Franklin Street Properties (FSP) 8-K Fourth Quarter & Year End 2011 Results

Exhibit 99.2

  Supplemental Operating
and Financial Data Fourth Quarter 2011

 

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

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.

December 31, 2011  2

   Company Overview

Overview

Franklin Street Properties Corp. (“FSP”, “we”, “our” or the “Company”) (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, 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 that previously sponsored the organization of single-purpose entities that own real estate and the private placement of equity in those entities, which we refer to as “Sponsored REITs”.

Our Business

As of December 31, 2011, the Company owned and operated a portfolio of real estate consisting of 36 properties, managed 16 Sponsored REITs and held seven promissory notes secured by mortgages on real estate owned by Sponsored REITs. From time-to-time, the Company may acquire real estate, make additional secured loans or acquire one of its Sponsored REITs. The Company may also pursue, on a selective basis, the sale of its properties in order to take advantage of the value creation and demand for its properties, or for geographic or property specific reasons.

Strategy

FSP’s investment strategy is to make direct investments in real estate assets. Our primary type of real estate asset is suburban office properties. The Company believes that real estate, in general, and suburban office real estate, in particular, is a cyclical asset class, and FSP tries to minimize the risk of investing in that cyclical asset class by maintaining a low to moderate level of debt at the corporate level and historically has not had secured debt at the property level. FSP believes that matching a low to moderate leverage ratio with investments in the cyclical suburban office asset class will allow it to take advantage of disposition opportunities during peaks in the cycles and protect its investments from foreclosure or refinancing risk during the lows of the cycles. In addition to maintaining modest leverage, FSP believes that it can lower investment risk while enhancing current income and long-term appreciation potential through geographical diversification by owning a portfolio of properties in varied markets that have sound long-term economic growth potential.

Snapshot
(as of December 31, 2011)
Corporate Headquarters	Wakefield, MA
Fiscal Year-End	31-Dec
Total Properties	36
Total Square Feet	7.1 Million
Common Shares Outstanding	82,937,405
Quarterly Dividend	$0.19
Dividend Yield	7.64%
Total Market Capitalization	$1.3 Billion
Insider Holdings	11.9%

December 31, 2011  3

   Company Overview

FSP selects acquisitions based on market and/or property specific criteria, and actively manages the properties to maximize current income and long term appreciation in value. Attempting to invest more heavily in property near the perceived bottom of market cycles and likewise disposing of properties near the perceived top of the market cycles is a natural consequence of our flexible lower leverage model. 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

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.

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

December 31, 2011  4

   Company Overview

Corporate Headquarters	Trading Symbol	Inquiries
401 Edgewater Place, Suite 200	NYSE Amex	Inquiries 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
	31-Dec-11	30-Sep-11	30-Jun-11	31-Mar-11	31-Dec-10	30-Sep-10	30-Jun-10	31-Mar-10
High Price	$      13.08	$      13.91	$      14.25	$      15.63	$      14.42	$      12.86	$      15.70	$    15.01
Low Price	$        9.90	$      10.49	$      12.00	$      13.52	$      12.20	$      10.99	$      11.04	$    11.64
Closing Price, at the end of the quarter	$        9.95	$      11.31	$      12.91	$      14.07	$      14.25	$      12.42	$      11.81	$    14.43
Dividends paid per share – quarterly	0.19	0.19	0.19	0.19	0.19	0.19	0.19	0.19
Closing dividend yield – annualized	7.64%	6.72%	5.89%	5.40%	5.33%	6.12%	6.44%	5.27%
Common shares outstanding (millions)	82.94	82.94	81.44	81.44	81.44	79.84	79.68	79.68

Timing

Quarterly and Annual results are expected to be announced during the week ending on these dates:

First Quarter:	4-May-12	Third Quarter:	2-Nov-12
Second Quarter:	3-Aug-12	Fourth Quarter:	1-Mar-13

December 31, 2011  5

   Financial Highlights
(in thousands, except per share data)

											For the										For the
	For the Three Months Ended										Year Ended		For the Three Months Ended								Year Ended
	31-Mar-11		30-Jun-11		30-Sep-11			31-Dec-11			31-Dec-11		31-Mar-10		30-Jun-10		30-Sep-10		31-Dec-10		31-Dec-10
Income Items:
Revenue:
Rental	$	31,100	$	33,605	$	33,672		$	37,014		$	135,391	$	28,588	$	27,046	$	29,222	$	29,782	$	114,638
Related party revenue		808		1,150		1,037			1,051			4,046		533		559		629		719		2,440
Other		6		7		7			29			49		8		6		20		54		88
Total revenue		31,914		34,762		34,716			38,094			139,486		29,129		27,611		29,871		30,555		117,166
Total expenses		28,288		31,201		31,772			33,685			124,946		24,448		23,408		26,231		27,428		101,515
Income before interest income, equity in earnings in non-consolidated REITs and taxes		3,626		3,561		2,944			4,409			14,540		4,681		4,203		3,640		3,127		15,651
Interest income		11		5		3			3			22		8		9		4		4		25
Equity in earnings in non-consolidated REITs		968		1,166		573			978			3,685		253		380		405		228		1,266
Income before taxes		4,605		4,732		3,520			5,390			18,247		4,942		4,592		4,049		3,359		16,942
Income tax expense (benefit)		50		68		67			82			267		57		57		48		55		217
Income from continuing operations		4,555		4,664		3,453			5,308			17,980		4,885		4,535		4,001		3,304		16,725
Income from discontinued operations		619		3,371		(139	)		(246	)		3,605		677		1,418		758		2,515		5,368
Gain on sale of assets		19,593		2,346		—			—			21,939		—		—		—		—		—
Net income	$	24,767	$	10,381	$	3,314		$	5,062		$	43,524	$	5,562	$	5,953	$	4,759	$	5,819	$	22,093
FFO+GOS*:
FFO	$	16,250	$	20,140	$	16,362		$	18,457		$	71,209	$	16,650	$	16,702	$	16,052	$	17,519	$	66,923
GOS		19,593		2,346		—			—			21,939		—		—		—		—		—
FFO+GOS	$	35,843	$	22,486	$	16,362		$	18,457		$	93,148	$	16,650	$	16,702	$	16,052	$	17,519	$	66,923
Per Share Data:
EPS	$	0.30	$	0.13	$	0.04		$	0.06		$	0.53	$	0.07	$	0.07	$	0.06	$	0.07	$	0.28
FFO		0.20		0.25		0.20			0.22			0.87		0.21		0.21		0.20		0.22		0.84
GOS		0.24		0.03		—			—			0.27		—		—		—		—		—
FFO+GOS		0.44		0.28		0.20			0.22			1.14		0.21		0.21		0.20		0.22		0.84
Weighted Average Shares (diluted)		81,437		81,437		81,600			82,937			81,857		79,681		79,681		79,751		80,187		79,826
Balance Sheet Items:
Real estate, net	$	979,560	$	976,131	$	997,258		$	1,006,221		$	867,608	$	778,409	$	798,058	$	796,289	$	862,698	$	862,698
Other assets, net		387,342		327,633		348,526			402,440			402,440		372,139		387,141		391,270		376,037		376,037
Total assets, net		1,366,902		1,303,764		1,345,784			1,408,661			1,238,735		1,150,548		1,185,199		1,187,559		1,238,735		1,238,735
Total liabilities, net		435,801		377,374		413,784			487,294			487,294		222,771		266,347		277,272		317,177		317,177
Shareholders' equity		931,101		926,390		932,000			921,367			921,367		927,777		918,852		910,287		921,558		921,558

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

December 31, 2011 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

December 31, 2011  7

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

											For the										For the
	For the Three Months Ended										Year Ended		For the Three Months Ended								Year Ended
	31-Mar-11		30-Jun-11		30-Sep-11			31-Dec-11			31-Dec-11		31-Mar-10		30-Jun-10		30-Sep-10		31-Dec-10		31-Dec-10
Revenue:
Rental	$	31,099	$	33,606	$	33,672		$	37,014		$	135,391	$	28,588	$	27,046	$	29,222	$	29,782	$	114,638
Related party revenue:
Management fees and interest income from loans		808		1,150		1,037			1,051			4,046		533		559		629		719		2,440
Other		6		7		7			29			49		8		6		20		54		88
Total revenue		31,913		34,763		34,716			38,094			139,486		29,129		27,611		29,871		30,555		117,166
Expenses:
Real estate operating expenses		8,730		8,765		9,328			9,862			36,685		7,949		7,335		8,714		9,602		33,600
Real estate taxes and insurance		4,759		5,228		5,020			5,426			20,433		4,973		4,038		4,636		4,430		18,077
Depreciation and amortization		10,745		12,029		12,351			13,124			48,249		8,427		8,446		9,589		9,694		36,156
Selling, general and administrative		1,645		1,602		1,654			2,012			6,913		1,447		1,854		1,400		1,698		6,399
Interest		2,408		3,578		3,419			3,261			12,666		1,652		1,735		1,892		2,004		7,283
Total expenses		28,287		31,202		31,772			33,685			124,946		24,448		23,408		26,231		27,428		101,515
Income before interest income, equity in earnings of non-consolidated REITs and taxes		3,626		3,561		2,944			4,409			14,540		4,681		4,203		3,640		3,127		15,651
Interest income		11		5		3			3			22		8		9		4		4		25
Equity in earnings of non-consolidated REITs		968		1,166		573			978			3,685		253		380		405		228		1,266
Income before taxes on income		4,605		4,732		3,520			5,390			18,247		4,942		4,592		4,049		3,359		16,942
Income tax expense (benefit)		50		68		67			82			267		57		57		48		55		217
Income from continuing operations		4,555		4,664		3,453			5,308			17,980		4,885		4,535		4,001		3,304		16,725
Income from discontinued operations		619		3,371		(139	)		(246	)		3,605		677		1,418		758		2,515		5,368
Gain on sale of assets		19,593		2,346		—			—			21,939		—		—		—		—		—
Net income	$	24,767	$	10,381	$	3,314		$	5,062		$	43,524	$	5,562	$	5,953	$	4,759	$	5,819	$	22,093
Weighted average number of shares outstanding, basic and diluted		81,437		81,437		81,600			82,937			81,857		79,681		79,681		79,751		80,187		79,826
Earnings per share, basic and diluted, attributable to:
Continuing operations	$	0.06	$	0.06	$	0.04		$	0.06		$	0.22	$	0.06	$	0.06	$	0.05	$	0.04	$	0.21
Discontinued operations		0.01		—		(0.00	)		(0.00	)		0.04		0.01		0.02		0.01		0.03		0.07
Gains on sales of assets		0.24		0.03		—			—			0.27		—		—		—		—		—
Net income per share, basic and diluted	$	0.30	$	0.13	$	0.04		$	0.06		$	0.53	$	0.07	$	0.07	$	0.06	$	0.07	$	0.28

December 31, 2011  8

   EPS, FFO, GOS and FFO+GOS*

 

* 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

December 31, 2011  9

   Condensed Consolidated Balance Sheets
(in thousands)

	March 31,			June 30,			September 30,			December 31,			March 31,			June 30,			September 30,			December 31,
	2011			2011			2011			2011			2010			2010			2010			2010
Assets:
Real estate assets:
Land	$	129,800		$	129,800		$	134,711		$	137,503		$	113,092		$	121,720		$	121,720		$	121,720
Buildings and improvements		978,876			982,821			1,006,814			1,020,449			840,963			857,445			861,269			863,317
Fixtures and equipment		600			726			761			856			354			458			458			578
		1,109,276			1,113,347			1,142,286			1,158,808			954,409			979,623			983,447			985,615
Less accumulated depreciation		129,716			137,216			145,028			152,587			103,745			110,033			116,348			122,917
Real estate assets, net		979,560			976,131			997,258			1,006,221			850,664			869,590			867,099			862,698
Acquired real estate leases, net		85,290			81,455			91,585			91,613			30,822			45,871			43,185			40,578
Investment in non-consolidated REITs		88,652			88,654			88,225			87,598			91,787			90,782			89,995			89,327
Assets held for syndication, net		47,630			11,206			4,720			—			2,791			—			—			2,976
Assets held for sale		5,108			—			—			—			76,879			76,234			75,590			74,947
Cash and cash equivalents		49,488			28,881			44,047			23,813			22,815			21,487			20,554			68,213
Restricted cash		440			459			477			493			50			59			55			420
Tenant rent receivables, net		1,688			1,846			1,418			1,460			1,385			900			2,123			1,922
Straight-line rent receivable, net		20,838			23,745			26,067			28,545			13,805			14,463			15,583			18,584
Prepaid expenses		1,400			1,255			2,553			1,223			2,236			2,280			2,511			1,654
Related party mortgage loan receivable		60,116			61,916			61,916			140,516			41,325			46,270			53,756			57,684
Other assets		6,339			6,237			5,219			4,538			1,220			1,620			1,387			1,356
Deferred leasing commissions, net		20,353			21,979			22,299			22,641			15,652			16,494			16,540			18,376
Total assets	$	1,366,902		$	1,303,764		$	1,345,784		$	1,408,661		$	1,151,431		$	1,186,050		$	1,188,378		$	1,238,735
Liabilities and Stockholders’ Equity:
Liabilities:
Bank note payable	$	404,000		$	345,000		$	375,000			449,000		$	119,968		$	162,968		$	167,968		$	209,968
Term loan payable		—			—			—			—			75,000			75,000			75,000			74,850
Accounts payable and accrued expenses		20,562			21,431			28,258			26,446			20,467			18,766			25,064			22,435
Accrued compensation		603			1,070			1,383			2,222			274			1,040			1,334			1,803
Tenant security deposits		2,533			2,476			2,453			2,008			1,696			2,004			1,922			1,930
Other liabilities: derivative termination value		828			447			63			—			1,995			1,735			1,416			1,077
Acquired unfavorable real estate leases, net		7,275			6,950			6,627			7,618			4,254			5,685			5,387			5,114
Total liabilities		435,801			377,374			413,784			487,294			223,654			267,198			278,091			317,177
Commitments and contingencies
Stockholders’ Equity:
Preferred stock		—			—			—			—			—			—			—			—
Common stock		8			8			8			8			8			8			8			8
Additional paid-in capital		1,025,491			1,025,491			1,042,876			1,042,876			1,003,712			1,003,712			1,005,211			1,025,491
Accumulated other comprehensive loss		(828	)		(447	)		(63	)		—			(1,995	)		(1,735	)		(1,416	)		(1,077	)
Accumulated distributions in excess of accumulated earnings		(93,570	)		(98,662	)		(110,821	)		(121,517	)		(73,948	)		(83,133	)		(93,516	)		(102,864	)
Total stockholders’ equity		931,101			926,390			932,000			921,367			927,777			918,852			910,287			921,558
Total liabilities and stockholders’ equity	$	1,366,902		$	1,303,764		$	1,345,784		$	1,408,661		$	1,151,431		$	1,186,050		$	1,188,378		$	1,238,735

December 31, 2011  10

   Condensed Consolidated Statements of Cash Flows
(in thousands)

	Twelve Months ended December 31
	2011			2010			2009
Cash flows from operating activities:
Net income	$	43,524		$	22,093		$	27,872
Adjustments to reconcile net income to net cash         provided by  operating activities:
Gains on assets sold		(21,939	)		—			(424	)
Depreciation and amortization expense		50,261			39,627			36,561
Amortization of above market lease		(47	)		1,362			3,359
Equity in earnings (losses) from non-consolidated REITs		(3,086	)		(1,183	)		(2,012	)
Distributions from non-consolidated REITs		3,474			1,633			2,283
Increase in bad debt reserve		(365	)		980			111
Changes in operating assets and liabilities:
Restricted cash		(73	)		(86	)		2
Tenant rent receivables		827			(1,120	)		(564	)
Straight-line rents		(9,878	)		(4,249	)		(1,879	)
Prepaid expenses and other assets		1,611			865			907
Accounts payable and accrued expenses		4,213			(351	)		2,760
Accrued compensation		419			387			(238	)
Tenant security deposits		78			122			(66	)
Payment of deferred leasing commissions		(8,058	)		(10,515	)		(2,659	)
Net cash provided by operating activities		60,961			49,565			66,013
Cash flows from investing activities:
Purchase of real estate assets, office computers and furniture, capitalized merger costs and acquired real estate leases		(236,250	)		(54,344	)		(132,323	)
Investment in non-consolidated REITs		(10	)		(11	)		(13,218	)
Distributions in excess of earnings from non-consolidated REITs		1,582			3,537			3,345
Investment in related party mortgage loan receivable		(82,832	)		(21,149	)		(35,410	)
Changes in deposits on real estate assets		200			(200	)		—
Investment in assets held for syndication, net		2,230			1,319			8,159
Proceeds received on sales of real estate assets		96,790			—			672
Net cash used in investing activities		(218,290	)		(70,848	)		(168,775	)
Cash flows from financing activities:
Distributions to stockholders		(62,177	)		(60,586	)		(55,313	)
Proceeds (costs) from equity offering, net		17,295			21,868			114,695
Borrowings under New Revolver, net		449,000			—			—
Borrowings (repayments) under Revolver		(209,968	)		100,960			41,540
Borrowing (repayment) of term loan payable, net		(74,850	)		(150	)		—
Deferred Financing Costs		(5,388	)		—			—
Swap termination payment		(983	)		—			—
Net cash provided by (used in) financing activities		112,929			62,092			100,922
Net decreases in cash and cash equivalents		(44,400	)		40,809			(1,840	)
Cash and cash equivalents, beginning of period		68,213			27,404			29,244
Cash and cash equivalents, end of period	$	23,813		$	68,213		$	27,404

December 31, 2011  11

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

	Year Ended December 31, 2011								Year Ended December 31, 2010								Year Ended December 31, 2009
	Real			Investment					Real			Investment					Real			Investment
	Estate			Banking (a)		Total			Estate			Banking (a)		Total			Estate			Banking (a)			Total
Revenue:
Rental Income	$	135,391		$	—	$	135,391		$	114,638		$	—	$	114,638		$	119,341		$	—		$	119,341
Syndication Fees		—			4,670		4,670			—			2,544		2,544			—			2,428			2,428
Transaction Fees		—			4,454		4,454			—			2,727		2,727			—			2,080			2,080
Management Fees & Interest Income		4,046			—		4,046			2,439			—		2,439			1,740			—			1,740
Other Income		49			42		91			89			—		89			61			—			61
Total Revenue		139,486			9,166		148,652			117,166			5,271		122,437			121,142			4,508			125,650
Expenses
Rental Operating Expenses		36,685			—		36,685			33,600			—		33,600			30,807			—			30,807
Real Estate Taxes and Insurance		20,433			—		20,433			18,077			—		18,077			18,892			—			18,892
Depreciation and Amortization		48,249			166		48,415			36,156			173		36,329			35,303			123			35,426
Selling, general  and administrative		7,291			3,052		10,343			6,399			2,887		9,286			4,452			4,062			8,514
Commissions and  Broker Expenses		—			2,535		2,535			—			1,477		1,477			—			1,801			1,801
Interest & Commitment Fees		12,666			—		12,666			7,283			—		7,283			6,570			—			6,570
Total Expenses		125,324			5,753		131,077			101,515			4,537		106,052			96,024			5,986			102,010
Income before Equity, Interest and Taxes		14,162			3,413		17,575			15,651			734		16,385			25,118			(1,478	)		23,640
Interest Income		22			14		36			24			1		25			92			4			96
Equity Income SARs		3,685			—		3,685			1,266			—		1,266			1,994			—			1,994
Income before Taxes		17,869			3,427		21,296			16,941			735		17,676			27,204			(1,474	)		25,730
Income Taxes		267			—		267			217			—		217			248			(827	)		(579	)
Income from continuing operations		17,602			3,427		21,029			16,724			735		17,459			26,956			(647	)		26,309
Income from discontinued operations		556			—		556			4,634			—		4,634			1,139			—			1,139
Gain on sale of assets		21,939			—		21,939			—			—		—			424			—			424
Net Income	$	40,097		$	3,427	$	43,524		$	21,358		$	735	$	22,093		$	28,519		$	(647	)	$	27,872
Funds From Operations (FFO)*
Net Income	$	40,097		$	3,427	$	43,524		$	21,358		$	735	$	22,093		$	28,519		$	(647	)	$	27,872
Gain on sale of assets, net		(21,939	)		—		(21,939	)		—			—		—			(424	)		—			(424	)
Equity in income of SARs		(4,490	)		—		(4,490	)		(1,190	)		—		(1,190	)		(2,012	)		—			(2,012	)
Cash received from SARs		5,056			—		5,056			5,170			—		5,170			5,628			—			5,628
Acquisition costs		620			—		620			125			—		125			643			—			643
Depreciation and amortization		48,273			166		48,439			40,551			173		40,724			39,529			123			39,652
Funds From Operations (FFO)*		67,617			3,593		71,210			66,014			908		66,922			71,883			(524	)		71,359
EPS	$	0.49		$	0.04	$	0.53		$	0.27		$	0.01	$	0.28		$	0.39		$	(0.01	)	$	0.38
FFO per Share*	$	0.83		$	0.04	$	0.87		$	0.83		$	0.01	$	0.84		$	0.99		$	(0.01	)	$	0.98
Weighted Average Shares							81,857								79,826									73,001

(a) Investment Banking was reclassified to Discontinued Operations for GAAP presentation, this presentation is for informational purposes. Discontinued Operations above are for properties sold only.

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

December 31, 2011  12

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

Property NOI Cash*

												Year										Year
				Three Months Ended								Ended		Three Months Ended								Ended
		31-Dec-11
Region	Division		Sq Feet		31-Mar-11		30-Jun-11		30-Sep-11		31-Dec-11		2011		31-Mar-10		30-Jun-10		30-Sep-10		31-Dec-10		2010
Eastern	Mideast		1,441	$	3,476	$	3,840	$	3,573	$	4,139	$	15,028	$	4,031	$	4,390	$	5,551	$	4,931	$	18,903
Midwest	East North Central		792		1,586		1,057		1,116		1,691		5,450		1,103		1,574		1,184		1,123		4,984
	West North Central		1,102		2,405		2,909		3,010		2,887		11,211		2,034		2,000		2,991		3,028		10,053
			1,894		3,991		3,966		4,126		4,578		16,661		3,137		3,574		4,175		4,151		15,037
						��
South	Southeast		600		2,068		2,023		2,027		1,893		8,011		2,307		2,251		2,285		1,917		8,760
	Southwest		2,028		3,747		4,907		5,399		6,189		20,242		4,234		4,238		3,597		3,564		15,633
			2,628		5,815		6,930		7,426		8,082		28,252		6,541		6,489		5,882		5,481		24,393
West	Mountain		790		922		1,311		1,144		1,619		4,996		3,254		2,212		810		894		7,170
	Pacific		299		518		523		518		530		2,089		443		491		498		480		1,912
			1,089		1,440		1,834		1,662		2,149		7,085		3,697		2,703		1,308		1,374		9,082
Total			7,052	$	14,722	$	16,570	$	16,787	$	18,948	$	67,026	$	17,406	$	17,156	$	16,916	$	15,937	$	67,415

Property NOI GAAP*

												Year										Year
				Three Months Ended								Ended		Three Months Ended								Ended
		31-Dec-11
Region	Division		Sq Feet		31-Mar-11		30-Jun-11		30-Sep-11		31-Dec-11		2011		31-Mar-10		30-Jun-10		30-Sep-10		31-Dec-10		2010
Eastern	Mideast		1,441	$	4,007	$	4,486	$	4,427	$	5,157	$	18,077	$	4,666	$	5,002	$	5,992	$	5,362	$	21,022
Midwest	East North Central		792		1,552		1,027		1,164		2,017		5,760		1,110		1,602		1,210		1,166		5,088
	West North Central		1,102		2,886		2,986		3,040		2,935		11,847		2,164		2,106		3,136		3,135		10,541
			1,894		4,438		4,013		4,204		4,952		17,607		3,274		3,708		4,346		4,301		15,629
South	Southeast		600		1,572		2,093		2,117		1,988		7,770		2,356		2,355		2,359		2,033		9,103
	Southwest		2,028		4,629		6,558		6,173		6,777		24,137		4,404		4,395		3,797		3,778		16,374
			2,628		6,201		8,651		8,290		8,765		31,907		6,760		6,750		6,156		5,811		25,477
West	Mountain		790		1,162		1,715		1,494		1,927		6,298		3,229		2,502		1,100		1,231		8,062
	Pacific		299		555		577		600		621		2,353		497		533		524		513		2,067
			1,089		1,717		2,292		2,094		2,548		8,651		3,726		3,035		1,624		1,744		10,129
Total			7,052	$	16,363	$	19,442	$	19,015	$	21,422	$	76,242	$	18,426	$	18,495	$	18,118	$	17,218	$	72,257

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

December 31, 2011  13

   Capital Analysis
(in thousands, except per share amounts)

	31-Mar-11			30-Jun-11			30-Sep-11			31-Dec-11			31-Mar-10			30-Jun-10			30-Sep-10			31-Dec-10
Market Data:
Shares Outstanding		81,437			81,437			82,937			82,937			79,681			79,681			79,837			81,437
Closing market price per share	$	14.07		$	12.91		$	11.31		$	9.95		$	14.43		$	11.81		$	12.42		$	14.25
Market capitalization	$	1,145,824		$	1,051,357		$	938,022		$	825,227		$	1,149,793		$	941,029		$	991,581		$	1,160,483
Total Debt		404,000			345,000			375,000			449,000			194,968			237,968			242,968		$	284,118
Total Market Capitalization	$	1,549,824		$	1,396,357		$	1,313,022		$	1,274,227		$	1,344,761		$	1,178,997		$	1,234,549		$	1,444,601
Dividend Data:
Total dividends paid	$	15,473		$	15,473		$	15,473		$	15,758		$	15,139		$	15,139		$	15,139		$	15,169
Common dividend per share	$	0.19		$	0.19		$	0.19		$	0.19		$	0.19		$	0.19		$	0.19		$	0.19
Quarterly dividend as a % of FFO*		95%			76%			95%			86%			90%			90%			95%			86%
Liquidity:
Cash and cash equivalents	$	49,488		$	28,881		$	44,047		$	23,813		$	22,815		$	21,487		$	20,554		$	68,213
Revolving credit facilities:
Gross potential available under current credit facilities		500,000			600,000			600,000			600,000			250,000			250,000			250,000			250,000
Less:
Outstanding balance		(404,000	)		(345,000	)		(375,000	)		(449,000	)		(119,968	)		(162,968	)		(167,968	)		(209,968	)
Total Liquidity	$	145,488		$	283,881		$	269,047		$	174,813		$	152,847		$	108,519		$	102,586		$	108,245

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

December 31, 2011  14

   Portfolio Overview

Property by Form of FSP Participation

	31-Dec-11	30-Sep-11	30-Jun-11	31-Mar-11	31-Dec-10	30-Sep-10	30-Jun-10	31-Mar-10
Owned portfolio of commercial real estate:
Number of properties (1)	36	35	34	35	33	33	33	32
Square feet	7,052,068	6,929,891	6,747,815	6,845,176	6,422,357	6,417,299	6,418,835	5,942,299
Leased percentage	89%	88%	87%	88%	86%	82%	85%	85%
Investments in non-consolidated commercial real estate:
Number of properties	3	3	3	3	3	3	3	3
Square feet	2,001,542	1,998,575	1,996,457	1,995,932	1,995,913	1,998,519	1,998,519	1,995,041
Leased percentage	87%	83%	82%	85%	77%	76%	77%	78%
Single Asset REITs (SARs) managed:
Number of properties	13	13	13	13	12	11	11	11
Square feet *	3,322,639	3,322,638	3,322,569	3,325,694	2,915,896	2,702,287	2,406,370	2,406,370
Leased percentage*	80%	80%	79%	79%	75%	73%	76%	76%
Total owned, investments and managed properties:
Number of properties	52	51	50	51	48	47	47	46
Square feet *	12,376,249	12,251,104	12,066,841	12,166,802	11,334,166	11,118,105	10,823,724	10,343,710
Leased percentage*	86%	85%	84%	85%	81%	79%	82%	82%

(1) Includes asset held for sale for 12/31/10 and prior periods

*Prior to September 30, 2010, excludes a property that completed construction on July 9, 2010 with approximately 295,891 square feet

December 31, 2011  15

   Regional Analysis and Map

Owned:
Name	City	State	Region	Square Feet
Park Seneca	Charlotte	NC	East	109,550
Forest Park	Charlotte	NC	East	62,212
Emperor Boulevard	Durham	NC	East	259,531
Meadow Point	Chantilly	VA	East	138,537
Stonecroft	Chantilly	VA	East	111,469
Innsbrook	Glen Allen	VA	East	298,456
East Baltimore	Baltimore	MD	East	325,445
Loudoun Tech Center	Dulles	VA	East	135,888
Southfield Centre	Southfield	MI	MidWest	214,697
Northwest Point	Elk Grove Village	IL	MidWest	176,848
909 Davis	Evanston	IL	MidWest	195,245
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	472,616
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
Legacy Tennyson Center	Plano	TX	South	202,600
One Legacy Circle	Plano	TX	South	214,110
Park Ten	Houston	TX	South	155,715
Addison Circle	Addison	TX	South	293,787
Collins Crossing	Richardson	TX	South	298,766
East Renner Road	Richardson	TX	South	122,300
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	110,405
380 Interlocken	Broomfield	CO	West	240,184
Greenwood Plaza	Englewood	CO	West	197,527
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				7,052,068
Managed:
Name	City	State	Region	Square Feet
1441 Main Street	Columbia	SC	East	264,857
303 East Wacker Drive	Chicago	IL	MidWest	844,953
Monument Circle	Indianapolis	IN	MidWest	213,609
505 Waterford	Plymouth	MN	MidWest	256,417
50 South Tenth Street	Minneapolis	MN	MidWest	498,768
Grand Boulevard	Kansas City	MO	MidWest	535,717
Lakeside Crossing II	Maryland Heights	MO	MidWest	116,000
Centre Pointe V	West Chester	OH	MidWest	135,936
Union Centre	West Chester	OH	MidWest	409,798
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	325,797
Phoenix Tower	Houston	TX	South	620,872
Highland Place I	Centennial	CO	West	139,142
385 Interlocken	Broomfield	CO	West	295,891
Total				5,324,181

Properties by Division/Region
($ in thousands)
				NBV (a)	% Leased
	# of Properties	Square Feet	% of Portfolio	31-Dec-11	31-Dec-11
Mideast Division	8	1,441,088	20.4%	$    224,621	88.2%
East Region Total	8	1,441,088	20.4%	224,621	88.2%
East North Central Division	4	791,849	11.2%	100,186	80.6%
West North Central	5	1,102,385	15.7%	106,251	95.3%
Midwest Region Total	9	1,894,234	26.9%	206,437	89.1%
Southeast	2	599,886	8.5%	118,546	93.1%
Southwest	10	2,027,979	28.8%	295,264	92.9%
South Region Total	12	2,627,865	37.3%	413,810	92.9%
Mountain	4	789,632	11.2%	125,615	78.6%
Pacific	3	299,249	4.2%	35,738	79.3%
West Region Total	7	1,088,881	15.4%	161,353	78.8%
Grand Total	36	7,052,068	100.0%	$  1,006,221	88.7%

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

 

December 31, 2011  16

   Owned Property List
(in thousands)

					NBV (1)	% Leased
Division	Name	City	State	S.F.	31-Dec-11	31-Dec-11
Pacific	Hillview Center	Milpitas	CA	36	$     4,101	100.0%
Pacific	Montague	San Jose	CA	146	17,401	100.0%
Mountain	380 Interlocken	Broomfield	CO	240	41,870	85.1%
Mountain	390 Interlocken	Broomfield	CO	242	41,828	93.4%
Mountain	Centennial Technology Center	Colorado Springs	CO	110	11,046	85.4%
Mountain	Greenwood Plaza	Englewood	CO	197	30,871	48.9%
Southeast	Blue Lagoon Drive	Miami	FL	213	46,919	100.0%
Southeast	One Overton Place	Atlanta	GA	387	71,628	89.3%
East North Central	Northwest Point	Elk Grove Village	IL	177	27,499	100.0%
East North Central	909 Davis	Evanston	IL	195	23,023	94.8%
East North Central	River Crossing	Indianapolis	IN	205	34,668	93.5%
Mideast	East Baltimore	Baltimore	MD	325	54,344	55.7%
East North Central	Southfield Centre	Southfield	MI	215	14,995	39.2%
West North Central	Eden Bluff	Eden Prairie	MN	153	14,120	100.0%
West North Central	121 South 8th Street	Minneapolis	MN	473	24,054	93.6%
West North Central	Timberlake	Chesterfield	MO	233	33,988	97.7%
West North Central	Timberlake East	Chesterfield	MO	116	17,275	85.9%
West North Central	Lakeside Crossing	Maryland Heights	MO	128	16,814	100.0%
Mideast	Park Seneca	Charlotte	NC	110	7,364	80.6%
Mideast	Forest Park	Charlotte	NC	62	6,058	100.0%
Mideast	Emperor Boulevard	Durham	NC	259	55,319	100.0%
Southwest	Addison Circle	Addison	TX	294	46,522	95.8%
Southwest	Liberty Plaza	Addison	TX	219	24,222	77.9%
Southwest	Park Ten	Houston	TX	156	18,750	81.2%
Southwest	Eldridge Green	Houston	TX	248	42,356	100.0%
Southwest	Park Ten Phase II	Houston	TX	157	30,194	100.0%
Southwest	Willow Bend Office Center	Plano	TX	117	18,618	83.1%
Southwest	Legacy Tennyson Center	Plano	TX	203	24,660	100.0%
Southwest	One Legacy Circle	Plano	TX	214	39,341	100.0%
Southwest	Collins Crossing	Richardson	TX	299	42,628	88.4%
Southwest	East Renner Road	Richardson	TX	122	7,973	100.0%
Mideast	Meadow Point	Chantilly	VA	139	22,935	100.0%
Mideast	Stonecroft	Chantilly	VA	111	18,950	100.0%
Mideast	Loudoun Tech Center	Dulles	VA	136	17,077	100.0%
Mideast	Innsbrook	Glen Allen	VA	298	42,575	98.3%
Pacific	Federal Way	Federal Way	WA	117	14,235	47.0%
				7,052	$ 1,006,221	88.7%

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

December 31, 2011  17

   Properties with Annualized Rent per Square Foot

						Percentage	Annualized Rent	Average
			Year Built			Leased as of	as of	Annualized
			or	Net Rentable	Leased	December 31,	December 31,	Rent per Leased
Property Name	City	State	Renovated	Square Feet	Sq. Ft.	2011 (a)	2011 (b)	Square Feet (c)
Park Seneca	Charlotte	NC	1969	109,550	88,262	80.6%	$    1,360,747	$      15.42
Forest Park	Charlotte	NC	1999	62,212	62,212	100.0%	768,213	12.35
Meadow Point	Chantilly	VA	1999	138,537	138,537	100.0%	3,522,057	25.42
Innsbrook	Glen Allen	VA	1999	298,456	293,410	98.3%	547,029	1.86
East Baltimore	Baltimore	MD	1989	325,445	181,298	55.7%	4,645,204	25.62
Loudoun Tech Center	Dulles	VA	1999	135,888	135,888	100.0%	1,788,430	13.16
Stonecroft	Chantilly	VA	2008	111,469	111,469	100.0%	4,035,422	36.20
Emperor Boulevard	Durham	NC	2009	259,531	259,531	100.0%	8,190,181	31.56
East total				1,441,088	1,270,607	88.2%	24,857,283	19.56
Southfield Centre	Southfield	MI	1977	214,697	84,205	39.2%	848,349	10.07
Northwest Point	Elk Grove Village	IL	1999	176,848	176,848	100.0%	3,511,335	19.86
909 Davis Street	Evanston	IL	2002	195,245	185,125	94.8%	7,004,667	37.84
River Crossing	Indianapolis	IN	1998	205,059	191,769	93.5%	3,478,521	18.14
Timberlake	Chesterfield	MO	1999	232,766	227,292	97.7%	4,378,988	19.27
Timberlake East	Chesterfield	MO	2000	116,197	99,801	85.9%	2,438,149	24.43
Lakeside Crossing	Sl. Louis	MO	2008	127,778	127,778	100.0%	3,153,561	24.68
Eden Bluff	Eden Praire	MN	2006	153,028	153,028	100.0%	3,984,757	26.04
121 South 8th Street	Minneapolis	MN	1974	472,616	442,228	93.6%	6,700,367	15.15
Midwest total				1,894,234	1,688,074	89.1%	35,498,694	21.03
Blue Lagoon Drive	Miami	FL	2002	212,619	212,619	100.0%	4,440,795	20.89
One Overton Place	Atlanta	GA	2002	387,267	345,733	89.3%	6,492,646	18.78
Willow Bend Office Center	Plano	TX	1999	116,622	96,912	83.1%	1,160,781	11.98
Park Ten	Houston	TX	1999	155,715	126,391	81.2%	2,649,747	20.96
Addison Circle	Addison	TX	1999	293,787	281,503	95.8%	6,851,358	24.34
Collins Crossing	Richardson	TX	1999	298,766	264,010	88.4%	5,896,461	22.33
Eldridge Green	Houston	TX	1999	248,399	248,399	100.0%	7,150,326	28.79
Park Ten Phase II	Houston	TX	2006	156,746	156,746	100.0%	4,199,249	26.79
Liberty Plaza	Addison	TX	1985	218,934	170,549	77.9%	2,721,512	15.96
Legacy Tennyson Center	Plano	TX	1999/2008	202,600	202,600	100.0%	3,440,040	16.98
One Legacy Circle	Plano	TX	2008	214,110	214,110	100.0%	5,987,580	27.96
East Renner Road	Richardson	TX	1999	122,300	122,300	100.0%	958,812	7.84
South Total				2,627,865	2,441,872	92.9%	51,949,307	21.27
Centennial Technology Center	Colorado Springs	CO	1999	110,405	94,296	85.4%	1,291,880	13.70
380 Interlocken	Broomfield	CO	2000	240,184	204,347	85.1%	5,533,635	27.08
Greenwood Plaza	Englewood	CO	2000	197,527	96,518	48.9%	385,199	3.99
390 Interlocken	Broomfield	CO	2002	241,516	225,576	93.4%	6,257,808	27.74
Hillview Center	Milpitas	CA	1984	36,288	36,288	100.0%	538,494	14.84
Federal Way	Federal Way	WA	1982	117,010	54,965	47.0%	712,107	12.96
Montague Business Center	San Jose	CA	1982	145,951	145,951	100.0%	1,787,393	12.25
West Total				1,088,881	857,941	78.8%	16,506,516	19.24
Grand Total				7,052,068	6,258,494	88.7%	$  128,811,800	$    20.58

(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 December 2011 (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 December 2011 divided by leased square feet.

December 31, 2011  18

   Owned Property Capital Expenditures
(in thousands)

									Year
	For the Three Months Ended								Ended
	31-Mar-11		30-Jun-11		30-Sep-11		31-Dec-11		31-Dec-11
Tenant improvements	$	2,506	$	3,215	$	5,092	$	8,219	$	19,032
Deferred leasing costs		2,819		2,567		1,324		1,348		8,058
Building improvements		449		876		754		747		2,826
Total	$	5,774	$	6,658	$	7,170	$	10,314	$	29,916

									Year
	For the Three Months Ended								Ended
	31-Mar-10		30-Jun-10		29-Sep-10		31-Dec-10		31-Dec-10
Tenant improvements	$	1,305	$	935	$	3,634	$	1,126	$	7,000
Deferred leasing costs		5,566		1,519		808		2,622		10,515
Building improvements		380		498		671		1,053		2,602
Total	$	7,251	$	2,952	$	5,113	$	4,801	$	20,117

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

									Year
	For the Three Months Ended								Ended
	31-Mar-08		30-Jun-08		30-Sep-08		31-Dec-08		31-Dec-08
Tenant improvements	$	2,337	$	560	$	1,667	$	823	$	5,387
Deferred leasing costs		817		1,313		305		919		3,354
Building improvements		197		372		740		419		1,728
Total	$	3,351	$	2,245	$	2,712	$	2,161	$	10,469

December 31, 2011  19

   20 Largest Tenants with Annualized Rent and
Remaining Term at December 31, 2011

			Remaining	Aggregate	% of Aggregate	Annualized	% of
	Tenant	Number of	Lease Term	Leased	Leased	Rent (1)	Aggregate
	Name	Leases	in Months	Square Feet	Square Feet	(in 000's)	Annualized Rent
1	TCF National Bank	2	48	267,470	3.79%	$   2,883,511	2.24%
2	Quintiles Transnational Corporation	1	87	259,531	3.68%	8,143,405	6.32%
3	CITGO Petroleum Corporation	1	122	248,399	3.52%	7,150,326	5.55%
4	Burger King Corporation	1	81	212,619	3.01%	4,440,795	3.45%
5	Denbury Onshore, LLC	2	55	202,600	2.87%	3,440,040	2.67%
6	RGA Reinsurance Company	2	36	185,501	2.63%	3,870,017	3.00%
7	SunTrust Bank	2	58, 117	182,888	2.59%	1,425,370	1.11%
8	Citicorp Credit Services, Inc	1	60	176,848	2.51%	3,511,335	2.73%
9	C.H. Robinson Worldwide, Inc	1	114	153,028	2.17%	3,984,757	3.09%
10	Houghton Mifflin Company	1	63	150,050	2.13%	5,561,713	4.32%
11	Murphy Exploration & Production Company	1	64	144,677	2.05%	3,914,253	3.04%
12	Giesecke & Devrient America, Inc.	1	38	135,888	1.93%	1,788,430	1.39%
13	Monsanto Company	1	37	127,778	1.81%	3,153,561	2.45%
14	Vail Holdings, Inc. (a)	1	87, 135	125,632	1.78%	3,449,296	2.68%
15	AT&T Services, Inc.	1	79	122,300	1.73%	958,812	0.74%
16	Argo Data Resource Corporation (b)	1	77	111,687	1.58%	2,735,492	2.12%
17	Northrop Grumman Systems Corporation	1	76	111,469	1.58%	4,035,422	3.13%
18	Alliance Data Systems	1	101, 114	96,749	1.37%	2,437,686	1.89%
19	Federal National Mortgage Association	1	20	92,358	1.31%	1,847,160	1.43%
20	Amdocs, Inc. (c)	1	5, 60	91,928	1.30%	1,746,632	1.36%
				3,199,400	45.37%	$  70,478,013	54.71%

(1) Annualized rent represents the monthly rent, including tenant reimbursements, for each lease in effect at December 31, 2011 multiplied by 12. Tenant reimbursements generally include payment of real estate taxes, operating expenses and common area maintenance and utility charges.

(a ) Vail Holdings temporarily leases 3,400 sf to expire 12/31/11

(b ) Argo Data temporarily leases 1,697 sf to expire 12/31/11

(c ) Amdocs, Inc provided notice to contract by 10,388 sf as of 5/31/12

December 31, 2011  20

   Tenant Analysis – 20 Largest Tenants Industry Profile
(as a % of square feet at December 31, 2011)

 

December 31, 2011  21

   Lease Expirations by Square Feet

 

Year	Total Square Feet	% of Square Feet Commercial
2012	287,371	4.1%
2013	444,965	6.3%
2014	425,504	6.0%
2015	796,239	11.3%
2016	922,543	13.1%
2017	721,307	10.2%
2018	653,126	9.3%
2019	637,782	9.0%
2020	163,844	2.3%
2021	590,748	8.4%
2022	475,730	6.7%
2023	139,335	2.0%
Vacant	793,574	11.3%
Total	7,052,068	100.0%

December 31, 2011  22

   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
December 31,	Year		Leases	Leases (a)	Leases	Leases
2012	113	(b)	287,371	$   5,781,298	$    20.12	4.49%
2013	48		444,965	9,995,449	22.46	7.76%
2014	41		425,504	7,840,983	18.43	6.09%
2015	36		796,239	16,572,611	20.81	12.87%
2016	34		922,543	16,428,461	17.81	12.75%
2017	23		721,307	17,625,312	24.44	13.68%
2018	12		653,126	14,670,172	22.46	11.39%
2019	12		637,782	15,202,536	23.84	11.80%
2020 and thereafter	31		1,369,657	24,694,977	18.03	19.17%
	350		6,258,494	$128,811,800	$    20.58	100.00%
Vacancies as of 12/31/11			793,574
Total Portfolio Square Footage			7,052,068

(a) Annualized rent represents the monthly rent, including tenant reimbursements, for each lease in effect at December 31, 2011 multiplied by 12. Tenant reimbursements generally include payment of real estate taxes, operating expenses and common area maintenance and utility charges.

(b) Includes 42 Month to Month leases with 22,417 of rentable square feet and annualized rent of $14.09 per square foot.

December 31, 2011  23

   Percentage of Leased Space by Property

					First		Second		Third		Fourth
				% Leased (1)	Quarter	% Leased (1)	Quarter	% Leased (1)	Quarter	% Leased (1)	Quarter
			Square	as of	Average %	as of	Average %	as of	Average %	as of	Average %
	Property Name	Location	Feet	31-Mar-11	Leased (2)	30-Jun-11	Leased (2)	30-Sep-11	Leased (2)	31-Dec-11	Leased (2)
1	PARK SENECA	Charlotte, NC	109,550	78.5%	78.5%	80.1%	79.1%	80.9%	80.5%	80.6%	80.6%
2	HILLVIEW CENTER	Milpitas, CA	36,288	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
3	SOUTHFIELD	Southfield, MI	214,697	61.1%	61.0%	39.2%	41.7%	39.2%	39.2%	39.2%	39.2%
4	FOREST PARK	Charlotte, NC	62,212	77.5%	77.5%	100.0%	85.0%	100.0%	100.0%	100.0%	100.0%
5	CENTENNIAL	Colorado Springs, CO	110,405	66.9%	66.9%	66.9%	66.9%	66.9%	66.9%	85.4%	73.0%
6	MEADOW POINT	Chantilly, VA	138,537	100.0%	98.6%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
7	TIMBERLAKE	Chesterfield, MO	232,766	97.7%	97.7%	97.7%	97.7%	97.7%	97.7%	97.7%	97.7%
8	FEDERAL WAY	Federal Way, WA	117,010	42.0%	38.5%	42.0%	42.0%	42.0%	42.0%	47.0%	44.3%
9	NORTHWEST POINT	Elk Grove Village, IL	176,848	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
10	TIMBERLAKE EAST	Chesterfield, MO	116,197	100.0%	100.0%	100.0%	100.0%	85.9%	90.6%	85.9%	85.9%
11	PARK TEN	Houston, TX	155,715	98.8%	95.4%	98.8%	98.8%	98.8%	98.8%	81.2%	81.2%
12	MONTAGUE	San Jose, CA	145,951	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
13	ADDISON	Addison, TX	293,787	95.8%	95.8%	95.8%	95.8%	95.8%	95.8%	95.8%	95.8%
14	COLLINS CROSSING	Richardson, TX	298,766	79.1%	79.1%	79.7%	79.3%	88.4%	88.4%	88.4%	88.4%
15	GREENWOOD PLAZA	Englewood, CO	197,527	60.1%	60.1%	54.3%	58.2%	54.3%	54.3%	48.9%	48.4%
16	RIVER CROSSING	Indianapolis, IN	205,059	93.8%	93.8%	93.5%	93.4%	93.5%	93.5%	93.5%	93.5%
17	LIBERTY PLAZA	Addison, TX	218,934	75.6%	74.3%	75.6%	75.6%	68.6%	68.0%	77.9%	74.8%
18	INNSBROOK	Glen Allen, VA	298,456	60.8%	61.0%	63.7%	67.3%	86.8%	78.8%	98.3%	90.7%
19	380 INTERLOCKEN	Broomfield, CO	240,184	85.1%	85.1%	85.1%	85.1%	85.1%	85.1%	85.1%	85.1%
20	BLUE LAGOON	Miami, FLA	212,619	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
21	ELDRIDGE GREEN	Houston, TX	248,399	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
22	WILLOW BEND	Plano, TX	116,622	67.0%	63.2%	83.1%	76.8%	83.1%	83.1%	83.1%	83.1%
23	ONE OVERTON PARK	Atlanta, GA	387,267	92.4%	92.4%	91.1%	91.5%	90.4%	90.6%	89.3%	90.0%
24	390 INTERLOCKEN	Broomfield, CO	241,516	95.9%	95.9%	95.9%	95.9%	96.6%	96.9%	93.4%	94.3%
25	EAST BALTIMORE	Baltimore, MD	325,445	84.5%	84.3%	55.7%	55.5%	55.7%	55.7%	55.7%	55.7%
26	PARK TEN PHASE II	Houston, TX	156,746	100.0%	99.1%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
27	LAKESIDE CROSSING I	Maryland Heights, MO	127,778	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
28	LOUDOUN TECH	Dulles, VA	135,888	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
29	4807 STONECROFT	Chantilly, VA	111,469	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
30	EDEN BLUFF	Eden Prairie, MN	153,028	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
31	121 SOUTH EIGHTH ST	Minneapolis, MN	472,616	92.2%	92.2%	92.5%	92.1%	93.6%	93.1%	93.6%	93.6%
32	EMPEROR BOULEVARD	Durham, NC	259,531	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
33	LEGACY TENNYSON CTR	Plano, TX	202,600	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
34	ONE LEGACY	Plano, TX	214,110	89.7%	89.7%	100.0%	94.6%	100.0%	100.0%	100.0%	100.0%
35	909 DAVIS	Evanston, IL	195,245	n/a	n/a	n/a	n/a	94.8%	94.8%	94.8%	94.8%
36	1410 EAST RENNER	Richardson, TX	122,300	n/a	n/a	n/a	n/a	n/a	n/a	100.0%	100.0%
	TOTAL WEIGHTED AVERAGE  (3)		7,052,068	88.4%	87.4%	86.9%	86.9%	88.1%	87.7%	88.7%	88.1%

(1) % Leased as of month's end includes all leases that expire on the last day of the quarter.

(2) Average quarterly percentage is the average of the end of the month leased percentage for each of the 3 months during the quarter.

(3) First & Second Quarter Totals include Bollman Place (98,745 sf) located Maryland, which sold in June.

December 31, 2011  24

   Capital Recycling
($ in thousands)

Recent Acquisitions:
	State/Region	Property Type	Square Feet	Date Acquired	Purchase Price
2011
Emperor Boulevard	NC/East	Office	259,531	3/4/11	$        75,800
Legacy Tennyson Center	TX/South	Office	202,600	3/10/11	37,000
One Legacy Circle	TX/South	Office	214,110	3/24/11	52,983
909 Davis	IL/Midwest	Office	195,245	9/30/11	37,062
East Renner Road	TX/South	Office	122,300	10/6/11	11,282
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
Recent Dispositions:
					Net Sales	Gain (Loss)
	State/Region	Property Type	Square Feet	Date Sold	Proceeds	on Sale
2011
Fairview	VA/East	Office	252,613	1/21/11	$        89,382	$        19,592
Bolman	MD/East	Industrial	98,745	6/24/11	7,408	2,346
2007
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

December 31, 2011  25

   Investment Banking Performance

 

In December 2011, we discontinued our investment banking segment from which Gross Syndication Proceeds (or “GSP”) were achieved and we earned fees primarily based on a percentage of GSP. Our investment banking segment generated 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. We refer to these entities which are organized as corporations and operated in a manner intended to qualify as REITs, as Sponsored REITs. On December 15, 2011, we announced that our broker/dealer subsidiary, FSP Investments LLC, would no longer sponsor the syndication of shares of preferred stock in newly-formed Sponsored REITs.

December 31, 2011  26

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

	For the three months ended:																																				For the year ended:
	31-Mar-11			30-Jun-11			30-Sep-11			31-Dec-11			31-Mar-10			30-Jun-10			30-Sep-10			31-Dec-10			31-Mar-09			30-Jun-09			30-Sep-09			31-Dec-09			2011			2010			2009
Net income	$	24,767		$	10,381		$	3,314		$	5,062		$	5,562		$	5,954		$	4,757		$	5,820		$	7,808		$	4,865		$	6,942		$	8,257		$	43,524		$	22,093		$	27,872
(Gain) Loss on sale of assets		(19,593	)		(2,346	)		—			—			—			—			—			—			—			—			—			(424	)		(21,939	)		—			(424	)
GAAP income from non-consolidated REITs		(1,773	)		(1,166	)		(573	)		(978	)		(253	)		(380	)		(404	)		(153	)		(792	)		(443	)		(476	)		(301	)		(4,490	)		(1,190	)		(2,012	)
Distributions from non-consolidated REITs		1,767			1,215			1,104			970			1,407			1,324			1,192			1,247			1,615			1,523			1,119			1,371			5,056			5,170			5,628
Acquisition costs		269			9			185			157			—			129			(4	)		—			—			248			391			4			620			125			643
Depreciation & amortization		10,812			12,047			12,332			13,248			9,934			9,675			10,510			10,605			8,707			11,216			9,561			10,168			48,439			40,724			39,652
Funds From Operations (FFO)		16,249			20,140			16,362			18,459			16,650			16,702			16,051			17,519			17,338			17,409			17,537			19,075			71,210			66,922			71,359
Plus gains on sales of assets (GOS)		19,592			2,346			—			—			—			—			—			—			—			—			—			424			—			—			424
FFO+GOS (Total Profits)	$	35,841		$	22,486		$	16,362		$	18,459		$	16,650		$	16,702		$	16,051		$	17,519		$	17,338		$	17,409		$	17,537		$	19,499		$	71,210		$	66,922		$	71,783
Per Share Data:
EPS	$	0.30		$	0.13		$	0.04		$	0.06		$	0.07		$	0.07		$	0.06		$	0.07		$	0.11		$	0.07		$	0.10		$	0.10		$	0.55		$	0.28		$	0.38
FFO		0.20			0.25			0.20			0.23			0.21			0.21			0.20			0.22			0.25			0.25			0.25			0.24			0.89			0.84			0.98
GOS		0.24			0.03			—			—			—			—			—			—			—			—			—			—			—			—			—
FFO+GOS		0.44			0.28			0.20			0.23			0.21			0.21			0.20			0.22			0.25			0.25			0.25			0.24			0.89			0.84			0.98
Weighted Average Shares (basic and diluted)		81,437			81,437			81,600			81,600			79,681			79,681			79,751			80,187			70,481			70,481			71,281			79,681			79,826			79,826			73,001

December 31, 2011  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”), because 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, 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. 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), nor 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 and the National Association of Real Estate Investment Trusts, or NAREIT, 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.

December 31, 2011  28

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

	For the three months ended:
	31-Mar-11			30-Jun-11			30-Sep-11			31-Dec-11			31-Mar-10			30-Jun-10			30-Sep-10			31-Dec-10			31-Mar-09			30-Jun-09			30-Sep-09			31-Dec-09
Net income	$	24,767		$	10,381		$	3,314		$	5,062		$	5,562		$	5,954		$	4,757		$	5,820		$	7,808		$	4,865		$	6,941		$	8,258
(Gain) Loss on sale of assets		(19,593	)		(2,346	)		—			—			—			—			—			—			—			—			—			(424	)
GAAP income from non-consolidated REITs		(1,773	)		(1,166	)		(573	)		(978	)		(253	)		(380	)		(404	)		(153	)		(792	)		(443	)		(475	)		(301	)
Distributions from non-consolidated REITs		1,767			1,215			1,104			970			1,407			1,324			1,192			1,247			1,615			1,522			1,119			1,371
Acquisition costs		269			9			185			157			—			129			(4	)		—			—			248			391			4
Depreciation & amortization		10,812			12,047			12,332			13,248			9,934			9,675			10,510			10,605			8,707			11,217			9,561			10,167
Funds From Operations (FFO)		16,249			20,140			16,362			18,459			16,650			16,702			16,051			17,519			17,338			17,409			17,537			19,075
Plus gains on sales of assets (GOS)		19,592			2,346			—			—			—			—			—			—			—			—			—			424
FFO+GOS (Total Profits)	$	35,841		$	22,486		$	16,362		$	18,459		$	16,650		$	16,702		$	16,051		$	17,519		$	17,338		$	17,409		$	17,537		$	19,499
Funds Available for Distribution:
Funds From Operations (FFO)		16,249			20,140			16,362			18,459			16,650			16,702			16,051			17,519			17,338			17,409			17,537			19,075
Straight-line rent		(2,303	)		(2,873	)		(2,228	)		(2,474	)		(1,018	)		(740	)		(1,203	)		(1,288	)		(374	)		(69	)		(405	)		(1,030	)
Capital expenditures		(449	)		(876	)		(754	)		(747	)		(380	)		(498	)		(671	)		(1,053	)		(466	)		(115	)		(265	)		(619	)
Funds Available for Distribution (FAD)	$	13,497		$	16,391		$	13,380		$	15,238		$	15,252		$	15,464		$	14,177		$	15,178		$	16,498		$	17,225		$	16,867		$	17,426
Per Share Data:
EPS	$	0.30		$	0.13		$	0.04		$	0.06		$	0.07		$	0.07		$	0.06		$	0.07		$	0.11		$	0.07		$	0.10		$	0.10
FFO		0.20			0.25			0.20			0.22			0.21			0.21			0.20			0.22			0.25			0.25			0.25			0.24
GOS		0.24			0.03			—			—			—			—			—			—			—			—			—			—
FFO+GOS		0.44			0.28			0.20			0.22			0.21			0.21			0.20			0.22			0.25			0.25			0.25			0.24
FAD		0.17			0.20			0.16			0.18			0.19			0.19			0.18			0.19			0.23			0.24			0.24			0.22
Weighted Average Shares (basic and diluted)		81,437			81,437			81,600			82,937			79,681			79,681			79,751			80,187			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 order 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.

December 31, 2011  29

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

	For the three months ended:								Year Ended		For the three months ended:										Year Ended		For the three months ended:											Year Ended
	31-Mar-11		30-Jun-11		30-Sep-11		31-Dec-11		31-Dec-11		31-Mar-10			30-Jun-10		30-Sep-10			31-Dec-10		31-Dec-10		31-Mar-09			30-Jun-09			30-Sep-09			31-Dec-09		31-Dec-09
Net income	$	24,767	$	10,381	$	3,314	$	5,062	$	43,524	$	5,562		$	5,954	$	4,757		$	5,820	$	22,093	$	7,808		$	4,865		$	6,941		$	8,258	$	27,872
Interest expense		2,408		3,578		3,419		3,261		12,666		1,652			1,735		1,892			2,004		7,283		1,577			1,599			1,744			1,650		6,570
Depreciation and amortization		10,812		12,047		12,332		13,248		48,439		9,934			9,675		10,510			10,605		40,724		8,707			11,216			9,561			10,167		39,651
Income taxes		50		68		67		82		267		(68	)		5		(37	)		317		217		(299	)		(75	)		(270	)		65		(579	)
EBITDA		38,037		26,074		19,132		21,653		104,896		17,080			17,369		17,122			18,746		70,317		17,793			17,605			17,976			20,140		73,514
Interest expense	$	2,408	$	3,578	$	3,419	$	3,261	$	12,666	$	1,652		$	1,735	$	1,892		$	2,004	$	7,283	$	1,577		$	1,599		$	1,744		$	1,650	$	6,570
Scheduled principal payments (1)		—		—		—		—		—		—			—		—			150		150		—			—			—			—		—
Interest and scheduled principal payments	$	2,408	$	3,578	$	3,419	$	3,261	$	12,666	$	1,652		$	1,735	$	1,892		$	2,154	$	7,433	$	1,577		$	1,599		$	1,744		$	1,650	$	6,570
Interest coverage ratio		15.80		7.29		5.60		6.64		8.28		10.34			10.01		9.05			9.35		9.65		11.28			11.01			10.31			12.21		11.19
Debt service coverage ratio		15.80		7.29		5.60		6.64		8.28		10.34			10.01		9.05			8.70		9.46		11.28			11.01			10.31			12.21		11.19

(1) Scheduled principal payments exclude repayment of our Term Loan on February 22, 2011 in its entirety.

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.

December 31, 2011  30

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

	Three Months Ended												2011			Three months ended												2010
	31-Mar-11			30-Jun-11			30-Sep-11			31-Dec-11			Total			31-Mar-10			30-Jun-10			30-Sep-10			31-Dec-10			Total
Net Income	$	24,767		$	10,381		$	3,314		$	5,062		$	43,524		$	5,562		$	5,954		$	4,757		$	5,820		$	22,093
Add (deduct):
Investment banking segment net loss (income)		(160	)		(3,274	)		139			(132	)		(3,427	)		479			(263	)		401			(1,352	)		(735	)
Gain on sale of assets		(19,592	)		(2,346	)		—			—			(21,938	)		—			—			—			—			—
Management fees (before elimination)		(364	)		(428	)		(439	)		(563	)		(1,794	)		(484	)		(359	)		(362	)		(535	)		(1,740	)
Depreciation and Amortization		10,781			12,065			12,279			13,195			48,320			9,184			9,205			10,348			10,453			39,190
Amortization of favorable leases		(39	)		(23	)		(57	)		72			(47	)		716			432			96			119			1,363
Selling, general and administrative		1,644			1,602			1,656			2,011			6,913			1,447			1,854			1,400			1,698			6,399
Interest expense		2,408			3,578			3,419			3,260			12,665			1,652			1,736			1,892			2,003			7,283
Interest income		(600	)		(910	)		(790	)		(810	)		(3,110	)		(338	)		(374	)		(431	)		(491	)		(1,634	)
Equity in earnings of nonconsolidated REITs		(968	)		(1,166	)		(573	)		(978	)		(3,685	)		(253	)		(380	)		(404	)		(229	)		(1,266	)
Non-property specific income and expenses, net		(1,514	)		(37	)		67			305			(1,179	)		461			690			421			(268	)		1,304
GAAP Property NOI		16,363			19,442			19,015			21,422			76,242			18,426			18,495			18,118			17,218			72,257
Straight-line rent		(1,641	)		(2,872	)		(2,228	)		(2,474	)		(9,216	)		(1,020	)		(1,339	)		(1,202	)		(1,281	)		(4,842	)
Cash Property NOI	$	14,722		$	16,570		$	16,787		$	18,948		$	67,026		$	17,406		$	17,156		$	16,916		$	15,937		$	67,415

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.

December 31, 2011  31

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

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