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                                                                    EXHIBIT 99.2
    
 
                                   FREIF.PRX
 
FRANKLIN REAL ESTATE INCOME FUND                                   SPECIAL PROXY
 
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
 
   
The undersigned hereby appoints MARK A. TEN BOER AND DAVID P. GOSS, jointly and
severally, with full power of substitution, the proxies of the undersigned to
vote all shares of common stock of Franklin Real Estate Income Fund ("FREIF")
which the undersigned is entitled to vote at the Special Meeting of the
Shareholders, to be held at FREIF's offices located at 777 Mariners Island
Boulevard, San Mateo, California, on        ,             , 1996, at 10:00 a.m.,
Pacific Standard Time, to consider the merger (the "Merger") of FREIF and/or
Franklin Advantage Real Estate Income Fund into Franklin Select Real Estate
Income Fund, as instructed below, and upon all motions and resolutions which may
properly be presented for consideration at said meeting or at any adjournment
thereof. The Board of Directors unanimously recommends a vote "FOR" the Merger.
    
 
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE MERGER.
 
   / /  FOR THE MERGER          / /  AGAINST THE MERGER           / /  ABSTAIN
 
THIS PROXY WILL BE VOTED AS SPECIFIED, IF NO SPECIFICATION IS MADE, THIS PROXY
SHALL BE VOTED IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATION AND
WITHIN THE DISCRETION OF THE PROXYHOLDERS AS TO OTHER MATTER WHICH MAY PROPERLY
COME BEFORE THE MEETING.
 
TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATION, MERELY SIGN
BELOW, NO BOXES NEED BE CHECKED.
 
The proxyholders designated hereon are directed to vote as specified, or, if no
specification is made, to vote in accordance with the recommendation of the
Board of Directors, and to vote in accordance with their discretion on such
other matters that may properly come before the meeting.
 
                                               (Please sign exactly as the name
                                               or names appear on your account
                                               statement or your Common Stock
                                               certificates. In signing as
                                               attorney, executor,
                                               administrator, trustee or
                                               guardian, or for a corporation,
                                               please give your full title. When
                                               shares are in the names of more
                                               than one person, each should sign
                                               the proxy.)
 
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                                               Signature
 
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                                               Date
 
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                                               Signature if held jointly