UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C.  20549





FORM
10 - Q





(Mark
One)


[
      X ]
            QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934For the quarterly period ended
      June 30, 2009





OR





[   ]
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934For the transition period from
      _________ to __________.





Commission File
Number:  000-53165




FSP 303 East Wacker Drive
Corp.


(Exact name of registrant as specified
in its charter)





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





401
Edgewater Place, Suite 200


Wakefield,
MA 01880-6210


(Address
of principal executive offices)(Zip Code)







(781)
557-1300


(Registrant’s
telephone number, including area code)




N/A


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





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





YES     [
      X ]
            NO     [   ]





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





YES     [   ]
            NO     [   ]





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, 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 Exchange Act).





YES     [   ]
            NO     [
      X ]





The number
of shares of common stock outstanding was 1 and the number of shares of
preferred stock outstanding was 2,210, each as of July 31, 2009.







FSP
303 East Wacker Drive Corp.





Form
10-Q





Quarterly
Report


June
30, 2009





Table
of Contents










Part
I.       Financial
Information


Item
1.  Financial Statements


Consolidated Balance Sheets as of June 30, 2009 and December 31,
2008


2


Consolidated Statements of Operations for the three and six months
ended  June 30, 2009 and 2008


3


Consolidated
Statements of Cash Flows for the six months ended June 30, 2009 and
2008


4


Notes to Consolidated Financial Statements


5-7


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


8-11


Item
3.   Quantitative and Qualitative Disclosures About Market
Risk


12


Item
4.   Controls and Procedures


12


Item
4T. Controls and Procedures


12


Part
II.     Other Information


Item
1.   Legal Proceedings


13


Item
1A. Risk Factors


13


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


13


Item
3.    Defaults Upon Senior Securities


13


Item
4.    Submission of Matters to a Vote of Security
Holders


13


Item
5.    Other Information


13


Item
6.    Exhibits


13


Signatures


14





1




PART
I – FINANCIAL INFORMATION




Item
1.                 Financial
Statements.





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





June
      30,
                  
                  
                  December
      31,(in
      thousands, except share and par value amounts)
                  
                  2009
                  
                  
                  2008Assets:Real
      estate investments, at cost:Land
                  
                  $
                  26,200
                  
                  
                  $
                  26,200Buildings
      and improvements
                  
                  
                  132,298
                  
                  
                  
                  131,541158,498
                  
                  
                  
                  157,741Less
      accumulated depreciation
                  
                  
                  8,719
                  
                  
                  
                  6,870Real
      estate investments, net
                  
                  
                  149,779
                  
                  
                  
                  150,871Acquired
      real estate leases, net of accumulated amortization
                    of
      $3,846 and $4,159, respectively
                  
                  
                  5,761
                  
                  
                  
                  6,667Acquired
      favorable real estate leases, net of accumulated
                    amortization
      of $2,399 and $3,181, respectively
                  
                  
                  3,963
                  
                  
                  
                  4,601Cash
      and cash equivalents
                  
                  
                  20,940
                  
                  
                  
                  23,878Tenant
      rent receivable
                  
                  
                  120
                  
                  
                  
                  58Step
      rent receivable
                  
                  
                  2,232
                  
                  
                  
                  2,104Deferred
      leasing costs, net of accumulated
                    amortization
      of $165 and $98, respectively
                  
                  
                  743
                  
                  
                  
                  677Prepaid
      expenses and other assets
                  
                  
                  181
                  
                  
                  
                  136Total
      assets
                  
                  $
                  183,719
                  
                  
                  $
                  188,992Liabilities
      and Stockholders’ Equity:Liabilities:Accounts
      payable and accrued expenses
                  
                  $
                  7,337
                  
                  
                  $
                  8,595Distribution
      payable
                  
                  
                  
                  
                  
                  
                  -Tenant
      security deposits
                  
                  
                  368
                  
                  
                  
                  583Acquired
      unfavorable real estate leases, net of accumulated
                    amortization
      of $243 and $209, respectively
                  
                  
                  320
                  
                  
                  
                  368Total
      liabilities
                  
                  
                  8,025
                  
                  
                  
                  9,546Commitments
      and Contingencies:
                  
                  
                  -
                  
                  
                  
                  -Stockholders’
      Equity:Preferred
      Stock, $.01 par value, 2,210 shares authorized,issued
      and outstanding at June 30, 2009 andDecember
      31, 2008, aggregate liquidation preference $221,000
                  
                  
                  -
                  
                  
                  
                  -Common
      Stock, $.01 par value, 1 shareauthorized,
      issued and outstanding
                  
                  
                  -
                  
                  
                  
                  -Additional
      paid-in capital
                  
                  
                  197,162
                  
                  
                  
                  197,162Retained
      deficit and distributions in excess of earnings
                  
                  
                  (21,468
                  )
                  
                  
                  (17,716
                  )Total
      Stockholders’ Equity
                  
                  
                  175,694
                  
                  
                  
                  179,446Total
      Liabilities and Stockholders’ Equity
                  
                  $
                  183,719
                  
                  
                  $
                  188,992See
      accompanying notes to consolidtated financial statements.







2





FSP
      303 East Wacker Drive CorpConsolidated
      Statements of Operations(Unaudited)





For
      the Three Months
                      
                      
                      For
      the Six MonthsEnded
      June 30,
                      
                      
                      Ended
      June 30,(in
      thousands, except share and per share amounts)
                      
                      2009
                      
                      
                      2008
                      
                      
                      2009
                      
                      
                      2008Revenues:Rental
                      
                      $
                      4,948
                      
                      
                      $
                      5,858
                      
                      
                      $
                      11,277
                      
                      
                      $
                      11,649Total
      revenue
                      
                      
                      4,948
                      
                      
                      
                      5,858
                      
                      
                      
                      11,277
                      
                      
                      
                      11,649Expenses:Rental
      operating expenses
                      
                      
                      1,385
                      
                      
                      
                      1,465
                      
                      
                      
                      3,159
                      
                      
                      
                      3,073Real
      estate taxes and insurance
                      
                      
                      1,461
                      
                      
                      
                      1,480
                      
                      
                      
                      2,935
                      
                      
                      
                      2,984Depreciation
      and amortization
                      
                      
                      1,347
                      
                      
                      
                      1,441
                      
                      
                      
                      2,823
                      
                      
                      
                      2,877Total
      expenses
                      
                      
                      4,193
                      
                      
                      
                      4,386
                      
                      
                      
                      8,917
                      
                      
                      
                      8,934Income
      before interest income
                      
                      
                      755
                      
                      
                      
                      1,472
                      
                      
                      
                      2,360
                      
                      
                      
                      2,715Interest
      income
                      
                      
                      31
                      
                      
                      
                      164
                      
                      
                      
                      76
                      
                      
                      
                      398Net
      income attributable to preferred stockholders
                      
                      $
                      786
                      
                      
                      $
                      1,636
                      
                      
                      $
                      2,436
                      
                      
                      $
                      3,113Weighted
      average number of preferred shares outstanding,basic
      and diluted
                      
                      
                      2,210
                      
                      
                      
                      2,210
                      
                      
                      
                      2,210
                      
                      
                      
                      2,210Net
      income per preferred share, basic and diluted
                      
                      $
                      356
                      
                      
                      $
                      740
                      
                      
                      $
                      1,102
                      
                      
                      $
                      1,409See
      accompanying notes to consolidated financial statements.







3





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





For
      the Six Months Ended
                      June
      30,(in
      thousands)
                    
                    2009
                    
                    
                    2008Cash
      flows from operating activities:Net
      income
                    
                    $
                    2,436
                    
                    
                    $
                    3,113Adjustments
      to reconcile net income to net cashprovided
      by operating activities:Depreciation
      and amortization
                    
                    
                    2,823
                    
                    
                    
                    2,877Amortization
      of favorable real estate leases
                    
                    
                    638
                    
                    
                    
                    838Amortization
      of unfavorable real estate leases
                    
                    
                    (48
                    )
                    
                    
                    (53
                    )Bad
      debt expense
                    
                    
                    -
                    
                    
                    
                    20Changes
      in operating assets and liabilities:Tenant
      rent receivable
                    
                    
                    (62
                    )
                    
                    
                    (88
                    )Step
      rent receivable
                    
                    
                    (128
                    )
                    
                    
                    (417
                    )Prepaid
      expenses and other assets
                    
                    
                    (45
                    )
                    
                    
                    (17
                    )Accounts
      payable and accrued expenses
                    
                    
                    (1,329
                    )
                    
                    
                    47Tenant
      security deposits
                    
                    
                    (215
                    )
                    
                    
                    (7
                    )Payment
      of deferred leasing costs
                    
                    
                    (134
                    )
                    
                    
                    (347
                    )Net
      cash provided by operating activities
                    
                    
                    3,936
                    
                    
                    
                    5,966Cash
      flows from investing activities:Purchase
      of real estate assets
                    
                    
                    (686
                    )
                    
                    
                    (1,091
                    )Net
      cash used for investing activities
                    
                    
                    (686
                    )
                    
                    
                    (1,091
                    )Cash
      flows from financing activities:Proceeds
      from sale of company stock
                    
                    
                    -
                    
                    
                    
                    -Syndication
      costs
                    
                    
                    -
                    
                    
                    
                    -Distributions
      to stockholders
                    
                    
                    (6,188
                    )
                    
                    
                    (4,802
                    )Net
      cash used for financing activities
                    
                    
                    (6,188
                    )
                    
                    
                    (4,802
                    )Net
      increase (decrease) in cash and cash equivalents
                    
                    
                    (2,938
                    )
                    
                    
                    73Cash
      and cash equivalents, beginning of period
                    
                    
                    23,878
                    
                    
                    
                    25,353Cash
      and cash equivalents, end of period
                    
                    $
                    20,940
                    
                    
                    $
                    25,426Supplemental disclosure of cash
      flow information:Disclosure
      of non-cash investing activities:Accrued
      costs for purchase of real estate assets
                    
                    $
                    407
                    
                    
                    $
                    1,853See
      accompanying notes to consolidated financial statements.







4


FSP
303 East Wacker Drive Corp.


Notes
to Consolidated Financial Statements


(Unaudited)





1.      Organization, Basis of
Presentation, Financial Instruments and Recent Accounting
Pronouncements





Organization





FSP 303 East Wacker Drive Corp. (the
“Company”) was organized on December 13, 2006 as a corporation under the laws of
the State of Delaware to purchase, own, and operate a twenty-eight story
multi-tenant office tower containing approximately 859,187 rentable square feet
of office and retail space and a 294-stall underground parking garage located in
downtown Chicago, Illinois (the “Property”).  The Company acquired the
Property and commenced operations on January 5, 2007. Franklin Street Properties
Corp. (“Franklin Street”) (NYSE Amex: FSP) holds the sole share of the Company’s
common stock, $.01 par value per share (the “Common Stock”).  Between
February 2007 and December 2007, FSP Investments LLC (member, FINRA and SIPC), a
wholly-owned subsidiary of Franklin Street, completed the sale on a best efforts
basis of 2,210 shares of preferred stock, $.01 par value per share (the
“Preferred Stock”) in the Company.  FSP Investments LLC sold the
Preferred Stock in a private placement offering to “accredited investors” within
the meaning of Regulation D under the Securities Act of
1933.





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





Basis
of Presentation


The unaudited consolidated financial
statements of the Company include all the accounts of the Company and its wholly
owned subsidiary.  These financial statements should be read in
conjunction with the Company's financial statements and notes thereto contained
in the Company's Annual Report on Form 10-K for the year ended December 31,
2008, as filed with the Securities and Exchange Commission
(“SEC”).





The accompanying interim financial
statements are unaudited; however, the financial statements have been prepared
in accordance with accounting principles generally accepted in the United States
of America for interim financial information and in conjunction with the rules
and regulations of the SEC.  Accordingly, they do not include all of
the disclosures required by accounting principles generally accepted in the
United States of America for complete financial statements. In the opinion of
management, all adjustments (consisting solely of normal recurring matters)
necessary for a fair presentation of the financial statements for these interim
periods have been included.  Operating results for the three and six
months ended June 30, 2009 are not necessarily indicative of the results that
may be expected for the year ending December 31, 2009 or for any other period.




Financial Instruments





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




Recent Accounting
Pronouncements





In May 2008, the Financial Accounting
Standards Board (“FASB”) issued Statement of Financial Accounting Standards
(“SFAS”) No. 162, “The Hierarchy of Generally Accepted Accounting Principles”
(SFAS No. 162).  SFAS No. 162 identifies the sources of accounting
principles and the framework for selecting the principles to be used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles (GAAP) in
the United States (the GAAP hierarchy).  SFAS No. 162 is effective 60
days following the SEC’s approval of the Public Company Accounting Oversight
Board (PCAOB) amendments to AU Section 411, The Meaning of Present Fairly in
Conformity With Generally Accepted Accounting Principles.  The Company
is currently evaluating the impact of SFAS No. 162 on the Company’s consolidated
financial statements.





On
May 28, 2009, the FASB issued SFAS No. 165, “Subsequent Events”.  This
Statement is intended to establish general standards of accounting for and
disclosure of events that occur after the balance sheet date but before
financial statements are issued or are available to be issued. It requires the
disclosure of the date through which an entity has evaluated subsequent events
and the basis for that date-that is, whether that date represents the date the
financial statements were issued or were available to be issued. This Statement
is effective for interim and annual periods ending after June 15,
2009.  The adoption of this standard did not have a material impact on
the Company’s financial position, results of operations or cash
flows.




5


FSP
303 East Wacker Drive Corp.


Notes
to Consolidated Financial Statements


(Unaudited)





1.      Organization, Basis of
Presentation, Financial
Instruments and Recent Accounting Pronouncements
(continued)





Recent Accounting Pronouncements
(continued)





On
July 1, 2009, the FASB issued SFAS No. 168, “The FASB Accounting Standards
Codification TM (Codification) and the Hierarchy of Generally Accepted Accounting
Principles—a replacement of FASB Statement No. 162”, which will become the
source of authoritative U.S. generally accepted accounting principles (GAAP)
recognized by the FASB to be applied by nongovernmental entities. Rules and
interpretive releases of the Securities and Exchange Commission (SEC) under
authority of federal securities laws are also sources of authoritative GAAP for
SEC registrants. On the effective date of this Statement, the Codification will
supersede all then-existing non-SEC accounting and reporting standards. All
other nongrandfathered non-SEC accounting literature not included in the
Codification will become nonauthoritative.   This Statement is
effective for financial statements issued for interim and annual periods ending
after September 15, 2009.  The Company is currently evaluating the
impact of SFAS No. 168 on the Company’s consolidated financial
statements.





2.      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 (the "Code").  As a REIT, the Company generally is entitled
to a tax deduction for dividends paid to its stockholders, thereby effectively
subjecting the distributed net income of the Company to taxation at the
shareholder level only.  The Company must comply with a variety of
restrictions to maintain its status as a REIT.  These restrictions
include the type of income it can earn, the type of assets it can hold, the
number of stockholders it can have and the concentration of their ownership, and
the amount of the Company’s income that must be distributed
annually.





The Company’s adoption of the provisions
of Financial Interpretation No. 48, Accounting for Uncertainty in Income Taxes
(“FIN 48”), effective January 1, 2007 did not result in recording a liability,
nor were any accrued interest and penalties recognized with the adoption of FIN
48.  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 of FIN
48.  The Company files income tax returns in the U.S. federal
jurisdiction and the State of Illinois 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 2006 and thereafter.





3.      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 its stockholders.  FSP Property Management
LLC currently provides the Company with asset management and financial reporting
services.  The asset management agreement between the Company and FSP
Property Management LLC requires the Company to pay FSP Property Management LLC
a monthly fee equal to one percent (1%) of the gross revenues of the
Property.  The asset management agreement between the Company and FSP
Property Management LLC may be terminated by either party without cause at any
time, upon at least thirty (30) days’ written notice.  For the six
months ended June 30, 2009 and 2008, management fees paid were $56,000 and$60,000, respectively.





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





Franklin Street is the sole holder of
the 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 December 2007, Franklin Street has not been entitled to
share in any earnings or any dividend related to the Common Stock of the
Company.


6


FSP
East Wacker Drive Corp.


Notes
to Consolidated Financial Statements


(Unaudited)





4.
            Net Income Per
      Share Basic
net income per share 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 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 June 30, 2009 and 2008.





5.
            Segment
      Reporting





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




6.
            Cash
      Distributions





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





Quarter
Paid
                        
                        Distributions PerPreferred
                          Share
                        
                        
                        Total
                          DistributionsFirst quarter of
      2009
                        
                        $
                        1,400
                        
                        
                        $
                        3,094,000Second Quarter
      2009
                        
                        $
                        1,400
                        
                        
                        $
                        3,094,000First quarter of
      2008
                        
                        $
                        1,400
                        
                        
                        $
                        1,708,000Second quarter of
      2008
                        
                        $
                        1,400
                        
                        
                        $
                        3,094,000





7.
            Subsequent
      Event





The
Company declared a cash distribution of $1,013 per preferred share on July 17,
2009 to the holders of record of the Company’s Preferred Stock on July 31, 2009,
payable on August 20, 2009.




The Company has evaluated all subsequent events
through August 7, 2009, the date the consolidated financial statements were
issued.




7





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





The following discussion should be read
in conjunction with the financial statements and notes thereto appearing
elsewhere in this report and in our General Form for Registration of Securities
on Form 10-K, for the year ended December 31, 2008.Historical results and percentage
relationships set forth in the consolidated financial statements, including
trends which might appear, should not be taken as necessarily indicative of
future operations.  The following
discussion and other parts of this Quarterly Report on Form 10-Q may also
contain forward-looking statements based on current judgments and current
knowledge of management, which are subject to certain risks, trends and
uncertainties that could cause actual results to
differ materially from those indicated in such forward-looking
statements.  Accordingly, readers are cautioned not to place undue
reliance on forward-looking statements.Investors are cautioned that our
forward-looking statements involve risks and uncertainty, including without
limitation the current disruptions in the credit markets, changes in economic
conditions in the market where we own the Property and in the global markets,
risks of a lessening of demand for the type of real estate owned by us, changes
in government regulations, 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
reflected in the forward-looking statements are reasonable, we cannot guarantee
future results, levels of activity, performance or achievements.  We
may not update any of the forward-looking statements after the date this Quarterly Report on Form
10-Q is filed to conform them to actual results or to changes in our
expectations that occur after such date, other than as required by
law.





Overview





FSP 303 East
WackerDrive Corp., which
we refer to as the Company, is a Delaware corporation formed to purchase, own,
and operate a twenty-eight story multi-tenant office tower containing
approximately 859,187 rentable square feet of office and retail space and a
294-stall underground parking garage located in downtown Chicago, Illinois,
which we refer to as the Property.





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





We
operate in one business segment, which is real estate operations, and own a
single property.  Our real estate operations involve real estate
rental operations, leasing services and property management
services.  The main factor that affects our real estate operations is
the broad economic market conditions in the United States and, more
specifically, the economic conditions in Chicago, Illinois, the relevant
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.





Trends and
Uncertainties




Economic
Conditions





The
economy in the United States is continuing to experience unprecedented
disruptions, including increased levels of unemployment, the failure and near
failure of a number of large financial institutions, reduced liquidity and
increased credit risk premiums for a number of market
participants.  Economic conditions may be affected by numerous
factors, including but not limited to, inflation and employment levels, energy
prices, recessionary concerns, changes in currency exchange rates, the
availability of debt and interest rate fluctuations.  The current
disruptions in the U.S. economy have affected real estate values, occupancy
levels and property income levels and may continue or worsen in the
future.  At this time, we cannot predict the extent or duration of any
negative impact that the current disruptions in the U.S. economy will have on
our business and, more specifically, on our efforts to lease vacant space and to
obtain the Permanent Mortgage Loan (as defined below).





Permanent
Mortgage Loan





Management believes that the Property
has the potential for increased occupancy and rental rates in the future and,
assuming that such increases occur, management believes that the holders of the
Preferred Stock could benefit, in the form of a return of capital that produces
a positive total return on their original investment, from either our obtaining
some level of permanent mortgage debt financing, which we refer to as the
Permanent Mortgage Loan, or the sale of the Property or a merger transaction at
such time.  Management believes that the Permanent Mortgage Loan, if
obtained in an amount and on terms considered favorable relative to the current
and anticipated future performance of the Property, could benefit the holders of
the Preferred Stock by providing them with a return of a portion of their
original capital investment in the Company and by decreasing the amount of their
remaining capital investment in the Company.  Assuming that the value
of the Property appreciates over time and that the Property is ultimately sold
for such appreciated value, Management believes that the Permanent Mortgage Loan
could provide




8




the holders of the Preferred Stock with a leveraged rate of return on
their remaining capital investment in the Company that could be enhanced over
the rate of return without the Permanent Mortgage Loan.  However,
there can be no assurance that the Property will appreciate in value over time
or that the Company will be able to obtain the Permanent Mortgage Loan on terms
considered favorable relative to the current and anticipated future performance
of the Property, especially in light of the current economic conditions
described above.  Subject to any contrary REIT requirements (or any
Property-specific current or anticipated future capital needs requirements in
the case of the Permanent Mortgage Loan only), any proceeds from the closing of
the Permanent Mortgage Loan, the sale of the Property or a merger transaction
would be distributed to the holders of the Preferred Stock and the Common Stock
in accordance with our charter.




The Company has the right, in its sole
and absolute discretion and without the consent of any holder of shares of the
Preferred Stock, to obtain the Permanent Mortgage Loan.  Although the
Company has no obligation to obtain the Permanent Mortgage Loan, if the Company
decides to obtain the Permanent Mortgage Loan, the Company will have the right,
in its sole and absolute discretion and without the consent of any holder of
shares of our Preferred Stock, to negotiate all of the terms and conditions of
the Permanent Mortgage Loan and any refinancing thereof including, without
limitation, the timing of the closing and funding, the identity of the lender,
the principal amount, the interest rate, the maturity and the
security.   As of July 31, 2009, the Company has neither sought
nor obtained the Permanent Mortgage Loan.





Real Estate
Operations




The
Property was approximately 75% leased as of June 30, 2009 to a diverse group of
tenants with staggered lease expirations.  Management believes that
any tenant that leases 10% or more of the Property’s rentable space is
material.  The largest tenant is KPMG LLP, or KPMG, which leases
259,090 square feet (approximately 30%) of the Property’s rentable space through
August 2012.  Consoer Townsend Environdyne Engineers, Inc., or CTE,
leases 117,379 square feet (approximately 14%) of the Property’s rentable space
through September 2014.  KPMG is one of the largest accounting firms
in the world and CTE is a subsidiary of AECOM Technology Corporation, a provider
of professional, technical and management support services (NYSE: ACM), which
has guaranteed CTE's obligations under the lease.  On February 16,
2009, KPMG notified the Company that it will be relocating to a different
property location following the expiration of its lease on August 31,
2012.  With approximately three years remaining on KPMG’s lease,
management will use that time to implement a marketing plan designed to locate a
replacement tenant (or tenants).  No other tenant leases 10% or more
of the Property’s rentable space.  On December 31, 2008, CTE notified
the Company that it will be exercising its early termination option on a portion
of the 10th floor.  Effective October 1, 2009, CTE’s total leased
space will be reduced from 117,379 square feet to 104,086 square feet, or
approximately 12% of the Property’s total leasable space.  This
reduction represents approximately 2% of the Property’s total leasable
space.  As of June 30, 2009, 32 tenants were leasing space at the
Property.





It is difficult for management to
predict what will happen to occupancy and rents at our 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 trendsin the national economy, such as job
growth, interest rates, the availability of credit and corporate earnings, which
in turn are tied to even larger macroeconomic and political factors, such as
recessionary concerns, volatility in energy pricing and therisk of terrorism.  In addition
to the difficulty of predicting macroeconomic factors, it is difficult to
predict how our local market or tenants (existing and potential) will suffer or
benefit from changes in the larger economy.  In addition, because theProperty 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
taketo lease vacant space at the Property
or what the terms and conditions of any new leases will be, we expect to sign
new leases at current market rates which may be below the expiring
rates.





For
the three months ended June 30, 2009, we believe that vacancy rates began to
increase and rental rates began to decrease for buildings in Chicago’s East Loop
office market.  There have been fewer prospects and less interest
overall in vacant space indicating that market conditions may worsen in the near
future.  Continuing turmoil in the global financial markets has slowed
the pace of leasing activity in the Chicago office market and will likely
prolong the time it takes to lease the vacant space at the
Property.  Management believes that the position of the Property
within Chicago’s office market is strong and management is optimistic that the
existing vacant space will ultimately be leased to new
tenants.





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




9





In light of the amount of space that
will need to be re-leased upon the expiration of KPMG’s lease on August 31, 2012
and the potential for significant tenant improvement allowances and leasing
commissions, it is possible that we may need to borrow funds in the
future.  The Company may, without the consent of any holder of shares
of the Preferred Stock, obtain a revolving line of credit of up to $66,800,000
on commercially reasonable terms to be used for capital improvements or to pay
operating expenses of the Property, if needed.   As of July 31,
2009, the Company has neither sought nor obtained a line of
credit.




Critical
Accounting Policies




We
have certain critical accounting policies that are subject to judgments and
estimates by our management and uncertainties of outcome that affect the
application of these policies.  We base our estimates on historical
experience and on various other assumptions we believe to be reasonable under
the circumstances.  On an on-going basis, we evaluate our
estimates.  In the event estimates or assumptions prove to be
different from actual results, adjustments are made in subsequent periods to
reflect more current information.  The accounting policies that we
believe are most critical to the understanding of our financial position and
results of operations and that require significant management estimates and
judgments are discussed in Item 7, “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” in our Annual Report on Form 10-K
for the year ended December 31, 2008.





Critical accounting policies are those
that have the most impact on the reporting of our financial condition and
results of operations and those requiring significant judgments andestimates.  We believe that our
judgments and estimates are consistently applied and produce financial
information that fairly presents our results of operations.




No change to our critical accounting
policies has occurred since the filing of our Annual Report on Form 10-K for the
year ended December 31, 2008.




Results of
Operations





As
of June 30, 2009, the Property was approximately 75% leased to a diverse group
of tenants with staggered lease expirations.





Comparison
of the three months ended June 30, 2009 to the three months ended June 30,
2008





Revenue





Total revenue decreased $1.0 million to
$4.9 million for the three months ended June 30, 2009, as compared to $5.9
million for the three
months ended June 30, 2008.This decrease was primarily due to
a decrease in revenue from base rents of $0.4 million and a decrease in recovery
of expenses of $0.6 million as a result of a decrease in leasing and
occupancy.





Expenses





Total expenses decreased approximately $0.2 million
to $4.2 million for the three months ended June 30, 2009 as compared to $4.4
million for the three months ended June 30, 2008.  This decrease is
attributable to a decrease in rental operating expenses of
approximately $0.1 million and a decrease in
depreciation and amortization of $0.1 million.





Comparison
of the six months ended June 30, 2009 to the six months ended June 30,
2008





Revenue





Total revenue decreased by $0.3 million
to $11.3 million for the six months ended June 30, 2009 as compared to $11.6
million for the six months ended June 30, 2008.  The decrease is
mainly due to the decrease in revenue from base rents of $0.4 million and a
decrease in recoverable expenses of $0.2 million which was offset by an
increase in termination fees of $0.3
million.





Expenses





Total expenses remained at approximately
$8.9 million for the six months ended June 30, 2009 and
2008.




10


Liquidity and Capital
Resources





Cash and cash equivalents were $20.9
million at June 30, 2009and $23.9 million at December 31, 2008.  The $3.0 million decrease for
the six months ended June 30, 2009 is primarily attributable to $3.9 million
provided by operating activities, which was offset by $0.7 million used for
investing activities and $6.2million used for financing
activities.





Management believes that the existing
cash and cash anticipated to be generated internally by operations will be
sufficient to meet working capital requirements, distributions and anticipated
capital expenditures for at
least the next 12 months.





Operating Activities





The cash provided by operating
activities of $3.9 million for the six months ended June 30, 2009 was primarily
attributable to a net income of approximately $2.4 million plus depreciation and
amortization of
approximately $3.4 million, offset primarily by a decrease in accounts payable
and accrued expenses of $1.3 million and uses arising from other current
accounts of $0.6 million.





Investing Activities





The cash used for investing activities
of approximately $0.7 million for the six months ended June 30, 2009 was
attributable to the
purchase of real estate assets.





Financing Activities





Cash used for financing activities of
$6.2 million for the six months ended June 30, 2009 was attributable to
distributions to stockholders.





Sources and Uses of
Funds





The Company’s principal demands on liquidity are cash
for operations and distributions to equity holders.  As of June 30,
2009, we had approximately $7.3 million in accrued liabilities.  In
the near term, liquidity is generated by cash from
operations.





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, which we
collectively refer to as FSP.  We expect to continue to have related
party transactions with FSP in the form of management fees paid to FSP to manage
the Company on behalf of our stockholders.  FSP Property Management
LLC currently provides us with asset management and financial reporting
services.  The asset management agreement between us and FSP Property
Management LLC requires us to pay FSP Property Management LLC a monthly fee
equal to one percent (1%) of the gross revenues of the Property.  The
asset management agreement between us and FSP Property Management LLC may be
terminated by either party without cause at any time, upon at least thirty (30)
days’ written notice.  For the six months ended June 30, 2009 and
2008, management fees paid were$56,000 and $60,000,
respectively.





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





Franklin Street is the sole holder
of the 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 December 2007, Franklin Street has not been entitled to
share in any earnings or any dividend related to the Common Stock of the
Company.




11




Item
3.     Quantitative and Qualitative Disclosures About Market
Risk.





Not
applicable.





Item
4.     Controls and Procedures.





Not
applicable.





Item
4T.  Controls and Procedures.





Disclosure
Controls and Procedures





Our management, with the participation
of our principal executive officer and principal financial officer, evaluated
the effectiveness of our disclosure controls and procedures as of June 30, 2009.
The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934 or the Exchange Act, means
controls and other procedures of a company that are designed to ensure that
information required to be disclosed by a company in the reports that it files
or submits under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the SEC's rules and
forms.  Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information required
to be disclosed by a company in the reports that it files or submits under the
Exchange Act is accumulated and communicated to the company’s management,
including its principal executive and principal financial officers, as
appropriate to allow timely decisions regarding required
disclosure.  Management recognizes that any controls and procedures,
no matter how well designed and operated, can provide only reasonable assurance
of achieving their objectives and management necessarily applies its judgment in
evaluating the cost-benefit relationship of possible controls and
procedures.  Based on the evaluation of our disclosure controls and
procedures as of June 30, 2009, our principal executive officer and principal
financial officer concluded that, as of such date, our disclosure controls and
procedures were effective at the reasonable assurance level.





Changes
in Internal Control Over Financial Reporting





No
change in our internal control over financial reporting occurred during the
quarter ended June 30, 2009 that has materially affected, or is reasonably
likely to materially affect, our internal control over financial
reporting.




12


Item
1.     Legal Proceedings.
 
 From time to time, we may be subject to
legal proceedings and claims that arise in the ordinary course of our
business.  Although occasional adverse decisions (or settlements) may
occur, we believe that the final disposition of such matters will not have a
material adverse effect on our financial position, cash flows or results of
operations.
 
 Item 1A.  Risk
Factors.
 
 Not
applicable.
 
 Item
2.    Unregistered Sales of Equity Securities and Use of
Proceeds.
 
 None.
 
 Item
3.   Defaults Upon Senior Securities.
 
 None.
 
 Item
4.   Submission of Matters to a Vote of Security Holders.
 
 None.
 
 Item
5.  Other Information.
 
 None.
 
 Item
6.   Exhibits.
 
 See Exhibit Index attached hereto,
which is incorporated herein by reference.
  13


SIGNATURES





Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.







FSP
303 EAST WACKER DRIVE CORP.








Date
                Signature
                TitleDate:  August
      7, 2009
                /s/ George J.
      Carter
                  George
      J. Carter
                President
                  (Principal
      Executive Officer)Date:  August
      7, 2009
                /s/ Barbara J.
      Fournier
                  Barbara
      J. Fournier
                Chief
      Operating Officer
                  (Principal
      Financial Officer)







14





EXHIBIT
INDEX





Exhibit
      No.
                  Description31.1
                  Certification
      of FSP 303 East Wacker Drive Corp.'s principal executive officer pursuant
      to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
                  Certification
      of FSP 303 East Wacker Drive Corp.'s principal financial officer pursuant
      to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
                  Certification
      of FSP 303 East Wacker Drive Corp.'s principal executive officer pursuant
      to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002.32.2
                  Certification
      of FSP 303 East Wacker Drive Corp.'s principal financial officer pursuant
      to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002.


15