UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10 - Q

(Mark One)

☑

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March~~June 3130, 2018

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to __________.

Commission File Number: 000-53165

FSP 303 East Wacker Drive Corp.

(Exact name of registrant as specified in its charter)

Delaware	20-8061759
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

401 Edgewater Place

Wakefield, MA 01880

(Address of principal executive offices)(Zip Code)

(781) 557-1300

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES ☑ NO ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

YES ☑ NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐		Accelerated filer ☐
Non-accelerated filer ☐	(Do not check if a smaller reporting company)	Smaller reporting company ☑
		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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES ☐ NO ☑

The number of shares of common stock outstanding was 1 and the number of shares of preferred stock outstanding was 2,210, each as of ~~April~~July 3031, 2018.

FSP 303 East Wacker Drive Corp.

Form 10-Q

Quarterly Report

~~March~~June 3130, 2018

Table of Contents

			Page
Part I.	Financial Information
	Item 1.	Financial Statements
		Consolidated Balance Sheets as of March 31, 2018 and December 31, 2017	2
		Consolidated Statements of Operations for the three months ended March 31, 2018 and 2017	3
		Consolidated Statements of Cash Flows for the three months ended March 31, 2018 and 2017	4
		Notes to Consolidated Financial Statements	5-8
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	9-13
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	13
	Item 4.	Controls and Procedures	14
Part II.	Other Information
	Item 1.	Legal Proceedings	15
	Item 1A.	Risk Factors	15
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	15
	Item 3.	Defaults Upon Senior Securities	15
	Item 4.	Mine Safety Disclosures	15
	Item 5.	Other Information	15
	Item 6.	Exhibits	16
Signatures			17

Page

Part I.

Financial Information


Item 1.	Financial Statements

	Consolidated Balance Sheets as of June 30, 2018 and December 31, 2017	2

	Consolidated Statements of Operations for the three and six months ended June 30, 2018 and 2017	3

	Consolidated Statements of Cash Flows for the six months ended June 30, 2018 and 2017	4

	Notes to Consolidated Financial Statements	5-9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10-14

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	15

Item 4.	Controls and Procedures	15

Part II.

Other Information


Item 1.	Legal Proceedings	16

Item 1A.	Risk Factors	16

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	16

Item 3.	Defaults Upon Senior Securities	16

Item 4.	Mine Safety Disclosures	16

Item 5.	Other Information	16

Item 6.	Exhibits	17

Signatures

PART I – FINANCIAL INFORMATION

Item

1. Financial Statements

FSP 303 East Wacker Drive Corp.
Consolidated Balance Sheets
(Unaudited)

	March 31,			December 31,
	June 30,			December 31,
(in thousands, except share and par value amounts)	2018			2017
Assets:
Real estate investments, at cost:
Land	$	26,200		$	26,200
Buildings and improvements		~~166~~167,~~452~~061			165,059
Furniture and equipment		837			837
		193,489			192,096
		194,098			192,096
Less accumulated depreciation		4951,~~627~~183			47,992
Real estate investments, net		~~143~~142,~~862~~915			144,104
Cash and cash equivalents		2024,~~111~~773			22,628
Restricted cash		~~3,942~~—			3,943
Tenant rent receivables, net of allowance for doubtful accounts of $98 and $133, respectively		~~320~~266			235
Step rent receivable		78,~~897~~136			7,553
Deferred leasing costs, net of accumulated amortization of $3,179 and $2,893, respectively		6,169			6,151
Deferred leasing costs, net of accumulated amortization of $2,865 and $2,893, respectively		6,372			6,151
Prepaid expenses and other assets		93392			88
Total assets	$	182,~~394~~854		$	184,702
Liabilities and Stockholders’ Equity:
Liabilities:
Accounts payable and accrued expenses	$	56,~~498~~781		$	6,694
Tenant security deposits		~~483~~481			483
Loan payable, less unamortized financing costs of $103 and $111, respectively		33,774			33,959
Loan payable, less unamortized financing costs of $96 and $111, respectively		33,586			33,959
Total liabilities		3940,~~755~~848			41,136
Commitments and Contingencies:		—			—
Stockholders’ Equity:
Preferred Stock, $.01 par value, 2,210 shares authorized, issued and outstanding, aggregate liquidation preference $221,000		—			—
Preferred Stock, $.01 par value, 2,210 shares authorized,
Common Stock, $.01 par value, 1 share authorized, issued and outstanding		—			—
issued and outstanding, aggregate liquidation preference $221,000		—			—
Common Stock, $.01 par value, 1 share
authorized, issued and outstanding		—			—
Additional paid-in capital		197,162			197,162
Retained losses and distributions in excess of earnings		(5455,~~523~~156	)		(53,596	)
Total Stockholders’ Equity		142,~~639~~006			143,566
Total Liabilities and Stockholders’ Equity	$	182,~~394~~854		$	184,702
See accompanying notes to consolidated financial statements.

FSP 303 East Wacker Drive Corp.

Consolidated Statements of Operations

(Unaudited)

	For the Three Months						For the Six Months
	Ended March 31,
	Ended June 30,						Ended June 30,
(in thousands, except share and per share amounts)	2018			2017			2018			2017
Revenues:
Rental	$	5,~~301~~182		$	4,~~769~~926		$	10,483		$	9,695
Total revenue		5,~~301~~182			4,~~769~~926			10,483			9,695
Expenses:
Rental operating expenses		1,~~772~~588			1,~~675~~557			3,360			3,232
Real estate taxes and insurance		1,~~364~~228			1,~~236~~409			2,592			2,645
Depreciation and amortization		1,~~925~~834			1,~~759~~785			3,759			3,544
Interest expense		~~417~~415			~~427~~424			832			851
Total expenses		5,~~478~~065			5,~~097~~175			10,543			10,272
Net loss before interest income		(177	)		(328	)
Income (loss) before interest income		117			(249	)		(60	)		(577	)
Interest income		1			2			2			4
Net loss attributable to preferred stockholders	$	(176	)	$	(326	)
Net income (loss) attributable to preferred stockholders	$	118		$	(247	)	$	(58	)	$	(573	)
Weighted average number of preferred shares outstanding, basic and diluted		2,210			2,210
Weighted average number of preferred shares outstanding,		2,210			2,210			2,210			2,210
Net loss per preferred share, basic and diluted	$	(80	)	$	(148	)
Net income (loss) per preferred share, basic and diluted	$	53		$	(112	)	$	(26	)	$	(259	)
See accompanying notes to consolidated financial statements.

FSP 303 East Wacker Drive Corp.
Consolidated Statements of Cash Flows
(Unaudited)

	For the Three Months
	For the Six Months
	Ended March 31,
	Ended June 30,
(in thousands)	2018			2017
Cash flows from operating activities:
Net loss	$	(~~176~~58	)	$	(~~326~~573	)
Adjustments to reconcile net loss to net cash
used for operating activities:
provided by operating activities:
Depreciation and amortization		13,~~933~~774			13,~~767~~559
Decrease in bad debt reserve		(35	)		—
Increase (decrease) in bad debt reserve		(35	)		35
Changes in operating assets and liabilities:
Tenant rent receivable		~~(50~~4	)		(~~111~~80	)
Step rent receivable		(~~344~~583	)		(~~298~~656	)
Prepaid expenses and other assets		(5304	)		(~~168~~32	)
Accounts payable and accrued expenses		~~(1,106~~604	)		~~(973~~448	)
Payment of deferred leasing costs		(308	)		(625	)
Tenant security deposits		(2	)		(9	)
Net cash used for operating activities		(91	)		(734	)
Payment of deferred leasing costs		(789	)		(921	)
Net cash provided by operating activities		2,611			1,771
Cash flows from investing activities:
Purchase of real estate assets		(12,~~483~~519	)		(781,515	)
Net cash used for investing activities		(12,~~483~~519	)		(781,515	)
Cash flows from financing activities:
Principal payments of the loan payable		(~~193~~388	)		(~~184~~370	)
Distributions to stockholders		(~~751~~1,502	)		(~~729~~1,458	)
Net cash used for financing activities		(~~944~~1,890	)		(~~913~~1,828	)
Net decrease in cash, cash equivalents and restricted cash		(21,~~518~~798	)		(1,~~725~~572	)
Cash, cash equivalents and restricted cash, beginning of year		26,571			31,874
Cash, cash equivalents and restricted cash, end of period	$	24,~~053~~773		$	30,~~149~~302
Supplemental disclosure of cash flow information:
Cash paid for interest	$	~~411~~819		$	~~420~~837
Disclosure of non-cash investing activities:
Accrued costs for purchase of real estate assets	$	~~545~~118		$	~~1,024~~176
See accompanying notes to consolidated financial statements.

FSP 303 East Wacker Drive Corp.

Notes to Consolidated Financial Statements

(Unaudited)

1. Organization, Basis of Presentation, Real Estate and Depreciation, Financial Instruments, Cash, Cash Equivalents and Restricted Cash, and Recent Accounting Standards

Organization

FSP 303 East Wacker Drive Corp. (the “Company”) was organized on December 13, 2006 as a corporation under the laws of the State of Delaware to purchase, own, and operate a twenty-eight story Class “A” multi-tenant office tower containing approximately 860,000 rentable square feet of office and retail space and a 294-stall underground parking garage located in downtown Chicago, Illinois (the “Property”). The Company acquired the Property and commenced operations on January 5, 2007. Franklin Street Properties Corp. (“Franklin Street”) (NYSE American: FSP) holds the sole share of the Company’s common stock, $.01 par value per share (the “Common Stock”). Between February 2007 and December 2007, FSP Investments LLC, a wholly-owned subsidiary of Franklin Street, completed the sale on a best efforts basis of 2,210 shares of the Company’s preferred stock, $.01 par value per share (the “Preferred Stock”). FSP Investments LLC sold the Preferred Stock in a private placement offering to “accredited investors” within the meaning of Regulation D under the Securities Act of 1933.

All references to the Company refer to FSP 303 East Wacker Drive Corp. and its consolidated subsidiary, collectively, unless the context otherwise requires.

Basis of Presentation

The unaudited consolidated financial statements of the Company include all of the accounts of the Company and its wholly owned subsidiary. These financial statements should be read in conjunction with the Company's consolidated financial statements and notes thereto contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2017, as filed with the Securities and Exchange Commission (“SEC”).

The accompanying interim financial statements are unaudited; however, the financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and in conjunction with the rules and regulations of the SEC. Accordingly, they do not include all of the disclosures required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting solely of normal recurring matters) necessary for a fair presentation of the financial statements for these interim periods have been included. Operating results for the ~~three~~six months ended ~~March~~June 3130, 2018 ~~are~~ are not necessarily indicative of the results that may be expected for the year ending December 31, 2018 or for any other period.

Real Estate and Depreciation

Real estate assets are stated at cost, less accumulated depreciation. If the Company determines that impairment has occurred, the affected assets are reduced to their fair value.

Costs related to property acquisition and improvements are capitalized. Typical capital items include new roofs, site improvements, various exterior building improvements and major interior renovations.

Routine replacements and ordinary maintenance and repairs ~~that~~ that do not extend the life of the asset are expensed as incurred. Funding for repairs and maintenance items typically is provided by by cash flows from operating activities.

Depreciation is computed using the straight-line method ~~over~~ over the assets’ estimated useful lives as follows:

	Category	Years
	Buildings	39
	Building Improvements	15-39
	Furniture and Equipment	5-7
	Tenant Improvements	shorter of estimated useful life or the term of the lease

The Company reviews the Property to determine if the ~~carrying~~ carrying amount will be recovered from future cash flows if certain indicators of impairment are identified at the Property. The ~~evaluation~~ evaluation of anticipated cash flows is highly subjective and is based in part on assumptions regarding future occupancy, rental rates and capital requirements that could differ materially from actual results in future periods. When indicators of impairment are present and the sum of the undiscounted future cash flows is less than the carrying value of such asset, an impairment loss is recorded equal to the difference between the asset’s current carrying value and its fair value based on discounting its ~~estimated~~ estimated future cash flows. At ~~March~~June 3130, 2018 and December 31, 2017, no impairment charges were recorded.

FSP 303 East Wacker Drive Corp.

Notes to Consolidated Financial Statements

(Unaudited)

1. Organization, Basis of Presentation, Real Estate and Depreciation, Financial Instruments, Cash, Cash Equivalents and Restricted Cash, and Recent Accounting Standards (continued)

Financial Instruments

The Company estimates that the carrying value of cash and cash equivalents, restricted cash and loan payable approximate their fair values based on their short-term maturity and prevailing interest rates.

Cash, Cash Equivalents and Restricted Cash

The Company is required under the loan payable to hold proceeds from the loan payable in a restricted reserve account or accounts. These proceeds are classified as restricted cash on the Consolidated Balance Sheets. Restricted cash at ~~March~~June 3130, 2018 and December 31, 2017 consisted of amounts in a money market account totaling $~~3,942,000~~0 and $3,943,000, respectively.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statement of cash flows.

(in thousands)	~~March~~June 3130, 2018		~~March~~June 3130, 2017
Cash and cash equivalents	$	2024,~~111~~773	$	2324,~~643~~970
Restricted cash		~~3,942~~—		65,~~506~~332
Total cash, cash equivalents and restricted cash	$	24,~~053~~773	$	30,~~149~~302

Recent Accounting Standards

In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers (“Topic 606”), which provides guidance for revenue recognition. The standard’s core principle is that a company will recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which a company expects to be entitled in exchange for those goods or services. This update is effective for interim and annual reporting periods beginning after December 15, 2017. A substantial portion of the Company’s revenue consists of rental income from leasing arrangements, which is specifically excluded from Topic 606. The Company adopted Topic 606 using the modified retrospective approach effective January 1, 2018 and the adoption did not have an impact on the amount or timing of revenue recognition in the consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 requires lessees to establish a lease liability for the obligation to make lease payments and a right-of-use asset for the right to use the underlying asset for the lease term on their balance sheets. Lessees will continue to recognize lease expenses on their income statements in a manner similar to current accounting. The guidance also eliminates current real estate-specific provisions for all entities. For lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. This new standard is effective for annual periods beginning after December 15, 2018, and interim periods thereafter with early adoption permitted. The Company is currently evaluating the potential changes from ASU 2016-02 to future financial reporting and disclosures.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which clarifies how reporting entities should present and classify certain cash receipts and cash payments in the statement of cash flows. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company adopted this guidance during the first quarter of 2018 and applied it retrospectively.

In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash (“ASU 2016-18”), which clarifies how reporting entities should present restricted cash and restricted cash equivalents. Reporting entities will show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. The new standard requires a reconciliation of the totals in the statement of cash flows to the related captions in the balance sheets. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Upon the adoption of ASU 2016-18, the Company reconciled both cash and cash equivalents and restricted cash and restricted cash equivalents, whereas under the previous guidance the Company explained the changes during the period for cash and cash equivalents only. Prior periods were retrospectively adjusted to conform to the current period’s presentation.

FSP 303 East Wacker Drive Corp.

Notes to Consolidated Financial Statements

(Unaudited)

Income Taxes

The Company has elected to be taxed as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended. As a REIT, the Company generally is entitled to a tax deduction for dividends paid to its stockholders, thereby effectively subjecting the distributed net income of the Company to taxation at the shareholder level only. The Company must comply with a variety of restrictions to maintain its status as a REIT. These restrictions include the type of income it can earn, the type of assets it can hold, the number of stockholders it can have and the concentration of their ownership, and the amount of the Company’s income that must be distributed annually.

Accrued interest and penalties will be recorded as income tax expense, if the Company records a liability in the future. The Company files income tax returns in the U.S. federal jurisdiction and the State of Illinois jurisdiction.

Loan Payable

On August 3, 2011, the Company entered into a mortgage note in favor of John Hancock Life Insurance Company (U.S.A.) (the “Lender”) to evidence a loan in the original principal amount of $35,000,000 that matures on September 1, 2021 (the “Loan”). The proceeds of the Loan are being held by the Lender for the Company’s benefit in a restricted reserve account or accounts to be drawn upon by the Company from time to time for tenant improvement costs and leasing commissions at the Property upon satisfaction of certain conditions. The Loan bears interest at the fixed rate of 4.83% per annum. The Company was obligated to make monthly payments of interest only for the initial 60 months of the Loan. Thereafter, the Company is obligated to make monthly payments of principal and interest for the remaining 60 months, based on a 25-year amortization schedule, until the maturity date, when all outstanding amounts become due. Commencing on October 1, 2016, the Loan became payable in monthly payments of principal and interest in the amount of $201,155. The Company may prepay the Loan with a prepayment premium, as defined in the Loan agreement. The Loan is secured, in part, by a mortgage, assignment of leases and rents and security agreement (the “Mortgage”) from the Company in favor of the Lender. The Mortgage constitutes a lien against the Property and has been recorded in the land records of Cook County, Illinois. Subject to customary exceptions, the Loan is nonrecourse to the Company. As of ~~March~~June 3130, 2018, the Company had drawn an aggregate of $3135,~~070~~012,000 from the restricted reserve account(s). Interest expense ~~paid~~incurred on the Loan for the ~~three~~six months ended ~~March~~June 3130, 2018 and 2017 was $~~411~~817,000 and $~~420~~837,000, respectively. The documents evidencing and securing the Loan include restrictions on property liens and require compliance with various non-financial covenants, which include the requirement that the Company provide annual reports to the Lender. The Company was in compliance with the Loan covenants as of ~~March~~June 3130, 2018 and December 31, 2017.

Fees paid associated with the Loan were $304,000 and are being amortized on the straight-line basis over the term of the Loan. Amortization expense for each of the ~~three~~six months ended ~~March~~June 3130, 2018 and 2017 was $815,000, and is included in interest expense in the Company’s Consolidated Statements of Operations.

Related Party Transactions

Asset Management Agreement

The Company has in the past engaged in and currently engages in transactions with a related party, Franklin Street, and its wholly-owned subsidiaries, FSP Investments LLC and FSP Property Management LLC (collectively “FSP”). The Company expects to continue to have related party transactions with FSP in the form of management fees paid to FSP to manage the Company on behalf of its stockholders. FSP Property Management LLC currently provides the Company with asset management and financial reporting services. The asset management agreement between the Company and FSP Property Management LLC requires the Company to pay FSP Property Management LLC a monthly fee equal to one-half of one percent (.5%) of the gross revenues of the Property. The asset management agreement between the Company and FSP Property Management LLC may be terminated by either party without cause at any time, upon at least thirty (30) days’ written notice. For the ~~three~~six months ended ~~March~~June 3130, 2018 and 2017, management fees paid to FSP Property Management LLC were approximately $2450,~~000~~200 and $2345,000, respectively.

FSP 303 East Wacker Drive Corp.

Notes to Consolidated Financial Statements

(Unaudited)

Related Party Transactions (continued)

Investor Services Agreement

On August 14, 2012, the Company entered into an Investor Services Agreement (the “FSPI Agreement”) with FSP Investments LLC for the provision of investor services to holders of Preferred Stock. FSP Investments LLC acted as a real estate investment firm and broker/dealer with respect to (a) the Company’s organization, (b) the Company’s acquisition of the Property and (c) the sale of the Company’s equity interests. The FSPI Agreement requires the Company to pay a monthly service fee of $500 for services performed under the FSPI Agreement, and to reimburse FSP Investments LLC for its reasonable out-of-pocket expenses incurred in connection with the FSPI Agreement. The FSPI Agreement may be terminated by either party with thirty days written notice or immediately upon certain events of default set forth in the FSPI Agreement. For the ~~three~~six months ended ~~March~~June 3130, 2018 and 2017, investor services fees paid were approximately $510,~~000~~400 and $48,~~000~~400, respectively.

Ownership of Preferred Stock and Common Stock

On December 27, 2007, Franklin Street purchased 965.75 shares of Preferred Stock (or approximately 43.7% of the currently issued and outstanding shares of Preferred Stock) for consideration totaling $82,813,000. Prior to purchasing any shares of the Preferred Stock, Franklin Street agreed to vote any shares of Preferred Stock held by it on any matter presented to the holders of the Preferred Stock in a manner that approximates as closely as possible the votes cast in favor of and opposed to such matter by the holders of the Preferred Stock other than Franklin Street and its affiliates. For purposes of determining how Franklin Street votes its shares of the Preferred Stock, abstentions and non-votes by stockholders other than Franklin Street are not considered. Franklin Street is entitled to distributions that are declared on the Preferred Stock.

Franklin Street is the sole holder of the one share of Common Stock that is issued and outstanding. Subsequent to the completion of the private placement of the Preferred Stock in December 2007, Franklin Street has not been entitled to share in the Company’s earnings or any dividend related to the Common Stock.

Net Income Per Share

Basic net income per share is computed by dividing net income or loss by the weighted average number of shares of Preferred Stock outstanding during the period. Diluted net income or loss per share reflects the potential dilution that could occur if securities or other contracts to issue shares were exercised or converted into shares. There were no potential dilutive shares outstanding at ~~March~~June 3130, 2018 and 2017.

Segment Reporting

The Company operates in one industry segment, which is real estate ownership of commercial property. The Company owned and operated the Property for all periods presented.

Cash Distributions

The Company’s board of directors declared and paid cash distributions as follows:

	Distribution Per		Total
Quarter Paid	Distributions Per Preferred Share		Total Distributions
Quarter Paid	Preferred Shares		Distributions
First quarter of 2018	$	340	$	751,000
First quarter of 2018	$	340	$	751,400
Second quarter of 2018	$	340	$	751,000
First quarter of 2017	$	330	$	729,~~300~~000
Second quarter of 2017	$	330	$	729,000

8~~. Subsequent Event~~

~~The~~FSP ~~Company~~303 ~~declared~~East ~~a cash distribution of $340 per~~Wacker ~~preferred~~Drive ~~share on April 24, 2018 to the holders of record of Preferred Stock on May 8, 2018, payable on May 15, 2018~~Corp.

8 Notes to Consolidated Financial Statements

~~Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.~~(Unaudited)

The following discussion should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this report and in our Annual Report on Form 10-K for the year ended December 31, 20178. ~~Historical~~Potential ~~results~~Sale ~~and percentage relationships set forth in the consolidated financial statements, including trends which might appear, should not be taken as necessarily indicative~~ of future operations. The following discussion and other parts of this Quarterly Report on Form 10-Q may also contain forward-looking statements based on current judgments and current knowledge of management, which 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, economic conditions in the ~~United States and in the market where we own the~~ Property, changes in interest rates, disruptions in the debt markets, risks of a lessening of demand for the type of real estate owned by us, changes in government regulations and regulatory uncertainty, geopolitical events, expenditures that cannot be anticipated, such as utility rate and usage increases, unanticipated repairs, uncertainties relating to fiscal policy, additional staffing, insurance increases and real estate tax valuation reassessments. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. We may not update any of the forward-looking statements after the date this Quarterly Report on Form 10-Q is filed to conform them to actual results or to changes in our expectations that occur after such date, other than as required by law.

~~Overview~~On June 28, 2018, the Company entered into a Purchase and Sale Agreement with BCSP 8 Acquisition LLC (the “Purchaser”) pursuant to which the Purchaser agreed to purchase the Property for an aggregate gross purchase price of $182,000,000, subject to the satisfaction of customary closing conditions, including the approval of the Company’s stockholders. If the sale is consummated, the Company intends to effect a dissolution and liquidation of the Company, with the net proceeds of the sale distributed to stockholders after the payment of the Company’s obligations and provision for any contingent liabilities.

~~FSP 303 East Wacker Drive Corp~~9., ~~which~~Subsequent we refer to as the Company, is a Delaware corporation formed to purchase, own, and operate a twenty-eight story Class “A” multi-tenant office tower containing approximately 860,000 rentable square feet of office and retail space and a 294-stall underground parking garage located in downtown Chicago, Illinois, which we refer to as the Property.Event

~~Franklin~~On ~~Street~~July ~~Properties Corp.~~27, ~~which we refer to as Franklin Street~~2018, is the ~~sole~~Company ~~holder~~filed ofa ~~our~~definitive ~~one~~information statement ~~share~~(the of“Consent ~~common~~Solicitation”) ~~stock,~~with ~~$.01 par value per share, which we refer to as~~ the ~~Common Stock, that is issued and outstanding~~SEC. ~~Between~~The ~~February~~Consent ~~2007 and December 2007~~Solicitation, ~~FSP~~among ~~Investments~~other ~~LLC~~items, arequests ~~wholly-owned subsidiary~~the consent of ~~Franklin Street, completed~~ the ~~sale~~holders ~~on a best efforts basis~~ of ~~2,210~~the ~~shares~~Preferred ofStock ~~our preferred stock, $.01 par value per share, which we refer~~ to as the ~~Preferred~~sale ~~Stock.~~of ~~FSP~~the ~~Investments~~Property ~~LLC~~to ~~sold~~an ~~the~~unaffiliated ~~Preferred~~third-party ~~Stock~~buyer infor a ~~private~~minimum ~~placement~~gross ~~offering~~sales toprice ~~“accredited investors” within the meaning~~ of ~~Regulation~~$182,000,000. DAt ~~under~~this time, the ~~Securities~~Company ~~Act~~is ofnot ~~1933.~~able ~~Since~~to ~~the~~predict ~~completion of~~ the ~~placement~~outcome of the ~~Preferred~~Consent ~~Stock in December 2007~~Solicitation, ~~Franklin~~which ~~Street~~would ~~has not been entitled to share in any earnings or dividend~~be ~~related~~required to sell the ~~Common Stock~~Property.

We operate in one business segment, which is real estate operations, and own a single property. Our real estate operations involve real estate rental operations, leasing services and property management services. The main factor that affects our real estate operations is the broad economic market conditions in the United States and, more specifically, the economic conditions in Chicago, Illinois, the relevant local market. These market conditions affect the occupancy levels and the rent levels on both a national and local level. We have no influence on national or local market conditions.9

~~Trends~~Item 2. Management’s Discussion and ~~Uncertainties~~Analysis of Financial Condition and Results of Operations.

~~Economic~~The ~~Conditions~~following discussion should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this report and in our Annual Report on Form 10-K for the year ended December 31, 2017. Historical results and percentage relationships set forth in the consolidated financial statements, including trends which might appear, should not be taken as necessarily indicative of future operations. The following discussion and other parts of this Quarterly Report on Form 10-Q may also contain forward-looking statements based on current judgments and current knowledge of management, which 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, economic conditions in the United States and in the market where we own the Property, changes in interest rates, disruptions in the debt markets, risks of a lessening of demand for the type of real estate owned by us, changes in government regulations and regulatory uncertainty, geopolitical events, expenditures that cannot be anticipated, such as utility rate and usage increases, unanticipated repairs, uncertainties relating to fiscal policy, additional staffing, insurance increases and real estate tax valuation reassessments. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. We may not update any of the forward-looking statements after the date this Quarterly Report on Form 10-Q is filed to conform them to actual results or to changes in our expectations that occur after such date, other than as required by law.

The economy in the United States is continuing to experience a period of moderate economic growth, which directly affects the demand for office space, our primary income producing asset. The broad economic market conditions in the United States are affected by numerous factors, including but not limited to, inflation and employment levels, energy prices, the pace of economic growth and/or recessionary concerns, uncertainty about government fiscal and tax policy, changes in currency exchange rates, geopolitical events, the regulatory environment, the availability of credit and interest rates. In addition, the Federal Reserve Bank has indicated that it could raise interest rates further in 2018. Although the interest rate on our existing indebtedness is fixed, any increase in interest rates could result in increased future borrowing costs to us. However, we could also benefit from any further improved economic fundamentals and increasing levels of employment. We believe that the economy is in a cyclically-slower but prolonged broad-based upswing. However, future economic factors may negatively affect real estate values, occupancy levels and property income.Overview

9 FSP 303 East Wacker Drive Corp., which we refer to as the Company, is a Delaware corporation formed to purchase, own, and operate a twenty-eight story Class “A” multi-tenant office tower containing approximately 860,000 rentable square feet of office and retail space and a 294-stall underground parking garage located in downtown Chicago, Illinois, which we refer to as the Property.

~~Real~~Franklin ~~Estate~~Street ~~Operations~~Properties Corp., which we refer to as Franklin Street, is the sole holder of our one share of common stock, $.01 par value per share, which we refer to as the Common Stock, that is issued and outstanding. Between February 2007 and December 2007, FSP Investments LLC, a wholly-owned subsidiary of Franklin Street, completed the sale on a best efforts basis of 2,210 shares of our preferred stock, $.01 par value per share, which we refer to as the Preferred Stock. FSP Investments LLC sold the Preferred Stock in a private placement offering to “accredited investors” within the meaning of Regulation D under the Securities Act of 1933. Since the completion of the placement of the Preferred Stock in December 2007, Franklin Street has not been entitled to share in any earnings or dividend related to the Common Stock.

~~The~~We ~~Property~~operate ~~was~~in ~~approximately 74.7%~~one ~~leased~~business assegment, which ofis ~~March~~real 31estate operations, ~~2018~~and toown a ~~diverse~~single ~~group~~property. ofOur ~~tenants~~real ~~with~~estate ~~staggered~~operations ~~lease~~involve ~~expirations,~~real ~~compared~~estate torental ~~approximately~~operations, ~~73.5%~~leasing ~~leased~~services asand ofproperty ~~December~~management ~~31, 2017~~services. WeThe ~~believe~~main factor that ~~any~~affects ~~tenant~~our ~~that~~real ~~leases~~estate ~~10%~~operations oris ~~more~~the ofbroad economic market conditions in the ~~Property’s~~United ~~rentable~~States ~~space~~and, ismore ~~material. As~~specifically, ofthe ~~March~~economic 31conditions in Chicago, ~~2018~~Illinois, 45the ~~tenants~~relevant ~~were~~local ~~leasing~~market. These ~~space~~market atconditions affect the ~~Property,~~occupancy ~~with~~levels and the ~~largest~~rent ~~being~~levels ~~Tribune~~on ~~Media~~both ata ~~approximately~~national ~~60,952 square~~and ~~feet,~~local orlevel. ~~approximately~~We ~~7.1%~~have ofno ~~the~~influence on ~~Property’s~~national ~~rentable~~or ~~space~~local market conditions.

~~During~~Trends ~~the three months ended March 31, 2018, we worked with several new prospects~~ and ~~multiple existing tenants on potential expansions and lease extensions.~~Uncertainties

WeEconomic believe that the vacancy rate in the downtown Chicago office market, which we refer to as the Central Business District, decreased slightly during the first quarter of 2018 compared to the fourth quarter of 2017. We believe that the decrease in the vacancy rate in the Central Business District during the first quarter of 2018 was primarily attributable to a decrease in available sublease space. The Property is located in the East Loop submarket of the Central Business District. We believe that the vacancy rate in the East Loop also decreased slightly during the first quarter of 2018 compared to the fourth quarter of 2017, but we think that the decrease in the East Loop was primarily attributable to positive net absorption and a decrease in available sublease space. During the three months ended March 31, 2018, we believe that rental rates increased for buildings in Chicago’s East Loop office submarket. We believe that several factors, including a limited supply of larger tenant prospects, have caused us to focus on renewing and expanding existing tenants, while also attempting to attract smaller and mid-sized prospective tenants. Accordingly, we believe that it may take longer than we had previously expected to stabilize the Property at a higher occupancy level.Conditions

ItThe iseconomy ~~difficult~~in ~~for~~the ~~management~~United States tois ~~predict~~continuing ~~what~~to ~~will~~experience ~~happen~~a toperiod ~~occupancy~~of ~~and~~moderate ~~rents~~economic ingrowth, ~~the~~which ~~future~~directly ~~because~~affects the ~~need~~demand for office space, ~~and~~our ~~the~~primary income ~~price~~producing ~~tenants~~asset. The ~~are~~broad ~~willing~~economic ~~to pay~~market ~~are~~conditions ~~tied~~in ~~to both~~ the ~~local~~United ~~economy~~States ~~and~~are toaffected ~~the~~by ~~larger~~numerous ~~trends~~factors, inincluding but ~~the~~not ~~national~~limited ~~economy~~to, ~~such~~inflation asand ~~job~~employment ~~growth~~levels, ~~interest~~energy ~~rates~~prices, the ~~availability~~ pace of ~~credit~~economic growth and/or ~~corporate~~recessionary ~~earnings~~concerns, ~~which~~uncertainty about ingovernment ~~turn~~fiscal ~~are~~and ~~tied~~tax topolicy, ~~even~~changes ~~larger~~in ~~macroeconomic~~currency ~~and~~exchange ~~political~~rates, ~~factors~~geopolitical events, ~~such as~~the ~~recessionary~~regulatory ~~concerns~~environment, ~~volatility~~the availability inof ~~energy~~credit ~~pricing~~ and ~~the~~interest ~~risk of terrorism~~rates. In addition, to the ~~difficulty~~Federal ofReserve ~~predicting~~Bank ~~macroeconomic factors,~~has itindicated isthat ~~difficult~~it tocould ~~predict~~raise ~~how~~interest rates ~~our~~further ~~local~~in ~~market~~2018. orAlthough ~~tenants~~the ~~(existing~~interest ~~and~~rate ~~potential)~~on ~~will~~our ~~suffer~~existing orindebtedness ~~benefit~~is ~~from changes in the larger economy. In addition~~fixed, ~~because~~any ~~the~~increase ~~Property is~~ in ainterest ~~single~~rates ~~geographical~~could ~~market,~~result in ~~these~~increased ~~macroeconomic~~future ~~trends~~borrowing ~~may~~costs ~~have a~~to ~~different~~us. However, ~~effect~~we oncould ~~the~~also ~~Property~~benefit ~~and~~from onany ~~its~~further ~~tenants~~improved ~~(existing~~economic fundamentals and ~~potential),~~increasing ~~some~~levels of ~~which may operate on a national level~~employment. ~~Although~~ We webelieve ~~cannot~~that ~~predict how long it will take to lease vacant space at~~ the ~~Property~~economy oris ~~what~~in ~~the~~a ~~terms~~cyclically-slower ~~and~~but ~~conditions~~prolonged ofbroad-based ~~any~~upswing. ~~new leases will be~~However, wefuture ~~expect~~economic tofactors ~~sign~~may ~~new~~negatively ~~leases~~affect atreal ~~then-current~~estate ~~market~~values, ~~rates~~occupancy ~~which~~levels ~~may~~and beproperty ~~below the expiring rates~~income.

The potential for any of our tenants to default on its lease or to seek the protection of bankruptcy laws exists. If any of our tenants defaults on its lease, we may experience delays in enforcing our rights as a landlord and may incur substantial costs in protecting our investment. In addition, at any time, a tenant may seek the protection of bankruptcy laws, which could result in the rejection and termination of such tenant’s lease and thereby cause a reduction in cash available for distribution to our stockholders. Bankruptcy or a material adverse change in the financial condition of a material tenant would likely have a material adverse effect on our results of operations.10

~~Dividends,~~Potential ~~Future~~Sale ~~Tenant~~of ~~Improvement Costs~~the ~~and Leasing Commissions~~Property

On ~~April~~June 2428, 2018, ~~our~~we ~~Board~~entered ofinto ~~Directors~~a ~~declared~~Purchase aand ~~dividend~~Sale inAgreement with BCSP 8 Acquisition LLC, which we refer to as the ~~amount~~Purchaser, pursuant to which the Purchaser agreed to purchase the Property for an aggregate gross purchase price of $~~340~~182,000,000, ~~per~~subject ~~share~~to the satisfaction of ~~Preferred~~customary closing ~~Stock~~conditions, inincluding ~~light~~the approval of ~~results~~our stockholders. If the sale is consummated, we intend to effect a dissolution and liquidation of ~~operations~~the Company, with the net proceeds of the ~~Property~~sale distributed to stockholders after payment of our obligations and provision for ~~the~~any ~~three~~contingent ~~months~~liabilities. ~~ended~~On ~~March~~July 3127, 2018., ~~Although~~ we ~~currently~~filed ~~expect~~ a ~~similar~~definitive ~~level~~information ofstatement, ~~dividend~~which ~~distributions~~we inrefer ~~future~~to ~~periods~~as the ~~until~~Consent ~~occupancy~~Solicitation, ~~levels~~with at the ~~Property~~SEC. ~~more~~The ~~fully~~Consent ~~recover~~Solicitation, among other items, requests the ~~level~~consent of ~~dividend~~the ~~payments~~holders inof ~~future~~the ~~periods~~Preferred Stock ~~may~~to ~~vary~~the ~~and~~sale ~~will~~of ~~depend on~~ the Property’s ~~actual~~to ~~operating~~an ~~results~~unaffiliated ~~and~~third-party ~~future~~buyer ~~capital~~for ~~and~~a ~~leasing~~minimum ~~needs~~gross sales price of $182,000,000. WeAt ~~cannot~~this time, ~~guarantee~~we ~~the~~are ~~future~~not ~~payment~~able ~~of dividends~~to orpredict the ~~amount~~outcome of ~~any~~the ~~such~~Consent ~~dividends~~Solicitation, which would be required to sell the Property.

~~Management~~Real ~~believes~~Estate ~~that~~Operations the Company will need to be able to quickly access cash in order to fund the potentially significant tenant improvements costs and leasing commissions that may be required to stabilize the occupancy and rent roll at the Property. In light of the amount of vacant space that needs to be leased at the Property and the potential for significant tenant improvement allowance costs and leasing commissions, on August 3, 2011, we entered into a mortgage note in favor of John Hancock Life Insurance Company (U.S.A.), which we refer to as the Lender, to evidence a loan, in the original principal amount of $35,000,000 that matures on September 1, 2021, which we refer to as the Loan. The remaining proceeds of the Loan are being held by the Lender for our benefit in a restricted reserve account or accounts to be drawn upon by us from time to time for tenant improvement costs and leasing commissions at the Property upon satisfaction of certain conditions.

The Property was approximately 73.5% leased as of June 30, 2018 to a diverse group of tenants with staggered lease expirations, compared to approximately 73.5% leased as of December 31, 2017. We believe that any tenant that leases 10 % or more of the Property’s rentable space is material. As of June 30, 2018, 44 tenants were leasing space at the Property, with the largest being Tribune Media at approximately 60,952 square feet, or approximately 7.1% of the Property’s rentable space.

~~The~~We ~~Loan~~believe ~~bears~~that ~~interest~~the atvacancy ~~the~~rate ~~fixed~~in ~~rate~~the ofdowntown ~~4.83%~~Chicago ~~per~~office ~~annum.~~market, Wewhich ~~were~~we ~~obligated~~refer to ~~make~~as ~~monthly~~the ~~payments~~Central ofBusiness ~~interest~~District, ~~only~~increased ~~for~~slightly ~~the~~during ~~initial 60 months of~~ the ~~Loan.~~second ~~Thereafter,~~quarter weof ~~are~~2018 ~~obligated~~compared to ~~make~~the ~~monthly~~first ~~payments~~quarter of ~~principal~~2018. ~~and~~We ~~interest~~believe ~~for~~that the ~~remaining~~increase 60in ~~months,~~the ~~based~~vacancy onrate ain ~~25-year amortization~~the ~~schedule,~~Central ~~until~~Business District during the ~~maturity~~second ~~date,~~quarter ~~when~~of ~~all~~2018 ~~outstanding~~was ~~amounts~~primarily ~~become~~attributable ~~due.~~to ~~Commencing~~new ondeliveries ~~October~~outpacing 1,net ~~2016,~~absorption. ~~the~~The ~~Loan~~Property ~~became~~is ~~payable~~located in ~~monthly~~the ~~payments~~East ofLoop ~~principal~~submarket ~~and~~of ~~interest in~~ the ~~amount~~Central ofBusiness ~~$201,155~~District. We ~~may~~believe ~~prepay~~that the ~~Loan~~vacancy ~~with~~rate ~~a prepayment premium, as defined~~ in the ~~Loan~~East ~~agreement.~~Loop ~~The~~also increased ~~Loan~~slightly isduring ~~secured,~~the insecond ~~part,~~quarter ~~by a mortgage, assignment~~ of ~~leases~~2018 ~~and~~compared ~~rents and security agreement, which we refer~~ to as the ~~Mortgage,~~first ~~from~~quarter ~~us in favor~~ of ~~the~~2018, ~~Lender.~~but ~~The~~we ~~Mortgage~~think ~~constitutes~~that ~~a lien against~~ the ~~Property and~~decrease ~~has been recorded~~ in the East ~~land~~Loop ~~records~~was ofprimarily ~~Cook~~attributable ~~County, Illinois. Subject~~ to ~~customary~~negative ~~exceptions,~~net ~~the~~absorption. ~~Loan~~During ~~is nonrecourse to~~ the ~~Company.~~three Asmonths ofended ~~March~~June 3130, 2018, we ~~had~~believe ~~drawn~~that anrental rates ~~aggregate~~increased offor ~~$31,070,000~~buildings ~~from~~in ~~the~~Chicago’s ~~restricted~~East ~~reserve~~Loop ~~account(s)~~office submarket. ~~Interest~~We ~~expense paid~~believe onthat ~~the~~several ~~Loan~~factors, ~~for~~including ~~the~~a ~~three~~limited supply ~~months~~of ~~ended~~larger ~~March~~tenant 31prospects, ~~2018~~have ~~and~~caused ~~2017~~us ~~was~~to ~~$411,000~~focus ~~and~~on ~~$420,000,~~renewing ~~respectively. The documents evidencing~~ and ~~securing~~expanding ~~the~~existing ~~Loan~~tenants, ~~include~~while ~~restrictions~~also onattempting ~~property~~to attract ~~liens~~smaller and ~~require~~mid-sized ~~compliance~~prospective ~~with~~tenants. ~~various non-financial covenants~~Accordingly, ~~which include~~we ~~the~~believe ~~requirement~~ that weit ~~provide~~may ~~annual~~take ~~reports~~longer tothan ~~the~~we ~~Lender.~~had Wepreviously ~~were~~expected to instabilize ~~compliance with~~ the ~~Loan~~Property ~~covenants~~at asa ofhigher ~~March 31,~~occupancy ~~2018 and December 31, 2017~~level.

~~Potential~~It ~~Sale~~is difficult for management to predict what will happen to occupancy and rents in the future because the need for space and the price tenants are willing to pay are tied to both the local economy and to the larger trends in the national economy, such as job growth, interest rates, the availability of credit and corporate earnings, which in turn are tied to even larger macroeconomic and political factors, such as recessionary concerns, volatility in energy pricing and the risk of terrorism. In addition to the difficulty of predicting macroeconomic factors, it is difficult to predict how our local market or tenants (existing and potential) will suffer or benefit from changes in the larger economy. In addition, because the Property is in a single geographical market, these macroeconomic trends may have a different effect on the Property and on its tenants (existing and potential), some of which may operate on a national level. Although we cannot predict how long it will take to lease vacant space at the Property or what the terms and conditions of any new leases will be, we expect to sign new leases at then-current market rates which may be below the expiring rates.

~~During~~The ~~the~~potential ~~three~~for ~~months~~any ~~ended~~of ~~March~~our tenants ~~31,~~to ~~2018,~~default ~~our~~on ~~Board~~its oflease ~~Directors~~or ~~made~~to seek the ~~decision~~protection toof ~~try~~bankruptcy tolaws ~~sell~~exists. ~~the~~If ~~Property.~~any ~~After~~of ~~soliciting~~our ~~interest~~tenants ~~and~~defaults ~~input~~on ~~from~~its ~~commercial~~lease, we may ~~real~~experience ~~estate~~delays ~~brokers~~in ~~familiar~~enforcing ~~with~~our ~~the~~rights ~~Property~~as a landlord and ~~the~~may ~~local~~incur ~~market,~~substantial wecosts ~~retained~~in ~~Jones~~protecting ~~Lang~~our ~~LaSalle~~investment. ~~Americas~~In ~~(Illinois)~~addition, at ~~L.P.~~any time, a ~~commercial~~ ~~real~~tenant ~~estate~~may ~~broker~~seek the protection of bankruptcy laws, which could result in the rejection and termination of such tenant’s lease and thereby cause a reduction in cash available for distribution to ~~facilitate~~our stockholders. Bankruptcy or a ~~potential~~material ~~sale~~adverse ofchange in the ~~Property~~financial condition of a material tenant would likely have a material adverse effect on our results of operations.

~~Any~~Future ~~sale~~Tenant ofImprovement ~~the Property would~~Costs ~~be subject to a number of conditions, including successful marketing of the Property~~ and ~~approval~~Leasing ofCommissions the sale by our Board of Directors and a majority of the holders of the Preferred Stock. At this time, we are not able to predict when or if the satisfaction of any of these conditions will occur and as a result there can be no assurance that we will be able to sell the Property on acceptable terms or within any particular time frame.

~~Critical~~In ~~Accounting~~the ~~Policies~~event that the sale of the Property described in the Consent Solicitation does not occur, management believes that the Company will need to be able to quickly access cash in order to fund the potentially significant tenant improvements costs and leasing commissions that may be required to stabilize the occupancy and rent roll at the Property. In light of the amount of vacant space that needs to be leased at the Property and the potential for significant tenant improvement allowance costs and leasing commissions, on August 3, 2011, we entered into a mortgage note in favor of John Hancock Life Insurance Company (U.S.A.), which we refer to as the Lender, to evidence a loan, in the original principal amount of $35,000,000 that matures on September 1, 2021, which we refer to as the Loan. The remaining proceeds of the Loan are being held by the Lender for our benefit in a restricted reserve account or accounts to be drawn upon by us from time to time for tenant improvement costs and leasing commissions at the Property upon satisfaction of certain conditions.

We have certain critical accounting policies that are subject to judgments and estimates by our management and uncertainties of outcome that affect the application of these policies. We base our estimates on historical experience and on various other assumptions we believe to be reasonable under the circumstances. On an on-going basis, we evaluate our estimates. In the event estimates or assumptions prove to be different from actual results, adjustments are made in subsequent periods to reflect more current information. The accounting policies that we believe are most critical to the understanding of our financial position and results of operations and that require significant management estimates and judgments are discussed below.11

~~Critical~~The ~~accounting~~Loan ~~policies~~bears interest at the fixed rate of 4.83% per annum. We were obligated to make monthly payments of interest only for the initial 60 months of the Loan. Thereafter, we are obligated to make monthly payments of principal and interest for the remaining 60 months, based on a 25-year ~~those~~amortization ~~that~~schedule, ~~have~~until the ~~most~~maturity ~~impact~~date, when all outstanding amounts become due. Commencing on October 1, 2016, the ~~reporting~~Loan became ofpayable ~~our~~in ~~financial~~monthly ~~condition~~payments of principal and ~~results~~interest in the amount of ~~operations~~$201,155. We may prepay the Loan with a prepayment premium, as defined in the Loan agreement. The Loan is secured, in part, by a mortgage, assignment of leases and ~~those~~rents ~~requiring~~and ~~significant~~security ~~judgments~~agreement, which we refer to as the Mortgage, from us in favor of the Lender. The Mortgage constitutes a lien against the Property and ~~estimates~~has been recorded in the land records of Cook County, Illinois. WeSubject ~~believe~~to ~~that~~customary ~~our~~exceptions, ~~judgments~~the Loan is nonrecourse to the Company. As of June 30, 2018, we had drawn an aggregate of $35,012,000 from the restricted reserve account(s). Interest expense incurred on the Loan for the six months ended June 30, 2018 and ~~estimates~~2017 ~~are~~was ~~consistently~~$817,000 ~~applied~~and $837,000, respectively. The documents evidencing and ~~produce~~securing the Loan include restrictions on property liens and require compliance with various non-financial ~~information~~covenants, which include the requirement that ~~fairly~~we ~~presents~~provide ~~our~~annual ~~results~~reports to the Lender. We were in compliance with the Loan covenants as of ~~operations~~June 30, 2018 and December 31, 2017.

NoCritical ~~change to our critical accounting~~Accounting ~~policies has occurred since the filing of our Annual Report on Form 10-K for the year ended December 31, 2017.~~Policies

~~Results~~We have certain critical accounting policies that are subject to judgments and estimates by our management and uncertainties of ~~Operations~~outcome that affect the application of these policies. We base our estimates on historical experience and on various other assumptions we believe to be reasonable under the circumstances. On an on-going basis, we evaluate our estimates. In the event estimates or assumptions prove to be different from actual results, adjustments are made in subsequent periods to reflect more current information. The accounting policies that we believe are most critical to the understanding of our financial position and results of operations and that require significant management estimates and judgments are discussed below.

AsCritical ofaccounting ~~March~~policies are ~~31,~~those ~~2018,~~that have the ~~Property~~most impact on the reporting of our financial condition and results of operations and those requiring significant ~~was~~judgments ~~approximately~~and 74estimates.7% ~~leased~~We tobelieve athat ~~diverse~~our ~~group~~judgments ofand ~~tenants~~estimates ~~with~~are ~~staggered~~consistently ~~lease~~applied ~~expirations~~and produce financial information that fairly presents our results of operations.

~~Comparison~~No ofchange ~~the~~to ~~three~~our ~~months~~critical ~~ended~~accounting ~~March~~policies ~~31,~~has ~~2018~~occurred tosince the ~~three~~filing ~~months~~of our Annual Report on Form 10-K for the year ended ~~March~~December 31, 2017.

~~Revenue~~Results of Operations

~~Total~~As ~~revenue~~of ~~increased~~June ~~by approximately $0.5 million to $5.3 million for the three months ended March 31~~30, 2018, ~~as compared to $4.8 million for~~ the ~~three months ended~~Property ~~March~~was ~~31,~~approximately ~~2017~~73.5% ~~This~~leased ~~increase was due~~ to ana ~~increase~~diverse ofgroup ~~$0.3 million in rental revenue and an increase~~ of ~~$0.2~~tenants ~~million~~with ~~from~~staggered ~~recovery from~~lease ~~operating expenses and real estate taxes~~expirations.

~~Expenses~~Comparison of the three months ended June 30, 2018 to the three months ended June 30, 2017

Total expenses increased by approximately $0.4 million to $5.5 million for the three months ended March 31, 2018, as compared to $5.1 million for the three months ended March 31, 2017. The increase is primarily due to a $0.2 million increase in depreciation and amortization, a $0.1 million increase in real estate taxes and insurance and a $0.1 million increase in operating expenses.Revenue

11 Total revenue increased by approximately $0.3 million to $5.2 million for the three months ended June 30, 2018, as compared to $4.9 million for the three months ended June 30, 2017. This increase was due to an increase of $0.1 million in rental revenue and an increase of $0.2 million from recovery from operating expenses and real estate taxes.

~~Liquidity and Capital Resources~~ Expenses

~~Cash~~Total ~~and~~expenses ~~cash~~decreased ~~equivalents~~by ~~were~~ approximately $200.1 million atto ~~March~~$5.1 ~~31,~~million ~~2018~~for ~~and~~the ~~$22.6~~three ~~million~~months atended ~~December~~June 3130, ~~2017.~~2018, ~~The~~as compared to $2.5.2 million ~~decrease~~ for the three months ended ~~March 31,~~June ~~2018~~30, ~~was~~2017. The decrease is primarily ~~attributable~~due to ~~approximately~~a $10.53 million ~~used~~real inestate ~~investing~~taxes ~~activities,~~abatements ~~$0.9~~from ~~million~~prior ~~used~~years, inwhich ~~financing~~was ~~activities, and~~offset by the $0.1 million ~~used~~increase ~~for~~in ~~operating~~current ~~activities~~year real estate taxes.

~~Management~~Comparison ~~believes~~of ~~that~~ the ~~existing cash~~six ~~and~~months ~~cash~~ended June ~~equivalents as of March 31~~30, 2018 ~~of $20.1 million and cash anticipated~~ to bethe ~~generated~~six ~~internally~~months byended ~~operations~~June ~~will be sufficient to meet working capital requirements~~30, ~~any distributions required for us to maintain our status as a real estate investment trust and anticipated capital expenditures for at least the next 12 months.~~2017

~~Operating Activities~~Revenue

~~The~~Total ~~cash~~revenue ~~used~~increased ~~for~~by ~~operating activities~~approximately of $0.18 million to $10.5 million for the ~~three~~six months ended ~~March~~June 3130, 2018, ~~was~~as ~~primarily~~compared ~~attributable~~ to ~~a net loss of approximately~~ $09.27 million~~, uses~~ ~~arising~~for ~~from~~the ~~other~~six ~~current~~months ~~operations~~ended ofJune 30, $12017.5 ~~million,~~This ~~and~~increase ~~payments~~was ofprimarily ~~deferred~~due ~~leasing~~to ~~costs~~an increase of $0.34 million, ~~which~~in ~~was~~rental ~~partially offset~~revenue byand an ~~add-back~~increase of ~~non-cash items of~~ $10.94 million, ~~consisting~~from recovery ~~primarily~~from ofoperating ~~depreciation~~expenses and ~~amortization~~real estate taxes.

~~Investing Activities~~12

~~The cash used in investing activities of approximately $1.5 million for the three months ended March 31, 2018 was attributable to purchases of real estate assets.~~Expenses

~~Financing~~Total ~~Activities~~expenses increased by approximately $0.3 million to $10.6 million for the six months ended June 30, 2018, as compared to $10.3 million for the six months ended June 30, 2017. The increase is primarily due to a $0.1 million increase in operating expenses and a $0.2 million increase in depreciation and amortization.

~~The~~Liquidity ~~cash used in financing activities of approximately $0.9 million for the three months ended March 31, 2018 was attributable to the distributions to stockholders of approximately $0.7 million~~ and ~~$0.2~~Capital ~~million of principal payments on the Loan.~~Resources

~~Sources~~Cash, cash equivalents and ~~Uses~~restricted cash ofwere ~~Funds~~$24.8 million at June 30, 2018 and $26.6 million at December 31, 2017. The $1.8 million decrease for the six months ended June 30, 2018 was primarily attributable to approximately $2.5 million used in investing activities and $1.9 million used in financing activities, which was offset by the $2.6 million provided by operating activities.

~~Our~~Management ~~principal~~believes ~~demands~~that onthe ~~liquidity~~existing ~~are~~cash and cash ~~for~~equivalents ~~operations,~~as ~~principal~~of ~~and~~June ~~interest~~30, on2018 ~~debt~~of ~~payments~~$24.8 million and ~~distributions~~cash anticipated to ~~equity~~be ~~holders.~~generated Asinternally ofby ~~March~~operations ~~31, 2018, we~~will ~~had~~be ~~approximately~~sufficient ~~$5.5~~to ~~million~~meet inworking ~~accrued~~capital ~~liabilities~~requirements, ~~and~~any ~~$33.8~~distributions ~~million~~required infor ~~loan~~us ~~payable.~~to Inmaintain ~~the~~our ~~near~~status ~~term,~~as ~~liquidity~~a isreal ~~generated~~estate investment bytrust ~~cash~~and ~~from~~anticipated ~~operations~~capital expenditures for at least the next 12 months.

~~Secured~~Operating ~~Debt~~Activities

~~On August 3, 2011, we entered into the Loan, in an original principal amount of $35,000,000 that matures on September 1, 2021.~~ The ~~proceeds~~cash ofprovided ~~the Loan are being held~~ by ~~the Lender for our benefit in a restricted reserve account or accounts to be drawn upon by us from time to time for tenant~~operating ~~improvement~~activities ~~costs and leasing commissions at the Property upon satisfaction~~ of ~~certain conditions~~$2.6 ~~The~~million ~~Loan bears interest at the fixed rate of 4.83% per annum. We were obligated to make monthly payments of interest only~~ for the ~~initial~~six 60 months ofended ~~the~~June ~~Loan. Thereafter~~30, we2018 ~~are~~was ~~obligated~~primarily attributable to ~~make~~an ~~monthly~~add ~~payments~~back of ~~principal and interest for the remaining 60 months, based on a 25~~non-~~year amortization~~cash ~~schedule,~~items ~~until the maturity date, when all outstanding amounts become due~~of $3.8 ~~Commencing on October 1~~million, ~~2016,~~consisting ~~the~~primarily ~~Loan became payable in monthly payments~~ of ~~principal~~depreciation and ~~interest in the amount of $201~~amortization,~~155.~~ Wewhich ~~may~~was ~~prepay~~partially ~~the~~offset ~~Loan~~by ~~with~~ a ~~prepayment premium,~~net asloss ~~defined~~of ~~in the Loan agreement~~approximately $0.1 ~~The Loan is secured~~million, inuses ~~part,~~arising ~~by the Mortgage,~~ from usother incurrent ~~favor~~operations of ~~the Lender~~$0.3 ~~The~~million ~~Mortgage constitutes a lien against the Property~~ and ~~has~~payments ~~been recorded in the land records~~ of ~~Cook~~deferred ~~County,~~leasing ~~Illinois.~~costs ~~Subject to customary exceptions, the Loan is nonrecourse to the Company. As~~ of ~~March 31, 2018, we had drawn an aggregate of~~ $~~31,070,000 from the restricted reserve account(s)~~0.8 ~~Interest expense paid on the Loan for the three months ended March 31, 2018 and 2017 was $411,000 and $420,000, respectively~~million.

~~The~~Investing documents evidencing and securing the Loan include restrictions on property liens and require compliance with various non-financial covenants, which include the requirement that we provide annual reporting. We were in compliance with the Loan covenants as of March 31, 2018 and December 31, 2017.Activities

~~Contingencies~~The cash used in investing activities of approximately $2.5 million for the six months ended June 30, 2018 was attributable to purchases of real estate assets.

WeFinancing may be subject to various legal proceedings and claims that arise in the ordinary course of our business. Although occasional adverse decisions (or settlements) may occur, we believe that the final disposition of such matters will not have a material adverse effect on our financial position or results of operations.Activities

12 The cash used in financing activities of approximately $1.9 million for the six months ended June 30, 2018 was attributable to the distributions to stockholders of approximately $1.5 million and $0.4 million of principal payments on the Loan.

~~Related~~Sources ~~Party~~and ~~Transactions~~Uses of Funds

~~Asset~~Our ~~Management~~principal ~~Agreement~~demands on liquidity are cash for operations, principal and interest on debt payments and distributions to equity holders. As of June 30, 2018, we had approximately $6.8 million in accrued liabilities, and $33.6 million in loan payable. In the near term, liquidity is generated by cash from operations.

WeSecured have in the past engaged in and currently engage in transactions with a related party, Franklin Street, and its wholly-owned subsidiaries, FSP Investments LLC and FSP Property Management LLC, which we collectively refer to as FSP. We expect to continue to have related party transactions with FSP in the form of management fees paid to FSP to manage the Company on behalf of our stockholders. FSP Property Management LLC currently provides us with asset management and financial reporting services. The asset management agreement between us and FSP Property Management LLC requires us to pay FSP Property Management LLC a monthly fee equal to one-half of one percent (.5%) of the gross revenues of the Property. The asset management agreement between us and FSP Property Management LLC may be terminated by either party without cause at any time, upon at least thirty (30) days’ written notice. For the three months ended March 31, 2018 and 2017, management fees paid to FSP Property Management LLC were approximately $24,000 and $23,000, respectively.Debt

~~Investor~~On ~~Services~~August ~~Agreement~~3, 2011, we entered into the Loan, in an original principal amount of $35,000,000 that matures on September 1, 2021. The proceeds of the Loan are being held by the Lender for our benefit in a restricted reserve account or accounts to be drawn upon by us from time to time for tenant improvement costs and leasing commissions at the Property upon satisfaction of certain conditions. The Loan bears interest at the fixed rate of 4.83% per annum. We were obligated to make monthly payments of interest only for the initial 60 months of the Loan. Thereafter, we are obligated to make monthly payments of principal and interest for the remaining 60 months, based on a 25-year amortization schedule, until the maturity date, when all outstanding amounts become due. Commencing on October 1, 2016, the Loan became payable in monthly payments of principal and interest in the amount of $201,155. We may prepay the Loan with a prepayment premium, as defined in the Loan agreement. The Loan is secured, in part, by the Mortgage, from us in favor of the Lender. The Mortgage constitutes a lien against the Property and has been recorded in the land records of Cook County, Illinois. Subject to customary exceptions, the Loan is nonrecourse to the Company. As of June 30, 2018, we had drawn an aggregate of $35,012,000 from the restricted reserve account(s). Interest expense incurred on the Loan for the six months ended June 30, 2018 and 2017 was $817,000 and $837,000, respectively.

OnThe ~~August~~documents ~~14,~~evidencing ~~2012,~~and ~~we entered~~securing ~~into~~the anLoan ~~Investor~~include ~~Services~~restrictions ~~Agreement,~~on ~~which~~property weliens ~~refer~~and torequire ascompliance ~~the FSPI Agreement,~~ with ~~FSP~~various ~~Investments LLC for the provision of investor services to holders of our Preferred Stock. FSP Investments LLC is a wholly~~non-~~owned~~financial ~~subsidiary of Franklin Street~~covenants, which isinclude the ~~sole~~ ~~holder~~requirement ~~of our one share of Common Stock~~ that iswe ~~issued~~provide ~~and~~annual ~~outstanding~~reporting. ~~FSP~~We ~~Investments~~were LLC acted as a real estate investment firm and broker/dealer with respect to (a) our organization, (b) our acquisition of the Property and (c) the sale of our equity interests. The FSPI Agreement requires us to pay a monthly service fee of $500 for services performed under the FSPI Agreement, and to reimburse FSP Investments LLC for its reasonable out-of-pocket expenses incurred in ~~connection~~compliance with the ~~FSPI~~Loan ~~Agreement.~~covenants ~~The~~as ~~FSPI Agreement may be terminated by either party with thirty days written notice or immediately upon certain events~~ of ~~default~~June ~~set forth in the FSPI Agreement. For the three months ended March 31~~30, 2018 and ~~2017,~~December ~~investor services fees paid were approximately $5~~31,~~000 and $4,000,~~ ~~respectively~~2017.

~~Ownership of Preferred Stock and Common Stock~~13

On December 27, 2007, Franklin Street purchased 965.75 shares of Preferred Stock (or approximately 43.7% of the currently issued and outstanding shares of Preferred Stock) for consideration totaling $82,813,000. Prior to purchasing any shares of Preferred Stock, Franklin Street agreed to vote any shares of Preferred Stock held by it on any matter presented to the holders of the Preferred Stock in a manner that approximates as closely as possible the votes cast in favor of and opposed to such matter by the holders of the Preferred Stock other than Franklin Street and its affiliates. For purposes of determining how Franklin Street votes its shares of Preferred Stock, abstentions and non-votes by stockholders other than Franklin Street are not considered. Franklin Street is entitled to distributions that are declared on the Preferred Stock.Contingencies

~~Franklin~~We ~~Street~~may isbe ~~the~~subject ~~sole~~to ~~holder~~various legal ofproceedings ~~our~~and ~~one~~claims ~~share~~that ofarise ~~Common~~in ~~Stock~~the ~~that~~ordinary iscourse ~~issued~~of ~~and~~our ~~outstanding~~business. ~~Subsequent~~Although tooccasional ~~the~~adverse ~~completion~~decisions of(or ~~the~~settlements) may ~~private~~occur, ~~placement~~we ofbelieve that the ~~Preferred Stock~~final indisposition ~~December~~of ~~2007,~~such ~~Franklin~~matters ~~Street~~will ~~has~~ not ~~been~~have ~~entitled~~a tomaterial ~~share~~adverse ineffect on our ~~earnings~~financial position or ~~any~~results ~~dividend related to the Common Stock~~ of ~~the Company~~operations.

~~Item~~Related 3.Party ~~Quantitative and Qualitative Disclosures About Market Risk.~~Transactions

~~Not~~Asset ~~applicable.~~Management Agreement

13 We have in the past engaged in and currently engage in transactions with a related party, Franklin Street, and its wholly-owned subsidiaries, FSP Investments LLC and FSP Property Management LLC, which we collectively refer to as FSP. We expect to continue to have related party transactions with FSP in the form of management fees paid to FSP to manage the Company on behalf of our stockholders. FSP Property Management LLC currently provides us with asset management and financial reporting services. The asset management agreement between us and FSP Property Management LLC requires us to pay FSP Property Management LLC a monthly fee equal to one-half of one percent (.5%) of the gross revenues of the Property. The asset management agreement between us and FSP Property Management LLC may be terminated by either party without cause at any time, upon at least thirty (30) days’ written notice. For the six months ended June 30, 2018 and 2017, management fees paid to FSP Property Management LLC were approximately $50,200 and $45,000, respectively.

~~Item~~Investor 4.Services ~~Controls and Procedures.~~Agreement

~~Disclosure~~On ~~Controls~~August 14, 2012, we entered into an Investor Services Agreement, which we refer to as the FSPI Agreement, with FSP Investments LLC for the provision of investor services to holders of our Preferred Stock. FSP Investments LLC is a wholly-owned subsidiary of Franklin Street, which is the sole holder of our one share of Common Stock that is issued and ~~Procedures~~outstanding. FSP Investments LLC acted as a real estate investment firm and broker/dealer with respect to (a) our organization, (b) our acquisition of the Property and (c) the sale of our equity interests. The FSPI Agreement requires us to pay a monthly service fee of $500 for services performed under the FSPI Agreement, and to reimburse FSP Investments LLC for its reasonable out-of-pocket expenses incurred in connection with the FSPI Agreement. The FSPI Agreement may be terminated by either party with thirty days written notice or immediately upon certain events of default set forth in the FSPI Agreement. For the six months ended June 30, 2018 and 2017, investor services fees paid were approximately $10,400 and $8,400, respectively.

~~Our~~Ownership ~~management, with the participation~~ of ~~our~~ ~~principal~~Preferred ~~executive~~Stock ~~officer~~ and ~~principal financial officer, evaluated the effectiveness of our disclosure controls and procedures~~ asCommon of March 31, 2018. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, or the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of March 31, 2018, our principal executive officer and principal financial officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.Stock

~~Changes~~On December 27, 2007, Franklin Street purchased 965.75 shares of Preferred Stock (or approximately 43.7% of the currently issued and outstanding shares of Preferred Stock) for consideration totaling $82,813,000. Prior to purchasing any shares of Preferred Stock, Franklin Street agreed to vote any shares of Preferred Stock held by it on any matter presented to the holders of the Preferred Stock in ~~Internal~~a ~~Control~~manner ~~Over~~that ~~Financial~~approximates as ~~Reporting~~closely as possible the votes cast in favor of and opposed to such matter by the holders of the Preferred Stock other than Franklin Street and its affiliates. For purposes of determining how Franklin Street votes its shares of Preferred Stock, abstentions and non-votes by stockholders other than Franklin Street are not considered. Franklin Street is entitled to distributions that are declared on the Preferred Stock.

NoFranklin ~~change~~Street inis ~~our~~the ~~internal~~sole ~~control~~holder ~~over~~of ~~financial~~our ~~reporting~~one ~~(as~~share ~~defined~~of inCommon ~~Rules~~Stock ~~13a-15(f)~~that is issued and ~~15d-15(f)~~outstanding. ~~under~~Subsequent to the ~~Exchange~~completion ~~Act)~~of ~~occurred~~the ~~during~~private ~~the~~placement ~~quarter~~of ~~ended~~the Preferred ~~March~~Stock 31in December 2007, ~~2018~~Franklin ~~that~~Street has ~~materially~~not ~~affected,~~been orentitled isto ~~reasonably~~share ~~likely~~in toour ~~materially~~earnings ~~affect,~~or ~~our~~any ~~internal~~dividend ~~control~~related ~~over~~to ~~financial~~the Common Stock ~~reporting~~of the Company.

~~PART~~Item II3. –Quantitative ~~OTHER~~and ~~INFORMATION~~Qualitative Disclosures About Market Risk.

~~Item~~Not 1applicable. ~~Legal Proceedings.~~

~~From~~Item ~~time~~4. toControls ~~time, we may be subject to legal proceedings~~ and ~~claims that arise in the ordinary course of our business~~Procedures. Although occasional adverse decisions (or settlements) may occur, we believe that the final disposition of such matters will not have a material adverse effect on our financial position, cash flows or results of operations.

~~Item~~Disclosure ~~1A.~~Controls ~~Risk~~and ~~Factors.~~Procedures

~~Not~~Our ~~applicable~~management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2018. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, or the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of June 30, 2018, our principal executive officer and principal financial officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

~~Item~~Changes 2.in ~~Unregistered~~Internal ~~Sales~~Control ofOver ~~Equity~~Financial ~~Securities and Use of Proceeds.~~Reporting

~~None~~No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the quarter ended June 30, 2018 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

~~Item 3. Defaults Upon Senior Securities.~~15

~~None.~~PART II – OTHER INFORMATION

Item 41. ~~Mine~~Legal ~~Safety Disclosures~~Proceedings.

~~Not~~From ~~applicable~~time to time, we may be subject to legal proceedings and claims that arise in the ordinary course of our business. Although occasional adverse decisions (or settlements) may occur, we believe that the final disposition of such matters will not have a material adverse effect on our financial position, cash flows or results of operations.

Item 51A. ~~Other~~Risk ~~Information~~Factors.

~~None~~Not applicable.

15 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

~~Item 6~~None. ~~Exhibits.~~

Exhibit No.	Description
31.1*	Certification of FSP 303 East Wacker Drive Corp.'s principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of FSP 303 East Wacker Drive Corp.'s principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of FSP 303 East Wacker Drive Corp.'s principal executive officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification of FSP 303 East Wacker Drive Corp.'s principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*	The following materials from FSP 303 East Wacker Drive Corp.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Operations; (iii) the Consolidated Statements of Cash Flows; and (iv) the Notes to Consolidated Financial Statements.
*	Filed herewith.

Item 3.

Defaults Upon Senior Securities.

16 None.

~~SIGNATURES~~Item 4. Mine Safety Disclosures.

~~Pursuant~~Not ~~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, thereunto duly authorized~~applicable.

~~FSP~~Item ~~303~~5. ~~East wacker~~Other ~~drive corp~~Information.

Date	Signature	Title
Date: May 11, 2018	/s/ George J. Carter George J. Carter	Chief Executive Officer (Principal Executive Officer)
Date: May 11, 2018	/s/ John G. Demeritt John G. Demeritt	Chief Financial Officer (Principal Financial Officer)

None.

1716

Item 6.

Exhibits.

Exhibit No.	Description

10.1 (1)	Purchase and Sale Agreement, dated June 28, 2018, by and between FSP 303 East Wacker Drive LLC and BCSP 8 Acquisition LLC.†

31.1*	Certification of FSP 303 East Wacker Drive Corp.'s principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*	Certification of FSP 303 East Wacker Drive Corp.'s principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*	Certification of FSP 303 East Wacker Drive Corp.'s principal executive officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*	Certification of FSP 303 East Wacker Drive Corp.'s principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101*	The following materials from FSP 303 East Wacker Drive Corp.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2018, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Operations; (iii) the Consolidated Statements of Cash Flows; and (iv) the Notes to Consolidated Financial Statements.

(1)	Incorporated by reference to Annex C to FSP 303 East Wacker Drive Corp.’s Information Statement on Schedule 14A, filed with the SEC on July 27, 2018 (File No. 000-53165).

*	Filed herewith.

†	Schedules and similar attachments have been omitted pursuant to Item 601(b)(2) of Regulation S-K. FSP 303 East Wacker Drive Corp. hereby undertakes to furnish supplementally copies of any of the omitted schedules or similar attachments upon request by the SEC.

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, thereunto duly authorized.

	FSP 303 East wacker drive corp.


Date	Signature	Title

Date: August 10, 2018	/s/ George J. Carter George J. Carter	Chief Executive Officer (Principal Executive Officer)

Date: August 10, 2018	/s/ John G. Demeritt John G. Demeritt	Chief Financial Officer (Principal Financial Officer)

Filing Compare · FSP 303 East Wacker Drive Corp.