FSP Franklin Street Properties Corp

Franklin Street Properties Corp. (the “Company”, “FSP”, “we” or “our”) (NYSE MKT: FSP), a real estate investment trust (REIT), announced today Funds From Operations (FFO) of $27.5 million or $0.27 per share for the fourth quarter ended December 31, 2014; and FFO of $112.5 million or $1.12 per share for the full year ended December 31, 2014. Net income was $4.3 million or $0.04 per share for the fourth quarter ended December 31, 2014 and $13.1 million or $0.13 per share for the year ended December 31, 2014.

The Company evaluates its performance based on FFO, Net Income and EPS 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 December 31, Year Ended December 31, (in 000's except per share data)

2014

2013

Increase(Decrease)

2014

2013

Increase(Decrease)

  Net Income $ 4,295   $ 6,591 $ (2,296 ) $ 13,148   $ 19,827 $ (6,679 )   FFO $ 27,525   $ 29,220 $ (1,695 ) $ 112,462   $ 100,832 $ 11,630   Per Share Data: EPS $ 0.04 $ 0.07 $ (0.03 ) $ 0.13 $ 0.21 $ (0.08 ) FFO $ 0.27 $ 0.29 $ (0.02 ) $ 1.12 $ 1.07 $ 0.05   Weighted average shares (diluted)   100,187     100,187   -     100,187     93,855   6,333    

Comparing results for the fourth quarter of 2014 to the same period in 2013, FFO decreased $1.7 million or $0.02 per share to $27.5 million or $0.27 per share in 2014. The FFO decrease was primarily from lower property income and higher personnel expenses, which were partially offset by lower interest expense for the quarter. Interest expense was lower as a result of lower spreads on our revolving line of credit that was amended on October 29, 2014 and from lower amounts outstanding during the fourth quarter of 2014 compared to the fourth quarter of 2013. Net Income and EPS was $4.3 million or $0.04 per share for the fourth quarter of 2014 compared to a net income of $6.6 million or $0.07 per share for the fourth quarter of 2013.

Comparing results for the year ended December 31, 2014 to the same period in 2013, FFO increased $11.6 million or $0.05 per share to $112.5 million or $1.12 per share. The FFO increase was primarily from higher property income from acquisitions made during 2013. These increases were partially offset by higher interest and personnel related expenses in 2014 compared to 2013. Interest expense was higher because we entered into a term loan on August 26, 2013, which is included in the full year results of 2014 and was outstanding for only a portion of 2013. Net Income and EPS was $13.1 million or $0.13 per share for the year ended December 31, 2014 compared to a net income of $19.8 million or $0.21 per share for the same period in 2013.

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

“For the fourth quarter of 2014, FSP's funds from operations, or FFO, totaled approximately $27.5 million or $0.27 per share. For the full year 2014, FSP's FFO totaled approximately $112.5 million or $1.12 per share, a 4.7% increase per share over full year 2013. FSP has grown its per share FFO over 33% during the last four years. Dividend distributions declared for the fourth quarter of 2014 were approximately $19.0 million or $0.19 per share. Our directly-owned real estate portfolio of 38 properties, totaling approximately 9.6 million square feet, was approximately 92.8% leased as of December 31, 2014, and our comparative same-store growth totaled approximately 2.2% for the full year 2014.

During the fourth quarter of 2014, we completed the disposition of our "Centennial" property located in Colorado Springs, Colorado for approximately $15,500,000. A gain of $940,000 was realized as a result of the sale. Centennial is a110,405 square foot single story "flex" suburban office property that has been owned by FSP or an FSP affiliate for over 14 years. It was our only property in Colorado Springs. Currently, we are considering disposal of several of our other suburban office assets that we believe are no longer core to our long-term strategy. Also, in the fourth quarter, a single asset REIT affiliate of FSP, "FSP Highland Place I Corp." (or “Highland”), completed the sale of its suburban office property located in the greater Denver, Colorado area. Our outstanding loan with Highland totaling $3,395,000, which was secured by a first mortgage on the Highland Place property, was repaid in full.

We acquired no additional office properties in 2014 primarily because market pricing metrics on properties we were interested in were too elevated to conform to our underwriting criteria. However, as 2015 begins, we are actively pursuing a number of new property acquisition opportunities within our primary markets. We anticipate additional property acquisitions this year. We are also busy trying to finalize potential anchor tenants/leases for our anticipated 2016 development effort in downtown Minneapolis, Minnesota at 801 Marquette Avenue South, and hope to be able to announce the size and scope of this project later this year.

As we begin 2015, our property portfolio is operating smoothly with existing and known upcoming vacancy square footage actively being marketed to multiple potential tenants. We look forward with anticipation to 2015 and beyond.”

Dividend Update

On January 9, 2015, the Company announced that its Board of Directors declared a regular quarterly dividend for the three months ended December 31, 2014 of $0.19 per share of common stock that will be paid on February 12, 2015 to stockholders of record on January 23, 2015.

FFO Guidance

Our full year FFO guidance for 2015 is updated to be in the range of $1.03 to $1.08 per diluted share. This guidance (a) excludes the impact of future acquisitions, dispositions, debt financings or repayments or other capital market transactions; (b) reflects estimates from our ongoing portfolio of properties, other real estate investments and G&A expenses; and (c) reflects our current expectations of economic conditions. We will update guidance quarterly in our earnings releases. There can be no assurance that the Company’s actual results will not differ materially from the estimates set forth above.

Real Estate Update

Supplementary schedules provide property information for the Company’s owned real estate portfolio and for two non-consolidated REITs in which the Company holds preferred stock interests as of December 31, 2014. The Company will also be filing an updated 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.

Funds From Operations (FFO)

A reconciliation of Net Income to FFO is shown below and a definition of FFO is provided on Supplementary Schedule H. Management believes FFO is used broadly throughout the real estate investment trust (REIT) industry as a measurement of performance. Management also believes that FFO represents the most accurate measure of activity and is the basis for distributions paid to equity holders. The Company has included the NAREIT FFO definition in the table and notes that other REITs may not define FFO in accordance with the current NAREIT definition or may interpret the current NAREIT definition differently. The Company’s 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 Year Ended December 31, December 31, (In thousands, except per share amounts)

2014

 

2013

2014

 

2013

  Net income $ 4,295 $ 6,591 $ 13,148 $ 19,827 Gain on sale of assets, less applicable income tax (940 ) (2,158 ) (940 ) (2,158 ) GAAP loss from non-consolidated REITs 269 543 1,760 1,358 FFO from non-consolidated REITs 652 346 1,930 2,148 Depreciation & amortization   23,249       23,886     96,550       79,090   NAREIT FFO 27,525 29,208 112,448 100,265 Acquisition costs of new properties   -       12     14       568   Funds From Operations (FFO) $ 27,525     $ 29,220   $ 112,462     $ 100,833     Per Share Data EPS $ 0.04 $ 0.07 $ 0.13 $ 0.21 FFO $ 0.27 $ 0.29 $ 1.12 $ 1.07   Weighted average shares (basic and diluted)   100,187       100,187     100,187       93,855    

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.

Earnings Call

A conference call is scheduled for February 18, 2015 at 10:00 a.m. (ET) to discuss the fourth quarter 2014 results. To access the call, please dial 1-877-507-4376. Internationally, the call may be accessed by dialing 1-412-317-6014. 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 investing in institutional-quality office properties in the U.S. FSP’s strategy is to invest in select urban infill and central business district (CBD) properties, with primary emphasis on our top five markets of Atlanta, Dallas, Denver, Houston, and Minneapolis. FSP seeks value-oriented investments with an eye towards long-term growth and appreciation, as well as current income. FSP is a Maryland corporation that operates in a manner intended to qualify as a real estate investment trust (REIT) for federal income tax purposes. To learn more about FSP please visit our website at www.franklinstreetproperties.com.

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, 2014, 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 Percentage of Leased Space F Largest 20 Tenants – FSP Owned Portfolio G Definition of Funds From Operations (FFO) H            

Franklin Street Properties Corp. Financial Results

Supplementary Schedule A

Condensed Consolidated Income (Loss) Statements

(Unaudited)

           

For theThree Months EndedDecember 31,

   

For theYear EndedDecember 31,

(in thousands, except per share amounts)           2014       2013         2014       2013   Revenue:     Rental $ 61,022 $ 61,307 $ 243,341 $ 206,926 Related party revenue: Management fees and interest income from loans 1,465 1,717 6,241 6,646 Other           2       -         101       64   Total revenue           62,489       63,024         249,683       213,636   Expenses: Real estate operating expenses 16,334 15,223 62,032 51,100 Real estate taxes and insurance 9,288 8,912 36,857 31,616 Depreciation and amortization 23,174 23,976 95,915 78,839 Selling, general and administrative 3,492 2,698 12,983 11,911 Interest           6,483       7,198         27,433       21,054   Total expenses           58,771       58,007         235,220       194,520   Income before interest income, equity in losses of non-consolidated REITs and taxes 3,718 5,017 14,463 19,116 Interest income 1 6 3 16 Equity in losses of non-consolidated REITs (269 ) (543 ) (1,760 ) (1,358 ) Gain on sale of property, less applicable income tax           940       -         940       -   Income before taxes on income 4,390 4,480 13,646 17,774 Taxes on income           95       128         498       480   Income from continuing operations           4,295       4,352         13,148       17,294   Discontinued operations: Income from discontinued operations, net of income tax - 81 - 375 Gain on sale of property, less applicable income tax           -       2,158         -       2,158   Total discontinued operations           -       2,239         -       2,533   Net income         $ 4,295     $ 6,591       $ 13,148     $ 19,827   Weighted average number of shares outstanding, basic and diluted           100,187       100,187         100,187       93,855   Earnings per share, basic and diluted, attributable to: Continuing operations $ 0.04 $ 0.04 $ 0.13 $ 0.18 Discontinued operations           -       0.03         -       0.03   Net income per share, basic and diluted         $ 0.04     $ 0.07       $ 0.13     $ 0.21                

Franklin Street Properties Corp. Financial Results

Supplementary Schedule B

Condensed Consolidated Balance Sheets

(Unaudited)

  December 31, (in thousands, except share and par value amounts)           2014         2013   Assets: Real estate assets: Land $ 183,930 $ 185,479 Buildings and improvements 1,604,984 1,603,941 Fixtures and equipment           1,677         1,170   1,790,591 1,790,590 Less accumulated depreciation           266,284         222,252   Real estate assets, net 1,524,307 1,568,338 Acquired real estate leases, less accumulated amortization of $101,838 and $69,848, respectively 138,714 183,454 Investment in non-consolidated REITs 78,611 80,494 Cash and cash equivalents 7,519 19,623 Restricted cash 742 643 Tenant rent receivables, less allowance for doubtful accounts of $325 and $50, respectively 4,733 5,102 Straight-line rent receivable, less allowance for doubtful accounts of $162 and $135, respectively 47,021 42,261 Prepaid expenses and other assets 10,292 10,506 Related party mortgage loan receivables 93,641 99,746 Other assets: derivative asset 3,020 5,321 Office computers and furniture, net of accumulated depreciation of $1,036 and $747, respectively 609 709 Deferred leasing commissions, net of accumulated amortization of $16,944 and $15,031, respectively           27,181         27,837   Total assets         $ 1,936,390       $ 2,044,034   Liabilities and Stockholders’ Equity: Liabilities: Bank note payable $ 268,000 $ 306,500 Term loans payable 620,000 620,000 Accounts payable and accrued expenses 42,561 44,137 Accrued compensation 3,758 2,985 Tenant security deposits 4,248 4,027 Other liabilities: derivative liability 7,268 2,044 Acquired unfavorable real estate leases, less accumulated amortization of $8,687 and $6,926, respectively           10,908         14,175   Total liabilities           956,743         993,868   Commitments and contingencies Stockholders’ Equity:

Preferred stock, $.0001 par value, 20,000,000 sharesauthorized, none issued or outstanding

- -

Common stock, $.0001 par value, 180,000,000 shares authorized,100,187,405 and 100,187,405 shares issued and outstanding, respectively

10 10 Additional paid-in capital 1,273,556 1,273,556 Accumulated other comprehensive income (loss) (4,248 ) 3,277 Accumulated distributions in excess of accumulated earnings           (289,671 )       (226,677 ) Total stockholders’ equity           979,647         1,050,166   Total liabilities and stockholders’ equity         $ 1,936,390       $ 2,044,034            

Franklin Street Properties Corp. Financial Results

Supplementary Schedule C

Condensed Consolidated Statements of Cash Flows

(Unaudited)

  For the Year Ended December 31, (in thousands)           2014         2013         2012   Cash flows from operating activities:         Net income $ 13,148 $ 19,827 $ 7,633 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization expense 97,916 81,267 57,500 Amortization of above market lease 635 (365 ) 71 Gain (loss) on sale of properties, less applicable income tax (940 ) (2,158 ) 14,826 Equity in (earnings) losses of non-consolidated REITs 1,760 1,358 (2,033 ) Distributions from non-consolidated REITs - - 705 Increase (decrease) in allowance for doubtful accounts 275 (1,250 ) 65 Changes in operating assets and liabilities: Restricted cash (99 ) (68 ) (82 ) Tenant rent receivables 94 (2,103 ) (354 ) Straight-line rents (4,737 ) (5,782 ) (4,464 ) Lease acquisition costs (440 ) (1,146 ) (2,520 ) Prepaid expenses and other assets 700 (1,547 ) (328 ) Accounts payable, accrued expenses and other items 206 11,137 3,717 Accrued compensation 773 445 318 Tenant security deposits 222 1,538 481 Payment of deferred leasing commissions           (6,347 )       (9,125 )       (5,179 ) Net cash provided by operating activities           103,166         92,028         70,356   Cash flows from investing activities: Property acquisitions - (454,447 ) (167,812 ) Property improvements, fixtures and equipment (18,370 ) (19,120 ) (15,824 ) Office computers and furniture (191 ) (355 ) (232 ) Acquired real estate leases - (100,143 ) (37,302 ) Investment in non-consolidated REITs - 4,858 (1 ) Distributions in excess of earnings from non-consolidated REITs 107 108 2,105 Investment in related party mortgage loan receivable (11,170 ) (8,200 ) (74,580 ) Repayment of related party mortgage receivable 17,275 2,350 121,200 Proceeds received on sales of real estate assets           14,192         12,301         157   Net cash provided by (used in) investing activities           1,843         (562,648 )       (172,289 ) Cash flows from financing activities: Distributions to stockholders (76,142 ) (69,588 ) (63,032 ) Proceeds from equity offering - 241,500 - Offering costs - (10,818 ) - Borrowings under bank note payable 15,000 160,000 294,750 Repayments of bank note payable (53,500 ) (70,250 ) (527,000 ) Borrowing of term loan payable - 220,000 400,000 Deferred financing costs           (2,471 )       (1,868 )       (5,331 ) Net cash provided by (used in) financing activities           (117,113 )       468,976         99,387   Net decrease in cash and cash equivalents (12,104 ) (1,644 ) (2,546 ) Cash and cash equivalents, beginning of year           19,623         21,267         23,813   Cash and cash equivalents, end of year         $ 7,519       $ 19,623       $ 21,267    

Franklin Street Properties Corp. Earnings ReleaseSupplementary Schedule DReal Estate Portfolio Summary Information(Unaudited & Approximated)

  Commercial portfolio lease expirations (1)             Total     % of

Year

Square Feet

Portfolio

2015 710,649 7.4% 2016 962,093 10.0% 2017 1,059,927 11.1% 2018 944,323 9.9% 2019 1,606,640 16.8% Thereafter (2) 4,296,425     44.8% 9,580,057     100.0%  

(1) Percentages are determined based upon square footage of expiring commercial leases.(2) Includes 688,936 square feet of current vacancies.

                            (dollars & square feet in 000's) As of December 31, 2014 # of % of Square % of

State

Properties

Investment

Portfolio

Feet

Portfolio

  Texas 10 $ 393,054 25.8 % 2,539 26.5 % Colorado 5 436,166 28.6 % 2,010 21.0 % Georgia 3 221,383 14.5 % 1,396 14.6 % Virginia 4 96,028 6.3 % 685 7.1 % Minnesota 2 43,373 2.9 % 628 6.6 % Missouri 3 62,111 4.1 % 477 5.0 % North Carolina 3 63,683 4.2 % 431 4.5 % Illinois 2 46,295 3.0 % 372 3.9 % Maryland 1 52,103 3.4 % 325 3.4 % Florida 1 43,081 2.8 % 213 2.2 % Indiana 1 32,819 2.2 % 205 2.1 % California 2 20,393 1.3 % 182 1.9 % Washington 1       13,818     0.9 %         117     1.2 % 38     $ 1,524,307     100.0 %         9,580     100.0 %                          

Franklin Street Properties Corp. Earnings Release

Supplementary Schedule E

Portfolio and Other Supplementary Information

(Unaudited & Approximated)

  Recurring Capital Expenditures Owned Portfolio (in thousands) For the Three Months Ended Year ended

31-Mar-14

30-Jun-14

30-Sep-14

31-Dec-14

31-Dec-14

  Tenant improvements $ 1,132 $ 1,837 $ 2,612 $ 4,244 $ 9,825 Deferred leasing costs 1,080 2,786 577 1,405 5,848 Non-investment capex   364   1,621   700   851   3,536 $ 2,576 $ 6,244 $ 3,889 $ 6,500 $ 19,209  

For the Three Months Ended:

Year ended

31-Mar-13

30-Jun-13

30-Sep-13

31-Dec-13

31-Dec-13

  Tenant improvements $ 1,724 $ 5,094 $ 4,594 $ 2,993 $ 14,405 Deferred leasing costs 2,812 909 3,821 1,498 9,040 Non-investment capex   482   707   498   1,179   2,866 $ 5,018 $ 6,710 $ 8,913 $ 5,670 $ 26,311               Square foot & leased percentages December, December 31,   2014 2013   Owned portfolio of commercial real estate Number of properties 38 39 Square feet 9,580,057 9,685,285 Leased percentage 92.8% 94.1%   Investments in non-consolidated REITs Number of properties 2 2 Square feet 1,395,780 1,395,500 Leased percentage 71.3% 64.1%   Single Asset REITs (SARs) managed Number of properties 8 12 Square feet 1,897,801 3,067,199 Leased percentage 84.7% 87.4%   Total owned, investments & managed properties Number of properties 48 53 Square feet 12,873,638 14,147,984 Leased percentage 89.3% 89.7%  

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

                Square     % Leased     % Interest

Single Asset REIT name

City

State

Feet

31-Dec-14

Held

FSP 303 East Wacker Drive Corp. Chicago IL 860,709 62.5% 43.7% FSP Grand Boulevard Corp. Kansas City MO 535,071     85.5% 27.0% 1,395,780     71.3%                              

Franklin Street Properties Corp. Earnings Release

Supplementary Schedule F

Percentage of Leased Space

(Unaudited & Estimated)

  Third Fourth % Leased (1) Quarter % Leased (1) Quarter as of Average % as of Average %

Property Name

Location

Square Feet

30-Sep-14

Leased (2)

31-Dec-14

Leased (2)

  1 PARK SENECA Charlotte, NC 109,674 88.4% 88.2% 92.1% 91.0% 2 HILLVIEW CENTER Milpitas, CA 36,288 100.0% 100.0% 100.0% 100.0% 3 FOREST PARK Charlotte, NC 62,212 100.0% 100.0% 100.0% 100.0% 4 CENTENNIAL Colorado Springs, CO - 97.3% 97.3% Sold December 3, 2014 5 MEADOW POINT Chantilly, VA 138,537 92.6% 92.6% 92.6% 92.6% 6 TIMBERLAKE Chesterfield, MO 232,766 98.3% 98.3% 98.3% 98.3% 7 FEDERAL WAY Federal Way, WA 117,010 56.5% 56.5% 57.1% 57.3% 8 NORTHWEST POINT Elk Grove Village, IL 176,848 100.0% 100.0% 100.0% 100.0% 9 TIMBERLAKE EAST Chesterfield, MO 116,197 91.0% 91.0% 91.0% 91.0% 10 PARK TEN Houston, TX 157,460 80.3% 80.3% 63.1% 68.8% 11 MONTAGUE San Jose, CA 145,951 81.1% 81.1% 81.1% 81.1% 12 ADDISON Addison, TX 293,926 95.3% 96.0% 89.6% 93.4% 13 COLLINS CROSSING Richardson, TX 300,472 99.5% 99.5% 99.5% 99.5% 14 GREENWOOD PLAZA Englewood, CO 196,236 100.0% 100.0% 100.0% 100.0% 15 RIVER CROSSING Indianapolis, IN 205,059 97.6% 97.0% 100.0% 99.7% 16 LIBERTY PLAZA Addison, TX 218,934 96.0% 96.0% 90.6% 93.2% 17 INNSBROOK Glen Allen, VA 298,456 99.9% 99.9% 99.9% 99.9% 18 380 INTERLOCKEN Broomfield, CO 240,185 95.8% 95.8% 95.8% 95.8% 19 BLUE LAGOON Miami, FL 212,619 100.0% 100.0% 100.0% 100.0% 20 ELDRIDGE GREEN Houston, TX 248,399 100.0% 100.0% 100.0% 100.0% 21 WILLOW BEND Plano, TX 117,050 100.0% 100.0% 100.0% 100.0% 22 ONE OVERTON PARK Atlanta, GA 387,267 98.9% 98.9% 86.3% 90.7% 23 390 INTERLOCKEN Broomfield, CO 241,516 71.2% 70.5% 72.3% 72.0% 24 EAST BALTIMORE Baltimore, MD 325,445 81.2% 81.2% 81.9% 81.9% 25 PARK TEN PHASE II Houston, TX 156,746 100.0% 100.0% 100.0% 100.0% 26

LAKESIDE CROSSING I

Maryland Heights, MO 127,778 100.0% 100.0% 100.0% 100.0% 27 LOUDOUN TECH Dulles, VA 136,658 92.0% 97.3% 92.0% 92.0% 28 4807 STONECROFT Chantilly, VA 111,469 100.0% 100.0% 100.0% 100.0% 29 EDEN BLUFF Eden Prairie, MN 153,028 100.0% 100.0% 100.0% 100.0% 30 121 SOUTH EIGHTH ST Minneapolis, MN 475,012 90.8% 90.6% 91.2% 90.9% 31 EMPEROR BOULEVARD Durham, NC 259,531 100.0% 100.0% 100.0% 100.0% 32 LEGACY TENNYSON CTR Plano, TX 202,600 100.0% 100.0% 100.0% 100.0% 33 ONE LEGACY Plano, TX 214,110 100.0% 100.0% 100.0% 100.0% 34 909 DAVIS Evanston, IL 195,245 97.9% 97.9% 97.9% 97.9% 35 ONE RAVINIA DRIVE Atlanta, GA 386,603 93.7% 93.7% 95.2% 94.7% 36 WESTCHASE I & II Houston, TX 629,025 97.3% 97.3% 97.7% 97.7% 37 1999 BROADWAY Denver, CO 676,379 87.6% 89.6% 88.9% 88.4% 38 999 PEACHTREE Atlanta, GA 621,946 97.8% 95.4% 97.7% 97.9% 39 1001 17th STREET Denver, CO 655,420 81.1% 82.2% 84.8% 82.3%                           TOTAL WEIGHTED AVERAGE (3) 9,580,057     93.3%     93.4%     92.8%     93.0%  

(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) Totals for Q3 include Centennial, which was sold on December 3, 2014.

Franklin Street Properties Corp. Earnings ReleaseSupplementary Schedule GLargest 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 December 31, 2014         % of

Tenant

Sq Ft

Portfolio

1 TCF National Bank 263,111 2.8% 2 Quintiles Transnational Corp 259,531 2.7% 3 CITGO Petroleum Corporation 248,399 2.6% 4 Sutherland Asbill Brennan LLP 243,839 2.5% 5 Newfield Exploration Company 234,495 2.4% 6 US Government (a) 224,427 2.3% 7 Burger King Corporation 212,619 2.2% 8 Denbury Onshore, LLC 202,600 2.1% 9 RGA Reinsurance Company (b) 197,354 2.1% 10 SunTrust Bank (c) 182,888 1.9% 11 Citicorp Credit Services, Inc 176,848 1.9% 12 C.H. Robinson Worldwide, Inc 153,028 1.6% 13 T-Mobile South, LLC dba T-Mobile 151,792 1.6% 14 Houghton Mifflin Harcourt Publishing Company 150,050 1.6% 15 Petrobras America, Inc. 144,813 1.5% 16 Murphy Exploration & Production Company 144,677 1.5% 17 Argo Data Resource Corporation 140,246 1.5% 18 Monsanto Company 127,778 1.3% 19 Federal National Mortgage Association 123,144 1.3% 20 Vail Corp d/b/a Vail Resorts (d) 122,232     1.3% Total 3,703,871     38.7%  

(a) Includes 180,444 and 5,090 square feet which expire in 2018 & 2016, respectively. The remaining 38,893 square feet expire between 2015 - 2020.(b) Lease expired and tenants vacated on December 31, 2014. As of January 1, 2015, Kaiser Foundation Health Plan will become the 20th largest tenant with 120,979 square feet.(c) Includes 55,388 square feet which expires October 31, 2016. The remaining 127,500 square feet expires September 30, 2021.(d ) Includes 38,293 square feet which expires March 31, 2019. The remaining 83,939 square feet expires March 31, 2023.

Franklin Street Properties Corp. Earnings ReleaseSupplementary Schedule HDefinition 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 on properties or investments in non-consolidated REITs, and after adjustments to exclude equity in income or losses from, and, to include the proportionate share of FFO from, non-consolidated REITs.

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

Other real estate companies and 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.

For Franklin Street Properties Corp.John Demeritt, 877-686-9496