• Buy investment properties at a price which produces real long-term value for investors and avoid overpaying for real estate just to outbid competitors. Many times this acquisition strategy involves countercyclical investing.

• Buy properties with established, excellent locations with substantial infrastructure in place and avoid investing in locations where the future construction of such infrastructure and the long-term stability of the location is speculative.

• Buy properties that are well constructed and designed to appeal to a broad base of users and avoid properties where quality has been sacrificed to cost savings in construction, or which appeal only to a narrow group of users.

• Aggressively manage, maintain and upgrade the properties.

• Have the ability to hold properties through down cycles and avoid overleveraging properties and placing them at a high risk of foreclosure.

FSP’s objective is to make selective acquisitions based on market and/or property specific criteria, actively manage the property to maximize its value and dispose of the property when the ideal time/situation arises. Proceeds from property sales are redeployed into other specific real estate assets, and/or paid out to stockholders as special dividends. FSP’s goal is to execute for its stockholders the following investment objectives:

#1. Diversification of Capital
#2. Preservation of Capital
#3. High-Quality Consistent Dividend Stream
#4. Long-Term Capital Appreciation

#1. Diversification of Capital:
FSP strongly believes that most substantial investors should have a portion of their capital committed to “investment real estate.” Traditional financial assets, such as stocks and bonds, can actually have their positions enhanced within an overall investment portfolio by the inclusion of hard assets, such as operating properties, especially during periods of high inflation. FSP professionally acquires, manages and services all aspects of its real estate investments. Within the asset class of real estate, FSP diversifies its stockholders' capital further by acquiring different property types (i.e.; suburban office buildings, select CBD office properties, and industrial properties) in different geographical U.S. markets.

#2. Preservation of Capital:
FSP views its stockholders’ investment as a “secure cornerstone building block” of a larger financial portfolio. FSP’s investment properties are currently owned with moderate mortgage debt (10-40% of property value), so there is a lowered risk of foreclosure. Properties are purchased in established locations with significant surrounding in-place infrastructure. They are thoroughly examined before acquisition to assess any structural, engineering or environmental issues. FSP’s financial strength provides for all current and future capital needs, leasing commissions or extraordinary tenant improvements. Properties are purchased with an eye to long-term investing and their ability to perform well through all of the natural economic and business cycles that affect the broader capital markets.

#3. High-Quality Consistent Dividend Stream:
FSP has a moderate level of debt service payments to make. Aggressive management of the diversified property pool has resulted in steady occupancy levels. The ongoing and recurring rental revenue stream provides stability to our regular quarterly dividend. In addition, the possibility exists for the payment of annual special dividends resulting from the sale of properties in the portfolio and FSP’s investment banking business. It is FSP’s objective to continue to grow its property portfolio and rental income by using its strong balance sheet to take advantage of value opportunities in the property acquisition process, resulting in the potential for enhanced profits and future dividend growth for stockholders.

#4. Long-Term Capital Appreciation:
Well-managed investment real estate, positioned within established quality locations, has the potential to increase rental income and operating cash flow margins which, in turn, can increase property values and share prices. Potential sales of certain properties that we believe can maximize investment returns to stockholders by their timely disposition are continually analyzed. FSP’s strategic plan is to make dispositions of properties for either 'property specific' and/or 'market driven' reasons and to either reinvest any sale proceeds and profits into other properties or pay them out as special dividends to stockholders. Likewise, the growth in profits of the businesses associated with the acquisition, management and capital raising requirements of a growing real estate investment company can also contribute to that company’s shares appreciating in value.