WAKEFIELD, MA-Franklin Street Properties Corp. reported mixed results for the second quarter, with net income off substantially compared to the same period in 2006, but officials for the multi-faceted real estate investment trust say the year as a whole is looking upbeat. "I continue to be optimistic about FSP's 2007 financial performance and growth prospects," CEO George Carter said in a release announcing the latest results for the period ending June 30th.

Net income for the quarter was $32.5 million and earnings per share was 46 cents. The company also announced Adjusted Funds From Operations of $19.2 million and AFFO plus Gains on Sales of $40.8 million, or 58 cents per share. Q2 net income was down $8.0 million, or 14 cents per share, compared to the same period in 2006, while AFFO was down by $900,000, or three cents per share. AFFO+GOS dipped by $7.4 million, or 14 cents per share. Net income for the first half of the year was also down overall compared to FY 2006, with FSP registering a decline of $11.4 million.

Nonetheless, FSP did exhibit several areas of strength, including profits of $59.1 million, or 84 cents per share, for the first half of 2007 as represented by AFFO+GOS. Dividend payouts in the first two quarters totaled about $43.9 million, or 62 cents per share, reflecting a pay-out ratio of 74%.

"Because of the transactional nature of significant portions of our real estate investment business, and their timing profiles, quarterly financial metrics historically have been quite variable," Carter says in preaching a long-range view of FSP's performance. FSP certainly had a substantial boost in net income between the first and second quarter of 2007, rising from $9.7 million in the opening frame to $32.4 million in Q2, and Carter says he anticipates the remainder of the year will also be encouraging.

On the sales front, the biggest deal for FSP occurred in June following the $62.7-million purchase of a 25-story, 326,000-sf office tower in Baltimore, part of a reverse 1031 exchange. The REIT harvested two assets totaling 302,000 sf for a total sale price of $21.6 million. One of the properties is in Seattle, while the other is a 104,000-sf building at 10 Lyberty Way in Westford. That asset was acquired for $11.5 million by footwear concern Puma Corp.