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): November 3, 2020

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))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol (s)	Name of each exchange on which registered
Common Stock, $.0001 par value per share	FSP	NYSE American

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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Item 2.02.  Results of Operations and Financial Condition.

On November 3, 2020, Franklin Street Properties Corp. (the “Registrant”) announced its financial results for the three and nine months ended September 30, 2020.  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

2

Exhibit No.	Description
99.1	Press Release issued by Franklin Street Properties Corp. on November 3, 2020.
99.2	Supplemental Operating and Financial Data for the Third Quarter of 2020.
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

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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: November 3, 2020	By:	/s/ George J. Carter
		George J. Carter
		Chief Executive Officer

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EX-99.1

Exhibit 99.1

PRESS RELEASE Franklin Street Properties Corp.

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

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

Franklin Street Properties Corp. Announces

Third Quarter 2020 Results

Wakefield, MA—November 3, 2020—Franklin Street Properties Corp. (the “Company”, “FSP”, “we” or “our”) (NYSE American:  FSP), a real estate investment trust (REIT), announced its results for the third quarter ended September 30, 2020.    

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

“After slower-second quarter 2020 leasing results primarily due to the emergence of the COVID-19 pandemic and its negative effects on economic activity, the pace of third quarter leasing in FSP’s property portfolio improved with approximately 282,000 square feet in total leasing, of which approximately 181,000 square feet was with new tenants.  Prior to the emergence of the COVID-19 pandemic, we were confident that the company was well positioned for new tenant absorption, increasing occupancy levels and higher rental rates during 2020, allowing us the potential to start realizing the longer-term value-add property proposition that was such an integral part of the strategy of recasting our portfolio.  

We currently have approximately 240,000 square feet of potential net absorption over the next three to six months, consisting of new prospects for approximately 180,000 square feet and tenant expansions for approximately 60,000 square feet.    

For the full third quarter of 2020, we collected approximately 98% of contracted rent and as of October 31, 2020 we have collected approximately 98% of October rents.  However, at this time, we are not able to predict whether and to what extent our level of rental receipts may change in future months.  Consequently, we are continuing suspension of Net Income and Funds From Operations (“FFO”) guidance and will not be providing additional guidance until such time as we have a better understanding of the duration of the COVID-19 pandemic and its impact on our business and the businesses of our tenants.

At this time, we believe the bulk of our tenants will be financially able to weather the COVID-19 pandemic and the inherent value of our property portfolio and our own financial resources and balance sheet flexibility will continue to see us through this difficult time.  We believe that we will then be well positioned to resume the strong leasing activity that occurred in 2018, 2019 and the first quarter of 2020.”  

Financial Highlights

● Net loss was $1.7 million, or $0.02 per basic and diluted share, for the third quarter ended September 30, 2020.  

● FFO was $20.4 million, or $0.19 per basic and diluted share, for the third quarter ended September 30, 2020.      

● Adjusted Funds From Operations (AFFO) was $3.5 million or $0.03 per basic and diluted share, for the third quarter ended September 30, 2020.

● As of September 30, 2020, we had $570 million available on our revolving line of credit.  

● Our debt is entirely unsecured and we have no debt maturities until November 30, 2021.      

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COVID-19 Pandemic Update

FSP remains committed to the health and safety of its employees, tenants, vendors and visitors and will continue to implement recommended guidelines for social distancing and other safety protocols at our properties and corporate headquarters.  

● We have implemented working from home policies for FSP employees.

● All of our properties remain open for business.

● As of October 31, 2020, we had collected approximately 98% of rental receipts due in October 2020. Due to the high level of uncertainty related to the COVID-19 pandemic, we are unable to predict the level of rental receipts in future months.  

● During the past approximately 7 months, we have received rent relief requests from some of our tenants.  The majority of these requests for relief have been in the form of potential rent deferrals for varying lengths of time.  To date, we have been in discussions with tenants regarding potential rent deferrals representing approximately 1% to 2% of annualized rents.  We will continue to review each request for rent relief on a case by case basis.  Where prudent, we may grant deferrals and, in some instances, seek extended lease terms.  We are unable to predict the outcomes of these ongoing negotiations, the amount of the rent relief packages, if any, and ultimate recovery of any deferred amounts.  

Leasing Update

● During the quarter ended September 30, 2020, we leased approximately 282,000 square feet, of which approximately 181,000 square feet was with new tenants.   During the nine months ended September 30, 2020, we leased approximately 606,000 square feet, of which approximately 347,000 square feet was with new tenants.  During the year ended December 31, 2019, we leased approximately 1,417,000 square feet, of which approximately 534,000 square feet was with new tenants.

● Our directly owned real estate portfolio of 35 owned properties (including our 3 redevelopment properties) totaling approximately 9.9 million square feet was approximately 84.3% leased as of September 30, 2020, compared to approximately 83.3% leased as of June 30, 2020.      

● On September 14, 2020, we announced that we entered into a lease agreement with a new tenant with an initial term of 16 years for approximately 94,000 square feet, approximately 23,000 square feet of which is at our property known as 121 South Eighth Street in Minneapolis, Minnesota and approximately 71,000 square feet of which is at our property known as 801 Marquette in Minneapolis, Minnesota.  Together with leases signed previously, 801 Marquette was approximately 91.8% leased as of September 30, 2020.    

● On September 24, 2020, we announced that we entered into a lease agreement with a new tenant with an initial term of 7 years for approximately 28,000 square feet, or 43.9% of the rentable square feet at our property known as Forest Park, in Charlotte, North Carolina.  Together with leases signed previously, Forest Park was approximately 78.4% leased as of September 30, 2020.    

● Despite delays caused by COVID-19, we currently have approximately 240,000 square feet of potential net absorption over the next three to six months, consisting of new prospects for 180,000 square feet and tenant expansions for 60,000 square feet.    

● Lease expirations for the remainder of 2020 are approximately 78,000 square feet, or approximately 0.8% of our owned portfolio.  

● The weighted average GAAP base rent per square foot achieved on leasing activity during the nine months ended September 30, 2020 was $29.61, or 11.8% higher than average rents in the respective properties as applicable compared to the year ended December 31, 2019.  The average lease term on leases in the nine months ended September 30, 2020, shortened to 7.8 years compared to 8.3 years for the full year of 2019.  Overall the portfolio weighted average rent per occupied square foot increased to $29.92 as of September 30, 2020 from $29.88 as of December 31, 2019.

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Dividend Update

On October 9, 2020, the Company announced that its Board of Directors declared a regular quarterly cash dividend for the three months ended September 30, 2020 of $0.09 per share of common stock that will be paid on November 12, 2020 to stockholders of record on October 23, 2020.        

Non-GAAP Financial Information

A reconciliation of Net income to FFO, AFFO and Sequential Same Store NOI and our definitions of FFO, AFFO and Sequential Same Store NOI can be found on Supplementary Schedules H and I.    

Real Estate Update

Supplementary schedules provide property information for the Company’s owned and managed real estate portfolio as of September 30, 2020.  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.fspreit.com.

Today’s news release, along with other news about Franklin Street Properties Corp., is available on the Internet at www.fspreit.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 November 4, 2020 at 11:00 a.m. (ET) to discuss the third quarter 2020 results. To access the call, please dial 1-800-464-8240. Internationally, the call may be accessed by dialing 1-412-902-6521. To access the call from Canada, please dial 1-866-605-3852. To listen via live audio webcast, please visit the Webcasts & Presentations section in the Investor Relations section of the Company's website (www.fspreit.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 infill and central business district (CBD) office properties in the U.S. Sunbelt and Mountain West, as well as select opportunistic markets.  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.fspreit.com.

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Forward-Looking Statements

Statements made in this press release that state FSP’s or management’s intentions, beliefs, expectations, or predictions for the future may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  This press release may also contain forward-looking statements, such as our ability to lease space in the future, value creation/enhancement in future periods and expectations for growth and leasing activities in future periods that are based on current judgments and current knowledge of management and 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, adverse changes in general economic or local market conditions, including as a result of the COVID-19 pandemic and other potential infectious disease outbreaks and terrorist attacks or other acts of violence, which may negatively affect the markets in which we and our tenants operate, increasing interest rates, 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, adverse changes in energy prices, which if sustained, could negatively impact occupancy and rental rates in the markets in which we own properties, including energy-influenced markets such as Dallas, Denver and Houston, 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, delays in construction schedules, unanticipated increases in construction costs, 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, 2019, as the same may be updated from time to time in subsequent filings with the United States Securities and Exchange Commission, including without limitation, the “Risk Factors” set forth in Part II, Item 1A of our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020.  Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, acquisitions, dispositions, 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
Reconciliation and Definitions of Funds From Operations (FFO) and Adjusted
Funds From Operations (AFFO)	H
Reconciliation and Definition of Sequential Same Store results to Property Net
Operating Income (NOI) and Net Loss	I

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Franklin Street Properties Corp. Financial Results

Supplementary Schedule A

Condensed Consolidated Statements of Operations

(Unaudited)

	For the				For the
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in thousands, except per share amounts)	2020		2019		2020		2019
Revenue:
Rental	$	61,834	$	68,108	$	184,799	$	196,952
Related party revenue:
Management fees and interest income from loans		400		426		1,208		3,100
Other		13		5		31		16
Total revenue		62,247		68,539		186,038		200,068
Expenses:
Real estate operating expenses		16,730		18,041		49,498		52,883
Real estate taxes and insurance		12,279		12,505		36,348		37,408
Depreciation and amortization		22,076		22,559		66,659		67,913
General and administrative		3,817		3,886		11,159		11,097
Interest		8,953		9,036		26,996		27,775
Total expenses		63,855		66,027		190,660		197,076
Income (loss) before taxes on income		(1,608)		2,512		(4,622)		2,992
Tax expense on income		71		113		203		165
Net income (loss)	$	(1,679)	$	2,399	$	(4,825)	$	2,827
Weighted average number of shares outstanding, basic and diluted		107,328		107,231		107,295		107,231
Net income (loss) per share, basic and diluted	$	(0.02)	$	0.02	$	(0.04)	$	0.03

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Franklin Street Properties Corp. Financial Results

Supplementary Schedule B

Condensed Consolidated Balance Sheets

(Unaudited)

	September 30,		December 31,
(in thousands, except share and par value amounts)	2020		2019
Assets:
Real estate assets:
Land	$	191,578	$	191,578
Buildings and improvements		1,983,979		1,924,664
Fixtures and equipment		12,714		11,665
		2,188,271		2,127,907
Less accumulated depreciation		538,622		490,697
Real estate assets, net		1,649,649		1,637,210
Acquired real estate leases, less accumulated amortization of $60,561 and $60,749, respectively		31,011		40,704
Cash, cash equivalents and restricted cash		4,840		9,790
Tenant rent receivables		4,007		3,851
Straight-line rent receivable		71,033		66,881
Prepaid expenses and other assets		6,538		7,246
Related party mortgage loan receivables		21,000		21,000
Other assets: derivative asset		—		3,022
Office computers and furniture, net of accumulated depreciation of $1,426 and $1,362, respectively		178		183
Deferred leasing commissions, net of accumulated amortization of $32,547 and $28,114, respectively		51,765		52,767
Total assets	$	1,840,021	$	1,842,654
Liabilities and Stockholders’ Equity:
Liabilities:
Bank note payable	$	30,000	$	—
Term loans payable, less unamortized financing costs of $3,137 and $4,267, respectively		766,863		765,733
Series A & Series B Senior Notes, less unamortized financing costs of $863 and $985, respectively		199,137		199,015
Accounts payable and accrued expenses		69,905		66,658
Accrued compensation		3,634		3,400
Tenant security deposits		9,435		9,346
Lease liability		1,627		1,890
Other liabilities: derivative liabilities		20,157		7,704
Acquired unfavorable real estate leases, less accumulated amortization of $4,911 and $4,676, respectively		1,798		2,512
Total liabilities		1,102,556		1,056,258
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, 107,328,199 and 107,269,201 shares issued and outstanding, respectively		11		11
Additional paid-in capital		1,357,131		1,356,794
Accumulated other comprehensive loss		(20,157)		(4,682)
Accumulated distributions in excess of accumulated earnings		(599,520)		(565,727)
Total stockholders’ equity		737,465		786,396
Total liabilities and stockholders’ equity	$	1,840,021	$	1,842,654

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Franklin Street Properties Corp. Financial Results

Supplementary Schedule C

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	For the
	Nine Months Ended
	September 30,
(in thousands)	2020		2019
Cash flows from operating activities:
Net income (loss)	$	(4,825)	$	2,827
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		68,859		70,072
Amortization of above and below market leases		(234)		(305)
Shares issued as compensation		337		—
Decrease in allowance for doubtful accounts and write-off of accounts receivable		(13)		(69)
Changes in operating assets and liabilities:
Tenant rent receivables		(143)		(403)
Straight-line rents		(2,636)		(6,950)
Lease acquisition costs		(1,516)		(3,155)
Prepaid expenses and other assets		(504)		1,261
Accounts payable and accrued expenses		2,527		2,849
Accrued compensation		234		726
Tenant security deposits		89		2,689
Payment of deferred leasing commissions		(6,168)		(9,485)
Net cash provided by operating activities		56,007		60,057
Cash flows from investing activities:
Property improvements, fixtures and equipment		(61,989)		(47,905)
Repayment of related party mortgage loan receivable		—		(2,400)
Investment in related party mortgage loan receivable		—		51,795
Proceeds received from liquidating trust		—		1,470
Net cash provided by (used in) investing activities		(61,989)		2,960
Cash flows from financing activities:
Distributions to stockholders		(28,968)		(28,953)
Borrowings under bank note payable		85,000		45,000
Repayments of bank note payable		(55,000)		(70,000)
Deferred financing costs		—		(82)
Net cash provided by (used in) financing activities		1,032		(54,035)
Net increase (decrease) in cash, cash equivalents and restricted cash		(4,950)		8,982
Cash, cash equivalents and restricted cash, beginning of year		9,790		11,177
Cash, cash equivalents and restricted cash, end of period	$	4,840	$	20,159

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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
2020	78,358	0.8%
2021	808,890	8.2%
2022	1,179,221	11.9%
2023	661,959	6.7%
2024	874,968	8.8%
Thereafter (2)	6,312,275	63.6%
	9,915,671	100.0%

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

(2) Includes 1,375,970 square feet of vacancies at our operating properties and 182,710 square feet of vacancies at our redevelopment properties as of September 30, 2020. We define redevelopment properties as properties being developed, redeveloped or where redevelopment is complete, but are in lease-up and that are not stabilized.

(dollars & square feet in 000's)	As of September 30, 2020 (a)
	# of			% of	Square	% of
State	Properties	Investment		Portfolio	Feet	Portfolio
Colorado	6	$	557,824	33.8%	2,620	26.4%
Texas	9		342,752	20.8%	2,420	24.4%
Georgia	5		322,465	19.6%	1,967	19.8%
Minnesota	3		121,048	7.3%	757	7.6%
Virginia	4		84,538	5.1%	685	6.9%
North Carolina	2		49,763	3.0%	324	3.3%
Missouri	2		43,316	2.6%	352	3.5%
Illinois	2		46,949	2.9%	372	3.8%
Florida	1		51,598	3.1%	213	2.2%
Indiana	1		29,396	1.8%	206	2.1%
Total	35	$	1,649,649	100.0%	9,916	100.0%

(a) Includes investment in our redevelopment properties. We define redevelopment properties as properties being developed, redeveloped or where redevelopment is complete, but are in lease-up and that are not stabilized.

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Franklin Street Properties Corp. Earnings Release

Supplementary Schedule E

Portfolio and Other Supplementary Information

(Unaudited & Approximated)

Recurring Capital Expenditures

								Nine Months
(in thousands)	For the Three Months Ended						Ended
	31-Mar-20		30-Jun-20		30-Sep-20		30-Sep-20
Tenant improvements	$	10,716	$	13,531	$	8,022	$	32,269
Deferred leasing costs		2,730		603		2,033		5,366
Non-investment capex		4,527		6,581		6,373		17,481
	$	17,973	$	20,715	$	16,428	$	55,116

	For the Three Months Ended								Year Ended
	31-Mar-19		30-Jun-19		30-Sep-19		31-Dec-19		31-Dec-19
Tenant improvements	$	8,318	$	10,169	$	7,890	$	15,874	$	42,251
Deferred leasing costs		4,239		3,666		1,286		3,164		12,355
Non-investment capex		2,413		4,049		3,968		6,304		16,734
	$	14,970	$	17,884	$	13,144	$	25,342	$	71,340

Square foot & leased percentages	September 30,	December 31,
	2020	2019
Operating Properties:
Number of properties	32	32
Square feet	9,526,822	9,504,634
Leased percentage	85.6%	87.6%
Redevelopment Properties (a):
Number of properties	3	3
Square feet	388,849	405,215
Leased percentage	53.0%	50.3%
Total Owned Properties:
Number of properties	35	35
Square feet	9,915,671	9,909,849
Leased percentage	84.3%	86.1%
Managed Properties - Single Asset REITs (SARs):
Number of properties	2	2
Square feet	348,545	348,545
Total Operating, Redevelopment and Managed Properties:
Number of properties	37	37
Square feet	10,264,216	10,258,394

(a) We define redevelopment properties as properties being developed, redeveloped or where redevelopment is complete, but are in lease-up and that are not stabilized.

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Franklin Street Properties Corp. Earnings Release

Supplementary Schedule F

Percentage of Leased Space

(Unaudited & Estimated)

					Second		Third
				% Leased (1)	Quarter	% Leased (1)	Quarter
				as of	Average %	as of	Average %
	Property Name	Location	Square Feet	30-Jun-20	Leased (2)	30-Sep-20	Leased (2)
1	FOREST PARK (3)	Charlotte, NC	64,198	35.6%	35.6%	78.4%	49.9%
2	MEADOW POINT	Chantilly, VA	138,537	70.3%	70.3%	70.3%	70.3%
3	TIMBERLAKE	Chesterfield, MO	234,496	95.7%	95.7%	95.7%	95.7%
4	TIMBERLAKE EAST	Chesterfield, MO	117,036	100.0%	100.0%	100.0%	100.0%
5	NORTHWEST POINT	Elk Grove Village, IL	177,095	100.0%	100.0%	100.0%	100.0%
6	PARK TEN	Houston, TX	157,460	71.7%	71.7%	71.7%	71.7%
7	PARK TEN PHASE II	Houston, TX	156,746	95.0%	95.0%	95.0%	95.0%
8	GREENWOOD PLAZA	Englewood, CO	196,236	100.0%	100.0%	100.0%	100.0%
9	ADDISON	Addison, TX	289,325	79.4%	79.4%	83.7%	84.6%
10	COLLINS CROSSING	Richardson, TX	300,887	79.7%	79.7%	83.5%	83.5%
11	INNSBROOK	Glen Allen, VA	298,183	57.2%	57.2%	57.2%	57.2%
12	RIVER CROSSING	Indianapolis, IN	205,729	98.5%	98.5%	100.0%	99.0%
13	LIBERTY PLAZA	Addison, TX	216,906	73.7%	73.6%	75.1%	74.2%
14	380 INTERLOCKEN	Broomfield, CO	240,359	73.1%	73.1%	73.1%	73.1%
15	390 INTERLOCKEN	Broomfield, CO	241,512	98.2%	99.0%	99.4%	99.0%
16	BLUE LAGOON (3)	Miami, FL	213,182	73.1%	73.1%	73.1%	73.1%
17	ELDRIDGE GREEN	Houston, TX	248,399	100.0%	100.0%	100.0%	100.0%
18	ONE OVERTON PARK	Atlanta, GA	387,267	93.3%	93.3%	93.3%	93.3%
19	LOUDOUN TECH	Dulles, VA	136,658	98.9%	98.9%	98.9%	98.9%
20	4807 STONECROFT (3)	Chantilly, VA	111,469	0.0%	0.0%	0.0%	0.0%
21	121 SOUTH EIGHTH ST	Minneapolis, MN	297,209	86.4%	91.2%	92.7%	87.4%
22	801 MARQUETTE AVE	Minneapolis, MN	129,821	37.0%	37.0%	91.8%	55.2%
23	EMPEROR BOULEVARD	Durham, NC	259,531	100.0%	100.0%	100.0%	100.0%
24	LEGACY TENNYSON CTR	Plano, TX	207,049	100.0%	100.0%	100.0%	100.0%
25	ONE LEGACY	Plano, TX	214,110	52.9%	52.9%	56.4%	55.2%
26	909 DAVIS	Evanston, IL	195,098	93.3%	93.3%	93.3%	93.3%
27	ONE RAVINIA DRIVE	Atlanta, GA	386,602	87.9%	87.9%	88.5%	87.7%
28	TWO RAVINIA	Atlanta, GA	411,047	69.5%	69.4%	69.2%	69.3%
29	WESTCHASE I & II	Houston, TX	629,025	55.6%	55.5%	56.3%	55.6%
30	1999 BROADWAY	Denver, CO	677,539	85.6%	85.6%	84.8%	85.3%
31	999 PEACHTREE	Atlanta, GA	621,946	90.9%	90.9%	86.5%	86.7%
32	1001 17TH STREET	Denver, CO	655,420	97.7%	98.0%	96.8%	97.0%
33	PLAZA SEVEN	Minneapolis, MN	330,096	88.8%	89.0%	91.9%	91.3%
34	PERSHING PLAZA	Atlanta, GA	160,145	98.9%	98.9%	98.9%	98.9%
35	600 17TH STREET	Denver, CO	609,353	92.9%	91.6%	87.1%	87.6%
	OWNED PORTFOLIO		9,915,671	83.3%	83.4%	84.3%	83.4%

(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 three months during the quarter.

(3) We define redevelopment properties as properties being developed, redeveloped or where redevelopment is complete, but are in lease-up and that are not stabilized.

-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 September 30, 2020

			% of
	Tenant	Sq Ft	Portfolio
1	IQVIA Holdings Inc.	259,531	2.6%
2	CITGO Petroleum Corporation	248,399	2.5%
3	Ovintiv USA Inc.	234,495	2.4%
4	US Government	226,140	2.3%
5	Centene Management Company, LLC	216,879	2.2%
6	Eversheds Sutherland (US) LLP	179,868	1.8%
7	EOG Resources, Inc.	169,167	1.7%
8	The Vail Corporation	164,636	1.7%
9	Lennar Homes, LLC	155,808	1.6%
10	T-Mobile South, LLC dba T-Mobile	151,792	1.5%
11	Citicorp Credit Services, Inc.	146,260	1.5%
12	Jones Day	140,342	1.4%
13	Worldventures Holdings, LLC	129,998	1.3%
14	Kaiser Foundation Health Plan	120,979	1.2%
15	Argo Data Resource Corporation	114,200	1.1%
16	Giesecke & Devrient America	112,110	1.1%
17	Randstad General Partner (US)	109,638	1.1%
18	VMWare, Inc.	100,853	1.0%
19	Deluxe Corporation	94,302	1.0%
20	Ping Identity Corp.	89,856	0.9%
	Total	3,165,253	31.9%

-12-

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				Nine Months Ended
	September 30,				September 30,
(In thousands, except per share amounts)	2020		2019		2020		2019
Net income (loss)	$	(1,679)	$	2,399	$	(4,825)	$	2,827
Depreciation & amortization		21,989		22,448		66,424		67,609
NAREIT FFO		20,310		24,847		61,599		70,436
Lease Acquisition costs		136		61		333		351
Funds From Operations (FFO)	$	20,446	$	24,908	$	61,932	$	70,787
Funds From Operations (FFO)	$	20,446	$	24,908	$	61,932	$	70,787
Amortization of deferred financing costs		727		720		2,201		2,157
Shares issued as compensation		—		—		337		—
Straight-line rent		(1,293)		(2,120)		(2,636)		(6,949)
Tenant improvements		(8,022)		(7,890)		(32,269)		(26,377)
Leasing commissions		(2,033)		(1,286)		(5,366)		(9,191)
Non-investment capex		(6,373)		(3,968)		(17,481)		(10,430)
Adjusted Funds From Operations (AFFO)	$	3,452	$	10,364	$	6,718	$	19,997
Per Share Data
EPS	$	(0.02)	$	0.02	$	(0.04)	$	0.03
FFO	$	0.19	$	0.23	$	0.58	$	0.66
AFFO	$	0.03	$	0.10	$	0.06	$	0.19
Weighted average shares (basic and diluted)		107,328		107,231		107,295		107,231

-13-

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 or loss (computed in accordance with GAAP), excluding gains (or losses) from sales of property, hedge ineffectiveness, acquisition costs of newly acquired properties that are not capitalized and lease acquisition costs 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 or loss (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 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 or loss 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 the amortization of deferred financing costs, (5) plus the value of shares issued as compensation and (6) 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 or loss (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 or loss and cash flows from operating, investing and financing activities in the consolidated financial statements.  

-14-

Franklin Street Properties Corp. Earnings Release

Supplementary Schedule I

Reconciliation and Definition of Sequential Same Store results to property Net Operating Income (NOI) and Net Income

Net Operating Income (“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 or loss (the most directly comparable GAAP financial measure) plus 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 the periods presented, which we call Sequential Same Store.  The comparative Sequential Same Store results include properties held for the periods presented and exclude our redevelopment properties.  We also exclude properties that have been placed in service, but that do not have operating activity for all periods presented, 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 or loss as an indication of our performance or to cash flows as a measure of the Company’s liquidity or its ability to make distributions.  The calculations of NOI and Sequential Same Store are shown in the following table:

	Rentable
	Square Feet	Three Months Ended		Three Months Ended		Inc		%
(in thousands)	or RSF	30-Sep-20		30-Jun-20		(Dec)		Change
Region
East	833	$	2,425	$	3,019	$	(594)	(19.7)	%
MidWest	1,557		5,068		5,089		(21)	(0.4)	%
South	4,387		13,619		13,025		594	4.6	%
West	2,620		10,976		11,211		(235)	(2.1)	%
Property NOI* from Operating Properties	9,397		32,088		32,344		(256)	(0.8)	%
Dispositions and Redevelopment Properties (a)	519		109		(148)		257	0.8	%
NOI*	9,916	$	32,197	$	32,196	$	1	0.0	%
Sequential Same Store		$	32,088	$	32,344	$	(256)	(0.8)	%
Less Nonrecurring
Items in NOI* (b)			351		810		(459)	1.4	%
Comparative
Sequential Same Store		$	31,737	$	31,534	$	203	0.6	%

-15-

	Three Months Ended		Three Months Ended
Reconciliation to Net income	30-Sep-20		30-Jun-20
Net loss	$	(1,679)	$	(2,075)
Add (deduct):
Management fee income		(484)		(446)
Depreciation and amortization		22,076		22,245
Amortization of above/below market leases		(86)		(75)
General and administrative		3,817		3,817
Interest expense		8,953		8,980
Interest income		(386)		(381)
Non-property specific items, net		(14)		131
NOI*	$	32,197	$	32,196

(a) We define redevelopment properties as properties being developed, redeveloped or where redevelopment is complete, but are in lease-up and that are not stabilized. We also include properties that have been placed in service, but that do not have operating activity for all periods presented.

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

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

EX-99.2

Exhibit 99.2 

Third Quarter 2020
Table of Contents

	Page		Page
Company Information	3	Tenant Analysis and Leasing Activity
		Tenants by Industry	18
Key Financial Data		20 Largest Tenants with Annualized Rent and Remaining Term	19-20
Financial Highlights	4	Leasing Activity	21
Income Statements	5	Lease Expirations by Square Feet	22
Balance Sheets	6	Lease Expirations with Annualized Rent per Square Foot	23
Cash Flow Statements	7	Redevelopment Activity	24
Property Net Operating Income (NOI)	8	Capital Expenditures	25
Reconciliation		Transaction Activity	26
FFO & AFFO	9
EBITDA	10	Loan Portfolio of Secured Real Estate	27
Property NOI	11
		Net Asset Value Components	28
Debt Summary	12
		Appendix: Definitions of Non-GAAP Measures
Capital Analysis	13	FFO	29
		EBITDA and NOI	30
Owned and Managed Portfolio Overview	14-17	AFFO	31

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 adverse changes in general economic or local market conditions, including as a result of the COVID-19 pandemic and other potential infectious disease outbreaks and terrorist attacks or other acts of violence, which may negatively affect the markets in which we and our tenants operate, increasing interest rates, 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, adverse changes in energy prices, which if sustained, could negatively impact occupancy and rental rates in the markets in which we own properties, including energy-influenced markets such as Dallas, Denver and Houston, 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, delays in construction schedules, unanticipated increases in construction costs, unanticipated repairs, additional staffing, insurance increases and real estate tax valuation reassessments.  FSP assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

Greenwood Plaza, Englewood, CO

September 30, 2020| Page 2

Company Information

Overview		Snapshot (as of September 30, 2020)
Franklin Street Properties Corp., based in Wakefield, Massachusetts, is focused on infill and central business district (CBD) office properties in the U.S. Sunbelt and Mountain West, as well as select opportunistic markets.  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 (1)
		Total Square Feet	9.9 Million (1)
		Trading Symbol	FSP
		Exchange	NYSE American
		Common Shares Outstanding	107,328,199
		Quarterly Dividend	$0.09
Our Business		Dividend Yield	9.8%
As of September 30, 2020, the Company owned and operated a portfolio of real estate consisting of 32 operating  properties, three redevelopment properties and two managed 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	$1.4 Billion (2)
		Insider Holdings	4.38%
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	Plaza Seven, Minneapolis, MN
Inquiries
Inquiries should be directed to: Georgia Touma
877.686.9496 or InvestorRelations@fspreit.com (1) Includes both operating and redevelopment properties. (2) Total Market Capitalization is the closing share price multiplied by the number of shares outstanding plus total debt outstanding.

September 30, 2020| Page 3

Summary of Financial Highlights

(in thousands except per share amounts, SF & number of properties)
	30-Sep-20		30-Jun-20		31-Mar-20		31-Dec-19		30-Sep-19
Income Items:
Rental revenue	$	61,834	$	60,398	$	62,567	$	68,575	$	68,108
Total revenue		62,247		60,808		62,983		68,997		68,539
Net income (loss)		(1,679)		(2,075)		(1,071)		3,648		2,399
Adjusted EBITDA*		29,334		29,139		30,325		35,632		33,996
FFO*		20,446		20,194		21,292		26,755		24,908
AFFO*		3,452		165		3,101		544		10,364
Per Share Data:
EPS	$	(0.02)	$	(0.02)	$	(0.01)	$	0.03	$	0.02
FFO*	$	0.19	$	0.19	$	0.20	$	0.25	$	0.23
AFFO*	$	0.03	$	0.00	$	0.03	$	0.01	$	0.10
Weighted Average Shares (diluted)		107,328		107,287		107,269		107,240		107,231
Closing share price	$	3.66	$	5.09	$	5.73	$	8.56	$	8.46
Dividend declared	$	0.09	$	0.09	$	0.09	$	0.09	$	0.09
Balance Sheet Items:
Real estate, net	$	1,649,649	$	1,645,898	$	1,639,196	$	1,637,210	$	1,626,510
Other assets, net		190,372		189,537		208,431		205,444		216,640
Total assets, net		1,840,021		1,835,435		1,847,627		1,842,654		1,843,150
Total liabilities, net		1,102,556		1,089,432		1,090,309		1,056,258		1,053,497
Shareholders' equity		737,465		746,003		757,318		786,396		789,653
Market Capitalization and Debt:
Total Market Capitalization (a)	$	1,392,821	$	1,546,301	$	1,614,653	$	1,888,224	$	1,877,176
Total debt outstanding (excluding unamortized financing costs)	$	1,000,000	$	1,000,000	$	1,000,000	$	970,000	$	970,000
Debt to Total Market Capitalization		71.8%		64.7%		61.9%		51.4%		51.7%
Net Debt to Adjusted EBITDA*		8.5		8.6		8.1		6.7		7.0
Operating Properties Leasing Statistics (b):
Operating properties assets		32		32		32		32		32
Operating properties total SF		9,526,822		9,508,226		9,506,513		9,504,634		9,503,964
Operating properties % leased		85.6%		84.5%		85.4%		87.6%		89.7%

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

(b) Excludes redevelopment properties.

* See pages 9 & 10 for reconciliations of Net income or loss to FFO, AFFO and Adjusted EBITDA, respectively, and the Appendix for Definitions of these Non-GAAP Measures beginning on page 29.

September 30, 2020| Page 4

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

							For the Nine										For the
	For the Three Months Ended						Months Ended		For the Three Months Ended								Year Ended
	31-Mar-20		30-Jun-20		30-Sep-20		30-Sep-20		31-Mar-19		30-Jun-19		30-Sep-19		31-Dec-19		31-Dec-19
Revenue:
Rental	$	62,567	$	60,398	$	61,834	$	184,799	$	63,359	$	65,485	$	68,108	$	68,575	$	265,527
Related party revenue:
Management fees and interest income from loans		403		405		400		1,208		1,352		1,322		426		417		3,517
Other		13		5		13		31		5		6		5		5		21
Total revenue		62,983		60,808		62,247		186,038		64,716		66,813		68,539		68,997		269,065
Expenses:
Real estate operating expenses		17,298		15,470		16,730		49,498		17,726		17,116		18,041		19,428		72,311
Real estate taxes and insurance		11,762		12,307		12,279		36,348		12,102		12,801		12,505		10,463		47,871
Depreciation and amortization		22,338		22,245		22,076		66,659		23,245		22,109		22,559		22,996		90,909
General and administrative		3,525		3,817		3,817		11,159		3,509		3,702		3,886		3,376		14,473
Interest		9,063		8,980		8,953		26,996		9,368		9,371		9,036		8,982		36,757
Total expenses		63,986		62,819		63,855		190,660		65,950		65,099		66,027		65,245		262,321
Income (loss) before taxes on income		(1,003)		(2,011)		(1,608)		(4,622)		(1,234)		1,714		2,512		3,752		6,744
Tax expense on income		68		64		71		203		(29)		81		113		104		269
Net income (loss)	$	(1,071)	$	(2,075)	$	(1,679)	$	(4,825)	$	(1,205)	$	1,633	$	2,399	$	3,648	$	6,475
Weighted average number of shares outstanding, basic and diluted		107,269		107,287		107,328		107,295		107,231		107,231		107,231		107,240		107,233
Net income (loss) per share, basic and diluted	$	(0.01)	$	(0.02)	$	(0.02)	$	(0.04)	$	(0.01)	$	0.02	$	0.02	$	0.03	$	0.06

September 30, 2020| Page 5

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

	March 31,		June 30,		September 30,		March 31,		June 30,		September 30,		December 31,
	2020		2020		2020		2019		2019		2019		2019
Assets:
Real estate assets:
Land	$	191,578	$	191,578	$	191,578	$	191,578	$	191,578	$	191,578	$	191,578
Buildings and improvements		1,941,952		1,964,308		1,983,979		1,872,082		1,886,294		1,900,131		1,924,664
Fixtures and equipment		11,917		12,250		12,714		9,153		10,607		11,099		11,665
		2,145,447		2,168,136		2,188,271		2,072,813		2,088,479		2,102,808		2,127,907
Less accumulated depreciation		506,251		522,238		538,622		447,980		460,798		476,298		490,697
Real estate assets, net		1,639,196		1,645,898		1,649,649		1,624,833		1,627,681		1,626,510		1,637,210
Acquired real estate leases, net		37,270		34,022		31,011		53,948		49,475		45,066		40,704
Cash, cash equivalents and restricted cash		17,283		2,890		4,840		8,832		13,100		20,159		9,790
Tenant rent receivables, net		3,609		4,192		4,007		4,489		6,366		4,410		3,851
Straight-line rent receivable, net		68,317		69,062		71,033		55,836		61,438		64,111		66,881
Prepaid expenses and other assets		7,486		6,506		6,538		10,469		8,052		8,868		7,246
Related party mortgage loan receivable		21,000		21,000		21,000		72,795		21,530		21,265		21,000
Other assets: derivative asset		—		—		—		10,469		4,645		2,844		3,022
Office computers and furniture, net of accumulated depreciation		215		196		178		166		154		136		183
Deferred leasing commissions, net		53,251		51,669		51,765		49,408		50,901		49,781		52,767
Total assets	$	1,847,627	$	1,835,435	$	1,840,021	$	1,891,245	$	1,843,342	$	1,843,150	$	1,842,654
Liabilities and Stockholders’ Equity:
Liabilities:
Bank note payable	$	30,000	$	30,000	$	30,000	$	40,000	$	—	$	—	$	—
Term loan payable, net of unamortized financing costs		766,124		766,493		766,863		764,642		765,005		765,369		765,733
Series A & Series B Senior Notes		199,055		199,096		199,137		198,892		198,933		198,974		199,015
Accounts payable and accrued expenses		57,076		55,712		69,905		52,248		54,282		61,657		66,658
Accrued compensation		1,335		2,278		3,634		1,073		2,191		3,769		3,400
Tenant security deposits		9,615		9,155		9,435		6,352		9,118		9,008		9,346
Lease liability		1,803		1,716		1,627		2,141		2,059		1,976		1,890
Other liabilities: derivative liabilities		23,035		22,958		20,157		2,496		8,132		9,934		7,704
Acquired unfavorable real estate leases, net		2,266		2,024		1,798		3,414		3,114		2,810		2,512
Total liabilities		1,090,309		1,089,432		1,102,556		1,071,258		1,042,834		1,053,497		1,056,258
Commitments and contingencies
Stockholders’ Equity:
Preferred stock		—		—		—		—		—		—		—
Common stock		11		11		11		11		11		11		11
Additional paid-in capital		1,356,794		1,357,131		1,357,131		1,356,457		1,356,457		1,356,457		1,356,794
Accumulated other comprehensive income (loss)		(23,035)		(22,958)		(20,157)		7,973		(3,487)		(7,090)		(4,682)
Accumulated distributions in excess of accumulated earnings		(576,452)		(588,181)		(599,520)		(544,454)		(552,473)		(559,725)		(565,727)
Total stockholders’ equity		757,318		746,003		737,465		819,987		800,508		789,653		786,396
Total liabilities and stockholders’ equity	$	1,847,627	$	1,835,435	$	1,840,021	$	1,891,245	$	1,843,342	$	1,843,150	$	1,842,654

September 30, 2020| Page 6

Condensed Consolidated Statements of Cash Flows (in thousands)

		Nine Months Ended September 30,
		2020		2019
Cash flows from operating activities:
Net income (loss)	$	(4,825)	$	2,827
Adjustments to reconcile net income or loss to net cash provided by operating activities:
Depreciation and amortization expense		68,859		70,072
Amortization of above and below market leases		(234)		(305)
Shares issued as compensation		337		—
Decrease in allowance for doubtful accounts and write-off of accounts receivable		(13)		(69)
Changes in operating assets and liabilities:
Tenant rent receivables		(143)		(403)
Straight-line rents		(2,636)		(6,950)
Lease acquisition costs		(1,516)		(3,155)
Prepaid expenses and other assets		(504)		1,261
Accounts payable and accrued expenses		2,527		2,849
Accrued compensation		234		726
Tenant security deposits		89		2,689
Payment of deferred leasing commissions		(6,168)		(9,485)
Net cash provided by operating activities		56,007		60,057
Cash flows from investing activities:
Property improvements, fixtures and equipment		(61,989)		(47,905)
Investment in related party mortgage loan receivable		—		(2,400)
Repayment of related party mortgage loan receivable		—		51,795
Proceeds received from liquidating trust		—		1,470
Net cash provided by (used) in investing activities		(61,989)		2,960
Cash flows from financing activities:
Distributions to stockholders		(28,968)		(28,953)
Borrowings under bank note payable		85,000		45,000
Repayments of bank note payable		(55,000)		(70,000)
Deferred Financing Costs		—		(82)
Net cash provided by (used in) financing activities		1,032		(54,035)
Net increase (decrease) in cash, cash equivalents and restricted cash		(4,950)		8,982
Cash, cash equivalents and restricted cash, beginning of period		9,790		11,177
Cash, cash equivalents and restricted cash, end of period	$	4,840	$	20,159

September 30, 2020| Page 7

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

	Rentable							Nine Months								Nine Months
	Square Feet	Three Months Ended						Ended		Three Months Ended						Ended		Inc		%
(in thousands)	or RSF	31-Mar-20		30-Jun-20		30-Sep-20		30-Sep-20		31-Mar-19		30-Jun-19		30-Sep-19		30-Sep-19		(Dec)		Change
Region
East	833	$	2,836	$	3,019	$	2,425	$	8,280	$	2,659	$	2,792	$	2,684	$	8,135	$	145	1.8	%
MidWest	1,557		5,485		5,089		5,068		15,642		5,163		5,174		5,297		15,634		8	0.1	%
South	4,387		13,290		13,025		13,619		39,934		14,272		15,196		17,456		46,924		(6,990)	(14.9)	%
West	2,620		11,463		11,211		10,976		33,650		10,558		11,240		11,134		32,932		718	2.2	%
Property NOI* from Operating Properties	9,397		33,074		32,344		32,088		97,506		32,652		34,402		36,571		103,625		(6,119)	(5.9)	%
Dispositions and Redevelopment Properties (a)	519		(200)		(148)		109		(239)		322		294		296		912		(1,151)	(1.1)	%
Property NOI*	9,916	$	32,874	$	32,196	$	32,197	$	97,267	$	32,974	$	34,696	$	36,867	$	104,537	$	(7,270)	(7.0)	%
Same Store		$	33,074	$	32,344	$	32,088	$	97,506	$	32,652	$	34,402	$	36,571	$	103,625	$	(6,119)	(5.9)	%
Less Nonrecurring
Items in NOI* (b)			26		810		351		1,187		35		706		3,434		4,175		(2,988)	2.8	%
Comparative
Same Store		$	33,048	$	31,534	$	31,737	$	96,319	$	32,617	$	33,696	$	33,137	$	99,450	$	(3,131)	(3.1)	%

(a) We define redevelopment properties as properties being developed, redeveloped or where redevelopment is complete, but are in lease-up and that are not stabilized. We also include properties that have been placed in service, but that do not have operating activity for all periods presented.

(b) 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 29.

September 30, 2020| Page 8

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

							Nine Months										Year
	Three Months Ended						Ended		Three Months Ended								Ended
	31-Mar-20		30-Jun-20		30-Sep-20		30-Sep-20		31-Mar-19		30-Jun-19		30-Sep-19		31-Dec-19		31-Dec-19
Net income (loss)	$	(1,071)	$	(2,075)	$	(1,679)	$	(4,825)	$	(1,205)	$	1,633	$	2,399	$	3,648	$	6,475
Depreciation & amortization		22,265		22,170		21,989		66,424		23,133		22,028		22,448		22,898		90,507
NAREIT FFO*		21,194		20,095		20,310		61,599		21,928		23,661		24,847		26,546		96,982
Lease Acquisition costs		98		99		136		333		182		108		61		209		560
Funds From Operations (FFO)*	$	21,292	$	20,194	$	20,446	$	61,932	$	22,110	$	23,769	$	24,908	$	26,755	$	97,542
Adjusted Funds From Operations (AFFO)*
Funds From Operations (FFO)*	$	21,292	$	20,194	$	20,446	$	61,932	$	22,110	$	23,769	$	24,908	$	26,755	$	97,542
Amortization of deferred financing costs		748		726		727		2,201		717		720		720		721		2,878
Shares issued as compensation		—		337		—		337		—		—		—		337		337
Straight-line rent		(966)		(377)		(1,293)		(2,636)		(1,140)		(3,689)		(2,120)		(1,927)		(8,876)
Tenant improvements		(10,716)		(13,531)		(8,022)		(32,269)		(8,318)		(10,169)		(7,890)		(15,874)		(42,251)
Leasing commissions		(2,730)		(603)		(2,033)		(5,366)		(4,239)		(3,666)		(1,286)		(3,164)		(12,355)
Non-investment capex		(4,527)		(6,581)		(6,373)		(17,481)		(2,413)		(4,049)		(3,968)		(6,304)		(16,734)
Adjusted Funds From Operations (AFFO)*	$	3,101	$	165	$	3,452	$	6,718	$	6,717	$	2,916	$	10,364	$	544	$	20,541
Per Share Data:
EPS	$	(0.01)	$	(0.02)	$	(0.02)	$	(0.04)	$	(0.01)	$	0.02	$	0.02	$	0.03	$	0.06
FFO*		0.20		0.19		0.19		0.58		0.21		0.22		0.23		0.25		0.91
AFFO*		0.03		0.00		0.03		0.06		0.06		0.03		0.10		0.01		0.19
Weighted Average Shares (basic and diluted)		107,269		107,287		107,328		107,295		107,231		107,231		107,231		107,240		107,233

* See the Appendix for Definitions of these Non-GAAP Measures beginning on page 29.

September 30, 2020| Page 9

EBITDA* & Adjusted EBITDA* Reconciliation (in thousands, except ratio amounts)

							Nine Months										Year
	Three Months Ended						Ended		Three Months Ended								Ended
	31-Mar-20		30-Jun-20		30-Sep-20		30-Sep-20		31-Mar-19		30-Jun-19		30-Sep-19		31-Dec-19		31-Dec-19
Net income (loss)	$	(1,071)	$	(2,075)	$	(1,679)	$	(4,825)	$	(1,205)	$	1,633	$	2,399	$	3,648	$	6,475
Interest expense		9,063		8,980		8,953		26,996		9,368		9,371		9,036		8,982		36,757
Depreciation and amortization		22,265		22,170		21,989		66,424		23,133		22,028		22,448		22,898		90,507
Income taxes		68		64		71		203		(29)		81		113		104		269
EBITDA*	$	30,325		29,139		29,334		88,798	$	31,267	$	33,113	$	33,996	$	35,632	$	134,008
(Gain) loss on sale of properties and provisions for loss on properties held for sale or equity investments		—		—		—		—		—		—		—		—		—
Adjusted EBITDA*	$	30,325	$	29,139	$	29,334	$	88,798	$	31,267	$	33,113	$	33,996	$	35,632	$	134,008
Interest expense	$	9,063	$	8,980	$	8,953	$	26,996	$	9,368	$	9,371	$	9,036	$	8,982	$	36,757
Scheduled principal payments		—		—		—		—		—		—		—		—		—
Interest and scheduled principal payments	$	9,063	$	8,980	$	8,953	$	26,996	$	9,368	$	9,371	$	9,036	$	8,982	$	36,757
Interest coverage ratio		3.35		3.24		3.28		3.29		3.34		3.53		3.76		3.97		3.65
Debt service coverage ratio		3.35		3.24		3.28		3.29		3.34		3.53		3.76		3.97		3.65
Debt excluding unamortized financing costs	$	1,000,000	$	1,000,000	$	1,000,000			$	1,010,000	$	970,000	$	970,000	$	970,000
Cash, cash equivalents and restricted cash		17,283		2,890		4,840				8,832		13,100		20,159		9,790
Net Debt (Debt less Cash, cash equivalents and restricted cash)	$	982,717	$	997,110	$	995,160			$	1,001,168	$	956,900	$	949,841	$	960,210
Adjusted EBITDA*	$	30,325	$	29,139	$	29,334			$	31,267	$	33,113	$	33,996	$	35,632
Annualized	$	121,300	$	116,556	$	117,336			$	125,068	$	132,452	$	135,984	$	142,528
Net Debt-to-Adjusted EBITDA*		8.1		8.6		8.5				8.0		7.2		7.0		6.7

* See the Appendix for Definitions of these Non-GAAP Measures beginning on page 29. Amounts in the EBITDA and Adjusted 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.

September 30, 2020| Page 10

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

							Nine Months										Year
	Three Months Ended						Ended		Three Months Ended								Ended
	31-Mar-20		30-Jun-20		30-Sep-20		30-Sep-20		31-Mar-19		30-Jun-19		30-Sep-19		31-Dec-19		31-Dec-19
Net income (loss)	$	(1,071)	$	(2,075)	$	(1,679)	$	(4,825)	$	(1,205)	$	1,633	$	2,399	$	3,648	$	6,475
Add (deduct):
Management fee income		(478)		(446)		(484)		(1,408)		(677)		(645)		(634)		(570)		(2,526)
Depreciation and amortization		22,338		22,245		22,076		66,659		23,245		22,109		22,559		22,996		90,909
Amortization of above/below market leases		(73)		(75)		(86)		(234)		(112)		(81)		(112)		(97)		(402)
General and administrative		3,525		3,817		3,817		11,159		3,509		3,703		3,886		3,375		14,473
Interest expense		9,063		8,980		8,953		26,996		9,368		9,371		9,036		8,982		36,757
Interest income		(382)		(381)		(386)		(1,149)		(1,294)		(1,259)		(395)		(390)		(3,338)
Non-property specific items, net		(48)		131		(14)		69		140		(135)		128		(11)		122
Property NOI*	$	32,874	$	32,196	$	32,197	$	97,267	$	32,974	$	34,696	$	36,867	$	37,933	$	142,470

* See the Appendix for Definition of Non-GAAP Measures beginning on page 29.

September 30, 2020| Page 11

Debt Summary (in thousands)

		Maximum		Amount		Interest			Interest
	Maturity	Amount		Drawn at		Rate (a)			Rate at	Facility
	Date	of Loan		30-Sep-20		Components			30-Sep-20	Fee
BAML Revolver	12-Jan-22	$	600,000	$	30,000	L	+	1.20%	1.36%	0.25%
JPM Term Loan (b)	30-Nov-21		150,000		150,000	L	+	1.25%	2.94%
BAML Term Loan	12-Jan-23		400,000		400,000	1.12%	+	1.35%	2.47%
BMO Term Loan Tranche A	30-Nov-21		55,000		55,000	2.39%	+	1.25%	3.64%
BMO Term Loan Tranche B	31-Jan-24		165,000		165,000	2.39%	+	1.25%	3.64%
Series A Senior Notes	20-Dec-24		116,000		116,000				3.99%
Series B Senior Notes	20-Dec-27		84,000		84,000				4.26%
		$	1,570,000	$	1,000,000				3.09%

● On August 2, 2018, we entered into an Amended and Restated Credit Agreement with respect to the JPM Term Loan, which extended the maturity of the JPM Term Loan to November 30, 2021 and reduced the number of basis points over the LIBOR-based rate used to determine the interest rate.  The maturity date may be extended by two additional six-month periods or until November 30, 2022.  On March 7, 2019, we entered into interest rate swap transactions for a $100 million portion of the $150 million JPM Term Loan that fixed the LIBOR-based rate at 2.44% from March 29, 2019 and until the loan matures on November 30, 2021.  Accordingly, the interest rate on the $100 million portion was 3.69% and the interest rate on the remaining $50 million portion was 1.44% at September 30, 2020.  The weighted average rate at September 30, 2020 was 2.94% on the JPM Term Loan.  

● On September 27, 2018, we entered into a Second Amended and Restated Credit Agreement with respect to the BMO Term Loan, which consists of a $55 million tranche A term loan and a $165 million tranche B term loan.  The tranche A term loan matures on November 30, 2021 and the tranche B term loan matures on January 31, 2024.  The number of basis points over LIBOR used to determine the interest rate was reduced.      

● The BAML Revolver is subject to a 25 basis point facility fee based on our credit rating and, when applied to our availability of $600 million at September 30, 2020, would be $1.5 million annually.      

● On October 24, 2017, we entered into a note purchase agreement relating to a private placement of $200 million in aggregate principal amount of unsecured senior notes, consisting of $116 million in aggregate principal amount of 3.99% Series A Senior Notes with a 7-year maturity and $84 million in aggregate principal amount of 4.26% Series B Senior Notes with a 10-year maturity.  On December 20, 2017, we drew the proceeds from the private placement and reduced the outstanding balance on our revolving line of credit.  

● We incurred financing costs, some of which are deferred and amortized into interest expense during the terms of the loans we execute.  We estimate the annualized rate for this amortization to interest expense will be approximately $2.9 million.

● Additional information on these transactions can be found in Current Reports on Form 8-K that the Company filed with the U.S. Securities and Exchange Commission on October 24, 2017, August 2, 2018 and September 27, 2018.    

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

(b) The interest rate is calculated as $100 million at the fixed rate of 3.69% and the remaining $50 million at the floating rate plus 1.25%, or 1.44% as of September 30, 2020.

September 30, 2020| Page 12

Capital Analysis (in thousands, except per share amounts)

	31-Mar-20		30-Jun-20		30-Sep-20		31-Mar-19		30-Jun-19		30-Sep-19		31-Dec-19
Market Data:
Shares Outstanding		107,269		107,328		107,328		107,231		107,231		107,231		107,269
Closing market price per share	$	5.73	$	5.09	$	3.66	$	7.19	$	7.38	$	8.46	$	8.56
Market capitalization	$	614,653	$	546,301	$	392,821	$	770,992	$	791,366	$	907,176	$	918,224
Total debt outstanding excluding unamortized financing costs		1,000,000		1,000,000		1,000,000		1,010,000		970,000		970,000		970,000
Total Market Capitalization	$	1,614,653	$	1,546,301	$	1,392,821	$	1,780,992	$	1,761,366	$	1,877,176	$	1,888,224
Dividend Data:
Total dividends declared for the quarter	$	9,654	$	9,654	$	9,660	$	9,651	$	9,651	$	9,651	$	9,650
Common dividend declared per share	$	0.09	$	0.09	$	0.09	$	0.09	$	0.09	$	0.09	$	0.09
Declared dividend as a % of Net income (loss) per share		-901%		-465%		-575%		-801%		591%		402%		265%
Declared dividend as a % of AFFO* per share		311%		5852%		280%		144%		331%		93%		1774%
Liquidity:
Cash, cash equivalents and restricted cash	$	17,283	$	2,890	$	4,840	$	8,832	$	13,100	$	20,159	$	9,790
Revolver:
Gross potential available under the BAML Revolver		600,000		600,000		600,000		600,000		600,000		600,000		600,000
Less:
Outstanding balance		(30,000)		(30,000)		(30,000)		(40,000)		—		—		—
Total Liquidity	$	587,283	$	572,890	$	574,840	$	568,832	$	613,100	$	620,159	$	609,790

* See page 9 for a reconciliation of Net Income (Loss) to AFFO and the Appendix for Definitions of Non-GAAP Measures beginning on page 29.

September 30, 2020| Page 13

Owned Portfolio Overview

	As of the Quarter Ended
	30-Sep-20	30-Jun-20	31-Mar-20	31-Dec-19	30-Sep-19
Operating Properties:
Number of properties	32	32	32	32	32
Square feet	9,526,822	9,508,226	9,506,513	9,504,634	9,503,964
Leased percentage	85.6%	84.5%	85.4%	87.6%	89.7%
Redevelopment Properties (a):
Number of properties	3	3	3	3	3
Square feet	388,849	405,215	405,215	405,215	405,215
Leased percentage	53.0%	55.8%	55.8%	50.3%	50.3%
Total Owned Properties:
Number of properties	35	35	35	35	35
Square feet	9,915,671	9,913,441	9,911,728	9,909,849	9,909,179
Leased percentage	84.3%	83.3%	84.2%	86.1%	88.1%
Managed Properties - Single Asset REITs (SARs):
Number of properties	2	2	2	2	2
Square feet	348,545	348,545	348,545	348,545	348,545
Total Operating, Redevelopment and Managed Properties:
Number of properties	37	37	37	37	37
Square feet	10,264,216	10,261,986	10,260,273	10,258,394	10,257,724

(a) We define redevelopment properties as properties being developed, redeveloped or where redevelopment is complete, but are in lease-up and that are not stabilized.

September 30, 2020| Page 14

Owned Portfolio Overview

				Percent	Wtd Occupied	GAAP						Percent	Wtd Occupied	GAAP
MSA / Property Name	City	State	Square Feet	Leased	Percentage (a)	Rent (b)		MSA / Property Name	City	State	Square Feet	Leased	Percentage (a)	Rent (b)
Owned Properties:
East Region								Midwest Region
Washington, D.C.								Chicago
Forest Park (c)	Charlotte	NC	64,198	78.4%	11.7%	$	20.20	Northwest Point	Elk Grove Village	IL	177,095	100.0%	100.0%	$	27.35
Meadow Point	Chantilly	VA	138,537	70.3%	78.2%	$	23.89	909 Davis Street	Evanston	IL	195,098	93.3%	93.3%	$	41.54
Loudoun Tech Center	Dulles	VA	136,658	98.9%	98.9%	$	18.30
Stonecroft (c)	Chantilly	VA	111,469	0.0%	0.0%	$	—	Indianapolis
								River Crossing	Indianapolis	IN	205,729	100.0%	98.2%	$	24.45
Richmond
Innsbrook	Glen Allen	VA	298,183	57.2%	57.2%	$	18.80	St. Louis
								Timberlake	Chesterfield	MO	234,496	95.7%	95.7%	$	27.47
Raleigh-Durham								Timberlake East	Chesterfield	MO	117,036	100.0%	100.0%	$	26.67
Emperor Boulevard	Durham	NC	259,531	100.0%	100.0%	$	32.26
								Minneapolis
								121 South 8th Street	Minneapolis	MN	297,209	92.7%	86.5%	$	22.35
								801 Marquette Ave	Minneapolis	MN	129,821	91.8%	37.0%	$	29.27
								Plaza Seven	Minneapolis	MN	330,096	91.9%	88.6%	$	32.67
East Region Total			1,008,576	70.7%	67.6%	$	24.65	Midwest Region Total			1,686,580	95.1%	88.9%	$	28.89

(a) Weighted Occupied Percentage for the nine months ended September 30, 2020.

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

(c) We define redevelopment properties as properties being developed, redeveloped or where redevelopment is complete, but are in lease-up and that are not stabilized.

September 30, 2020| Page 15

Owned Portfolio Overview

				Percent	Wtd Occupied	GAAP						Percent	Wtd Occupied	GAAP
MSA / Property Name	City	State	Square Feet	Leased	Percentage (a)	Rent (b)		MSA / Property Name	City	State	Square Feet	Leased	Percentage (a)	Rent (b)
South Region								West Region
Dallas-Fort Worth								Denver
Legacy Tennyson Center	Plano	TX	207,049	100.0%	93.7%	$	30.02	380 Interlocken	Broomfield	CO	240,359	73.1%	72.6%	$	32.88
One Legacy Circle	Plano	TX	214,110	56.4%	45.5%	$	37.14	1999 Broadway	Denver	CO	677,539	84.8%	79.8%	$	32.69
Addison Circle	Addison	TX	289,325	83.7%	75.3%	$	33.32	Greenwood Plaza	Englewood	CO	196,236	100.0%	100.0%	$	25.04
Collins Crossing	Richardson	TX	300,887	83.5%	80.0%	$	26.65	390 Interlocken	Broomfield	CO	241,512	99.4%	98.5%	$	33.46
Liberty Plaza	Addison	TX	216,906	75.1%	72.8%	$	22.96	1001 17th Street	Denver	CO	655,420	96.8%	97.7%	$	36.74
								600 17th Street	Denver	CO	609,353	87.1%	86.0%	$	31.89
Houston								West Region Total			2,620,419	89.7%	88.3%	$	33.07
Park Ten	Houston	TX	157,460	71.7%	71.7%	$	27.13
Eldridge Green	Houston	TX	248,399	100.0%	100.0%	$	29.97	Total Owned Properties			9,915,671	84.3%	79.5%	$	29.92
Park Ten Phase II	Houston	TX	156,746	95.0%	88.5%	$	28.48
Westchase I & II	Houston	TX	629,025	56.3%	55.6%	$	29.22
Miami-Ft. Lauderdale-West Palm Beach
Blue Lagoon Drive (c)	Miami	FL	213,182	73.1%	0.0%	$	—
Atlanta
One Overton Park	Atlanta	GA	387,267	93.3%	84.6%	$	24.09
One Ravinia	Atlanta	GA	386,602	88.5%	86.5%	$	27.57
Two Ravinia	Atlanta	GA	411,047	69.2%	67.5%	$	27.42
Pershing Plaza	Atlanta	GA	160,145	98.9%	98.8%	$	33.28
999 Peachtree	Atlanta	GA	621,946	86.5%	85.9%	$	33.44
South Region Total			4,600,096	80.2%	73.7%	$	29.29

(a) Weighted Occupied Percentage for the nine months ended September 30, 2020.

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

(c) We define redevelopment properties as properties being developed, redeveloped or where redevelopment is complete, but are in lease-up and that are not stabilized.

September 30, 2020| Page 16

Managed Portfolio Overview

MSA / Property Name	City	State	Square Feet	MSA / Property Name	City	State	Square Feet
Southeast Region				Midwest Region
Atlanta				Indianapolis
Satellite Place	Duluth	GA	134,785	Monument Circle	Indianapolis	IN	213,760
Southeast Region Total			134,785	Midwest Region Total			213,760
				Total Managed			348,545
				Total Owned & Managed			10,264,216

September 30, 2020| Page 17

Tenants by Industry (By Square Feet)

September 30, 2020| Page 18

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 (a)		Annualized Rent
1	IQVIA Holdings Inc.	1	68	259,531	2.6%	$	8,970,574	3.8%
2	CITGO Petroleum Corporation	1	17	248,399	2.5%		8,269,203	3.5%
3	Ovintiv USA Inc.	1	17	234,495	2.4%		9,937,161	4.2%
4	US Government (b)	2	4, 4, 124	226,140	2.3%		5,846,360	2.4%
5	Centene Management Company, LLC	3	33, 33, 33	216,879	2.2%		6,199,729	2.6%
6	Eversheds Sutherland (US) LLP	1	67	179,868	1.8%		6,048,032	2.5%
7	EOG Resources, Inc.	1	75	169,167	1.7%		6,052,795	2.5%
8	The Vail Corporation	1	114	164,636	1.7%		5,641,693	2.4%
9	Lennar Homes, LLC (c)	1	192	155,808	1.6%		—	0.0%
10	T-Mobile South, LLC dba T-Mobile	1	59	151,792	1.5%		4,027,042	1.7%
11	Citicorp Credit Services, Inc	1	83	146,260	1.5%		4,809,029	2.0%
12	Jones Day	1	8	140,342	1.4%		5,029,307	2.1%
13	Worldventures Holdings, LLC	2	112, 118	129,998	1.3%		3,954,086	1.6%
14	Kaiser Foundation Health Plan	1	44	120,979	1.2%		3,714,547	1.5%
15	Argo Data Resource Corporation (d)	1	35, 119	114,200	1.1%		3,280,966	1.4%
16	Giesecke & Devrient America	1	51	112,110	1.1%		2,153,633	0.9%
17	Randstad General Partner (US) (e)	1	9, 44	109,638	1.1%		2,826,613	1.2%
18	VMWare, Inc.	1	68	100,853	1.0%		3,311,004	1.4%
19	Deluxe Corporation (f)	1	193	94,302	1.0%		—	0.0%
20	Ping Identity Corp.	1	69	89,856	0.9%		3,490,906	1.5%
			Total	3,165,253	31.9%	$	93,562,680	39.2%

Footnotes on next page

September 30, 2020| Page 19

20 Largest Tenants with Annualized Rent and Remaining Term

Footnotes:

(a) Annualized rent represents the monthly rent charged, including tenant reimbursements, for each lease in effect at September 30, 2020 multiplied by 12. Tenant reimbursements generally include payment of real estate taxes, operating expenses and common area maintenance and utility charges.

(b) Includes 101,140 square feet, which expire in 2021. The remaining 125,000 square feet expire in 2031.

(c) Lease and rent estimated to commence in January 2021.

(d) Includes 28,550 square feet, which expire in 2023. The remaining 85,650 square feet expire in 2030.

(e) Includes 98,695 square feet, which expire in 2021, and 10,943 square feet, which expire in 2024.

(f) Lease and rent commence on July 1, 2021.

September 30, 2020| Page 20

Leasing Activity (Owned Portfolio)

					Year		Year
	Nine Months Ended				Ended		Ended
Leasing Activity (a)		30-Sep-20		30-Sep-19		31-Dec-19		31-Dec-18
(in Square Feet - SF)
New leasing		347,000		444,000		534,000		397,000
Renewals and expansions		259,000		695,000		883,000		1,284,000
		606,000		1,139,000		1,417,000		1,681,000
Other information per SF
(Activity on a year-to-date basis)
GAAP Rents on leasing	$	29.61	$	32.73	$	31.78	$	31.02
Weighted average lease term		7.8 Years		8.6 Years		8.3 Years		7.2 Years
Increase or decrease over average GAAP rents in prior year (b)		11.8%		11.9%		10.9%		7.3%
Average free rent		6 Months		3 Months		3 Months		4 Months
Tenant Improvements	$	33.80	$	35.67	$	34.44	$	29.13
Leasing Costs	$	10.71	$	13.95	$	13.51	$	8.99

(a)  Leasing activity includes leasing at redevelopment properties. We define redevelopment properties as properties being developed, redeveloped or where redevelopment is complete, but are in lease-up and that are not stabilized.

(b)  The increase or decrease percentage is calculated by comparing average GAAP rents at properties that had leasing activity in the current year to average GAAP rents at the same properties in the prior year.

September 30, 2020| Page 21

Lease Expirations by Square Feet (a) (Owned Portfolio)

(a) Lease expirations include leases in redevelopment properties. We define redevelopment properties as properties being developed, redeveloped or where redevelopment is complete, but are in lease-up and that are not stabilized.

September 30, 2020| Page 22

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
2020	12	(c)	78,358		$	2,807,571	$	35.83	1.2%	1.2%
2021	67		808,890			24,405,631		30.17	10.2%	11.4%
2022	77		1,179,221			39,324,891		33.35	16.5%	27.9%
2023	65		661,959			20,402,508		30.82	8.5%	36.4%
2024	65		874,968			26,809,624		30.64	11.2%	47.6%
2025	56		853,755			23,453,100		27.47	9.8%	57.4%
2026	36		1,006,906			30,999,652		30.79	13.0%	70.4%
2027	17		646,910			21,274,503		32.89	8.9%	79.3%
2028	19		450,799			8,570,276		19.01	3.6%	82.9%
2029	12		405,689			12,876,199		31.74	5.4%	88.3%
2030 and thereafter	78		1,389,536	(d)		27,881,265		20.07	11.7%	100.0%
Leased total	504		8,356,991		$	238,805,220	$	28.58	100.0%
Vacancies as of 9/30/20			1,375,970
Redevelopment properties (e)			182,710
Total Portfolio Square Footage			9,915,671

(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. Includes annualized rent from redevelopment properties. We define redevelopment properties as properties being developed, redeveloped or where redevelopment is complete, but are in lease-up and that are not stabilized.

(b) Annualized rent represents the monthly rent charged, including tenant reimbursements, for each lease in effect at September 30, 2020 multiplied by 12. Tenant reimbursements generally include payment of real estate taxes, operating expenses and common area maintenance and utility charges.

(c) Includes 2 leases that are month-to-month.

(d) Includes 117,089 square feet that are non-revenue producing building amenities.

(e) Redevelopment properties include properties being developed, redeveloped, or where redevelopment is complete, but are in lease-up and that are not stabilized.

September 30, 2020| Page 23

Redevelopment Activity

(in 000's except square feet)										Estimated	Estimated
						Incurred		Percent	Estimated	Leased	Occupied
			Rentable	Anticipated		Through		Leased	Completion	Stabilization	Stabilization
Property Name	City	State	Square Feet	Investment (1)		30-Sep-20		30-Sep-20	Date	Date	Date
Redevelopment Activity
Redevelopment in Process
Blue Lagoon Drive (2)	Miami	FL	213,182	$	39,900	$	16,541	73.1%	31-Dec-20	31-Mar-21	1-Sep-21
Stonecroft	Chantilly	VA	111,469		18,462		1,405	0.0%	30-Jun-21	1-Jul-21	1-Dec-22
Total Office in Process			324,651		58,362		17,946
Redevelopment Complete But Not Stabilized
Forest Park (3)	Charlotte	NC	64,198	$	5,718	$	1,592	78.4%	30-Jun-20	30-Sep-20	1-Jul-21
Total			388,849	$	64,080	$	19,538

(1) Anticipated Investment includes capitalized redevelopment costs, capitalized interest and lease-up costs.

(2) Leased square feet was 155,808 as of September 30, 2020.

(3) Leased square feet was 50,331 as of September 30, 2020.

September 30, 2020| Page 24

Capital Expenditures

(in thousands)							Nine Months
	For the Three Months Ended						Ended
	31-Mar-20		30-Jun-20		30-Sep-20		30-Sep-20
Tenant improvements	$	10,716	$	13,531	$	8,022	$	32,269
Deferred leasing costs		2,730		603		2,033		5,366
Non-investment capex		4,527		6,581		6,373		17,481
Total Capital Expenditures	$	17,973	$	20,715	$	16,428	$	55,116

	For the Three Months Ended								Year Ended
	31-Mar-19		30-Jun-19		30-Sep-19		31-Dec-19		31-Dec-19
Tenant improvements	$	8,318	$	10,169	$	7,890	$	15,874	$	42,251
Deferred leasing costs		4,239		3,666		1,286		3,164		12,355
Non-investment capex		2,413		4,049		3,968		6,304		16,734
Total Capital Expenditures	$	14,970	$	17,884	$	13,144	$	25,342	$	71,340

First generation leasing and investment capital was $13.7 million for nine months ended September 30, 2020 and $18.1 million for the year ended December 31, 2019.

September 30, 2020| Page 25

Transaction Activity (in thousands except for Square Feet)

Recent Acquisitions:	City	State	Square Feet	Date Acquired	Purchase Price
2016
Plaza Seven	Minneapolis	MN	325,796	6/6/16	$	82,000
Pershing Plaza	Atlanta	GA	160,145	8/10/16		45,450
600 17th Street	Denver	CO	613,527	12/1/16		154,260
2015
Two Ravinia	Atlanta	GA	442,130	4/8/15	$	78,000

Recent Dispositions:					Gross Sale		Gain (loss)
	City	State	Square Feet	Date Sold	Proceeds		on Sale
2017
Hillview	Milpitas	CA	36,288	1/6/17	$	6,342	$	2,289
East Baltimore	Baltimore	MD	325,445	10/20/17		32,547		(20,770)
2016
Lakeside I	Maryland Heights	MO	127,778	4/5/16	$	20,189	$	4,154
Federal Way	Federal Way	WA	117,010	12/16/16		7,500		(7,092)
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		30,250		12,251

September 30, 2020| Page 26

Loan Portfolio of Secured Real Estate (in thousands)

(dollars in thousands, except footnotes)			Maximum		Amount		Interest
		Maturity	Amount		Outstanding		Rate at
Sponsored REIT	Location	Date	of Loan		30-Sep-20		30-Sep-20
Mortgage loan secured by property
FSP Monument Circle LLC (1)	Indianapolis, IN	6-Dec-20		21,000		21,000	7.19%
			$	21,000	$	21,000

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

September 30, 2020| Page 27

Net Asset Value Components

(in thousands except per share data)
	As of		Assets:			Other information:
	30-Sep-20		Loans outstanding on secured RE	$	21,000	Leased SF to be FFO producing
Total Market Capitalization Values			Investments in SARs (book basis)		—	In 2020 and 2021 (in 000's)		390
Shares outstanding		107,328.2	Straight-line rent receivable		71,033
Closing price	$	3.66	Asset held for sale		—	Straight-line rental revenue current quarter	$	1,293
Market capitalization	$	392,821	Cash, cash equivalents and restricted cash		4,840
Debt		1,000,000	Tenant rent receivables		4,007	Management fee income current quarter	$	16
Total Market Capitalization	$	1,392,821	Prepaid expenses		3,326	Interest income from secured loans		386
			Office computers and furniture		178	Management fees and interest income from loans	$	400
			Other assets:
	3 Months		Deferred financing costs, net		5,671
	Ended		Other assets: Derivative Market Value		—
NOI Components	30-Sep-20		Other assets - Right-to-Use Asset		1,541
				$	111,596
Same Store NOI (1)	$	32,088
Acquisitions (1) (2)		—	Liabilities:			Footnotes to the components
Property NOI (1)		32,088	Debt (excluding contra for unamortized financing costs)	$	1,000,000
Full quarter adjustment (3)		—	Accounts payable & accrued expenses		73,539	(1) See pages 11 & 30 for definitions and reconciliations.
Stabilized portfolio	$	32,088	Tenant security deposits		9,435
			Other liabilities: lease liability		1,627	(2) Includes NOI from acquisitions not in Same Store.
			Other liabilities: derivative liability		20,157
Financial Statement Reconciliation:				$	1,104,758	(3) Adjustment to reflect property NOI for a full quarter in the quarter acquired, if necessary.
Rental Revenue	$	61,834
Rental operating expenses		(16,730)				(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		(12,279)
NOI from dispositions & redevelopment properties		(109)				(5) Management & other fees are eliminated in consolidation but included in Property NOI.
Taxes (4)		(71)
Management & other fees (5)		(557)
Property NOI (1)	$	32,088

September 30, 2020| Page 28

Appendix: Non-GAAP Financial Measure Definitions

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 or loss (computed in accordance with GAAP), excluding gains (or losses) from sales of property, hedge ineffectiveness, acquisition costs of newly acquired properties that are not capitalized and lease acquisition costs 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 or loss (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 on page 9 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 or loss and cash flows from operating, investing and financing activities in the consolidated financial statements.

September 30, 2020| Page 29

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 or loss 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 or equity investments. 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 or loss 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 or loss (the most directly comparable GAAP financial measure) plus 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 the periods presented, which we call Same Store. The comparative Same Store results include properties held for the periods presented and exclude properties that are redevelopment properties.  We also exclude properties that have been placed in service, but that do not have operating activity for all periods presented, dispositions and significant nonrecurring income such as bankruptcy settlements and lease termination fees.  We define redevelopment properties as properties being developed, redeveloped or where redevelopment is complete, but are in lease-up and that are not stabilized.  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 or loss as an indication of our performance or to cash flows as a measure of the Company's liquidity or its ability to make distributions.

September 30, 2020| Page 30

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 the amortization of deferred financing costs, (5) plus the value of shares issued for compensation and (6) 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 or loss (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 or loss and cash flows from operating, investing and financing activities in the consolidated financial statements.  

September 30, 2020| Page 31

September 30, 2020| Page 32

XML

Document and Entity Information	Nov. 03, 2020
Document and Entity Information [Abstract]
Document Type	8-K
Document Period End Date	Nov. 03, 2020
Entity File Number	001-32470
Entity Registrant Name	Franklin Street Properties Corp.
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	04-3578653
Entity Address, Address Line One	401 Edgewater Place
Entity Address, Adress Line Two	Suite 200
Entity Address, State or Province	MA
Entity Address, City or Town	Wakefield
Entity Address, Postal Zip Code	01880
City Area Code	781
Local Phone Number	557-1300
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $.0001 par value per share
Trading Symbol	FSP
Security Exchange Name	NYSE
Entity Emerging Growth Company	false
Entity Central Index Key	0001031316
Amendment Flag	false