 30, 2010 mulitplied by 12.  Tenant reimbursements generally include payment of real estate taxes, operating expenses and common area maintenance and utility charges.

(b) 35 Leases are Month-to-Month

June 30, 2010 24

   Capital Recycling ($ in thousands)

Acquisitions:
	State/Region	Property Type	Square Feet	Date Acquired	Purchase Price
2010
121 South 8th Street	MN/Midwest	Office	474,646	6/29/10	$      39,405
2009
Stonecroft-Chantilly	VA/East	Office	111,469	6/26/09	29,000
Eden Bluff - Eden Prairie	MN/Midwest	Office	153,028	6/30/09	22,784
Fairview	VA/East	Office	252,613	9/30/09	73,000
2008
Park Ten Phase II	TX/South	Office	156,746	5/15/08	35,079
Lakeside Crossing	MO/Midwest	Office	127,778	12/11/08	20,003
Loudoun Tech Center	VA/East	Office	135,888	12/23/08	18,628
2007
East Baltimore	MD/East	Office	325,298	6/13/07	63,592
2006
Liberty Plaza	TX/South	Office	218,934	2/24/06	26,472
Innsbrook	VA/East	Office	297,789	5/1/06	48,240
380 Interlocken	CO/West	Office	240,184	5/1/06	47,587
Blue Lagoon Drive	FL/South	Office	212,619	5/1/06	56,051
Eldridge Green	TX/South	Office	248,399	5/1/06	53,435
Willow Bend Office Center	TX/South	Office	116,622	5/1/06	19,713
One Overton Place	GA/South	Office	387,267	6/27/06	85,284
390 Interlocken	CO/West	Office	241,516	12/21/06	46,459
2005
Greenwood Plaza	CO/West	Office	199,077	2/24/05	44,116
Addison Circle	TX/South	Office	293,787	5/1/05	56,295
Royal Ridge	GA/South	Office	161,366	5/1/05	27,391
Collins Crossing	TX/South	Office	298,766	5/1/05	53,667
Montague Business Center	CA/West	Office	145,951	5/1/05	20,147
River Crossing	IN/Midwest	Office	205,059	7/6/05	42,016
Dispositions:
					Net Sales	Gain (Loss)
2007	State/Region	Property Type	Square Feet	Date Sold	Proceeds	on Sale
Piedmont Center	SC/East	Office	144,029	1/31/07	$     5,830	$     (4,849)
Royal Ridge	GA/South	Office	161,366	6/21/07	32,535	6,601
Goldentop Technology Center	CA/West	Office	141,405	6/27/07	36,199	14,741
Lyberty Way	MA/East	Office	104,711	7/16/07	10,861	1,942
Austin N.W. (Canyon Hills)	TX/South	Office	68,533	12/20/07	10,429	257
2006
Merrywood Apartments	TX/South	Apt	231,363	5/24/06	18,204	2,373
Santa Clara	CA/West	Office	40,280	5/31/06	8,188	1,557
Fair Lakes	VA/East	Office	210,613	5/31/06	61,412	24,240
One Technology Drive	MA/East	Industrial	188,000	8/10/06	15,995	6,366
Plaza Ridge	VA/East	Office	158,016	11/16/06	58,022	27,941
North Andover Office Park	MA/East	Office	92,913	11/21/06	11,362	3,810
2005
Blue Ravine	CA/West	Office	47,058	7/13/05	4,764	(1,124)
Silverside Plantation	LA/South	Apt	223,812	9/19/05	22,280	7,265
Gateway Crossing	MD/East	Office	188,819	9/20/05	25,949	6,807
Essex Lane Associates	TX/South	Apt	118,798	10/5/05	13,752	5,112
Gael Apartments	TX/South	Apt	187,338	10/5/05	22,715	5,151
Telecom Business Center	CA/West	Office	101,726	12/8/05	22,570	6,943

June 30, 2010 25

   Investment Banking Performance

June 30, 2010 26

   FFO and FFO+GOS Reconciliations (in thousands, except per share amounts)

	For the three months ended																		For the year ended
	31-Mar-10			30-Jun-10			31-Mar-09			30-Jun-09			30-Sep-09			31-Dec-09			2009			2008			2007
Net income	$	5,562		$	5,954		$	7,808		$	4,865		$	6,941		$	8,258		$	27,872		$	31,958		$	61,085
(Gain) Loss on sale of assets		-			-			-			-			-			(424	)		(424	)		-			(23,789	)
GAAP income from non-consolidated REITs		(253	)		(380	)		(792	)		(443	)		(475	)		(301	)		(2,011	)		(2,746	)		472
Distributions from non-consolidated REITs		1,407			1,324			1,615			1,523			1,119			1,371			5,628			5,348			1,806
Acquisition costs		-			129			-			248			391			4			643			-			-
Depreciation & amortization		9,934			9,675			8,707			11,216			9,561			10,167			39,651			34,644			35,475
Funds From Operations (FFO)		16,650			16,702			17,338			17,409			17,537			19,075			71,359			69,204			75,049
Plus gains on sales of assets (GOS)		-			-			-			-			-			424			424			-			23,789
FFO+GOS (Total Profits)	$	16,650		$	16,702		$	17,338		$	17,409		$	17,537		$	19,499		$	71,783		$	69,204		$	98,838
Per Share Data:
EPS	$	0.07		$	0.07		$	0.11		$	0.07		$	0.10		$	0.10		$	0.38		$	0.45		$	0.86
FFO		0.21			0.21			0.25			0.25			0.25			0.24			0.98			0.98			1.06
GOS		-			-			-			-			-			-			-			-			0.34
FFO+GOS		0.21			0.21			0.25			0.25			0.25			0.24			0.98			0.98			1.40
Weighted Average Shares (basic and diluted)		79,681			79,681			70,481			70,481			71,281			79,681			73,001			70,481			70,651

June 30, 2010 27

   FFO and FFO+GOS  Definitions

Definition of Funds From Operations (“FFO”), and FFO plus Gains on Sales (“FFO+GOS”)

The Company evaluates the performance of its reportable segments based on several measures including, Funds From Operations (“FFO”) and FFO plus Gains on Sales (“FFO+GOS” or “Total Profits”) as management believes they represent important measures of activity and are an important consideration in determining distributions paid to equity holders.  The Company defines FFO as net income (computed in accordance with generally accepted accounting principles, or GAAP), excluding gains (or losses) from sales of property, and acquisition costs of newly acquired properties that are not capitalized, plus depreciation and amortization, and after adjustments to exclude non-cash income (or losses) from non-consolidated or Sponsored REITs, plus distributions received from non-consoli dated or Sponsored REITs.  The Company defines FFO+GOS as FFO as defined above, plus gains (or losses) from sales of properties and provisions for assets held for sale, if applicable.

FFO and FFO+GOS should not be considered as alternatives to net income (determined in accordance with GAAP), as indicators of the Company’s financial performance, nor as alternatives to cash flows from operating activities (determined in accordance with GAAP), nor as measures of the Company’s liquidity, nor are they necessarily indicative of sufficient cash flow to fund all of the Company’s needs.  Other real estate companies may define these terms in a different manner.  We believe that in order to facilitate a clear understanding of the results of the Company, FFO and FFO+GOS should be examined in connection with net income and cash flows from operating, investing and financing activities in the consolidated financial statements.

June 30, 2010 28

   Funds Available for Distribution (FAD)
Reconciliation and Definition (in thousands, except per share amounts)

	For the three months ended:
	31-Mar-10			30-Jun-10			31-Mar-09			30-Jun-09			30-Sep-09			31-Dec-09
Net income	$	5,562		$	5,954		$	7,808		$	4,865		$	6,941		$	8,258
(Gain) Loss on sale of assets		-			-			-			-			-			(424	)
GAAP income from non-consolidated REITs		(253	)		(380	)		(792	)		(443	)		(475	)		(301	)
Distributions from non-consolidated REITs		1,407			1,324			1,615			1,522			1,119			1,371
Acquisition costs		-			129			-			248			391			4
Depreciation & amortization		9,934			9,675			8,707			11,217			9,561			10,167
Funds From Operations (FFO)		16,650			16,702			17,338			17,409			17,537			19,075
Plus gains on sales of assets (GOS)		-			-			-			-			-			424
FFO+GOS (Total Profits)	$	16,650		$	16,702		$	17,338		$	17,409		$	17,537		$	19,499
Funds Available for Distribution:
Funds From Operations (FFO)		16,650			16,702			17,338			17,409			17,537			19,075
Straight-line rent		(1,018	)		(740	)		(374	)		(69	)		(405	)		(1,030	)
Capital expenditures		(380	)		(498	)		(466	)		(115	)		(265	)		(619	)
Funds Available for Distribution (FAD)	$	15,252		$	15,464		$	16,498		$	17,225		$	16,867		$	17,426
Per Share Data:
EPS	$	0.07		$	0.07		$	0.11		$	0.07		$	0.10		$	0.10
FFO		0.21			0.21			0.25			0.25			0.25			0.24
GOS		-			-			-			-			-			0
FFO+GOS		0.21			0.21			0.25			0.25			0.25			0.24
FAD		0.19			0.19			0.23			0.24			0.24			0.22
Weighted Average Shares (basic and diluted)		79,681			79,681			70,481			70,481			71,281			79,681

The Company defines FAD as the sum of (1) FFO, (2) less the effect of straight-line rent, (3) less recurring capital expenditures that are generally for maintenance of properties and are not recovered through rental income from tenants, and (4) plus non-cash compensation expenses, if any.  FAD should not be considered as an alternative to net income (determined in accordance with GAAP), 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 or der to facilitate a clear understanding of the results of the Company, FAD should be examined in connection with net income and cash flows from operating, investing and financing activities in the consolidated financial statements.

June 30, 2010 29

   EBITDA Reconciliation and Definition (in thousands, except ratio amounts)

	For the three months ended:																Year Ended
	31-Mar-10			30-Jun-10		31-Mar-09			30-Jun-09			30-Sep-09			31-Dec-09		31-Dec-09
Net income	$	5,562		$	5,954	$	7,808		$	4,865		$	6,941		$	8,258	$	27,872
Interest expense		1,652			1,736		1,577			1,599			1,744			1,650		6,570
Depreciation and amortization		9,934			9,675		8,707			11,216			9,561			10,167		39,651
Income taxes		(68	)		4		(299	)		(75	)		(270	)		65		(579	)
EBITDA		17,080			17,369		17,793			17,605			17,976			20,140		73,514
Interest expense	$	1,652		$	1,736	$	1,577		$	1,599		$	1,744		$	1,650	$	6,570
Scheduled principal payments (1)		-			-		-			-			-			-		-
Interest and scheduled principal payments	$	1,652		$	1,736	$	1,577		$	1,599		$	1,744		$	1,650	$	6,570
Interest coverage ratio		10.34			10.01		11.28			11.01			10.31			12.21		11.19
Debt service coverage ratio		10.34			10.01		11.28			11.01			10.31			12.21		11.19

(1) Scheduled principal payments include required principal payments on our unsecured term debt, which are scheduled to commence in November 2011 using a 30 year amortization schedule.

EBITDA, a non-GAAP financial measure, is defined as net income, plus interest expense, income tax expense and depreciation and amortization expense. EBITDA is not intended to represent cash flow for the period, is 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 is not indicative of operating income or cash provided by operating activities as determined under GAAP. EBITDA is 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 the same way, this presentation of EBITDA may not be comparable to similarly titled measures of other companies. The Company believes that net income is the financial measure calculated and presented in accordance with GAAP that is most directly comparable to EBITDA.

June 30, 2010 30

   Reconciliation of Net Income to Property NOI:
Cash & GAAP Basis and Definition (in thousands)

							6 Month			Three months ended:												2009
	31-Mar-10			30-Jun-10			Total			31-Mar-09			30-Jun-09			30-Sep-09			31-Dec-09			Total
Net Income	$	5,562		$	5,954		$	11,516		$	7,808		$	4,865		$	6,941		$	8,258		$	27,872
Add (deduct):
Investment banking segment net loss (income)		479			(263	)		216			778			346			625			(1,103	)		646
Gain on sale of assets		-			-			-			-			-			-			(424	)		(424	)
Management fees (before elimination)		(484	)		(359	)		(843	)		(425	)		(398	)		(402	)		(408	)		(1,633	)
Depreciation and Amortization		9,184			9,205			18,389			7,887			10,200			8,768			9,314			36,169
Amortization of favorable leases		716			432			1,148			793			992			759			815			3,359
Selling, general and administrative		1,447			1,854			3,301			983			1,163			1,324			1,359			4,829
Interest expense		1,652			1,736			3,388			1,577			1,599			1,744			1,650			6,570
Interest income		(338	)		(374	)		(712	)		(347	)		(136	)		(170	)		(278	)		(931	)
Equity in earnings of nonconsolidated REITs		(253	)		(380	)		(633	)		(792	)		(443	)		(475	)		(283	)		(1,993	)
Non-property specific income and expenses, net		461			690			1,151			57			(145	)		(13	)		(34	)		(135	)
GAAP Property NOI		18,426			18,495			36,921			18,319			18,043			19,101			18,866			74,329
Straight-line rent		(1,020	)		(1,339	)		(2,359	)		(374	)		92			(405	)		(1,033	)		(1,720	)
Cash Property NOI	$	17,406		$	17,156		$	34,562		$	17,945		$	18,135		$	18,696		$	17,833		$	72,609

GAAP Property NOI is a non-GAAP financial measure equal to net income, the most directly comparable GAAP financial measure, plus selling, general and administrative expenses, depreciation and amortization, interest expense, less equity in earnings of nonconsolidated REITs, interest income, management fee income, gains or losses on the sale of assets and excludes non-property specific income and expenses. The Company also presents this on a cash basis (Cash Property NOI), which is GAAP Property NOI after eliminating the effects of straight-line rent. GAAP Property NOI and Cash Property NOI presented 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 as an indication of our performance or to cash flows as a measure of the Company's liquidity or its ability to make distributions.

June 30, 2010 31