Franklin Street Properties : Q1 2024 Supplemental Operating Data

Franklin Street Properties Corp.

Supplemental Operating & Financial Data

401 Edgewater Place ~Wakefield, MA 01880

781.557.1300.~ www.fspreit.com

First Quarter 2024

Table of Contents

	Page		Page
Company Information	3	Tenant Analysis and Leasing Activity
		Tenants by Industry	17
Key Financial Data		20 Largest Tenants with Annualized Rent and Remaining Term	18-19
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
Reconciliation		Disposition Activity	24
FFO & AFFO	9
EBITDA	10	Loan Portfolio of Secured Real Estate	25
Property NOI	11
		Net Asset Value Components	26
Debt Summary	12
		Appendix: Non-GAAP Financial Measures Definitions
Capital Analysis	13	FFO	27
		EBITDA and NOI	28
Owned and Consolidated Portfolio Overview	14-16	AFFO	29

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 geopolitical events, the long-term effects of the COVID-19 pandemic and wars, terrorist attacks or other acts of violence, which may negatively affect the markets in which we and our tenants operate, inflation rates, 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 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.

45 South Seventh Street Minneapolis, MN

March 31, 2024| Page 2

Company Information

Overview

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.

Our Business

As of March 31, 2024, the Company owned a portfolio of real estate consisting of 16 owned properties and one consolidated Sponsored REIT. 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, for geographic, property specific reasons or for other general corporate purposes.

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

Inquiries

Inquiries should be directed to: Georgia Touma 877.686.9496 or [e-mail]

1. Total Market Capitalization is the closing share price multiplied by the number of shares outstanding plus total debt outstanding.

Snapshot (as of March 31, 2024)

Corporate Headquarters	Wakefield, MA
Fiscal Year-End	31-Dec
Owned & Consolidated	17
Properties
Total Square Feet	5.5 Million
Trading Symbol	FSP
Exchange	NYSE
	American
Common Shares Outstanding 103,430,353
Total Market Capitalization	$0.5 Billion (1)
Insider Holdings	6.60%

1420 Peachtree Street NE Atlanta, GA

March 31, 2024| Page 3

Summary of Financial Highlights

(in thousands except per share amounts, SF & number of properties)
		31-Mar-24		31-Dec-23		30-Sep-23		30-Jun-23		31-Mar-23
Income Items:
Rental revenue	$	31,225	$	34,519	$	36,903	$	36,257	$	37,767
Total revenue		31,225		34,771		36,903		36,266		37,767
Net income (loss)		(7,552)		3,575		(45,671)		(8,420)		2,406
Adjusted EBITDA*		11,113		13,112		13,718		13,178		14,269
FFO*		4,193		6,938		7,509		7,110		8,407
AFFO*		(659)		(4,462)		1,777		(903)		1,810
Per Share Data:
Earnings (loss) per share	$	(0.07)	$	0.03	$	(0.44)	$	(0.08)	$	0.02
FFO*	$	0.04	$	0.07	$	0.07	$	0.07	$	0.08
AFFO*	$	(0.01)	$	(0.04)	$	0.02	$	(0.01)	$	0.02
Weighted Average Shares (diluted)		103,430		103,430		103,430		103,330		103,236
Closing share price	$	2.27	$	2.56	$	1.85	$	1.45	$	1.57
Dividend declared	$	0.01	$	0.01	$	0.01	$	0.01	$	0.01
Balance Sheet Items:
Real estate, net	$	884,733	$	890,824	$	921,581	$	1,081,959	$	1,095,915
Other assets, net		154,230		278,506		230,192		117,350		117,767
Total assets, net		1,038,963		1,169,330		1,151,773		1,199,309		1,213,682
Total liabilities, net		335,099		456,525		440,447		440,215		444,387
Shareholders equity		703,864		712,805		711,326		759,094		769,295
Market Capitalization and Debt:
Total Market Capitalization (a)	$	537,787	$	669,782	$	586,346	$	549,974	$	562,080
Total debt outstanding (excluding unamortized financing costs)	$	303,000	$	405,000	$	395,000	$	400,000	$	400,000
Debt to Total Market Capitalization		56.3%		60.5%		67.4%		72.7%		71.2%
Net Debt to Adjusted EBITDA ratio*		6.0		5.3		7.0		7.5		6.8
Owned Properties Leasing Statistics (b):
Owned properties assets		16		17		19		20		20
Owned properties total SF		5,264,416		5,565,782		5,992,700		6,056,898		6,049,466
Owned properties % leased		73.3%		74.0%		74.8%		75.7%		73.9%

1. Total Market Capitalization is the closing share price multiplied by the number of shares outstanding plus total debt outstanding on that date.
2. Excludes one property known as Monument Circle that was consolidated in our financial statements effective January 1, 2023. Please see the note: Consolidation of Sponsored REIT on page 25 for more information.

• See pages 9 & 10 for reconciliations of Net income or loss to FFO, AFFO and Adjusted EBITDA, respectively, and the Appendix for Non-GAAP Financial Measures Definitions beginning on page 27.

March 31, 2024| Page 4

Condensed Consolidated Income Statements

($ in thousands, except per share amounts)

		For the Three												For the
	Months Ended					For the Three Months Ended					Year Ended
		31-Mar-24		31-Mar-23			30-Jun-23		30-Sep-23		31-Dec-23			31-Dec-23
Revenue:
Rental	$	31,225	$	37,767		$	36,257	$	36,903	$	34,519	$	145,446
Other		-		-		9		-		252			261
Total revenue		31,225		37,767			36,266		36,903		34,771			145,707
Expenses:
Real estate operating expenses		11,019		12,690			12,140		12,797		13,105			50,732
Real estate taxes and insurance		5,936		6,973			7,169		7,115		5,943			27,200
Depreciation and amortization		11,625		14,727			14,645		13,408		11,958			54,738
General and administrative		4,159		3,817			3,767		3,265		3,172			14,021
Interest		6,846		5,806			6,084		6,209		6,219			24,318
Total expenses		39,585		44,013			43,805		42,794		40,397			171,009
Loss on extinguishment of debt		(137)		(67)		-		(39)		-			(106)
Gain on consolidation of Sponsored REIT		-		394			-		-		-			394
Gain (loss) on sale of properties and impairment of assets held for sale, net		(5)		8,392			(806)		(39,671)		8,701			(23,384)
Interest income		1,008		-		-		-		567			567
Income (loss) before taxes on income		(7,494)		2,473			(8,345)		(45,601)		3,642			(47,831)
Tax expense on income		58		67			75		70		67			279
Net income (loss)	$	(7,552)	$	2,406		$	(8,420)	$	(45,671)	$	3,575	$	(48,110)
Weighted average number of shares outstanding, basic and diluted		103,430		103,236			103,330		103,430		103,430			103,357
Net income (loss) per share, basic and diluted	$	(0.07)	$	0.02		$	(0.08)	$	(0.44)	$	0.03	$	(0.47)

March 31, 2024| Page 5

Condensed Consolidated Balance Sheets

(in thousands)

			March 31,			March 31,		June 30,		September 30,		December 31,
			2024				2023		2023		2023		2023
Assets:
Real estate assets:
Land	$	110,298		$	130,147	$	128,588	$	114,298	$	110,298
Buildings and improvements			1,137,496				1,367,629		1,362,939		1,183,744		1,133,971
Fixtures and equipment			13,002				11,411		11,612		10,377		12,904
			1,260,796				1,509,187		1,503,139		1,308,419		1,257,173
Less accumulated depreciation			376,063				413,272		421,180		386,838		366,349
Real estate assets, net			884,733				1,095,915		1,081,959		921,581		890,824
Acquired real estate leases, net			5,971				9,620		8,828		7,447		6,694
Assets held for sale			38,947				-		8,860		132,659		73,318
Cash, cash equivalents and restricted cash			37,779				13,110		6,697		13,043		127,880
Tenant rent receivables, net			2,200				3,306		1,938		2,854		2,191
Straight-line rent receivable, net			40,357				51,703		50,267		43,253		40,397
Prepaid expenses and other assets			4,140				6,125		5,648		5,601		4,239
Office computers and furniture, net of accumulated depreciation			106				145		127		109		123
Deferred leasing commissions, net			24,730				33,758		34,985		25,226		23,664
Total assets	$	1,038,963		$	1,213,682	$	1,199,309	$	1,151,773	$	1,169,330
Liabilities and Stockholders' Equity:
Liabilities:
Bank note payable	$	-	$	75,000	$	75,000	$	80,000	$	90,000
Term loan payable, net of unamortized financing costs			149,169				124,365		124,471		114,610		114,707
Series A & Series B Senior Notes			147,340				199,547		199,588		199,629		199,670
Accounts payable and accrued expenses			30,099				37,720		32,501		36,857		41,879
Accrued compensation			1,196				1,189		2,286		3,179		3,644
Tenant security deposits			6,268				5,740		5,666		5,631		6,204
Lease liability			953				655		550		444		334
Acquired unfavorable real estate leases, net			74				171		153		97		87
Total liabilities			335,099				444,387		440,215		440,447		456,525
Commitments and contingencies
Stockholders' Equity:
Preferred stock			-			-		-		-		-
Common stock			10				10		10		10		10
Additional paid-in capital			1,335,091				1,334,776		1,335,091		1,335,091		1,335,091
Accumulated other comprehensive income			-			3,544		2,480		1,417		355
Accumulated distributions in excess of accumulated earnings			(631,237)			(569,035)		(578,487)		(625,192)		(622,651)
Total stockholders' equity			703,864				769,295		759,094		711,326		712,805
Total liabilities and stockholders' equity	$	1,038,963		$	1,213,682	$	1,199,309	$	1,151,773	$	1,169,330

March 31, 2024| Page 6

Condensed Consolidated Statements of Cash Flows

(in thousands)

		Three Months Ended March 31,
		2024		2023
Cash flows from operating activities:
Net income (loss)	$	(7,552)$	2,406
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization expense		12,305		15,316
Amortization of above and below market leases		(6)		(18)
Amortization of other comprehensive income into interest expense		(355)		(662)
Loss on extinguishment of debt		137		67
Gain on consolidation of Sponsored REIT		-		(394)
(Gain) loss on sale of properties and impairment of assets held for sale, net		5		(8,392)
Changes in operating assets and liabilities:
Tenant rent receivables		(9)		(1,105)
Straight-line rents		206		(332)
Lease acquisition costs		(122)		(818)
Prepaid expenses and other assets		(400)		(513)
Accounts payable and accrued expenses		(6,677)		(3,317)
Accrued compensation		(2,448)		(2,455)
Tenant security deposits		64		30
Payment of deferred leasing commissions		(2,236)		(908)
Net cash used in operating activities		(7,088)		(1,095)
Cash flows from investing activities:
Property improvements, fixtures and equipment		(8,759)		(11,420)
Consolidation of Sponsored REIT		-		3,048
Proceeds received from sales of properties		34,329		28,098
Net cash provided by investing activities		25,570		19,726
Cash flows from financing activities:
Distributions to stockholders		(1,034)		(1,033)
Proceeds received from termination of interest rate swap		-		4,206
Borrowings under Bank note payable		-		57,000
Repayments of Bank note payable		(22,667)		(30,000)
Repayments of Term loans payable		(28,963)		(40,000)
Repayments of Series A&B Senior Notes		(50,370)		-
Deferred financing costs		(5,549)		(2,326)
Net cash used in financing activities		(108,583)		(12,153)
Net increase (decrease) in cash, cash equivalents and restricted cash		(90,101)		6,478
Cash, cash equivalents and restricted cash, beginning of period		127,880		6,632
Cash, cash equivalents and restricted cash, end of period	$	37,779	$	13,110

March 31, 2024| Page 7

Property Net Operating Income (NOI)* with

Same Store Comparison (in thousands)

		Rentable
		Square Feet		Three Months Ended					Three Months Ended						Year Ended			Inc	%
(in thousands)		or RSF			31-Mar-24		31-Mar-23			30-Jun-23			30-Sep-23			31-Dec-23			31-Dec-23			(Dec)	Change
Region
East	298	$	709		$	276	$	343	$	239			285	$	1,143	$	433		156.9 %
MidWest	757			1,640			2,239			1,718			1,396			1,656			7,009			(599)	(26.8)%
South	2,069			5,266			5,129			5,251			5,359			5,482			21,221			137		2.7 %
West		2,140			6,204			6,423			6,412			6,505			5,994			25,334			(219)		(3.4)%
Property NOI* from Owned Properties		5,264			13,819			14,067			13,724			13,499			13,417			54,707			(248)		(1.8)	%
Disposition and Acquisition Properties (a)	214			89			3,673			2,847			3,105			1,662			11,287			(3,584)	(19.8)%
Property NOI*		5,478		$	13,908		$	17,740		$	16,571		$	16,604		$	15,079		$	65,994		$	(3,832)		(21.6)	%
Same Store			$	13,819		$	14,067	$	13,724	$	13,499	$	13,417	$	54,707	$	(248)		(1.8)%
Less Nonrecurring
Items in NOI* (b)					246			1,292			301			485			217			2,295			(1,046)		8.0 %
Comparative
Same Store				$	13,573		$	12,775		$	13,423		$	13,014		$	13,200		$	52,412		$	798		6.2 %

1. We define Disposition and Acquisition Properties as properties that were sold or acquired or consolidated and do not have operating activity for all periods presented.
2. Nonrecurring items in NOI include proceeds from bankruptcies, lease termination fees or other significant nonrecurring income or expenses, which may affect comparability.

• See Appendix for Non-GAAP Financial Measures Definitions beginning on page 27.

March 31, 2024| Page 8

FFO* & AFFO* Reconciliation

(in thousands, except per share amounts)

																			Year
	Three Months Ended					Three Months Ended					Ended
			31-Mar-24				31-Mar-23			30-Jun-23			30-Sep-23			31-Dec-23			31-Dec-23
Net income (loss)	$	(7,552)		$	2,406		$	(8,420)	$	(45,671)	$	3,575		$	(48,110)
(Gain) on consolidation of Sponsored REIT			-			(394)		-		-		-		(394)
(Gain) on sale of properties and impairment of assets held for sale, net			5				(8,392)		806			39,671			(8,701)		23,384
Depreciation & amortization			11,619				14,709			14,633			13,400			11,952			54,694
NAREIT FFO*			4,072				8,329			7,019			7,400			6,826			29,574
Lease Acquisition costs			121				78			91			109			112			390
Funds From Operations (FFO)*	$		4,193			$	8,407		$	7,110		$	7,509		$	6,938		$	29,964
Adjusted Funds From Operations (AFFO)*
Funds From Operations (FFO)*	$		4,193			$	8,407		$	7,110		$	7,509		$	6,938		$	29,964
Loss on extinguishment of debt			137				67			-		39			-		106
Amortization of deferred financing costs			680				589			672			665			576			2,502
Shares issued as compensation			-			-		315			-		-		315
Straight-line rent			206				(331)		653			106			198			626
Tenant improvements			(2,619)			(3,047)		(4,381)		(3,653)		(5,295)		(16,376)
Leasing commissions			(2,237)			(908)		(3,230)		(1,114)		(1,649)		(6,901)
Non-investment capex			(1,019)			(2,967)		(2,042)		(1,775)		(5,230)		(12,014)
Adjusted Funds From Operations (AFFO)*	$		(659)		$	1,810		$	(903)	$	1,777		$	(4,462)	$	(1,778)
Per Share Data:
Earnings (loss) per share	$		(0.07)		$	0.02		$	(0.08)	$	(0.44)	$	0.03		$	(0.47)
FFO*			0.04				0.08			0.07			0.07			0.07			0.29
AFFO*			(0.01)			0.02			(0.01)		0.02			(0.04)		(0.02)
Weighted Average Shares (basic and diluted)		103,430				103,236			103,330			103,430			103,430			103,357

• See Appendix for Non-GAAP Financial Measures Definitions beginning on page 27.

March 31, 2024| Page 9

EBITDA* & Adjusted EBITDA* Reconciliation

(in thousands, except ratio amounts)

																					Year
		Three Months Ended					Three Months Ended						Ended
			31-Mar-24			31-Mar-23			30-Jun-23			30-Sep-23			31-Dec-23			31-Dec-23
Net income (loss)	$	(7,552)			$	2,406		$	(8,420)	$	(45,671)	$	3,575		$	(48,110)
Interest expense		6,846					5,806			6,084			6,209				6,219			24,318
Depreciation and amortization		11,619					14,709			14,633			13,400				11,952			54,694
Income taxes		58					67			75			70				67			279
EBITDA*	$	10,971				$	22,988		$	12,372		$	(25,992)		$		21,813		$	31,181
Loss on extinguishment of debt		137					67			-		39				-		106
Gain on consolidation of Sponsored REIT		-				(394)			-		-			-		(394)
(Gain) loss on sale of properties and impairment of assets held for sale, net		5					(8,392)		806			39,671				(8,701)		23,384
Adjusted EBITDA*	$	11,113				$	14,269		$	13,178		$	13,718		$		13,112		$	54,277
Interest expense	$	6,846				$	5,806		$	6,084		$	6,209		$	6,219		$	24,318
Scheduled principal payments		-				-		-		-			-		-
Interest and scheduled principal payments	$	6,846				$	5,806		$	6,084		$	6,209		$		6,219		$	24,318
Interest coverage ratio		1.62					2.46			2.17			2.21			2.11			2.23
Debt service coverage ratio		1.62					2.46			2.17			2.21			2.11			2.23
Debt excluding unamortized financing costs	$	303,000				$	400,000		$	400,000		$	395,000		$	405,000
Cash, cash equivalents and restricted cash		37,779					13,110			6,697			13,043				127,880
Net Debt (Debt less Cash, cash equivalents and restricted cash)	$	265,221				$	386,890		$	393,303		$	381,957		$		277,120
Adjusted EBITDA*	$	11,113				$	14,269		$	13,178		$	13,718		$	13,112
Annualized	$	44,452				$	57,076		$	52,712		$	54,872		$		52,448
Net Debt-to-Adjusted EBITDA ratio*			6.0					6.8			7.5			7.0			5.3

• See Appendix for Non-GAAP Financial Measures Definitions beginning on page 27.

March 31, 2024| Page 10