8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  May 4, 2010

Franklin Street Properties Corp.

(Exact name of registrant as specified in its charter)

Maryland	001-32470	04-3578653
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

401 Edgewater Place, Suite 200, Wakefield, Massachusetts	01880-6210
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code:  (781) 557-1300

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02.  Results of Operations and Financial Condition.

On May 4, 2010, Franklin Street Properties Corp. (the “Registrant”) announced its financial results for the three months ended March 31, 2010.  The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K.  The press release references certain supplemental operating and financial data that is now available on the Registrant’s website.  A copy of the supplemental operating and financial data is attached hereto as Exhibit 99.2 and is incorporated by reference herein.

The information in this Form 8-K (including Exhibits 99.1 and 99.2) shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01.  Financial Statements and Exhibits.

(d) Exhibits

See Exhibit Index attached hereto.

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	FRANKLIN STREET PROPERTIES CORP.
Date:  May 4, 2010	By:  /s/ George J. Carter
		George J. Carter President and Chief Executive Officer

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EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release issued by Franklin Street Properties Corp. on May 4, 2010.
99.2	Supplemental Operating and Financial Data for the three months ended March 31, 2010.

4

EX-99.1

Exhibit 99.1

PRESS RELEASE	Franklin Street Properties Corp.
401 Edgewater Place · Suite 200 · Wakefield, Massachusetts  01880-6210 · (781) 557-1300 ·  www.franklinstreetproperties.com
Contact: John Demeritt   877-686-9496		FOR IMMEDIATE RELEASE

FRANKLIN STREET PROPERTIES CORP. ANNOUNCES

FIRST QUARTER 2010 RESULTS

Wakefield, MA—May 4, 2010—Franklin Street Properties Corp. (the “Company”, “FSP”, “we” or “our”) (NYSE Amex:  FSP), an investment firm specializing in real estate, announced today Funds From Operations (FFO) of $16.7 million or $0.21 per share for the first quarter ended March 31, 2010.  The Company also announced Net Income of $5.6 million and Earnings Per Share (EPS) of $0.07 for the first quarter and provided an update on other activities.

The Company evaluates its performance based on Net Income, EPS, FFO, Gains on Sales (GOS) and FFO+GOS, and believes each is an important measure.  A reconciliation of Net Income to FFO and FFO+GOS, which are non-GAAP financial measures, is provided on page 4 of this press release.

(in 000's except per share data)	Three Months Ended March 31,
	2010		2009		Increase (Decrease)
Net Income	$	5,562	$	7,808	$	(2,246	)
FFO	$	16,650	$	17,338	$	(688	)
GOS		-		-		-
FFO+GOS	$	16,650	$	17,338	$	(688	)
Per Share Data:
EPS	$	0.07	$	0.11	$	(0.04	)
FFO	$	0.21	$	0.25	$	(0.04	)
GOS	$	-	$	-	$	-
FFO+GOS	$	0.21	$	0.25	$	(0.04	)
Weighted ave shares (diluted)		79,681		70,481		9,200

Comparing results for the first quarter of 2010 to 2009, Net Income and EPS decreased $2.2 million or $0.04 per share, FFO decreased $0.7 million or $0.04 per share and FFO+GOS decreased $0.7 million or $0.04 per share.  The decrease in FFO was primarily attributable to a decrease in real estate FFO of $1.0 million and was partially offset by an increase in investment banking FFO of $0.3 million.   The decrease in real estate FFO consisted of approximately $0.8 million as a result of decreased occupancy in the real estate portfolio at March 31, 2010 compared to March 31, 2009; and $0.2 million from decreases in distributions received from investments in our non-consolidated REITs.  The increase fr om investment banking resulted from greater sales of securities by our investment bank, which were $2.1 million in the first quarter of 2010 as compared to $0.2 million by our investment bank for the first quarter of 2009.  Revenue from our investment bank is primarily based on the value of securities sales.  There was no GOS during the first quarter of 2010 or 2009.

George J. Carter, President and CEO, commented as follows:

“For the first quarter of 2010, FSP's profits as represented by FFO + GOS totaled approximately $16.7 million or $0.21 per share, down $2.8 million from the fourth quarter of 2009.  Dividend distributions declared for the first quarter of 2010, which are payable on May 20, 2010, will be approximately $15.1 million or $0.19 per share.

For 2010, FSP's profit results are likely to have more quarter-to-quarter variability than 2009.  The transactional nature, success and timing of our re-leasing efforts of existing vacancy and upcoming lease-roll in the portfolio will interplay with the timing of new property acquisitions and the capital closings of private placement offerings through our investment bank to affect FFO levels.

Our real estate portfolio of 32 properties continued to provide steady rental income during the first quarter with occupancy rising to 85.4% from 84.4% in the previous quarter.  Several of our office properties have significant lease-roll in 2010 and, as a consequence, we expect occupancy and rental income for the year from those properties to be lower.  However, we anticipate positive re-leasing efforts in 2010 for all of these properties, and during the first quarter we saw strong prospective new tenant activity for all of them.  Since 2010 is such a large lease-roll year for FSP, we anticipate updating our leasing progress from time to time outside of regular quarterly earnings releases.  Successful leasing efforts during the course of 2010 should position FSP for a more m odest vacancy/lease roll picture in 2011, 2012 and 2013 with potentially meaningful rental income growth in those years from the existing portfolio.

New property acquisition efforts in the first quarter of 2010 were vigorous with FSP working on several potential additions to its portfolio.  While no new properties were purchased in the period, we anticipate current and future activity to produce additional acquisitions of properties for the FSP portfolio this year.  While pricing for new property acquisitions remained attractive during the first quarter, there are more buyers in the market now compared to the last two years and, consequently, the pricing of quality well-leased properties has firmed somewhat from 2008/2009 levels.  New property acquisitions, when completed, are anticipated to provide additional accretive rental income to the FSP profit picture.

During the first quarter of 2010, our investment banking group completed capital closings totaling only $2.1 million, and consequently operated at a loss of $0.5 million or about $0.01 per share.  While we believe that general investor confidence and interest in commercial real estate investing continues to slowly improve, capital-raising efforts over any specific period of time remain choppy and unpredictable.  In addition, the timing of property acquisition opportunities that could be attractive for our syndication business is unpredictable.  For full year 2009, our investment banking group raised equity capital totaling about $40.4 million.  We are optimistic that business for full year 2010 will show increases over 2009.

FSP did not list for sale any of its properties during the first quarter of 2010. Generally speaking, we continue to find the property sales environment challenged relative to both liquidity and pricing. However, in a continuation of the commercial property sales market improvement witnessed in the second half of 2009, the first quarter of 2010 seemed to develop more buying interest from a broader spectrum of potential investors, even though the number of completed transactions remained low by historical standards.  We believe that both improving office property fundamentals as well as plentiful and attractive financing availability will likely be required to meaningfully improve the market place for property dispositions.  As an important part of our total return strategy, it will be FSP's obje ctive to be active in property dispositions once the improving part of the real estate cycle fully re-establishes itself.

We believe that FSP continues to be in an excellent environment to position itself for meaningful future growth in profits and dividends.  Our company will continue to use its capabilities and conservative financial structure to take advantage of real estate investment opportunities that are presenting themselves as a result of the current cyclical downturn in the economy and commercial property market.  We are looking forward to the balance of 2010 with optimism.”

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Dividend Announcement

On April 16, 2010, the Company announced that its Board of Directors declared a regular quarterly dividend for the three months ended March 31, 2010 of $0.19 per share of common stock payable on May 20, 2010 to stockholders of record on April 30, 2010.

Real Estate Update

Supplementary Schedules D & E provide property information for our continuing real estate portfolio of 32 properties and for three non-consolidated REITs that we have interests in as of March 31, 2010.  The Company will also be filing a supplemental information package that will provide stockholders and the financial community with additional operating and financial data.  The Company will file this supplemental information package with the SEC and make it available on its website at www.franklinstreetproperties.com.

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A reconciliation of Net Income to FFO and FFO+GOS is shown below and definitions of FFO and FFO+GOS are provided on Supplementary Schedule H.  We believe FFO is used broadly throughout the real estate investment trust (REIT) industry as a measurement of performance and is generally calculated in a similar manner to our calculation.  We also believe that FFO+GOS is an important measure as it considers investment performance.

Reconciliation of Net Income to FFO and FFO+GOS:
	Three Months Ended
	March 31,
(In thousands, except per share amounts)	2010			2009
Net income	$	5,562		$	7,808
GAAP (income) loss from non-consolidated REITs		(253	)		(792	)
Distributions from non-consolidated REITs		1,407			1,615
Depreciation of real estate & intangible amortization		9,934			8,707
Funds From Operations (FFO)		16,650			17,338
Plus gains on sales of assets (GOS)		-			-
FFO+GOS	$	16,650		$	17,338
Per Share Data
EPS	$	0.07		$	0.11
FFO	$	0.21		$	0.25
GOS	$	-		$	-
FFO+GOS	$	0.21		$	0.25
Weighted average shares (basic and diluted)		79,681			70,481

Today’s news release, along with other news about Franklin Street Properties Corp., is available on the Internet at www.franklinstreetproperties.com.  We routinely post information that may be important to investors in the Investor Relations section of our website.  We encourage investors to consult that section of our website regularly for important information about us and, if they are interested in automatically receiving news and information as soon as it is posted, to sign up for E-mail Alerts.

A conference call is scheduled for May 5, 2010 at 10:00 a.m. (ET) to discuss the first quarter 2010 results. To access the call, please dial 1-866-713-8395, passcode 28698751.  Internationally, the call may be accessed by dialing 1-617-597-5309, passcode 28698751. To listen via live audio webcast, please visit the Webcasts & Presentations section in the Investor Relations section of the Company's website, www.franklinstreetproperties.com at least ten minutes prior to the start of the call and follow the posted directions. The webcast will also be available via replay from the above location starting one hour after the call is finished.

About Franklin Street Properties Corp.

Franklin Street Properties Corp., based in Wakefield, Massachusetts, is focused on achieving current income and long-term growth through investments in commercial properties. FSP operates in two business segments: real estate operations and investment banking/investment services. The majority of FSP's property portfolio is suburban office buildings, with select investments in certain central business district properties. FSP's subsidiary, FSP Investments LLC (member, FINRA and SIPC), is a real estate investment banking firm and a registered broker/dealer. 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. To learn more about FSP please visit our website at www.franklin streetproperties.com.

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Forward-Looking Statements

Statements made in this press release that state FSP’s or management’s intentions, beliefs, expectations, or predictions for the future may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  This press release may also contain forward-looking statements based on current judgments and current knowledge of management, which are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those indicated in such forward-looking statements.  Accordingly, readers are cautioned not to place undue reliance on forward-looking statements.  Investors are cautioned that our forward-looking statements involve risks and uncertainty, including without limitation , economic conditions in the United States, disruptions in the debt markets, economic conditions in the markets in which we own properties, changes in the demand by investors for investment in Sponsored REITs (as defined in our Annual Report on Form 10-K for the year ended December 31, 2009), risks of a lessening of demand for the types of real estate owned by us, changes in government regulations, and expenditures that cannot be anticipated such as utility rate and usage increases, unanticipated repairs, additional staffing, insurance increases and real estate tax valuation reassessments.  See the “Risk Factors” set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2009, as the same may be updated from time to time in subsequent filings with the United States Securities and Exchange Commission.  Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.  We will not update any of the forward-looking statements after the date of this press release to conform them to actual results or to changes in our expectations that occur after such date, other than as required by law.

Franklin Street Properties Corp.

Earnings Release

Supplementary information

Table of Contents

Franklin Street Properties Corp. Financial Results	A-C
Real Estate Portfolio Summary Information	D
Portfolio and Other Supplementary Information	E
Quarterly Information	F
Largest 20 Tenants – FSP Owned Portfolio	G
Definition of Funds From Operations (FFO) and  FFO+GOS	H

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Franklin Street Properties Corp. Financial Results

Supplementary Schedule A

Condensed Consolidated Income Statements

(Unaudited)

	For the Three Months Ended March 31,
(in thousands, except per share amounts)	2010			2009
Revenue:
Rental	$	30,799		$	29,818
Related party revenue:
Syndication fees		121			10
Transaction fees		146			28
Management fees and interest income from loans		533			545
Other		9			18
Total revenue		31,608			30,419
Expenses:
Real estate operating expenses		7,973			7,280
Real estate taxes and insurance		5,246			4,829
Depreciation and amortization		9,219			7,914
Selling, general and administrative		2,171			2,008
Commissions		114			130
Interest		1,652			1,577
Total expenses		26,375			23,738
Income before interest income, equity in earnings of
non-consolidated REITs and taxes		5,233			6,681
Interest income		8			36
Equity in earnings of non-consolidated REITs		253			792
Income before taxes on income		5,494			7,509
Taxes on income		(68	)		(299	)
Net income	$	5,562		$	7,808
Weighted average number of shares outstanding,
basic and diluted		79,681			70,481
Net income per share, basic and diluted	$	0.07		$	0.11

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Franklin Street Properties Corp. Financial Results

Supplementary Schedule B

Condensed Consolidated Balance Sheets

(Unaudited)

	March 31,			December 31,
(in thousands, except share and par value amounts)	2010			2009
Assets:
Real estate assets, net		916,955			921,833
Acquired real estate leases, less accumulated amortization
of $35,636 and $34,592, respectively		41,783			44,757
Investment in non-consolidated REITs		91,787			92,910
Assets held for syndication, net		2,791			4,827
Cash and cash equivalents		22,815			27,404
Restricted cash		50			334
Tenant rent receivables, less allowance for doubtful accounts
of $1,000 and $620, respectively		1,385			1,782
Straight-line rent receivable, less allowance for doubtful accounts
of $100 and $100, respectively		14,215			10,754
Prepaid expenses		2,236			2,594
Related party mortgage loan receivable		41,325			36,535
Other assets		870			844
Office computers and furniture, net of accumulated depreciation
of $1,267 and $1,233, respectively		350			384
Deferred leasing commissions, net of accumulated amortization
of $5,350, and $4,995, respectively		15,752			10,808
Total assets	$	1,152,314		$	1,155,766
Liabilities and Stockholders’ Equity:
Liabilities:
Bank note payable	$	119,968		$	109,008
Term loan payable		75,000			75,000
Accounts payable and accrued expenses		20,467			23,787
Accrued compensation		274			1,416
Tenant security deposits		1,696			1,808
Other liabilities: derivative termination value		1,995			2,076
Acquired unfavorable real estate leases, less accumulated amortization
of $2,698, and $2,492, respectively		5,137			5,397
Total liabilities		224,537			218,492
Commitments and contingencies
Stockholders’ Equity:
Preferred stock, $.0001 par value, 20,000,000 shares authorized, none issued or outstanding		-			-
Common stock, $.0001 par value, 180,000,000 shares authorized, 79,680,705 and 79,680,705 shares issued and outstanding, respectively		8			8
Additional paid-in capital		1,003,712			1,003,713
Accumulated other comprehensive loss		(1,995	)		(2,076	)
Accumulated distributions in excess of accumulated earnings		(73,948	)		(64,371	)
Total stockholders’ equity		927,777			937,274
Total liabilities and stockholders’ equity	$	1,152,314		$	1,155,766

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Franklin Street Properties Corp. Financial Results

Supplementary Schedule C

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	For the Three Months Ended March 31,
(in thousands)	2010			2009
Cash flows from operating activities:
Net income	$	5,562		$	7,808
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		9,284			7,981
Amortization of above market lease		716			793
Equity in earnings of non-consolidated REITs		(253	)		(792	)
Distributions from non-consolidated REITs		1,407			1,615
Increase in bad debt reserve		380			86
Changes in operating assets and liabilities:
Restricted cash		284			-
Tenant rent receivables, net		17			159
Straight-line rents, net		(1,020	)		(374	)
Prepaid expenses and other assets, net		265			(171	)
Accounts payable and accrued expenses		(3,917	)		(3,154	)
Accrued compensation		(1,142	)		(1,404	)
Tenant security deposits		(112	)		(79	)
Payment of deferred leasing commissions		(5,566	)		(162	)
Net cash provided by operating activities		5,905			12,306
Cash flows from investing activities:
Purchase of real estate assets, office computers and furniture		(3,529	)		(3,295	)
Changes in deposits on real estate assets		-			1,300
Investment in related party mortgage loan receivable		(4,790	)		(3,600	)
Investment in assets held for syndication, net		2,005			86
Net cash used in investing activities		(6,314	)		(5,509	)
Cash flows from financing activities:
Distributions to stockholders		(15,139	)		(13,391	)
Proceeds from equity offering, net		(1	)		-
Borrowings under bank note payable		10,960			5,000
Net cash used in financing activities		(4,180	)		(8,391	)
Net decrease in cash and cash equivalents		(4,589	)		(1,594	)
Cash and cash equivalents, beginning of period		27,404			29,244
Cash and cash equivalents, end of period	$	22,815		$	27,650

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Franklin Street Properties Corp. Earnings Release

Supplementary Schedule D

Real Estate Portfolio Summary Information

(Unaudited & Approximated)

Commercial portfolio lease expirations (1)
As of March 31, 2010
	Total	% of
Year	Square Feet	Portfolio
2010	732,934	12.3%
2011	460,349	7.8%
2012	439,496	7.4%
2013	361,867	6.1%
2014	585,420	9.9%
2015	482,830	8.1%
Thereafter (2)	2,879,403	48.4%
	5,942,299	100.0%

(1) Percentages are determined based upon square footage of expiring commercial leases.

(2) Includes 867,325 square feet of current vacancies.

(dollars & square feet in 000's)	As of March 31, 2010
	# of				% of		Square		% of
State	Properties		Investment		Portfolio		Feet		Portfolio
Texas		7	$	227,269		24.8%		1,488		25.1%
Virginia		5		161,113		17.6%		940		15.8%
Colorado		4		127,199		13.9%		792		13.3%
Georgia		1		75,034		8.2%		387		6.5%
Missouri		3		71,748		7.8%		477		8.0%
Maryland		2		61,224		6.7%		424		7.1%
Florida		1		47,881		5.2%		213		3.6%
Indiana		1		36,405		4.0%		205		3.4%
Illinois		1		29,772		3.2%		177		3.0%
California		2		21,337		2.3%		182		3.1%
Michigan		1		14,771		1.6%		215		3.6%
Washington		1		14,661		1.6%		117		2.0%
Minnesota		1		14,537		1.6%		153		2.6%
North Carolina		2		14,004		1.5%		172		2.9%
		32	$	916,955		100.0%		5,942		100.0%

Property by type:
(dollars & square feet	As of March 31, 2010
in 000's)	# of				% of		Square		% of
Type	Properties		Investment		Portfolio		Feet		Portfolio
Office		31		911,957		99.5%		5,843		98.3%
Industrial		1		4,998		0.5%		99		1.7%
		32	$	916,955		100.0%		5,942		100.0%

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Franklin Street Properties Corp. Earnings Release

Supplementary Schedule E

Portfolio and Other Supplementary Information

(Unaudited & Approximated)

Capital Expenditures
Owned Portfolio	Three Months Ended
(in thousands)	31-Mar-10		31-Mar-09
Tenant improvements	$	1,305	$	1,374
Deferred leasing costs		5,566		162
Building improvements		380		465
	$	7,251	$	2,001

Square foot & leased percentages	March 31,			December 31,
		2010			2009
Owned portfolio of commercial real estate
Number of properties			32			32
Square feet			5,942,299			5,942,414
Leased percentage			85%			84%
Investments in non-consolidated commercial real estate
Number of properties			3			3
Square feet			1,995,041			1,995,041
Leased percentage			78%			78%
Single Asset REITs (SARs) managed
Number of properties			11			11
Square feet*			2,406,370			2,406,370
Leased percentage*			76%			91%
Total owned, investments & managed properties
Number of properties			46			46
Square feet*			10,343,710			10,343,825
Leased percentage*			82%			85%
*Excludes a property under construction with approximately 285,000 square feet.

The following table shows property information for our investments in non-consolidated REITs:

			Square	% Leased	% Interest
Single Asset REIT name	City	State	Feet	31-Mar-10	Held
FSP 303 East Wacker Drive Corp.	Chicago	IL	844,081	73.89%	43.7%
FSP Grand Boulevard Corp.	Kansas City	MO	532,453	90.03%	27.0%
FSP Phoenix Tower Corp.	Houston	TX	618,507	74.30%	4.6%
			1,995,041	78.32%

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Franklin Street Properties Corp. Earnings Release

Supplementary Schedule F: Quarterly Information

(Unaudited)

(in thousands)
		Q1			Q2			Q3			Q4
Revenue:		2009			2009			2009			2009
Rental		29,818			29,254			31,702			31,300
Related party revenue:
Syndication fees		10			29			-			2,389
Transaction fees		28			514			1			1,537
Management fees and
interest income from loans		545			317			370			508
Other		18			18			19			6
Total revenue		30,419			30,132			32,092			35,740
Expenses:
Real estate operating expenses		7,280			7,144			7,752			8,646
Real estate taxes and insurance		4,829			4,686			5,364			4,349
Depreciation and amortization		7,914			10,225			8,801			9,353
Selling, general and administrative		2,008			2,127			2,243			2,513
Commissions		130			40			8			1,623
Interest		1,577			1,599			1,744			1,650
Total expenses		23,738			25,821			25,912			28,134
Income before interest income, equity
in earnings in non-consolidated REITs		6,681			4,311			6,180			7,606
Interest income		36			36			16			9
Equity in earnings in non-consolidated REITs		792			443			475			284
Income before taxes on income		7,509			4,790			6,671			7,899
Taxes on income		(299	)		(75	)		(270	)		65
Income from continuing operations		7,808			4,865			6,941			7,834
Income from discontinued operations		-			-			-			-
Income before gain on sale of properties		7,808			4,865			6,941			7,834
Gain on sale of assets		-			-			-			424
Net income	$	7,808		$	4,865		$	6,941		$	8,258
FFO and  FFO+GOS calculations:
Net income	$	7,808		$	4,865		$	6,941		$	8,258
(Gain) Loss on sale of assets		-			-			-			(424	)
GAAP income from non-consolidated REITs		(792	)		(443	)		(475	)		(301	)
Distributions from non-consolidated REITs		1,615			1,523			1,119			1,371
Acquisition costs		-			248			391			4
Depreciation & amortization		8,707			11,216			9,561			10,167
Funds From Operations (FFO)		17,338			17,409			17,537			19,075
Plus gains on sales of assets		-			-			-			424
FFO+GOS	$	17,338		$	17,409		$	17,537		$	19,499

-11-

Franklin Street Properties Corp. Earnings Release

Supplementary Schedule G

Largest 20 Tenants – FSP Owned Portfolio

(Unaudited & Estimated)

The following table includes the largest 20 tenants in FSP’s owned portfolio based on leased square feet:

	As of March 31, 2010
						% of
	Tenant		Sq Ft		SIC Code	Portfolio
1	Noblis, Inc.			252,613	54		4.2%
2	CITGO Petroleum Corporation	(1)		248,399	29		4.2%
3	Tektronix Texas, LLC			241,372	73		4.1%
4	Burger King Corporation			212,619	58		3.6%
5	New Era of Networks, Inc. (Sybase)			199,077	73		3.4%
6	RGA Reinsurance Company			185,501	63		3.1%
7	Citicorp Credit Services, Inc.	(2)		176,848	61		3.0%
8	C.H. Robinson Worldwide, Inc.			153,028	47		2.6%
9	Geisecke & Devrient America, Inc.			135,888	73		2.3%
10	Murphy Exploration & Production Company			133,786	13		2.2%
11	Monsanto Company			127,778	28		2.2%
12	Vail Holdings, Inc. d/b/a Vail Resorts	(3)		121,913	79		2.1%
13	Northrop Grumman Systems Corporation			111,469	73		1.9%
14	Maines Paper & Food Service, Inc.			98,745	51		1.6%
15	Amdocs, Inc.			91,928	73		1.5%
16	County of Santa Clara			90,467	91		1.5%
17	Ober Kaler Grimes & Shriver			89,885	81		1.5%
18	International Business Machines Corp.			83,209	79		1.4%
19	Corporate Holdings, LLC			81,818	67		1.4%
20	Noble Royalties, Inc.			78,344	67		1.3%
	Total			2,914,687			49.1%

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

(2) The lease with Citicorp Credit Services, Inc. is guaranteed by Citigroup, Inc.

(3) On March 22, 2010, the Company signed a lease for an additional 38,000 square feet of space with one of its tenants, Vail Holdings, Inc.

-12-

Franklin Street Properties Corp. Earnings Release

Supplementary Schedule H

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”) as management believes they represent important measures of activity and are an important consideration in determining distributions paid to equity holders.  The Company defines FFO as net income (computed in accordance with generally accepted accounting principles, or GAAP), excluding gains (or losses) from sales of property and acquisition costs of newly acquired properties that are not capitalized, plus depreciation and amortization, and after adjustments to exclude non-cash income (or losses) from non-consolidated or Sponsored REITs, plus distributions received from non-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), as indicators of the Company’s financial performance, nor as alternatives to cash flows from operating activities (determined in accordance with GAAP), nor as measures of the Company’s liquidity, nor are they necessarily indicative of sufficient cash flow to fund all of the Company’s needs.  Other real estate companies may define these terms in a different manner.  We believe that in order to facilitate a clear understanding of the results of the Company, FFO and FFO+GOS should be examined in connection with net income and cash flows from operating, investing and financing activities in the consolidated financial statements.

-13-

EX-99.2

Exhibit 99.2

  Supplemental Operating and Financial Data First Quarter 2010

 

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

www.franklinstreetproperties.com

Table of Contents

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

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

2

Company Overview

Overview

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

Our Business

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

Strategy

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

Snapshot
(as of March 31, 2010)
Corporate Headquarters	Wakefield, MA
Fiscal Year-End	31-Dec
Total Properties	32
Total Square Feet	5.9 Million
Common Shares Outstanding	79,680,705
Quarterly Dividend	$0.19
Dividend Yield	5.27%
Total Market Capitalization	$1,150 Million
Insider Holdings	13.0%

3

Company Overview

Structure of the Company

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

Dividend Philosophy

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

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

4

Company Overview

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

Common Stock Data (NYSE Amex: FSP)
	For the Three Months Ended
	31-Mar-10	31-Dec-09	30-Sep-09	30-Jun-09	31-Mar-09
High Price	14.82	15.36	15.20	14.84	14.88
Low Price	11.81	10.35	12.00	11.43	9.57
Closing Price, at the end of the quarter	14.43	14.61	13.10	13.25	12.30
Dividends paid per share – quarterly	0.19	0.19	0.19	0.19	0.19
Closing dividend yield – annualized	5.27%	5.20%	5.80%	5.74%	6.18%
Common shares outstanding (millions)	79.68	79.68	79.68	70.48	70.48

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

5

Financial Highlights

(in thousands, except per share data)

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

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

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

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

7

Condensed Consolidated Income Statements

($ in thousands, except per share amounts)

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

8

EPS, FFO, GOS and FFO+GOS*

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

9

Condensed Consolidated Balance Sheets

(in thousands)

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

10

Condensed Consolidated Statements of Cash Flows

(in thousands)

	Three Months ended March 31						Twelve Months ended December 31
	2010			2009			2009			2008
Cash flows from operating activities:
Net income	$	5,562		$	7,808		$	27,872		$	31,959
Adjustments to reconcile net income to net cash         provided by  operating activities:
Gains on assets sold		-			-			(424	)		-
Depreciation and amortization expense		9,284			7,981			36,561			30,444
Amortization of above market lease		716			793			3,359			4,283
Equity in earnings (losses) from non-consolidated REITs		(253	)		(792	)		(2,012	)		(2,747	)
Distributions from non-consolidated REITs		1,407			1,615			5,628			5,348
Increase in bad debt reserve		380			86			111			79
Changes in operating assets and liabilities:
Restricted cash		284			-			2			-
Tenant rent receivables		17			159			(564	)		64
Straight-line rents		(1,020	)		(374	)		(1,879	)		(1,406	)
Prepaid expenses and other assets		265			(171	)		907			(901	)
Accounts payable and accrued expenses		(3,917	)		(3,154	)		2,760			448
Accrued compensation		(1,142	)		(1,404	)		(238	)		90
Tenant security deposits		(112	)		(79	)		(66	)		-
Payment of deferred leasing commissions		(5,566	)		(162	)		(2,659	)		(3,353	)
Net cash provided by operating activities		5,905			12,306			69,358			64,308
Cash flows from investing activities:
Purchase of real estate assets, office computers and furniture, capitalized merger costs and acquired real estate leases		(3,529	)		(3,295	)		(132,323	)		(78,396	)
Investment in non-consolidated REITs		-			-			(13,218	)		(10	)
Investment in related party mortgage loan receivable		(4,790	)		(3,600	)		(35,410	)		(1,125	)
Redemption of certificate of deposit		-			-			-			-
Changes in deposits on real estate assets		-			1,300			-			(1,300	)
Investment in assets held for syndication, net		2,005			86			8,159			12,236
Proceeds received on sales of real estate assets		-			-			672			-
Net cash used in investing activities		(6,314	)		(5,509	)		(172,120	)		(68,595	)
Cash flows from financing activities:
Distributions to stockholders		(15,139	)		(13,391	)		(55,313	)		(70,481	)
Proceeds from equity offering, net		(1	)		-			114,695			-
Purchase of treasury shares		-			-			-			-
Borrowings (repayments) under bank note payable, net		10,960			5,000			41,540			(17,282	)
Borrowings under term note payable		-			-			-			75,000
Deferred financing costs		-			-			-			(694	)
Net cash (used in) provided by financing activities		(4,180	)		(8,391	)		100,922			(13,457	)
Net decreases in cash and cash equivalents		(4,589	)		(1,594	)		(1,840	)		(17,744	)
Cash and cash equivalents, beginning of period		27,404			29,244			29,244			46,988
Cash and cash equivalents, end of period	$	22,815		$	27,650		$	27,404		$	29,244

11

Segment Information*

($ in thousands except per share amounts)

	Three Months Ended March 31, 2010									Three Months Ended March 31, 2009
	Real			Investment						Real			Investment
	Estate			Banking			Total			Estate			Banking			Total
Revenue:
Rental Income	$	30,799		$	-		$	30,799		$	29,818		$	-		$	29,818
Syndication Fees		-			121			121			-			10			10
Transaction Fees		-			146			146			-			28			28
Management Fees & Interest Income		533			-			533			545			-			545
Other Income		9			-			9			18			-			18
Total Revenue		31,341			267			31,608			30,381			38			30,419
Expenses
Rental Operating Expenses		7,973			-			7,973			7,280			-			7,280
Real Estate Taxes and Insurance		5,246			-			5,246			4,829			-			4,829
Depreciaton and Amortization		9,186			33			9,219			7,887			27			7,914
Selling, general  and administrative		1,447			724			2,171			983			1,025			2,008
Commissions and  Broker Expenses		-			114			114			-			130			130
Interest & Commitment Fees		1,652			-			1,652			1,577			-			1,577
Total Expenses		25,504			871			26,375			22,556			1,182			23,738
Income before Equity, Interest and Taxes		5,837			(604	)		5,233			7,825			(1,144	)		6,681
Interest Income		8			-			8			34			2			36
Equity Income SARs		253			-			253			792			-			792
Income before Taxes		6,098			(604	)		5,494			8,651			(1,142	)		7,509
Income Taxes		57			(125	)		(68	)		65			(364	)		(299	)
Income from continuing operations		6,041			(479	)		5,562			8,586			(778	)		7,808
Income from discontinued operations		-			-			-			-			-			-
Gain on sale of assets		-			-			-			-			-			-
Net Income (loss)	$	6,041		$	(479	)	$	5,562		$	8,586		$	(778	)	$	7,808
Funds From Operations (FFO)*
Net Income	$	6,041		$	(479	)	$	5,562		$	8,586		$	(778	)	$	7,808
Gain on sale of assets, net		-			-			-			-			-			-
Equity in income of SARs		(253	)		-			(253	)		(792	)		-			(792	)
Cash received from SARs		1,407			-			1,407			1,615			-			1,615
Acquisition costs		-			-			-			-			-			-
Depreciation and amortization		9,901			33			9,934			8,680			27			8,707
Funds From Operations (FFO)*		17,096			(446	)		16,650			18,089			(751	)		17,338
EPS	$	0.08		$	(0.01	)	$	0.07		$	0.12		$	(0.01	)	$	0.11
FFO per Share*	$	0.21		$	-		$	0.21		$	0.26		$	(0.01	)	$	0.25
Weighted Average Shares								79,681									70,481

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

12

Segment Information*

($ in thousands except per share amounts)

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

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

13

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

(in thousands)

Property NOI Cash*			Three Months		Year to date
			Ended		2010		Three Months Ended								Year Ended
		31-Mar-10
Region	Division	Sq Feet	31-Mar-10		2010 Total		31-Mar-09		30-Jun-09		30-Sep-09		31-Dec-09		2009 Total
Eastern	Mideast	1,535	$	4,031	$	4,031	$	3,740	$	3,803	$	4,401	$	4,839	$	16,783
Midwest	East North Central	597		1,103		1,103		1,524		1,578		1,108		1,129		5,339
	West North Central	630		2,034		2,034		1,689		1,758		2,653		1,867		7,967
		1,227		3,137		3,137		3,213		3,336		3,761		2,996		13,306
South	Southeast	600		2,307		2,307		2,220		2,213		2,353		2,138		8,924
	Southwest	1,489		4,234		4,234		5,203		4,953		4,718		4,370		19,244
		2,089		6,541		6,541		7,423		7,166		7,071		6,508		28,168
West	Mountain	792		3,254		3,254		3,194		3,519		3,003		3,126		12,842
	Pacific	299		443		443		375		311		460		364		1,510
		1,091		3,697		3,697		3,569		3,830		3,463		3,490		14,352
Total		5,942	$	17,406	$	17,406	$	17,945	$	18,135	$	18,696	$	17,833	$	72,609
Property NOI GAAP*			Three Months		Year to date
			Ended			2010	Three Months Ended								Year Ended
		31-Mar-10
Region	Division	Sq Feet	31-Mar-10		2010 Total		31-Mar-09		30-Jun-09		30-Sep-09		31-Dec-09		2009 Total
Eastern	Mideast	1,535	$	4,666	$	4,666	$	3,749	$	3,726	$	4,483	$	5,232	$	17,190
Midwest	East North Central	597		1,110		1,110		1,570		1,592		1,161		1,191		5,514
	West North Central	630		2,164		2,164		1,606		1,667		2,626		2,016		7,915
		1,227		3,274		3,274		3,176		3,259		3,787		3,207		13,429
South	Southeast	600		2,356		2,356		2,391		2,343		2,477		2,245		9,456
	Southwest	1,489		4,404		4,404		5,265		4,828		4,820		4,643		19,556
		2,089		6,760		6,760		7,656		7,171		7,297		6,888		29,012
West	Mountain	792		3,229		3,229		3,334		3,548		3,019		3,114		13,015
	Pacific	299		497		497		404		339		515		425		1,683
		1,091		3,726		3,726		3,738		3,887		3,534		3,539		14,698
Total		5,942	$	18,426	$	18,426	$	18,319	$	18,043	$	19,101	$	18,866	$	74,329

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

14

Capital Analysis

(in thousands, except per share amounts)

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

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

15

Portfolio Overview 

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

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

16

Regional Analysis and Map

(as of March 31, 2010)

Owned:
Name	City	State	Region	Square Feet
Park Seneca	Charlotte	NC	East	109,550
Forest Park	Charlotte	NC	East	62,212
Meadow Point	Chantilly	VA	East	136,683
Stonecroft	Chantilly	VA	East	111,469
Fairview	Falls Church	VA	East	252,613
Innsbrook	Glen Allen	VA	East	303,745
East Baltimore	Baltimore	MD	East	325,410
Loudoun Tech Center	Dulles	VA	East	135,888
Bollman Place (1)	Savage	MD	East	98,745
Southfield Centre	Southfield	MI	MidWest	214,697
Northwest Point	Elk Grove Village	IL	MidWest	176,848
River Crossing	Indianapolis	IN	MidWest	205,059
Timberlake	Chesterfield	MO	MidWest	232,766
Timberlake East	Chesterfield	MO	MidWest	116,197
Lakeside Crossing	Maryland Heights	MO	MidWest	127,778
Eden Bluff	Eden Prairie	MN	MidWest	153,028
Blue Lagoon Drive	Miami	FL	South	212,619
One Overton Place	Atlanta	GA	South	387,267
Willow Bend Office Center	Plano	TX	South	116,622
Park Ten	Houston	TX	South	155,715
Addison Circle	Addison	TX	South	293,787
Collins Crossing	Richardson	TX	South	298,766
Eldridge Green	Houston	TX	South	248,399
Park Ten Phase II	Houston	TX	South	156,746
Liberty Plaza	Addison	TX	South	218,934
Centennial Technology Center	Colorado Springs	CO	West	110,730
380 Interlocken	Broomfield	CO	West	240,184
Greenwood Plaza	Englewood	CO	West	199,077
390 Interlocken	Broomfield	CO	West	241,516
Hillview Center	Milpitas	CA	West	36,288
Federal Way	Federal Way	WA	West	117,010
Montague Business Center	San Jose	CA	West	145,951
Total				5,942,299
Managed:
Name	City	State	Region	Square Feet
1441 Main Street	Columbia	SC	East	267,956
303 East Wacker Drive	Chicago	IL	MidWest	844,081
505 Waterford	Plymouth	MN	MidWest	256,348
50 South Tenth Street	Minneapolis	MN	MidWest	498,768
Grand Boulevard	Kansas City	MO	MidWest	532,453
Lakeside Crossing II	Maryland Heights	MO	MidWest	116,000
Centre Pointe V	West Chester	OH	MidWest	135,936
Satellite Place	Duluth	GA	South	134,785
5601 Executive Drive	Irving	TX	South	152,121
Galleria North	Dallas	TX	South	379,518
Energy Tower I	Houston	TX	South	325,796
Phoenix Tower	Houston	TX	South	618,507
Highland Place I	Centennial	CO	West	139,142
Total (2)				4,401,411

(1) Industrial property, all others are office properties

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

Properties by Division/Region
($ in thousands)
				NBV (a)	% Leased
	# of Properties	Square Feet	% of Portfolio	31-Mar-10	31-Mar-10
East Region Total	9	1,536,315	25.9	$     236,341	80.54%
East North Central Division	3	596,604	10.0	80,947	82.24%
West North Central	4	629,769	10.6	86,286	99.62%
Midwest Region Total	7	1,226,373	20.6	167,233	91.16%
Southeast	2	599,886	10.1	122,915	93.74%
Southwest	7	1,488,969	25.1	227,269	81.39%
South Region Total	9	2,088,855	35.2	350,184	84.93%
Mountain	4	791,507	13.3	127,199	92.57%
Pacific	3	299,249	5.0	35,998	71.12%
West Region Total	7	1,090,756	18.3	163,197	86.68%
Grand Total	32	5,942,299	100.0	$     916,955	85.40%

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

17

Owned Property List

(in thousands)

						NBV (1)	% Leased
Region	Division	Name	City	State	S.F.	31-Mar-10	31-Mar-10
West	Pacific	Hillview Center	Milpitas	CA	36	4,228	100.0%
West	Pacific	Montague Business Center	San Jose	CA	146	17,109	100.0%
West	Mountain	380 Interlocken	Broomfield	CO	240	42,972	87.0%
West	Mountain	390 Interlocken	Broomfield	CO	242	43,034	98.5%
West	Mountain	Centennial Technology Center	Colorado Springs	CO	111	11,804	78.5%
West	Mountain	Greenwood Plaza	Englewood	CO	199	29,390	100.0%
South	Southeast	Blue Lagoon Drive	Miami	FL	213	47,881	100.0%
South	Southeast	One Overton Place	Atlanta	GA	387	75,034	90.3%
MidWest	East North Central	Northwest Point	Elk Grove Village	IL	177	29,772	100.0%
MidWest	East North Central	River Crossing	Indianapolis	IN	205	36,405	94.7%
East	Mideast	East Baltimore	Baltimore	MD	325	56,226	94.4%
East	Mideast	Bollman Place	Savage	MD	99	4,998	100.0%
MidWest	East North Central	Southfield Centre	Southfield	MI	215	14,771	55.7%
MidWest	West North Central	Eden Bluff - Eden Prairie	Eden Prairie	MN	153	14,537	100.0%
MidWest	West North Central	Timberlake	Chesterfield	MO	233	36,018	99.0%
MidWest	West North Central	Timberlake East	Chesterfield	MO	116	18,189	100.0%
MidWest	West North Central	Lakeside Crossing	Maryland Heights	MO	128	17,541	100.0%
East	Mideast	Park Seneca	Charlotte	NC	110	7,638	85.1%
East	Mideast	Forest Park	Charlotte	NC	62	6,366	100.0%
South	Southwest	Addison Circle	Addison	TX	294	47,907	61.3%
South	Southwest	Liberty Plaza	Addison	TX	219	25,207	77.8%
South	Southwest	Park Ten	Houston	TX	156	18,772	66.0%
South	Southwest	Eldridge Green	Houston	TX	248	43,342	100.0%
South	Southwest	Park Ten Phase II	Houston	TX	157	31,515	97.8%
South	Southwest	Willow Bend Office Center	Plano	TX	117	17,990	49.8%
South	Southwest	Collins Crossing	Richardson	TX	299	42,537	100.0%
East	Mideast	Meadow Point	Chantilly	VA	137	20,423	51.5%
East	Mideast	Stonecroft	Chantilly	VA	111	19,758	100.0%
East	Mideast	Loudoun Tech Center	Dulles	VA	136	17,673	100.0%
East	Mideast	Fairview	Falls Church	VA	253	61,293	100.0%
East	Mideast	Innsbrook	Glen Allen	VA	304	41,966	34.7%
West	Pacific	Federal Way	Federal Way	WA	117	14,661	26.1%
					5,942	$    916,955	85.4%

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

18

Properties with Annualized Rent per Square Foot

													Average
			Year Built					Percentage Leased			Annualized Rent as of		Annualized
			or	Net Rentable		Leased		as of March 31,			as of March 31,		Rent per Leased
Property Name	City	State	Renovated	Square Feet		Sq. Ft. (a)		2010 (a)			2010 (b)		Square Feet (c)
Park Seneca	Charlotte	NC	1969		109,550		93,272		85.14	%		1,412,601	$	15.14
Forest Park	Charlotte	NC	1999		62,212		62,212		100.00	%		987,940		15.88
Meadow Point	Chantilly	VA	1999		136,683		70,357		51.47	%		186,732		2.65
Innsbrook	Glen Allen	VA	1999		303,745		105,497		34.73	%		1,022,846		9.70
East Baltimore	Baltimore	MD	1989		325,410		307,252		94.42	%		8,218,852		26.75
Loudoun Tech Center	Dulles	VA	1999		135,888		135,888		100.00	%		1,736,340		12.78
Bollman Place	Savage	MD	1984		98,745		98,745		100.00	%		611,232		6.19
Stonecroft	Chantilly	VA	2008		111,469		111,469		100.00	%		3,981,177		35.72
Fairview Park	Falls Church	VA	2001		252,613		252,613		100.00	%		6,644,676		26.30
East total					1,536,315		1,237,305		80.54	%		24,802,396		20.05
Southfield Centre	Southfield	MI	1977		214,697		119,566		55.69	%		1,310,319		10.96
Northwest Point	Elk Grove Village	IL	1999		176,848		176,848		100.00	%		3,334,487		18.86
River Crossing	Indianapolis	IN	1998		205,059		194,246		94.73	%		4,888,569		25.17
Timberlake	Chesterfield	MO	1999		232,766		230,347		98.96	%		4,685,165		20.34
Timberlake East	Chesterfield	MO	2000		116,197		116,197		100.00	%		2,692,054		23.17
Lakeside Crossing	Sl. Louis	MO	2008		127,778		127,778		100.00	%		2,947,839		23.07
Eden Bluff	Eden Praire	MN	2006		153,028		153,028		100.00	%		3,977,266		25.99
Midwest total					1,226,373		1,118,010		91.16	%		23,835,698		21.32
Blue Lagoon Drive	Miami	FL	2002		212,619		212,619		100.00	%		4,505,691		21.19
One Overton Place	Atlanta	GA	2002		387,267		349,728		90.31	%		8,998,529		25.73
Willow Bend Office Center	Plano	TX	1999		116,622		58,071		49.79	%		1,228,912		21.16
Park Ten	Houston	TX	1999		155,715		102,821		66.03	%		2,680,348		26.07
Addison Circle	Addison	TX	1999		293,787		180,006		61.27	%		4,335,336		24.08
Collins Crossing	Richardson	TX	1999		298,766		298,766		100.00	%		7,603,669		25.45
Eldridge Green	Houston	TX	1999		248,399		248,399		100.00	%		7,075,482		28.48
Park Ten Phase II	Houston	TX	2006		156,746		153,326		97.82	%		3,992,631		26.04
Liberty Plaza	Addison	TX	1985		218,934		170,424		77.84	%		3,370,903		19.78
South Total					2,088,855		1,774,160		84.93	%		43,791,500		24.68
Centennial Technology Center	Colorado Springs	CO	1999		110,730		86,910		78.49	%		1,382,703		15.91
380 Interlocken	Broomfield	CO	2000		240,184		208,844		86.95	%		6,511,207		31.18
Greenwood Plaza	Englewood	CO	2000		199,077		199,077		100.00	%		7,868,486		39.52
390 Interlocken	Broomfield	CO	2002		241,516		237,837		98.48	%		6,217,339		26.14
Hillview Center	Milpitas	CA	1984		36,288		36,288		100.00	%		532,421		14.67
Federal Way	Federal Way	WA	1982		117,010		30,592		26.14	%		550,275		17.99
Montague Business Center	San Jose	CA	1982		145,951		145,951		100.00	%		2,118,489		14.52
West Total					1,090,756		945,499		86.68	%		25,180,921		26.63
Grand Total					5,942,299		5,074,974		85.40	%	$	117,610,515	$	23.17

(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 March 2010 (including month-to-month leases) multiplied by 12.

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

19

Owned Property Capital Expenditures

(in thousands)

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

20

20 Largest Tenants with Annualized Rent and Remaining Term

As of March 31, 2010
			Remaining	Aggregate	% of Aggregate	Annualized	% of
	Tenant	Number of	Lease Term	Leased	Leased	Rent (a)	Aggregate
	Name	Leases	in Months	Square Feet	Square Feet	(in 000's)	Annualized Rent
1	Noblis, Inc.	1	82	252,613	4.25%	6,645	5.65%
2	CITGO Petroleum Corporation	1	143	248,399	4.18%	7,075	6.02%
3	Tektronix Texas, LLC	1	3	241,372	4.06%	6,277	5.34%
4	Burger King Corporation	1	102	212,619	3.58%	4,506	3.83%
5	New Era of Networks, Inc.	1	1	199,077	3.35%	7,868	6.69%
6	Citicorp Credit Services, Inc (b)	1	81	176,848	2.98%	3,334	2.84%
7	RGA Reinsurance Company	1	57	185,501	3.12%	3,645	3.10%
8	C.H. Robinson Worldwide, Inc.	1	135	153,028	2.58%	3,977	3.38%
9	Geisecke & Devrient America, Inc.	1	59	135,888	2.29%	1,736	1.48%
10	Murphy Exploration & Production Company	1	85	133,786	2.25%	3,515	2.99%
11	Monsanto Company	1	58	127,778	2.15%	2,948	2.51%
12	Vail Holdings, Inc. (c)	1	156	121,913	2.05%	3,209	2.73%
13	Northrop Grumman Information Technology, Inc.	1	97	111,469	1.88%	3,981	3.39%
14	Maines Paper & Food Service, Inc.	1	44	98,745	1.66%	611	0.52%
15	Amdocs, Inc.	1	14	91,928	1.55%	2,139	1.82%
16	County of Santa Clara	1	93	90,467	1.52%	1,347	1.15%
17	Ober, Kaler, Grimes & Shriver	1	12	89,885	1.51%	2,470	2.10%
18	International Business Machines Corp.	1	28	83,209	1.40%	978	0.83%
19	Corporate Holdings, LLC	1	48	81,818	1.38%	2,161	1.84%
20	Noble Royalties, Inc.	1	56	78,344	1.32%	2,045	1.74%
				2,914,687	49.05%	$      70,468	59.92%

(a) Annualized rent represents the monthly rent, including tenant reimbursements, for each lease in effect at March 31, 2010 multiplied by 12.Tenant reimbursements generally include payment of real estate taxes, operating expenses and common area maintenance and utility charges.

(b) The lease with Citicorp Credit Services, Inc. is guaranteed by Citigroup.

(c) On March 22, 2010, the Company signed a lease for an additional 38,000 square feet of space with one of its tenants, Vail Holdings, Inc.

21

Tenant Analysis – 20 Largest Tenants, Industry Profile

(as a % of square feet at March 31, 2010)

22

Lease Expirations by Square Feet

(as of March 31, 2010)

Year	Total Square Feet	% of Square Feet Commercial
2010	732,934	12.3%
2011	460,349	7.8%
2012	439,496	7.4%
2013	361,867	6.1%
2014	585,420	9.9%
2015	482,830	8.1%
2016	489,481	8.2%
2017	523,658	8.8%
2018	394,913	6.6%
2019	43,392	0.7%
2020	75,587	1.3%
2021	153,028	2.6%
2022	248,399	4.2%
2023	83,620	1.4%
Vacant	867,325	14.6%
Total	5,942,299	100.0%

23

Lease Expirations

with Annualized Rent per Square Foot

			Rentable		Annualized	Percentage
	Number of		Square		Rent	of Total Final
Year of	Leases		Footage	Annualized	Per Square	Annualized
Lease	Expiring		Subject to	Rent Under	Foot Under	Rent Under
Expiration	Within the		Expiring	Expiring	Expiring	Expiring	Cumulative
December 31,	Year		Leases	Leases (a)	Leases	Leases	Total
2010	80	(b)	732,934	20,738,900	28.30	17.63%	17.63%
2011	38		460,349	10,163,857	22.08	8.64%	26.28%
2012	43		439,496	9,335,526	21.24	7.94%	34.21%
2013	31		361,867	6,154,653	17.01	5.23%	39.45%
2014	22		585,420	12,812,624	21.89	10.89%	50.34%
2015	18		482,830	9,487,251	19.65	8.07%	58.41%
2016	8		489,481	11,418,722	23.33	9.71%	68.12%
2017	6		523,658	12,302,877	23.49	10.46%	78.58%
2018	5		394,913	10,342,340	26.19	8.79%	87.37%
2019	2		43,392	1,224,355	28.22	1.04%	88.41%
2020 and thereafter	5		560,634	13,629,410	24.31	11.59%	100.00%
	258		5,074,974	117,610,515	23.17	100.00%
Vacancies as of 3/31/10			867,325
Total Portfolio Square Footage			5,942,299

(a) Annualized rent represents the monthly rent, including tenant reimbursements, for each lease in effect at March 31, 2010 multiplied by 12.  Tenant reimbursements generally include payment of real estate taxes, operating expenses and common area maintenance and utility charges.

(b) 31 Leases are Month to Month

24

Capital Recycling

($ in thousands)

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

25

Investment Banking Performance

26

FFO and FFO+GOS Reconciliations

(in thousands, except per share amounts)

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

27

FFO and FFO+GOS  Definitions

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

The Company evaluates the performance of its reportable segments based on several measures including, Funds From Operations (“FFO”) and FFO plus Gains on Sales (“FFO+GOS” or “Total Profits”) as management believes they represent important measures of activity and are an important consideration in determining distributions paid to equity holders.  The Company defines FFO as net income (computed in accordance with generally accepted accounting principles, or GAAP), excluding gains (or losses) from sales of property, and acquisition costs of newly acquired properties that are not capitalized, plus depreciation and amortization, and after adjustments to exclude non-cash income (or losses) from non-consolidated or Sponsored REITs, plus distributions received from non-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), as indicators of the Company’s financial performance, nor as alternatives to cash flows from operating activities (determined in accordance with GAAP), nor as measures of the Company’s liquidity, nor are they necessarily indicative of sufficient cash flow to fund all of the Company’s needs.  Other real estate companies may define these terms in a different manner.  We believe that in order to facilitate a clear understanding of the results of the Company, FFO and FFO+GOS should be examined in connection with net income and cash flows from operating, investing and financing activities in the consolidated financial statements.

28

Funds Available for Distribution (FAD)
Reconciliation and Definition

(in thousands, except per share amounts)

	For the three months ended:
	31-Mar-10			31-Mar-09			30-Jun-09			30-Sep-09			31-Dec-09
Net income	$	5,562		$	7,808		$	4,865		$	6,941		$	8,258
(Gain) Loss on sale of assets		-			-			-			-			(424	)
GAAP income from non-consolidated REITs		(253	)		(792	)		(443	)		(475	)		(301	)
Distributions from non-consolidated REITs		1,407			1,615			1,522			1,119			1,371
Acquisition costs		-			-			248			391			4
Depreciation & amortization		9,934			8,707			11,217			9,561			10,167
Funds From Operations (FFO)		16,650			17,338			17,409			17,537			19,075
Plus gains on sales of assets (GOS)		-			-			-			-			424
FFO+GOS (Total Profits)	$	16,650		$	17,338		$	17,409		$	17,537		$	19,499
Funds Available for Distribution:
Funds From Operations (FFO)		16,650			17,338			17,409			17,537			19,075
Straight-line rent		(1,619	)		(374	)		(69	)		(405	)		(1,030	)
Capital expenditures		(380	)		(466	)		(115	)		(265	)		(619	)
Funds Available for Distribution (FAD)	$	14,651		$	16,498		$	17,225		$	16,867		$	17,426
Per Share Data:
EPS	$	0.07		$	0.11		$	0.07		$	0.10		$	0.10
FFO		0.21			0.25			0.25			0.25			0.24
GOS		-			-			-			-			0
FFO+GOS		0.21			0.25			0.25			0.25			0.24
FAD		0.18			0.23			0.24			0.24			0.22
Weighted Average Shares (basic and diluted)		79,681			70,481			70,481			71,281			79,681

The Company defines FAD as the sum of (1) FFO, (2) less the effect of straight-line rent, (3) less recurring capital expenditures that are generally for maintenance of properties and are not recovered through rental income from tenants, and (4) plus non-cash compensation expenses, if any.  FAD should not be considered as an alternative to net income (determined in accordance with GAAP), as an indicator of the Company’s financial performance, nor as an alternative to cash flows from operating activities (determined in accordance with GAAP), nor as a measure of the Company’s liquidity, nor is it necessarily indicative of sufficient cash flow to fund all of the Company’s needs.  Other real estate companies may define this term in a different manner.  We believe that in 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.

29

EBITDA Reconciliation and Definition

(in thousands, except ratio amounts)

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

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

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

30

 

Reconciliation of Net Income to Property NOI:
Cash and GAAP Basis

(in thousands)

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

31