UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2012

~~For~~[_] ~~the~~TRANSITION ~~fiscal~~REPORT ~~year~~PURSUANT ~~ended~~TO ~~December~~SECTION ~~31,~~13 ~~2011~~OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to

~~[_]~~Commission ~~TRANSITION~~File ~~REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~No. 000-52559*

~~For~~FSP ~~the~~Phoenix ~~transition period~~Tower ~~from~~Corp. toLiquidating Trust

Commission File No. 000-52559

FSP Phoenix Tower Corp.

(Exact name of registrant as specified in its charter)

Delaware	2090-~~3965390~~6229241
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
401 Edgewater Place, Wakefield, Massachusetts	01880
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (781) 557-1300

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: None

~~Preferred~~Indicate ~~Stock~~by check mark if the registrant is a well-known seasoned issuer, ~~$.01~~as ~~par~~defined ~~value~~in ~~per~~Rule ~~share~~405 of the Securities Act. Yes [_] No X .

Indicate by check mark if the registrant is anot ~~well-known~~required ~~seasoned~~to ~~issuer,~~file asreports ~~defined~~pursuant into ~~Rule~~Section ~~405~~13 or 15(d) of the ~~Securities~~ Act.* Yes [_] No [X_].

Indicate by check mark ifwhether the registrant is(1) ~~not~~has ~~required~~filed toall ~~file~~ reports ~~pursuant~~required to ~~Section~~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 [X_].

Indicate by check mark whether the registrant ~~(1)~~ has ~~filed~~submitted ~~all~~electronically ~~reports~~and ~~required~~posted on its corporate Website, if any, every Interactive Data File required to be ~~filed~~submitted byand ~~Section 13~~posted orpursuant ~~15(d)~~to Rule 405 of ~~the~~Regulation ~~Securities~~S-T ~~Exchange~~(§ ~~Act~~ 232.405 of ~~1934~~this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to ~~file~~submit ~~such reports),~~ and ~~(2) has~~post ~~been subject to~~ such ~~filing requirements for the past 90 days~~files).* Yes [X_] No [_].

Indicate by check mark ~~whether~~if ~~the~~disclosure ~~registrant~~of ~~has~~delinquent ~~submitted~~filers ~~electronically~~pursuant ~~and~~to ~~posted~~Item on405 ~~its~~of ~~corporate~~Regulation ~~Website,~~S-K if(229.405 ~~any,~~of ~~every~~this ~~Interactive~~chapter) ~~Data~~is ~~File~~not ~~required to~~contained beherein, ~~submitted~~ and will ~~posted~~not ~~pursuant~~be contained, to ~~Rule~~the ~~405~~best of ~~Regulation~~registrant’s ~~S-T~~knowledge, (§in ~~232.405~~definitive ofproxy ~~this~~or ~~chapter)~~information ~~during~~statements ~~the~~incorporated by ~~preceding~~reference 12in ~~months (or~~Part ~~for~~III ~~such~~of ~~shorter~~this ~~period~~Form ~~that~~10-K ~~the~~or ~~registrant~~any ~~was~~amendment ~~required~~ to ~~submit~~this ~~and~~Form ~~post such files)~~10-K.* ~~Yes~~ [X] ~~No [_].~~

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting 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 [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes [_] No [X].

As of June 30, ~~2011~~2012, the aggregate fair market value of ~~Common~~common ~~Stock~~stock held by non-affiliates of ~~the~~FSP ~~registrant~~Phoenix Tower Corp. was $0.

The number of shares of ~~Common~~common ~~Stock~~stock outstanding ~~was 1~~ and ~~the~~preferred ~~number~~stock outstanding of ~~shares~~FSP ofPhoenix ~~Preferred~~Tower ~~Stock~~Corp. ~~outstanding~~at ~~was~~December 131,~~050,~~ ~~each~~2012 aswas not applicable. As of ~~February~~December 2931, 2012 there were 1,050 units of beneficial interest in FSP Phoenix Tower Corp. Liquidating Trust outstanding.

Documents incorporated by reference: ~~None.~~

None.

*FSP Phoenix Tower Corp. Liquidating Trust is the transferee of the assets and liabilities of FSP Phoenix Tower Corp., and files reports under the Commission file number for FSP Phoenix Tower Corp. FSP Phoenix Tower Corp. filed a Form 15 on February 1, 2013, indicating its notice of termination of registration and filing requirements.

TABLE OF CONTENTS

PART I		1	1
~~Item 1.~~	~~Business~~Item 1.	1Business.	1
~~Item 1A.~~	~~Risk~~Item ~~Factors~~1A.	5Risk Factors.	4
~~Item 1B.~~	~~Unresolved~~Item ~~Staff Comments~~1B.	5Unresolved Staff Comments.	4
~~Item 2.~~	~~Properties~~Item 2.	6Properties.	5
~~Item 3.~~	~~Legal~~Item ~~Proceedings~~3.	7Legal Proceedings.	5
~~Item 4.~~	~~Mine~~Item ~~Safety Disclosures~~4.	7Mine Safety Disclosures.	5
PART II		8	6
~~Item 5.~~	~~Market~~Item ~~for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities~~5.	8Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities…	6
~~Item 6.~~	~~Selected~~Item ~~Financial Data~~6.	8Selected Financial Data.	6
~~Item 7.~~	~~Management’s~~Item ~~Discussion and Analysis of Financial Condition and Results of Operations~~7.	9Management’s Discussion and Analysis of Financial Condition and Results of Operations.	7
~~Item 7A.~~	~~Quantitative~~Item ~~and Qualitative Disclosures About Market Risk~~7A.	15Quantitative and Qualitative Disclosures About Market Risk.	11
~~Item 8.~~	~~Financial~~Item ~~Statements and Supplementary Data~~8.	15Financial Statements and Supplementary Data.	11
~~Item 9.~~	~~Changes~~Item ~~in and Disagreements With Accountants on Accounting and Financial Disclosure~~9.	15Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.	11
~~Item 9A.~~	~~Controls~~Item ~~and Procedures~~9A.	16Controls and Procedures.	11
~~Item 9B.~~	~~Other~~Item ~~information~~9B.	17Other information.	11
PART III		18	12
~~Item 10.~~	~~Directors,~~Item ~~Executive Officers and Corporate Governance~~10.	18Directors, Executive Officers and Corporate Governance	12
~~Item 11.~~	~~Executive~~Item ~~Compensation~~11.	19Executive Compensation.	12
~~Item 12.~~	~~Security~~Item ~~Ownership of Certain Beneficial Owners and Management~~12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	12
	and Related Stockholder Matters.	20
	Item 13.	Certain Relationships and Related Transactions, and Director Independence.	13
Item 13.	Certain Relationships and Related Transactions, and Director Independence.	21
	Item 14.	Principal Accounting Fees and Services.	14
Item 14.	Principal Accounting Fees and Services.	22
PART IV			14
PART IV		23
	Item 15.	Exhibits, Financial Statement Schedules.	14
Item 15.	Exhibits, Financial Statement Schedules.	23
SIGNATURES			20
SIGNATURES		24

As used in this Annual Report on Form 10-K, unless the context otherwise requires, the terms “we,” “us,” “our,” and “the Trust” refer to the FSP Phoenix Tower Corp. Liquidating Trust. The use of “Phoenix Tower” refers to FSP Phoenix Tower Corp., except where the context otherwise requires.

Forward-Looking Statements

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements represent our current expectations, assumptions, estimates and projections about the Trust and include, but are not limited to, the following:

• any statements regarding the execution, timing and expenses associated with the completion of the Trust;

• any statements regarding the disposition of our remaining assets;

• any statements regarding the resolution of any outstanding creditor claims and liabilities; and

• any statements regarding the amount and timing of any future distributions to our beneficial unit holders.

Forward-looking statements involve risks and uncertainties. Our actual results could differ materially from those anticipated in such forward-looking statements as a result of certain factors, as more fully described elsewhere in this report. Readers are urged to carefully review and consider the various disclosures we make, which advise them of the factors that may affect the Trust, including without limitation, the disclosures made under Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included herein and throughout this Annual Report on Form 10-K for the year then ended December 31, 2012. Risk factors are described under Part II, Item 1A of this report. The important factors listed in these disclosures, which could cause our actual results to differ materially from the forward-looking statements contained herein, include but are not limited to, the following:

• our ability to accurately estimate the expenses associated with executing our plan of complete liquidation and dissolution;

• our ability to successfully resolve all our outstanding or unknown future creditor claims and liabilities; and

• our ability to correctly estimate the amount and timing of any future distributions, to our beneficial unit holders.

In light of these risks, uncertainties and assumptions, readers are cautioned not to place undue reliance on such forward-looking statements. These forward-looking statements represent beliefs and assumptions only as of the date of this report. We do not intend to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future, except as otherwise required pursuant to our on-going reporting obligations under the Securities Exchange Act of 1934, as amended.

PART I

Item 1. Business

Our principal executive office is located at 401 Edgewater Place, Suite 200, Wakefield, Massachusetts 01880, and our telephone number is (781) 557-1300. Our annual reports on Form 10-K, current reports on Form 8-K and any amendments to those reports and other Securities and Exchange Commission (“SEC”) filings are electronically filed with, or furnished to, the SEC. All reports filed by the Trust with the SEC are available free of charge via EDGAR through the SEC website at www.sec.gov. In addition, the public may read and copy materials filed by the Trust with the SEC at the SEC’s public reference room located at 100 F Street, N.E, Washington, D.C. 20549 or by calling the SEC at 1-202-551-8090.

History

~~Our company, FSP~~ Phoenix Tower ~~Corp.,~~was ~~which individually or together with its subsidiaries, we refer to as the “Company”, “we” or “our”, is~~ a Delaware corporation formed to purchase, own, operate, improve and reposition in the marketplace a ~~thirty~~34-~~four~~ story multi-tenant office building containing approximately 629,054 rentable square feet of space located on approximately 2.1 acres of land in Houston, Texas, ~~which we refer to as~~ (the “Property”). ~~The~~Phoenix ~~Company~~Tower ~~operates~~operated in a manner intended to qualify as a real estate investment trust, or REIT, for federal income tax purposes.

~~The~~Phoenix ~~Company~~Tower was organized in December 2005 by FSP Investments LLC (member, FINRA and SIPC), a wholly-owned subsidiary of Franklin Street Properties Corp., ~~which we refer to as~~ (“Franklin Street”) (NYSE ~~Amex~~MKT: FSP). FSP Investments LLC acted as a real estate investment firm and broker/dealer ~~with~~ with respect to (a) the organization of ~~the~~Phoenix ~~Company~~Tower, (b) the acquisition of the Property by ~~the~~Phoenix ~~Company~~Tower and (c) the sale of equity interests in ~~the~~Phoenix ~~Company~~Tower.

~~The~~Phoenix ~~Company~~Tower purchased ~~the~~ the Property from an unaffiliated third party for $74,500,000 on February 22, 2006. ~~The~~Phoenix ~~purchase~~Tower price, which was determined based on arm’s-length negotiations, was financed entirely by a loan from Franklin Street collateralized by a first mortgage, which we refer to as the First Mortgage Loan. The First Mortgage Loan was repaid in its entirety on August 22, 2006 from the proceeds of the sale of equity interests in the Company. Total interest and loan fees incurred on the First Mortgage Loan were approximately $6,840,000. The Company acquired the Property through a limited partnership, FSP Phoenix Tower Limited Partnership, of which ~~the Company~~Phoenix isTower was the sole limited partner and of which FSP Phoenix Tower LLC, a wholly-owned subsidiary of ~~the~~Phoenix ~~Company~~Tower, iswas the sole general partner. The sole business of FSP Phoenix Tower Limited Partnership iswas to own and operate the Property; the sole business of each of FSP Phoenix Tower LLC and ~~the~~Phoenix ~~Company~~Tower was is to hold the equity interests of FSP Phoenix Tower Limited Partnership.

~~The~~Phoenix ~~Company~~Tower commenced ~~operations~~ operations in February 2006.

Franklin Street ~~holds~~held the sole share of ~~the~~Phoenix ~~Company~~Tower’s common stock, $.01 par value per share~~, which we refer to as the Common Stock~~. Between March 2006 and September 2006, FSP Investments LLC completed the sale on a best efforts basis of 1,050 shares of the Company’s preferred stock, $.01 par value per share~~, which we refer to as the Preferred Stock~~. Phoenix WeTower sold the ~~Preferred~~preferred ~~Stock~~stock for an aggregate consideration of approximately $104,316,000 in a private placement offering to 789 “accredited investors” within the meaning of Regulation D under the Securities Act of 1933. Between March 31, 2006 and September 22, 2006, ~~the~~Phoenix ~~Company~~Tower held 10 investor closings, at each of which shares of ~~Preferred~~preferred ~~Stock~~stock were sold and funds were received. On September 22, 2006, Franklin Street purchased 48 shares of ~~Preferred~~preferred ~~Stock~~stock (approximately 4.6% of the 1,050 shares sold) for $4,116,000, representing $4,800,000 at the offering price net of commissions of $384,000 and fees of $300,000 that were excluded. Prior to purchasing any shares of ~~Preferred Stock~~preferred stock, Franklin Street agreed to vote any shares held by it on any matter presented to the holders of ~~Preferred~~preferred ~~Stock~~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~~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~~were not considered. Funds from each individual closing were used to repay the First Mortgage Loan and associated fees as well as other expenses payable to Franklin Street’s wholly-owned subsidiary, FSP Investments LLC. The use of proceeds received from the offerings of Preferred Stock and affiliates receiving payments are set forth in the table below:

Overview of Sale of the Property, Plan of Dissolution and Trust Agreement

On May 25, 2012, the Board of Directors of Phoenix Tower approved (i) the sale of the Property to an unaffiliated third-party buyer for a gross sales price of no less than $123,250,000 and (ii) the subsequent dissolution and liquidation of Phoenix Tower pursuant to a Plan of Complete Dissolution and Liquidation (the “Plan of Dissolution”), intended to allow for the orderly disposition of Phoenix Tower’s remaining assets and liabilities. On June 21, 2012, Phoenix Tower received the required vote of the stockholders to approve the Plan of Dissolution. The Plan of Dissolution provided the Board of Directors with the authority to transfer Phoenix Tower’s remaining assets and liabilities to a liquidating trust without further approval by its stockholders, in connection with the Plan of Dissolution.

On December 3, 2012, Phoenix Tower, through FSP Phoenix Tower Limited Partnership, entered into an agreement (the “Purchase and Sale Agreement”) with PKY 3200 SW Freeway, LLC, an unaffiliated third-party, for the sale of the Property for a gross sales price of $123,750,000.

Use of proceeds:
Type	Affiliate paid	Amount
Operating/Capital Reserve (1)		$ 15,012,500
Organizational, Offering and
Other Expenditures for the Company(2)(6)	FSP Investments LLC	525,000
Selling Commissions(3)	FSP Investments LLC	8,016,000
Acquisition-Related Costs:
Purchase Price of the Property(4)	Franklin Street Properties Corp.	74,500,000
Loan Fee Paid to Franklin Street (5)	Franklin Street Properties Corp.	5,761,500
Acquisition Fee(6)	FSP Investments LLC	501,000
Total Uses of Gross Offering Proceeds		$ 104,316,000

On December 10, 2012, Phoenix Tower and FSP Property Management LLC, as Trustee (the “Trustee”), formed the Trust by entering into the Liquidating Trust Agreement (as amended, the “Trust Agreement”), for the creation and operation of the FSP Phoenix Tower Corp. Liquidating Trust. FSP Property Management LLC previously served as Phoenix Tower’s asset manager and is a wholly-owned subsidiary of Franklin Street. The Trust’s activities are restricted to the conservation and protection of the assets transferred by Phoenix Tower to the Trust and the administration thereof, including the payment of any liabilities, costs and expenses of Phoenix Tower or the Trust. The Trust will terminate upon the earlier of the distribution of all of the Trust’s assets in accordance with the terms of the Trust Agreement, or the expiration of a period of three years from the effective date of the Trust. The existence of the Trust may, however, be extended for up to two additional one-year periods in the Trustee’s reasonable discretion. The beneficial interests in the Trust are not transferable except by will, intestate succession or by operation of law. Any beneficial interests in the Trust transferred by will, intestate succession or by operation of law will thereafter be subject to such transfer restrictions.

~~(1)~~On ~~The~~December ~~Operating/Capital~~20, ~~Reserve~~2012, ~~proceeds~~Phoenix Tower, ~~were~~through ~~retained~~its bysubsidiaries, consummated the ~~Company~~sale of the Property to PKY 3200 SW Freeway, LLC, an unaffiliated third-party, for ~~operating~~a ~~and~~gross ~~capital~~sales ~~uses~~price of $123,750,000.

On December 21, 2012, Phoenix Tower filed its certificate of dissolution with the Secretary of State of the State of Delaware, which became effective on that date, and transferred its remaining net assets (2consisting primarily of cash) ~~Organizational~~totaling $106,683,000 ~~Offering~~to ~~and~~the ~~Other~~Trust. ~~Expenditures~~Upon ~~were~~the ~~paid~~transfer of ~~for~~the ~~various~~assets ~~expenses~~and liabilities to the Trust, ~~including~~Phoenix ~~legal~~Tower’s stock records were closed, ~~accounting~~all of the outstanding shares of Phoenix Tower’s preferred and common stock were cancelled, ~~appraisal~~and each stockholder of Phoenix Tower automatically became the holder of one unit of beneficial interest in the Trust for each one share of Phoenix Tower’s preferred stock then currently held of record by such stockholder. The rights of beneficiaries in their beneficial interests are not represented by any form of certificate or other instrument. Stockholders of Phoenix Tower on December 21, ~~engineering~~2012 ~~and~~were ~~organizational~~not ~~expenses~~required ~~allocable~~to take any action to receive units of beneficial interests. On the ~~offering~~date of the conversion, ~~incurred~~the economic value of one unit of beneficial interest in ~~connection~~the ~~with~~Trust was equivalent to the ~~organization~~economic ~~and~~value ~~syndication~~of one share of ~~the~~Phoenix ~~Company~~Tower’s preferred stock.

~~(3)~~Although ~~Selling~~Phoenix ~~Commissions~~Tower’s dissolution ~~were~~was ~~paid~~effective on December 21, 2012, Section 278 of the General Corporation Law of the State of Delaware provides that Phoenix Tower’s existence continues for at least three years after dissolution for limited purposes. Specifically, Phoenix Tower will continue to ~~FSP~~exist ~~Investments~~for ~~LLC~~the purpose of prosecuting and defending suits, aswhether ~~Selling~~civil, ~~Agent~~criminal or administrative, by or against it, and enabling Phoenix Tower gradually to settle and close its business, to dispose of and convey its property, to discharge its liabilities and to distribute to its stockholders any remaining assets, but not for the purpose of continuing the business for which Phoenix Tower was organized.

~~(4)~~On ~~The~~December ~~Purchase~~21, ~~Price~~2012, ofFSP Phoenix ~~the~~Tower ~~Property~~LLC ~~was~~filed ~~financed~~a bycertificate ~~the~~of ~~First~~cancellation ~~Mortgage~~with ~~Loan,~~the ~~which~~Secretary ~~was~~of ~~repaid~~State ~~from~~of ~~proceeds~~the State of ~~the~~Delaware, ~~offering~~which became effective upon filing.

~~(5)~~On ~~The~~December ~~Loan~~21, 2012, ~~Fee~~following ~~Paid~~the dissolution of Phoenix Tower, the Trustee authorized, pursuant to ~~Franklin~~the ~~Street~~Trust ~~was~~Agreement, aan ~~fee~~initial liquidating ~~(or~~distribution ~~points)~~of ~~payable~~a tototal ~~Franklin~~of ~~Street~~$103,950,000 to ~~obtain~~the beneficial unit holders of the ~~First~~Trust, ~~Mortgage~~which ~~Loan~~amount was to ~~purchase~~be apportioned pro rata according to the ~~Property~~beneficial unit holders’ respective interest in the ~~amount~~Trust as of ~~$5,761,500~~December 21, 2012. The ~~First~~initial ~~Mortgage~~liquidating ~~Loan~~distribution was ineffected anon ~~original~~January ~~principal~~4, ~~amount~~2013. ~~equal~~After giving effect to the ~~purchase~~initial ~~price~~liquidating distribution, as of January 4, 2013, the ~~Property~~Trust retained approximately $4,121,000 in assets, comprised of $2,335,000 in cash and ~~had~~cash aequivalents, ~~term~~the right to receive up to $1,500,000 in escrow proceeds in accordance with the terms of ~~two~~the ~~years~~Purchase and Sale Agreement and related documents, ~~which~~and ~~was~~$286,000 ~~prepayable~~in attenant receivables, in order to wind up Phoenix Tower’s affairs, resolve any ~~time~~claims ~~without~~and ~~premium~~discharge orany ~~penalty~~liabilities of Phoenix Tower during Phoenix Tower’s continued existence under the General Corporation Law of the State of Delaware as described above. As of January 4, 2013, the known liabilities of Phoenix Tower were estimated to be approximately $1,388,000, primarily consisting of accounts payable and ~~carried~~accrued expenses, antaxes ~~interest~~and ~~rate~~professional ~~equal~~fees and the Trust has estimated that it will incur approximately $225,000 in costs related to the ~~rate~~liquidation, ~~payable~~including bylegal ~~Franklin~~expenses, ~~Street~~accounting onexpenses, ~~borrowings~~tax ~~under~~reporting ~~its~~expenses, ~~line~~contractor ofservices, ~~credit~~and miscellaneous ~~with~~other ~~its~~expected ~~bank~~future costs.

~~(6)~~On ~~The~~February ~~Acquisition~~1, ~~Fee~~2013, ~~was~~Phoenix Tower ~~paid~~filed ~~for~~a ~~various~~Form ~~services~~15 inwith ~~connection~~the ~~with~~SEC ~~identifying~~to ~~and~~terminate ~~acquiring~~the registration of Phoenix Tower’s preferred stock under the ~~Property~~Securities Exchange Act of 1934, as amended, (the “Exchange Act”).

~~Transactions~~On ~~between~~February ~~the Company~~5, ~~and~~2013, ~~Franklin~~FSP Phoenix ~~Street~~Tower ~~and/or~~Limited ~~its~~Partnership ~~affiliates~~filed ~~were~~a ~~entered~~certificate ~~into without the benefit~~ of ~~arm’s-length~~termination ~~bargaining~~with ~~and involved conflicts of interest. Although Franklin Street has sponsored~~ the ~~syndication~~Secretary of ~~other~~State ~~REITs similar to the Company and has in the past acquired some~~ of ~~those REITs, Franklin Street is under no obligation to acquire or to offer to acquire~~ the ~~Company~~State ~~or the outstanding shares~~ of ~~Preferred Stock~~Texas, ~~and~~which ~~any acquisition transaction would need to be approved by the Company’s stockholders~~became ~~and~~effective ~~the~~upon ~~boards of directors of Franklin Street and the Company~~filing. ~~Please see “Item 13. Certain Relationships and Related Transactions, and Director Independence”.~~

~~Our~~On ~~Business~~April 1, 2013, the Trust received a no-action letter (the “No Action Letter”) from the SEC stating that the Trust would not be required to register the units of beneficial interests under the Exchange Act if it operated as described in that letter. Pursuant to the No Action Letter and the Trust Agreement, the Trust’s activities are restricted to the liquidation of the assets and liabilities transferred by Phoenix Tower to the Trust, and distributing the proceeds therefrom to the beneficiaries, and paying all liabilities, costs and expenses of Phoenix Tower and the Trust. Under the No Action Letter, the Trustee agreed to file Annual Reports on Form 10-K with unaudited financial statements and Current Reports on Form 8-K upon the occurrence of a material event relating to the Trust with the SEC. The Trust is not required to file periodic reports on Form 10-Q, file proxy statements, or present its financial statements in an interactive format through the use of XBRL under the terms of the No Action Letter.

Our sole business is to own, operate, improve and reposition in the marketplace the Property and we do not intend to invest in or purchase any additional properties. We derive rental revenue from income paid to us by the tenants of the Property. Asset and property management services are provided by third parties.

The Property was completed in 1984 and is a 34-story multi-tenant office building containing approximately 629,054 rentable square feet of space located on approximately 2.1 acres of land in Houston, Texas. The Property benefits from a glass-enclosed fully-integrated attached eight-level parking garage designed to accomodate up to 1,649 parking spaces. In addition to approximately 17 on-site surface parking spaces, the Property also has the right to use approximately 190 additional uncovered off-site spaces at an adjacent property pursuant to a lease that expires on February 28, 2019.

The Property underwent a remeasurement of space in 1997. This remeasurement concluded that the rentable space in the Property should be increased from approximately 618,578 square feet to approximately 629,054 square feet. This Annual Report on Form 10-K makes reference to the more recently determined 629,054 square foot number in all of its general descriptions of the Property. Because lease payments are calculated on a per square foot basis, the Company believes that the potential exists in the future to gain greater amounts of rental income from leasing this extra space. However, the Company also believes that any such potential gains will not come immediately as existing tenants and their respective leases are mostly based upon the previous 618,578 square foot measurement. Accordingly, all tenant and lease descriptions set forth in this Annual Report on Form 10-K reflect the terms and conditions of the respective lease documents, which generally are based on the 618,578 square foot measurement instead of the 629,054 square foot number.

Since its completion in 1984, the Property has competed within the office market in Houston, Texas. Management believes that the Property is still competitive with other office buildings, but given its age, determined at the time of acquisition that it needed improvements in several important areas in order to maintain or enhance its prominent position in the marketplace. Management believes that such a repositioning could increase the value of the Property and lead to higher future rent and occupancy levels. The improvements included, among others, remediation of the glass façade and upgrades to the garage, ground floor lobby, ninth floor sky lobby and terrace, streetscape and landscape. The improvements were substantially completed in June 2009 at a cost of approximately $12 million and have received favorable responses from our existing tenants, potential future tenants and the local leasing community. Distributions

~~Conditions,~~The ~~including~~Plan ~~new~~of Dissolution ~~leasing~~provides ~~activity,~~that atliquidating ~~the~~distributions ~~Property~~will ~~have~~be ~~caused management~~made to ~~make~~the ~~additional~~beneficiaries ~~improvements~~as atdetermined ~~additional~~by ~~cost in order to further enhance~~ the ~~Property~~Trustee. ~~Through~~On ~~December~~January 314, ~~2011~~2013, the Trust ~~Company~~effected ~~had~~the ~~incurred~~conveyance ~~additional costs~~ of ~~approximately~~the ~~$3.7~~initial ~~million~~liquidating todistribution ~~make additional improvements~~ to the ~~Property,~~holders ~~including~~of anunits ~~elevator~~of ~~modernization~~beneficial ~~project~~interest ~~(described~~in ~~further below), common corridor upgrades, multi-tenant corridor conversions and~~ the ~~establishment~~ Trust of a ~~fitness~~total ~~center. If~~of ~~future conditions warrant~~$103,950,000 ~~management may~~pursuant ~~elect~~ to ~~make~~the ~~additional~~Plan ~~improvements~~of ~~at additional cost in order to further enhance the Property~~Dissolution.

OnTax ~~September~~Treatment 15, 2010, we entered into a $2.8 million dollar contract with Thyssen Krupp Elevator Corporation to modernize 21 elevators serving the Property. Over the years, the increasing costs to maintain and operate the system’s mechanical relay controls, as well as the declining level of performance of the vertical transportation, have warranted the modernization project. The work commenced during the fourth quarter of 2010 and was completed on budget and on time at the end of 2011. Management believes that the elevator modernization project could reduce operating costs, improve the overall performance of elevator service, and provide another positive attribute to entice prospective tenants.

~~The~~For ~~Property~~Federal isincome ~~occupied~~tax ~~by a diverse group of tenants~~purposes, ~~including~~the ~~financial~~Trust ~~institutions,~~is ~~energy~~treated ~~firms,~~as ~~law~~a ~~firms~~“grantor” ~~and other professional service organizations~~trust. As ~~of December 31~~such, ~~2011,~~ the ~~Property~~Trust ~~was~~itself ~~approximately 82% leased, a 9.8% increase from the prior quarter. Management~~ is ~~aggressively working~~not subject to ~~lease~~Federal ~~all~~income ~~vacant space~~tax. ~~Management believes that any tenant that leases 10% or more of the Property’s rentable~~ ~~space is material. As of December 31~~Instead, ~~2011,~~each ~~Permian~~beneficiary ~~Mud~~will ~~Service,~~be ~~Inc.,~~treated anas ~~energy-related~~having ~~firm d/b/~~a ~~Champion~~direct ~~Technologies,~~interest ~~leased approximately~~in ~~95,310~~an ~~square~~allocable ~~feet~~pro ~~(15%)~~rata share of ~~the~~each ~~Property’s~~asset ~~rentable space through February 2018. Other prominent additional tenants include Allen Boone Humphries Robinson LLP, (law firm), which leases approximately 51,153 square feet (8%) through July 2018~~ and ~~Thompson and Horton LLP, (law firm), which leases approximately 18,708 square feet (3%) through November 2018. Permian~~liability ~~Mud~~of ~~Service,~~the ~~Inc~~Trust., ~~Allen~~As ~~Boone~~a ~~Humphries Robinson LLP~~result, ~~and~~an ~~Thompson~~allocable ~~and~~portion ~~Horton account for approximately 165,171 square feet (27%)~~ of ~~the~~all ~~rentable~~items ~~area~~ of ~~the~~Trust ~~Property. Other well-known tenants include Sprint Communications~~income, ~~Lincoln~~deductions ~~National Life Insurance Company~~ and ~~the~~credits ~~NetApp,~~must ~~Inc.~~be ~~There~~reported ~~are~~by ~~currently~~beneficiaries on ~~approximately~~their 45income ~~tenants~~tax ~~leasing office space at the Property~~return(s).

OnThe ~~January~~Trust ~~12,~~has ~~2012,~~issued wean ~~entered~~annual ~~into~~information anstatement ~~amendment~~ to ~~the~~our ~~lease~~beneficiaries with ~~Permian~~tax ~~Mud~~information ~~Service,~~for ~~Inc.~~their ~~Pursuant~~2012 totax ~~that amendment, Permian Mud Service, Inc~~returns. ~~added approximately~~Beneficiaries ~~10,131~~are ~~square~~urged ~~feet of space at the Property. The commencement date for the additional premises is expected~~ to beconsult onwith ortheir ~~about~~own ~~April~~tax 1,advisers ~~2012.~~as ~~The~~to ~~expiration~~their ~~date~~own ~~for~~filing ~~the~~requirements ~~additional premises is February 28, 2018. Accordingly, from~~ and ~~after~~ the ~~commencement~~ ~~date~~appropriate ~~for~~tax ~~the~~reporting ~~additional premises, Permian Mud Service, Inc. will lease an aggregate~~ of ~~approximately~~this ~~105,441~~information ~~square feet~~on ~~of space at the Property, or approximately 17% of the Property’s rentable area~~their returns.

~~Some~~Segment ofInformation the Property’s leases are structured on a full-service base year system, where tenants reimburse the landlord for operating expenses above an initial base year. However, as of July 2007, for new and renewing leases, management initiated a conversion from full-service base year leases to net leases, where tenants pay annual base net rent, plus the tenant’s proportionate share of operating expenses. Normal operating expenses at the Property include, but are not limited to, maintenance, repairs, real estate taxes, insurance, utilities and management costs. The landlord is generally obligated, at its expense, to maintain and replace, if necessary, all structural components of the Property, including walls, roof, slab and foundation.

3We do not report segment information.

FSP Property Management LLC, a wholly-owned subsidiary of Franklin Street, provides the Company with asset management and financial reporting services, which include but are not limited to, selecting and supervising a local property management company and local leasing brokers, approving lease transactions, evaluating performance of the asset, and recommending appropriate stockholder distributions to the Board of Directors of the Company. 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 percent (1%) of that month’s 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. Hines Interests Limited Partnership provides the Company with local, on-site property management and building maintenance services and periodic financial, operating and budget reports relating to the operation of the Property for review by FSP Property Management LLC. Hines Interests Limited Partnership is a third-party service provider that is not related to or affiliated with Franklin Street. The management agreement between the Company and Hines Interests Limited Partnership requires the Company to pay Hines Interests Limited Partnership a monthly fee equal to three percent (3%) of the net operating receipts collected in the preceding month. The management agreement between the Company and Hines Interests Limited Partnership may be terminated by either party without cause at any time, upon at least thirty (30) days written notice.

Investment Objectives

The Company’s objectives are to (i) improve and reposition the Property in the marketplace, (ii) obtain cash available to pay dividends through rental receipts from operations of the Property, (iii) have that cash increase over time as a result of rental rate step increases in existing leases, (iv) have our rental revenue potentially increase over time if rental rates increase for new leases, (v) provide increased equity in the Property to our holders of Preferred Stock as a result of appreciation in market value, and (vi) preserve and protect the capital invested by the holders of our Preferred Stock. We cannot be sure of meeting our objectives.

Our policy is not to make loans to other persons, not to invest in the securities of other issuers for the purpose of exercising control, not to underwrite the securities of other issuers, not to offer securities in exchange for property and not to purchase or otherwise reacquire our securities. These policies may be changed by our directors without a vote of the holders of shares of our Preferred Stock.

We have issued our shares of Preferred Stock in the 2006 offering described above. No additional shares of Preferred Stock are authorized by our charter, and authorization of any increase in the number of authorized shares or the creation of any new series or class of stock would require the affirmative vote of the holders of 66.67% of the outstanding shares of Preferred Stock.

We intend to dispose of the Property at such time that our directors determine that we have achieved our investment objectives. We do not intend to reinvest the proceeds and would distribute cash proceeds to stockholders following such disposition. We also do not intend to list our shares of Preferred Stock on an exchange and therefore do not expect any trading market to develop in such shares.

On February 22, 2012, we sent a special communication to the holders of our Preferred Stock to inform them that our board of directors had made the decision to try to sell the Property. More specifically, we have retained CB Richard Ellis to facilitate a potential sale of the Property. We believe that recent leasing activity at the Property, together with an improving and active Houston office building investment climate, are combining to create a potentially advantageous sales opportunity for the holders of our Preferred Stock. Of course, any sale of the Property would be subject to a number of conditions, including approval by our board of directors, review by the U.S. Securities and Exchange Commission and approval by a majority of the holders of our Preferred Stock.

We have the right to obtain a line of credit as described below.

Revolving Line of Credit

Given the amount of space that needs to be leased and the potential for significant tenant improvement allowances and leasing commissions, on December 4, 2008, we entered into a three-year secured promissory note for a revolving line of credit, which we refer to as the Phoenix Revolver, with Franklin Street for up to $15,000,000. On March 31, 2011, the Phoenix Revolver was amended to extend its maturity date from November 2011 to November 30, 2012 and to increase the interest rate applicable to advances thereunder from the 30-day LIBOR rate plus 300 basis points to the 30-day LIBOR rate plus 440 basis points (4.67% at December 31, 2011). The Phoenix Revolver is secured by a mortgage on the Property and each advance thereunder requires payment of a 50 basis point draw fee. We anticipate that the Phoenix Revolver will be replaced or refinanced on or before its maturity date. However, there can be no assurance that we will be able to replace or refinance the Phoenix Revolver on favorable terms or at all. As of December 31, 2011, advances drawn and outstanding under the Phoenix Revolver totaled $11,000,000. For the years ended December 31, 2011 and 2010, the draw fees were $22,500 and $14,500, respectively, and interest expense paid to Franklin Street was approximately $390,000 and $135,000, respectively.

Competition

The Property is an office building located in Houston, Texas. The Property is competing against the other office buildings which are or may become available in the general area in which the Property is located and which may be priced at rental levels lower than those for space in the Property or which may otherwise be more attractive to tenants. In order to lease existing vacancy, the Property must be competitive, in regards to cost and amenities, with other buildings of similar use near our location. Some of our competitors may have significantly more resources than we do and may be able to offer more attractive rental rates or services. On the other hand, some of our competitors may be smaller or have lower fixed overhead costs, less cash or other resources that make them willing or able to accept lower rents in order to maintain a certain occupancy level. If, at any time, there is no significant existing competition for the Property, our competitors may decide to enter the market and build new buildings to compete with our Property. Our competition is not only with other developers, but also with property users who choose to own their building. In addition, larger market forces beyond our control, such as general economic conditions, may increase competition among landlords for quality tenants and individual decisions beyond our control. Given that the Property is a multi-tenant office building that is leased to a diverse group of tenants with staggered lease expirations, we cannot predict which competitive factors will be relevant to prospective future tenants at this time.

In light of the recent improvements to the Property, management believes that the position of the Property in the local office market is strong and management is optimistic that the existing vacant space will ultimately be leased to new tenants. Please see “Part I, Item 2. Properties” for additional information on the improvements to the Property.

Employees

We ~~had~~have no employees asor executive officers. All of ~~December~~our ~~31,~~work ~~2011~~is performed by the Trustee directly or through contract services.

~~Available Information~~3

We are subject to the informational requirements of the Securities Exchange Act of 1934, and, in accordance therewith, we file reports and other information with the Securities and Exchange Commission (SEC). This Annual Report on Form 10-K and other reports and other information we file can be inspected and copied at the SEC Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549 on official business days during the hours of 10:00 to 3:00 pm. Such reports, proxy and information statements, if any, and other information about issuers that file electronically with the SEC may also be obtained from the web site that the SEC maintains at http://www.sec.gov. Further information about the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330.

We will make available and voluntarily provide, free of charge upon written request at the address on the cover of this Annual Report on Form 10-K, a copy of our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish such material to, the SEC. We do not maintain a website.

Item 1A. Risk Factors

~~Not~~Risk ~~applicable~~associated with our liquidation.

In addition to other information in this annual report on Form 10-K, the following risk factors should be carefully reviewed because such factors may have a significant impact on the execution of the Plan of Dissolution and the timing and amount of future liquidating distributions, if any, to our beneficial unit holders. As a result of the risk factors set forth below and elsewhere in this Form 10-K, actual results could differ materially from those projected in any forward-looking statements.

We cannot assure you of the exact amount or timing of any future distribution to our beneficial unit holders.

The liquidation and dissolution process is subject to numerous uncertainties and may result in less than anticipated or no remaining capital available for future distribution to our beneficial unit holders. The precise nature, amount and timing of any future distribution to our beneficial unit holders will depend on and could be delayed by, among other things, currently unknown creditor claims or lawsuits and unexpected or greater than expected expenses. Furthermore, we cannot provide any assurances that we will actually make additional distributions.

We will continue to incur liabilities and expenses that will reduce the amount available for distribution out of the liquidation to beneficial unit holders.

Liabilities and expenses from operations, such as legal, accounting and investor services fees and other operating expenses, will continue to be incurred as we complete the Plan of Dissolution. These expenses and liabilities will reduce the amount of assets available for future distribution to beneficial unit holders.

If our existing contingency reserve for payment of our expenses and liabilities is inadequate, the amount available for distribution to beneficial unit holders could be reduced, or if any liability exceeds our remaining assets, each beneficial unit holder could be held liable for payment to our creditors of his or her pro rata share of amounts owed to creditors in excess of the Trust’s remaining assets, up to the amount actually distributed to each such beneficial unit holder.

Although the liability of any beneficial unit holder is limited to the amounts received by such beneficial unit holder, both as a stockholder of Phoenix Tower, and as a beneficiary of the Trust, from either Phoenix Tower or the Trust in the liquidation process, a beneficiary could be required to return all distributions previously made to such stockholder/beneficiary and receive nothing from us, if amounts required to settle the Trust’s remaining liabilities exceed available assets. Moreover, in the event a stockholder/beneficiary has paid taxes on amounts previously received, a repayment of all or a portion of such amount could result in the beneficial unit holder incurring a net tax cost if the beneficial unit holder’s repayment of an amount previously distributed does not cause a commensurate reduction in taxes payable. While we have endeavored to make adequate reserves for all known and contingent liabilities, there is no guarantee that the reserves established by us, or our remaining assets will be adequate to cover all such expenses and liabilities.

We may be subject to final examinations by taxing authorities across various jurisdictions, which may impact the amount of taxes that we pay and the ultimate distributions to our beneficiaries.

The Trust evaluates its probable exposures associated with the tax filing positions of both Phoenix Tower and the Trust. At December 31, 2012, the Trust believes it has no such exposures, and accordingly has not accrued any such charges. Significant judgment is required in determining the Trust’s provision for income taxes payable, and as a result, the Trust’s determinations may not prove to be accurate. Phoenix Tower and/or the Trust may be subject to final examination by taxing authorities; thus, a final determination by the taxing authorities could increase or decrease amounts of cash available for distribution to our stockholders, perhaps significantly.

A Successor Trustee may need to be appointed to complete the Plan of Dissolution, which could delay the final distribution and closing of the Trust.

The Trust Agreement provides that in the event of death, resignation or removal of the Trustee, a successor trustee will be appointed. In such event, there may be a delay in the administration of the Trust while the successor trustee is appointed and takes office, which may delay the final liquidating distribution, if any, and the closure of the Trust.

Item 1B. Unresolved Staff Comments

~~Not applicable~~None.

Item 2. Properties

~~Set~~Our ~~forth~~principal ~~below~~office is located ~~information~~at ~~regarding~~401 ~~the Property~~Edgewater asPlace, ofSuite ~~December~~200, 31Wakefield, ~~2011:~~Massachusetts 01880.

			Percent
	Date of	Approx.	Leased as	Number	Name of
Property Location	Purchase	Square Feet	of 12/31/11	of Tenants	Major Tenant
3200 Southwest Freeway	02/22/06	629,054	82%	45	Permian Mud Service, Inc.
Houston, TX 77027

We acquired the Property on February 22, 2006 through a limited partnership, all of whose equity interest is owned, directly or indirectly, by the Company. In the opinion of our management, the Property is adequately covered by insurance.

The Property underwent a remeasurement of space in 1997. This remeasurement concluded that the rentable space in the Property should be increased from approximately 618,578 square feet to approximately 629,054 square feet. Holders of our Preferred Stock should note that this Annual Report on Form 10-K makes reference to the newly determined 629,054 square foot number in all of its general descriptions of the Property. Because lease payments are calculated on a per square foot basis, the Company believes that the potential exists in the future to gain greater amounts of rental income from leasing this extra space. However, the Company also believes that any such potential gains will not come immediately as existing tenants and their respective leases are based for the most part upon the previous 618,578 square foot measurement. Accordingly, holders of our Preferred Stock should note that all tenant and lease descriptions set forth in this Annual Report on Form 10-K reflect the terms and conditions of their respective lease documents, which in most cases are based on the 618,578 square foot measurement instead of the 629,054 square foot number.

Conditions, including new leasing activity, at the Property have caused management to make additional improvements at additional cost in order to further enhance the Property. Through December 31, 2011, the Company had incurred additional costs of approximately $3.7 million to make additional improvements to the Property, including an elevator modernization project (described further below), common corridor upgrades, multi-tenant corridor conversions and the establishment of a fitness center. If future conditions warrant, management may elect to make additional improvements at additional cost in order to further enhance the Property.

On September 15, 2010, we entered into a $2.8 million dollar contract with Thyssen Krupp Elevator Corporation to modernize 21 elevators serving the Property. Over the years, the increasing costs to maintain and operate the system’s mechanical relay controls, as well as the declining level of performance of the vertical transportation, have warranted the modernization project. The work commenced during the fourth quarter of 2010 was completed on time and on budget at the end of 2011. Management believes that the elevator modernization project could reduce operating costs, improve the overall performance of elevator service, and provide another positive attribute to entice prospective tenants.

Below is certain information with respect to the Property’s tenants and leases.

Tenants

The Property is occupied by a diverse group of tenants, including financial institutions, energy firms, law firms and other professional service organizations. As of December 31, 2011, the Property was approximately 82% leased, a 9.8% increase from the prior quarter. Management is aggressively working to lease all vacant space. Management believes that any tenant that leases 10% or more of the Property’s rentable space is material. As of December 31, 2011, Permian Mud Service, Inc., an energy-related firm d/b/a Champion Technologies, leased approximately 95,310 square feet (15%) of the Property’s rentable space through February 2018. Other prominent additional tenants include Allen Boone Humphries Robinson LLP, (law firm), which leases approximately 51,153 square feet (8%) through July 2018 and Thompson and Horton LLP, (law firm), which leases approximately 18,708 square feet (3%) through November 2018. Permian Mud Service, Inc., Allen Boone Humphries Robinson LLP, and Thompson and Horton account for approximately 165,171 square feet (27%) of the rentable area of the Property. Other well-known tenants include Sprint Communications, Lincoln National Life Insurance Company and the NetApp, Inc. There are currently approximately 45 tenants leasing office space at the Property.

On January 12, 2012, we entered into an amendment to the lease with Permian Mud Service, Inc. Pursuant to that amendment, Permian Mud Service, Inc. added approximately 10,131 square feet of space at the Property. The commencement date for the additional premises is expected to be on or about April 1, 2012. The expiration date for the additional premises is February 28, 2018. Accordingly, from and after the commencement date for the additional premises, Permian Mud Service, Inc. will lease an aggregate of approximately 105,441 square feet of space at the Property, or approximately 17% of the Property’s rentable area.

Permian Mud Service, Inc. (d/b/a Champion Technologies)

Champion Technologies is a specialty chemical company that offers innovative and environmentally acceptable solutions to oil and gas production problems. Champion Technologies delivers technical solutions that enhance productivity and improve well economics. The information contained in the preceding sentences is from Champion Technologies’ website and has not been independently verified by us. Additional information is available on Permian Mud Service, Inc.’s website at http://www.permianmud.com or Champion Technologies’ website at http://www.champ-tech.com .

Leases

Some of the Property’s leases are structured on a full-service base year system, where tenants reimburse the landlord for operating expenses above an initial base year. However, as of July 2007, for new and renewing leases, management initiated a conversion from full-service base year leases to net leases, where tenants pay annual base net rent, plus the tenant’s proportionate share of operating expenses. Normal operating expenses at the Property include, but are not limited to, maintenance, repairs, real estate taxes, insurance, utilities and management costs. The landlord is generally obligated, at its expense, to maintain and replace, if necessary, all structural components of the Property, including walls, roof, slab and foundation.

Additional Operating Data

Additional information regarding the amount of the Property’s annual real estate taxes and insurance can be found in the Statements of Operations that are included with this Annual Report on Form 10-K. Additional information regarding the Property’s Federal tax basis, rate, method and life claimed for purposes of depreciation can be found in the Notes to Consolidated Financial Statements that are included with this Annual Report on Form 10-K.

Item 3. Legal Proceedings

~~There~~The ~~are~~Trust noor ~~material legal proceedings to which~~ the ~~Company~~ Trustee is ~~a party. The Company from time to time may be involved in lawsuits including, but~~ not ~~limited to,~~presently ~~lawsuits~~subject ~~relating~~ to ~~the~~any ~~real~~claims ~~property it owns for liability for slips and falls, damage to automobiles in the parking garage, minor theft~~ or ~~similar matters. The Company expects that most of these suits will be covered by insurance~~litigation, ~~subject~~nor to ~~customary deductions. In addition, in~~ the ~~ordinary~~Trustee’s ~~course of business~~knowledge, ~~the~~are ~~Company~~any ~~may~~such ~~become~~claims ~~involved~~or in litigation tothreatened against ~~collect~~Phoenix ~~rents~~Tower or ~~other~~ ~~income~~the ~~due to it from tenants~~Trust.

Item 4. Mine Safety Disclosures

Not applicable.

PART II

Item 5. Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

~~There~~Market ~~is no established public trading market for the Company’s Common Stock or Preferred Stock.~~Information

AsThere ofis ~~February~~no ~~29,~~public ~~2012,~~market ~~Franklin~~for ~~Street was~~ the ~~sole~~units ~~holder~~ of ~~record~~beneficial ofinterest in the ~~Common~~FSP ~~Stock~~Phoenix ~~and~~Tower ~~there~~Corp. ~~were~~Liquidating ~~797~~Trust. ~~holders~~The ofunits ~~record~~ of ~~the~~beneficial ~~Preferred~~interest ~~Stock.~~are not ~~This~~and ~~computation~~will isnot ~~based~~be ~~upon~~listed ~~the~~on ~~number~~any ofexchange, ~~record~~quoted ~~holders~~by ~~reflected~~a insecurities ~~our~~broker ~~corporate~~or ~~records.~~dealer, ~~The~~nor ~~final~~admitted ~~sale~~for oftrading ~~Preferred~~in ~~Stock occurred~~any ~~on September 22~~market, ~~2006~~including the ~~and~~over-the-counter ~~following~~market. ~~that~~The ~~date~~units noof ~~further~~beneficial ~~distributions~~interests ~~have~~are ~~been~~not ortransferable ~~will~~except beby ~~declared~~operation onof ~~the~~law, ~~Common~~will ~~Stock.~~or intestate ~~The~~succession, ~~last~~all ~~Common~~in ~~Stock~~accordance ~~distribution~~with ~~was~~the ~~declared~~terms ~~on September 21, 2006~~ and ~~was~~conditions ~~paid~~of onthe ~~September~~Trust ~~29, 2006~~Agreement.

~~Set~~Beneficiaries forth below are the distributions made to Preferred Stockholders in respect of each quarter from the last two fiscal years. Distributions are determined based on the Company’s Board of Directors’ review of cash available for distribution and distribution requirements necessary for the Company to continue to qualify as a real estate investment trust. We cannot guarantee the future payment of dividends or the amount of any such dividends. See Note 4 of the Notes to Consolidated Financial Statements for additional information.

	Distributions
	paid to
Quarter	Preferred
Ended	Stockholders
March 31, 2010	$	999,600
June 30, 2010		1,099,350
September 30, 2010		999,600
December 31, 2010		810,600
March 31, 2011	$	749,700
June 30, 2011		699,300
September 30, 2011		699,300
December 31, 2011		699,300

As of April 10, 2013, there were 783 holders of beneficial interest in the Trust. The rights of beneficiaries in the Trust are not represented by any form of certificate or other instrument. Rather, the Trustee, through its transfer agent, is maintaining a record of the name and address of each beneficiary holding units of record and such beneficiary’s aggregate units of beneficial interest in the Trust.

~~The~~Dividends ~~following schedule summarizes tax components of the distributions paid for the years ended December 31:~~

(dollars in thousands)	2011			2010
		Preferred	%		Preferred	%
Ordinary income	$	-	0%	$	923	24%
Return of Capital		2,847	100%		2,986	76%
Total	$	2,847	100%	$	3,909	100%

Distributions

~~The~~On ~~Company~~December ~~does~~21, ~~not~~2012, ~~have~~following the dissolution of Phoenix Tower, the Trustee authorized, pursuant to the Trust Agreement, an ~~equity~~initial ~~compensation~~liquidating ~~plan~~distribution of ora ~~any~~total ~~outstanding~~of ~~stock~~$103,950,000 ~~options~~to orthe ~~other~~beneficial ~~securities~~unit ~~convertible~~holders ~~into~~of the ~~Company~~Trust, which amount was to be apportioned pro rata according to the beneficial unit holders’s ~~Common~~respective ~~Stock~~interest in the Trust as of December 21, 2012. The initial liquidating distribution was effected on January 4, 2013.

Equity Compensation Plan Information

The Trust has no equity compensation plans.

Item 6. Selected Financial Data

Not applicable.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

~~The~~As ~~following~~used ~~discussion should be read~~ in ~~conjunction with the financial statements and notes thereto appearing elsewhere in~~ this report. 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 Annual Report on Form 10-K ~~may also contain forward-looking statements based on current judgments and current knowledge of management~~, ~~which~~unless ~~are~~the ~~subject to~~context ~~certain~~otherwise ~~risks~~requires, 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~~terms ~~States and in the market where~~ “we ~~own the Property~~,” ~~disruptions in the debt markets, risks of a lessening of demand for the type of real estate owned by~~ “us,” “our ~~ability to lease our vacant space~~,” ~~changes in government regulations~~ and ~~regulatory~~ uncertainty, and expenditures that cannot be anticipated such as utility rate and usage increases, unanticipated repairs, additional staffing, insurance increases and real estate tax valuation reassessments. Although we believe “the ~~expectations~~Trust” ~~reflected~~refer into the ~~forward-looking~~ ~~statements~~FSP ~~are~~Phoenix ~~reasonable,~~Tower weCorp. ~~cannot~~Liquidating ~~guarantee future results, levels of activity, performance or achievements~~Trust. We ~~may~~The ~~not~~use ~~update any~~ of ~~the~~“Phoenix ~~forward-looking~~Tower” ~~statements~~refers ~~after the date this Annual Report on Form 10-K is filed~~ to ~~conform them~~ toFSP ~~actual~~Phoenix ~~results~~Tower ~~or to changes in our expectations that occur after such date~~Corp., ~~other~~except ~~than~~where asthe ~~required~~context byotherwise ~~law~~requires.

~~Overview~~The following discussion should be read in conjunction with our condensed financial statements and notes appearing elsewhere in this Form 10-K. Such financial statements and information have been prepared to reflect our net assets in liquidation.

~~FSP Phoenix Tower Corp., which we refer to as the Company, is a Delaware corporation formed to purchase, own, operate, improve and reposition in the marketplace a 34~~Forward-~~story~~Looking ~~multi-tenant~~Statements office building containing approximately 629,054 rentable square feet of space located on approximately 2.1 acres of land in Houston, Texas, which we refer to as the Property. The Property was completed in 1984 and benefits from a glass-enclosed fully-integrated attached eight-level parking garage designed to accomodate up to 1,649 parking spaces. In addition to approximately 17 on-site surface parking spaces, the Property also has the right to use approximately 190 additional uncovered off-site spaces at an adjacent property pursuant to a lease that expires on February 28, 2019.

~~Franklin~~This ~~Street~~report ~~Properties~~contains forward-looking ~~Corp.,~~statements ~~which~~within wethe ~~refer~~meaning toof asSection ~~Franklin~~27A ~~Street,~~of is the ~~sole~~Securities ~~holder~~Act of ~~our~~1933, ~~one~~as ~~share~~amended, and Section 21E of ~~common~~the ~~stock~~Securities Exchange Act of 1934, $as amended.01 ~~par~~Forward-looking ~~value~~statements ~~per~~represent ~~share~~our current expectations, ~~which~~assumptions, estimates and projections weabout ~~refer~~the toFSP asPhoenix Tower Corp. Liquidating Trust. These forward-looking statements include estimates of the ~~Common~~net ~~Stock~~assets of the Trust, ~~that~~statements isabout ~~issued~~the amount and ~~outstanding.~~timing ~~Between~~of ~~March~~the ~~2006~~payment ~~and~~of ~~September~~additional ~~2006,~~liquidating ~~FSP~~distributions ~~Investments~~and ~~LLC~~statements ~~(member FINRA~~about ~~and~~the ~~SIPC),~~Trust’s operating acosts ~~wholly-owned~~through ~~subsidiary~~termination of ~~Franklin~~the ~~Street~~Trust, ~~completed~~which will vary with the ~~sale~~length onof atime ~~best~~it ~~efforts~~operates. ~~basis~~The forward-looking statements in this report are subject to a number of 1significant risks and uncertainties,~~050~~ ~~shares~~and ofthere ~~our~~can be no assurance that the expectations ~~preferred~~reflected ~~stock,~~in $those statements will be realized or achieved.01 ~~par~~Such ~~value~~risks ~~per~~and ~~share~~uncertainties include, ~~which~~without welimitation, ~~refer~~the risk that the Trust may not be able to asrealize its current estimate of the ~~Preferred~~net ~~Stock.~~value ~~FSP~~of ~~Investments~~its ~~LLC~~assets; ~~sold~~the risk that the ~~Preferred~~Trust ~~Stock~~may have inunderestimated aits ~~private~~obligations ~~placement~~and ~~offering~~liabilities, toincluding ~~“accredited~~without ~~investors”~~limitation, ~~within~~operating expenses incurred in connection with carrying out the ~~meaning~~Plan of ~~Regulation~~Dissolution, Dliabilities ~~under~~and obligations of Phoenix Tower or the ~~Securities~~Trust, ~~Act~~ discharge of ~~1933.~~any ~~Since~~outstanding creditor claims, and the ~~completion~~termination of the ~~placement~~Trust. See Item 1A, “Risk Factors” for additional information regarding certain of ~~the~~these risks ~~Preferred~~and ~~Stock~~uncertainties. inIn ~~September~~light ~~2006~~of these risks, ~~Franklin~~uncertainties ~~Street~~and ~~has~~assumptions, readers are cautioned not ~~been~~to ~~entitled~~place undue reliance toon ~~share~~such inforward-looking ~~any~~statements. ~~earnings~~These forward-looking statements represent beliefs and assumptions only as of the date of this report. Except as required by applicable law, we do not intend to update or ~~dividend~~revise ~~related~~forward-looking statements contained in this report to ~~the~~reflect ~~Common~~future ~~Stock~~events or circumstances.

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 Houston, Texas, the relevant submarket. 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.History

~~Trends~~Phoenix Tower was a Delaware corporation formed to purchase, own, operate, improve and ~~Uncertainties~~reposition in the marketplace a 34-story multi-tenant office building containing approximately 629,054 rentable square feet of space located on approximately 2.1 acres of land in Houston, Texas (the “Property”). Phoenix Tower operated in a manner intended to qualify as a real estate investment trust, or REIT, for federal income tax purposes.

~~Economic~~Phoenix ~~Conditions~~Tower was organized in December 2005 by FSP Investments LLC (member, FINRA and SIPC), a wholly-owned subsidiary of Franklin Street Properties Corp. (“Franklin Street”) (NYSE MKT: FSP). FSP Investments LLC acted as a real estate investment firm and broker/dealer with respect to (a) the organization of Phoenix Tower, (b) the acquisition of the Property by Phoenix Tower and (c) the sale of equity interests in Phoenix Tower.

~~The~~Phoenix ~~economy~~Tower in purchased the ~~United States~~Property isfrom ~~continuing~~an tounaffiliated ~~experience~~third aparty ~~period~~for of$74,500,000 ~~limited~~on ~~economic~~February ~~growth~~22, ~~including~~2006. ~~high~~Phoenix ~~levels~~Tower ofacquired ~~unemployment,~~ the ~~failure~~Property ~~and~~through ~~near failure of~~ a ~~number~~limited ofpartnership, ~~financial~~FSP ~~institutions~~Phoenix ~~and~~Tower ~~increased~~Limited ~~credit~~Partnership, ~~risk premiums for a number~~ of ~~market~~which ~~participants.~~Phoenix ~~Economic conditions~~Tower ~~may~~was bethe ~~affected~~sole ~~by numerous factors, including but not~~ limited ~~to,~~partner ~~inflation~~ and ~~employment~~of ~~levels, energy prices, slow~~which ~~growth~~FSP ~~and/or~~Phoenix ~~recessionary~~Tower ~~concerns~~LLC, ~~changes~~a inwholly-owned ~~currency~~subsidiary ~~exchange~~of ~~rates,~~Phoenix ~~geopolitical events~~Tower, ~~the~~was ~~regulatory environment and~~ the ~~availability~~ ofsole ~~debt~~general ~~and interest rate fluctuations~~partner. ~~Current~~The ~~and~~sole ~~future~~business ~~economic~~of ~~factors~~FSP ~~may~~Phoenix Tower ~~negatively~~Limited ~~affect~~Partnership ~~real~~was ~~estate~~to ~~values, occupancy~~own ~~levels~~ and ~~property~~operate ~~income.~~the AtProperty; ~~this~~the ~~time,~~sole webusiness ~~cannot~~of ~~predict~~each ~~the~~of ~~extent~~FSP orPhoenix ~~duration~~Tower ofLLC ~~any~~and ~~negative~~Phoenix ~~impact~~Tower was ~~that~~to ~~current or~~hold ~~future~~the ~~economic~~equity ~~factors~~interests ~~will~~of ~~have~~FSP onPhoenix ~~our~~Tower ~~business~~Limited Partnership.

9Phoenix Tower commenced operations in February 2006.

~~Potential~~Franklin ~~Sale~~Street held the sole share of Phoenix Tower’s common stock, $.01 par value per share. Between March 2006 and September 2006, FSP Investments LLC completed the ~~Property~~sale on a best efforts basis of 1,050 shares of the Company’s preferred stock, $.01 par value per share. Phoenix Tower sold the preferred stock for an aggregate consideration of approximately $104,316,000 in a private placement offering to 789 “accredited investors” within the meaning of Regulation D under the Securities Act of 1933. Between March 31, 2006 and September 22, 2006, Phoenix Tower held 10 investor closings, at each of which shares of preferred stock were sold and funds were received. On September 22, 2006, Franklin Street purchased 48 shares of preferred stock (approximately 4.6% of the 1,050 shares sold) for $4,116,000, representing $4,800,000 at the offering price net of commissions of $384,000 and fees of $300,000 that were excluded. Prior to purchasing any shares of preferred stock, Franklin Street agreed to vote any shares held by it on any matter presented to the holders of 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 were not considered.

~~Real~~Overview ~~Estate~~of ~~Operations~~Sale of the Property, Plan of Dissolution and Trust Agreement

~~The~~On ~~Property~~May ~~is occupied by a diverse group of tenants~~25, ~~including financial institutions~~2012, ~~energy~~the ~~firms, law firms and other professional service organizations.~~Board As of ~~December~~Directors ~~31,~~of ~~2011,~~Phoenix ~~the~~Tower ~~Property~~approved ~~was~~(i) ~~approximately~~the ~~82%~~sale ~~leased,~~of ~~a 9.8% increase from~~ the ~~prior~~Property ~~quarter. Management is aggressively working~~ to ~~lease~~an ~~all~~unaffiliated ~~vacant~~third-party ~~space.~~buyer ~~Management~~for ~~believes~~a ~~that~~gross ~~any~~sales ~~tenant that leases 10% or more of the Property’s rentable~~price ~~space is material. As~~ of ~~December~~no ~~31,~~less ~~2011,~~than ~~Permian Mud Service~~$123, ~~Inc.~~250,000 anand ~~energy-related firm d/b/a Champion Technologies, leased approximately 95,310 square feet~~ (~~15%~~ii) of the ~~Property’s~~subsequent ~~rentable~~dissolution ~~space~~and ~~through~~liquidation ~~February~~of ~~2018.~~Phoenix ~~Other~~Tower ~~prominent~~pursuant ~~additional tenants~~to ~~include~~a ~~Allen~~Plan ~~Boone~~of ~~Humphries~~Complete Dissolution ~~Robinson~~and ~~LLP,~~Liquidation (~~law~~the ~~firm~~“Plan of Dissolution”), ~~which~~intended ~~leases~~to ~~approximately~~allow ~~51,153~~for ~~square~~the ~~feet~~orderly ~~(8%)~~disposition ~~through~~of ~~July~~Phoenix Tower’s ~~2018~~remaining assets and ~~Thompson~~liabilities. ~~and~~On ~~Horton~~June ~~LLP~~21, ~~(law firm)~~2012, ~~which~~Phoenix ~~leases~~Tower ~~approximately~~received ~~18,708~~the ~~square~~required ~~feet~~vote ~~(3%)~~of ~~through~~the ~~November~~stockholders ~~2018.~~to ~~Permian~~approve the ~~Mud~~Plan ~~Service,~~of ~~Inc~~Dissolution., ~~Allen~~The ~~Boone~~Plan ~~Humphries~~of ~~Robinson~~Dissolution ~~LLP,~~provided ~~and~~the ~~Thompson~~Board ~~and~~of ~~Horton~~Directors ~~account~~with ~~for~~the ~~approximately~~authority ~~165,171~~to ~~square~~transfer ~~feet~~Phoenix ~~(27%)~~Tower’s ofremaining ~~the~~assets ~~rentable~~and ~~area~~liabilities ofto ~~the~~a ~~Property.~~liquidating ~~Other~~trust ~~well-known~~without ~~tenants~~further ~~include~~approval ~~Sprint~~by ~~Communications~~its stockholders, ~~Lincoln~~in ~~National~~order ~~Life~~to ~~Insurance~~complete ~~Company~~the ~~and~~Plan ~~the~~of ~~NetApp, Inc~~Dissolution. ~~There are currently approximately 45 tenants leasing office space at the Property.~~

On ~~January~~December 123, 2012, wePhoenix ~~entered into an amendment to the lease with Permian Mud Service~~Tower, ~~Inc.~~through ~~Pursuant~~FSP toPhoenix ~~that~~Tower ~~amendment,~~Limited ~~Permian Mud Service~~Partnership, ~~Inc.~~entered ~~added approximately~~into ~~10,131~~an ~~square~~agreement ~~feet of space at~~ (the ~~Property.~~“Purchase ~~The~~and ~~commencement~~Sale ~~date for the additional premises is expected to be~~Agreement”) onwith orPKY ~~about~~3200 ~~April~~SW 1Freeway, ~~2012.~~LLC, ~~The~~an ~~expiration~~unaffiliated ~~date~~third-party, for the ~~additional~~sale ~~premises~~of ~~is February 28, 2018. Accordingly, from and after~~ the ~~commencement~~ ~~date~~Property for ~~the~~a ~~additional~~gross ~~premises,~~sales ~~Permian~~price ~~Mud Service, Inc. will lease an aggregate~~ of ~~approximately 105~~$123,~~441 square feet of space at the Property~~750, ~~or approximately 17% of the Property’s rentable area~~000.

~~Since~~On ~~its~~December ~~completion~~10, ~~in 1984~~2012, ~~the~~Phoenix Tower and FSP Property ~~has~~Management ~~competed~~LLC, ~~within~~as Trustee (the ~~office~~“Trustee”), ~~market~~formed inthe ~~Houston,~~Trust ~~Texas. Management~~by ~~believes~~entering ~~that~~into the ~~Property~~Liquidating Trust isAgreement ~~still competitive~~(as ~~with~~amended, ~~other~~the ~~office~~“Trust ~~buildings~~Agreement”), ~~but~~for ~~given~~the ~~its~~creation ~~age,~~and ~~determined~~operation atof the ~~time~~FSP ofPhoenix ~~acquisition~~Tower ~~that~~Corp. Liquidating itTrust. ~~needed~~FSP ~~improvements~~Property ~~in several~~Management ~~important~~LLC ~~areas~~previously inserved ~~order~~as toPhoenix ~~maintain~~Tower’s orasset ~~enhance~~manager ~~its~~and ~~prominent~~is ~~position~~a inwholly-owned ~~the~~subsidiary of ~~marketplace~~Franklin Street. ~~Management~~ ~~believes~~The ~~that such~~Trust’s aactivities ~~repositioning~~are ~~could~~restricted ~~increase~~to the ~~value~~conservation and protection of the ~~Property~~assets ~~and~~transferred ~~lead~~by Phoenix Tower to ~~higher~~the ~~future~~Trust ~~rent~~and the administration thereof, including the payment of any liabilities, costs and ~~occupancy~~expenses ~~levels~~of Phoenix Tower or the Trust. The ~~improvements included,~~Trust ~~among~~will ~~others,~~terminate ~~remediation~~upon the earlier of the ~~glass~~distribution ~~façade~~of ~~and~~all ~~upgrades~~of tothe Trust’s assets in accordance with the ~~garage,~~terms ~~ground~~of ~~floor~~the ~~lobby~~Trust Agreement, ~~ninth~~or ~~floor~~the ~~sky~~expiration of a period of three years from the effective date of the Trust. The existence ~~lobby~~of ~~and~~the ~~terrace~~Trust may, ~~streetscape~~however, ~~and~~be ~~landscape~~extended for up to two additional one-year periods in the Trustee’s reasonable discretion. The ~~improvements~~beneficial ~~were~~interests ~~substantially~~in ~~completed~~the inTrust ~~June~~are ~~2009~~not attransferable aexcept ~~cost~~by will, intestate succession or by operation of ~~approximately~~law. Any beneficial ~~$12~~interests ~~million~~in ~~and~~the ~~have~~Trust ~~received~~transferred ~~favorable~~by ~~responses~~will, ~~from~~intestate ~~our~~succession ~~existing~~or ~~tenants,~~by ~~potential~~operation ~~future~~of ~~tenants~~law ~~and~~will ~~the~~thereafter ~~local~~be ~~leasing~~subject ~~community~~to such transfer restrictions.

~~Conditions,~~On ~~including~~December ~~new leasing~~20, ~~activity~~2012, ~~at the Property have caused management to make additional improvements at additional cost in order to further~~Phoenix ~~enhance~~Tower, ~~the~~through ~~Property.~~its ~~Through December 31~~subsidiaries, ~~2011,~~consummated the ~~Company~~sale ~~had incurred additional costs~~ of ~~approximately~~the ~~$3.7~~Property ~~million~~ to ~~make additional~~PKY ~~improvements~~3200 toSW ~~the~~Freeway, ~~Property~~LLC, ~~including~~ an ~~elevator~~unaffiliated ~~modernization project (described further below)~~third-party, ~~common corridor~~ ~~upgrades,~~for ~~multi-tenant~~a ~~corridor~~gross ~~conversions~~sales ~~and~~price ~~the establishment~~ of ~~a fitness center. If future conditions warrant~~$123, ~~management may elect to make additional improvements at additional cost in order to further enhance the Property~~750,000.

On ~~September~~December 1521, ~~2010~~2012, Phoenix weTower ~~entered~~filed ~~into~~its acertificate ~~$2.8~~of ~~million~~dissolution ~~dollar~~with ~~contract~~the ~~with~~Secretary ~~Thyssen~~of ~~Krupp~~State ~~Elevator~~of ~~Corporation~~the toState ~~modernize~~of 21Delaware, ~~elevators~~which ~~serving~~became effective on that date, and transferred its remaining net assets (consisting primarily of cash) totaling $106,683,000 to the ~~Property~~Trust. ~~Over~~ Upon the ~~years,~~transfer of the ~~increasing~~assets ~~costs~~and liabilities to ~~maintain~~the ~~and~~Trust, ~~operate~~Phoenix Tower’s stock records were closed, all of the ~~system~~outstanding shares of Phoenix Tower’s ~~mechanical~~preferred ~~relay~~and ~~controls~~common stock were cancelled, asand ~~well~~each asstockholder of Phoenix Tower automatically became the ~~declining~~holder ~~level~~ of ~~performance~~one unit of beneficial interest in the ~~vertical~~Trust ~~transportation,~~for ~~have~~each ~~warranted~~one ~~the~~share ~~modernization~~of ~~project~~Phoenix Tower’s preferred stock then currently held of record by such stockholder. The ~~work~~rights ~~commenced~~of ~~during~~beneficiaries ~~the~~in ~~fourth quarter~~their beneficial interests are not represented by any form of ~~2010~~certificate or ~~and~~other ~~was~~instrument. ~~completed~~Stockholders onof ~~time~~Phoenix ~~and~~Tower on ~~budget~~December at21, ~~the~~2012 ~~end~~were ofnot ~~2011.~~required ~~Management~~to ~~believes~~take ~~that~~any action to receive units of ~~the~~beneficial ~~elevator~~interests. ~~modernization~~On ~~project~~the ~~could~~date ~~reduce~~of ~~operating~~the ~~costs~~conversion, ~~improve~~ the ~~overall~~economic ~~performance~~value of ~~elevator~~one ~~service,~~unit ~~and~~of ~~provide another~~beneficial ~~positive~~interest ~~attribute~~in the Trust was equivalent to ~~entice~~the ~~prospective~~economic ~~tenants.~~value of one share of Phoenix Tower’s preferred stock.

10Although Phoenix Tower’s dissolution was effective on December 21, 2012, Section 278 of the General Corporation Law of the State of Delaware provides that Phoenix Tower’s existence continues for at least three years after dissolution for limited purposes. Specifically, Phoenix Tower will continue to exist for the purpose of prosecuting and defending suits, whether civil, criminal or administrative, by or against it, and enabling Phoenix Tower gradually to settle and close its business, to dispose of and convey its property, to discharge its liabilities and to distribute to its stockholders any remaining assets, but not for the purpose of continuing the business for which Phoenix Tower was organized.

ItOn isDecember difficult for management to predict what will happen to occupancy and rents at the Property 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 economy21, ~~such as job growth~~2012, ~~interest rates,~~FSP ~~the~~Phoenix ~~availability~~Tower ofLLC ~~credit~~filed ~~and~~a ~~corporate~~certificate ~~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.~~cancellation Inwith ~~addition to~~ the ~~difficulty~~Secretary of ~~predicting~~State 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~~State ~~or what the terms and conditions~~ of ~~any new leases will be~~Delaware, ~~we expect to sign new leases at current market rates~~ which ~~may~~became ~~be below the expiring rates. Until the existing~~effective ~~vacancy~~upon ~~is re-leased, we could see lower occupancy rates and/or lower dividend yields~~filing.

~~Given~~On ~~the~~December ~~amount~~21, of2012, ~~space~~following ~~that~~the ~~needs~~dissolution toof bePhoenix ~~leased~~Tower, ~~and~~ the ~~potential~~Trustee ~~for~~authorized, ~~significant~~pursuant ~~tenant~~to ~~improvement~~the ~~allowances~~Trust ~~and leasing commissions~~Agreement, onan ~~December~~initial 4,liquidating distribution ~~2008,~~of ~~we entered into~~ a ~~three-year~~total ~~secured~~of ~~promissory~~$103,950,000 ~~note~~to ~~for~~the abeneficial ~~revolving~~unit ~~line~~holders of ~~credit~~the Trust, which weamount ~~refer~~was to asbe ~~the~~apportioned ~~Phoenix~~pro ~~Revolver, with~~rata ~~Franklin~~according ~~Street for up~~ to the ~~$15,000,000.~~beneficial Onunit ~~March~~holders’ ~~31,~~respective ~~2011,~~interest in the ~~Phoenix~~Trust ~~Revolver~~as ~~was~~of ~~amended~~December to21, ~~extend~~2012. ~~its~~The ~~maturity~~initial ~~date~~liquidating ~~from~~distribution ~~November~~was ~~2011~~effected toon ~~November~~January 304, ~~2012~~2013. ~~and~~After togiving ~~increase~~effect to the ~~interest~~initial ~~rate~~liquidating ~~applicable~~distribution, toas ~~advances~~of ~~thereunder~~January ~~from~~4, 2013, the ~~30-day~~Trust retained ~~LIBOR~~approximately ~~rate plus~~$4,121,000 ~~300~~in ~~basis~~assets, ~~points~~comprised toof ~~the~~$2,335,000 ~~30-day~~in ~~LIBOR~~cash ~~rate~~and ~~plus~~cash ~~440~~equivalents, ~~basis~~the ~~points~~right ~~(4.67%~~to atreceive ~~December~~up 31to $1,500,000 in ~~2011).~~escrow ~~The~~proceeds ~~Phoenix~~in ~~Revolver~~accordance iswith ~~secured by~~the aterms ~~mortgage~~of on the ~~Property~~Purchase and ~~each~~Sale ~~advance~~Agreement ~~thereunder~~and ~~requires~~related ~~payment~~documents, ofand a$286,000 50in ~~basis~~tenant receivables, ~~point~~in ~~draw~~order ~~fee.~~to Wewind ~~anticipate~~up ~~that the~~ Phoenix ~~Revolver~~Tower’s ~~will~~affairs, beresolve ~~replaced~~any orclaims ~~refinanced~~and ondischarge orany ~~before~~liabilities ~~its~~of ~~maturity~~Phoenix ~~date.~~Tower during ~~However,~~Phoenix ~~there~~Tower’s ~~can~~continued beexistence nounder ~~assurance~~the ~~that~~General weCorporation ~~will be~~Law ~~able~~of ~~to replace or refinance~~ the ~~Phoenix~~State ~~Revolver~~of onDelaware ~~favorable~~as ~~terms~~described ~~or at all~~above. As of ~~December~~January 314, ~~2011~~2013, ~~advances~~the ~~drawn~~known ~~and outstanding~~liabilities ~~under~~of ~~the~~ Phoenix ~~Revolver~~Tower ~~totaled~~were estimated to be approximately $111,~~000~~388,000., ~~For~~primarily ~~the~~consisting of ~~years~~accounts ~~ended~~payable ~~December~~and 31accrued expenses, ~~2011~~taxes and ~~2010~~professional fees, and the ~~draw~~Trust ~~fees~~has ~~were $22,500~~estimated ~~and~~that it will incur approximately $14225,~~500,~~000 ~~respectively~~in costs related to the liquidation, ~~and~~including ~~interest~~legal ~~expense~~expenses, ~~paid~~accounting toexpenses, ~~Franklin~~tax ~~Street~~reporting ~~was~~expenses, ~~approximately~~contractor ~~$390~~services,~~000~~ and miscellaneous ~~$135,000,~~other ~~respectively~~expected future costs.

For the three months ended December 31, 2011, we believe that vacancy rates decreased slightly and that rental rates remained relatively unchanged for buildings in the Houston office market compared to the third quarter of 2011. These trends may continue, worsen or improve in the future. Continuing economic turmoil has slowed the pace of leasing activity in the Houston market and will likely prolong the time it takes to lease the vacant space at the Property. However, management believes that the repositioning of the Property in the marketplace, combined with a dwindling supply of large blocks of available Class A office space in the area, will continue to result in increased inquiries from prospective tenants. Management also believes that the position of the Property within the city’s office market is strong, and management is optimistic that the existing vacant space will ultimately be leased to new tenants.8

~~The~~On ~~potential~~February ~~for~~1, ~~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~~2013, ~~we may experience delays in enforcing our rights as a landlord and may incur substantial costs in protecting our investment.~~Phoenix InTower ~~addition,~~filed ~~at any time,~~ a ~~tenant~~Form ~~may~~15 ~~seek~~with the ~~protection~~SEC ofto ~~bankruptcy~~terminate ~~laws, which could result in~~ the ~~rejection~~registration ~~and termination~~ of ~~such~~Phoenix ~~tenant~~Tower’s ~~lease~~preferred ~~and~~stock ~~thereby~~under ~~cause~~the ~~a reduction in cash available for distribution to our stockholders. Bankruptcy or~~Securities aExchange ~~material~~Act ~~adverse change in the financial condition~~ of a1934, ~~material~~as ~~tenant~~amended, ~~would~~(the ~~likely~~“Exchange ~~have a material adverse effect on our results of operations~~Act”).

On February 5, 2013, FSP Phoenix Tower Limited Partnership filed a certificate of termination with the Secretary of State of the State of Texas, which became effective upon filing.

On April 1, 2013, the Trust received a no-action letter (the “No Action Letter”) from the SEC stating that the Trust would not be required to register the units of beneficial interests under the Exchange Act if it operated as described in that letter. Pursuant to the No Action Letter and the Trust Agreement, the Trust’s activities are restricted to the liquidation of the assets and liabilities transferred by Phoenix Tower to the Trust, and distributing the proceeds therefrom to the beneficiaries, and paying all liabilities, costs and expenses of Phoenix Tower and the Trust. Under the No Action Letter, the Trustee agreed to file Annual Reports on Form 10-K with unaudited financial statements and Current Reports on Form 8-K upon the occurrence of a material event relating to the Trust with the SEC. The Trust is not required to file periodic reports on Form 10-Q, file proxy statements, or present its financial statements in an interactive format through the use of XBRL under the terms of the No Action Letter.

Liquidation Basis of Accounting and Plan of Dissolution

The accompanying financial statements have been prepared on the liquidation basis of accounting. Under the liquidation basis of accounting, assets are stated at their estimated net realizable values and liabilities are stated at their estimated settlement amounts. The precise nature, amount and timing of any future distribution to our beneficial unit holders will depend on and could be delayed by, among other things, claim settlements with creditors, new claims filed by third parties, whether our insurance policies will provide coverage for defense costs and any damages payable on any future litigation matters, and unexpected or greater than expected expenses. Claims, liabilities and future expenses for operations, although currently declining in the aggregate, will continue to be incurred until termination of the Trust. These costs will reduce the amount of net assets available for ultimate distribution to beneficial unit holders

Critical Accounting Policies

WeAlthough ~~have~~our ~~certain critical~~financial ~~accounting~~statements ~~policies~~and ~~that~~accompanying notes are ~~subject~~prepared towithout ~~judgments~~audit, ~~and~~they ~~estimates~~continue byto ~~our~~be ~~management~~prepared ~~and~~in ~~uncertainties~~accordance ofwith ~~outcome~~accounting ~~that affect the~~principles ~~application~~generally ofaccepted ~~these~~in ~~policies.~~the WeUnited ~~base~~States ~~our~~of ~~estimates~~America on(“GAAP”) ~~historical experience~~ and onapplicable ~~various~~sections ~~other~~of ~~assumptions~~Regulation weS-X ~~believe~~promulgated ~~to be~~by ~~reasonable under~~ the ~~circumstances~~SEC. OnThe anpreparation ~~ongoing~~of ~~basis,~~these wefinancial ~~evaluate~~statements ~~our~~requires ~~estimates.~~us Into ~~the~~use ~~event~~ estimates orand assumptions ~~prove to~~that beaffect ~~different~~reported ~~from~~amounts of ~~actual~~assets ~~results,~~and ~~adjustments~~liabilities. ~~are~~These ~~made~~estimates inare ~~subsequent~~subject ~~periods~~ to ~~reflect~~known ~~more~~and ~~current~~unknown ~~information.~~risks, ~~The~~uncertainties ~~accounting policies~~and other factors that wecould ~~believe~~materially impact ~~are~~the ~~most~~amounts ~~critical~~reported toand disclosed in the ~~understanding~~financial ofstatements. ~~our~~We ~~financial~~believe ~~position~~the ~~and~~following ~~results~~to ofbe ~~operations,~~among ~~and~~the ~~that~~most ~~require~~critical judgment ~~significant~~areas ~~management~~in ~~estimates~~the ~~and~~application ~~judgments,~~of ~~are~~our ~~discussed~~accounting ~~below~~policies.

11Liquidation Basis of Accounting

~~Critical~~The ~~accounting~~liquidation ~~policies~~basis ~~are~~of ~~those~~accounting ~~that~~was ~~have~~adopted ~~the~~by ~~most~~Phoenix ~~impact~~Tower onin executing the ~~reporting~~Plan of ~~our~~Dissolution ~~financial~~for ~~condition~~all ~~and~~periods ~~results~~subsequent ofto ~~operations~~December ~~and~~21, ~~those requiring significant~~2012, ~~judgments~~ and ~~estimates.~~will Wecontinue ~~believe~~as ~~that~~the ~~our~~basis ~~judgments and estimates are consistently applied and produce financial information that fairly presents our results~~ of ~~operations.~~accounting ~~These~~for ~~policies~~the ~~affect our:~~Trust.

·Use ~~recognition~~ of ~~rental income and depreciation and amortization expense; and~~Estimates

·The ~~assessment~~preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the ~~carrying~~reported ~~values~~amounts of assets and ~~impairments~~liabilities and disclosure of ~~long-lived~~contingent assets and liabilities at the date of the financial statements. The liquidation basis of accounting requires us to make assumptions, judgments and estimates that can have a significant impact on our reported net assets in liquidation. We base our assumptions, judgments and estimates on the most recent information available and various other factors that we believe to be reasonable under the circumstances. Actual results could differ materially from these estimates under different assumptions or conditions. Any increases in the amount of estimated costs to be incurred during liquidation or decreases in the estimated realizable value of assets will reduce the amount of net assets available for ultimate distribution to the trust beneficiaries

~~Depreciation~~On a regular basis, we evaluate our assumptions, judgments and ~~Amortization~~estimates and make changes accordingly. Under the liquidation basis of accounting, we accrue for the estimated remaining costs to be incurred during liquidation, including expenses of the Trustee, legal expenses, accounting expenses, tax expenses, contractor services, and miscellaneous other expected future costs. As of December 31, 2012, such costs were estimated at approximately $225,000. Our estimates are based on assumptions regarding costs to be incurred in executing the Plan of Dissolution. If there are delays in executing the Plan of Dissolution, actual costs incurred during liquidation may increase, reducing net assets available in liquidation.

We compute depreciation expense using the straight-line method over estimated useful lives of up to 39 years for the building and improvements, and up to 15 years for personal property. The allocated cost of land is not depreciated. The value of above or below-market leases are amortized over the remaining non-cancelable periods of the leases as an adjustment to rental income. The value of in-place leases, exclusive of the value of above-market and below-market in-place leases, is also amortized over the remaining non-cancelable periods of the respective leases. If a lease is terminated prior to its stated expiration, all unamortized amounts relating to that lease would be written off. Inappropriate allocation of acquisition costs, or incorrect estimates of useful lives, could result in depreciation and amortization expenses which do not appropriately reflect the allocation of our capital expenditures over future periods, as is required by generally accepted accounting principles.9

~~Impairment~~Net Assets in Liquidation and Changes in Net Assets in Liquidation

WeOn ~~periodically~~December ~~evaluate the Property for impairment indicators. These indicators may include declining tenant occupancy~~21, ~~weak or declining tenant profitability~~2012, ~~cash~~ ~~flow or liquidity, our decision to dispose of an asset before~~ the ~~end of its estimated useful life or legislative, economic~~ orremaining ~~market~~net ~~changes~~assets ~~that permanently reduce the value~~ of ~~our~~Phoenix ~~investment. If indicators of impairment are present~~Tower, wetotaling ~~evaluate the carrying value of the Property by comparing it to its expected future undiscounted cash flows. If the sum of these expected future cash flows is less than the carrying value~~$106, we reduce the net carrying value of the Property to the present value of these expected future cash flows. This analysis requires us to judge whether indicators of impairment exist and to estimate likely future cash flows. If we misjudge or estimate incorrectly or if future tenant profitability683, ~~market or industry factors differ from our expectations~~000, we ~~may~~were ~~record~~transferred ~~an impairment charge which is inappropriate or fail~~ to ~~record a charge when we should have done so, or~~ the ~~amount of such charges may be inaccurate~~Trust.

~~Lease~~As ~~Classification~~of December 31, 2012, net assets in liquidation of the Trust totaled $2,508,000, as follows:

~~Each~~Assets time we enter a new lease or materially modify an existing lease we evaluate whether it is appropriately classified as a capital lease or as an operating lease. The classification of a lease as capital or operating affects the carrying value of a property, as well as our recognition of rental payments as revenue. These evaluations require us to make estimates of, among other things, the remaining useful life and market value of a property, discount rates and future cash flows. Incorrect assumptions or estimates may result in misclassification of our leases.

~~Results~~As of ~~Operations~~December 31, 2012, the Trust retained approximately $108,017,000 in assets, comprised of $106,215,000 in cash and cash equivalents, the right to receive up to $1,500,000 in escrow proceeds in accordance with the terms of the Purchase and Sale Agreement and related documents, and $302,000 in tenant receivables. The Purchase and Sale Agreement required Phoenix Tower to deposit $1,500,000 in an escrow account held by a title company for a period of nine months from the closing of the sale of the Property on December 20, 2012 as security for any claim made by the buyer for breach of any of Phoenix Tower’s representations in the Purchase and Sale Agreement. We anticipate that all of these funds will be returned to the Trust on or about September 20, 2013 and be available for one or more additional liquidating distributions in amounts and on dates to be determined. However, there can be no assurance all or any portion of these funds will be returned to the Trust or that there will be sufficient funds available to make any such future liquidating distributions.

~~The~~Liabilities ~~Property is occupied by a diverse group of tenants, including financial institutions, energy firms, law firms and other professional service organizations.~~

~~Comparison~~As of December 31, 2012, the ~~year~~Trust retained approximately $105,509,000 in liabilities, comprised of $103,950,000 of distributions payable, $1,334,000 of ~~ended~~accounts ~~December~~payable, 31accrued expenses, ~~2011~~taxes and professional fees and the Trust has estimated that it will incur approximately $225,000 in costs related to the ~~year~~liquidation, ~~ended~~including ~~December~~legal 31expenses, ~~2010.~~accounting expenses, tax reporting expenses, contractor services, and miscellaneous other expected future costs.

~~Revenue~~Statement of Operations

~~Total~~The ~~revenue~~financial ~~decreased~~statements ~~$0.1~~of ~~million~~the toTrust ~~$11.4~~are ~~million~~prepared ~~for~~on ~~the~~a ~~year~~liquidation ~~ended~~basis ~~December~~and ~~31,~~therefore ~~2011,~~do asnot ~~compared~~include toa ~~$11.5~~statement ~~million~~of ~~for~~operations; ~~the~~all ~~year~~references ~~ended~~to ~~December 31,~~the ~~2010.~~results ~~This~~of ~~decrease~~operations ~~was~~have ~~primarily~~been ~~attributable~~deleted toand areplaced ~~decrease~~by ofreferences ~~$0.1~~to ~~million~~changes in ~~base~~net ~~rent~~assets.

12Changes in Net Assets (In thousands, except units outstanding):

Expenses

	December 31,	December 21,
	2012	2012
Net assets in liquidation	$ 2,508	$ 106,458
Number of beneficial units outstanding at each respective date	1,050	1,050
Net asset value per unit	$ 2	$ 101

~~Total~~For ~~expenses decreased approximately $0.8 million to $11.7 million for~~ the ~~year~~period ~~ended~~ December 3121, ~~2011~~2012 ~~as compared~~ to ~~$12.5 million for the year ended~~ December 31, ~~2010.~~2012 This decrease was attributable to a $0.2 million decrease in rental operating expenses and a decrease of $0.9 million in depreciation and amortization and was offset by an increase of $0.3 million in interest expense.

Net assets in liquidation decreased $103,950,000, or $99,000 per unit, during the period December 21, 2012 to December 31, 2012. The decrease in our net assets in liquidation is the result of the Trustee having authorized, pursuant to the Trust Agreement, an initial liquidating distribution of a total of $103,950,000 to the beneficial unit holders of the Trust, which amount was to be apportioned pro rata according to the beneficial unit holders’ respective interest in the Trust as of December 21, 2012.

Liquidity and Capital Resources

~~Cash~~We believe that our cash and cash equivalents ~~decreased~~ ~~$1.2~~balance ~~million~~of toapproximately $~~2.8~~106,215,000 ~~million~~should atprovide ~~December~~sufficient ~~31,~~liquidity ~~2011~~to ~~from~~meet ~~$4.0~~our ~~million~~cash atneeds during the next twelve months from December 31, ~~2010~~2012. ~~The~~While ~~decrease~~we ~~was~~anticipate ~~primarily~~that our existing cash and cash equivalents balance will be ~~attributable~~sufficient to ~~$4.7~~fund ~~million~~our ~~used~~cash needs for ~~investing~~expenses ~~activities~~related ~~and~~to ~~was~~completion ~~offset~~of bythe ~~$1.8~~Plan ~~million~~of ~~provided~~Dissolution byfor ~~operating~~the ~~activities~~next ~~and~~twelve months, we ~~$1.7~~can ~~million~~provide ~~provided~~no byassurances ~~financing~~that ~~activities~~this will be the case.

AsAt of December 31, ~~2011~~2012, ~~advances~~our ~~drawn~~cash ~~under the Phoenix Revolver totaled $11.0 million~~ and ~~the~~cash ~~facility~~equivalents ~~matures~~were onheld ~~November~~in ~~30,~~bank ~~2012~~deposit accounts. We ~~anticipate~~expect ~~that the~~to ~~Phoenix~~continue ~~Revolver~~to ~~will~~hold beour ~~replaced~~cash orand ~~refinanced~~cash onequivalents orprimarily in ~~before~~bank ~~its~~deposit ~~maturity~~accounts ~~date.~~while ~~However, there can be no assurance that~~ we ~~will~~ beexecute ~~able to replace or refinance~~ the ~~Phoenix~~Plan ~~Revolver~~of ~~on favorable terms or at all~~Dissolution.

Management believes that the existing cash and cash equivalents as of December 31, 2011 of $2.8 million and cash anticipated to be generated internally by operations and borrowings will be sufficient to meet working capital requirements, distributions and anticipated capital expenditures for at least the next 12 months.10

Operating Activities

The cash provided by operating activities of $1.8 million is primarily attributable to net loss of approximately $0.3 million, uses arising from other current accounts of $0.3 million and payments of deferred leasing costs of $1.4 million and was offset by the add-back of $3.8 million of non-cash activities which consisted primarily of depreciation and amortization.

Investing Activities

Cash used for investing activities for the year ended December 31, 2011 of approximately $4.7 million was primarily for capital expenditures.

Financing Activities

Cash provided by financing activities for the year ended December 31, 2011 of $1.7 million was attributable to the advance on the Phoenix Revolver of $4.5 million and was offset by distributions to stockholders of $2.8 million.

Sources and Uses of Funds

The Company’s principal demands on liquidity are cash for operations, capital expenditures, and distributions to equity holders. As of December 31, 2011, we had approximately $3.3 million in accrued liabilities and $11.0 million in long-term debt. In the near term, liquidity is generated by cash from operations and borrowings.

Contingencies

We 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.

Related Party Transactions

We have in the past engaged in and currently engage in transactions with a related party, Franklin Street and its subsidiaries FSP Investments LLC and FSP Property Management LLC (collectively “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 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 percent (1%) of the gross revenues of the Property for the corresponding month. 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 years ended December 31, 2011 and 2010, management fees paid were $108,000 and $165,000, respectively.

On December 4, 2008, we entered into a three-year secured promissory note for a revolving line of credit, which we refer to as the Phoenix Revolver, with Franklin Street for up to $15,000,000. On March 31, 2011, the Phoenix Revolver was amended to extend its maturity date from November 30, 2011 to November 30, 2012 and to increase the interest rate applicable to advances thereunder from the 30-day LIBOR rate plus 300 basis points to the 30-day LIBOR rate plus 440 basis points (4.67% at December 31, 2011). The Phoenix Revolver is secured by a mortgage on the Property and each advance thereunder requires payment of a 50 basis point draw fee. We anticipate that the Phoenix Revolver will be replaced or refinanced on or before its maturity date. However, there can be no assurance that we will be able to replace or refinance the Phoenix Revolver on favorable terms or at all. As of December 31, 2011, advances drawn and outstanding under the Phoenix Revolver totaled $11,000,000. For the years ended December 31, 2011 and 2010, the draw fees were $22,500 and $14,500, respectively, and interest expense paid to Franklin Street was approximately $390,000 and $135,000, respectively.

On September 22, 2006, Franklin Street purchased 48 shares of Preferred Stock for $4,116,000. Prior to purchasing any shares of Preferred Stock, Franklin Street agreed to vote any shares held by it on any matter presented to the holders of 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.

Franklin Street is the sole holder of the Company’s one share of Common Stock that is issued and outstanding. Subsequent to the completion of the private placement of the Preferred Stock in September 2006, Franklin Street has not been entitled to share in any earnings or any dividend as a result of its ownership of the Common Stock of the Company.

Rental Income Commitments

Our commercial real estate operations consist of the leasing of the Property. Approximate future minimum rental income under non-cancelable operating leases as of December 31, 2011 is:

Year Ending December 31,	Amount (in thousands)
2012	$ 5,999
2013	5,527
2014	5,026
2015	4,469
2016	4,287
Thereafter	8,239
	$ 33,547

Off Balance Sheet Arrangements

~~The~~As ~~Company~~of isDecember ~~not~~31, ~~party~~2012, towe did not have any off -balance sheet arrangements. ~~The~~or ~~Company~~other iscontractually anarrow ~~party~~or tolimited ~~management,~~purpose ~~construction~~arrangements. ~~management~~As ~~and leasing agreements with an unaffiliated third party management company~~such, ~~Hines~~we ~~Interests Limited Partnership, to provide property management, construction~~are ~~management~~not ~~and~~exposed ~~leasing services, and is party~~ to anany ~~asset management agreement with an affiliate~~financing, ~~FSP Property Management LLC~~liquidity, to ~~provide~~market ~~asset~~or ~~management~~credit ~~and~~risk ~~financial~~that ~~reporting~~could ~~services,~~arise ~~all~~if ofwe ~~which~~had ~~agreements~~engaged ~~may~~in besuch terminated by either party without cause at any time, upon at least thirty (30) days’ written notice. 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 percent (1%) of the gross revenues of the Property for the corresponding month.relationships

Obligations and Commitments

Our contractual obligations and commitments as of December 31, 2012 are reported in the statements of net assets in liquidation as estimated costs to be incurred during liquidation. Obligations and commitments of the Trust include the Trust Agreement, the purchase and sale agreement relating to the sale of the Property, and all banking arrangements.

Item 7A. Quantitative and Qualitative Disclosure About Market Risk

Not applicable.

Item 8. Financial Statements and Supplementary Data

~~The~~See ~~information~~Part ~~required~~IV, ~~by this item is included elsewhere herein and incorporated herein by reference. Reference is made to the Index to Consolidated Financial Statements in~~ Item 15 ~~of Part IV~~.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

Not applicable.

Item 9A. Controls and Procedures

Disclosure Controls and Procedures

~~Our management, with the~~(a) ~~participation~~Evaluation of ~~our principal executive officer and principal financial officer, evaluated the effectiveness of our~~ disclosure controls and procedures ~~as of December 31, 2011~~. ~~The~~Pursuant ~~term~~to ~~“disclosure~~the ~~controls and procedures,” as defined in Rules 13a~~No-~~15(e)~~Action ~~and 15d-15(e) under the Securities Exchange Act of 1934~~Letter, orwe ~~the~~maintain ~~Exchange~~disclosure ~~Act, means~~ controls and ~~other~~ procedures of ~~a company~~ that are designed to ensure that information required to be disclosed byin aour ~~company~~reports inunder the ~~reports~~Securities ~~that~~Exchange itAct ~~files~~of ~~or submits~~1934, ~~under~~as amended, (the “Exchange Act”), is recorded, processed, summarized and reported, within the time periods specified in the ~~SEC's~~ rules and ~~forms.~~ ~~Disclosure controls and procedures include~~forms, ~~without limitation, controls~~ and ~~procedures designed to ensure~~ that such 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~~Trustee, ~~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~~case ~~relationship~~when ofoutside ~~possible controls and procedures. Based on the evaluation of our disclosure controls~~contract ~~and~~services ~~procedures~~are asused ~~of December 31, 2011, our principal executive officer~~ and ~~principal financial officer concluded that,~~ as ~~of such date~~appropriate, ~~our~~to ~~disclosure~~allow ~~controls~~timely ~~and~~decisions ~~procedures~~regarding ~~were~~required ~~effective at the reasonable assurance level~~disclosure.

~~Management’s~~As required ~~Annual~~by ~~Report~~Rules 13a-15(b) and 15d-15(b) of the Exchange Act, an evaluation as of December 31, 2012 was conducted by our Trustee of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on ~~Internal~~this evaluation, our Trustee concluded that our disclosure controls and procedures as of December 31, 2012 were ~~Control~~effective ~~Over~~for ~~Financial~~the ~~Reporting~~purposes stated above.

~~The~~(b) Management’s ~~management~~Report ofon ~~the~~Internal ~~Company~~ Control over Financial Reporting. The Trustee is responsible for establishing and maintaining adequate internal control over financial reporting., ~~Internal~~as ~~control~~such ~~over~~term ~~financial reporting~~ is defined in ~~Rule~~Rules 13a-15(f) orand 15d-15(f) ~~promulgated~~ under the ~~Securities~~ Exchange Act. ofBased ~~1934~~on ~~as a process designed by, or under~~ the ~~supervision~~evaluation of, the ~~Company’s principal executive and principal financial officer and effected by the Company’s board of directors~~Trustee, ~~management~~our ~~and~~Trustee ~~other~~concluded ~~personnel,~~that toour ~~provide~~internal ~~reasonable~~control ~~assurance~~over ~~regarding the reliability of~~ financial reporting ~~and~~ ~~the~~was ~~preparation~~effective as of ~~financial~~December ~~statements~~31, ~~for~~2012. ~~external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:~~

~~• Pertain~~(c) Changes toin ~~the maintenance~~internal ofcontrol ~~records~~over ~~that~~financial reporting. There were no changes in ~~reasonable~~our ~~detail~~internal ~~accurately~~control ~~and~~over ~~fairly~~financial ~~reflect~~reporting that occurred during the ~~transactions~~year ~~and~~ended ~~dispositions~~December of31, ~~the~~2012, ~~assets~~that have materially affected, or are reasonably likely to materially affect, ofour ~~the~~internal ~~Company;~~control over financial reporting.

~~• Provide reasonable~~The ~~assurance~~Trustee’s ~~that~~assessment ~~transactions~~of ~~are~~the ~~recorded~~effectiveness asof ~~necessary~~our tointernal ~~permit~~controls ~~preparation~~over of financial ~~statements~~reporting inwas ~~accordance~~not ~~with~~audited. ~~generally~~The Trustee’s ~~accepted~~report ~~accounting~~is ~~principles,~~not ~~and~~subject ~~that~~to ~~receipts~~attestation ~~and~~pursuant ~~expenditures~~to of the ~~Company~~rules ~~are being made only in accordance with authorizations~~ of ~~management~~the Securities and ~~directors~~Exchange ofCommission. ~~the Company; and~~

• Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2011. In making this assessment, the Company’s management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework.

Based on our assessment, management concluded that, as of December 31, 2011, the Company’s internal control over financial reporting is effective based on those criteria.

This annual report is not required to include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. This report shall not be deemed to be filed for the purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section.

Changes in Internal Control Over Financial Reporting

No change in our internal control over financial reporting occurred during the year ended December 31, 2011 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

Not applicable.

1711

PART III

Item 10. Directors, Executive Officers and Corporate Governance

~~Directors~~As of December 31, 2012, we have no directors or executive officers. The Trustee manages the business affairs and ~~Executive~~assets ~~Officers~~of the Trust.

~~Information regarding the~~Responsibilities ~~executive officers and directors~~ of the Company as of February 29, 2012 is set forth below. The biographies of each of the directors below contain information regarding the person’s service as a director, business experience, director positions held currently or at any time during the last five years, information regarding involvement in certain legal or administrative proceedings, if applicable, and the experiences, qualifications, attributes or skills that caused our Board of Directors to determine that the person should serve as a director of the Company. In addition, all of our directors bring to our Board executive leadership experience derived from their service as executives of a public company and specifically as an executive of Franklin Street, as well as other key attributes that are important to an effective board: integrity, candor, analytical skills, the willingness to engage management and each other in a constructive and collaborative fashion. In addition, we have included information about each nominee’s specific experience, qualifications, attributes, or skills that led the Board to conclude that he or she should serve as a director of the Company, in light of our business and structure.Trustee

~~George~~The J.Trust ~~Carter, age 63,~~Agreement isprovides ~~President~~that ~~and a director of~~ the ~~Company.~~Trustee ~~Since~~will ~~1996~~not hebe ~~has~~personally ~~also~~liable ~~been~~to ~~President~~any ~~and~~beneficiary ~~Chief~~or ~~Executive~~to ~~Officer~~any ~~and~~other aparty ~~director~~for ~~of Franklin~~any ~~Street~~act ~~and~~it ismay ~~responsible~~do ~~for~~or ~~all~~omit to ~~aspects~~do ofas ~~the~~trustee ~~business~~while ofacting ~~Franklin~~in ~~Street~~good ~~and its affiliates~~faith, ~~with~~except ~~special~~for ~~emphasis on~~its ~~the~~own ~~evaluation,~~gross ~~acquisition~~negligence ~~and~~or ~~structuring~~willful ofmisconduct. ~~real~~The ~~estate~~fact ~~investments.~~that ~~From~~any ~~1992~~such act ~~through~~or ~~1996~~omission he was ~~President of Boston Financial Securities~~advised, ~~Inc.,~~directed or ~~Boston~~approved ~~Financial.~~by ~~Prior~~an toattorney ~~joining~~acting ~~Boston~~as ~~Financial,~~attorney ~~Mr.~~for ~~Carter~~the ~~was~~Trust ~~owner~~will ~~and~~be ~~developer~~conclusive ofevidence ~~Gloucester Dry~~of ~~Dock,~~such agood ~~commercial shipyard in Gloucester, Massachusetts~~faith. ~~From~~The ~~1979~~Trustee tohas ~~1988,~~responsibility ~~Mr.~~for ~~Carter~~the ~~served~~safekeeping asand ~~Managing~~use ~~Director~~of inall ~~charge~~ of ~~marketing~~ atour ~~First~~funds ~~Winthrop~~and ~~Corporation~~assets, awhether ~~national~~or ~~real~~not ~~estate~~they are ~~and~~in ~~investment~~its ~~banking~~immediate ~~firm~~possession ~~headquartered~~and ~~in Boston~~control, ~~Massachusetts. Prior~~and tomay ~~that,~~not heuse ~~held~~or acommingle ~~number~~funds ~~of positions in the brokerage industry including those~~ with ~~Merrill~~other ~~Lynch~~person &or ~~Co.~~entity ~~and~~or ~~Loeb~~permit ~~Rhodes~~another to &use ~~Co.~~such ~~Mr.~~funds ~~Carter~~or isassets ain ~~graduate~~any ofmanner ~~the~~except ~~University~~for ofour ~~Miami~~exclusive (Bbenefit.~~S.).~~ ~~Mr.~~The ~~Carter~~Trustee ismay autilize ~~FINRA~~the ~~General~~assistance ~~Securities~~of ~~Principal~~contract ~~(Series~~services ~~24)~~or ~~and~~firms ~~holds~~to aassist ~~FINRA~~in ~~Series~~completing 7the ~~general~~Plan ~~securities~~of ~~license and a FINRA Series 79, Investment Banker Registration license~~Dissolution.

~~Barbara~~Audit ~~J. Fournier, age~~Committee 56, is the Vice President, Chief Operating Officer, Treasurer and Secretary and a director of the Company. Since 1996, she has also been Chief Operating Officer, Treasurer and Secretary and a director of Franklin Street. In 2008, Ms. Fournier became an Executive Vice President of Franklin Street. Ms. Fournier has as her primary responsibility, together with George J. Carter, the management of all operating business affairs of Franklin Street and its affiliates. From 1993 through 1996, she was Director of Operations for the private placement division of Boston Financial. Prior to joining Boston Financial, Ms. Fournier served as Director of Operations for Schuparra Securities Corp. and as the Sales Administrator for Weston Financial Group. From 1979 through 1986, Ms. Fournier worked at First Winthrop Corporation in administrative and management capacities, including Office Manager, Securities Operations and Partnership Administration. Ms. Fournier attended Northeastern University and the New York Institute of Finance. Ms. Fournier is a member of the NYSE Amex Listed Company Council. Ms. Fournier participates in corporate governance-related continuing education sessions offered by the NYSE affiliate, Corporate Board Member. Ms. Fournier is a FINRA General Securities Principal (Series 24). She also holds other FINRA supervisory licenses including Series 4 and Series 53, and a FINRA Series 7 general securities license, a FINRA Series 99, Operations Professional license and a FINRA Series 79, Investment Banker Registration license.

~~Janet~~The ~~Prier~~Trust ~~Notopoulos,~~does not ~~age~~have ~~64, is a Vice President and a director of the Company. In addition, she is President of FSP Property Management LLC and~~ an ~~Executive~~ ~~Vice~~audit ~~President~~committee ~~and~~or aother ~~director~~committee ofthat ~~Franklin~~performs ~~Street~~similar ~~and~~functions ~~has as her primary responsibility the oversight of the management of the real estate assets of Franklin Street~~ and ~~its affiliates. Prior to joining Franklin Street in 1997~~, ~~Ms. Notopoulos was a real estate and marketing consultant for various clients. From 1975 to 1983~~consequently, ~~she~~has ~~was~~not ~~Vice~~designated ~~President~~an ofaudit ~~North Coast Properties,~~committee ~~Inc.,~~financial ~~a Boston real estate investment company~~expert. ~~Between 1969 and 1973, she was a real estate paralegal at Goodwin, Procter & Hoar. Ms. Notopoulos is a graduate of Wellesley College (B.A.) and the Harvard School of Business Administration (M.B.A).~~

Jeffrey B. Carter, age 40, is a Vice President and a director of the Company, and is George J. Carter's son. In addition, he is an Executive Vice President and Chief Investment Officer of Franklin Street. Prior to joining Franklin Street in 1998, Mr. Carter worked in Trust Administration for Northern Trust Bank in Miami, Florida. Mr. Carter is a graduate of Arizona State University (B.A.) and The George Washington University (M.A.). Mr. Carter holds a FINRA Series 7 general securities license and a FINRA Series 79, Investment Banker Registration license.

Each of our directors holds office from the time of his or her election until the next annual meeting and until a successor is elected and qualified, or until such director’s earlier death, resignation or removal. Except for Jeffrey B. Carter, who became a director in December 2011, each of the above persons has been associated with us in the positions described above since our inception in 2005. Each of them is an employee of Franklin Street, which is the sole owner of the Common Stock. Each of our officers serves in that capacity at the request of Franklin Street.

Each of our directors also serve as directors of FSP Galleria North Corp., FSP 50 South Tenth Street Corp. and FSP 303 East Wacker Drive Corp., which are public reporting companies sponsored by Franklin Street. In their capacities as directors of FSP Galleria North Corp., FSP 50 South Tenth Street Corp. and FSP 303 East Wacker Drive Corp., each holds office from the time of his or her election until the next annual meeting and until a successor is elected and qualified, or until such director's earlier death, resignation or removal.

Sections 16(a) Beneficial Ownership Reporting Compliance

~~Based~~Not solely on its review of copies of reports filed by the directors and executive officers of the Company pursuant to Section 16(a) of the Exchange Act, the Company believes that during 2011 all filings required to be made by its reporting persons were timely made in accordance with the requirements of the Exchange ActApplicable.

~~Corporate~~Code ~~Governance~~of Ethics

~~Our~~We ~~board~~have ~~of directors does~~ not ~~have~~adopted ~~standing~~a ~~compensation, nominating and corporate governance or audit committees. Our officers are compensated by Franklin~~code ~~Street in connection with their employment by Franklin Street and serve as our executive officers at Franklin Street’s request. Our directors are officers~~ of ~~Franklin~~ethics ~~Street~~nor ~~and~~do we docurrently ~~not~~intend ~~consider~~to itdue ~~necessary~~ to ~~establish~~the afact ~~nominating~~that ~~committee~~we ~~or a policy for reviewing nominees recommended by stockholders. We do not~~ have ano ~~director~~employees ~~who~~and ~~qualifies~~our asTrustee anmanages ~~“audit~~our ~~committee~~business ~~financial~~and affairs ~~expert”~~subject ~~under~~to ~~the~~its ~~regulations~~fiduciary ~~of the SEC~~duties. WeOur ~~have~~Trustee ~~not~~intends ~~adopted~~to apromote ~~code~~honest ofand ~~business~~ethical conduct, orfull ~~code~~and offair ~~ethics~~disclosure ~~for~~in our ~~executive~~reports ~~officers~~to ~~because~~the ~~all~~SEC, ~~of our officers are officers of Franklin Street~~ and ~~are~~compliance ~~governed~~with byapplicable ~~Franklin~~governmental ~~Street’s~~laws ~~code of business conduct~~ and ~~ethics~~regulations.

Item 11. Executive Compensation

~~Each~~As of ~~the~~December ~~executive~~31, ~~officers~~2012, ofwe ~~the~~have ~~Company~~no isdirectors ~~compensated by Franklin Street in connection with his~~ or ~~her employment by Franklin Street and serves as an~~ executive ~~officer~~ ~~of the Company at Franklin Street’s request without compensation~~officers. ~~Franklin~~The ~~Street~~Trustee ismanages ~~subject to~~ the ~~informational requirements~~business ofaffairs ~~the Exchange Act,~~ and, inassets ~~accordance~~of ~~therewith, files reports and other information with~~ the ~~Securities and Exchange Commission (SEC)~~Trust. ~~Franklin~~The ~~Street’s~~Trustee ~~common~~does not ~~stock~~receive isany ~~traded on the NYSE Amex under the symbol “FSP”~~compensation.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

~~The~~Principal following tables set forth the beneficial ownership of the Company’s Common Stock and Preferred Stock as of February 29, 2012 by each holder who beneficially owns more than five percent of the Company’s Common Stock or Preferred Stock, by each director, by each of the Company’s executive officers and by all current directors and executive officers as a group. To the Company’s knowledge, no person or group, other than as set forth below, beneficially owns more than five percent of the Company’s Common Stock or Preferred Stock.Beneficiaries

Common Stock	Number of Shares	Percentage of
	Beneficially	Outstanding
Name of Holder	Owned	Common Stock
Franklin Street Properties Corp. (1)	1	100%
George J. Carter(2)	-	0%
Barbara J. Fournier(2)	-	0%
Jeffrey B. Carter(2)	-	0%
Janet P. Notopoulos(2)	-	0%
All Directors and Executive Officers as a Group (consisting of 4 persons)(2)	-	0%

There is no public market for the units of beneficial interest in the Trust. On December 21, 2012, Phoenix Tower filed its certificate of dissolution with the Secretary of State of the State of Delaware, which became effective on that date, and transferred its remaining net assets (consisting primarily of cash) totaling $106,683,000 to the Trust. Upon the transfer of the assets and liabilities to the Trust, Phoenix Tower’s stock records were closed, all of the outstanding shares of Phoenix Tower’s preferred and common stock were cancelled, and each stockholder of Phoenix Tower automatically became the holder of one unit of beneficial interest in the Trust for each one share of Phoenix Tower’s preferred stock then currently held of record by such stockholder. The units are not and will not be listed on any exchange, quoted by a securities broker or dealer, nor admitted for trading in any market, including the over-the-counter market. The beneficial interests in the Trust are not transferable except by will, intestate succession or by operation of law. Any beneficial interests in the Trust transferred by will, intestate succession or by operation of law will thereafter be subject to such transfer restrictions.

Preferred Stock	Number of Shares	Percentage of
	Beneficially	Outstanding
Name of Holder	Owned	Preferred Stock
Franklin Street Properties Corp. (1)	48	4.6%
George J. Carter(2)	-	0%
Barbara J. Fournier(2)	-	0%
Jeffrey B. Carter(2)	-	0%
Janet P. Notopoulos(2)	-	0%
Edward Darman Company Limited Partnership(3)	98	9.33%
All Directors and Executive Officers as a Group (consisting of 4 persons)	-	0%

~~(1)~~ The ~~address~~following table sets forth the beneficial ownership of ~~Franklin~~units ~~Street~~as ~~Properties~~of ~~Corp.~~March 31, 2013, as to (i) each beneficiary that is ~~401~~known ~~Edgewater~~by ~~Place~~us to beneficially own more than five percent of the outstanding units as of March 31, ~~Wakefield~~2013; and (ii) a wholly-owned subsidiary of Franklin Street, ~~Massachusetts~~which is ~~01880~~the parent corporation of our Trustee.

(2) Each of the Executive Officers is employed by Franklin Street Properties Corp. Franklin Street Properties Corp. owns 100% of the issued and outstanding Common Stock of the Company.

	Number of Units	Percentage of
	Beneficially	Units Beneficially
Beneficial Owner	Owned	Owned

FSP PT Houston LLC (1)	48	4.6%

Edward Darman Company Limited Partnership (2)	98	9.33%

(31) ~~Edward~~FSP ~~Darman~~PT isHouston ~~the~~LLC ~~Chief~~is ~~Executive~~a ~~Officer~~wholly-owned subsidiary of ~~Edward~~Franklin ~~Darman Company Limited Partnership~~Street, orwhich ~~the~~is ~~Partnership, and, in such capacity, has sole voting and dispositive power over~~ the ~~shares~~parent corporation of ~~Preferred Stock held by~~ the ~~Partnership~~Trustee. The address of ~~the~~FSP ~~Partnership~~PT Houston LLC is c/o ~~Saxon~~Franklin ~~Real~~Street ~~Estate~~Properties ~~Partners~~Corp., ~~200~~401 ~~Oak~~Edgewater ~~Point Drive~~Place, ~~Middleboro~~Wakefield, Massachusetts ~~02346-1325~~01880.

20(2) Edward Darman is the Chief Executive Officer of Edward Darman Company Limited Partnership, or the Partnership, and, in such capacity, has sole voting and dispositive power over the units of beneficial interest held by the Partnership. The address of the Partnership is c/o Saxon Real Estate Partners, 200 Oak Point Drive, Middleboro, Massachusetts 02346-1325.

Equity Compensation Plan Information

The ~~Company~~Trust does not have any equity compensation plans.

~~Certain~~The Trustee manages our ~~Relationships~~day-to-day business affairs and ~~Related~~assets. ~~Transactions~~Prior to the sale of the Property on December 20, 2012, the Trustee provided asset management services to Phoenix Tower. The Trustee is a wholly-owned subsidiary of Franklin Street. FSP PT Houston LLC, a wholly-owned subsidiary of Franklin Street, beneficially owns 48 units of beneficial interests in the Trust. Like all beneficiaries, FSP PT Houston LLC is required to retain ownership of such units in accordance with the terms of the Trust Agreement.

~~George~~Trust J. Carter, Barbara J. Fournier, Janet P. Notopoulos and Jeffrey B. Carter, each of whom is an executive officer of the Company, are executive officers of Franklin Street and, except for Jeffrey B. Carter, are directors of Franklin Street. Jeffrey B. Carter is George J. Carter’s son. None of such persons received any remuneration from the Company for their services.Agreement

WeOn ~~have~~December in10, ~~the~~2012, ~~past engaged~~Phoenix inTower and ~~currently engage in transactions with a related party, Franklin Street and its subsidiaries~~ FSP ~~Investments LLC and FSP~~ Property Management LLC, ~~which~~as weTrustee ~~collectively~~(the ~~refer to as~~ “~~FSP~~Trustee”.), Weformed ~~expect to continue to have related party transactions with FSP in~~ the ~~form~~Trust ofby ~~management~~entering ~~fees~~into ~~paid to FSP to manage~~ the ~~Company on behalf of our stockholders. FSP Property Management~~Liquidating ~~LLC~~Trust ~~currently~~Agreement ~~provides~~(as amended, the ~~Company~~“Trust ~~with~~Agreement”), ~~asset~~for ~~management and financial reporting services. The asset management agreement between~~ the ~~Company~~creation and ~~FSP~~operation ~~Property~~of ~~Management LLC requires~~ the ~~Company to pay~~ FSP ~~Property~~Phoenix ~~Management~~Tower ~~LLC a monthly fee equal to one~~Corp. ~~percent~~Liquidating ~~(1%) of the gross revenues of the Property for the corresponding month~~Trust. The ~~asset~~Trustee ~~management~~does ~~agreement~~not ~~between~~receive ~~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~~compensation. ~~For the years ended December 31, 2011 and 2010, management fees paid were $108,000 and $165,000, respectively.~~

OnTrustee December 4, 2008, we entered into a three-year secured promissory note for a revolving line of credit, which we refer to as the Phoenix Revolver, with Franklin Street for up to $15,000,000. On March 31, 2011, the Phoenix Revolver was amended to extend its maturity date from November 2011 to November 30, 2012 and to increase the interest rate applicable to advances thereunder from the 30-day LIBOR rate plus 300 basis points to the 30-day LIBOR rate plus 440 basis points (4.67% at December 31, 2011). The Phoenix Revolver is secured by a mortgage on the Property and each advance thereunder requires payment of a 50 basis point draw fee. We anticipate that the Phoenix Revolver will be replaced or refinanced on or before its maturity date. However, there can be no assurance that we will be able to replace or refinance the Phoenix Revolver on favorable terms or at all. As of December 31, 2011, advances drawn and outstanding under the Phoenix Revolver totaled $11,000,000. For the years ended December 31, 2011 and 2010, the draw fees were $22,500 and $14,500, respectively, and interest expense paid to Franklin Street was approximately $390,000 and $135,000, respectively.Indemnification

OnPursuant ~~September~~to 22the Trust Agreement, ~~2006~~the Trust shall, ~~Franklin~~ ~~Street~~to ~~purchased~~the 48maximum ~~shares~~extent ofpermitted ~~Preferred~~by ~~Stock~~law, ~~for~~indemnify $4the Trustee against,~~116,000.~~ ~~Prior~~and tohold ~~purchasing~~the Trustee harmless as to, any ~~shares~~and all claims, causes of ~~Preferred~~action ~~Stock~~and liabilities, ~~Franklin~~including all expenses and defense costs (including reasonable attorneys’ ~~Street~~fees), ~~agreed~~arising toout ~~vote~~of ~~any~~or ~~shares~~in ~~held~~connection bywith itits onservice as trustee under the Trust Agreement or any ~~matter~~acts ~~presented~~or omissions taken or omitted to ~~the~~be ~~holders~~taken ofas ~~Preferred~~trustee ~~Stock~~under inthe aTrust ~~manner~~Agreement, except to the extent that ~~approximates as~~it ~~closely~~is asfinally ~~possible~~determined that the ~~votes~~Trustee ~~cast~~did not act in ~~favor~~good offaith ~~and~~or ~~opposed~~such toactions ~~such~~or ~~matter~~omissions byconstitute gross negligence or willful misconduct on the ~~holders~~part of the ~~Preferred~~Trustee. In ~~Stock~~the ~~other~~event ~~than~~that ~~Franklin Street~~any ~~and~~legal ~~its~~proceeding ~~affiliates.~~is ~~For~~instituted ~~purposes~~against the Trustee, as trustee or personally, on account of ~~determining~~any ~~how~~actions ~~Franklin~~or omissions ~~Street~~taken ~~votes~~by ~~its~~the ~~shares~~Trustee, then prior to the final disposition of ~~Preferred~~such ~~Stock~~action, ~~abstentions~~the ~~and~~Trustee shall be entitled to cause the ~~non-votes~~Trust byto ~~stockholders~~advance ~~other~~to ~~than~~the ~~Franklin~~Trustee ~~Street~~such fees and costs as are ~~not~~reasonably ~~considered~~incurred by the Trustee in defending against such action.

~~Franklin~~Investor ~~Street~~Services is the sole holder of the Company’s one share of Common Stock that is issued and outstanding. Subsequent to the completion of the private placement of the Preferred Stock in September 2006, Franklin Street has not been entitled to share in any earnings or any dividend as a result of its ownership of the Common Stock of the Company.Agreement

~~Director~~On ~~Independence~~January 1, 2013, we entered into an Amended and Restated Investor Services Agreement (the “FSPI Agreement”) with FSP Investments LLC for the provision of investor services to beneficial unit holders. FSP Investments LLC is a wholly-owned subsidiary of Franklin Street. FSP Investments LLC acted as a real estate investment firm and broker/dealer with respect to (a) Phoenix Tower’s organization, (b) Phoenix Tower’s acquisition of the Property and (c) the sale of equity interests in Phoenix Tower. 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.

Our securities are not listed on a national securities exchange or in an inter-dealer quotation system. None of our directors qualifies as “independent” under the standards of the NYSE Amex, where Franklin Street is listed.13

Item 14. Principal Accounting Fees and Services

~~Independent~~Not ~~Auditor Fees and Other Matters~~applicable.

The following tables summarize the aggregate fees billed by the Company’s independent registered public accounting firm, Braver PC, for audit services for each of the last two fiscal years and for other services rendered to the Company in each of the last two fiscal years.

Fee Category	2011		2010
Audit Fees (1)	$	64,050	$	64,050
Audit-Related Fees (2)		-		-
Tax Fees (3)		5,250		5,250
All Other Fees (4)		-		-
Total Fees	$	69,300	$	69,300

(1) Audit fees consist of fees for the audit of our financial statements, the review of the interim financial statements included in our quarterly reports on Form 10-Q, and other professional services provided in connection with statutory and regulatory filings or engagements.

(2) Audit-related fees consist of fees for assurance and related services that are reasonably related to the performance of the audit and the review of our financial statements and which are not reported under “Audit Fees”.

(3) Tax fees consist of fees for tax compliance, tax advice and tax planning services. Tax compliance services, which relate to the preparation of tax returns, claims for refunds and tax payment-planning services, accounted for $5,250 of the total tax fees incurred in 2011 and 2010.

(4) The Company was not billed by its independent registered public accounting firm in 2011 or 2010 for any other fees.

Pre-Approval Policy and Procedures

The Company has not adopted policies and procedures relating to the pre-approval of audit and non-audit services that are to be performed by the Company’s independent registered public accounting firm.

PART IV

Item 15. Exhibits, Financial Statement Schedules

(a)(1) Financial ~~The~~Statements ~~following~~and ~~documents~~Financial Statement ~~are filed as part of this report~~Schedules.

1. Financial Statements: The Financial Statements listed in the accompanying Index to Consolidated Financial Statements are filed as part of this Annual Report on Form 10-K.

		Page
Unaudited Statement of Net Assets in Liquidation as of December 31, 2012		15
Unaudited Statement of Changes in Net Assets in Liquidation for the period December 21, 2012 to December 31, 2012		16
Notes to Unaudited Financial Statements		17

(a)(2.) Financial Statement ~~Schedule~~Schedules: ~~The Financial Statement Schedule listed on the accompanying Index to Consolidated Financial Statements is filed as part of this Annual Report on Form 10-K.~~

3.All ~~Exhibits:~~schedules ~~The~~have ~~Exhibits~~been ~~listed~~omitted inas the ~~Exhibit~~required information ~~Index~~is ~~are~~inapplicable ~~filed~~or asthe ~~part~~information ofis ~~this~~presented ~~Annual~~in ~~Report~~the onunaudited ~~Form~~financial ~~10-K~~statements or related notes.

23(a)(3) Exhibits:

~~SIGNATURES~~The exhibits listed on the Exhibit Index (following the signatures section of this report) are included, or incorporated by reference, in this annual report.

~~Pursuant to the requirements of Section 13 or 15~~(db) ofExhibits: ~~the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf as of March 9, 2012 by the undersigned, thereunto duly authorized.~~

~~FSP~~See ~~PHOENIX~~item ~~TOWER~~15(a)(3) ~~CORP~~above.

~~By: /s/ George~~(c) J.Financial ~~Carter~~ Statement Schedules:

~~George~~All J.schedules ~~Carter~~have been omitted as the required information is inapplicable or the information is presented in the unaudited financial statements or related notes.

~~President~~14

~~Pursuant~~FSP toPhoenix ~~the requirements~~Tower ofCorp. ~~the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant~~Liquidating ~~and~~Trust ~~in the capacities and on the dates indicated.~~

Signature	Title	Date
/s/ George J. Carter George J. Carter	President and Director (Principal Executive Officer)	March 9, 2012
/s/ Barbara J. Fournier Barbara J. Fournier	Vice President, Chief Operating Officer, Treasurer, Secretary and Director (Principal Financial Officer and Principal Accounting Officer)	March 9, 2012
/s/ Janet P. Notopoulos Janet P. Notopoulos	Director, Vice President	March 9, 2012
/s/ Jeffrey B. Carter Jeffrey B. Carter	Director, Vice President	March 9, 2012

Statement of Net Assets in Liquidation

24As of December 31, 2012

(in thousands, unaudited)

Assets
	Cash and cash equivalents	$ 106,215
	Restricted Cash	1,500
	Receivables and other assets	302
		108,017

Liabilities
	Accounts payable and accrued expenses	$ 1,334
	Distribution Payable	103,950
	Costs to be incurred during liquidation	225
		105,509

Net Assets in Liquidation		$ 2,508

The accompanying notes are an integral part of this unaudited financial statement.

FSP Phoenix Tower Corp. Liquidating Trust

Statement of Changes in Net Assets in Liquidation

For the Period December 21, 2012 to December 31, 2012

(in thousands, unaudited)

Net Assets in liquidation, beginning of period		$ -
Changes in net assets in liquidation:
	Transfer from Phoenix Tower	106,683
	Costs to be incurred during liquidation	(225)
Net Change in net assets in liquidation		106,458
Amount of authorized distribution		103,950
Net increase in net assets in liquidation		2,508
Net Assets in liquidation, end of period		$ 2,508

The accompanying notes are an integral part of this unaudited financial statement.

FSP Phoenix Tower Corp. Liquidating Trust
Notes to Unaudited Financial Statements

Note 1. Description of Business

On December 21, 2012, Phoenix Tower filed its certificate of dissolution with the Secretary of State of the State of Delaware, which became effective on that date, and transferred its remaining net assets (consisting primarily of cash) totaling $106,683,000 to the Trust. Upon the transfer of the assets and liabilities to the Trust, Phoenix Tower’s stock records were closed, all of the outstanding shares of Phoenix Tower’s preferred and common stock were cancelled, and each stockholder of Phoenix Tower automatically became the holder of one unit of beneficial interest in the Trust for each one share of Phoenix Tower’s preferred stock then currently held of record by such stockholder. The rights of beneficiaries in their beneficial interests are not represented by any form of certificate or other instrument. Stockholders of Phoenix Tower on December 21, 2012 were not required to take any action to receive units of beneficial interests. On the date of the conversion, the economic value of one unit of beneficial interest in the Trust was equivalent to the economic value of one share of Phoenix Tower’s preferred stock.

Although Phoenix Tower’s dissolution was effective on December 21, 2012, Section 278 of the General Corporation Law of the State of Delaware provides that Phoenix Tower’s existence continues for at least three years after dissolution for limited purposes. Specifically, Phoenix Tower will continue to exist for the purpose of prosecuting and defending suits, whether civil, criminal or administrative, by or against it, and enabling Phoenix Tower gradually to settle and close its business, to dispose of and convey its property, to discharge its liabilities and to distribute to its stockholders any remaining assets, but not for the purpose of continuing the business for which Phoenix Tower was organized.

Note 2. Summary of Significant Accounting Policies

Basis of Accounting

The liquidation basis of accounting was adopted by Phoenix Tower in executing the Plan of Complete Dissolution and Liquidation (the “Plan of Dissolution”) for all periods subsequent to December 21, 2012, and will continue as the basis of accounting for the Trust. Under the liquidation basis of accounting, assets are stated at their estimated net realizable values and liabilities are stated at their estimated settlement amounts. Claims, liabilities and future expenses for operation of the Liquidating Trust will continue to be incurred until the Trust is terminated.

Use of Estimates

The preparation of financial statements in accordance with GAAP and under the liquidation basis of accounting requires us to make estimates and judgments that affect the reported amounts of assets (including net assets in liquidation), liabilities and expenses. We believe that our critical accounting policies are those that require significant judgments and estimates. These estimates are made and evaluated on an on-going basis using information that is currently available as well as various other assumptions believed to be reasonable under the circumstances. Actual results could vary from those estimates, perhaps in material adverse ways, and those estimates could be different under different assumptions or conditions.

FSP Phoenix Tower Corp. Liquidating Trust
Notes to Unaudited Financial Statements

Note 2. Summary of Significant Accounting Policies (continued)

Cash and Cash Equivalents

As of December 31, 2012, cash and cash equivalents total approximately $106,215,000, which consist of funds held in a bank deposit accounts. Cash equivalents are stated at costs plus accrued interest approximates market value.

Restricted Cash

As of December 31, 2012, restricted cash was approximately $1,500,000 representing funds held in an escrow account by a title company as security for any claim of breach of any of Phoenix Tower’s representations in the purchase and sale agreement signed in connection with the sale of Phoenix Tower’s real property on December 20, 2012. We anticipate that all of these funds will be returned to the Trust on or about September 20, 2013 and be available for one or more additional liquidating distributions in amounts and on dates to be determined. However, there can be no assurance all or any portion of these funds will be returned to the Trust or that there will be sufficient funds available to make any such future liquidating distributions.

Recent Accounting Pronouncements

There are no previously issued or new accounting pronouncements or changes in accounting pronouncements that have had, or are expected to have a material impact on the Trust’s financial statements.

Concentration of Credit Risk - Financial Instruments

Financial instruments that subject the Trust to a concentration of credit risk consist of cash and cash equivalents and restricted cash balances maintained in financial institutions that are, in part, in excess of Federal Deposit Insurance Corporation (“FDIC”) limits. As of December 31, 2012, the Trust held cash and cash equivalents and restricted cash of approximately $107,715,000 in excess of the FDIC insurance limits.

Financial Instruments

Our net assets in liquidation as of December 31, 2012 include the following financial instruments: cash and cash equivalents and accrued expenses. As our financial statements have been prepared under the liquidation basis of accounting, the carrying values of these instruments classified as assets and liabilities represent their estimated net realizable values and estimated settlement amounts, respectively.

Costs to be incurred during liquidation

Under the liquidation basis of accounting, we accrue for the estimated remaining costs to be incurred during liquidation, including legal expenses, accounting expenses, tax reporting expenses, contractor services, and miscellaneous other expected future costs. As of December 31, 2012, such costs were estimated at approximately $225,000. Our estimates are based on assumptions regarding costs to be incurred in executing the Trust Agreement, as described above in Note 1. The actual costs incurred during liquidation may increase, reducing net assets available in liquidation.

Income Taxes

We are treated as a grantor trust for federal income tax purposes and accordingly, will not be subject to federal or state income tax on any income earned or gain recognized by us. Our beneficiaries will be treated as the owner of a pro rata portion of each asset, including cash, received by and held by us and will be required to report on his or her federal, state or foreign tax return his or her pro rata share (per unit) of taxable income, including gains and losses recognized by us. Accordingly, there is no provision for federal or state income taxes in the accompanying financial statements.

FSP Phoenix Tower Corp. Liquidating Trust
Notes to Unaudited Financial Statements

Note 3. Commitments and Contingencies

Indemnifications

Pursuant to the Trust Agreement, the Trust shall, to the maximum extent permitted by law, indemnify the Trustee against, and hold the Trustee harmless as to, any and all claims, causes of action and liabilities, including all expenses and defense costs (including reasonable attorneys’ fees), arising out of or in connection with its service as trustee under the Trust Agreement or any acts or omissions taken or omitted to be taken as trustee under the Trust Agreement, except to the extent that it is finally determined that the Trustee did not act in good faith or such actions or omissions constitute gross negligence or willful misconduct on the part of the Trustee. In the event that any legal proceeding is instituted against the Trustee, as trustee or personally, on account of any actions or omissions taken by the Trustee, then prior to the final disposition of such action, the Trustee shall be entitled to cause the Trust to advance to a Trustee such fees and costs as are reasonably incurred by the Trustee in defending against such action.

Note 4. Subsequent Event.

The Plan of Dissolution provides that liquidating distributions will be made to the beneficiaries as determined by the Trustee. On January 4, 2013, the Trust effected the conveyance of the initial liquidating distribution to the holders of units of beneficial interest in the Trust of a total of $103,950,000 pursuant to the Plan of Dissolution.

SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) 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 PHOENIX TOWER CORP. LIQUIDATING TRUST

(Registrant)

By: FSP Property Management LLC, its Trustee

Date: April 12, 2013	By: /s/ John G. Demeritt
	John G. Demeritt
	Executive Vice President and Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
3.1	Amended and Restated Certificate of Incorporation, incorporated herein by reference to Exhibit 3.1 to FSP Phoenix Tower Corp.’s Registration Statement on Form 10, as amended (File No. 000-52559)
3.2	By-Laws, incorporated herein by reference to Exhibit 3.2 to FSP Phoenix Tower Corp.’s Registration Statement on Form 10, as amended (File No. 000-52559)
10.1	Permian Mud Service, Inc. d/b/a Champion Technologies Lease, as amended, incorporated herein by reference to Exhibit 10.4 to FSP Phoenix Tower Corp.’s Annual Report on Form 10-K for the year ended December 31, 2008 (File No. 000-52559), incorporated herein by reference to Exhibit 10.1 to FSP Phoenix Tower Corp.’s Current Report on Form 8-K filed on June 2, 2011 (File No. 000-52559), incorporated herein by reference to Exhibit 10.1 to FSP Phoenix Tower Corp.’s Current Report on Form 8-K filed on January 12, 2012 (File No. 000-52559)
10.2	Asset Management Agreement, incorporated herein by reference to Exhibit 10.2 to FSP Phoenix Tower Corp.’s Registration Statement on Form 10, as amended (File No. 000-52559)
10.3	Voting Agreement, incorporated herein by reference to Exhibit 10.3 to FSP Phoenix Tower Corp.’s Registration Statement on Form 10, as amended (File No. 000-52559)
10.4	Secured Promissory Note (Revolving), dated December 4, 2008, as amended, from FSP Phoenix Tower Limited Partnership in favor of Franklin Street Properties Corp., incorporated herein by reference to Exhibit 10.1 to FSP Phoenix Tower Corp.’s Current Report on Form 8-K filed on December 9, 2008 (File No. 000-52559), incorporated herein by reference to Exhibit 10.1 to FSP Phoenix Tower Corp.’s Current Report on Form 8-K filed on March 31, 2011 (File No. 000-52559)
10.5	Deed of Trust, Assignment of Rents and Leases, Security Agreement and Fixture Filing, dated December 4, 2008, from FSP Phoenix Tower Limited Partnership in favor of Franklin Street Properties Corp., incorporated herein by reference to Exhibit 10.2 to FSP Phoenix Tower Corp.’s Current Report on Form 8-K filed on December 9, 2008 (File No. 000-52559)
21.1	Subsidiaries of the Registrant, incorporated herein by reference to Exhibit 21.1 to FSP Phoenix Tower Corp.’s Registration Statement on Form 10, as amended (File No. 000-52559)
31.1*	Certification of FSP Phoenix Tower Corp.'s principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of FSP Phoenix Tower Corp.'s principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Certification of FSP Phoenix Tower 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 Phoenix Tower 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 Phoenix Tower Corp.’s Annual Report on Form 10-K for the year ended December 31, 2011, 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, tagged as blocks of text.

Pursuant to Item 601(a)(2) of Regulation S-K, this exhibit index immediately precedes the exhibits.

25The following exhibits are included, or incorporated by reference, in the Annual Report on Form 10-K for the fiscal year 2012 (and are numbered in accordance with Item 601 of Regulation S-K).

Exhibit No.	Description
2.1	Plan of Complete Dissolution and Liquidation of FSP Phoenix Tower Corp., as approved by stockholders on June 21, 2012 and as currently in effect (included as Annex A to Phoenix Tower’s Definitive Proxy Statement filed on May 4, 2012 and incorporated herein by reference)
10.1*	Liquidating Trust Agreement, dated as of December 10, 2012, by and between FSP Phoenix Tower Corp. and FSP Property Management LLC
10.2*	Amendment No. 1 to Liquidating Trust Agreement, dated as of March 28, 2013, by and between FSP Phoenix Tower Corp. and FSP Property Management LLC
10.3*	Purchase and Sale Agreement by and between FSP Phoenix Tower Limited Partnership and PKY 3200 SW FREEWAY, LLC, dated December 3, 2012
31.1*	Certification of Trustee pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Certification of Trustee pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
*	Filed herewith.
**	XBRL (eXtensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these Sections.

2621

FSP Phoenix Tower Corp.

Index to Consolidated Financial Statements

Table of Contents

		Page
Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm		F-2
Consolidated Balance Sheets as of December 31, 2011 and 2010		F-3
Consolidated Statements of Operations for the years ended December 31, 2011 and 2010		F-4
Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2010 and 2011		F-5
Consolidated Statements of Cash Flows for the years ended December 31, 2011 and 2010		F-6
Notes to Consolidated Financial Statements		F-7
Financial Statement Schedule – Schedule III		F-15

F-1

[LETTERHEAD OF BRAVER PC]

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders

FSP Phoenix Tower Corp.

Wakefield, Massachusetts

We have audited the accompanying consolidated balance sheets of FSP Phoenix Tower Corp. as of December 31, 2011 and 2010, and the related consolidated statements of operations, changes in stockholders’ equity and cash flows for the years then ended. Our audits also included the financial statement schedule listed in the Index at Item 15(a)(2). These consolidated financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of FSP Phoenix Tower Corp. as of December 31, 2011 and 2010, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

/s/ Braver PC

Needham, Massachusetts

March 9, 2012

F-2

FSP Phoenix Tower Corp. Consolidated Balance Sheets

	December 31,
(in thousands, except share and par value amounts)	2011			2010
Assets:
Real estate investments, at cost:
Land	$	3,300		$	3,300
Buildings and improvements		90,073			86,557
Furniture and fixtures		436			283
		93,809			90,140
Less accumulated depreciation		14,936			11,834
Real estate investments, net		78,873			78,306
Acquired real estate leases, net of accumulated amortization of $1,059 and $1,202, respectively		521			764
Acquired favorable real estate leases, net of accumulated amortization of $371 and $317, respectively		131			197
Cash and cash equivalents		2,805			4,030
Tenant rent receivable, less allowance for doubtful accounts of $4 and $5, respectively		80			54
Step rent receivable		2,301			1,789
Deferred leasing costs, net of accumulated amortization of $1,341 and $938, respectively		2,852			1,942
Prepaid expenses and other assets		96			373
Total assets	$	87,659		$	87,455
Liabilities and Stockholders’ Equity:
Liabilities:
Accounts payable and accrued expenses	$	2,965		$	4,160
Tenant security deposits		368			240
Loan payable - affiliate		11,000			6,500
Acquired unfavorable real estate leases, net of accumulated amortization of $436 and $361, respectively		243			318
Total liabilities		14,576			11,218
Commitments and Contingencies:		-			-
Stockholders’ Equity:
Preferred Stock, $.01 par value, 1,050 shares authorized,
issued and outstanding, aggregate liquidation preference $105,000		-			-
Common Stock, $.01 par value, 1 share
authorized, issued and outstanding		-			-
Additional paid-in capital		96,188			96,188
Retained earnings and distributions in excess of earnings		(23,105	)		(19,951	)
Total Stockholders’ Equity		73,083			76,237
Total Liabilities and Stockholders’ Equity	$	87,659		$	87,455
See accompanying notes to consolidated financial statements.

F-3

FSP Phoenix Tower Corp. Consolidated Statements of Operations

	For the Year Ended December 31,
(in thousands, except per share and share amounts)	2011			2010
Revenues:
Rental	$	11,372		$	11,494
Total revenue		11,372			11,494
Expenses:
Rental operating expenses		5,901			6,131
Real estate taxes and insurance		1,525			1,543
Depreciation and amortization		3,842			4,669
Interest expense		412			149
Total expenses		11,680			12,492
Net loss before interest income		(308	)		(998	)
Interest income		1			7
Net loss attributable to preferred stockholders	$	(307	)	$	(991	)
Weighted average number of preferred shares outstanding,
basic and diluted		1,050			1,050
Net loss per preferred share, basic and diluted	$	(292	)	$	(944	)
See accompanying notes to consolidated financial statements.

F-4

FSP Phoenix Tower Corp. Consolidated Statements of Changes in Stockholders’ Equity For the Years Ended December 31, 2010 and 2011

(in thousands, except per share amounts)	Preferred Stock		Common Stock		Additional Paid-in Capital		Retained Earnings and Distributions in Excess of Earnings			Total Stockholders' Equity
Balance, January 1, 2010	$	-	$	-	$	96,188	$	(15,051	)	$	81,137
Distributions - preferred stockholders		-		-		-		(3,909	)		(3,909	)
or $3,723 per preferred share
Net loss		-		-		-		(991	)		(991	)
Balance, December 31, 2010		-		-		96,188		(19,951	)		76,237
Distributions - preferred stockholders		-		-		-		(2,847	)		(2,847	)
or $2,712 per preferred share
Net loss		-		-		-		(307	)		(307	)
Balance, December 31, 2011	$	-	$	-	$	96,188	$	(23,105	)	$	73,083
See accompanying notes to consolidated financial statements.

F-5

FSP Phoenix Tower Corp. Consolidated Statements of Cash Flows

	For the Year Ended December 31,
(in thousands)	2011			2010
Cash flows from operating activities:
Net loss	$	(307	)	$	(991	)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization		3,842			4,669
Amortization of favorable real estate leases		66			69
Amortization of unfavorable real estate leases		(75	)		(79	)
Bad debt expense (recovery)		(1	)		5
Changes in operating assets and liabilities:
Tenant rent receivable		(25	)		120
Step rent receivable		(512	)		50
Prepaid expenses and other assets		277			(35	)
Accounts payable and accrued expenses		(193	)		(24	)
Tenant security deposits		128			10
Payment of deferred leasing costs		(1,407	)		(508	)
Net cash provided by operating activities		1,793			3,286
Cash flows from investing activities:
Purchase of real estate assets		(4,671	)		(2,561	)
Net cash used for investing activities		(4,671	)		(2,561	)
Cash flows from financing activities:
Distributions to stockholders		(2,847	)		(3,909	)
Proceeds from loan payable - affiliate		4,500			2,900
Net cash provided by (used for) financing activities		1,653			(1,009	)
Net decrease in cash and cash equivalents		(1,225	)		(284	)
Cash and cash equivalents, beginning of year		4,030			4,314
Cash and cash equivalents, end of year	$	2,805		$	4,030
Supplemental disclosure of cash flow information:
Cash paid for interest	$	412		$	149
Disclosure of non-cash investing activities:
Accrued costs for purchase of real estate assets	$	410		$	1,412
See accompanying notes to consolidated financial statements.

F-6

FSP Phoenix Tower Corp.

Notes to Consolidated Financial Statements

1. Organization

FSP Phoenix Tower Corp. (the “Company”) was organized on December 20, 2005 as a corporation under the laws of the State of Delaware to purchase, own and operate, improve, and reposition a thirty-four story multi-tenant office building containing approximately 629,054 rentable square feet of space located on approximately 2.1 acres of land in Houston, Texas (the “Property”). The Company acquired the Property and commenced operations on February 22, 2006. Franklin Street Properties Corp. (“Franklin Street”) (NYSE Amex: FSP) holds the sole share of the Company’s common stock, $.01 par value per share (the “Common Stock”). Between March 2006 and September 2006, FSP Investments LLC (member, FINRA and SIPC), a wholly-owned subsidiary of Franklin Street, completed the sale on a best efforts basis of 1,050 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 Phoenix Tower Corp. and its consolidated subsidiaries, collectively, unless the context otherwise requires.

2. Summary of Significant Accounting Policies

BASIS OF PRESENTATION

The accompanying consolidated financial statements include all of the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

ESTIMATES AND ASSUMPTIONS

The Company prepares its consolidated financial statements and related notes in conformity with accounting principles generally accepted in the United States of America (“GAAP”). These principles require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

REAL ESTATE AND DEPRECIATION

Real estate assets are stated at the lower of cost or fair value, as appropriate, less accumulated depreciation.

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

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

	Category	Years
	Building - Commercial	39
	Building Improvements	15-39
	Furniture and Fixtures	5-7

The Company reviews the Property to determine if the carrying amount will be recovered from future cash flows if certain indicators of impairment are identified at the Property. The 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 future cash flows. At December 31, 2011 and 2010, no impairment charges were recorded.

Depreciation expense of $3,102,000 and $3,594,000 is included in Depreciation and Amortization in the Company’s Consolidated Statements of Operations for the years ended December 31, 2011 and 2010, respectively.

F-7

FSP Phoenix Tower Corp.

Notes to Consolidated Financial Statements

2. Summary of Significant Accounting Policies (continued)

ACQUIRED REAL ESTATE LEASES

The acquired real estate leases represent the estimated value of legal and leasing costs related to the acquired leases that were included in the purchase price when the Company acquired the Property. The Company segregates these costs from its investment in real estate. The Company subsequently amortizes these costs on a straight-line basis over the remaining lives of the related leases. Amortization expense of $243,000 and $282,000 is included in Depreciation and Amortization in the Company’s Consolidated Statements of Operations for the years ended December 31, 2011 and 2010, respectively.

Acquired real estate lease costs included in the purchase price of the Property were $4,516,000. Detail of the acquired real estate leases is as follows:

	December 31,
(in thousands)	2011			2010
Cost	$	1,580		$	1,966
Accumulated amortization		(1,059	)		(1,202	)
Book value	$	521		$	764

The estimated annual amortization expense for the four years succeeding December 31, 2011 is as follows:

(in thousands)
2012	$ 182
2013	$ 153
2014	$ 133
2015	$ 53

ACQUIRED FAVORABLE REAL ESTATE LEASES

Acquired favorable real estate leases represents the value related to the lease when the lease payments due under a tenant’s lease exceed the market rate of the lease at the date the Property was acquired. The Company reports this value separately from its investment in real estate. The Company subsequently amortizes this amount on a straight-line basis over the remaining life of the related lease. Amortization of $66,000 and $69,000 is shown as a reduction of rental income in the Company’s Consolidated Statements of Operations for the years ended December 31, 2011 and 2010, respectively.

The acquired favorable real estate lease costs included in the purchase price of the property were $1,568,000. Detail of the acquired favorable real estate leases is as follows:

	December 31,
(in thousands)	2011			2010
Cost	$	502		$	514
Accumulated amortization		(371	)		(317	)
Book value	$	131		$	197

The estimated annual amortization expense for the three years succeeding December 31, 2011 is as follows:

(in thousands)
2012	$ 63
2013	$ 43
2014	$ 25

F-8

FSP Phoenix Tower Corp.

Notes to Consolidated Financial Statements

2. Summary of Significant Accounting Policies (continued)

ACQUIRED UNFAVORABLE REAL ESTATE LEASES

Acquired unfavorable real estate leases represent the value relating to leases with rents below the market rate at the time of property acquisition. Amortization is computed using the straight-line method over the remaining lives of the related leases. Amortization of $75,000 and $79,000 is included with rental revenue in the Company’s Consolidated Statements of Operations for the years ended December 31, 2011 and 2010, respectively.

The acquired unfavorable real estate lease costs included in the purchase price of the property was $826,000. Detail of the acquired unfavorable real estate leases is as follows:

	December 31
(in thousands)	2011			2010
Cost	$	679		$	679
Accumulated amortization		(436	)		(361	)
Book value	$	243		$	318

The estimated annual amortization for the four years succeeding December 31, 2011 is as follows:

(in thousands)
2012	$ 75
2013	$ 67
2014	$ 66
2015	$ 35

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid debt instruments with an initial maturity of three months or less to be cash equivalents.

CONCENTRATION OF CREDIT RISKS

Cash, cash equivalents and short-term investments are financial instruments that potentially subject the Company to a concentration of credit risk. The Company maintains its cash balances and short-term investments principally in banks which the Company believes to be creditworthy. The Company periodically assesses the financial condition of the banks and believes that the risk of loss is minimal. Cash balances held with various financial institutions frequently exceed the insurance limit of $250,000 provided by the Federal Deposit Insurance Corporation.

For the years ended December 31, 2011 and 2010, rental income was derived from various tenants. As such, future receipts are dependent upon the financial strength of the lessees and their ability to perform under the lease agreements.

The following tenants represent greater than 10% of rental revenue as of December 31, 2011 and 2010:

Tenant	2011	2010
Permian Mud d/b/a Champion	16%	15%
Allen, Boone and Humphries	11%	12%

On January 12, 2012, the Company entered into an amendment to the lease with Permian Mud Service, Inc. Pursuant to that amendment, Permian Mud Service, Inc. added approximately 10,131 square feet of space at the Property. The commencement date for the additional premises is expected to be on or about April 1, 2012. The expiration date for the additional premises is February 28, 2018. Accordingly, from and after the commencement date for the additional premises, Permian Mud Service, Inc. will lease an aggregate of approximately 105,441 square feet of space at the Property, or approximately 17% of the Property’s rentable area.

F-9

FSP Phoenix Tower Corp.

Notes to Consolidated Financial Statements

2. Summary of Significant Accounting Policies (continued)

FINANCIAL INSTRUMENTS

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

STEP RENT RECEIVABLE

The leases provide for fixed rental increases over the life of the lease. Rental revenue is recognized on the straight-line basis over the related lease term; however, billings by the Company are based on required minimum rentals in accordance with the lease agreements. Step rent receivable, which is the cumulative revenue recognized in excess of amounts billed by the Company, is $2,301,000 and $1,789,000 at December 31, 2011 and 2010, respectively.

TENANT RENT RECEIVABLE

Tenant rent receivable is reported at the amount the Company expects to collect on balances outstanding at year-end. The Company provides an allowance for doubtful accounts based on its estimate of a tenant’s ability to make future rent payments. The computation of this allowance is based in part on the tenant’s payment history and current credit status. Management monitors outstanding balances and tenant relationships and concluded that an allowance of $4,000 and $5,000 as of December 31, 2011 and 2010, respectively, is sufficient.

DEFERRED LEASING COSTS

Deferred leasing commissions represent direct and incremental external leasing costs incurred in the leasing of commercial space. These costs are capitalized and are amortized on a straight-line basis over the terms of the related lease agreement. Amortization expense was $497,000 and $793,000 for the years ended December 31, 2011 and 2010, respectively.

REVENUE RECOGNITION

The Company has retained substantially all of the risks and benefits of ownership of the Company’s commercial property and accounts for its leases as operating leases. Rental income from the leases, which may include rent concessions (including free rent and tenant improvement allowances) and scheduled increases in rental rates during the lease term, is recognized on a straight-line basis. The Company does not have any percentage rent arrangements with its commercial property tenants. Reimbursable costs are included in rental income in the year earned. A schedule showing the components of rental revenue is shown below.

	Year Ended
	December 31,
(in thousands)	2011			2010
Income from leases	$	5,428		$	6,018
Straight-line rent adjustment		379			(55	)
Reimbursable expenses		5,556			5,521
Amortization of favorable leases		(66	)		(69	)
Amortization of unfavorable leases		75			79
Total	$	11,372		$	11,494

INTEREST INCOME

Interest income is recognized when the earnings process is complete.

F-10

FSP Phoenix Tower Corp.

Notes to Consolidated Financial Statements

2. Summary of Significant Accounting Policies (continued)

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 stockholder 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 taxable income that must be distributed annually.

NET INCOME PER SHARE

Basic net income per share of Preferred Stock is computed by dividing net income by the weighted average number of shares of Preferred Stock outstanding during the period. Diluted net income per share of Preferred Stock 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 December 31, 2011 and 2010. Subsequent to the completion of the offering of shares of Preferred Stock, the holders of Common Stock are not entitled to share in any income nor in any related dividend.

SUBSEQUENT EVENTS

In preparing these consolidated financial statements the Company evaluated events that occurred through the date of issuance of these financial statements for potential recognition or disclosure.

3. Income Taxes

The Company files as a REIT under Sections 856-860 of the Internal Revenue Code of 1986, as amended. In order to qualify as a REIT, the Company is required to distribute at least 90% of its taxable income to stockholders and to meet certain asset and income tests as well as certain other requirements. The Company will generally not be liable for federal income taxes, provided it satisfies these requirements. Even as a qualified REIT, the Company is subject to certain state and local taxes on its income and property. For the period ended December 31, 2006, the Company incurred a net operating loss for income tax purposes of approximately $2,267,000 that can be carried forward until it expires in the year 2026.

The Company adopted an accounting pronouncement related to uncertainty in income taxes effective January 1, 2007, which did not result in recording a liability, nor was any accrued interest and penalties recognized with the adoption. Accrued interest and penalties will be recorded as income tax expense, if the Company records a liability in the future. The Company’s effective tax rate was not affected by the adoption. The Company files income tax returns in the U.S. federal jurisdiction and State of Texas jurisdiction. The statute of limitations for the Company’s income tax returns is generally three years and as such, the Company’s returns that remain subject to examination would be primarily from 2008 and thereafter.

At December 31, 2011, the Company’s net tax basis of its real estate assets was $86,255,000.

F-11

FSP Phoenix Tower Corp.

Notes to Consolidated Financial Statements

3. Income Taxes (continued)

The following schedule reconciles net loss to taxable income subject to dividend requirements, which are calculated annually:

	Year Ended December 31,
(in thousands)	2011			2010
Net loss	$	(307	)	$	(991	)
Adjustments:
Book depreciation and amortization		3,842			4,669
Amortization of favorable real estate leases		66			69
Deferred rent		4			(41	)
Other adjustments		-			(49	)
Tax depreciation and amortization		(2,894	)		(3,096	)
Amortization of unfavorable real estate leases		(75	)		(79	)
Straight-line rents		(418	)		36
Taxable income	$	218		$	518

The following schedule summarizes the tax components of the distributions paid, which are calculated annually, for the years ended December 31:

(dollars in thousands)	2011			2010
		Preferred	%		Preferred	%
Ordinary income	$	-	0%	$	923	24%
Return of Capital		2,847	100%		2,986	76%
Total	$	2,847	100%	$	3,909	100%

4. Capital Stock

PREFERRED STOCK

Generally, each holder of shares of Preferred Stock is entitled to receive ratably all dividends, if any, declared by the Board of Directors out of funds legally available. The right to receive dividends is non-cumulative, and no right to dividends shall accrue by reason of the fact that no dividend has been declared in any prior year. Each holder of shares of Preferred Stock will be entitled to receive, to the extent that funds are available therefore, $100,000 per share of Preferred Stock, before any payment to the holder of Common Stock, out of distributions to stockholders upon liquidation, dissolution or the winding up of the Company; the balance of any such funds available for distribution will be distributed among the holders of shares of Preferred Stock and the holder of Common Stock, pro rata based on the number of shares held by each; provided, however, that for these purposes, one share of Common Stock will be deemed to equal one-tenth of a share of Preferred Stock.

In addition to certain rights to remove and replace directors, the holders of a majority of the then outstanding shares of Preferred Stock shall have the further right to approve or disapprove a proposed sale of the Property, the merger of the Company with any other entity and amendments to the corporate charter. A vote of the holders of not less than 66.67% of then outstanding shares of Preferred Stock is required for the issuance of any additional shares of capital stock. Holders of shares of Preferred Stock have no redemption or conversion rights.

COMMON STOCK

Franklin Street is the sole holder of the Company’s Common Stock. Franklin Street has the right to vote to elect the directors of the Company and to vote on all matters, subject to the voting rights of the Preferred Stock set forth above. Subsequent to the completion of the offering of the shares of Preferred Stock in September 2006, Franklin Street, as the holder of Common Stock, was not entitled to share in any earnings nor any related dividend.

F-12

FSP Phoenix Tower Corp.

Notes to Consolidated Financial Statements

5. Related Party Transactions

The Company has in the past engaged in and currently engages in transactions with a related party, Franklin Street and its 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 our 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 percent (1%) of the gross revenues of the Property for the corresponding month. 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 years ended December 31, 2011 and 2010, management fees paid were $108,000 and $165,000, respectively.

On December 4, 2008, the Company entered into a three-year secured promissory note for a revolving line of credit (the “Phoenix Revolver”) with Franklin Street for up to $15,000,000. On March 31, 2011, the Phoenix Revolver was amended to extend its maturity date from November 30, 2011 to November 30, 2012 and to increase the interest rate applicable to advances thereunder from the 30-day LIBOR rate plus 300 basis points to the 30-day LIBOR rate plus 440 basis points (4.67% at December 31, 2011). The Phoenix Revolver is secured by a mortgage on the Property and each advance thereunder requires payment of a 50 basis point draw fee. The Company anticipates that the Phoenix Revolver will be replaced or refinanced on or before its maturity date. However, there can be no assurance that the Company will be able to replace or refinance the Phoenix Revolver on favorable terms or at all. As of December 31, 2011, advances drawn and outstanding under the Phoenix Revolver totaled $11,000,000. For the years ended December 31, 2011 and 2010, the draw fees were $22,500 and $14,500, respectively, and interest expense paid to Franklin Street was approximately $390,000 and $135,000, respectively.

6. Commitments and Contingencies

The Company, as lessor, has minimum future rentals due under non-cancelable operating leases as follows:

	Year Ending
(in thousands)	December 31,	Amount
	2012	$ 5,999
	2013	5,527
	2014	5,026
	2015	4,469
	2016	4,287
	Thereafter	8,239
		$ 33,547

In addition, the lessees are liable for real estate taxes and certain operating expenses of the Property.

Upon acquiring the commercial rental property on February 22, 2006, the Company was assigned the lease agreements between the seller of the Property and the existing tenants.

F-13

FSP Phoenix Tower Corp.

Notes to Consolidated Financial Statements

6. Commitments and Contingencies (continued)

Upon acquiring the commercial rental property on February 22, 2006, the Company was assigned a lease agreement to lease parking spaces at an adjacent property for approximately 190 additional uncovered off-site parking spaces. The lease expires on February 28, 2019. Future minimum lease payments payable by the Company are as follows:

	Year Ending
(in thousands)	December 31,	Amount
	2012	$ 194
	2013	194
	2014	194
	2015	194
	2016	194
	Thereafter	420
		$ 1,390

7. Segment Reporting

The Company operates in one industry segment – real estate ownership of commercial property. As of December 31, 2011 and 2010 the Company owned and operated a thirty-four story office tower in that one segment.

8. Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consist of the components shown below:

	December 31,
(in thousands)	2011		2010
Accrued property tax	$	1,321	$	1,348
Deferred rental income		562		495
Accrued capital expenditures		409		1,370
Accounts payable and other accrued expenses		672		905
Due to tenant - tenant improvements		1		42
Total	$	2,965	$	4,160

9. Subsequent Event

On January 26, 2012, the Board of Directors of the Company declared a cash distribution of $699,300 payable on February 29, 2012 to stockholders of record on February 9, 2012.

On March 7, 2012, the Company requested a $1,000,000 advance under the Phoenix Revolver.

F-14

SCHEDULE III

FSP Phoenix Tower Corp.

Real Estate and Accumulated Depreciation

December 31, 2011

		Initial Cost			Historical Costs
Description	Encumbrances (1)	Land	Buildings Improvements and Equipment	Costs Capitalized (Disposals) Subsequent to Acquisition	Land	Buildings Improvements and Equipment	Total (2)	Accumulated Depreciation	Total Costs, Net of Accumulated Depreciation	Depreciable Life (Years)	Date of Acquisition
			(dollars in thousands)
Phoenix Tower, Houston, Texas	$11,000	$3,300	$66,806	$23,703	$3,300	$90,509	$93,809	$14,936	$78,873	5-39	2006

(1) On December 4, 2008, the Company entered into a revolving line of credit (the “Phoenix Revolver”) with Franklin Street Properties Corp. for up to $15,000. The Phoenix Revolver is secured by a mortgage on the Property. As of December 31, 2011, $11,000 has been advanced under the Phoenix Revolver.

(2) The aggregate cost for Federal Income Tax purposes is $99,067.

F-15

FSP Phoenix Tower Corp.

The following table summarizes the changes in the Company's real estate investments and accumulated depreciation:

	December 31,		December 31,
(in thousands)	2011		2010
Real estate investments, at cost:
Balance, beginning of year	$	90,140	$	86,805
Improvements		3,669		3,335
Balance, end of year	$	93,809	$	90,140
Accumulated depreciation:
Balance, beginning of year	$	11,834	$	8,240
Depreciation		3,102		3,594
Balance, end of year	$	14,936	$	11,834

F-16

Filing Compare · FSP PHOENIX TOWER CORP