Exhibit 99.1
Index to Financial Statements
Page
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One Overton Park
Index to statements of revenues and certain operating expenses for the
Period January 1, 2006 to June 26, 2006 (unaudited) and for the
year ended December 31, 2005...........................................F-2
F-1
ONE OVERTON PARK
STATEMENTS OF REVENUES
AND CERTAIN OPERATING EXPENSES
CONTENTS
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INDEPENDENT AUDITORS' REPORT F-3
STATEMENTS OF REVENUES AND CERTAIN OPERATING EXPENSES F-4
NOTES TO STATEMENTS OF REVENUES AND CERTAIN OPERATING EXPENSES F-5
F-2
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of
Franklin Street Properties Corp.
Wakefield, Massachusetts
We have audited the accompanying statement of revenues and certain operating
expenses (the "Historical Summary") of One Overton Park (the "Property") for the
year ended December 31, 2005. The Historical Summary is the responsibility of
the Property's management. Our responsibility is to express an opinion on the
Historical Summary based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the Historical
Summary is free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the Historical
Summary. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
presentation of the Historical Summary. We believe that our audit provides a
reasonable basis for our opinion.
The accompanying Historical Summary was prepared for the purpose of complying
with the rules and regulation of the Securities and Exchange Commission (for
inclusion in Form 8-K/A of Franklin Street Properties Corp.) as described in
Note 2 and is not intended to be a complete presentation of the Property's
revenues and expenses.
In our opinion, the Historical Summary referred to above presents fairly, in all
material respects, the revenues and certain operating expenses described in Note
2 of One Overton Park for the year ended December 31, 2005, in conformity with
accounting principles generally accepted in the United States of America.
/s/ JOSEPH DECOSIMO AND COMPANY, LLC
Atlanta, Georgia
July 19, 2006
F-3
ONE OVERTON PARK
STATEMENTS OF REVENUES AND CERTAIN OPERATING EXPENSES
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January 1, 2006 Year Ended
to December 31,
June 26, 2006 2005
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(Unaudited)
REVENUES
Rental income $2,294,304 $3,200,963
Reimbursement income 1,217,547 1,418,156
Percentage rent 35,326 60,727
Other income 49,127 79,208
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3,596,304 4,759,054
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CERTAIN OPERATING EXPENSES
Real estate taxes 336,251 628,721
Cleaning 156,626 250,095
Repairs and maintenance 114,705 204,321
Salaries 180,142 387,266
Building management services 330,167 640,487
Utilities 280,729 472,434
Insurance 32,508 58,244
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1,431,128 2,641,568
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REVENUES IN EXCESS OF
CERTAIN OPERATING EXPENSES $2,165,176 $2,117,486
========== ==========
The accompanying notes are an integral part of the statement of
revenues and certain operating expenses.
F-4
ONE OVERTON PARK
NOTES TO STATEMENTS OF REVENUES AND CERTAIN OPERATING EXPENSES
For the Period January 1, 2006 to June 26, 2006 (unaudited) and
Year Ended December 31, 2005
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NOTE 1 - DESCRIPTION OF PROPERTY
One Overton Park is a 15-story office building with 387,267 rentable square feet
(unaudited) located in the northwest market of Atlanta, Georgia. The Property
was owned by One Overton Park LLC and sold to FSP One Overton Park LLC (the
"Company"), a wholly-owned subsidiary of Franklin Street Properties Corp., on
June 27, 2006.
NOTE 2 - BASIS OF PRESENTATION
The statement of revenues and certain operating expenses has been prepared for
the purpose of complying with the provisions of Rule 3-14 of Regulation S-X
promulgated by the Securities and Exchange Commission (the "SEC"), which
requires certain information with respect to real estate operations to be
included with certain filings with the SEC. This Historical Summary includes the
historical revenues and certain operating expenses of the Property, exclusive of
items which may not be comparable to the proposed future operations of the
Property.
NOTE 3 - USE OF ESTIMATES
The preparation of the Historical Summary in conformity with accounting
principles generally accepted in the United States of America requires the
Property's management to make estimates and assumptions that affect the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
NOTE 4 - SIGNIFICANT ACCOUNTING POLICIES
REVENUE RECOGNITION - The Property's operations consist of rental income earned
from tenants under leasing arrangements which generally provide for minimum
rents, escalations, charges to tenants for their pro rata share of real estate
taxes and operating expenses. All leases have been accounted for as operating
leases. Rental income is recognized by amortizing the aggregate lease payments
on a straight-line basis over the terms of the leases, which amounted to an
increase in rental income of approximately $1,414,296 for the year ended
December 31, 2005. Reimbursement income consists of recovery of certain basic
operating costs and is recognized as revenue in the period the costs are
incurred. Revenues also include percentage rent that certain tenants are
required to pay in accordance with the terms of their leases; these revenues are
recognized as income when earned and their amounts can be reasonably estimated.
BAD DEBT EXPENSE - Bad debts are recorded under the specific identification
method whereby uncollectible receivables are directly written off when
identified.
REPAIRS AND MAINTENANCE - Expenditures for repairs and maintenance are expensed
as incurred.
UNAUDITED INTERIM STATEMENT - The statement of revenue and certain expenses for
the period January 1 to June 26, 2006 is unaudited. In the opinion of
management, the statement reflects all adjustments necessary for a fair
presentation of the results of the interim period. All such adjustments are of a
normal recurring nature.
F-5
ONE OVERTON PARK
NOTES TO STATEMENTS OF REVENUES AND CERTAIN OPERATING EXPENSES
For the Period January 1, 2006 to June 26, 2006 (unaudited) and
Year Ended December 31, 2005
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NOTE 5 - CONCENTRATION OF RISKS
Three tenants accounted for approximately 27%, 15% and 10% of gross revenue,
respectively for 2005.
NOTE 6 - LEASES
The aggregate annual minimum future rental revenue on noncancelable operating
leases in effect at December 31, 2005, is as follows:
Year Ending
December 31, 2006 $ 3,196,953
December 31, 2007 5,034,115
December 31, 2008 5,251,696
December 31, 2009 5,226,936
December 31, 2010 5,196,764
Later Years 21,250,538
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$ 45,157,002
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Total minimum future rental income represents the base rent, including base year
operating expenses, that tenants are required to pay under the terms of their
leases exclusive of charges for contingent rents, real estate taxes and
operating cost escalations.
F-6