Franklin Street Properties Corp. (the “Company”, “FSP”, “we” or “our”) (NYSE American: FSP), a real estate investment trust (REIT), announced its results for the second quarter ended June 30, 2026.

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

“As we continue to move through 2026, our focus remains squarely on maximizing shareholder value through our expanded evaluation of strategic alternatives, proactive asset management, and efforts to improve leasing and occupancy.

During the quarter, we endeavored to make progress on several important strategic initiatives that we believe could help position the Company to potentially capitalize on incrementally improving market conditions, while maintaining financial and strategic flexibility.

Most notably, during the quarter, we expanded and formally launched our expanded strategic review process with BofA Securities and JLL Real Estate Investment Banking serving as our co-financial advisors. We believe this enhanced framework broadens our ability to identify, evaluate and execute upon a wide range of possible strategic opportunities, including potential corporate transactions, portfolio level transactions, individual asset dispositions and other initiatives intended to maximize shareholder value. We look forward to continuing to work closely with our co-advisors to carefully evaluate credible opportunities to maximize shareholder value.

Importantly, our recent refinancing of our outstanding debt has provided the Company with increased flexibility, allowing us to avoid making forced or rushed decisions and instead pursue strategic initiatives in a disciplined and thoughtful manner. This position allows us to act opportunistically as market conditions evolve and as attractive opportunities emerge.

Subsequent to the end of the quarter, on July 8, 2026, we sold our Greenwood Plaza property located in Englewood, Colorado to University of Colorado Health for a gross selling price of approximately $19.4 million. In addition, on July 8, 2026, we used approximately $8.5 million of the net proceeds from the disposition for the repayment of debt, including interest and fees. We believe that this disposition reflects disciplined execution, targeted owner-user marketing, and continued progress on our broader strategic objectives. We filed a Form 8-K on July 13, 2026 announcing the sale and presenting pro forma financial information as adjusted to give effect to the sale of the property in our unaudited pro forma condensed consolidated financial statements.

Nationally, the office investment market continues to exhibit incremental signs of stabilization. Leasing activity has generally improved, new office construction has declined dramatically, and investment sales activity has continued a modest recovery nationally. While capital markets remain selective and transaction activity continues to be below historical averages, we believe these trends represent the potential early stages of greater normalization in the office sector and could provide a potentially more constructive environment for well-located institutional quality office assets over time.

Operationally, we remain focused on improving occupancy, extending lease duration, prudently managing operating expenses, and allocating capital where we believe it can generate the greatest long-term value for our shareholders. Notably, we were successful in reducing general and administrative expenses for the six months ended June 30, 2026 by $1.7 million compared to the six months ended June 30, 2025 as a result of lower personnel costs.

We continue to believe that the combination of an expanded and active strategic review process, disciplined execution, and leasing progress provides the best path to maximizing value. We remain focused on taking the actions necessary to deliver the strongest possible outcomes for our shareholders.”

Financial Highlights

• GAAP net loss was $16.6 million and $26.1 million, or $0.16 and $0.25 per basic and diluted share for the three and six months ended June 30, 2026, respectively.
• Funds From Operations (FFO) was $1.6 million and $2.7 million, or $0.02 and $0.03 per basic and diluted share, for the three and six months ended June 30, 2026, respectively.
• General and administrative expenses for the six months ended June 30, 2026, were $1.7 million lower compared to the six months ended June 30, 2025 as a result of lower personnel costs.
• On July 8, 2026, we sold our property Greenwood Plaza property located in Englewood, Colorado for a gross selling price of approximately $19.4 million and used proceeds to repay debt of approximately $8.5 million, including interest and fees. We retained cash from the sale of approximately $8.9 million.

Leasing Highlights

• During the six months ended June 30, 2026, we leased approximately 170,000 square feet of space of which approximately 120,000 were from renewals and expansions of existing tenants.
• Our directly-owned real estate portfolio of 14 properties, totaling approximately 4.8 million square feet, was approximately 67.4% leased as of June 30, 2026, compared to approximately 68.9% leased as of December 31, 2025. The decrease in the leased percentage is due to lease expirations exceeding new executed leases during the six months ended June 30, 2026.
• The weighted average GAAP base rent per square foot achieved on leasing activity during the six months ended June 30, 2026, was $34.34, or 7.4% higher than average rents in the respective properties for the year ended December 31, 2025. The average lease term on leases signed during the six months ended June 30, 2026, was 6.3 years compared to 5.7 years during the year ended December 31, 2025. Overall, the portfolio weighted average rent per occupied square foot was $30.79 as of June 30, 2026, compared to $30.86 as of December 31, 2025.
• We believe that our continuing portfolio of real estate is well located within their respective markets, primarily in the Sunbelt and Mountain West geographic regions, and consists of high-quality assets with long-term upside leasing potential.

Dividend

On March 9, 2026, the Company announced that the Board of Directors had determined to suspend the payment of quarterly dividends. The Board did so in part to redeploy that capital into leasing efforts intended to enhance the value of our portfolio.

The Company estimates that suspension of the dividend will preserve approximately $4.1 million in cash on an annualized basis. The Board and the Company will reassess, on a quarterly basis, when and if quarterly dividend payments can be reinstated and will announce any change to the dividend policy.

Consolidation of Sponsored REIT

As of January 1, 2023, we consolidated the operations of our Monument Circle sponsored REIT into our financial statements and on June 6, 2025, the property held by Monument Circle was sold and Monument Circle and the corporation that had been its sole member were dissolved on December 9, 2025. Additional information about the consolidation of Monument Circle can be found in Note 2, “Significant Accounting Policies - Variable Interest Entities (VIEs)”, Note 3, “Related Party Transactions and Investments in Non-Consolidated Entities - Management fees and interest income from loans” and Note 10, “Disposition of Properties and Assets Held for Sale”, in the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for year ended December 31, 2025.

Non-GAAP Financial Information

A reconciliation of Net loss to FFO, Adjusted Funds From Operations (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 consolidated properties as of June 30, 2026. 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.

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 is focused on long-term growth and appreciation. 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.

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 those relating to our review of strategic alternatives, expectations for future potential leasing activity, expectations for property dispositions, 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 long-term effects of the COVID-19 pandemic, wars, terrorist attacks or other acts of violence, which may negatively affect the markets in which we and our tenants operate, impacts of changes in tariffs that the United States and other countries have announced or implemented, as well as any additional new tariffs, trade restrictions or export regulations that may be implemented or reversed in the future, inflation rates, 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, increases in the level of general and administrative costs as a percentage of revenues as revenues decrease as a result of property dispositions, 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, 2025, which may be further updated from time to time in subsequent filings with the United States Securities and Exchange Commission. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, 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.

A reconciliation of Net loss 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.

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 mortgage loans, 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 loss on extinguishment of debt that is non-cash, (3) excluding our proportionate share of FFO and including distributions received, from non-consolidated REITs, (4) excluding the effect of straight-line rent, (5) plus the amortization of deferred financing costs and original issue discounts, (6) plus the value of shares issued as compensation and (7) 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.

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 extinguishment of debt, 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 all periods presented. We 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:

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