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): August 1, 2012

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
(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 August 1, 2012, Franklin Street Properties Corp. (the “Registrant”) announced its financial results for the three and six months ended June 30, 2012. 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:  August 1, 2012	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 August 1, 2012.
99.2	Supplemental Operating and Financial Data for the three and six months ended June 30, 2012.

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EX-99

Exhibit 99.1

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

FRANKLIN STREET PROPERTIES CORP. ANNOUNCES

SECOND QUARTER 2012 RESULTS

Wakefield, MA—August 1, 2012—Franklin Street Properties Corp. (the “Company”, “FSP”, “we” or “our”) (NYSE MKT: FSP), an investment firm specializing in real estate, announced today Funds From Operations (FFO) of $19.0 million or $0.23 per share for the second quarter ended June 30, 2012. The Company also announced Net Income of $5.4 million and Earnings Per Share (EPS) of $0.07 for the second quarter and provided an update on other activities.

The Company evaluates its performance based on Net Income, EPS and FFO and believes each is an important measure. A reconciliation of Net Income to FFO, which is a non-GAAP financial measure, is provided on page 3 of this press release.

	Three Months Ended June 30,							Six Months Ended June 30,
(in 000's except per share data)	2012		2011		Increase (Decrease)			2012		2011		Increase (Decrease)
Net Income	$	5,434	$	10,381	$	(4,947	)	$	11,172	$	35,148	$	(23,976	)
FFO	$	19,041	$	20,140	$	(1,099	)	$	38,612	$	36,390	$	2,222
Per Share Data:
EPS	$	0.07	$	0.13	$	(0.06	)	$	0.13	$	0.43	$	(0.30	)
FFO	$	0.23	$	0.25	$	(0.02	)	$	0.47	$	0.45	$	0.02

Comparing results for the second quarter of 2012 to 2011, Net Income and EPS decreased $4.9 million or $0.06 per share and FFO decreased $1.1 million or $0.02 per share. The decrease in Net Income and EPS was primarily because in the second quarter of 2011 our investment bank contributed about $3.3 million and we realized a gain on sale of a property in Savage, Maryland in June of 2011, which contributed $2.3 million, neither of which was a factor in the second quarter of 2012. These decreases were partially offset by the benefits of real estate investments made over the last 12 months discussed further below. The decrease in FFO was also because of the investment banking segment, which was discontinued during 2011, and was partially offset by increases from the benefit of increased interest income from real estate loan investments, five property acquisitions made in 2011 (including three acquisitions made in March 2011), all of which we had for the full second quarter of 2012 and leasing activity.

Comparing results for the first half of 2012 to 2011, Net Income and EPS decreased $24.0 million or $0.30 per share and FFO increased $2.2 million or $0.02 per share. The decrease in Net Income and EPS was primarily from the gains on sale of properties in January and June of 2011, which contributed $21.9 million or $0.27 per share to the first half of 2011. We did not sell any properties during the first half of 2012. In addition, during the six months ended June 30, 2011 our investment bank contributed about $3.4 million, which was not a factor during the six months ended June 30, 2012. These decreases were partially offset by the benefits of real estate investments made over the last 12 months discussed further below. The increase in FFO was primarily from the benefits of increased interest income from real estate loan investments, five property acquisitions made in 2011 (including three acquisitions made in March 2011), all of which we had for the full first half of 2012. We also had the benefit of increased leasing activity that increased occupancy in the real estate portfolio at June 30, 2012 to 90.0% compared to 86.9% at June 30, 2011.

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

“For the second quarter of 2012, FSP's profits as represented by FFO totaled approximately $19.0 million or $0.23 per share, a decrease of approximately $529,000 or $0.01 per share compared to the first quarter of 2012. Dividend distributions declared for the second quarter of 2012, which are payable on August 16, 2012, will be approximately $15.8 million or $0.19 per share.

Our directly-owned real estate portfolio of 36 properties, totaling 7,052,592 square feet, was approximately 90% leased as of June 30, 2012, up from approximately 89% leased as of March 31, 2012. Our property portfolio is primarily suburban office assets. Most of the rental/leasing markets where our properties are located remained stable during the second quarter, both in terms of occupancy and rental rate levels. Within this environment, we continue to make slow but steady leasing progress. Our property portfolio has relatively modest lease expirations over the next two and a half years and, along with our improving occupancy levels, should allow overall tenant improvement expenditures and leasing costs to moderate in relation to the level of rental revenues being achieved. We are beginning to see the early signs of that trend.

There were no additional real estate investments completed in the second quarter of 2012. However, on July 5, 2012, FSP made a $33 million two-year bridge loan on a suburban office property located in the I-10 energy corridor of Houston, Texas. The property is a 14-story, multi-tenant Class A office building containing approximately 325,796 rentable square feet. The property is owned by FSP Energy Tower I Corp., a single-asset REIT affiliate of FSP, and is approximately 100% leased. The loan is secured by a first mortgage on the property. On July 31, 2012, FSP purchased a Class A suburban office property in Atlanta, Georgia known as “One Ravinia Drive” for $52.8 million. The property is 17 stories, contains approximately 386,603 rentable square feet, is approximately 82% leased to numerous tenants and is located in the “Central Perimeter” submarket of Atlanta. FSP and its affiliates have been investing in the suburban Atlanta office market since 2003 and currently own three properties there totaling approximately 907,000 square feet.

There were no property sales in the second quarter of 2012, although we continuously review and evaluate our directly-owned portfolio of 36 properties for potentially advantageous disposition opportunities. In addition, certain properties owned by some of our single-asset REIT affiliates, and in which FSP may have a financial interest, could become possible candidates for sale as they stabilize their occupancies and the markets in which they are located become more attractive to potential acquirers. FSP Phoenix Tower Corp., a single-asset REIT affiliate of FSP, owns a 34-story multi-tenant Class A office building containing approximately 623,944 square feet located in Houston, Texas that is currently being offered for sale. FSP has both an equity and first mortgage loan investment in FSP Phoenix Tower Corp. On July 27, 2012, FSP’s $106.2 million two-year bridge loan to its single-asset REIT affiliate, FSP 50 South Tenth Street Corp., was repaid in full from the proceeds of an institutional third-party first mortgage loan secured by the Minneapolis, Minnesota CBD property. Additional potential real estate investment opportunities are actively being explored and we anticipate further real estate investments this year.

We continue looking forward to the balance of 2012 and beyond.”

Dividend Announcement

On July 13, 2012, the Company announced that its Board of Directors declared a regular quarterly dividend for the three months ended June 30, 2012 of $0.19 per share of common stock payable on August 16, 2012 to stockholders of record on July 27, 2012.

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Real Estate Update

Supplementary Schedules D and E provide property information for our continuing real estate portfolio of 36 properties and for three non-consolidated REITs that we had preferred stock interests in as of June 30, 2012. 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.

__________________________________________________________________________________________

A reconciliation of Net Income to FFO is shown below and a definition of FFO is provided on Supplementary Schedule I. We believe FFO is used broadly throughout the real estate investment trust (REIT) industry as a measurement of performance. We have included the NAREIT FFO definition in our table and note that other REITs may not define FFO in accordance with the current NAREIT definition or may interpret the current NAREIT definition differently than we do. Our computation of FFO may not be comparable to FFO reported by other REITs or real estate companies that define FFO differently.

Reconciliation of Net Income to FFO:	Three Months Ended						Six Months Ended
	June 30,						June 30,
(In thousands, except per share amounts)	2012			2011			2012			2011
Net income	$	5,434		$	10,381		$	11,172		$	35,148
Less gain on sale of properties		—			(2,346	)		—			(21,939	)
GAAP (income) loss from non-consolidated REITs		(494	)		(1,166	)		(885	)		(2,938	)
Distributions from non-consolidated REITs		898			1,215			1,827			2,982
Depreciation & amortization		13,203			12,047			26,498			22,859
NAREIT FFO		19,041			20,131			38,612			36,112
Acquisition costs of new properties		—			9			—			278
Funds From Operations (FFO)	$	19,041		$	20,140		$	38,612		$	36,390
Per Share Data
EPS	$	0.07		$	0.13		$	0.13		$	0.43
FFO	$	0.23		$	0.25		$	0.47		$	0.45
Weighted average shares (basic and diluted)		82,937			81,437			82,937			81,437

__________________________________________________________________________________________

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 August 2, 2012 at 10:00 a.m. (ET) to discuss the second quarter 2012 results. To access the call, please dial 1-877-317-6789. Internationally, the call may be accessed by dialing 1-412-317-6789. 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. The majority of FSP's property portfolio is suburban office buildings, with select investments in certain central business district properties. 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.franklinstreetproperties.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, risks of a lessening of demand for the types of real estate owned by us, changes in government regulations and regulatory uncertainty, uncertainty about governmental fiscal policy, geopolitical events 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, 2011, 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 – Prior Four Quarters	F
Percentage of Leased Space	G
Largest 20 Tenants – FSP Owned Portfolio	H
Definition of Funds From Operations (FFO)	I

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Franklin Street Properties Corp. Financial Results

Supplementary Schedule A

Condensed Consolidated Income Statements

(Unaudited)

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
(in thousands, except per share amounts)	2012		2011		2012		2011
Revenue:
Rental	$	35,830	$	33,606	$	72,498	$	64,705
Related party revenue:
Management fees and interest income from loans		3,045		1,150		5,661		1,958
Other		39		7		73		13
Total revenue		38,914		34,763		78,232		66,676
Expenses:
Real estate operating expenses		8,828		8,765		17,905		17,495
Real estate taxes and insurance		5,576		5,228		11,389		9,987
Depreciation and amortization		13,224		12,029		26,480		22,774
Selling, general and administrative		2,236		1,602		4,313		3,247
Interest		4,037		3,578		7,714		5,986
Total expenses		33,901		31,202		67,801		59,489
Income before interest income, equity in earnings of
non-consolidated REITs and taxes		5,013		3,561		10,431		7,187
Interest income		4		5		12		16
Equity in earnings of non-consolidated REITs		494		1,166		885		2,134
Income before taxes on income		5,511		4,732		11,328		9,337
Taxes on income		77		68		156		118
Income from continuing operations		5,434		4,664		11,172		9,219
Discontinued operations:
Income from discontinued operations, net of income tax		—		3,371		—		3,990
Gain on sale of property less applicable income tax		—		2,346		—		21,939
Total discontinued operations		—		5,717		—		25,929
Net income	$	5,434	$	10,381	$	11,172	$	35,148
Weighted average number of shares outstanding,
basic and diluted		82,937		81,437		82,937		81,437
Earnings per share, basic and diluted, attributable to:
Continuing operations	$	0.07	$	0.06	$	0.13	$	0.11
Discontinued operations		—		0.07		—		0.32
Net income per share, basic and diluted	$	0.07	$	0.13	$	0.13	$	0.43

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Franklin Street Properties Corp. Financial Results

Supplementary Schedule B

Condensed Consolidated Balance Sheets

(Unaudited)

	June 30,			December 31,
(in thousands, except share and par value amounts)	2012			2011
Assets:
Real estate assets, net	$	997,345		$	1,006,221
Acquired real estate leases, less accumulated amortization
of $32,337 and $31,189, respectively		82,769			91,613
Investment in non-consolidated REITs		86,658			87,598
Cash and cash equivalents		22,620			23,813
Restricted cash		533			493
Tenant rent receivables, less allowance for doubtful accounts
of $1,300 and $1,235, respectively		1,403			1,460
Straight-line rent receivable, less allowance for doubtful accounts
of $135 and $135, respectively		33,142			28,545
Prepaid expenses		2,605			1,223
Related party mortgage loan receivables		177,536			140,516
Other assets		3,184			4,070
Office computers and furniture, net of accumulated depreciation
of $500 and $428, respectively		456			468
Deferred leasing commissions, net of accumulated amortization
of $10,706 and $9,220, respectively		22,112			22,641
Total assets	$	1,430,363		$	1,408,661
Liabilities and Stockholders’ Equity:
Liabilities:
Bank note payable	$	494,000		$	449,000
Accounts payable and accrued expenses		25,408			26,446
Accrued compensation		944			2,222
Tenant security deposits		2,113			2,008
Acquired unfavorable real estate leases, less accumulated amortization of $4,203 and $3,759, respectively		6,875			7,618
Total liabilities		529,340			487,294
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, 82,937,405 and 82,937,405 shares issued and outstanding, respectively		8			8
Additional paid-in capital		1,042,876			1,042,876
Accumulated distributions in excess of accumulated earnings		(141,861	)		(121,517	)
Total stockholders’ equity		901,023			921,367
Total liabilities and stockholders’ equity	$	1,430,363		$	1,408,661

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Franklin Street Properties Corp. Financial Results

Supplementary Schedule C

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	For the Six Months Ended June 30,
(in thousands)	2012			2011
Cash flows from operating activities:
Net income	$	11,172		$	35,148
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		27,495			23,670
Amortization of above market lease		20			(62	)
Gain on sale of real estate assets		—			(21,939	)
Equity in earnings of non-consolidated REITs		(885	)		(2,844	)
Distributions from non-consolidated REITs		993			2,318
Increase (decrease) in bad debt reserve		65			(365	)
Changes in operating assets and liabilities:
Restricted cash		(40	)		(39	)
Tenant rent receivables, net		(8	)		441
Straight-line rents, net		(2,571	)		(5,176	)
Lease acquisition costs		(2,026	)		(55	)
Prepaid expenses and other assets, net		(1,512	)		914
Accounts payable and accrued expenses		(1,395	)		(726	)
Accrued compensation		(1,278	)		(733	)
Tenant security deposits		105			546
Payment of deferred leasing commissions		(1,513	)		(5,386	)
Net cash provided by operating activities		28,622			25,712
Cash flows from investing activities:
Purchase of real estate assets, office computers and furniture		(7,112	)		(127,999	)
Acquired real estate leases		—			(45,032	)
Investments in non-consolidated REITs		(1	)		(10	)
Distributions in excess of earnings from non-consolidated REITs		834			664
Investment in related party mortgage loan receivable		(37,020	)		(4,232	)
Changes in deposits on real estate assets		—			200
Investment in assets held for syndication, net		—			(8,200	)
Proceeds received on sales of real estate assets		—			96,790
Net cash used in investing activities		(43,299	)		(87,819	)
Cash flows from financing activities:
Distributions to stockholders		(31,516	)		(30,946	)
Proceeds from equity offering, net		—			(90	)
Borrowings under bank note payable		45,000			345,000
Repayment of bank note payable		—			(209,968	)
Repayment of term loan payable		—			(74,850	)
Deferred financing costs		—			(5,389	)
Swap termination payment		—			(982	)
Net cash provided by financing activities		13,484			22,775
Net decrease in cash and cash equivalents		(1,193	)		(39,332	)
Cash and cash equivalents, beginning of period		23,813			68,213
Cash and cash equivalents, end of period	$	22,620		$	28,881

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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)
	Total	% of
Year	Square Feet	Portfolio
2012	155,148	2.2%
2013	450,290	6.4%
2014	415,284	5.9%
2015	812,702	11.5%
2016	921,681	13.1%
Thereafter (2)	4,297,487	60.9%
	7,052,592	100.0%

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

(2) Includes 705,090 square feet of current vacancies.

(dollars & square feet in thousands)	As of June 30, 2012
	# of		% of	Square	% of
State	Properties	Investment	Portfolio	Feet	Portfolio
Texas	10	$      291,915	29.4%	2,029	28.7%
Colorado	4	124,153	12.4%	789	11.2%
Virginia	4	101,082	10.1%	684	9.7%
Minnesota	2	38,814	3.9%	626	8.9%
Missouri	3	66,949	6.7%	477	6.8%
North Carolina	3	67,834	6.8%	431	6.1%
Georgia	1	70,932	7.1%	387	5.5%
Illinois	2	50,283	5.0%	372	5.3%
Maryland	1	53,776	5.4%	325	4.6%
Michigan	1	14,659	1.5%	215	3.0%
Florida	1	46,244	4.6%	213	3.0%
Indiana	1	34,886	3.5%	205	2.9%
California	2	21,716	2.2%	182	2.6%
Washington	1	14,102	1.4%	117	1.7%
	36	$      997,345	100.0%	7,052	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				Three Months Ended				Six Months Ended
(in thousands)	31-Mar-12		31-Mar-11		30-Jun-12		30-Jun-11		30-Jun-12		30-Jun-11
Tenant improvements	$	3,014	$	2,506	$	2,705	$	3,215	$	5,719	$	5,721
Deferred leasing costs		2,196		2,819		1,343		2,567		3,539		5,386
Building improvements		746		449		1,003		876		1,749		1,325
	$	5,956	$	5,774	$	5,051	$	6,658	$	11,007	$	12,432

Square foot & leased percentages		June 30,	December 31,
		2012	2011
Owned portfolio of commercial real estate
	Number of properties	36	36
	Square feet	7,052,592	7,052,068
	Leased percentage	90%	89%
Investments in non-consolidated REITs
	Number of properties	3	3
	Square feet	2,003,968	2,001,542
	Leased percentage	89%	87%
Single Asset REITs (SARs) managed
	Number of properties	13	13
	Square feet	3,322,589	3,322,639
	Leased percentage	85%	80%
Total owned, investments & managed properties
	Number of properties	52	52
	Square feet	12,379,149	12,376,249
	Leased percentage	89%	86%

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

			Square	% Leased	% Interest
Single Asset REIT name	City	State	Feet	30-Jun-12	Held
FSP 303 East Wacker Drive Corp.	Chicago	IL	844,953	93.8%	43.7%
FSP Grand Boulevard Corp.	Kansas City	MO	535,071	79.9%	27.0%
FSP Phoenix Tower Corp.	Houston	TX	623,944	91.8%	4.6%
			2,003,968	89.5%

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Franklin Street Properties Corp. Earnings Release

Supplementary Schedule F: Quarterly Information

(Unaudited)

(in thousands)
		Q2			Q3			Q4			Q1
Revenue:		2011			2011			2011			2012
Rental	$	33,606		$	33,672		$	37,014		$	36,668
Related party revenue:
Management fees and interest income from loans		1,150			1,037			1,051			2,616
Other		7			7			29			34
Total revenues		34,763			34,716			38,094			39,318
Expenses:
Real estate operating expenses		8,765			9,328			9,862			9,077
Real estate taxes and insurance		5,228			5,020			5,426			5,813
Depreciation and amortization		12,029			12,351			13,124			13,256
Selling, general and administrative		1,602			1,654			2,012			2,077
Interest		3,578			3,419			3,261			3,677
Total expenses		31,202			31,772			33,685			33,900
Income before interest income, equity in earnings of non-consolidated REITs and taxes on income		3,561			2,944			4,409			5,418
Interest income		5			3			3			8
Equity in earnings of non-consolidated REITs		1,166			573			978			391
Income before taxes on income		4,732			3,520			5,390			5,817
Taxes on income		68			67			82			79
Income from continuing operations		4,664			3,453			5,308			5,738
Discontinued operations:
Income (loss) from discontinued operations, net of tax		3,371			(139	)		(246	)		—
Gain on sale of properties, less applicable income tax		2,346			—			—			—
Total discontinued operations		5,717			(139	)		(246	)		—
Net income	$	10,381		$	3,314		$	5,062		$	5,738
FFO calculations:
Net income	$	10,381		$	3,314		$	5,062		$	5,738
(Gain) Loss on sale of assets		(2,346	)		—			—			—
GAAP income from non-consolidated REITs		(1,166	)		(573	)		(978	)		(391	)
Distributions from non-consolidated REITs		1,215			1,104			970			929
Acquisition costs		9			185			157			—
Depreciation of real estate & intangible amortization		12,047			12,332			13,248			13,295
Funds From Operations (FFO)	$	20,140		$	16,362		$	18,459		$	19,571

-11-

Franklin Street Properties Corp. Earnings Release

Supplementary Schedule G

Percentage of Leased Space

(Unaudited & Estimated)

					First		Second
				% Leased (1)	Quarter	% Leased (1)	Quarter
			Square	as of	Average %	as of	Average %
	Property Name	Location	Feet	31-Mar-12	Leased (2)	30-Jun-12	Leased (2)
1	PARK SENECA	Charlotte, NC	109,550	80.5%	79.9%	81.5%	80.9%
2	HILLVIEW CENTER	Milpitas, CA	36,288	100.0%	100.0%	100.0%	100.0%
3	SOUTHFIELD	Southfield, MI	214,697	39.2%	39.2%	39.6%	38.5%
4	FOREST PARK	Charlotte, NC	62,212	100.0%	100.0%	100.0%	100.0%
5	CENTENNIAL	Colorado Springs, CO	110,405	85.4%	85.4%	85.4%	85.4%
6	MEADOW POINT	Chantilly, VA	138,537	100.0%	100.0%	100.0%	100.0%
7	TIMBERLAKE	Chesterfield, MO	232,766	97.7%	97.7%	93.2%	96.2%
8	FEDERAL WAY	Federal Way, WA	117,010	47.0%	47.0%	47.0%	47.0%
9	NORTHWEST POINT	Elk Grove Village, IL	176,848	100.0%	100.0%	100.0%	100.0%
10	TIMBERLAKE EAST	Chesterfield, MO	116,197	85.9%	85.9%	97.0%	89.6%
11	PARK TEN	Houston, TX	155,715	81.2%	81.2%	96.1%	91.1%
12	MONTAGUE	San Jose, CA	145,951	100.0%	100.0%	100.0%	100.0%
13	ADDISON	Addison, TX	293,787	95.8%	95.8%	95.8%	95.8%
14	COLLINS CROSSING	Richardson, TX	298,766	87.8%	87.8%	87.8%	87.8%
15	GREENWOOD PLAZA	Englewood, CO	197,527	48.9%	48.9%	48.9%	48.9%
16	RIVER CROSSING	Indianapolis, IN	205,059	93.9%	93.1%	96.1%	94.6%
17	LIBERTY PLAZA	Addison, TX	218,934	76.4%	77.4%	84.1%	78.9%
18	INNSBROOK	Glen Allen, VA	298,456	98.3%	98.3%	98.3%	98.3%
19	380 INTERLOCKEN	Broomfield, CO	240,184	89.5%	86.5%	89.5%	89.5%
20	BLUE LAGOON	Miami, FLA	212,619	100.0%	100.0%	100.0%	100.0%
21	ELDRIDGE GREEN	Houston, TX	248,399	100.0%	100.0%	100.0%	100.0%
22	WILLOW BEND	Plano, TX	117,050	77.4%	77.4%	77.8%	77.8%
23	ONE OVERTON PARK	Atlanta, GA	387,267	91.7%	90.9%	92.6%	92.3%
24	390 INTERLOCKEN	Broomfield, CO	241,516	96.4%	94.6%	97.2%	96.9%
25	EAST BALTIMORE	Baltimore, MD	325,445	56.2%	55.9%	58.2%	57.5%
26	PARK TEN PHASE II	Houston, TX	156,746	100.0%	100.0%	100.0%	100.0%
27	LAKESIDE CROSSING I	Maryland Heights, MO	127,778	100.0%	100.0%	100.0%	100.0%
28	LOUDOUN TECH	Dulles, VA	135,888	100.0%	100.0%	100.0%	100.0%
29	4807 STONECROFT	Chantilly, VA	111,469	100.0%	100.0%	100.0%	100.0%
30	EDEN BLUFF	Eden Prairie, MN	153,028	100.0%	100.0%	100.0%	100.0%
31	121 SOUTH EIGHTH ST	Minneapolis, MN	472,712	93.8%	93.8%	95.6%	94.4%
32	EMPEROR BOULEVARD	Durham, NC	259,531	100.0%	100.0%	100.0%	100.0%
33	LEGACY TENNYSON CTR	Plano, TX	202,600	100.0%	100.0%	100.0%	100.0%
34	ONE LEGACY	Plano, TX	214,110	100.0%	100.0%	100.0%	100.0%
35	909 DAVIS	Evanston, IL	195,245	94.8%	94.8%	94.8%	94.8%
36	1410 EAST RENNER	Richardson, TX	122,300	100.0%	100.0%	100.0%	100.0%
	TOTAL WEIGHTED AVERAGE		7,052,592	89.0%	88.8%	90.0%	89.5%

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

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

-12-

Franklin Street Properties Corp. Earnings Release

Supplementary Schedule H

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 June 30, 2012
			% of
Tenant	Sq Ft	SIC Code	Portfolio
TCF National Bank	268,984	60	3.8%
Quintiles Transnational Corp	259,531	87	3.7%
CITGO Petroleum Corporation	248,399	29	3.5%
Burger King Corporation	212,619	58	3.0%
Denbury Onshore LLC	202,600	13	2.9%
RGA Reinsurance Company	185,501	63	2.6%
SunTrust Bank	182,888	60	2.6%
Citicorp Credit Services, Inc	176,848	61	2.5%
C.H. Robinson Worldwide, Inc	153,028	47	2.2%
Houghton Mifflin Harcourt Publishing Company	150,050	27	2.1%
Murphy Exploration & Production Company	144,677	13	2.1%
Giesecke & Devrient America, Inc.	135,888	73	1.9%
Monsanto Company	127,778	28	1.8%
AT&T Services, Inc.	122,300	48	1.7%
Vail Holdings, Inc.	122,232	79	1.7%
Northrop Grumman Systems Corporation	111,469	73	1.6%
Argo Data Resource Corporation	109,990	73	1.6%
Alliance Data Systems	96,749	73	1.4%
Federal National Mortgage Association	92,358	61	1.3%
County of Santa Clara	90,467	91	1.3%
Total	3,194,356		45.3%

-13-

Franklin Street Properties Corp. Earnings Release

Supplementary Schedule I

Definition of Funds From Operations (“FFO”),

The Company evaluates performance based on Funds From Operations, which we refer to as FFO, as management believes that FFO represents the most accurate measure of activity and is the basis for distributions paid to equity holders. The Company defines FFO as net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property and acquisition costs of newly acquired properties that are not capitalized, plus depreciation and amortization, including amortization of acquired above and below market lease intangibles and impairment charges, and after adjustments to exclude non-cash income (or losses) from non-consolidated or Sponsored REITs, plus distributions received from non-consolidated or Sponsored REITs.

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

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

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

EX-99

Exhibit 99.2

  Supplemental Operating
and Financial Data Second Quarter 2012

 

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

www.franklinstreetproperties.com

   Table of Contents

	Page		Page
Company Overview	3-5	Tenant Analysis
		20 Largest Tenants with Annualized Rent and Remaining Term	17
Key Financial Data		20 Largest Tenants, Industry Profile	18
Financial Highlights	6	Lease Expirations by Square Feet	19
Income Statements	7	Lease Expirations with Annualized Rent per Square Foot	20
Balance Sheets	8	Percentage of Leased Space by Property	21
Cash Flow Statements	9
Property Net Operating Income (NOI)	10	Transactional Drivers
Capital Analysis	11	Capital Recycling	22
Portfolio Overview		FFO Reconciliation	23
Property by Form of FSP Participation	12	FFO Definition	24
Regional Analysis and Map	13	FAD Reconciliation and Definition	25
Owned Property List	14	EBITDA Reconciliation and Definition	26
Properties with GAAP Rent per Square Foot	15	NOI Reconciliation and Definition	27
Capital Expenditures	16

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.

June 30, 2012  2

   Company Overview

Overview

Franklin Street Properties Corp. (“FSP”, “we”, “our” or the “Company”) (NYSE MKT: FSP) is an investment firm focused on achieving current income and long-term growth through investments in commercial properties. FSP’s portfolio of real estate assets consists primarily of suburban office buildings and includes select investments in central business district (CBD) properties. FSP’s real estate operations include property acquisitions and dispositions, short-term financing, leasing, development and asset management. FSP’s subsidiary, FSP Investments LLC (member, FINRA and SIPC), is a real estate investment banking firm and registered broker/dealer that previously sponsored the organization of single-purpose entities that own real estate and the private placement of equity in those entities, which we refer to as “Sponsored REITs”.

Our Business

As of June 30, 2012, the Company owned and operated a portfolio of real estate consisting of 36 properties, managed 16 Sponsored REITs and held eight promissory notes secured by mortgages on real estate owned by Sponsored REITs. From time-to-time, the Company may acquire real estate, make additional secured loans or acquire one of its Sponsored REITs. The Company may also pursue, on a selective basis, the sale of its properties in order to take advantage of the value creation and demand for its properties, or for geographic or property specific reasons.

Strategy

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

Snapshot
(as of Juns 30, 2012)
Corporate Headquarters	Wakefield, MA
Fiscal Year-End	31-Dec
Total Properties	36
Total Square Feet	7.1 Million
Common Shares Outstanding	82,937,405
Quarterly Dividend	$0.19
Dividend Yield	7.2%
Total Market Capitalization	$1.4 Billion
Insider Holdings	12.1%

June 30, 2012  3

   Company Overview

FSP selects acquisitions based on market and/or property specific criteria, and actively manages the properties to maximize current income and long term appreciation in value. Attempting to invest more heavily in property near the perceived bottom of market cycles and likewise disposing of properties near the perceived top of the market cycles is a natural consequence of our flexible lower leverage model. Proceeds from property sales are redeployed into other specific real estate assets, used for other corporate purposes and/or paid out to shareholders as special dividends.

Structure of the Company

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

Dividend Philosophy

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

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

June 30, 2012  4

   Company Overview

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

Common Stock Data (NYSE MKT: FSP)
	For the Three Months Ended
	30-Jun-12	31-Mar-12	31-Dec-11	30-Sep-11	30-Jun-11	31-Mar-11	31-Dec-10	30-Sep-10
High Price	$          10.84	$          11.14	$          13.08	$          13.91	$          14.25	$          15.63	$          14.42	$      12.86
Low Price	$            9.57	$            9.43	$            9.90	$          10.49	$          12.00	$          13.52	$          12.20	$      10.99
Closing Price, at the end of the quarter	$          10.58	$          10.60	$            9.95	$          11.31	$          12.91	$          14.07	$          14.25	$      12.42
Dividends paid per share – quarterly	0.19	0.19	0.19	0.19	0.19	0.19	0.19	0.19
Closing dividend yield – annualized	7.2%	7.2%	7.64%	6.72%	5.89%	5.40%	5.33%	6.12%
Common shares outstanding (millions)	82.94	82.94	82.94	82.94	81.44	81.44	81.44	79.84

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

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

June 30, 2012  5

   Financial Highlights
(in thousands, except per share data)

															For the Year
	For the Three Months Ended				For the Three Months Ended										Ended
	31-Mar-12		30-Jun-12		31-Mar-11		30-Jun-11		30-Sep-11			31-Dec-11			31-Dec-11
Income Items:
Revenue:
Rental	$	36,668	$	35,830	$	31,099	$	33,606	$	33,672		$	37,014		$	135,391
Related party revenue		2,616		3,045		808		1,150		1,037			1,051			4,046
Other		34		39		7		6		7			29			49
Total revenue		39,318		38,914		31,914		34,762		34,716			38,094			139,486
Total expenses		33,900		33,901		28,288		31,201		31,772			33,685			124,946
Income before interest income, equity in earnings in non-consolidated REITs and taxes		5,418		5,013		3,626		3,561		2,944			4,409			14,540
Interest income		8		4		11		5		3			3			22
Equity in earnings in non-consolidated REITs		391		494		968		1,166		573			978			3,685
Income before taxes		5,817		5,511		4,605		4,732		3,520			5,390			18,247
Income tax expense		79		77		50		68		67			82			267
Income from continuing operations		5,738		5,434		4,555		4,664		3,453			5,308			17,980
Income from discontinued operations		-		-		620		3,370		(139	)		(246	)		3,605
Gain on sale of assets		-		-		19,592		2,347		-			-			21,939
Net income	$	5,738	$	5,434	$	24,767	$	10,381	$	3,314		$	5,062		$	43,524
FFO*	$	19,571	$	19,041	$	16,250	$	20,140	$	16,362		$	18,457		$	71,209
Per Share Data:
EPS	$	0.07	$	0.07	$	0.30	$	0.13	$	0.04		$	0.06		$	0.53
FFO*		0.24		0.23		0.20		0.25		0.20			0.22			0.87
Weighted Average Shares (diluted)		82,937		82,937		81,437		81,437		81,600			82,937			81,857
Balance Sheet Items:
Real estate, net	$	1,001,863	$	997,345	$	979,560	$	976,131	$	997,258		$	1,006,221		$	867,608
Other assets, net		436,665		433,018		387,342		327,633		348,526			402,440			402,440
Total assets, net		1,438,528		1,430,363		1,366,902		1,303,764		1,345,784			1,408,661			1,238,735
Total liabilities, net		527,181		529,340		435,801		377,374		413,784			487,294			487,294
Shareholders' equity		911,347		901,023		931,101		926,390		932,000			921,367			921,367

* See page 23 for a reconciliation of Net Income to FFO and page 24 for a definition of FFO

June 30, 2012 6

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

															For the
	For the Three Months Ended				For the Three Months Ended										Year Ended
	31-Mar-12		30-Jun-12		31-Mar-11		30-Jun-11		30-Sep-11			31-Dec-11			31-Dec-11
Revenue:
Rental	$	36,668	$	35,830	$	31,099	$	33,606	$	33,672		$	37,014		$	135,391
Related party revenue:
Management fees and interest income from loans		2,616		3,045		808		1,150		1,037			1,051			4,046
Other		34		39		7		6		7			29			49
Total revenue		39,318		38,914		31,914		34,762		34,716			38,094			139,486
Expenses:
Real estate operating expenses		9,077		8,828		8,730		8,765		9,328			9,862			36,685
Real estate taxes and insurance		5,813		5,576		4,759		5,228		5,020			5,426			20,433
Depreciation and amortization		13,256		13,224		10,745		12,029		12,351			13,124			48,249
Selling, general and administrative		2,077		2,236		1,645		1,602		1,654			2,012			6,913
Interest		3,677		4,037		2,408		3,578		3,419			3,261			12,666
Total expenses		33,900		33,901		28,287		31,202		31,772			33,685			124,946
Income before interest income, equity in earnings of non-consolidated REITs and taxes		5,418		5,013		3,627		3,560		2,944			4,409			14,540
Interest income		8		4		11		5		3			3			22
Equity in earnings of non-consolidated REITs		391		494		968		1,166		573			978			3,685
Income before taxes on income		5,817		5,511		4,606		4,731		3,520			5,390			18,247
Income tax expense		79		77		50		68		67			82			267
Income from continuing operations		5,738		5,434		4,556		4,663		3,453			5,308			17,980
Income from discontinued operations		-		-		620		3,370		(139	)		(246	)		3,605
Gain on sale of assets		-		-		19,592		2,347		-			-			21,939
Net income	$	5,738	$	5,434	$	24,768	$	10,380	$	3,314		$	5,062		$	43,524
Weighted average number of shares outstanding,basic and diluted		82,937		82,937		81,437		81,437		81,600			82,937			81,857
Earnings per share, basic and diluted, attributable to:Continuing operations	$	0.07	$	0.07	$	0.06	$	0.06	$	0.04		$	0.06		$	0.22
Discontinued operations		-		-		0.01		-		(0.00	)		(0.00	)		0.04
Gains on sales of assets		-		-		0.24		0.03		-			-			0.27
Net income per share, basic and diluted	$	0.07	$	0.07	$	0.30	$	0.13	$	0.04		$	0.06		$	0.53

June 30, 2012  7

   Condensed Consolidated Balance Sheets
(in thousands)

	March 31,			June 30,			March 31,			June 30,			September 30,			December 31,
	2012			2012			2011			2011			2011			2011
Assets:
Real estate assets:
Land	$	137,503		$	137,503		$	129,800		$	129,800		$	134,711		$	137,503
Buildings and improvements		1,023,905			1,027,321			978,876			982,821			1,006,814			1,020,449
Fixtures and equipment		885			896			600			726			761			856
		1,162,293			1,165,720			1,109,276			1,113,347			1,142,286			1,158,808
Less accumulated depreciation		160,430			168,375			129,716			137,216			145,028			152,587
Real estate assets, net		1,001,863			997,345			979,560			976,131			997,258			1,006,221
Acquired real estate leases, net		87,073			82,769			85,290			81,455			91,585			91,613
Investment in non-consolidated REITs		87,061			86,658			88,652			88,654			88,225			87,598
Assets held for syndication, net		-			-			47,630			11,206			4,720			-
Assets held for sale		-			-			5,108			-			-			-
Cash and cash equivalents		29,283			22,620			49,488			28,881			44,047			23,813
Restricted cash		511			533			440			459			477			493
Tenant rent receivables, net		1,090			1,403			1,688			1,846			1,418			1,460
Straight-line rent receivable, net		31,932			33,142			20,838			23,745			26,067			28,545
Prepaid expenses		1,164			2,605			1,400			1,255			2,553			1,223
Related party mortgage loan receivable		172,286			177,536			60,116			61,916			61,916			140,516
Other assets		4,006			3,640			6,339			6,237			5,219			4,538
Deferred leasing commissions, net		22,259			22,112			20,353			21,979			22,299			22,641
Total assets	$	1,438,528		$	1,430,363		$	1,366,902		$	1,303,764		$	1,345,784		$	1,408,661
Liabilities and Stockholders’ Equity:
Liabilities:
Bank note payable	$	494,000		$	494,000		$	404,000		$	345,000		$	375,000			449,000
Term loan payable		-			-			-			-			-			-
Accounts payable and accrued expenses		23,311			25,408			20,562			21,431			28,258			26,446
Accrued compensation		446			944			603			1,070			1,383			2,222
Tenant security deposits		2,181			2,113			2,533			2,476			2,453			2,008
Other liabilities: derivative termination value		-			-			828			447			63			-
Acquired unfavorable real estate leases, net		7,243			6,875			7,275			6,950			6,627			7,618
Total liabilities		527,181			529,340			435,801			377,374			413,784			487,294
Commitments and contingencies
Stockholders’ Equity:
Preferred stock		-			-			-			-			-			-
Common stock		8			8			8			8			8			8
Additional paid-in capital		1,042,876			1,042,876			1,025,491			1,025,491			1,042,876			1,042,876
Accumulated other comprehensive loss		-			-			(828	)		(447	)		(63	)		-
Accumulated distributions in excess of accumulated earnings		(131,537	)		(141,861	)		(93,570	)		(98,662	)		(110,821	)		(121,517	)
Total stockholders’ equity		911,347			901,023			931,101			926,390			932,000			921,367
Total liabilities and stockholders’ equity	$	1,438,528		$	1,430,363		$	1,366,902		$	1,303,764		$	1,345,784		$	1,408,661

June 30, 2012  8

   Condensed Consolidated Statements of Cash Flows
(in thousands)

	Six Months Ended June 30,						Twelve Months Ended December 31
	2012			2011			2011			2010			2009
Cash flows from operating activities:
Net income	$	11,172		$	35,148		$	43,524		$	22,093		$	27,872
Adjustments to reconcile net income to net cash provided by  operating activities:
Gains on assets sold		-			(21,939	)		(21,939	)		-			(424	)
Depreciation and amortization expense		27,495			23,670			50,261			39,627			36,561
Amortization of above market lease		20			(62	)		(47	)		1,362			3,359
Equity in earnings (losses) from non-consolidated REITs		(885	)		(2,844	)		(3,086	)		(1,183	)		(2,012	)
Distributions from non-consolidated REITs		993			2,318			3,474			1,633			2,283
Increase in bad debt reserve		65			(365	)		(365	)		980			111
Changes in operating assets and liabilities:
Restricted cash		(40	)		(39	)		(73	)		(86	)		2
Tenant rent receivables		(8	)		441			827			(1,120	)		(564	)
Straight-line rents		(2,571	)		(5,176	)		(9,878	)		(4,249	)		(1,879	)
Lease Acquisition Costs		(2,026	)		(55	)		(153	)		(4,246	)		(59	)
Prepaid expenses and other assets		(1,512	)		914			1,611			865			907
Accounts payable and accrued expenses		(1,395	)		(726	)		4,213			(351	)		2,760
Accrued compensation		(1,278	)		(733	)		419			387			(238	)
Tenant security deposits		105			546			78			122			(66	)
Payment of deferred leasing commissions		(1,513	)		(5,386	)		(8,058	)		(10,515	)		(2,659	)
Net cash provided by operating activities		28,622			25,712			60,808			45,319			65,954
Cash flows from investing activities:
Purchase of real estate assets, office computers and furniture, capitalized merger costs and acquired real estate leases		(7,112	)		(173,031	)		(236,097	)		(50,098	)		(132,264	)
Investment in non-consolidated REITs		(1	)		(10	)		(10	)		(11	)		(13,218	)
Distributions in excess of earnings from non-consolidated REITs		834			664			1,582			3,537			3,345
Investment in related party mortgage loan receivable		(37,020	)		(4,232	)		(82,832	)		(21,149	)		(35,410	)
Changes in deposits on real estate assets		-			200			200			(200	)		-
Investment in assets held for syndication, net		-			(8,200	)		2,230			1,319			8,159
Proceeds received on sales of real estate assets		-			96,790			96,790			-			672
Net cash used in investing activities		(43,299	)		(87,819	)		(218,137	)		(66,602	)		(168,716	)
Cash flows from financing activities:
Distributions to stockholders		(31,516	)		(30,946	)		(62,177	)		(60,586	)		(55,313	)
Proceeds (costs) from equity offering, net		-			(90	)		17,295			21,868			114,695
Borrowings under New Revolver, net		45,000			345,000			449,000			-			-
Borrowings (repayments) under Revolver		-			(209,968	)		(209,968	)		100,960			41,540
Borrowing (repayment) of term loan payable, net		-			(74,850	)		(74,850	)		(150	)		-
Deferred Financing Costs		-			(5,389	)		(5,388	)		-			-
Swap termination payment		-			(982	)		(983	)		-			-
Net cash provided by (used in) financing activities		13,484			22,775			112,929			62,092			100,922
Net decreases in cash and cash equivalents		(1,193	)		(39,332	)		(44,400	)		40,809			(1,840	)
Cash and cash equivalents, beginning of period		23,813			68,213			68,213			27,404			29,244
Cash and cash equivalents, end of period	$	22,620		$	28,881		$	23,813		$	68,213		$	27,404

June 30, 2012  9

   Property Net Operating Income (NOI):
with Same Store comparison
(in thousands)

	Net Operating Income (NOI)*
(in thousands)
	Rentable						Six Months						Six Months
	Square Feet		Three Months Ended:				Ended		Three Months Ended:				Ended		Inc			%
Region	or RSF		31-Mar-12		30-Jun-12		30-Jun-12		31-Mar-11		30-Jun-11		30-Jun-11		(Dec)			Change
East		1,181	$	3,479	$	3,094	$	6,573	$	3,019	$	2,735	$	5,754	$	819			14.2%
MidWest		1,699		4,034		3,983		8,017		4,438		4,012		8,450		(433	)		-5.1%
South		2,089		6,901		6,725		13,626		5,886		6,756		12,642		984			7.8%
West		1,089		2,278		2,443		4,721		1,718		2,293		4,011		710			17.7%
Same Store		6,058		16,692		16,245		32,937		15,061		15,796		30,857		2,080			6.7%
Acquisitions		994		4,901		4,868		9,769		807		3,513		4,320		5,449
Dispositions		-		-		-		-		495		133		628		(628	)
Property NOI		7,052	$	21,593	$	21,113	$	42,706	$	16,363	$	19,442	$	35,805	$	6,901			6.7%
Same Store			$	16,692	$	16,245	$	32,937	$	15,061	$	15,796	$	30,857	$	2,080			6.7%
Nonrecurring
Items in NOI (a)				599		20		619		1		-		1		618			2.0%
Comparative
Same Store			$	16,093	$	16,225	$	32,318	$	15,060	$	15,796	$	30,856	$	1,462			4.7%

(a) Nonrecurring Items in NOI include proceeds from bankruptcies, termination fees or other significant nonrecurring

      income or expenses, which may affect comparability.

*Excludes NOI from investments in and interest income from secured loans to non-consolidated REITs.  

  See page 27 for a reconciliation and definition of Net Income to Property NOI GAAP.

June 30, 2012  10

   Capital Analysis
(in thousands, except per share amounts)

	31-Mar-12			30-Jun-12			31-Mar-11			30-Jun-11			30-Sep-11			31-Dec-11
Market Data:
Shares Outstanding		82,937			82,937			81,437			81,437			82,937			82,937
Closing market price per share	$	10.60		$	10.58		$	14.07		$	12.91		$	11.31		$	9.95
Market capitalization	$	879,136		$	877,478		$	1,145,824		$	1,051,357		$	938,022		$	825,227
Total Debt		494,000			494,000			404,000			345,000			375,000			449,000
Total Market Capitalization	$	1,373,136		$	1,371,478		$	1,549,824		$	1,396,357		$	1,313,022		$	1,274,227
Dividend Data:
Total dividends paid	$	15,758		$	15,758		$	15,473		$	15,473		$	15,473		$	15,758
Common dividend per share	$	0.19		$	0.19		$	0.19		$	0.19		$	0.19		$	0.19
Quarterly dividend as a % of FFO*		80.5%			82.6%			95%			76%			95%			86%
Liquidity:
Cash and cash equivalents	$	29,283		$	22,620		$	49,488		$	28,881		$	44,047		$	23,813
Revolving credit facilities:
Gross potential available under current credit facilities		600,000			600,000			500,000			600,000			600,000			600,000
Less:
Outstanding balance		(494,000	)		(494,000	)		(404,000	)		(345,000	)		(375,000	)		(449,000	)
Total Liquidity	$	135,283		$	128,620		$	145,488		$	283,881		$	269,047		$	174,813
*See page 23 for a reconciliation of Net Income to FFO and page 24 for a definition of FFO

June 30, 2012  11

   Portfolio Overview

 

	30-Jun-12	31-Mar-12	31-Dec-11	30-Sep-11	30-Jun-11
Owned portfolio of commercial real estate:
Number of properties	36	36	36	35	34
Square feet	7,052,592	7,052,068	7,052,068	6,929,891	6,747,815
Leased percentage	90%	89%	89%	88%	87%
Investments in non-consolidated commercial real estate:
Number of properties	3	3	3	3	3
Square feet	2,003,968	2,004,953	2,001,542	1,998,575	1,996,457
Leased percentage	89%	90%	87%	83%	82%
Single Asset REITs (SARs) managed:
Number of properties	13	13	13	13	13
Square feet	3,322,589	3,322,570	3,322,639	3,322,638	3,322,569
Leased percentage	85%	84%	80%	80%	79%
Total owned, investments and managed properties:
Number of properties	52	52	52	51	50
Square feet	12,379,149	12,379,591	12,376,249	12,251,104	12,066,841
Leased percentage	89%	88%	86%	85%	84%

June 30, 2012  12

   Regional Analysis and Map

Owned:
Name	City	State	Region	Square Feet
Park Seneca	Charlotte	NC	East	109,550
Forest Park	Charlotte	NC	East	62,212
Emperor Boulevard	Durham	NC	East	259,531
Meadow Point	Chantilly	VA	East	138,537
Stonecroft	Chantilly	VA	East	111,469
Innsbrook	Glen Allen	VA	East	298,456
East Baltimore	Baltimore	MD	East	325,445
Loudoun Tech Center	Dulles	VA	East	135,888
Southfield Centre	Southfield	MI	MidWest	214,697
Northwest Point	Elk Grove Village	IL	MidWest	176,848
909 Davis	Evanston	IL	MidWest	195,245
River Crossing	Indianapolis	IN	MidWest	205,059
Timberlake	Chesterfield	MO	MidWest	232,766
Timberlake East	Chesterfield	MO	MidWest	116,197
Lakeside Crossing	Maryland Heights	MO	MidWest	127,778
Eden Bluff	Eden Prairie	MN	MidWest	153,028
121 South 8th Street	Minneapolis	MN	MidWest	472,712
Blue Lagoon Drive	Miami	FL	South	212,619
One Overton Place	Atlanta	GA	South	387,267
Willow Bend Office Center	Plano	TX	South	117,050
Legacy Tennyson Center	Plano	TX	South	202,600
One Legacy Circle	Plano	TX	South	214,110
Park Ten	Houston	TX	South	155,715
Addison Circle	Addison	TX	South	293,787
Collins Crossing	Richardson	TX	South	298,766
East Renner Road	Richardson	TX	South	122,300
Eldridge Green	Houston	TX	South	248,399
Park Ten Phase II	Houston	TX	South	156,746
Liberty Plaza	Addison	TX	South	218,934
Centennial Technology Center	Colorado Springs	CO	West	110,405
380 Interlocken	Broomfield	CO	West	240,184
Greenwood Plaza	Englewood	CO	West	197,527
390 Interlocken	Broomfield	CO	West	241,516
Hillview Center	Milpitas	CA	West	36,288
Federal Way	Federal Way	WA	West	117,010
Montague Business Center	San Jose	CA	West	145,951
Total				7,052,592
Managed:
Name	City	State	Region	Square Feet
1441 Main Street	Columbia	SC	East	264,857
303 East Wacker Drive	Chicago	IL	MidWest	844,953
Monument Circle	Indianapolis	IN	MidWest	213,609
505 Waterford	Plymouth	MN	MidWest	256,367
50 South Tenth Street	Minneapolis	MN	MidWest	498,768
Grand Boulevard	Kansas City	MO	MidWest	535,071
Lakeside Crossing II	Maryland Heights	MO	MidWest	116,000
Centre Pointe V	West Chester	OH	MidWest	135,936
Union Centre	West Chester	OH	MidWest	409,798
Satellite Place	Duluth	GA	South	134,785
5601 Executive Drive	Irving	TX	South	152,121
Galleria North	Dallas	TX	South	379,518
Energy Tower I	Houston	TX	South	325,797
Phoenix Tower	Houston	TX	South	623,944
Highland Place I	Centennial	CO	West	139,142
385 Interlocken	Broomfield	CO	West	295,891
Total				5,326,557

Properties by Division/Region
($ in thousands)
					NBV (a)	% Leased
	# of Properties	Square Feet	% of Portfolio		30-Jun-12	30-Jun-12
Mideast Division	8	1,441,088	20.4%	$	222,692	88.8%
East Region Total	8	1,441,088	20.4%		222,692	88.8%
East North Central Division	4	791,849	11.2%		99,828	81.3%
West North Central	5	1,102,481	15.6%		105,764	96.3%
Midwest Region Total	9	1,894,330	26.8%		205,592	90.0%
Southeast	2	599,886	8.5%		117,176	95.2%
Southwest	10	2,028,407	28.8%		291,915	94.3%
South Region Total	12	2,628,293	37.3%		409,091	94.5%
Mountain	4	789,632	11.2%		124,153	81.1%
Pacific	3	299,249	4.3%		35,817	79.3%
West Region Total	7	1,088,881	15.5%		159,970	80.6%
Grand Total	36	7,052,592	100.0%	$	997,345	90.0%
(a) NBV is for real estate assets, excluding intangibles

 

June 30, 2012  13

   Owned Property List
(in thousands)

						NBV (1)	% Leased
Region	Division	Name	City	State	S.F.	30-Jun-12	30-Jun-12
West	Pacific	Hillview Center	Milpitas	CA	36	$          4,065	100.0%
West	Pacific	Montague	San Jose	CA	146	17,650	100.0%
West	Mountain	380 Interlocken	Broomfield	CO	240	41,135	89.5%
West	Mountain	390 Interlocken	Broomfield	CO	242	41,260	97.2%
West	Mountain	Centennial Technology Center	Colorado Springs	CO	110	11,417	85.4%
West	Mountain	Greenwood Plaza	Englewood	CO	197	30,342	48.9%
South	Southeast	Blue Lagoon Drive	Miami	FL	213	46,244	100.0%
South	Southeast	One Overton Place	Atlanta	GA	387	70,932	92.6%
MidWest	East North Central	Northwest Point	Elk Grove Village	IL	177	27,494	100.0%
MidWest	East North Central	909 Davis	Evanston	IL	195	22,790	94.8%
MidWest	East North Central	River Crossing	Indianapolis	IN	205	34,886	96.1%
East	Mideast	East Baltimore	Baltimore	MD	325	53,776	58.2%
MidWest	East North Central	Southfield Centre	Southfield	MI	215	14,659	39.6%
MidWest	West North Central	Eden Bluff	Eden Prairie	MN	153	14,001	100.0%
MidWest	West North Central	121 South 8th Street	Minneapolis	MN	473	24,813	95.6%
MidWest	West North Central	Timberlake	Chesterfield	MO	233	33,402	93.2%
MidWest	West North Central	Timberlake East	Chesterfield	MO	116	16,941	97.0%
MidWest	West North Central	Lakeside Crossing	Maryland Heights	MO	128	16,606	100.0%
East	Mideast	Park Seneca	Charlotte	NC	110	7,240	81.5%
East	Mideast	Forest Park	Charlotte	NC	62	5,968	100.0%
East	Mideast	Emperor Boulevard	Durham	NC	259	54,626	100.0%
South	Southwest	Addison Circle	Addison	TX	294	45,464	95.8%
South	Southwest	Liberty Plaza	Addison	TX	219	23,826	84.1%
South	Southwest	Park Ten	Houston	TX	156	18,794	96.1%
South	Southwest	Eldridge Green	Houston	TX	248	41,744	100.0%
South	Southwest	Park Ten Phase II	Houston	TX	157	29,882	100.0%
South	Southwest	Willow Bend Office Center	Plano	TX	117	18,343	77.8%
South	Southwest	Legacy Tennyson Center	Plano	TX	203	24,377	100.0%
South	Southwest	One Legacy Circle	Plano	TX	214	38,842	100.0%
South	Southwest	Collins Crossing	Richardson	TX	299	42,736	87.8%
South	Southwest	East Renner Road	Richardson	TX	122	7,907	100.0%
East	Mideast	Meadow Point	Chantilly	VA	139	22,340	100.0%
East	Mideast	Stonecroft	Chantilly	VA	111	18,719	100.0%
East	Mideast	Loudoun Tech Center	Dulles	VA	136	16,906	100.0%
East	Mideast	Innsbrook	Glen Allen	VA	298	43,116	98.3%
West	Pacific	Federal Way	Federal Way	WA	117	14,102	47.0%
					7,053	$      997,345	90.0%
		(1) NBV is for real estate assets, excluding intangibles

June 30, 2012  14

   Properties with GAAP Rent per Square Foot

						Weighted
						Occupied	Weighted
			Year Built		Weighted	Percentage as of	Average GAAP
			or	Net Rentable	Occupied	December 31,	Rent per Occupied
Property Name	City	State	Renovated	Square Feet	Sq. Ft.	2011 (a)	Square Feet (b)
Park Seneca	Charlotte	NC	1969	109,550	87,300	79.7%	$                     15.58
Forest Park	Charlotte	NC	1999	62,212	48,239	77.5%	15.53
Meadow Point	Chantilly	VA	1999	138,537	137,817	99.5%	26.23
Innsbrook	Glen Allen	VA	1999	298,456	149,944	50.2%	20.82
East Baltimore	Baltimore	MD	1989	325,445	204,445	62.8%	27.43
Loudoun Tech Center	Dulles	VA	1999	135,888	135,888	100.0%	15.58
Stonecroft	Chantilly	VA	2008	111,469	111,469	100.0%	37.40
Emperor Boulevard	Durham	NC	2009	259,531	259,531	100.0%	34.58
East total				1,441,088	1,134,633	78.7%	26.19
Southfield Centre	Southfield	MI	1977	214,697	97,215	45.3%	11.83
Northwest Point	Elk Grove Village	IL	1999	176,848	176,848	100.0%	19.38
909 Davis Street	Evanston	IL	2002	195,245	185,131	94.8%	33.84
River Crossing	Indianapolis	IN	1998	205,059	191,833	93.6%	23.75
Timberlake	Chesterfield	MO	1999	232,766	227,296	97.7%	21.33
Timberlake East	Chesterfield	MO	2000	116,197	109,365	94.1%	23.74
Lakeside Crossing	St. Louis	MO	2008	127,778	127,778	100.0%	23.68
Eden Bluff	Eden Praire	MN	2006	153,028	153,028	100.0%	27.21
121 South 8th Street	Minneapolis	MN	1974	472,616	419,021	88.7%	15.64
Midwest total				1,894,234	1,687,515	89.1%	21.68
Blue Lagoon Drive	Miami	FL	2002	212,619	212,619	100.0%	22.03
One Overton Place	Atlanta	GA	2002	387,267	352,916	91.1%	21.19
Willow Bend Office Center	Plano	TX	1999	116,622	74,801	64.1%	20.23
Park Ten	Houston	TX	1999	155,715	108,533	69.7%	28.67
Addison Circle	Addison	TX	1999	293,787	281,507	95.8%	25.16
Collins Crossing	Richardson	TX	1999	298,766	217,830	72.9%	24.37
Eldridge Green	Houston	TX	1999	248,399	248,399	100.0%	27.20
Park Ten Phase II	Houston	TX	2006	156,746	156,746	100.0%	28.75
Liberty Plaza	Addison	TX	1985	218,934	156,516	71.5%	20.91
Denbury Park	Plano	TX	1999/2008	202,600	202,600	100.0%	17.03
One Legacy Circle	Plano	TX	2008	214,110	198,608	92.8%	33.10
East Renner Road	Richardson	TX	1999	122,300	122,300	100.0%	10.00
South Total				2,627,865	2,333,376	88.8%	23.56
Centennial Technology Center	Colorado Springs	CO	1999	110,405	73,817	66.9%	16.39
380 Interlocken	Broomfield	CO	2000	240,184	204,349	85.1%	27.64
Greenwood Plaza	Englewood	CO	2000	197,527	92,383	46.8%	18.68
390 Interlocken	Broomfield	CO	2002	241,516	215,456	89.2%	29.24
Hillview Center	Milpitas	CA	1984	36,288	36,288	100.0%	14.19
Federal Way	Federal Way	WA	1982	117,010	43,773	37.4%	18.94
Montague Business Center	San Jose	CA	1982	145,951	145,951	100.0%	15.45
West Total				1,088,881	812,018	74.6%	22.76
Grand Total				7,052,068	5,967,542	84.6%	$                     23.42
(a) Based on weighted occupied square feet for the year ended December 31, 2011, including month-to-month tenants, divided by the Property's net rentable square footage
(b) Represents GAAP rental revenue for year ended December 2011 per weighted occupied square foot.

June 30, 2012  15

   Owned Property Capital Expenditures
(in thousands)

					Six Months
	For the Three Months Ended:				Ended
	31-Mar-12		30-Jun-12		30-Jun-12
Tenant improvements	$	3,014	$	2,705	$	5,719
Deferred leasing costs		2,196		1,343		3,539
Building improvements		746		1,003		1,749
Total	$	5,956	$	5,051	$	11,007

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

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

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

June 30, 2012  16

   20 Largest Tenants with Annualized Rent and
Remaining Term at June 30, 2012

			Remaining	Aggregate	% of Aggregate	Annualized	% of Aggregate
	Tenant	Number of	Lease Term	Leased	Leased	Rent	Leased
	Name	Leases	in Months	Square Feet	Square Feet	(in 000's)	Annualized Rent
1	TCF National Bank (a)	1	6, 42	268,984	3.81%	$            2,903,475	2.12%
2	Quintiles Transnational Corp.	1	81	259,531	3.68%	8,279,077	6.04%
3	CITGO Petroleum Corporation	1	116	248,399	3.52%	7,363,001	5.37%
4	Burger King Corporation	1	75	212,619	3.01%	4,465,755	3.26%
5	Denbury Onshore, LLC	1	49	202,600	2.87%	3,510,042	2.56%
6	RGA Reinsurance Company	1	30	185,501	2.63%	3,803,069	2.77%
7	SunTrust Bank	2	52, 111	182,888	2.59%	2,856,446	2.08%
8	Citicorp Credit Services, Inc	1	54	176,848	2.51%	3,511,335	2.56%
9	C.H. Robinson Worldwide, Inc	1	108	153,028	2.17%	4,064,622	2.96%
10	Houghton Mifflin Harcourt Publishing Company	1	57	150,050	2.13%	5,696,915	4.15%
11	Murphy Exploration & Production Company	1	58	144,677	2.05%	4,017,514	2.93%
12	Giesecke & Devrient America, Inc.	1	32	135,888	1.93%	1,842,083	1.34%
13	Monsanto Company	1	31	127,778	1.81%	3,308,333	2.41%
14	AT&T Services, Inc.	1	72	122,300	1.73%	958,812	0.70%
15	Vail Holdings, Inc.	2	81, 129	122,232	1.73%	3,366,724	2.45%
16	Northrop Grumman Systems Corporation	1	70	111,469	1.58%	4,260,211	3.11%
17	Argo Data Resource Corporation	1	71	109,990	1.56%	2,690,829	1.96%
18	Alliance Data Systems	1	95, 108	96,749	1.37%	2,890,424	2.11%
19	Federal National Mortgage Association	1	14	92,358	1.31%	1,863,613	1.36%
20	County of Santa Clara	1	102	90,467	1.28%	1,399,304	1.02%
			Total	3,194,356	45.29%	$        73,051,584	53.25%
(a) Tenant to contract by 5,141 sf of December 31, 2012.

June 30, 2012  17

   Tenant Analysis – 20 Largest Tenants Industry Profile
(as a % of square feet at June 30, 2012)

 

June 30, 2012  18

   Lease Expirations by Square Feet

Year	Total Square Feet	% of Square Feet Commercial
2012	155,148	2.2%
2013	450,290	6.4%
2014	415,284	5.9%
2015	812,702	11.5%
2016	921,681	13.1%
2017	756,940	10.7%
2018	721,612	10.2%
2019	720,848	10.2%
2020	181,879	2.6%
2021	590,748	8.4%
2022	475,730	6.7%
2023	144,640	2.1%
Vacant	705,090	10.0%
Total	7,052,592	100.0%

 

June 30, 2012  19

   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
June 30,	Year		Leases	Leases (a)	Leases	Leases
2012	80	(b)	155,148	$       2,954,911	$            19.05	2.2%
2013	53		450,290	10,148,904	22.54	7.4%
2014	45		415,284	7,649,361	18.42	5.6%
2015	44		812,702	17,027,468	20.95	12.4%
2016	40		921,681	17,817,791	19.33	13.0%
2017	32		756,940	18,977,692	25.07	13.8%
2018	17		721,612	15,731,269	21.80	11.5%
2019	15		720,848	17,006,355	23.59	12.4%
2020	9		181,879	4,291,352	23.59	3.1%
2021 and thereafter	45		1,211,118	25,574,060	21.12	18.6%
	380		6,347,502	$    137,179,163	$            21.61	100.0%
Vacancies as of 6/30/12			705,090
Total Portfolio Square Footage			7,052,592

(a) Annualized rent represents the monthly rent, including tenant reimbursements, for each lease in effect at June 30, 2012 mulitplied by 12. Tenant reimbursements generally include payment of real estate taxes, operating expenses and common area maintenance and utility charges.

(b) 51 leases are Month to Month

June 30, 2012  20

   Percentage of Leased Space by Property

					Second		Third		Fourth		First		Second
				% Leased (1)	Quarter	% Leased (1)	Quarter	% Leased (1)	Quarter	% Leased (1)	Quarter	% Leased (1)	Quarter
			Square	as of	Average %	as of	Average %	as of	Average %	as of	Average %	as of	Average %
	Property Name	Location	Feet	30-Jun-11	Leased (2)	30-Sep-11	Leased (2)	31-Dec-11	Leased (2)	31-Mar-12	Leased (2)	30-Jun-12	Leased (2)
1	PARK SENECA	Charlotte, NC	109,550	80.1%	79.1%	80.9%	80.5%	80.6%	80.6%	80.5%	79.9%	81.5%	80.9%
2	HILLVIEW CENTER	Milpitas, CA	36,288	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
3	SOUTHFIELD	Southfield, MI	214,697	39.2%	41.7%	39.2%	39.2%	39.2%	39.2%	39.2%	39.2%	39.6%	38.5%
4	FOREST PARK	Charlotte, NC	62,212	100.0%	85.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
5	CENTENNIAL	Colorado Springs, CO	110,405	66.9%	66.9%	66.9%	66.9%	85.4%	73.0%	85.4%	85.4%	85.4%	85.4%
6	MEADOW POINT	Chantilly, VA	138,537	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
7	TIMBERLAKE	Chesterfield, MO	232,766	97.7%	97.7%	97.7%	97.7%	97.7%	97.7%	97.7%	97.7%	93.2%	96.2%
8	FEDERAL WAY	Federal Way, WA	117,010	42.0%	42.0%	42.0%	42.0%	47.0%	44.3%	47.0%	47.0%	47.0%	47.0%
9	NORTHWEST POINT	Elk Grove Village, IL	176,848	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
10	TIMBERLAKE EAST	Chesterfield, MO	116,197	100.0%	100.0%	85.9%	90.6%	85.9%	85.9%	85.9%	85.9%	97.0%	89.6%
11	PARK TEN	Houston, TX	155,715	98.8%	98.8%	98.8%	98.8%	81.2%	81.2%	81.2%	81.2%	96.1%	91.1%
12	MONTAGUE	San Jose, CA	145,951	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
13	ADDISON	Addison, TX	293,787	95.8%	95.8%	95.8%	95.8%	95.8%	95.8%	95.8%	95.8%	95.8%	95.8%
14	COLLINS CROSSING	Richardson, TX	298,766	79.7%	79.3%	88.4%	88.4%	88.4%	88.4%	87.8%	87.8%	87.8%	87.8%
15	GREENWOOD PLAZA	Englewood, CO	197,527	54.3%	58.2%	54.3%	54.3%	48.9%	48.4%	48.9%	48.9%	48.9%	48.9%
16	RIVER CROSSING	Indianapolis, IN	205,059	93.5%	93.4%	93.5%	93.5%	93.5%	93.5%	93.9%	93.1%	96.1%	94.6%
17	LIBERTY PLAZA	Addison, TX	218,934	75.6%	75.6%	68.6%	68.0%	77.9%	74.8%	76.4%	77.4%	84.1%	78.9%
18	INNSBROOK	Glen Allen, VA	298,456	63.7%	67.3%	86.8%	78.8%	98.3%	90.7%	98.3%	98.3%	98.3%	98.3%
19	380 INTERLOCKEN	Broomfield, CO	240,184	85.1%	85.1%	85.1%	85.1%	85.1%	85.1%	89.5%	86.5%	89.5%	89.5%
20	BLUE LAGOON	Miami, FLA	212,619	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
21	ELDRIDGE GREEN	Houston, TX	248,399	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
22	WILLOW BEND	Plano, TX	117,050	83.1%	76.8%	83.1%	83.1%	83.1%	83.1%	77.4%	77.4%	77.8%	77.8%
23	ONE OVERTON PARK	Atlanta, GA	387,267	91.1%	91.5%	90.4%	90.6%	89.3%	90.0%	91.7%	90.9%	92.6%	92.3%
24	390 INTERLOCKEN	Broomfield, CO	241,516	95.9%	95.9%	96.6%	96.9%	93.4%	94.3%	96.4%	94.6%	97.2%	96.9%
25	EAST BALTIMORE	Baltimore, MD	325,445	55.7%	55.5%	55.7%	55.7%	55.7%	55.7%	56.2%	55.9%	58.2%	57.5%
26	PARK TEN PHASE II	Houston, TX	156,746	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
27	LAKESIDE CROSSING I	Maryland Heights, MO	127,778	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
28	LOUDOUN TECH	Dulles, VA	135,888	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
29	4807 STONECROFT	Chantilly, VA	111,469	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
30	EDEN BLUFF	Eden Prairie, MN	153,028	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
31	121 SOUTH EIGHTH ST	Minneapolis, MN	472,712	92.5%	92.1%	93.6%	93.1%	93.6%	93.6%	93.8%	93.8%	95.6%	94.4%
32	EMPEROR BOULEVARD	Durham, NC	259,531	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
33	LEGACY TENNYSON CTR	Plano, TX	202,600	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
34	ONE LEGACY	Plano, TX	214,110	100.0%	94.6%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
35	909 DAVIS	Evanston, IL	195,245	n/a	n/a	94.8%	94.8%	94.8%	94.8%	94.8%	94.8%	94.8%	94.8%
36	1410 EAST RENNER	Richardson, TX	122,300	n/a	n/a	n/a	n/a	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
	TOTAL WEIGHTED AVERAGE (3)		7,052,592	86.9%	86.9%	88.1%	87.7%	88.7%	88.1%	89.0%	88.8%	90.0%	89.5%

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

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

(3) 2011 Second Quarter Totals include Bollman Place (98,745 sf) located Maryland, which sold in June 2011.

June 30, 2012  21

   Capital Recycling
($ in thousands)

Recent Acquisitions:
	State/Region	Property Type	Square Feet	Date Acquired	Purchase Price
2011
Emperor Boulevard	NC/East	Office	259,531	3/4/11	$             75,800
Legacy Tennyson Center	TX/South	Office	202,600	3/10/11	37,000
One Legacy Circle	TX/South	Office	214,110	3/24/11	52,983
909 Davis	IL/Midwest	Office	195,245	9/30/11	37,062
East Renner Road	TX/South	Office	122,300	10/6/11	11,282
2010
121 South 8th Street	MN/Midwest	Office	474,646	6/29/10	39,405
2009
Stonecroft-Chantilly	VA/East	Office	111,469	6/26/09	29,000
Eden Bluff - Eden Prairie	MN/Midwest	Office	153,028	6/30/09	22,784
Fairview	VA/East	Office	252,613	9/30/09	73,000
2008
Park Ten Phase II	TX/South	Office	156,746	5/15/08	35,079
Lakeside Crossing	MO/Midwest	Office	127,778	12/11/08	20,003
Loudoun Tech Center	VA/East	Office	135,888	12/23/08	18,628
2007
East Baltimore	MD/East	Office	325,298	6/13/07	63,592
Recent Dispositions:
					Net Sales	Gain (Loss)
	State/Region	Property Type	Square Feet	Date Sold	Proceeds	on Sale
2011
Fairview	VA/East	Office	252,613	1/21/11	$             89,382	$             19,592
Bollman	MD/East	Industrial	98,745	6/24/11	7,408	2,346
2007
Piedmont Center	SC/East	Office	144,029	1/31/07	5,830	(4,849)
Royal Ridge	GA/South	Office	161,366	6/21/07	32,535	6,601
Goldentop Technology Center	CA/West	Office	141,405	6/27/07	36,199	14,741
Lyberty Way	MA/East	Office	104,711	7/16/07	10,861	1,942
Austin N.W. (Canyon Hills)	TX/South	Office	68,533	12/20/07	10,429	257

June 30, 2012  22

   FFO Reconciliation
(in thousands, except per share amounts)

	For the Three Months Ended:																		For the Year Ended:
	31-Mar-12			30-Jun-12			31-Mar-11			30-Jun-11			30-Sep-11			31-Dec-11			2011			2010			2009			2008
Net income	$	5,738		$	5,434		$	24,767		$	10,381		$	3,314		$	5,062		$	43,524		$	22,093		$	27,872		$	24,572
Less gain on sale of assets		—			—			(19,593	)		(2,346	)		—			—			(21,939	)		—			(424	)		—
GAAP income from non-consolidated REITs		(391	)		(494	)		(1,773	)		(1,166	)		(573	)		(978	)		(4,490	)		(1,190	)		(2,012	)		(1,953	)
Distributions from non-consolidated REITs		929			898			1,767			1,215			1,104			970			5,056			5,170			5,628			4,802
Depreciation & amortization		13,295			13,203			10,812			12,047			12,332			13,248			48,439			40,724			39,652			26,146
NAREIT FFO		19,571			19,041			15,980			20,131			16,177			18,302			70,590			66,797			70,716			53,567
Acquisition costs		—			—			269			9			185			157			620			125			643			—
Funds From Operations (FFO)	$	19,571		$	19,041		$	16,249		$	20,140		$	16,362		$	18,459		$	71,210		$	66,922		$	71,359		$	53,567
Per Share Data:
EPS	$	0.07		$	0.07		$	0.30		$	0.13		$	0.04		$	0.06		$	0.55		$	0.28		$	0.38		$	0.35
FFO		0.24			0.23			0.20			0.25			0.20			0.23			0.89			0.84			0.98			0.76
Weighted Average Shares (basic and diluted)		82,937			82,937			81,437			81,437			81,600			81,600			79,826			79,826			73,001			70,481

June 30, 2012  23

   FFO Definition

Definition of Funds From Operations (“FFO”)

The Company evaluates performance based on Funds From Operations, which we refer to as FFO, as management believes that FFO represents the most accurate measure of activity and is the basis for distributions paid to equity holders. The Company defines FFO as net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property and acquisition costs of newly acquired properties that are not capitalized, plus depreciation and amortization, including amortization of acquired above and below market lease intangibles and impairment charges, and after adjustments to exclude non-cash income (or losses) from non-consolidated or Sponsored REITs, plus distributions received from non-consolidated or Sponsored REITs.

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

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

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

June 30, 2012  24

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

	For the Three Months Ended:
	31-Mar-12			30-Jun-12			31-Mar-11			30-Jun-11			30-Sep-11			31-Dec-11			31-Mar-10			30-Jun-10			30-Sep-10			31-Dec-10
Net income	$	5,738		$	5,434		$	24,767		$	10,381		$	3,314		$	5,062		$	5,562		$	5,954		$	4,757		$	5,820
(Gain) Loss on sale of assets		—			—			(19,593	)		(2,346	)		—			—			—			—			—			—
GAAP income from non-consolidated REITs		(391	)		(494	)		(1,773	)		(1,166	)		(573	)		(978	)		(253	)		(380	)		(404	)		(153	)
Distributions from non-consolidated REITs		929			898			1,767			1,215			1,104			970			1,407			1,324			1,192			1,247
Acquisition costs		—			—			269			9			185			157			—			129			(4	)		—
Depreciation & amortization		13,295			13,203			10,812			12,047			12,332			13,248			9,934			9,675			10,510			10,605
Funds From Operations (FFO)	$	19,571		$	19,041		$	16,249		$	20,140		$	16,362		$	18,459		$	16,650		$	16,702		$	16,051		$	17,519
Funds Available for Distribution:
Funds From Operations (FFO)		19,571			19,041			16,249			20,140			16,362			18,459			16,650			16,702			16,051			17,519
Straight-line rent		(1,516	)		(1,054	)		(2,303	)		(2,873	)		(2,228	)		(2,474	)		(1,018	)		(740	)		(1,203	)		(1,288	)
Capital expenditures		(746	)		(1,003	)		(449	)		(876	)		(754	)		(747	)		(380	)		(498	)		(671	)		(1,053	)
Funds Available for Distribution (FAD)	$	17,309		$	16,984		$	13,497		$	16,391		$	13,380		$	15,238		$	15,252		$	15,464		$	14,177		$	15,178
Per Share Data:
EPS	$	0.07		$	0.07		$	0.30		$	0.13		$	0.04		$	0.06		$	0.07		$	0.07		$	0.06		$	0.07
FFO		0.24			0.23			0.20			0.25			0.20			0.22			0.21			0.21			0.20			0.22
FAD		0.21			0.20			0.17			0.20			0.16			0.18			0.19			0.19			0.18			0.19
Weighted Average Shares (basic and diluted)		82,937			82,937			81,437			81,437			81,600			82,937			79,681			79,681			79,751			80,187

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.

June 30, 2012  25

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

	For the three												Year Ended												Year Ended
	months ended:				For the three months ended:								31-Dec-11		For the three months ended:										31-Dec-10
	31-Mar-12		30-Jun-12		31-Mar-11		30-Jun-11		30-Sep-11		31-Dec-11				31-Mar-10			30-Jun-10		30-Sep-10			31-Dec-10
Net income	$	5,738	$	5,434	$	24,767	$	10,381	$	3,314	$	5,062	$	43,524	$	5,562		$	5,954	$	4,757		$	5,820	$	22,093
Interest expense		3,677		4,037		2,408		3,578		3,419		3,261		12,666		1,652			1,735		1,892			2,004		7,283
Depreciation and amortization		13,295		13,203		10,812		12,047		12,332		13,248		48,439		9,934			9,675		10,510			10,605		40,724
Income taxes		79		77		50		68		67		82		267		(68	)		5		(37	)		317		217
EBITDA		22,789		22,751		38,037		26,074		19,132		21,653		104,896		17,080			17,369		17,122			18,746		70,317
Interest expense	$	3,677	$	4,037	$	2,408	$	3,578	$	3,419	$	3,261	$	12,666	$	1,652		$	1,735	$	1,892		$	2,004	$	7,283
Scheduled principal payments (1)		—		—		—		—		—		—		—		—			—		—			150		150
Interest and scheduled principal payments	$	3,677	$	4,037	$	2,408	$	3,578	$	3,419	$	3,261	$	12,666	$	1,652		$	1,735	$	1,892		$	2,154	$	7,433
Interest coverage ratio		6.20		5.64		15.80		7.29		5.60		6.64		8.28		10.34			10.01		9.05			9.35		9.65
Debt service coverage ratio		6.20		5.64		15.80		7.29		5.60		6.64		8.28		10.34			10.01		9.05			8.70		9.46

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.

June 30, 2012  26

   Reconciliation of Net Income to Property NOI
and Definition
(in thousands)

	Three Months Ended						Three Months Ended												2011			Three Months Ended												2010
	31-Mar-12			30-Jun-12			31-Mar-11			30-Jun-11			30-Sep-11			31-Dec-11			Total			31-Mar-10			30-Jun-10			30-Sep-10			31-Dec-10			Total
Net Income	$	5,738		$	5,434		$	24,767		$	10,381		$	3,314		$	5,062		$	43,524		$	5,562		$	5,954		$	4,757		$	5,820		$	22,093
Add (deduct):
Investment banking segment net loss (income)		—			—			(160	)		(3,274	)		139			(132	)		(3,427	)		479			(263	)		401			(1,352	)		(735	)
Gain on sale of assets		—			—			(19,593	)		(2,346	)		—			—			(21,939	)		—			—			—			—			—
Management fees (before elimination)		(488	)		(479	)		(364	)		(428	)		(439	)		(563	)		(1,794	)		(484	)		(359	)		(362	)		(535	)		(1,740	)
Depreciation and Amortization		13,256			13,224			10,781			12,065			12,279			13,195			48,320			9,184			9,205			10,348			10,453			39,190
Amortization of favorable leases		40			(20	)		(39	)		(23	)		(57	)		72			(47	)		716			432			96			119			1,363
Selling, general and administrative		2,077			2,236			1,644			1,602			1,656			2,011			6,913			1,447			1,854			1,400			1,698			6,399
Interest expense		3,677			4,037			2,408			3,578			3,419			3,260			12,665			1,652			1,736			1,892			2,003			7,283
Interest income		(2,340	)		(2,774	)		(600	)		(910	)		(790	)		(810	)		(3,110	)		(338	)		(374	)		(431	)		(491	)		(1,634	)
Equity in earnings of nonconsolidated REITs		(391	)		(494	)		(968	)		(1,166	)		(573	)		(978	)		(3,685	)		(253	)		(380	)		(404	)		(229	)		(1,266	)
Non-property specific income and expenses, net		24			(51	)		(1,513	)		(37	)		67			305			(1,178	)		461			690			421			(268	)		1,304
Property NOI		21,593			21,113			16,363			19,442			19,015			21,422			76,242			18,426			18,495			18,118			17,218			72,257

Property NOI is a non-GAAP financial measure equal to net income, the most directly comparable GAAP financial measure, plus selling, general and administrative expenses, depreciation and amortization, including amortization of acquired above and below market lease intangibles and impairment charges, interest expense, less equity in earnings of nonconsolidated REITs, interest income, management fee income, gains or losses on the sale of assets and excludes non-property specific income and expenses. Property NOI presented by the Company may not be comparable to NOI reported by other REITs that define NOI differently. NOI should not be considered an alternative to net income as an indication of our performance or to cash flows as a measure of the Company's liquidity or its ability to make distributions.

June 30, 2012  27

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

www.franklinstreetproperties.com