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):  July 26, 2016

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 July 26, 2016, Franklin Street Properties Corp. (the “Registrant”) announced its financial results for the three and six months ended June 30, 2016.  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:  July 26, 2016	By:	/s/ George J. Carter
		George J. Carter
		Chief Executive Officer

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EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release issued by Franklin Street Properties Corp. on July 26, 2016.
99.2	Supplemental Operating and Financial Data for the Second Quarter of 2016.

4

EX-99.1

Exhibit 99.1

PRESS RELEASE Franklin Street Properties Corp.

401 Edgewater Place  Suite 200  Wakefield, Massachusetts  01880  (781) 557-1300 www.franklinstreetproperties.com

Contact: Georgia Touma   (877) 686-9496 For Immediate Release

Franklin Street Properties Corp. Announces

Second Quarter 2016 Results

Wakefield, MA—July 26, 2016—Franklin Street Properties Corp. (the “Company”, “FSP”, “we” or “our”) (NYSE MKT:  FSP), a real estate investment trust (REIT), announced its results for the second quarter ended June 30, 2016. 

George J. Carter, Chairman and Chief Executive Officer, commented as follows:

“As the third quarter begins, we continue to believe that full-year 2016 will mark the bottom of the reductive effects that our ongoing property portfolio transition is having on Funds From Operations (FFO). Our current forecast is for resumed FFO growth in 2017 propelled primarily from our projected realization of increased positive leasing metrics in our more recently acquired urban office properties, many of which contain meaningful value-add square footage, as well as from select new investments and redevelopment efforts.  We look forward with anticipation to the balance of 2016 and beyond.”

Highlights

· Net Income was $1.6 million, or $0.02 per share, for the second quarter ended June 30, 2016, and FFOwas $26.7 million or $0.27 per share for the second quarter ended June 30, 2016.

· WeareupdatingourfullyearFFOguidancefor2016tobeintherangeof$1.03to$1.06perdilutedshareand, for the third quarter of 2016, we estimate FFO to be in the range of $0.25 to $0.26 per diluted share.

· Adjusted Funds From Operations (AFFO) was $0.19 per share for the second quarter ended June 30, 2016. 

· Portfolio was approximately 90.1% leased as of June 30, 2016.

· Expanded our presence in downtown Minneapolis, MN with the acquisition of Plaza Seven for $82 million.

· Sold Lakeside Crossing I in Maryland Heights, MO for gross proceeds of $20.2 million.

· On July 21, 2016, we extended the maturity of our $400 million term loan from September 27, 2017 to September 27, 2021.  On July 22, 2016, we entered into a forward interest rate swap that fixed the base LIBOR interest rate for that extension period at 1.12%.  Accordingly, based upon our credit rating as of June 30, 2016, the interest rate when the extension commences would be 2.57%.  

Leasing Update

· Our directly owned real estate portfolio of 35 properties totaling approximately 9.5 million square feet was approximately 90.1% leased as of June 30, 2016.

· During the quarter, we leased approximately 421,000 square feet, of which approximately 381,000 square feet was with existing tenants.

· Executed early lease renewals with (a) Citicorp Credit Services, Inc. for approximately 146,000 square feet at Northwest Point, Elk Grove, IL; (b) Amdocs, Inc. for approximately 70,000 square feet at Timberlake Corporate Center, Chesterfield, MO; and (c) American Systems Corporation for approximately 57,000 square feet at Meadow Point, Chantilly, VA.

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Acquisition and Disposition Update

· Acquired Plaza Seven in downtown Minneapolis, MN on June 6, 2016 for $82 million.

· Entered into a Purchase and Sale Agreement to acquire an urban infill Class “A” office property located in Midtown Atlanta for a gross purchase price of $45.5 million.  This potential acquisition remains subject to our satisfactory completion of a due diligence inspection period. We anticipate that the closing will occur by the end of August 2016 and first full year cash and GAAP yields will each be approximately 6.7%. 

· Sold Lakeside Crossing I in Maryland Heights, MO on April 5, 2016 for $20.2 million.

· Classified our office property located in Federal Way, WA, as an asset held for sale.

801 Marquette Avenue, Minneapolis, MN Development Update

· Interior demolition and construction work expected to commence during the third quarter.

· Anticipate launching our full marketing campaign during the third quarter with our leasing team at CBRE and with newly created leasing materials.

· Expected costs are anticipated to total between $15 and $20 million including all leasing expenses, and should result in about 120,000 RSF.

· Upon completion, expect rents of approximately $15-$18 net per square foot compared to previously expired rents of about $4.75 net per square foot.

Dividend Update

On July 8, 2016, the Company announced that its Board of Directors declared a regular quarterly dividend for the three months ended June 30, 2016 of $0.19 per share of common stock that will be paid on August 11, 2016 to stockholders of record on July 22, 2016.    

Non-GAAP Financial Information

A reconciliation of Net Income to FFO and AFFO and our definitions of FFO and AFFO can be found on Supplementary Schedule H.    

FFO Guidance

We are updating our full year FFO guidance for 2016 to be in the range of $1.03 to $1.06 per diluted share and, for the third quarter of 2016, we estimate FFO to be in the range of $0.25 to $0.26 per diluted share.  This guidance (a) excludes the impact of future acquisitions, developments, dispositions, debt financings or repayments or other capital market transactions; (b) reflects estimates from our ongoing portfolio of properties, other real estate investments and general and administrative 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 June 30, 2016.  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.  

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________________________________________________________________________________________

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 July 27, 2016 at 10:00 a.m. (ET) to discuss the second quarter 2016 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, 2015, 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. 

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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
Reconciliation and Definitions of Funds From Operations (FFO) and Adjusted
Funds From Operations (AFFO)	H

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Franklin Street Properties Corp. Financial Results

Supplementary Schedule A

Condensed Consolidated Income (Loss) Statements

(Unaudited)

	For the				For the
	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in thousands, except per share amounts)	2016		2015		2016		2015
Revenue:
Rental	$	59,453	$	58,801	$	117,813	$	117,814
Related party revenue:
Management fees and interest income from loans		1,337		1,412		2,770		2,885
Other		17		20		37		41
Total revenue		60,807		60,233		120,620		120,740
Expenses:
Real estate operating expenses		14,929		14,644		30,221		30,000
Real estate taxes and insurance		10,154		9,469		19,304		19,517
Depreciation and amortization		22,352		23,207		44,797		45,879
Selling, general and administrative		3,494		3,401		7,024		7,092
Interest		6,417		6,365		12,850		12,552
Total expenses		57,346		57,086		114,196		115,040
Income before interest income, equity in losses of non-consolidated REITs, other, gain (loss) on sale of properties and property held for sale, less applicable income tax and taxes		3,461		3,147		6,424		5,700
Interest income		—		—		—		1
Equity in losses of non-consolidated REITs		(86)		(38)		(372)		(360)
Other		(1,009)		—		(1,009)		—
Gain (loss) on sale of properties and property held for sale, less applicable income tax		(643)		948		(643)		11,410
Income before taxes on income		1,723		4,057		4,400		16,751
Taxes on income		111		154		209		315
Net income	$	1,612	$	3,903	$	4,191	$	16,436
Weighted average number of shares outstanding,  basic and diluted		100,187		100,187		100,187		100,187
Net income per share, basic and diluted	$	0.02	$	0.04	$	0.04	$	0.16

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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)	2016		2015
Assets:
Real estate assets:
Land	$	172,205	$	170,021
Buildings and improvements		1,667,507		1,637,066
Fixtures and equipment		2,771		2,528
		1,842,483		1,809,615
Less accumulated depreciation		315,547		299,991
Real estate assets, net		1,526,936		1,509,624
Acquired real estate leases, less accumulated amortization of $121,865 and $112,844, respectively		104,350		108,046
Investment in non-consolidated REITs		76,289		77,019
Asset held for sale		9,275		—
Cash and cash equivalents		7,524		18,163
Restricted cash		3		23
Tenant rent receivables, less allowance for doubtful accounts of $200 and $130, respectively		3,268		2,898
Straight-line rent receivable, less allowance for doubtful accounts of $50 and $50, respectively		50,196		48,502
Prepaid expenses and other assets		5,875		5,484
Related party mortgage loan receivables		79,310		118,641
Other assets: derivative asset		—		1,132
Office computers and furniture, net of accumulated depreciation of $1,438 and $1,333, respectively		385		484
Deferred leasing commissions, net of accumulated amortization of $21,210 and $20,002, respectively		32,006		28,999
Total assets	$	1,895,417	$	1,919,015
Liabilities and Stockholders’ Equity:
Liabilities:
Bank note payable	$	310,000	$	290,000
Term loans payable, less unamortized financing costs of $1,887 and $2,353, respectively		618,113		617,647
Accounts payable and accrued expenses		41,498		49,489
Accrued compensation		2,170		3,726
Tenant security deposits		4,693		4,829
Other liabilities: derivative liabilities		14,913		8,243
Acquired unfavorable real estate leases, less accumulated amortization of $10,420 and $9,368, respectively		9,047		9,425
Total liabilities		1,000,434		983,359
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, 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 loss		(13,904)		(7,111)
Accumulated distributions in excess of accumulated earnings		(364,679)		(330,799)
Total stockholders’ equity		894,983		935,656
Total liabilities and stockholders’ equity	$	1,895,417	$	1,919,015

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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)	2016		2015
Cash flows from operating activities:
Net income	$	4,191	$	16,436
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		45,830		46,913
Amortization of above market lease		82		(32)
Equity in losses of non-consolidated REITs		372		360
Hedge ineffectiveness		1,009		—
Gain (loss) on sale of properties and property held for sale, less applicable income tax		643		(11,410)
Increase (decrease) in allowance for doubtful accounts		70		(75)
Changes in operating assets and liabilities:
Restricted cash		20		694
Tenant rent receivables		(440)		1,922
Straight-line rents		(1,975)		(643)
Lease acquisition costs		(252)		(231)
Prepaid expenses and other assets		(958)		196
Accounts payable, accrued expenses and other items		(7,776)		(4,306)
Accrued compensation		(1,398)		(1,431)
Tenant security deposits		(136)		66
Payment of deferred leasing commissions		(6,898)		(2,737)
Net cash provided by operating activities		32,384		45,722
Cash flows from investing activities:
Property acquisitions		(60,844)		(66,104)
Acquired real estate leases		(12,951)		(10,604)
Property improvements, fixtures and equipment		(10,904)		(10,333)
Distributions in excess of earnings from non-consolidated REITs		359		54
Repayment of related party mortgage loan receivable		39,331		—
Proceeds received on sales of real estate assets		20,058		55,659
Net cash used in investing activities		(24,951)		(31,328)
Cash flows from financing activities:
Distributions to stockholders		(38,072)		(38,072)
Borrowings under bank note payable		95,000		95,000
Repayments of bank note payable		(75,000)		(63,000)
Net cash used in financing activities		(18,072)		(6,072)
Net increase (decrease) in cash and cash equivalents		(10,639)		8,322
Cash and cash equivalents, beginning of year		18,163		7,519
Cash and cash equivalents, end of period	$	7,524	$	15,841

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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
2016	436,223	4.6%
2017	767,294	8.0%
2018	1,147,500	12.0%
2019	1,302,896	13.7%
2020	780,183	8.2%
Thereafter (2)	5,088,958	53.5%
	9,523,054	100.0%

(1) Percentages are determined based upon total square footage.   

(2) Includes 939,704 square feet of current vacancies.

(dollars & square feet in 000's)	As of June 30, 2016
	# of			% of	Square	% of
State	Properties	Investment		Portfolio	Feet	Portfolio
Texas	9	$	360,991	23.7%	2,418	25.4%
Colorado	5		426,002	28.0%	2,010	21.1%
Georgia	4		285,943	18.8%	1,838	19.3%
Virginia	4		92,186	6.0%	685	7.2%
Minnesota (a)	2		87,278	5.7%	632	6.6%
Missouri	2		45,478	3.0%	350	3.7%
North Carolina	2		54,422	3.6%	322	3.4%
Illinois	2		43,732	2.9%	372	3.9%
Maryland	1		50,304	3.3%	325	3.4%
Florida	1		41,279	2.7%	213	2.2%
Indiana	1		31,068	2.0%	205	2.2%
California	1		3,776	0.3%	36	0.4%
Washington (b)	1		—	0.0%	117	1.2%
Total	35	$	1,522,459	100.0%	9,523	100.0%

(a) Excludes approximately $4,477, which is our investment in a property being redeveloped.

(b) Includes asset held for sale of $9,275.

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Franklin Street Properties Corp. Earnings Release

Supplementary Schedule E

Portfolio and Other Supplementary Information

(Unaudited & Approximated)

Recurring Capital Expenditures

Owned Portfolio

						Six Months						Six Months
		Three Months Ended				Ended		Three Months Ended				Ended
	31-Mar-16		30-Jun-16		30-Jun-16		31-Mar-15		30-Jun-15		30-Jun-15
Tenant improvements	$	1,929	$	1,329	$	3,258	$	2,936	$	3,420	$	6,356
Deferred leasing costs		1,613		4,966		6,579		830		1,539		2,369
Non-investment capex		438		1,052		1,490		643		1,411		2,054
	$	3,980	$	7,347	$	11,327	$	4,409	$	6,370	$	10,779

Square foot & leased percentages	June 30,	December 31,
	2016	2015
Owned portfolio of commercial real estate
Number of properties (a)	35	36
Square feet	9,523,054	9,494,953
Leased percentage	90.1%	91.6%
Investments in non-consolidated REITs
Number of properties	2	2
Square feet	1,396,071	1,396,071
Leased percentage	73.1%	73.5%
Single Asset REITs (SARs) managed
Number of properties	5	7
Square feet	1,075,135	1,487,026
Leased percentage	86.1%	77.0%
Total owned, investments & managed properties
Number of properties	42	45
Square feet	11,994,260	12,378,050
Leased percentage	87.8%	87.8%

(a) Excludes property in redevelopment in 2016.

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-16	Held
FSP 303 East Wacker Drive Corp.	Chicago	IL	861,000	66.4%	43.7%
FSP Grand Boulevard Corp.	Kansas City	MO	535,071	83.7%	27.0%
			1,396,071	73.1%

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Franklin Street Properties Corp. Earnings Release

Supplementary Schedule F

Percentage of Leased Space

(Unaudited & Estimated)

					First		Second
				% Leased (1)	Quarter	% Leased (1)	Quarter
				as of	Average %	as of	Average %
	Property Name	Location	Square Feet	31-Mar-16	Leased (2)	30-Jun-16	Leased (2)
1	HILLVIEW CENTER	Milpitas, CA	36,288	100.0%	100.0%	100.0%	100.0%
2	FOREST PARK	Charlotte, NC	62,212	100.0%	100.0%	100.0%	100.0%
3	MEADOW POINT	Chantilly, VA	138,368	100.0%	100.0%	100.0%	100.0%
4	TIMBERLAKE	Chesterfield, MO	234,023	95.4%	95.4%	96.3%	96.3%
5	FEDERAL WAY	Federal Way, WA	117,010	61.6%	65.1%	61.6%	61.6%
6	NORTHWEST POINT	Elk Grove Village, IL	176,848	100.0%	100.0%	100.0%	100.0%
7	TIMBERLAKE EAST	Chesterfield, MO	116,197	96.2%	96.2%	96.2%	96.2%
8	PARK TEN	Houston, TX	157,460	63.1%	63.1%	65.4%	63.9%
9	ADDISON	Addison, TX	289,755	93.4%	93.4%	97.7%	95.6%
10	COLLINS CROSSING	Richardson, TX	300,887	100.0%	100.0%	100.0%	100.0%
11	GREENWOOD PLAZA	Englewood, CO	196,236	100.0%	100.0%	100.0%	100.0%
12	RIVER CROSSING	Indianapolis, IN	205,059	91.1%	91.1%	91.7%	91.7%
13	LIBERTY PLAZA	Addison, TX	218,934	80.9%	81.5%	81.7%	81.7%
14	INNSBROOK	Glen Allen, VA	298,456	100.0%	100.0%	100.0%	100.0%
15	380 INTERLOCKEN	Broomfield, CO	240,185	97.1%	97.1%	93.2%	93.2%
16	BLUE LAGOON	Miami, FL	212,619	100.0%	100.0%	100.0%	100.0%
17	ELDRIDGE GREEN	Houston, TX	248,399	100.0%	100.0%	100.0%	100.0%
18	ONE OVERTON PARK	Atlanta, GA	387,267	85.0%	85.0%	90.4%	90.4%
19	390 INTERLOCKEN	Broomfield, CO	241,751	84.6%	84.6%	94.6%	94.2%
20	EAST BALTIMORE	Baltimore, MD	325,445	83.6%	84.8%	83.7%	83.6%
21	PARK TEN PHASE II	Houston, TX	156,746	100.0%	100.0%	100.0%	100.0%
	LAKESIDE CROSSING I	Maryland Heights, MO	—	100.0%	100.0%	(3)	(3)
22	LOUDOUN TECH	Dulles, VA	136,658	92.0%	92.0%	92.0%	92.0%
23	4807 STONECROFT	Chantilly, VA	111,469	100.0%	100.0%	100.0%	100.0%
24	121 SOUTH EIGHTH ST	Minneapolis, MN	305,990	56.2%	56.2%	56.3%	56.2%
25	PLAZA SEVEN	Minneapolis, MN	326,068	(4)	(4)	96.4%	96.4%
26	EMPEROR BOULEVARD	Durham, NC	259,531	100.0%	100.0%	100.0%	100.0%
27	LEGACY TENNYSON CTR	Plano, TX	202,600	100.0%	100.0%	100.0%	100.0%
28	ONE LEGACY	Plano, TX	214,110	100.0%	100.0%	100.0%	100.0%
29	909 DAVIS	Evanston, IL	194,980	88.8%	88.8%	80.4%	83.2%
30	ONE RAVINIA DRIVE	Atlanta, GA	386,603	94.8%	94.8%	94.8%	94.8%
31	TWO RAVINIA	Atlanta, GA	442,130	84.0%	82.2%	81.3%	82.4%
32	WESTCHASE I & II	Houston, TX	629,025	87.0%	87.0%	84.0%	84.0%
33	1999 BROADWAY	Denver, CO	676,379	83.0%	82.8%	80.0%	81.0%
34	999 PEACHTREE	Atlanta, GA	621,946	95.3%	95.1%	95.3%	95.3%
35	1001 17th STREET	Denver, CO	655,420	87.6%	87.9%	87.6%	87.6%
	TOTAL WEIGHTED AVERAGE		9,523,054	90.2%	90.2%	90.1%	90.1%

(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) Property was sold April 5, 2016.

(4) Property was acquired June 6, 2016. 

-11-

Franklin Street Properties Corp. Earnings Release

Supplementary Schedule G

Largest 20 Tenants – FSP Owned Portfolio

(Unaudited & Estimated)

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

As of June 30, 2016

			% of
	Tenant	Sq Ft	Portfolio
1	Quintiles Transnational Corp	259,531	3.0%
2	CITGO Petroleum Corporation	248,399	2.9%
3	Newfield Exploration Company	234,495	2.7%
4	US Government	223,433	2.6%
5	Sutherland Asbill Brennan LLP	222,422	2.6%
6	Burger King Corporation	212,619	2.5%
7	Denbury Onshore, LLC	202,600	2.4%
8	SunTrust Bank	182,888	2.1%
9	Centene Management Company, LLC	179,637	2.1%
10	Citicorp Credit Services, Inc	176,848	2.1%
11	T-Mobile South, LLC dba T-Mobile	151,792	1.8%
12	Petrobras America, Inc.	144,813	1.7%
13	Murphy Exploration & Production Company	144,677	1.7%
14	Argo Data Resource Corporation	140,246	1.6%
15	Vail Corp d/b/a Vail Resorts	125,588	1.5%
16	Federal National Mortgage Association	123,144	1.4%
17	Kaiser Foundation Health Plan	120,979	1.4%
18	Giesecke & Devrient America	112,110	1.3%
19	Houghton Mifflin Harcourt Publishing Company	111,550	1.3%
20	Northrop Grumman Systems Corp	111,469	1.3%
	Total	3,429,240	40.0%

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Franklin Street Properties Corp. Earnings Release

Supplementary Schedule H

Reconciliation and Definitions of Funds From Operations (“FFO”) and

Adjusted Funds From Operations (“AFFO”)

A reconciliation of Net Income to FFO and AFFO is shown below and a definition of FFO and AFFO is provided on Supplementary Schedule I.  Management believes FFO and AFFO are used broadly throughout the real estate investment trust (REIT) industry as measurements of performance.   The Company has included the National Association of Real Estate Investment Trusts (NAREIT)  FFO definition as of May 17, 2016 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 and AFFO may not be comparable to FFO or AFFO reported by other REITs or real estate companies that define FFO or AFFO differently. 

Reconciliation of Net Income to FFO and AFFO:	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In thousands, except per share amounts)	2016		2015		2016		2015
Net income	$	1,612	$	3,903	$	4,191	$	16,436
Gain (loss) on sale of properties and property held for sale, less applicable income tax		643		(948)		643		(11,410)
GAAP loss from non-consolidated REITs		86		38		372		360
FFO from non-consolidated REITs		895		885		1,540		1,486
Depreciation & amortization		22,352		23,168		44,879		45,846
NAREIT FFO		25,588		27,046		51,625		52,718
Hedge ineffectiveness		1,009		—		1,009		—
Acquisition costs of new properties		134		142		134		142
Funds From Operations (FFO)	$	26,731	$	27,188	$	52,768	$	52,860
Funds From Operations (FFO)	$	26,731	$	27,188	$	52,768	$	52,860
Reverse FFO from non-consolidated REITs		(895)		(885)		(1,540)		(1,486)
Distributions from non-consolidated REITs		332		27		359		54
Amortization of deferred financing costs		517		517		1,034		1,034
Straight-line rent		(700)		(574)		(1,975)		(643)
Tenant improvements		(1,329)		(3,420)		(3,258)		(6,356)
Leasing commissions		(4,966)		(1,539)		(6,579)		(2,369)
Non-investment capex		(1,052)		(1,411)		(1,490)		(2,054)
Adjusted Funds From Operations (AFFO)	$	18,638	$	19,903	$	39,319	$	41,040
Per Share Data
EPS	$	0.02	$	0.04	$	0.04	$	0.16
FFO	$	0.27	$	0.27	$	0.53	$	0.53
AFFO	$	0.19	$	0.20	$	0.39	$	0.41
Weighted average shares (basic and diluted)		100,187		100,187		100,187		100,187

-13-

During the three months ended June 30, 2016 we changed the definition of FFO to exclude hedge ineffectiveness, which does not affect any prior period.  Our interest rate swaps effectively fix interest rates on our term loans, however, there is no floor on the variable interest rate of the swaps whereas the current term loans are subject to a zero percent floor. As a result there is a mismatch and the ineffective portion of the derivatives’ changes in fair value are recognized directly into earnings each quarter as hedge ineffectiveness. We believe that FFO excluding hedge ineffectiveness is useful supplemental information regarding our operating performance as it provides a more meaningful and consistent comparison of our operating performance and allows investors to more easily compare our operating results. 

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, hedge ineffectiveness 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 as of May 17, 2016 in the 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.

Adjusted Funds From Operations (“AFFO”)

The Company also evaluates performance based on Adjusted Funds From Operations, which we refer to as AFFO.  The Company defines AFFO as (1) FFO,  (2) excluding our proportionate share of FFO and including distributions received, from non-consolidated REITs, (3) excluding the effect of straight-line rent, (4) plus deferred financing costs and (5) less recurring capital expenditures that are generally for maintenance of properties, which we call non-investment capex or are second generation capital expenditures.  Second generation costs include re-tenanting space after a tenant vacates, which include tenant improvements and leasing commissions. 

We exclude development/redevelopment activities, capital expenditures planned at acquisition and costs to reposition a property. We also exclude first generation leasing costs, which are generally to fill vacant space in properties we acquire or were planned for at acquisition. 

AFFO 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 may define this term in a different manner.  We believe that in order to facilitate a clear understanding of the

-14-

results of the Company, AFFO should be examined in connection with net income and cash flows from operating, investing and financing activities in the consolidated financial statements. 

EX-99.2

Exhibit 99.2

Franklin Street Properties

Supplemental Operating

and Financial Data

Second Quarter 2016

Franklin Street Properties Corp.

401 Edgewater Place | Wakefield, Massachusetts 01880

781.557.1300 | www.franklinstreetproperties.com

Table of Contents

	Page		Page
Company Overview	3	Tenant Analysis and Leasing Activity
		Tenants by Industry	18
Key Financial Data		20 Largest Tenants with Annualized Rent and Remaining Term	19
Financial Highlights	4	Leasing Activity	20
Income Statements	5	Lease Expirations by Square Feet	21
Balance Sheets	6	Lease Expirations with Annualized Rent per Square Foot	22
Cash Flow Statements	7	Capital Expenditures	23
Property Net Operating Income (NOI)	8
		Transaction Activity	24
Reconciliation
FFO & AFFO	9	Loan Portfolio of Secured Real Estate	25
EBITDA	10
Property NOI	11	Net Asset Value Components	26
Debt Summary	12	Appendix: Definitions of Non-GAAP Measures
		FFO	27
Capital Analysis	13	EBITDA and NOI	28
		AFFO	29
Owned and Managed Portfolio Overview	14-17

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, uncertainties relating to fiscal policy, changes in government regulations, regulatory uncertainty, geopolitical events, local real estate conditions, the performance of properties that FSP has acquired or may acquire, the timely lease-up of properties and other risks, which are detailed from time to time in FSP’s reports filed with the Securities and Exchange Commission.  FSP assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

FSP 1001 17th Street, Denver, CO

June 30, 2016 | Page 2

Company Overview

Overview		Snapshot (as of June 30, 2016)
Franklin Street Properties Corp. (“FSP”, “we”, “our” or the “Company”) (NYSE MKT: FSP) is 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. FSP’s real estate operations include property acquisitions and dispositions, short-term financing, leasing, development and asset management.		Corporate Headquarters	Wakefield, MA
		Fiscal Year-End	31-Dec
		Total Properties	35
		Total Square Feet	9.5 Million
		Trading Symbol	FSP
		Exchange	NYSE MKT
		Common Shares Outstanding	100,187,405
		Quarterly Dividend	$0.19
Our Business		Dividend Yield	6.2%
As of June 30, 2016, the Company owned and operated a portfolio of real estate consisting of 35 properties, managed 7 Sponsored REITs and held five promissory notes secured by mortgages on real estate owned by Sponsored REITs. From time-to-time, the Company may acquire, develop or redevelop 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.		Total Market Capitalization	$2.2 Billion
		Insider Holdings	4.1%
Management Team
George J. Carter	Jeffrey B. Carter
Chief Executive Officer and	President and Chief Investment
Chairman of the Board	Officer
John G. Demeritt	Scott H. Carter
Executive Vice President, Chief	Executive Vice President, General
Financial Officer and Treasurer	Counsel and Secretary
John F. Donahue	Eriel Anchondo
Executive Vice President	Executive Vice President and Chief Operating Officer	FSP 999 Peachtree Street, Atlanta, GA
Inquiries
Inquiries should be directed to:  Georgia Touma
877.686.9496 or InvestorRelations@franklinstreetproperties.com

June 30, 2016 | Page 3

Summary of Financial Highlights

(in thousands except per share amounts, SF & number of properties)
	30-Jun-16		31-Mar-16		31-Dec-15		30-Sep-15		30-Jun-15
Income Items:
Rental revenue		59,453	$	58,360	$	59,656	$	60,386	$	58,801
Total revenue		60,807		59,813		61,250		61,877		60,233
Adjusted EBITDA*		32,144		31,637		32,112		32,567		32,642
Equity in losses of non-consolidated REITs		(86)		(286)		(807)		(284)		(38)
Net income		1,612		2,579		15,412		3,166		3,903
FFO*		26,731		26,037		27,076		26,954		27,188
Per Share Data:
EPS		0.02	$	0.03	$	0.15	$	0.03	$	0.04
FFO*		0.27	$	0.26	$	0.27	$	0.27	$	0.27
Weighted Average Shares (diluted)		100,187		100,187		100,187		100,187		100,187
Closing share price		12.27	$	10.61	$	10.35	$	10.75	$	11.31
Dividend		0.19	$	0.19	$	0.19	$	0.19	$	0.19
Payout Ratio:		71%		73%		70%		71%		70%
Balance Sheet Items:
Real estate, net		1,526,936	$	1,487,281	$	1,509,624	$	1,530,691	$	1,539,343
Other assets, net		368,481		374,104		409,391		393,103		397,940
Total assets, net		1,895,417		1,861,385		1,919,015		1,923,794		1,937,283
Total liabilities, net		1,000,434		948,301		983,359		989,500		981,737
Shareholders' equity		894,983		913,084		935,656		934,294		955,546
Market Capitalization and Debt:
Total Market Capitalization (a)		2,159,299	$	1,947,988	$	1,946,940	$	1,997,015	$	2,053,120
Total debt outstanding (excluding unamortized financing costs)		930,000		885,000		910,000		920,000		920,000
Debt to Total Market Capitalization		43.1%		45.4%		46.7%		46.1%		44.8%
Debt to Adjusted EBITDA		7.2		7.0		7.1		7.1		7.0
Owned Portfolio Leasing Statistics (b):
Owned portfolio assets		35		35		36		36		36
Portfolio total SF		9,523,054		9,325,249		9,494,953		9,640,904		9,639,740
Portfolio % leased		90.1%		90.2%		91.6%		90.5%		90.6%

(a) Total Market Capitalization is the closing share price multiplied by the number of shares outstanding plus total debt outstanding on that date.

(b) For periods in 2016, excludes one property held for redevelopment located in Minneapolis, Minnesota.

*See pages 9 & 10 for reconciliations of Net Income to FFO and Adjusted EBITDA, respectively, and the Appendix for Definitions of these Non-GAAP Measures beginning on page 27.

June 30, 2016 | Page 4

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

					Six Months										For the
	For the Three Months Ended				Ended		For the Three Months Ended								Year Ended
	31-Mar-16		30-Jun-16		30-Jun-16		31-Mar-15		30-Jun-15		30-Sep-15		31-Dec-15		31-Dec-15
Revenue:
Rental	$	58,360	$	59,453	$	117,813	$	59,013	$	58,801	$	60,386	$	59,656	$	237,856
Related party revenue:
Management fees and interest income from loans		1,433		1,337		2,770		1,473		1,412		1,470		1,575		5,930
Other		20		17		37		21		20		21		19		81
Total revenue		59,813		60,807		120,620		60,507		60,233		61,877		61,250		243,867
Expenses:
Real estate operating expenses		15,292		14,929		30,221		15,356		14,644		15,951		15,939		61,890
Real estate taxes and insurance		9,150		10,154		19,304		10,048		9,469		9,941		9,202		38,660
Depreciation and amortization		22,445		22,352		44,797		22,672		23,207		22,911		22,569		91,359
Selling, general and administrative		3,530		3,494		7,024		3,691		3,401		3,071		3,128		13,291
Interest		6,433		6,417		12,850		6,187		6,365		6,425		6,455		25,432
Total expenses		56,850		57,346		114,196		57,954		57,086		58,299		57,293		230,632
Income before interest income, equity in losses of non-consolidated REITs, other, gain (loss) on sale of properties and property held for sale, less applicable income tax and taxes		2,963		3,461		6,424		2,553		3,147		3,578		3,957		13,235
Interest income		—		—		—		1		—		—		—		1
Equity in losses of non-consolidated REITs		(286)		(86)		(372)		(322)		(38)		(284)		(807)		(1,451)
Other		—		(1,009)		(1,009)		—		—		—		—		—
Gain (loss) on sale of properties and provision for loss on property held for sale, less applicable income tax		—		(643)		(643)		10,462		948		1		12,251		23,662
Income before taxes on income		2,677		1,723		4,400		12,694		4,057		3,295		15,401		35,447
Income tax expense		98		111		209		161		154		129		(11)		433
Net income	$	2,579	$	1,612	$	4,191	$	12,533	$	3,903	$	3,166	$	15,412	$	35,014
Weighted average number of shares outstanding, basic and diluted		100,187		100,187		100,187		100,187		100,187		100,187		100,187		100,187
Net income per share, basic and diluted	$	0.03	$	0.02	$	0.04	$	0.13	$	0.04	$	0.03	$	0.15	$	0.35

June 30, 2016 | Page 5

	$ in thousands, except per share amounts)
	Condensed Consolidated Balance Sheets (in thousands)

	March 31,		June 30,		March 31,		June 30,		September 30,		December 31,
	2016		2016		2015		2015		2015		2015
Assets:
Real estate assets:
Land	$	168,120	$	172,205	$	174,707	$	180,271	$	180,271	$	170,021
Buildings and improvements		1,625,819		1,667,507		1,581,524		1,636,444		1,639,869		1,637,066
Fixtures and equipment		2,649		2,771		1,724		1,800		1,882		2,528
		1,796,588		1,842,483		1,757,955		1,818,515		1,822,022		1,809,615
Less accumulated depreciation		309,307		315,547		271,058		279,172		291,331		299,991
Real estate assets, net		1,487,281		1,526,936		1,486,897		1,539,343		1,530,691		1,509,624
Acquired real estate leases, net		99,102		104,350		124,337		126,926		117,272		108,046
Investment in non-consolidated REITs		76,707		76,289		78,228		78,164		77,853		77,019
Asset held for sale		15,921		9,275		—		—		—		—
Cash and cash equivalents		14,316		7,524		14,945		15,841		19,100		18,163
Restricted cash		10		3		56		48		34		23
Tenant rent receivables, net		3,691		3,268		4,587		2,886		3,548		2,898
Straight-line rent receivable, net		49,696		50,196		45,498		46,168		47,330		48,502
Prepaid expenses and other assets		5,943		5,875		10,475		6,278		7,187		5,484
Related party mortgage loan receivable		79,575		79,310		93,641		93,641		93,641		118,641
Other assets: derivative asset		—		—		774		918		—		1,132
Office computers and furniture, net of accumulated depreciation		438		385		588		562		551		484
Deferred leasing commissions, net		28,705		32,006		26,335		26,508		26,587		28,999
Total assets	$	1,861,385	$	1,895,417	$	1,886,361	$	1,937,283	$	1,923,794	$	1,919,015
Liabilities and Stockholders’ Equity:
Liabilities:
Bank note payable	$	265,000	$	310,000	$	240,000	$	300,000	$	300,000	$	290,000
Term loan payable, net of unamortized financing costs		617,880		618,113		616,949		617,182		617,414		617,647
Accounts payable and accrued expenses		37,791		41,498		36,065		39,199		42,164		49,489
Accrued compensation		1,274		2,170		1,241		2,327		3,236		3,726
Tenant security deposits		4,433		4,693		4,019		4,315		4,349		4,829
Other liabilities: derivative liabilities		13,226		14,913		9,836		7,632		12,096		8,243
Acquired unfavorable real estate leases, net		8,697		9,047		9,921		11,082		10,241		9,425
Total liabilities		948,301		1,000,434		918,031		981,737		989,500		983,359
Commitments and contingencies
Stockholders’ Equity:
Preferred stock		-		-		-		-		-		-
Common stock		10		10		10		10		10		10
Additional paid-in capital		1,273,556		1,273,556		1,273,556		1,273,556		1,273,556		1,273,556
Accumulated other comprehensive income (loss)		(13,226)		(13,904)		(9,062)		(6,714)		(12,096)		(7,111)
Accumulated distributions in excess of accumulated earnings		(347,256)		(364,679)		(296,174)		(311,306)		(327,176)		(330,799)
Total stockholders’ equity		913,084		894,983		968,330		955,546		934,294		935,656
Total liabilities and stockholders’ equity	$	1,861,385	$	1,895,417	$	1,886,361	$	1,937,283	$	1,923,794	$	1,919,015

June 30, 2016 | Page 6

Condensed Consolidated Statements of Cash Flows (in thousands)

		Six Months ended June 30,				Twelve Months ended December 31,
		2016		2015	2015		2014
Cash flows from operating activities:
Net income	$	4,191	$	16,436	$	35,014	$	13,148
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		45,830		46,913		93,426		97,916
Amortization of above market lease		82		(32)		(158)		635
Hedge ineffectiveness		1,009		-		—		—
(Gain) loss on sale of properties and property held for sale, less applicable income tax		643		(11,410)		(23,662)		(940)
Equity in earnings (losses) from non-consolidated REITs		372		360		1,451		1,760
Increase in allowance for doubtful accounts		70		(75)		(195)		275
Changes in operating assets and liabilities:
Restricted cash		20		694		719		(99)
Tenant rent receivables		(440)		1,922		2,030		94
Straight-line rents		(1,975)		(643)		(2,448)		(4,737)
Lease acquisition costs		(252)		(231)		(1,487)		(440)
Prepaid expenses and other assets		(958)		196		422		700
Accounts payable and accrued expenses		(7,776)		(4,306)		5,505		206
Accrued compensation		(1,398)		(1,431)		(32)		773
Tenant security deposits		(136)		66		581		222
Payment of deferred leasing commissions		(6,898)		(2,737)		(8,276)		(6,347)
Net cash provided by operating activities		32,384		45,722		102,890		103,166
Cash flows from investing activities:
Property acquisitions		(60,844)		(66,104)		(66,104)		—
Acquired real estate leases		(12,951)		(10,604)		(10,604)		—
Property improvements, fixtures and equipment		(10,904)		(10,333)		(21,929)		(18,561)
Distributions in excess of earnings from non-consolidated REITs		359		54		107		107
Investment in related party mortgage loan receivable		-		-		(25,000)		(11,170)
Repayment of related party mortgage loan receivable		39,331		-		—		17,275
Proceeds received on sales of real estate assets		20,058		55,659		85,426		14,192
Net cash provided by (used in) investing activities		(24,951)		(31,328)		(38,104)		1,843
Cash flows from financing activities:
Distributions to stockholders		(38,072)		(38,072)		(76,142)		(76,142)
Borrowings under bank note payable		95,000		95,000		110,000		15,000
Repayments of bank note payable		(75,000)		(63,000)		(88,000)		(53,500)
Deferred Financing Costs		-		-		—		(2,471)
Net cash used in financing activities		(18,072)		(6,072)		(54,142)		(117,113)
Net increase (decrease) in cash and cash equivalents		(10,639)		8,322		10,644		(12,104)
Cash and cash equivalents, beginning of period		18,163		7,519		7,519		19,623
Cash and cash equivalents, end of period	$	7,524	$	15,841	$	18,163	$	7,519

June 30, 2016 | Page 7

Property Net Operating Income (NOI)* with Same Store Comparison(in thousands)

	Rentable					Six Months						Six Months
	Square Feet	Three Months Ended				Ended		Three Months Ended				Ended		Inc		%
(in thousands)	or RSF	31-Mar-16		30-Jun-16		30-Jun-16		31-Mar-15		30-Jun-15		30-Jun-15		(Dec)		Change
Region
East	1,333	$	4,671	$	4,604	$	9,275	$	4,736	$	4,648	$	9,384	$	(109)	(1.2)	%
MidWest	1,233		2,958		3,103		6,061		2,915		2,941		5,856		205	3.5	%
South	4,026		16,020		16,256		32,276		15,781		15,995		31,776		500	1.6	%
West	2,163		8,438		8,591		17,029		7,859		8,221		16,080		949	5.9	%
Same Store	8,755		32,087		32,554		64,641		31,291		31,805		63,096		1,545	2.4	%
Acquisitions	768		1,180		1,350		2,530		0		1,057		1,057		1,473	2.3	%
Property NOI from the continuing portfolio	9,523		33,267		33,904		67,171		31,291		32,862		64,153		3,018	4.7	%
Dispositions, Non-Operating, Development or Redevelopment			200		5		205		1,733		1,033		2,766		(2,561)	(4.0)	%
Property NOI*		$	33,467	$	33,909	$	67,376	$	33,024	$	33,895	$	66,919	$	457	0.7	%
Same Store		$	32,087	$	32,554	$	64,641	$	31,291	$	31,805	$	63,096	$	1,545	2.4	%
Less Nonrecurring
Items in NOI (a)			413		586		999		75		81		156		843	(1.3)	%
Comparative
Same Store		$	31,674	$	31,968	$	63,642	$	31,216	$	31,724	$	62,940	$	702	1.1	%

(a) Nonrecurring items in NOI include proceeds from bankruptcies, lease termination fees or other significant nonrecurring income or expenses, which may affect comparability. 

* See the Appendix for Definition of Non-GAAP Measures beginning on page 27.

June 30, 2016 | Page 8

FFO* & AFFO* Reconciliation (in thousands, except per share amounts)

					Six Months										For the
	For the Three Months Ended				Ended		For the Three Months Ended								Year Ended
	31-Mar-16		30-Jun-16		30-Jun-16		31-Mar-15		30-Jun-15		30-Sep-15		31-Dec-15		31-Dec-15
Net income	$	2,579	$	1,612	$	4,191	$	12,533	$	3,903	$	3,166	$	15,412	$	35,014
(Gain) loss on sale of properties and property held for sale, less applicable income tax		—		643		643		(10,462)		(948)		(1)		(12,251)		(23,662)
GAAP income from non-consolidated REITs		286		86		372		322		38		284		807		1,451
FFO from non-consolidated REITs		645		895		1,540		601		885		645		601		2,732
Depreciation & amortization		22,527		22,352		44,879		22,678		23,168		22,848		22,507		91,201
NAREIT FFO*		26,037		25,588		51,625		25,672		27,046		26,942		27,076		106,736
Hedge ineffectiveness		—		1,009		1,009		—		—		—		—		—
Acquisition costs		—		134		134		—		142		12		—		154
Funds From Operations (FFO)*	$	26,037	$	26,731	$	52,768	$	25,672	$	27,188	$	26,954	$	27,076	$	106,890
Adjusted Funds From Operations (AFFO)*
Funds From Operations (FFO)*	$	26,037	$	26,731	$	52,768	$	25,672	$	27,188	$	26,954	$	27,076	$	106,890
Reverse FFO from non-consolidated REITs		(645)		(895)		(1,540)		(601)		(885)		(645)		(601)		(2,732)
Distributions from non-consolidated REITs		27		332		359		27		27		27		26		107
Amortization of deferred financing costs		517		517		1,034		517		517		516		518		2,068
Straight-line rent		(1,275)		(700)		(1,975)		(69)		(574)		(930)		(875)		(2,448)
Tenant improvements		(1,929)		(1,329)		(3,258)		(2,936)		(3,420)		(1,794)		(3,788)		(11,938)
Leasing commissions		(1,613)		(4,966)		(6,579)		(830)		(1,539)		(1,490)		(3,952)		(7,811)
Non-investment capex		(438)		(1,052)		(1,490)		(643)		(1,411)		(1,090)		(1,162)		(4,306)
Adjusted Funds From Operations (AFFO)*	$	20,681	$	18,638	$	39,319	$	21,137	$	19,903	$	21,548	$	17,242	$	79,830
Per Share Data:
EPS	$	0.03	$	0.02	$	0.04	$	0.13	$	0.04	$	0.03	$	0.15	$	0.35
FFO*		0.26		0.27		0.53		0.26		0.27		0.27		0.27		1.07
AFFO*		0.21		0.19		0.39		0.21		0.20		0.22		0.17		0.80
Weighted Average Shares (basic and diluted)		100,187		100,187		100,187		100,187		100,187		100,187		100,187		100,187

* See the Appendix for Definitions of these Non-GAAP Measures beginning on page 27

June 30, 2016 | Page 9

EBITDA* Reconciliation (in thousands, except ratio amounts)

					Six Months
	Three Months Ended				Ended		Three Months Ended								Year Ended
	31-Mar-16		30-Jun-16		30-Jun-16		31-Mar-15		30-Jun-15		30-Sep-15		31-Dec-15		31-Dec-15
Net income	$	2,579	$	1,612	$	4,191	$	12,533	$	3,903	$	3,166	$	15,412	$	35,014
Interest expense		6,433		6,417		12,850		6,187		6,365		6,425		6,455		25,432
Depreciation and amortization		22,527		22,352		44,879		22,678		23,168		22,848		22,507		91,201
Income taxes		98		111		209		161		154		129		(11)	$	433
EBITDA*		31,637		30,492		62,129		41,559		33,590		32,568		44,363		152,080
(Gain) loss on sale of properties and property held for sale, less applicable income tax		—		643		643		(10,462)		(948)		(1)		(12,251)		(23,662)
Hedge ineffectiveness		—		1,009		1,009		—		—		—		—		—
Adjusted EBITDA*	$	31,637	$	32,144	$	63,781	$	31,097	$	32,642	$	32,567	$	32,112	$	128,418
Interest expense	$	6,433	$	6,417	$	12,850	$	6,187	$	6,365	$	6,425	$	6,455	$	25,432
Scheduled principal payments		—		—		—		—		—		—		—		—
Interest and scheduled principal payments	$	6,433	$	6,417	$	12,850	$	6,187	$	6,365	$	6,425	$	6,455	$	25,432
Interest coverage ratio		4.92		5.01		4.96		5.03		5.13		5.07		4.97		5.05
Debt service coverage ratio		4.92		5.01		4.96		5.03		5.13		5.07		4.97		5.05
Debt (excluding unamortized financing costs)	$	885,000	$	930,000			$	860,000	$	920,000	$	920,000	$	910,000
Adjusted EBITDA*		31,637		32,144				31,097		32,642		32,567		32,112
Annualized		126,548		128,576				124,388		130,568		130,268		128,448
Debt-to-EBITDA*		7.0		7.2				6.9		7.0		7.1		7.1

* See the Appendix for Definitions of these Non-GAAP Measures beginning on page 27.  Amounts in the EBITDA reconciliation do not reflect our proportionate share of interest expense, depreciation, amortization, income taxes, gains or losses on sales and debt from our investments in non-consolidated REITs, which are accounted for under the equity method.

June 30, 2016 | Page 10

Reconciliation of Net Income to Property NOI* (in thousands)

Reconciliation of Net income to Property NOI*					Six Months										Year
	Three Months Ended				Ended		Three Months Ended								Ended
	31-Mar-16		30-Jun-16		30-Jun-16		31-Mar-15		30-Jun-15		30-Sep-15		31-Dec-15		31-Dec-15
Net Income	$	2,579	$	1,612	$	4,191	$	12,533	$	3,903	$	3,166	$	15,412	$	35,014
Add (deduct):
(Gain) loss on sale of properties and property held for sale, less applicable income taxes		—		643		643		(10,462)		(948)		(1)		(12,251)		(23,662)
Hedge ineffectiveness		—		1,009		1,009		—		—		—		—		—
Management fee income		(660)		(688)		(1,348)		(643)		(559)		(621)		(645)		(2,468)
Depreciation and amortization		22,445		22,352		44,797		22,672		23,207		22,911		22,569		91,359
Amortization of above/below market leases		81		—		81		6		(39)		(63)		(62)		(158)
Selling, general and administrative		3,530		3,494		7,024		3,691		3,401		3,071		3,128		13,291
Interest expense		6,433		6,417		12,850		6,187		6,365		6,425		6,455		25,432
Interest income		(1,279)		(1,171)		(2,450)		(1,262)		(1,278)		(1,293)		(1,397)		(5,230)
Equity in losses of non-consolidated REITs		286		86		372		322		38		284		807		1,451
Non-property specific items, net		52		155		207		(20)		(195)		(62)		(72)		(349)
Property NOI*	$	33,467	$	33,909	$	67,376	$	33,024	$	33,895	$	33,817	$	33,944	$	134,680

* See the Appendix for Definition of Non-GAAP Measures beginning on page 27.

June 30, 2016 | Page 11

Debt Summary (in thousands)

		Maximum		Amount		Interest			Interest
	Maturity	Amount		Drawn at		Rate (a)			Rate at	Facility
	Date	of Loan		30-Jun-16		Components			30-Jun-16	Fee
BAML Revolver	29-Oct-18	$	500,000	$	310,000	L	+	1.25%	1.71%	0.25%
BAML Term Loan (b)	27-Sep-17		400,000		400,000	0.75%	+	1.45%	2.20%
BMO Term Loan	26-Aug-20		220,000		220,000	2.32%	+	1.65%	3.97%
		$	1,120,000	$	930,000				2.46%

On October 29, 2014, we amended and restated our bank facility we call the BAML Credit Facility, which has a total of $900 million available and is comprised of a revolver that we can borrow up to $500 million on, which we call the BAML Revolver,  and a term loan for $400 million that we call the BAML Term Loan. On August 26, 2013, we entered into a term loan we call the BMO Term Loan and borrowed $220 million. Additional information about these loans are in the footnotes to our financial statements.  Pricing is based on our credit rating for the BAML Revolver, BAML Term Loan and the BMO Term Loan. Our credit rating as of June 30, 2016 was Baa3 from Moody’s.

· The BAML Revolver is priced based on our current credit rating at a spread of 1.25%, which was an interest rate of 1.44% as of June 30, 2016.  The BAML Revolver is also subject to a facility fee based on our credit rating, which was 25 bps or approximately $1.25 million per year. 

· The BAML Term Loan has LIBOR fixed at 0.75% for five yearsand was to mature on September 27, 2017.  At our credit rating, the spread for the BAML Term Loan is 1.45%, so our interest rate is 2.20%. 

· The BMO Term Loan has fixed LIBOR at 2.32% for seven years.  At our credit rating, the spread over LIBOR is 1.65%, so our interest rate is 3.97%.  

· We incurred financing costs to close the BAML Revolver, BAML Term Loan and the credit facilities that preceded them.  We also incurred financing costs to close the BMO Term Loan.  These costs are deferred and amortized into interest expense during the terms of the loans.  The annual run rate for amortization to interest expense from deferred financing costs is approximately $2.1 million. 

· The BAML Revolver can be extended for 1 year at our option upon payment of fees and includes an accordion feature that allows for up to $250 million of additional borrowing capacity.  The BMO Term Loan includes an accordion feature that allows for up to $50 million of additional borrowing capacity.  The accordion features are subject to receipt of lender commitments and satisfaction of certain customary conditions.

(a) Interest rate excludes amortization of deferred financing costs and facility fees, which is discussed in the notes above.

(b) On July 21, 2016, we amended the BAML Credit Facility to extend the maturity date applicable to the BAML Term Loan from September 27, 2017 to September 27, 2021,  and amended financial covenants and definitions.  We also amended the BMO Term Loan to conform covenants and definitions to the BAML Credit Facility.  On July 22, 2016, we entered into a forward interest rate swap that fixed the base LIBOR interest rate for that extension period at 1.12%.  Accordingly, based upon our credit rating as of June 30, 2016, the interest rate when the extension commences on the BAML Term Loan would be 2.57%.

June 30, 2016 | Page 12

Capital Analysis (in thousands, except per share amounts)

	31-Mar-16		30-Jun-16		31-Mar-15		30-Jun-15		30-Sep-15		31-Dec-15
Market Data:
Shares Outstanding		100,187		100,187		100,187		100,187		100,187		100,187
Closing market price per share	$	10.61	$	12.27	$	12.82	$	11.31	$	10.75	$	10.35
Market capitalization	$	1,062,988	$	1,229,299	$	1,284,403	$	1,133,120	$	1,077,015	$	1,036,940
Total Debt		885,000		930,000		860,000		920,000		920,000		910,000
Total Market Capitalization	$	1,947,988	$	2,159,299	$	2,144,403	$	2,053,120	$	1,997,015	$	1,946,940
Dividend Data:
Total dividends paid	$	19,036	$	19,036	$	19,036	$	19,036	$	19,035	$	19,035
Common dividend per share	$	0.19	$	0.19	$	0.19	$	0.19	$	0.19	$	0.19
Quarterly dividend as a % of FFO*		73.1%		71.2%		74.1%		70.0%		70.6%		70.3%
Liquidity:
Cash and cash equivalents	$	14,316	$	7,524	$	14,945	$	15,841	$	19,100	$	18,163
Revolving credit facilities:
Gross potential available under the BAML Credit Facility		900,000		900,000		900,000		900,000		900,000		900,000
Less:
Outstanding balance		(665,000)		(710,000)		(640,000)		(700,000)		(700,000)		(690,000)
Total Liquidity	$	249,316	$	197,524	$	274,945	$	215,841	$	219,100	$	228,163

*See page 9 for a reconciliation of Net Income to FFO and the Appendix for Definitions of Non-GAAP Measures beginning on page 27.

June 30, 2016 | Page 13

Owned Portfolio Overview

	As of the Quarter Ended
	30-Jun-16	31-Mar-16	31-Dec-15	30-Sep-15	30-Jun-15
Owned portfolio of commercial real estate:
Number of properties (a)	35	35	36	36	36
Square feet	9,523,054	9,325,249	9,494,953	9,640,904	9,639,740
Leased percentage	90.1%	90.2%	91.6%	90.5%	90.6%
Investments in non-consolidated commercial real estate:
Number of properties	2	2	2	2	2
Square feet	1,396,071	1,396,071	1,396,071	1,396,071	1,396,071
Leased percentage	73.1%	73.9%	73.5%	71.2%	69.7%
Single Asset REITs (SARs) managed:
Number of properties	5	6	7	7	7
Square feet	1,075,135	1,191,135	1,487,026	1,487,026	1,487,026
Leased percentage	86.1%	75.8%	77.0%	77.0%	73.5%
Total owned, investments and managed properties:
Number of properties	42	43	45	45	45
Square feet	11,994,260	11,912,455	12,378,050	12,524,001	12,522,837
Leased percentage	87.8%	86.8%	87.8%	86.8%	86.3%
(a) Excludes one property being redeveloped in 2016.

June 30, 2016 | Page 14

Owned Portfolio Overview

				Percent	Wtd Ave (a)	GAAP (b)						Percent	Wtd Ave (a)	GAAP (b)
MSA / Property Name	City	State	Square Feet	Leased	Occupied	Rent		MSA / Property Name	City	State	Square Feet	Leased	Occupied	Rent
East Region								Midwest Region
Baltimore								Chicago
East Baltimore	Baltimore	MD	325,445	83.7%	84.2%	$	23.32	Northwest Point	Elk Grove Village	IL	176,848	100.0%	100.0%	$	23.05
								909 Davis Street	Evanston	IL	194,980	80.4%	86.0%	$	31.99
Washington, D.C.
Meadow Point	Chantilly	VA	138,368	100.0%	100.0%	$	27.10	Indianapolis
Stonecroft	Chantilly	VA	111,469	100.0%	100.0%	$	38.70	River Crossing	Indianapolis	IN	205,059	91.7%	91.0%	$	19.99
Loudoun Tech Center	Dulles	VA	136,658	92.0%	92.0%	$	18.83
								St. Louis
Richmond								Timberlake	Chesterfield	MO	234,023	96.3%	95.1%	$	23.33
Innsbrook	Glen Allen	VA	298,456	100.0%	100.0%	$	19.14	Timberlake East	Chesterfield	MO	116,197	96.2%	69.5%	$	24.66
Charlotte								Minneapolis
Forest Park	Charlotte	NC	62,212	100.0%	100.0%	$	13.96	121 South 8th Street	Minneapolis	MN	305,990	56.3%	56.2%	$	20.21
								Plaza Seven	Minneapolis	MN	326,068	96.4%	76.0%		31.05
Raleigh-Durham
Emperor Boulevard	Durham	NC	259,531	100.0%	100.0%	$	35.22
East Region Total			1,332,139	95.2%	95.3%	$	25.63	Midwest Region Total			1,559,165	86.3%	80.4%	$	25.13

(a) Weighted Occupied Percentage for the six months ended June 30, 2016.

(b) Weighted Average GAAP Rent per Occupied Square Foot.

June 30, 2016 | Page 15

Owned Portfolio Overview

				Percent	Wtd Ave (a)	GAAP (b)						Percent	Wtd Ave (a)	GAAP (b)
MSA / Property Name	City	State	Square Feet	Leased	Occupied	Rent		MSA / Property Name	City	State	Square Feet	Leased	Occupied	Rent
South Region								West Region
Dallas-Fort Worth								Seattle
Legacy Tennyson Center	Plano	TX	202,600	100.0%	100.0%	$	16.88	Federal Way	Federal Way	WA	117,010	61.6%	62.4%	$	19.07
One Legacy Circle	Plano	TX	214,110	100.0%	99.7%	$	33.74
Addison Circle	Addison	TX	289,755	97.7%	93.5%	$	26.85	San Francisco-San Jose-Oakland
Collins Crossing	Richardson	TX	300,887	100.0%	100.0%	$	24.68	Hillview Center	Milpitas	CA	36,288	100.0%	100.0%	$	16.23
Liberty Plaza	Addison	TX	218,934	81.7%	79.4%	$	20.97
								Denver
Houston								380 Interlocken	Broomfield	CO	240,185	93.2%	95.2%	$	29.44
Park Ten	Houston	TX	157,460	65.4%	63.1%	$	30.87	1999 Broadway	Denver	CO	676,379	80.0%	81.9%	$	31.78
Eldridge Green	Houston	TX	248,399	100.0%	100.0%	$	29.36	Greenwood Plaza	Englewood	CO	196,236	100.0%	100.0%	$	24.32
Park Ten Phase II	Houston	TX	156,746	100.0%	100.0%	$	31.11	390 Interlocken	Broomfield	CO	241,751	94.6%	82.6%	$	28.31
Westchase I & II	Houston	TX	629,025	84.0%	85.2%	$	32.17	1001 17th Street	Denver	CO	655,420	87.6%	86.3%	$	35.05
Miami-Ft. Lauderdale-West Palm Beach								West Region Total			2,163,269	86.6%	85.7%	$	30.52
Blue Lagoon Drive	Miami	FL	212,619	100.0%	100.0%	$	22.53
Atlanta								Total Owned			9,523,054	90.1%	88.5%	$	27.30
One Overton Place	Atlanta	GA	387,267	90.4%	85.5%	$	24.63
One Ravinia	Atlanta	GA	386,603	94.8%	94.8%	$	23.06
Two Ravinia	Atlanta	GA	442,130	81.3%	79.3%	$	25.75
999 Peachtree	Atlanta	GA	621,946	95.3%	95.1%	$	29.88
South Region Total			4,468,481	83.6%	90.7%	$	27.02

(a) Weighted Occupied Percentage for the six months ended June 30, 2016.

(b) Weighted Average GAAP Rent per Occupied Square Foot.

June 30, 2016 | Page 16

Managed Portfolio Overview

MSA / Property Name	City	State	Square Feet		MSA / Property Name	City	State	Square Feet
Southeast Region					Midwest Region
Columbia					Chicago
1441 Main Street	Columbia	SC	264,857	(a)	East Wacker	Chicago	IL	861,000
Atlanta					Indianapolis
Satellite Place	Duluth	GA	134,785		Monument Circle	Indianapolis	IN	213,760
Southeast Region Total			399,642		Kansas City
				(b)	Grand Boulevard	Kansas City	MO	535,071
Southwest Region					Cincinnati
					Centre Pointe V	West Chester	OH	135,936
Houston
Energy Tower I	Houston	TX	325,797
Southwest Region Total			325,797		Midwest Region Total			1,745,767
					Total Managed			2,471,206
					Total Owned & Managed			11,994,260

(a) FSP has a Preferred Share Interest of 43.7% in the entity that owns this property.

(b) FSP has a Preferred Share Interest of 27.0% in the entity that owns this property.

June 30, 2016 | Page 17

Tenants by Industry (By Square Feet)  

June 30, 2016 | Page 18

20
	20 Largest Tenants with Annualized Rent and Remaining Term

			Remaining	Aggregate				% of Aggregate
	Tenant	Number of	Lease Term	Leased	% of Total	Annualized		Leased
	Name	Leases	in Months	Square Feet	Square Feet	Rent		Annualized Rent
1	Quintiles Transnational Corp	1	119	259,531	3.0%	$	8,740,721	3.8%
2	CITGO Petroleum Corporation	1	68	248,399	2.9%		7,894,120	3.5%
3	Newfield Exploration Company	1	68	234,495	2.7%		8,903,155	3.9%
4	US Government (a)	5	2,6,23,37,51	223,433	2.6%		7,189,560	3.1%
5	Sutherland Asbill Brennan LLP	1	46	222,422	2.6%		7,010,151	3.1%
6	Burger King Corporation	1	27	212,619	2.5%		5,255,942	2.3%
7	Denbury Onshore, LLC (b)	2	1,37	202,600	2.4%		3,582,843	1.6%
8	SunTrust Bank (c)	3	2,124,63	182,888	2.1%		3,644,383	1.6%
9	Centene Management Company, LLC (d)	2	84,84	179,637	2.1%		—	—
10	Citicorp Credit Services, Inc (e)	1	6,134	176,848	2.1%		4,704,157	2.1%
11	T-Mobile South, LLC dba T-Mobile	1	33	151,792	1.8%		3,761,406	1.6%
12	Petrobras America, Inc.	1	41	144,813	1.7%		5,387,043	2.4%
13	Murphy Exploration & Production Company	1	10	144,677	1.7%		4,790,659	2.1%
14	Argo Data Resource Corporation	1	86	140,246	1.6%		3,782,034	1.7%
15	Vail Corp d/b/a Vail Resorts (f)	2	36,84	125,588	1.5%		3,548,134	1.6%
16	Federal National Mortgage Association	1	30	123,144	1.4%		2,791,674	1.2%
17	Kaiser Foundation Health Plan	1	95	120,979	1.4%		3,094,764	1.4%
18	Giesecke & Devrient America	1	102	112,110	1.3%		1,948,472	0.9%
19	Houghton Mifflin Harcourt Publishing Company (g)	1	9,129	111,550	1.3%		4,756,044	2.1%
20	Northrop Grumman Systems Corp	1	10	111,469	1.3%		4,571,697	2.0%
			Total	3,429,240	40.0%	$	95,356,958	41.7%

(a) Includes 180,444 and 27,398 square feet which expire in 2018 & 2017, respectively. The remaining 15,591 square feet expire between 2016 and 2020.

(b) Includes 102,600 square feet, which expire 7/31/16 and 100,000 square feet, which expire 7/31/19.

(c) Includes 23,217 square feet, which expire 4/30/16 and 127,500 square feet, which expire 9/30/21. The remaining 32,171 square feet expire 10/31/26. 

(d) Includes 62,019 SF commenced on 4/1/16 and 117,618 SF commenced 12/15 with rent commencing on 7/1/16.

(e) Includes 30,588 square feet, which expire 12/31/16 and 146,260 square feet, which expire 8/31/2027.

(f) Includes 38,293 square feet, which expire 3/31/19. The remaining 83,939 square feet expire 3/31/23.

(g) Includes 50,961 square feet, which expire on 12/31/2016 and 60,522 square feet, which expire on 3/31/27.

June 30, 2016 | Page 19

20
	Leasing Activity (Owned Portfolio)

					Year		Year
	Six Months Ended				Ended		Ended
Leasing Activity		30-Jun-16		30-Jun-15		31-Dec-15		31-Dec-14
(in Square Feet - SF)
New leasing		84,000		218,000		362,000		149,000
Renewals		515,000		329,000		957,000		635,000
		599,000		547,000		1,319,000		784,000
Other information per SF
(Activity on a year-to-date basis)
GAAP Rents on leasing	$	27.93	$	26.38	$	28.66	$	26.89
Weighted average lease term		7.8 Years		4.8 Years		5.3 Years		6.25 Years
Increase over average GAAP rents in prior year		6.6%		12.9%		10.4%		11.8%
Average free rent		4 Months		3 Months		3 Months		3 Months
Tenant Improvements	$	19.87	$	15.97	$	13.17	$	16.40
Leasing Costs	$	11.34	$	5.80	$	5.81	$	7.66

June 30, 2016 | Page 20

Lease Expirations by Square Feet (Owned Portfolio)

June 30, 2016 | Page 21

Lease Expirations with Annualized Rent per Square Foot (Owned Portfolio)

			Rentable				Annualized		Percentage
	Number of		Square				Rent		of Total
Year of	Leases		Footage		Annualized		Per Square		Annualized
Lease	Expiring		Subject to		Rent Under		Foot Under		Rent Under
Expiration	Within the		Expiring		Expiring		Expiring		Expiring	Cumulative
December 31,	Year (a)		Leases		Leases (b)		Leases		Leases	Total
2016	49	(c)	436,223		$	10,390,509	$	23.82	4.5%	4.5%
2017	74		767,294			22,173,846		28.90	9.7%	14.2%
2018	75		1,147,500			33,540,983		29.23	14.7%	28.9%
2019	69		1,302,896			35,186,145		27.01	15.4%	44.3%
2020	64		780,183			22,865,123		29.31	10.0%	54.3%
2021	44		823,727			21,183,429		25.72	9.3%	63.6%
2022	34		1,100,159			32,082,600		29.16	14.0%	77.6%
2023	23		682,813			12,368,951		18.11	5.4%	83.0%
2024	13		349,767			9,455,617		27.03	4.1%	87.1%
2025	10		350,157			8,595,461		24.55	3.8%	90.9%
2026 and thereafter	58		842,631	(d)		20,641,583		24.50	9.1%	100.0%
	513		8,583,350		$	228,484,248	$	26.62	100.0%
Vacancies as of 6/30/16			939,704
Total Portfolio Square Footage			9,523,054

(a) The number of leases approximates the number of tenants. Tenants with lease maturities in different years are included in annual totals for each lease. Tenants may have multiple leases in the same year.

(b) Annualized rent represents the monthly rent charged, including tenant reimbursements, for each lease in effect at June 30, 2016 multiplied by 12. Tenant reimbursements generally include payment of real estate taxes, operating expenses and common area maintenance and utility charges.

(c) Includes 20 leases that are month-to-month.

(d) Includes 87,183 square feet that are non-revenue producing building amenities.

June 30, 2016 | Page 22

Capital Expenditures

(in thousands)					Six Months
	Three Months Ended				Ended
	31-Mar-16		30-Jun-16		30-Jun-16
Tenant improvements	$	1,929	$	1,329	$	3,258
Deferred leasing costs		1,613		4,966		6,579
Non-investment capex		438		1,052		1,490
Total Capital Expenditures	$	3,980	$	7,347	$	11,327

	For the Three Months Ended								Year ended
	31-Mar-15		30-Jun-15		30-Sep-15		31-Dec-15		31-Dec-15
Tenant improvements	$	2,936	$	3,420	$	1,794	$	3,788	$	11,938
Deferred leasing costs		830		1,539		1,490		3,952		7,811
Non-investment capex		643		1,411		1,090		1,162		4,306
Total Capital Expenditures	$	4,409	$	6,370	$	4,374	$	8,902	$	24,055

First generation leasing and investment capital was $ 6.1 million and $3.1 million for the six months ended June 30, 2016 and 2015, respectively.

June 30, 2016 | Page 23

Transaction Activity (in thousands except for Square Feet)

	City	State	Square Feet	Date Acquired	Purchase Price
2016
Plaza Seven	Minneapolis	MN	325,796	6/6/16	$	82,000
2015
Two Ravinia	Atlanta	GA	442,130	4/8/15	$	78,000
2013
1999 Broadway	Denver	CO	673,793	5/22/13	$	183,000
999 Peachtree	Atlanta	GA	621,946	7/1/13		157,900
1001 17th Street	Denver	CO	655,420	8/28/13		217,000
2012
One Ravinia	Atlanta	GA	386,603	7/31/12	$	52,750
Westchase	Houston	TX	629,025	11/1/12		154,750

					Gross Sales		Gains
	City	State	Square Feet	Date Sold	Proceeds		on Sales
2016
Lakeside I	Maryland Heights	MO	127,778	4/5/16	$	20,189	$	4,155
2015
Willow Bend	Plano	TX	117,050	2/23/15	$	20,750	$	1,462
Eden Bluff	Eden Prairie	MN	153,028	3/31/15		28,000		9,000
Park Seneca	Charlotte	NC	109,699	5/13/15		8,150		949
Montague	San Jose	CA	145,561	12/9/15		30,000		12,251
2014
Centennial	Colorado Springs	CO	110,405	12/3/14	$	15,500	$	940

June 30, 2016 | Page 24

Loan Portfolio of Secured Real Estate (in thousands)

(dollars in thousands)			Maximum		Amount						Interest
		Maturity	Amount		Drawn at		Interest			Draw	Rate at
Sponsored REIT	Location	Date	of Loan		30-Jun-16		Rate (1)			Fee (2)	30-Jun-16
Secured revolving lines of credit
FSP Satellite Place Corp.	Duluth, GA	31-Mar-17	$	5,500	$	3,710	L	+	4.40%	0.5%	4.87%
FSP 1441 Main Street Corp. (3)	Columbia, SC	31-Mar-17		10,800		9,000	L	+	4.40%	0.5%	4.87%
FSP Energy Tower I Corp.	Houston, TX	30-Jun-17		20,000		12,600	L	+	5.00%	0.5%	5.47%
Mortgage loan secured by property
FSP Monument Circle LLC (4)	Indianapolis, IN	7-Dec-18		21,000		21,000			4.90%	n/a	4.90%
FSP Energy Tower I Corp. (5)	Houston, TX	30-Jun-17		33,000		33,000			6.41%	n/a	6.41%
			$	90,300	$	79,310

(1) The interest rate is 30-day LIBOR rate plus the additional rate indicated, otherwise a fixed rate.

(2) The draw fee is a percentage of each new advance, and is paid at the time of each new draw.

(3) This revolving line of credit was extended on March 25, 2016.

(4) Includes an origination fee of $164,000 and an exit fee of $38,000 when repaid by the borrower.

(5) This mortgage includes an annual extension fee of $108,900 paid by the borrower. 

June 30, 2016 | Page 25

Net Asset Value Components

(in thousands except per share data)
	Asof		Assets:			Other information:
	30-Jun-16		Loans outstanding on secured RE	$	79,310	Leased SF to be FFO producing
Total Market Capitalization Values			Investments in SARs (book basis)		76,289	During 2016 (in 000's)		138
Shares outstanding		100,187.4	Straight-line rent receivable		50,196
Closing price	$	12.27	Asset held for sale		9,275	Straight-line rental revenue current quarter	$	700
Market capitalization	$	1,229,299	Cash and cash equivalents		7,524
Debt		930,000	Restricted cash		3	Management fee income current quarter	$	166
Total Market Capitalization	$	2,159,299	Tenant rent receivables		3,268	Interest income from secured loans		1,171
			Prepaid expenses		2,708	Management fees and interest income from loans	$	1,337
			Office computers and furniture		385
	3 Months		Other assets:			FFO from non-consolidated REITs - Q1 2016 (6):
	Ended		Deferred financing costs, net		5,054	East Wacker	$	453
NOI Components	30-Jun-16		Other assets: Derivative Market Value		—	Grand Boulevard		192
			Other assets		—	Total	$	645
Same Store NOI (1)	$	32,554		$	234,012
Acquisitions (1) (2)		1,350				Footnotes to the components
Property NOI (1)		33,904	Liabilities:
Full quarter adjustment (3)		334	Debt (excluding contra for unamortized financing costs)	$	930,000	(1) See pages 11 & 28 for definitions and reconciliations
Stabilized portfolio	$	34,238	Accounts payable & accrued expenses		43,668
			Tenant security deposits		4,693	(2) Includes NOI from acquisitions not in same store
			Other liabilities: derivative liability		14,913
Financial Statement Reconciliation:				$	993,274	(3) Adjustment to reflect property NOI for a full quarter in the quarter acquired, if necessary
Rental Revenue	$	59,453
Rental operating expenses		(14,929)				(4) HB3 Tax in Texas is classified as an income tax, though we treat it as a real estate tax in Property NOI
Real estate taxes and insurance		(10,154)
NOI on assets sold during the quarter		5				(5) Management & other fees are eliminated in consolidation but included on Property NOI
Taxes (4)		(111)
Management fees & other (5)		(26)				(6) We report FFO from non-consolidated REITs for the previous quarter as their financial statements are not yet complete for the current quarter.
Property NOI (1)	$	34,238

June 30, 2016 | Page 26

Appendix: Non-GAAP Financial Measure Definitions

During the three months ended June 30, 2016 we changed the definition of FFO, Adjusted EBITDA and Property NOI to exclude hedge ineffectiveness, which does not affect any prior period. Our interest rate swaps effectively fix interest rates on our term loans; however, there is no floor on the variable interest rate of the swaps whereas the current term loans are subject to a zero percent floor. As a result there is a mismatch and the ineffective portion of the derivatives’ changes in fair value are recognized directly into earnings each quarter as hedge ineffectiveness. We believe that FFO, Adjusted EBITDA and Property NOI excluding hedge ineffectiveness is useful supplemental information regarding our operating performance as it provides a more meaningful and consistent comparison of our operating performance and allows investors to more easily compare our operating results.

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, hedge ineffectiveness 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 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 as of May 17, 2016 in the 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, 2016 | Page 27

Appendix: Non-GAAP Financial Measure Definitions

Definition of Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA)
and Adjusted EBITDA

EBITDA is defined as net income plus interest expense, income tax expense and depreciation and amortization expense. Adjusted EBITDA is defined as EBITDA excluding hedge ineffectiveness,  gains and losses on sales of properties or shares of equity investments or provisions for losses on assets held for sale. EBITDA and Adjusted EBITDA are not intended to represent cash flow for the period, are 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 are not indicative of operating income or cash provided by operating activities as determined under GAAP. EBITDA and Adjusted EBITDA are 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 or Adjusted EBITDA the same way, this presentation 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 and Adjusted EBITDA.

Definition of Property Net Operating Income (Property NOI)

The Company provides property performance based on Net Operating Income, which we refer to as NOI. Management believes that investors are interested in this information. NOI is a non-GAAP financial measure that the Company defines as 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, hedge ineffectiveness,  gains or losses on the sale of assets and excludes non-property specific income and expenses. The information presented includes footnotes and the data is shown by region with properties owned in both periods, which we call Same Store. The Comparative Same Store results include properties held for the periods presented and exclude properties that are non-operating, being developed or redeveloped, dispositions and significant nonrecurring income such as bankruptcy settlements and lease termination fees.  NOI, as defined 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, 2016 | Page 28

Appendix: Non-GAAP Financial Measure Definitions

Definition of Adjusted Funds From Operations (AFFO)

The Company also evaluates performance based on Adjusted Funds From Operations, which we refer to as AFFO.  The Company defines AFFO as (1) FFO, (2) excluding our proportionate share of FFO and including distributions received, from non-consolidated REITs,  (3) excluding the effect of straight-line rent, (4) plus deferred financing costs and (5) less recurring capital expenditures that are generally for maintenance of properties, which we call non-investment capex or are second generation capital expenditures.  Second generation costs include re-tenanting space after a tenant vacates, which include tenant improvements and leasing commissions. 

We exclude development/redevelopment activities, capital expenditures planned at acquisition and costs to reposition a property. We also exclude first generation leasing costs, which are generally to fill vacant space in properties we acquire or were planned for at acquisition. 

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

June 30, 2016 | Page 29

Investor Relations Contact Georgia Touma | 877.686.9496 InvestorRelations@franklinstreetproperties.com

One & Two Ravinia Drive, Atlanta, GA

Franklin Street Properties Corp.

401 Edgewater Place ­ Wakefield, Massachusetts 01880

781.557.1300 ­ www.franklinstreetproperties.com

June 30, 2016 | Page 30