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

Exhibit 99.2

Franklin Street Properties

Supplemental Operating

and Financial Data

Fourth Quarter 2016

Franklin Street Properties Corp.

401 Edgewater Place | Wakefield, Massachusetts 01880

781.557.1300 | www.fspreit.com

Table of Contents

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

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

1001 17th Street, Denver, CO

December 31, 2016 | Page 2

Company Information

Overview		Snapshot (as of December 31, 2016)
Franklin Street Properties Corp. (“FSP”, “we”, “our” or the “Company”) (NYSE MKT: FSP) is investing in institutional-quality office properties in the U.S.  FSP’s strategy is to invest in select urban infill and central business district (CBD) properties, with primary emphasis on our top five markets of Atlanta, Dallas, Denver, Houston, and Minneapolis.  FSP seeks value-oriented investments with an eye towards long-term growth and appreciation, as well as current income.  FSP is a Maryland corporation that operates in a manner intended to qualify as a real estate investment trust (REIT) for federal income tax purposes. FSP’s real estate operations include property acquisitions and dispositions, short-term financing, leasing, development and asset management.		Corporate Headquarters	Wakefield, MA
		Fiscal Year-End	31-Dec
		Total Properties	36
		Total Square Feet	10.2 Million
		Trading Symbol	FSP
		Exchange	NYSE MKT
		Common Shares Outstanding	107,231,155
		Quarterly Dividend	$0.19
Our Business		Dividend Yield	5.9%
As of December 31, 2016, the Company owned and operated a portfolio of real estate consisting of 36 properties, managed seven Sponsored REITs and held five promissory notes secured by mortgages on real estate owned by Sponsored REITs. From time-to-time, the Company may acquire, develop or redevelop real estate, make additional secured loans or acquire one of its Sponsored REITs. The Company may also pursue, on a selective basis, the sale of its properties in order to take advantage of the value creation and demand for its properties, or for geographic or property specific reasons.		Total Market Capitalization	$2.4 Billion
		Insider Holdings	3.9%
Management Team
George J. Carter	Jeffrey B. Carter
Chief Executive Officer and	President and Chief Investment
Chairman of the Board	Officer
John G. Demeritt	Scott H. Carter
Executive Vice President, Chief	Executive Vice President, General
Financial Officer and Treasurer	Counsel and Secretary
John F. Donahue	Eriel Anchondo
Executive Vice President	Executive Vice President and Chief Operating Officer	999 Peachtree Street, Atlanta, GA
Inquiries
Inquiries should be directed to:  Georgia Touma
877.686.9496 or InvestorRelations@fspreit.com

December 31, 2016 | Page 3

Summary of Financial Highlights

(in thousands except per share amounts, SF & number of properties)
	31-Dec-16		30-Sep-16		30-Jun-16		31-Mar-16		31-Dec-15
Income Items:
Rental revenue	$	64,611		61,925	$	59,453	$	58,360	$	59,656
Total revenue		65,988		63,280		60,807		59,813		61,250
Adjusted EBITDA*		32,823		32,356		32,144		31,637		32,112
Equity in losses of non-consolidated REITs		(263)		(196)		(86)		(286)		(807)
Net income		1,729		2,458		1,612		2,579		15,412
FFO*		26,907		26,670		26,731		26,037		27,076
Per Share Data:
EPS	$	0.02		0.02	$	0.02	$	0.03	$	0.15
FFO*	$	0.25		0.26	$	0.27	$	0.26	$	0.27
Weighted Average Shares (diluted)		107,231		103,709		100,187		100,187		100,187
Closing share price	$	12.96		12.60	$	12.27	$	10.61	$	10.35
Dividend	$	0.19		0.19	$	0.19	$	0.19	$	0.19
Payout Ratio:		76%		74%		71%		73%		70%
Balance Sheet Items:
Real estate, net	$	1,685,269		1,567,521	$	1,526,936	$	1,487,281	$	1,509,624
Other assets, net		402,864		372,924		368,481		374,104		409,391
Total assets, net		2,088,133		1,940,445		1,895,417		1,861,385		1,919,015
Total liabilities, net		1,126,089		977,497		1,000,434		948,301		983,359
Shareholders' equity		962,044		962,948		894,983		913,084		935,656
Market Capitalization and Debt:
Total Market Capitalization (a)	$	2,439,716		2,249,113	$	2,159,299	$	1,947,988	$	1,946,940
Total debt outstanding (excluding unamortized financing costs)		1,050,000		898,000		930,000		885,000		910,000
Debt to Total Market Capitalization		43.0%		39.9%		43.1%		45.4%		46.7%
Debt to Adjusted EBITDA*		8.0		6.9		7.2		7.0		7.1
Owned Portfolio Leasing Statistics (b):
Owned portfolio assets		36		36		35		35		36
Portfolio total SF		10,163,615		9,683,846		9,523,054		9,325,249		9,494,953
Portfolio % leased		89.3%		89.5%		90.1%		90.2%		91.6%

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

(b) For periods in 2016, excludes one property held for redevelopment located in Minneapolis, Minnesota.

*See pages 9 & 10 for reconciliations of Net Income to FFO and Adjusted EBITDA, respectively, and the Appendix for Definitions of these Non-GAAP Measures beginning on page 27.

December 31, 2016 | Page 4

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

									Year										For the
	For the Three Months Ended								Ended		For the Three Months Ended								Year Ended
	31-Mar-16		30-Jun-16		30-Sep-16		31-Dec-16		31-Dec-16		31-Mar-15		30-Jun-15		30-Sep-15		31-Dec-15		31-Dec-15
Revenue:
Rental	$	58,360	$	59,453	$	61,925	$	64,611	$	244,349	$	59,013	$	58,801	$	60,386	$	59,656	$	237,856
Related party revenue:
Management fees and interest income from loans		1,433		1,337		1,338		1,357		5,465		1,473		1,412		1,470		1,575		5,930
Other		20		17		17		20		74		21		20		21		19		81
Total revenue		59,813		60,807		63,280		65,988		249,888		60,507		60,233		61,877		61,250		243,867
Expenses:
Real estate operating expenses		15,292		14,929		16,905		18,209		65,335		15,356		14,644		15,951		15,939		61,890
Real estate taxes and insurance		9,150		10,154		10,218		10,618		40,140		10,048		9,469		9,941		9,202		38,660
Depreciation and amortization		22,445		22,352		23,298		24,957		93,052		22,672		23,207		22,911		22,569		91,359
Selling, general and administrative		3,530		3,494		3,419		3,683		14,126		3,691		3,401		3,071		3,128		13,291
Interest		6,433		6,417		6,767		6,931		26,548		6,187		6,365		6,425		6,455		25,432
Total expenses		56,850		57,346		60,607		64,398		239,201		57,954		57,086		58,299		57,293		230,632
Income before interest income, equity in losses of non-consolidated REITs, other, gain (loss) on sale of properties and property held for sale, less applicable income tax and taxes		2,963		3,461		2,673		1,590		10,687		2,553		3,147		3,578		3,957		13,235
Interest income		—		—		—		—		—		1		—		—		—		1
Equity in losses of non-consolidated REITs		(286)		(86)		(196)		(263)		(831)		(322)		(38)		(284)		(807)		(1,451)
Other		—		(1,009)		621		2,266		1,878		—		—		—		—		—
Gain (loss) on sale of properties and provision for loss on property held for sale, less applicable income tax		—		(643)		(523)		(1,772)		(2,938)		10,462		948		1		12,251		23,662
Income before taxes on income		2,677		1,723		2,575		1,821		8,796		12,694		4,057		3,295		15,401		35,447
Income tax expense		98		111		117		92		418		161		154		129		(11)		433
Net income	$	2,579	$	1,612	$	2,458	$	1,729	$	8,378	$	12,533	$	3,903	$	3,166	$	15,412	$	35,014
Weighted average number of shares outstanding, basic and diluted		100,187		100,187		103,709		107,231		102,843		100,187		100,187		100,187		100,187		100,187
Net income per share, basic and diluted	$	0.03	$	0.02	$	0.02	$	0.02	$	0.08	$	0.13	$	0.04	$	0.03	$	0.15	$	0.35

December 31, 2016 | Page 5

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

	March 31,		June 30,		September 30,		December 31,		March 31,		June 30,		September 30,		December 31,
	2016		2016		2016		2016		2015		2015		2015		2015
Assets:
Real estate assets:
Land	$	168,120	$	172,205	$	177,505	$	196,178	$	174,707	$	180,271	$	180,271	$	170,021
Buildings and improvements		1,625,819		1,667,507		1,713,296		1,822,183		1,581,524		1,636,444		1,639,869		1,637,066
Fixtures and equipment		2,649		2,771		3,205		4,136		1,724		1,800		1,882		2,528
		1,796,588		1,842,483		1,894,006		2,022,497		1,757,955		1,818,515		1,822,022		1,809,615
Less accumulated depreciation		309,307		315,547		326,485		337,228		271,058		279,172		291,331		299,991
Real estate assets, net		1,487,281		1,526,936		1,567,521		1,685,269		1,486,897		1,539,343		1,530,691		1,509,624
Acquired real estate leases, net		99,102		104,350		102,226		125,491		124,337		126,926		117,272		108,046
Investment in non-consolidated REITs		76,707		76,289		75,761		75,165		78,228		78,164		77,853		77,019
Asset held for sale		15,921		9,275		8,893		3,871		—		—		—		—
Cash and cash equivalents		14,316		7,524		13,372		9,335		14,945		15,841		19,100		18,163
Restricted cash		10		3		48		31		56		48		34		23
Tenant rent receivables, net		3,691		3,268		3,331		3,113		4,587		2,886		3,548		2,898
Straight-line rent receivable, net		49,696		50,196		50,742		50,930		45,498		46,168		47,330		48,502
Prepaid expenses and other assets		5,943		5,875		6,460		5,231		10,475		6,278		7,187		5,484
Related party mortgage loan receivable		79,575		79,310		79,045		81,780		93,641		93,641		93,641		118,641
Other assets: derivative asset		—		—		—		12,907		774		918		—		1,132
Office computers and furniture, net of accumulated depreciation		438		385		370		313		588		562		551		484
Deferred leasing commissions, net		28,705		32,006		32,676		34,697		26,335		26,508		26,587		28,999
Total assets	$	1,861,385	$	1,895,417	$	1,940,445	$	2,088,133	$	1,886,361	$	1,937,283	$	1,923,794	$	1,919,015
Liabilities and Stockholders’ Equity:
Liabilities:
Bank note payable	$	265,000	$	310,000	$	278,000	$	280,000	$	240,000	$	300,000	$	300,000	$	290,000
Term loan payable, net of unamortized financing costs		617,880		618,113		615,636		765,217		616,949		617,182		617,414		617,647
Accounts payable and accrued expenses		37,791		41,498		53,964		57,259		36,065		39,199		42,164		49,489
Accrued compensation		1,274		2,170		3,238		3,784		1,241		2,327		3,236		3,726
Tenant security deposits		4,433		4,693		4,719		5,355		4,019		4,315		4,349		4,829
Other liabilities: derivative liabilities		13,226		14,913		12,651		5,551		9,836		7,632		12,096		8,243
Acquired unfavorable real estate leases, net		8,697		9,047		9,289		8,923		9,921		11,082		10,241		9,425
Total liabilities		948,301		1,000,434		977,497		1,126,089		918,031		981,737		989,500		983,359
Commitments and contingencies
Stockholders’ Equity:
Preferred stock		-		-		-		-		-		-		-		-
Common stock		10		10		11		11		10		10		10		10
Additional paid-in capital		1,273,556		1,273,556		1,356,457		1,356,457		1,273,556		1,273,556		1,273,556		1,273,556
Accumulated other comprehensive income (loss)		(13,226)		(13,904)		(12,263)		5,478		(9,062)		(6,714)		(12,096)		(7,111)
Accumulated distributions in excess of accumulated earnings		(347,256)		(364,679)		(381,257)		(399,902)		(296,174)		(311,306)		(327,176)		(330,799)
Total stockholders’ equity		913,084		894,983		962,948		962,044		968,330		955,546		934,294		935,656
Total liabilities and stockholders’ equity	$	1,861,385	$	1,895,417	$	1,940,445	$	2,088,133	$	1,886,361	$	1,937,283	$	1,923,794	$	1,919,015

December 31, 2016 | Page 6

Condensed Consolidated Statements of Cash Flows (in thousands)

	Twelve Months ended December 31,
	2016		2015		2014
Cash flows from operating activities:
Net income	$	8,378	$	35,014	$	13,148
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		95,243		93,426		97,916
Amortization of above market lease		(496)		(158)		635
Hedge ineffectiveness		(1,878)		—		—
(Gain) loss on sale of properties and property held for sale, less applicable income tax		2,938		(23,662)		(940)
Equity in earnings (losses) from non-consolidated REITs		831		1,451		1,760
Increase in allowance for doubtful accounts		(30)		(195)		275
Changes in operating assets and liabilities:
Restricted cash		(8)		719		(99)
Tenant rent receivables		(185)		2,030		94
Straight-line rents		(1,977)		(2,448)		(4,737)
Lease acquisition costs		(1,095)		(1,487)		(440)
Prepaid expenses and other assets		(721)		422		700
Accounts payable and accrued expenses		5,751		5,505		206
Accrued compensation		58		(32)		773
Tenant security deposits		526		581		222
Payment of deferred leasing commissions		(12,965)		(8,276)		(6,347)
Net cash provided by operating activities		94,370		102,890		103,166
Cash flows from investing activities:
Property acquisitions		(221,119)		(66,104)		—
Acquired real estate leases		(51,509)		(10,604)		—
Property improvements, fixtures and equipment		(37,407)		(21,929)		(18,561)
Office computers and furniture		(83)		—		—
Distributions in excess of earnings from non-consolidated REITs		1,023		107		107
Investment in related party mortgage loan receivable		(3,000)		(25,000)		(11,170)
Repayment of related party mortgage loan receivable		39,861		—		17,275
Proceeds received on sales of real estate assets		27,262		85,426		14,192
Net cash provided by (used in) investing activities		(244,972)		(38,104)		1,843
Cash flows from financing activities:
Distributions to stockholders		(77,481)		(76,142)		(76,142)
Proceeds (costs) from equity offering, net		82,902		—		—
Borrowings under bank note payable		175,000		110,000		15,000
Repayments of bank note payable		(185,000)		(88,000)		(53,500)
Borrowing (repayment) of term loan payable, net		150,000		—		—
Deferred Financing Costs		(3,647)		—		(2,471)
Net cash provided by (used in) financing activities		141,774		(54,142)		(117,113)
Net increase (decrease) in cash and cash equivalents		(8,828)		10,644		(12,104)
Cash and cash equivalents, beginning of period		18,163		7,519		19,623
Cash and cash equivalents, end of period	$	9,335	$	18,163	$	7,519

December 31, 2016 | Page 7

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

	Rentable									Year										Year
	Square Feet	Three Months Ended								Ended		Three Months Ended								Ended		Inc		%
(in thousands)	or RSF	31-Mar-16		30-Jun-16		30-Sep-16		31-Dec-16		31-Dec-16		31-Mar-15		30-Jun-15		30-Sep-15		31-Dec-15		31-Dec-15		(Dec)		Change
Region
East	1,332	$	4,671	$	4,604	$	4,602	$	4,527	$	18,404	$	4,736	$	4,648	$	4,703	$	4,735	$	18,822	$	(418)	(2.2)	%
MidWest	1,235		2,958		3,103		2,973		2,882		11,916		2,915		2,941		2,950		3,419		12,225		(309)	(2.5)	%
South	4,025		16,020		16,256		15,346		15,392		63,014		15,781		15,995		15,971		15,956		63,703		(689)	(1.1)	%
West	2,046		8,302		8,467		8,038		7,799		32,606		7,720		8,077		8,071		7,892		31,760		846	2.7	%
Same Store	8,638		31,951		32,430		30,959		30,600		125,940		31,152		31,661		31,695		32,002		126,510		(570)	(0.5)	%
Acquisitions	1,525		1,180		1,350		2,928		4,003		9,461		—		1,057		1,067		1,090		3,214		6,247	4.8	%
Property NOI* from the continuing portfolio	10,163		33,131		33,780		33,887		34,603		135,401		31,152		32,718		32,762		33,092		129,724		5,677	4.4	%
Dispositions, Non-Operating, Development or Redevelopment			336		129		157		91		713		1,871		1,178		1,055		852		4,956		(4,243)	(3.3)	%
Property NOI*		$	33,467	$	33,909	$	34,044	$	34,694	$	136,114	$	33,023	$	33,896	$	33,817	$	33,944	$	134,680	$	1,434	1.1	%
Same Store		$	31,951	$	32,430	$	30,959	$	30,600	$	125,940	$	31,152	$	31,661	$	31,695	$	32,002	$	126,510	$	(570)	(0.5)	%
Less Nonrecurring
Items in NOI* (a)			413		586		146		502		1,647		75		81		420		576		1,152		495	(0.4)	%
Comparative
Same Store		$	31,538	$	31,844	$	30,813	$	30,098	$	124,293	$	31,077	$	31,580	$	31,275	$	31,426	$	125,358	$	(1,065)	(0.8)	%

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

* See page 11 for a reconciliation of Net Income to Property NOI and the Appendix for Definition of Non-GAAP Measures beginning on page 27.

December 31, 2016 | Page 8

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

									Year										Year
	For the Three Months Ended								Ended		For the Three Months Ended								Ended
	31-Mar-16		30-Jun-16		30-Sep-16		31-Dec-16		31-Dec-16		31-Mar-15		30-Jun-15		30-Sep-15		31-Dec-15		31-Dec-15
Net income	$	2,579	$	1,612	$	2,458	$	1,729	$	8,378	$	12,533	$	3,903	$	3,166	$	15,412	$	35,014
(Gain) loss on sale of properties and property held for sale, less applicable income tax		—		643		523		1,772		2,938		(10,462)		(948)		(1)		(12,251)		(23,662)
GAAP income from non-consolidated REITs		286		86		196		263		831		322		38		284		807		1,451
FFO from non-consolidated REITs		645		895		787		714		3,041		601		885		645		601		2,732
Depreciation & amortization		22,527		22,352		23,112		24,565		92,556		22,678		23,168		22,848		22,507		91,201
NAREIT FFO*		26,037		25,588		27,076		29,043		107,744		25,672		27,046		26,942		27,076		106,736
Hedge ineffectiveness		—		1,009		(621)		(2,266)		(1,878)		—		—		—		—		—
Acquisition costs		—		134		215		130		479		—		142		12		—		154
Funds From Operations (FFO)*	$	26,037	$	26,731	$	26,670	$	26,907	$	106,345	$	25,672	$	27,188	$	26,954	$	27,076	$	106,890
Adjusted Funds From Operations (AFFO)*
Funds From Operations (FFO)*	$	26,037	$	26,731	$	26,670	$	26,907	$	106,345	$	25,672	$	27,188	$	26,954	$	27,076	$	106,890
Reverse FFO from non-consolidated REITs		(645)		(895)		(787)		(714)		(3,041)		(601)		(885)		(645)		(601)		(2,732)
Distributions from non-consolidated REITs		27		332		332		332		1,023		27		27		27		26		107
Amortization of deferred financing costs		517		517		622		535		2,191		517		517		516		518		2,068
Straight-line rent		(1,275)		(700)		(119)		117		(1,977)		(69)		(574)		(930)		(875)		(2,448)
Tenant improvements		(1,929)		(1,329)		(3,325)		(7,885)		(14,468)		(2,936)		(3,420)		(1,794)		(3,788)		(11,938)
Leasing commissions		(1,613)		(4,966)		(2,247)		(3,783)		(12,609)		(830)		(1,539)		(1,490)		(3,952)		(7,811)
Non-investment capex		(438)		(1,052)		(2,211)		(1,842)		(5,543)		(643)		(1,411)		(1,090)		(1,162)		(4,306)
Adjusted Funds From Operations (AFFO)*	$	20,681	$	18,638	$	18,935	$	13,667	$	71,921	$	21,137	$	19,903	$	21,548	$	17,242	$	79,830
Per Share Data:
EPS	$	0.03	$	0.02	$	0.02	$	0.02	$	0.08	$	0.13	$	0.04	$	0.03	$	0.15	$	0.35
FFO*		0.26		0.27		0.26		0.25		1.03		0.26		0.27		0.27		0.27		1.07
AFFO*		0.21		0.19		0.18		0.13		0.70		0.21		0.20		0.22		0.17		0.80
Weighted Average Shares (basic and diluted)		100,187		100,187		103,709		107,231		102,843		100,187		100,187		100,187		100,187		100,187

* See the Appendix for Definitions of these Non-GAAP Measures beginning on page 27

December 31, 2016 | Page 9

EBITDA* Reconciliation (in thousands, except ratio amounts)

									Year										Year
	Three Months Ended								Ended		Three Months Ended								Ended
	31-Mar-16		30-Jun-16		30-Sep-16		31-Dec-16		31-Dec-16		31-Mar-15		30-Jun-15		30-Sep-15		31-Dec-15		31-Dec-15
Net income	$	2,579	$	1,612	$	2,458	$	1,729	$	8,378	$	12,533	$	3,903	$	3,166	$	15,412	$	35,014
Interest expense		6,433		6,417		6,767		6,931		26,548		6,187		6,365		6,425		6,455		25,432
Depreciation and amortization		22,527		22,352		23,112		24,565		92,556		22,678		23,168		22,848		22,507		91,201
Income taxes		98		111		117		92		418		161		154		129		(11)		433
EBITDA*		31,637		30,492		32,454		33,317		127,900		41,559		33,590		32,568		44,363		152,080
(Gain) loss on sale of properties and property held for sale, less applicable income tax		—		643		523		1,772		2,938		(10,462)		(948)		(1)		(12,251)		(23,662)
Hedge ineffectiveness		—		1,009		(621)		(2,266)		(1,878)		—		—		—		—		—
Adjusted EBITDA*	$	31,637	$	32,144	$	32,356	$	32,823	$	128,960	$	31,097	$	32,642	$	32,567	$	32,112	$	128,418
Interest expense	$	6,433	$	6,417	$	6,767	$	6,931	$	26,548	$	6,187	$	6,365	$	6,425	$	6,455	$	25,432
Scheduled principal payments		—		—		—		—		—		—		—		—		—		—
Interest and scheduled principal payments	$	6,433	$	6,417	$	6,767	$	6,931	$	26,548	$	6,187	$	6,365	$	6,425	$	6,455	$	25,432
Interest coverage ratio		4.92		5.01		4.78		4.74		4.86		5.03		5.13		5.07		4.97		5.05
Debt service coverage ratio		4.92		5.01		4.78		4.74		4.86		5.03		5.13		5.07		4.97		5.05
Debt (excluding unamortized financing costs)	$	885,000	$	930,000	$	898,000	$	1,050,000			$	860,000	$	920,000	$	920,000	$	910,000
Adjusted EBITDA* (1)		31,637		32,478		32,721		34,418				31,097		32,716		32,567		32,112
Annualized		126,548		129,913		130,885		137,674				124,388		130,864		130,268		128,448
Debt-to-EBITDA*		7.0		7.2		6.9		7.6				6.9		7.0		7.1		7.1

* See the Appendix for Definitions of these Non-GAAP Measures beginning on page 27.  Amounts in the EBITDA reconciliation do not reflect our proportionate share of interest expense, depreciation, amortization, income taxes, gains or losses on sales and debt from our investments in non-consolidated REITs, which are accounted for under the equity method.

(1)  Includes an adjustment for acquisitions in the quarter acquired by the amount attributable to properties owned less than a full quarter.  The calculation is based on 

      the partial quarter results over the number of days held multiplied by the number of days in the full quarter. 

December 31, 2016 | Page 10

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

Reconciliation of Net income to Property NOI*									Year										Year
	Three Months Ended								Ended		Three Months Ended								Ended
	31-Mar-16		30-Jun-16		30-Sep-16		31-Dec-16		31-Dec-16		31-Mar-15		30-Jun-15		30-Sep-15		31-Dec-15		31-Dec-15
Net Income	$	2,579	$	1,612	$	2,458	$	1,729	$	8,378	$	12,533	$	3,903	$	3,166	$	15,412	$	35,014
Add (deduct):
(Gain) loss on sale of properties and property held for sale, less applicable income taxes		—		643		523		1,772		2,938		(10,462)		(948)		(1)		(12,251)		(23,662)
Hedge ineffectiveness		—		1,009		(621)		(2,266)		(1,878)		—		—		—		—		—
Management fee income		(660)		(688)		(727)		(749)		(2,824)		(643)		(559)		(621)		(645)		(2,468)
Depreciation and amortization		22,445		22,352		23,298		24,957		93,052		22,672		23,207		22,911		22,569		91,359
Amortization of above/below market leases		81		—		(185)		(392)		(496)		6		(39)		(63)		(62)		(158)
Selling, general and administrative		3,530		3,494		3,419		3,683		14,126		3,691		3,401		3,071		3,128		13,291
Interest expense		6,433		6,417		6,767		6,931		26,548		6,187		6,365		6,425		6,455		25,432
Interest income		(1,279)		(1,171)		(1,184)		(1,200)		(4,834)		(1,262)		(1,278)		(1,293)		(1,397)		(5,230)
Equity in losses of non-consolidated REITs		286		86		196		263		831		322		38		284		807		1,451
Non-property specific items, net		52		155		100		(34)		273		(20)		(195)		(62)		(72)		(349)
Property NOI*	$	33,467	$	33,909	$	34,044	$	34,694	$	136,114	$	33,024	$	33,895	$	33,817	$	33,944	$	134,680

* See the Appendix for Definition of Non-GAAP Measures beginning on page 27.

December 31, 2016 | Page 11

Debt Summary (in thousands)

		Maximum		Amount		Interest			Interest
	Maturity	Amount		Drawn at		Rate (a)			Rate at	Facility
	Date	of Loan		31-Dec-16		Components			31-Dec-16	Fee
BAML Revolver	29-Oct-18	$	500,000	$	280,000	L	+	1.25%	1.88%	0.25%
JPM Term Loan	30-Nov-18		150,000		150,000	L	+	1.35%	2.16%
BAML Term Loan	27-Sep-21		400,000		400,000	0.75%	+	1.45%	2.20%
BMO Term Loan	26-Aug-20		220,000		220,000	2.32%	+	1.65%	3.97%
		$	1,270,000	$	1,050,000				2.48%

We have a bank facility we call the BAML Credit Facility, which is comprised of a revolver that we can borrow up to $500 million on, which we call the BAML Revolver, and a term loan for $400 million that we call the BAML Term Loan. We also have a term loan we call the BMO Term Loan for $220 million and a bridge loan we call the JPM Term Loan for $150 million. Additional information about these loans can be found in the footnotes to our financial statements.  Pricing is based on our credit rating for the BAML Revolver, JPM Term Loan, BAML Term Loan and the BMO Term Loan. Our credit rating as of December 31, 2016 was Baa3 from Moody’s.

· The BAML Revolver is priced based on our current credit rating at a spread of 1.25%, which was an interest rate of 1.88% as of December 31, 2016.  The BAML Revolver is also subject to a facility fee based on our credit rating, which was 25 bps or approximately $1.25 million per year. 

· The JPM Term Loan is priced based on our current credit rating at a spread of 1.35%, which was an interest rate of 2.16% at December 31, 2016. 

· The BAML Term Loan has base LIBOR fixed at 0.75% until September 27, 2017.  At our credit rating, the spread for the BAML Term Loan is 1.45%, so our interest rate is 2.20%.  On July 21, 2016, we extended the maturity date of the BAML Term Loan to September 27, 2021 (see below).     

· On July 21, 2016, we amended the BAML Credit Facility to extend the maturity date applicable to the BAML Term Loan from September 27, 2017 to September 27, 2021 (the extension period), and amended financial covenants and definitions.  We also amended the BMO Term Loan to conform covenants and definitions to the BAML Credit Facility.  On July 22, 2016, we entered into a forward interest rate swap that fixed the base LIBOR interest rate for the extension period at 1.12%.  Accordingly, based upon our credit rating as of December 31, 2016, the interest rate when the extension period of the BAML Term Loan commences would be 2.57%.

· The BMO Term Loan has fixed base LIBOR at 2.32% until August 20, 2020.  At our credit rating, the spread over LIBOR is 1.65%, so our interest rate is 3.97%.  

· We incurred financing costs to close the BAML Revolver and BAML Term Loan and the credit facilities that preceded them.  We also incurred financing costs in connection with the JPM Term Loan and the BMO Term Loan.  These costs are deferred and amortized into interest expense during the terms of the loans.  The annual run rate for amortization to interest expense from deferred financing costs is approximately $2.5 million. 

· The BAML Revolver can be extended for 1 year at our option upon payment of fees.  The BAML Credit Facility includes an accordion feature that allows for up to $350 million of additional borrowing capacity.  The BMO Term Loan includes an accordion feature that allows for up to $50 million of additional borrowing capacity.  The accordion features are subject to receipt of lender commitments and satisfaction of certain customary conditions.

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

December 31, 2016 | Page 12

Capital Analysis (in thousands, except per share amounts)

	31-Mar-16		30-Jun-16		30-Sep-16		31-Dec-16		31-Mar-15		30-Jun-15		30-Sep-15		31-Dec-15
Market Data:
Shares Outstanding		100,187		100,187		107,231		107,231		100,187		100,187		100,187		100,187
Closing market price per share	$	10.61	$	12.27	$	12.60	$	12.96	$	12.82	$	11.31	$	10.75	$	10.35
Market capitalization	$	1,062,988	$	1,229,299	$	1,351,113	$	1,389,716	$	1,284,403	$	1,133,120	$	1,077,015	$	1,036,940
Total Debt		885,000		930,000		898,000		1,050,000		860,000		920,000		920,000		910,000
Total Market Capitalization	$	1,947,988	$	2,159,299	$	2,249,113	$	2,439,716	$	2,144,403	$	2,053,120	$	1,997,015	$	1,946,940
Dividend Data:
Total dividends paid	$	19,036	$	19,036	$	19,036	$	20,373	$	19,036	$	19,036	$	19,035	$	19,035
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*		73.1%		71.2%		73.9%		75.7%		74.1%		70.0%		70.6%		70.3%
Liquidity:
Cash and cash equivalents	$	14,316	$	7,524	$	13,372	$	9,335	$	14,945	$	15,841	$	19,100	$	18,163
Revolver:
Gross potential available under the BAML Revolver		500,000		500,000		500,000		500,000		500,000		500,000		500,000		500,000
Less:
Outstanding balance		(265,000)		(310,000)		(278,000)		(280,000)		(240,000)		(300,000)		(300,000)		(290,000)
Total Liquidity	$	249,316	$	197,524	$	235,372	$	229,335	$	274,945	$	215,841	$	219,100	$	228,163

*See page 9 for a reconciliation of Net Income to FFO and the Appendix for Definitions of Non-GAAP Measures beginning on page 27.

December 31, 2016 | Page 13

Owned Portfolio Overview

	As of the Quarter Ended
	31-Dec-16	30-Sep-16	30-Jun-16	31-Mar-16	31-Dec-15
Owned portfolio of commercial real estate:
Number of properties (a)	36	36	35	35	36
Square feet	10,163,615	9,683,846	9,523,054	9,325,249	9,494,953
Leased percentage	89.3%	89.5%	90.1%	90.2%	91.6%
Investments in non-consolidated commercial real estate:
Number of properties	2	2	2	2	2
Square feet	1,396,071	1,396,071	1,396,071	1,396,071	1,396,071
Leased percentage	78.1%	73.8%	73.1%	73.9%	73.5%
Single Asset REITs (SARs) managed:
Number of properties	5	5	5	6	7
Square feet	1,075,135	1,075,135	1,075,135	1,191,135	1,487,026
Leased percentage	89.6%	89.6%	86.1%	75.8%	77.0%
Total owned, investments and managed properties:
Number of properties	43	43	42	43	45
Square feet	12,634,821	12,155,052	11,994,260	11,912,455	12,378,050
Leased percentage	88.1%	87.7%	87.8%	86.8%	87.8%
(a) Excludes one property being redeveloped in 2016.

December 31, 2016 | Page 14

Owned Portfolio Overview

				Percent	Wtd Ave (a)	GAAP (b)						Percent	Wtd Ave (a)	GAAP (b)
MSA / Property Name	City	State	Square Feet	Leased	Occupied	Rent		MSA / Property Name	City	State	Square Feet	Leased	Occupied	Rent
East Region								Midwest Region
Baltimore								Chicago
East Baltimore	Baltimore	MD	325,445	76.5%	81.6%	$	23.48	Northwest Point	Elk Grove Village	IL	176,848	100.0%	100.0%	$	25.05
								909 Davis Street	Evanston	IL	195,080	86.1%	83.2%	$	34.04
Washington, D.C.
Meadow Point	Chantilly	VA	138,537	100.0%	100.0%	$	27.08	Indianapolis
Stonecroft	Chantilly	VA	111,469	100.0%	100.0%	$	37.83	River Crossing	Indianapolis	IN	205,059	96.6%	89.0%	$	20.83
Loudoun Tech Center	Dulles	VA	136,658	92.0%	92.0%	$	18.35
								St. Louis
Richmond								Timberlake	Chesterfield	MO	234,496	100.0%	94.7%	$	22.02
Innsbrook	Glen Allen	VA	298,456	100.0%	100.0%	$	19.04	Timberlake East	Chesterfield	MO	117,036	100.0%	82.9%	$	22.93
Charlotte								Minneapolis
Forest Park	Charlotte	NC	62,212	100.0%	100.0%	$	14.03	121 South 8th Street	Minneapolis	MN	305,990	61.1%	56.2%	$	21.48
								Plaza Seven	Minneapolis	MN	326,413	95.6%	92.2%		28.98
Raleigh-Durham
Emperor Boulevard	Durham	NC	259,531	100.0%	100.0%	$	34.88
East Region Total			1,332,308	93.4%	94.7%	$	25.46	Midwest Region Total			1,560,922	89.3%	84.2%	$	25.34

(a) Weighted Occupied Percentage for the year ended December 31, 2016.

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

December 31, 2016 | Page 15

Owned Portfolio Overview

				Percent	Wtd Ave (a)	GAAP (b)						Percent	Wtd Ave (a)	GAAP (b)
MSA / Property Name	City	State	Square Feet	Leased	Occupied	Rent		MSA / Property Name	City	State	Square Feet	Leased	Occupied	Rent
South Region								West Region
Dallas-Fort Worth								San Francisco-San Jose-Oakland
Legacy Tennyson Center	Plano	TX	202,600	65.6%	85.7%	$	18.96	Hillview Center (c)	Milpitas	CA	36,288	100.0%	100.0%	$	16.85
One Legacy Circle	Plano	TX	214,110	100.0%	99.4%	$	33.83
Addison Circle	Addison	TX	288,667	97.0%	92.7%	$	28.56	Denver
Collins Crossing	Richardson	TX	300,887	100.0%	100.0%	$	24.56	380 Interlocken	Broomfield	CO	240,185	82.7%	92.0%	$	30.20
Liberty Plaza	Addison	TX	218,934	81.3%	79.9%	$	20.83	1999 Broadway	Denver	CO	676,379	74.8%	79.6%	$	31.83
								Greenwood Plaza	Englewood	CO	196,236	100.0%	100.0%	$	24.21
Houston								390 Interlocken	Broomfield	CO	241,751	96.1%	87.8%	$	28.02
Park Ten	Houston	TX	157,460	65.4%	63.1%	$	31.62	1001 17th Street	Denver	CO	655,413	89.9%	87.2%	$	35.19
Eldridge Green	Houston	TX	248,399	100.0%	100.0%	$	30.02	600 17th Street	Denver	CO	596,595	92.7%	92.7%	$	31.04
Park Ten Phase II	Houston	TX	156,746	100.0%	100.0%	$	30.99	West Region Total			2,642,847	87.5%	88.1%	$	31.09
Westchase I & II	Houston	TX	629,025	83.4%	84.5%	$	32.29
								Total Owned			10,163,615	89.3%	89.2%	$	27.92
Miami-Ft. Lauderdale-West Palm Beach
Blue Lagoon Drive	Miami	FL	212,619	100.0%	100.0%	$	22.72
Atlanta
One Overton Place	Atlanta	GA	387,267	80.7%	85.6%	$	24.95
One Ravinia	Atlanta	GA	386,603	90.9%	93.4%	$	23.66
Two Ravinia	Atlanta	GA	442,130	79.0%	78.3%	$	26.00
Pershing Plaza	Atlanta	GA	160,145	97.4%	97.4%	$	34.35
999 Peachtree	Atlanta	GA	621,946	97.5%	95.1%	$	29.72
South Region Total			4,627,538	89.2%	90.0%	$	27.70

(a) Weighted Occupied Percentage for the year ended December 31, 2016.

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

(c) Property was sold on January 6, 2017.

December 31, 2016 | Page 16

Managed Portfolio Overview

MSA / Property Name	City	State	Square Feet		MSA / Property Name	City	State	Square Feet
Southeast Region					Midwest Region
Columbia					Chicago
1441 Main Street	Columbia	SC	264,857	(a)	East Wacker	Chicago	IL	861,000
Atlanta					Indianapolis
Satellite Place	Duluth	GA	134,785		Monument Circle	Indianapolis	IN	213,760
Southeast Region Total			399,642		Kansas City
				(b)	Grand Boulevard	Kansas City	MO	535,071
Southwest Region					Cincinnati
					Centre Pointe V	West Chester	OH	135,936
Houston
Energy Tower I	Houston	TX	325,797
Southwest Region Total			325,797		Midwest Region Total			1,745,767
					Total Managed			2,471,206
					Total Owned & Managed			12,634,821

(a) FSP has a Preferred Share Interest of 43.7% in the entity that owns this property.

(b) FSP has a Preferred Share Interest of 27.0% in the entity that owns this property.

December 31, 2016 | Page 17

Tenants by Industry (By Square Feet)  

December 31, 2016 | Page 18

20
	20 Largest Tenants with Annualized Rent and Remaining Term

			Remaining	Aggregate				% of Aggregate
	Tenant	Number of	Lease Term	Leased	% of Total	Annualized		Leased
	Name	Leases	in Months	Square Feet	Square Feet	Rent		Annualized Rent
1	Quintiles IMS Healthcare Incorporated (a)	1	113	259,531	2.9%	$	8,740,721	3.5%
2	US Government (b)	5	6, 8, 17, 45, 49	255,610	2.8%		7,870,275	3.1%
3	CITGO Petroleum Corporation	1	62	248,399	2.7%		7,894,120	3.1%
4	Newfield Exploration Company	1	62	234,495	2.6%		8,928,280	3.5%
5	Sutherland Asbill & Brennan LLP (c)	1	40	222,422	2.5%		7,010,151	2.8%
6	Burger King Corporation	1	21	212,619	2.3%		5,381,387	2.1%
7	Centene Management Company, LLC (d)	3	78,78,78	206,262	2.3%		4,446,016	1.8%
8	Citicorp Credit Services, Inc (e)	1	128	176,848	1.9%		4,704,157	1.9%
9	EOG Resources, Inc.	1	119	174,215	1.9%		5,703,824	2.3%
10	SunTrust Bank (f)	2	57,116	159,671	1.8%		3,075,309	1.2%
11	T-Mobile South, LLC dba T-Mobile	1	26	151,792	1.7%		3,864,880	1.5%
12	Petrobras America, Inc.	1	35	144,813	1.6%		5,387,043	2.1%
13	Murphy Exploration & Production Company	1	4	144,677	1.6%		4,790,659	1.9%
14	Jones Day	1	47	140,342	1.5%		4,533,900	1.8%
15	Argo Data Resource Corporation	1	80	140,246	1.5%		4,005,426	1.6%
16	Vail Corp d/b/a Vail Resorts (g)	2	30,78	125,588	1.4%		3,665,638	1.5%
17	Federal National Mortgage Association	1	21	123,144	1.4%		4,329,743	1.7%
18	Kaiser Foundation Health Plan	1	89	120,979	1.3%		3,094,764	1.2%
19	Giesecke & Devrient America	1	96	112,110	1.2%		1,948,472	0.8%
20	Houghton Mifflin Harcourt Publishing Company (h)	2	3,123	111,550	1.2%		4,756,044	1.9%
			Total	3,465,313	38.2%	$	104,130,810	41.3%

(a) Quintiles Transnational Corp. is now known as Quintiles IMS Healthcare Incorporated.

(b) Includes 180,444 and 27,398 square feet which expire in 2018 and 2017, respectively. The remaining 47,768 square feet expire between 2017 and 2021.

(c) Effective 2/1/17, the firm changed their name to Eversheds Sutherland (US) LLP.

(d) Includes 62,019 SF, which commenced on 4/1/16, 117,618 SF, which commenced 12/15 and 26,625 that commenced on 12/1/16.

(e) Includes 30,588 square feet, which expire 12/31/16 and 146,260 square feet, which expire 8/31/27.

(f) Includes 32,171 square feet, which expire 10/31/16 and 127,500 square feet, which expire 9/30/21.

(g) Includes 38,293 square feet, which expire 3/31/19.  The remaining 87,295 square feet expire 3/31/23. 

(h) Includes 50,128 square feet, which expire on 3/31/17 and 60,522 square feet, which expire on 3/31/27.

December 31, 2016 | Page 19

20
	Leasing Activity (Owned Portfolio)

	Year		Year		Year
	Ended		Ended		Ended
Leasing Activity		31-Dec-16		31-Dec-15		31-Dec-14
(in Square Feet - SF)
New leasing		299,000		362,000		149,000
Renewals		895,000		957,000		635,000
		1,194,000		1,319,000		784,000
Other information per SF
(Activity on a year-to-date basis)
GAAP Rents on leasing	$	29.64	$	28.66	$	26.89
Weighted average lease term		6.6 Years		5.3 Years		6.25 Years
Increase over average GAAP rents in prior year		10.4%		10.4%		11.8%
Average free rent		3 Months		3 Months		3 Months
Tenant Improvements	$	18.71	$	13.17	$	16.40
Leasing Costs	$	10.05	$	5.81	$	7.66

December 31, 2016 | Page 20

Lease Expirations by Square Feet (Owned Portfolio)

December 31, 2016 | Page 21

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

			Rentable				Annualized		Percentage
	Number of		Square				Rent		of Total
Year of	Leases		Footage		Annualized		Per Square		Annualized
Lease	Expiring		Subject to		Rent Under		Foot Under		Rent Under
Expiration	Within the		Expiring		Expiring		Expiring		Expiring	Cumulative
December 31,	Year (a)		Leases		Leases (b)		Leases		Leases	Total
2017	80	(c)	704,297		$	21,787,488	$	30.94	8.6%	8.6%
2018	86		1,219,193			38,101,723		31.25	15.1%	23.7%
2019	79		1,359,362			38,013,112		27.96	15.1%	38.8%
2020	74		1,017,262			29,039,426		28.55	11.5%	50.3%
2021	59		856,990			22,799,732		26.60	9.1%	59.4%
2022	53		1,177,420			33,189,062		28.19	13.2%	72.6%
2023	28		732,996			18,454,352		25.18	7.3%	79.9%
2024	23		465,469			9,902,355		21.27	3.9%	83.8%
2025	11		359,406			9,037,500		25.15	3.6%	87.4%
2026	8		451,597			14,892,002		32.98	5.9%	93.3%
2027 and thereafter	65		733,338	(d)		16,718,397		22.80	6.7%	100.0%
	566		9,077,330		$	251,935,150	$	27.75	100.0%
Vacancies as of 12/31/16			1,086,285
Total Portfolio Square Footage			10,163,615

(a) The number of leases approximates the number of tenants. Tenants with lease maturities in different years are included in annual totals for each lease. Tenants may have multiple leases in the same year.

(b) Annualized rent represents the monthly rent charged, including tenant reimbursements, for each lease in effect at December 31, 2016 multiplied by 12. Tenant reimbursements generally include payment of real estate taxes, operating expenses and common area maintenance and utility charges.

(c) Includes 10 leases that are month-to-month.

(d) Includes 99,069 square feet that are non-revenue producing building amenities.

December 31, 2016 | Page 22

Capital Expenditures

(in thousands)									Year
	Three Months Ended								Ended
	31-Mar-16		30-Jun-16		30-Sep-16		31-Dec-16		31-Dec-16
Tenant improvements	$	1,929	$	1,329	$	3,325	$	7,885	$	14,468
Deferred leasing costs		1,613		4,966		2,247		3,783		12,609
Non-investment capex		438		1,052		2,211		1,842		5,543
Total Capital Expenditures	$	3,980	$	7,347	$	7,783	$	13,510	$	32,620

	For the Three Months Ended								Year ended
	31-Mar-15		30-Jun-15		30-Sep-15		31-Dec-15		31-Dec-15
Tenant improvements	$	2,936	$	3,420	$	1,794	$	3,788	$	11,938
Deferred leasing costs		830		1,539		1,490		3,952		7,811
Non-investment capex		643		1,411		1,090		1,162		4,306
Total Capital Expenditures	$	4,409	$	6,370	$	4,374	$	8,902	$	24,055

First generation leasing and investment capital was $19.6 million and $7.4 million for the year ended December 31, 2016 and 2015, respectively.

December 31, 2016 | Page 23

Transaction Activity (in thousands except for Square Feet)

	City	State	Square Feet	Date Acquired	Purchase Price
2016
Plaza Seven	Minneapolis	MN	325,796	6/6/16	$	82,000
Pershing Plaza	Atlanta	GA	160,145	8/10/16		45,450
600 17th Street	Denver	CO	613,527	12/1/16		154,260
2015
Two Ravinia	Atlanta	GA	442,130	4/8/15	$	78,000
2013
1999 Broadway	Denver	CO	673,793	5/22/13	$	183,000
999 Peachtree	Atlanta	GA	621,946	7/1/13		157,900
1001 17th Street	Denver	CO	655,420	8/28/13		217,000
2012
One Ravinia	Atlanta	GA	386,603	7/31/12	$	52,750
Westchase	Houston	TX	629,025	11/1/12		154,750

					Gross Sales		Gain (loss)
	City	State	Square Feet	Date Sold	Proceeds		on Sales
2016
Lakeside I	Maryland Heights	MO	127,778	4/5/16	$	20,189	$	4,154
Federal Way	Federal Way	WA	117,010	12/16/16		7,500		(7,092)
2015
Willow Bend	Plano	TX	117,050	2/23/15	$	20,750	$	1,462
Eden Bluff	Eden Prairie	MN	153,028	3/31/15		28,000		9,000
Park Seneca	Charlotte	NC	109,699	5/13/15		8,150		949
Montague	San Jose	CA	145,561	12/9/15		30,000		12,251
2014
Centennial	Colorado Springs	CO	110,405	12/3/14	$	15,500	$	940

December 31, 2016 | Page 24

Loan Portfolio of Secured Real Estate (in thousands)

(dollars in thousands)			Maximum		Amount						Interest
		Maturity	Amount		Drawn at		Interest			Draw	Rate at
Sponsored REIT	Location	Date	of Loan		31-Dec-16		Rate (1)			Fee (2)	31-Dec-16
Secured revolving lines of credit
FSP Satellite Place Corp.	Duluth, GA	31-Mar-17	$	5,500	$	3,180	L	+	4.40%	0.5%	5.03%
FSP 1441 Main Street Corp.	Columbia, SC	31-Mar-17		10,800		9,000	L	+	4.40%	0.5%	5.03%
FSP Energy Tower I Corp.	Houston, TX	30-Jun-17		20,000		15,600	L	+	5.00%	0.5%	5.63%
Mortgage loan secured by property
FSP Monument Circle LLC (3)	Indianapolis, IN	7-Dec-18		21,000		21,000			4.90%	n/a	4.90%
FSP Energy Tower I Corp. (4)	Houston, TX	30-Jun-17		33,000		33,000			6.41%	n/a	6.41%
			$	90,300	$	81,780

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

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

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

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

December 31, 2016 | Page 25

Net Asset Value Components

(in thousands except per share data)
	Asof		Assets:			Other information:
	31-Dec-16		Loans outstanding on secured RE	$	81,780	Leased SF to be FFO producing
Total Market Capitalization Values			Investments in SARs (book basis)		75,165	During 2017 (in 000's)		136
Shares outstanding		107,231.2	Straight-line rent receivable		50,930
Closing price	$	12.96	Asset held for sale		3,871	Straight-line rental revenue current quarter	$	(117)
Market capitalization	$	1,389,716	Cash and cash equivalents		9,335
Debt		1,050,000	Restricted cash		31	Management fee income current quarter	$	157
Total Market Capitalization	$	2,439,716	Tenant rent receivables		3,113	Interest income from secured loans		1,201
			Prepaid expenses		2,989	Management fees and interest income from loans	$	1,357
			Office computers and furniture		313
	3 Months		Other assets:			FFO from non-consolidated REITs - Q3 2016 (6):
	Ended		Deferred financing costs, net		7,025	East Wacker	$	624
NOI Components	31-Dec-16		Other assets: Derivative Market Value		12,907	Grand Boulevard		163
			Other assets		—	Total	$	787
Same Store NOI (1)	$	30,600		$	247,459
Acquisitions (1) (2)		4,003				Footnotes to the components
Property NOI (1)		34,603	Liabilities:
Full quarter adjustment (3)		1,595	Debt (excluding contra for unamortized financing costs)	$	1,050,000	(1) See pages 11 & 28 for definitions and reconciliations.
Stabilized portfolio	$	36,198	Accounts payable & accrued expenses		61,043
			Tenant security deposits		5,355	(2) Includes NOI from acquisitions not in same store.
			Other liabilities: derivative liability		5,551
Financial Statement Reconciliation:				$	1,121,949	(3) Adjustment to reflect property NOI for a full quarter in the quarter acquired, if necessary.
Rental Revenue	$	64,611
Rental operating expenses		(18,209)				(4) HB3 Tax in Texas is classified as an income tax, though we treat it as a real estate tax in Property NOI.
Real estate taxes and insurance		(10,618)
NOI on assets sold		91				(5) Management & other fees are eliminated in consolidation but included in Property NOI.
Taxes (4)		(92)
Management fees & other (5)		415				(6) We report FFO from non-consolidated REITs for the previous quarter as their financial statements are not yet complete for the current quarter.
Property NOI (1)	$	36,198

December 31, 2016 | Page 26

Appendix: Non-GAAP Financial Measure Definitions

During the three months ended June 30, 2016 we changed the definition of FFO, Adjusted EBITDA and Property NOI to exclude hedge ineffectiveness, which does not affect any prior period. Our interest rate swaps effectively fix interest rates on our term loans; however, there is no floor on the variable interest rate of the swaps whereas the current term loans are subject to a zero percent floor. As a result there is a mismatch and the ineffective portion of the derivatives’ changes in fair value are recognized directly into earnings each quarter as hedge ineffectiveness. We believe that FFO, Adjusted EBITDA and Property NOI excluding hedge ineffectiveness is useful supplemental information regarding our operating performance as it provides a more meaningful and consistent comparison of our operating performance and allows investors to more easily compare our operating results. 

Definition of Funds From Operations (“FFO”)

The Company evaluates performance based on Funds From Operations, which we refer to as FFO, as management believes that FFO represents the most accurate measure of activity and is the basis for distributions paid to equity holders.  The Company defines FFO as net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property, hedge ineffectiveness 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 on properties or investments in non-consolidated REITs, and after adjustments to exclude equity in income or losses from, and, to include the proportionate share of FFO from, non-consolidated REITs.

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

Other real estate companies and the National Association of Real Estate Investment Trusts, or NAREIT, may define this term in a different manner. We have included the NAREIT FFO definition as of May 17, 2016 in the table on page 9 and note that other REITs may not define FFO in accordance with the current NAREIT definition or may interpret the current NAREIT definition differently than we do.

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

December 31, 2016 | Page 27

Appendix: Non-GAAP Financial Measure Definitions

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

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

Definition of Property Net Operating Income (Property NOI)

The Company provides property performance based on Net Operating Income, which we refer to as NOI. Management believes that investors are interested in this information. NOI is a non-GAAP financial measure that the Company defines as net income (the most directly comparable GAAP financial measure) plus selling, general and administrative expenses, depreciation and amortization, including amortization of acquired above and below market lease intangibles and impairment charges, interest expense, less equity in earnings of nonconsolidated REITs, interest income, management fee income, hedge ineffectiveness, gains or losses on the sale of assets and excludes non-property specific income and expenses. The information presented includes footnotes and the data is shown by region with properties owned in both periods, which we call Same Store. The Comparative Same Store results include properties held for the periods presented and exclude properties that are non-operating, being developed or redeveloped, dispositions and significant nonrecurring income such as bankruptcy settlements and lease termination fees.  NOI, as defined by the Company, may not be comparable to NOI reported by other REITs that define NOI differently. NOI should not be considered an alternative to net income 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, 2016 | Page 28

Appendix: Non-GAAP Financial Measure Definitions

Definition of Adjusted Funds From Operations (AFFO)

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

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

AFFO should not be considered as an alternative to net income (determined in accordance with GAAP), nor as an indicator of the Company’s financial performance, nor as an alternative to cash flows from operating activities (determined in accordance with GAAP), nor as a measure of the Company’s liquidity, nor is it necessarily indicative of sufficient cash flow to fund all of the Company’s needs.  Other real estate companies may define this term in a different manner.  We believe that in order to facilitate a clear understanding of the results of the Company, AFFO should be examined in connection with net income and cash flows from operating, investing and financing activities in the consolidated financial statements. 

December 31, 2016 | Page 29

Investor Relations Contact Georgia Touma | 877.686.9496 InvestorRelations@fspreit.com

One & Two Ravinia Drive, Atlanta, GA

Franklin Street Properties Corp.

401 Edgewater Place ­ Wakefield, Massachusetts 01880

781.557.1300 ­ www.fspreit.com

December 31, 2016 | Page 30