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 1934

      For the quarterly period ended September 30, 2006.

                                       OR

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

            For the transition period from _________ to __________.

                        Commission File Number: 000-51940


                            FSP Galleria North Corp.
             (Exact name of registrant as specified in its charter)

                    Delaware                              20-1641289
        (State or other jurisdiction of                (I.R.S. Employer
         incorporation 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 is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check
one):

Large Accelerated Filer |_|   Accelerated Filer |_|   Non-Accelerated Filer |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 860 each as of November 13, 2006.

<PAGE>

                            FSP Galleria North Corp.

                                    Form 10-Q

                                Quarterly Report
                               September 30, 2006

                                Table of Contents

<TABLE>
<CAPTION>
                                                                                                                   Page
                                                                                                                   ----
<S>                                                                                                               <C>
Part I.  Financial Information

         Item 1.  Financial Statements

                  Balance Sheets as of September 30, 2006 and December 31, 2005.................................      2

                  Statements of Operations for the three and nine months ended September 30, 2006 and 2005......      3

                  Statements of Cash Flows for the nine months ended September 30, 2006 and 2005................      4

                  Notes to 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....................................     11

         Item 4.  Controls and Procedures.......................................................................     11

Part II. Other Information

         Item 1.  Legal Proceedings.............................................................................     13

         Item 1A. Risk Factors .................................................................................  13-18

         Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds...................................     18

         Item 3.  Defaults Upon Senior Securities...............................................................     18

         Item 4.  Submission of Matters to a Vote of Security Holders...........................................     18

         Item 5.  Other Information.............................................................................     18

         Item 6.  Exhibits......................................................................................     19

Signatures .....................................................................................................     20
</TABLE>


                                       1
<PAGE>

                            FSP Galleria North Corp.
                                 Balance Sheets
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                   September 30,     December 31,
(in thousands, except shares and par value amounts)                    2006              2005
==================================================================================================

<S>                                                                  <C>              <C>
Assets:

Real estate investments, at cost:
     Land                                                            $  5,535         $  5,535
     Buildings and improvements                                        58,461           58,461
--------------------------------------------------------------------------------------------------
                                                                       63,996           63,996

     Less accumulated depreciation                                      2,936            1,811
--------------------------------------------------------------------------------------------------

Real estate investments, net                                           61,060           62,185

Acquired real estate leases, net of accumulated amortization
      of $1,349 and $833, respectively                                  2,265            2,781
Acquired favorable real estate leases, net of accumulated
      amortization of $582 and $359, respectively                         975            1,198
Cash and cash equivalents                                               8,531            8,787
Tenant rent receivable                                                    239              151
Step rent receivable                                                      103              127
Prepaid expenses and other assets                                          19               22
--------------------------------------------------------------------------------------------------

      Total assets                                                   $ 73,192         $ 75,251
==================================================================================================

Liabilities and Stockholders' Equity:

Liabilities:
Accounts payable and accrued expenses                                $  2,302         $  2,492
--------------------------------------------------------------------------------------------------

     Total liabilities                                                  2,302            2,492
--------------------------------------------------------------------------------------------------

Commitments and Contingencies:                                             --               --

Stockholders' Equity:
     Preferred Stock, $.01 par value, 860 shares
       authorized, issued and outstanding                                  --               --

     Common Stock, $.01 par value, 1 share
        authorized, issued and outstanding                                 --               --
     Additional paid-in capital                                        78,956           78,956
     Retained deficit and distributions in excess of earnings          (8,066)          (6,197)
--------------------------------------------------------------------------------------------------

     Total Stockholders' Equity                                        70,890           72,759
--------------------------------------------------------------------------------------------------

     Total Liabilities and Stockholders' Equity                      $ 73,192         $ 75,251
==================================================================================================
                                                   See accompanying notes to financial statements.
</TABLE>


                                       2
<PAGE>

                            FSP Galleria North Corp.
                            Statements of Operations
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                         For the                       For the
                                                                   Three Months Ended             Nine Months Ended
                                                                      September 30,                 September 30,
(in thousands, except shares and per share amounts)               2006           2005           2006            2005
======================================================================================================================

<S>                                                             <C>            <C>            <C>            <C>
Revenues:
     Rental                                                     $ 2,881        $ 2,620        $ 8,205        $  7,858
----------------------------------------------------------------------------------------------------------------------

        Total revenue                                             2,881          2,620          8,205           7,858
----------------------------------------------------------------------------------------------------------------------

Expenses:

     Rental operating expenses                                      849            792          2,362           2,192
     Real estate taxes and insurance                                529            315          1,259           1,103
     Depreciation and amortization                                  547            546          1,641           1,638
     Interest                                                        --            582             --           5,325
----------------------------------------------------------------------------------------------------------------------

       Total expenses                                             1,925          2,235          5,262          10,258
----------------------------------------------------------------------------------------------------------------------

Net income (loss) before interest income                            956            385          2,943          (2,400)

Interest income                                                      96             25            254              41
----------------------------------------------------------------------------------------------------------------------

Net income (loss)                                                 1,052            410          3,197          (2,359)

Distributions paid to common stockholder                             --            273             --             782
----------------------------------------------------------------------------------------------------------------------

Net income (loss) attributable to preferred stockholders        $ 1,052        $   137        $ 3,197        $ (3,141)
======================================================================================================================

Weighted average number of preferred shares outstanding,
     basic and diluted                                           860.00         806.48         860.00          535.49
======================================================================================================================

Net income (loss) per preferred share, basic and diluted        $ 1,223        $   170        $ 3,717        $ (5,866)
======================================================================================================================
                                                                       See accompanying notes to financial statements.
</TABLE>


                                       3
<PAGE>

                            FSP Galleria North Corp.
                            Statements of Cash Flows
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                         For the
                                                                                    Nine Months Ended
                                                                                      September 30,
                                                                                --------------------------
(in thousands)                                                                    2006             2005
==========================================================================================================

<S>                                                                             <C>             <C>
Cash flows from operating activities:
     Net income (loss)                                                          $ 3,197         $ (2,359)
     Adjustments to reconcile net income (loss) to net cash
          provided by (used for) operating activities:
               Depreciation and amortization                                      1,641            1,638
               Amortization of favorable real estate leases                         223              223
           Changes in operating assets and liabilities:
               Tenant rent receivable                                               (88)            (109)
               Step rent receivable                                                  24               24
               Prepaid expenses and other assets                                      3               12
               Accounts payable and accrued expenses                               (190)          (1,976)
----------------------------------------------------------------------------------------------------------

                    Net cash provided by (used for) operating activities          4,810           (2,547)
----------------------------------------------------------------------------------------------------------

Cash flows from investing activities:
     Purchase of real estate assets                                                  --             (128)
----------------------------------------------------------------------------------------------------------

                    Net cash used for investing activities                           --             (128)
----------------------------------------------------------------------------------------------------------

Cash flows from financing activities:
     Proceeds from sale of company stock                                             --           75,250
     Syndication costs                                                               --           (6,110)
     Distributions to stockholders                                               (5,066)          (2,296)
     Principal payments on long-term debt                                            --          (59,439)
----------------------------------------------------------------------------------------------------------

                    Net cash provided by (used for) financing activities         (5,066)           7,405
----------------------------------------------------------------------------------------------------------

Net (decrease) increase in cash and cash equivalents                               (256)           4,730

Cash and cash equivalents, beginning of period                                    8,787            2,673
----------------------------------------------------------------------------------------------------------

Cash and cash equivalents, end of period                                        $ 8,531         $  7,403
==========================================================================================================

Supplemental disclosure of cash flow information:

Cash paid for:
     Interest                                                                   $    --         $  5,516

                                                         See accompanying notes to financial statements.
</TABLE>


                                       4
<PAGE>

                            FSP Galleria North Corp.
                          Notes to Financial Statements
                                   (Unaudited)

1.    Organization, Properties, Basis of Presentation and Recent Accounting
      Pronouncements

Organization

FSP Galleria North Corp. (the "Company") was organized on September 21, 2004 as
a corporation under the laws of the State of Delaware to purchase, own and
operate a sixteen-story Class "A" office tower containing approximately 379,518
rentable square feet of space located on approximately 4.8 acres of land in
Dallas, Texas (the "Property"). The Company acquired the Property on October 14,
2004. Franklin Street Properties Corp. ("Franklin Street") (AMEX: FSP) holds the
sole share of the Company's common stock, $.01 par value per share (the "Common
Stock"). Between December 2004 and August 2005, FSP Investments LLC (member,
NASD and SIPC), a wholly-owned subsidiary of Franklin Street, completed the sale
on a best efforts basis of 860 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.

Basis of Presentation

The unaudited financial statements of the Company include all the accounts of
the Company. These financial statements should be read in conjunction with the
Company's financial statements and notes thereto contained in the Company's
General Form for Registration of Securities on Form 10, as amended, for its
fiscal year ended December 31, 2005, as filed with the Securities and Exchange
Commission (the "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 nine months ended September 30, 2006 are not necessarily
indicative of the results that may be expected for the year ending December 31,
2006 or for any other period.

Recent Accounting Standards

In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 48, which clarifies the accounting for uncertainty in income
taxes recognized in an enterprise's financial statements in accordance with FASB
Statement No. 109, "Accounting for Income Taxes". This interpretation prescribes
a recognition threshold and measurement attribute for the financial statement
recognition and measurement of a tax position taken or expected to be taken in a
tax return. This interpretation also provides guidance on derecognition,
classification, interest and penalties, accounting for interim periods,
disclosure and transition. The guidance is effective for periods beginning after
December 15, 2006. The Company is evaluating the impact, if any, this
interpretation may have on the Company's results of operations, financial
position, or liquidity.

In June 2005, the FASB ratified the consensus reached by the Emerging Issues
Task Force ("EITF") regarding EITF No. 05-6, "Determining the Amortization
Period for Leasehold Improvements." ("EITF 05-6"). The guidance requires that
leasehold improvements acquired in a business combination, or purchased
subsequent to the inception of a lease, be amortized over the lesser of the
useful life of the assets or a term that includes renewals that are reasonably
assured at the date of the business combination or purchase. The guidance is
effective for periods beginning after June 29, 2005. The Company has adopted
EITF 05-6, which did not materially impact the Company's results of operations,
financial position, or liquidity.

In March 2005, the FASB issued FASB Interpretation No. 47 ("FIN 47"), which
clarifies that the term conditional asset retirement obligation as used in FASB
Statement No. 143, "Accounting for Asset Retirement Obligations", refers to a
legal obligation to perform an asset retirement activity in which the timing and
(or) method of settlement are conditional on a future event that may or may not
be within the control of the entity. The guidance was effective for periods
ending after December 15, 2005. The Company has adopted FIN 47, which did not
impact the Company's results of operations, financial position, or liquidity.


                                       5
<PAGE>

                            FSP Galleria North Corp.
                          Notes to Financial Statements
                                   (Unaudited)

2.   Net Income Per Share

Basic net income per share is computed by dividing net income by the weighted
average number 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 September 30, 2006 and
2005.

3.   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.

4.    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, effective at the end of the
notice period. For the nine months ended September 30, 2006 and September 30,
2005, management fees paid were $81,000 and $82,000, respectively. The related
party transactions described below are not expected to impact the Company's
results of operations, financial position, or liquidity for fiscal year 2006 or
for future periods.

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 placement of
the Preferred Stock in August 2005, Franklin Street was not and is not currently
entitled to share in earnings or any related dividend of the Company.

The following is a summary of related party transactions that occurred during
the nine months ended September 30, 2006 and 2005, respectively.

The Company paid syndication fees of $6,110,000 in the nine months ended
September 30, 2005 to FSP for services related to syndication of the Company's
Preferred Stock, which were for its efforts to identify potential accredited
investors and subsequently complete the sale of Preferred Stock to them. No
syndication fees were paid to FSP in 2006 because the placement of Preferred
Stock was completed in 2005.

During 2004, the Company borrowed and has subsequently repaid a note payable to
FSP with an original principal amount of $68,500,000 and interest equal to the
rate paid by FSP on its line of credit. The proceeds of the loan were used to
acquire the Property. During 2004 the Company repaid $9,061,000 of the principal
and the remainder was repaid during 2005 with the final payment on the loan
being made on August 8, 2005. During the nine months ended September 30, 2005,
the Company repaid approximately $59,439,000 of the remaining principal.
Interest incurred during the nine months ended September 30, 2005 was
approximately $998,000. The average interest rate during the time the loan was
outstanding was 5.59%. No interest payments were made to FSP in 2006 because the
loan was repaid in 2005.

The Company paid commitment fees of approximately $4,327,000 in the nine months
ended September 30, 2005 to FSP for obtaining the first mortgage loan on the
Property. Such amounts are included in interest expense in the financial
statements. No commitment fees were paid to FSP in 2006 because the loan was
repaid in 2005.


                                       6
<PAGE>

                            FSP Galleria North Corp.
                          Notes to Financial Statements
                                   (Unaudited)

4.    Related Party Transactions (continued)

The Company made distributions of approximately $782,000 during the nine months
ended September 30, 2005 to FSP relating to earnings of the Company attributed
to the common stock prior to the completion of the offering of Preferred Stock.
No distributions were paid to FSP in 2006 because subsequent to the completion
of the final closing of the sale of shares of the Preferred Stock in August
2005, FSP was not and is not currently entitled to share in earnings or any
related dividend of the Company.

5.    Segment Reporting

The Company operates in one industry segment - real estate ownership of
commercial property. As of September 30, 2006 and 2005, the Company owned and
operated a sixteen-story office building in that one segment.

6.    Cash Distributions

The Company's cash distributions for the nine months ended September 30, 2006
and 2005 are as follows:

<TABLE>
<CAPTION>
(in thousands)                        2006                                         2005
                    ---------------------------------------      ---------------------------------------
                    Preferred        Common         Total        Preferred        Common         Total
                    ---------      ---------      ---------      ---------      ---------      ---------
<S>                 <C>            <C>            <C>            <C>            <C>            <C>
First Quarter       $   1,656      $      --      $   1,656      $       4      $      --      $       4
Second Quarter      $   1,708      $      --      $   1,708      $     449      $     509      $     958
Third Quarter       $   1,702      $      --      $   1,702      $   1,061      $     273      $   1,334
                    ---------      ---------      ---------      ---------      ---------      ---------
                    $   5,066      $      --      $   5,066      $   1,514      $     782      $   2,296
                    =========      =========      =========      =========      =========      =========
</TABLE>

7.    Subsequent Event

The Company declared a cash distribution of $2,000 per preferred share on
October 20, 2006 to the holders of record of the Company's Preferred Stock on
October 31, 2006, payable on November 20, 2006.


                                       7
<PAGE>

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, as amended. 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 changes
in economic conditions in the market where we own the Property, 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. See the factors
set forth below under the caption, Item 1A. "Risk Factors". 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

      The Company owns and operates a sixteen-story Class A suburban office
tower located in Dallas, Texas containing approximately 379,518 square feet of
rentable space located on approximately 4.8 acres of land. The Property is 100%
leased to its single tenant, Tenet Hospitals Limited ("Tenet Hospitals"), whose
lease expires on December 31, 2009. The lease grants the tenant the option to
extend the lease for two consecutive five year terms with at least 24 month's
prior written notice.

      The Company operates in one business segment, which is real estate
operations, and owns 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 Dallas, Texas, the relevant submarket where the property is located. 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.

      It is difficult for management to predict what will happen to occupancy or
rents after the expiration of our lease with Tenet Hospitals in 2009 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 economy, such as job growth,
interest rates, and corporate earnings, which in turn are tied to even larger
macroeconomic and political factors, such as volatility in energy pricing and
the risk of terrorism. In addition to the difficulty of predicting macroeconomic
factors, it is difficult to predict how our local market or tenants will suffer
or benefit from changes in the larger economy. In addition, because the Property
is in a single geographical market and leased to one tenant in the healthcare
industry, these macroeconomic trends may have a different effect on the Property
and on its tenant.

Trends and Uncertainties

      Tenet Hospitals has informed us that it has hired a broker to assist it in
evaluating its alternatives for future space requirements, which space
requirements may include downsizing or leaving the Property. Because Tenet
Hospitals is not required to give us notice of its intention to exercise its
first option to extend the term of the lease until December 31, 2007, at this
time we are not able to predict what Tenet Hospitals' space requirements will be
nor are we able to predict whether rents will be above or below the current
expiring rents in the event that Tenet Hospitals remains at the Property.

      During 2006, vacancy rates for Class A buildings in the far north Dallas
submarket have improved and rental rates have increased modestly. Management
does not know how much longer this trend will continue or if changes in the
healthcare industry or the tenant specifically will lead to different trends in
the future for the Property. Following termination of the existing lease, we may
only be able to release the space at a rate that is significantly lower than the
current rate, possibly resulting in decreased cash flows. Bankruptcy or a
material adverse change in the financial condition of the tenant would likely
cause a material adverse affect.


                                       8
<PAGE>

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 2, Management's
Discussion and Analysis of Financial Conditions and Results of Operations in our
General Form for Registration of Securities on Form 10, as amended.

      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 and estimates. We believe that our judgments and
assessments are consistently applied and produce financial information that
fairly presents our results of operations.

      No changes to our critical accounting policies have occurred since the
filing of Amendment No. 3 to our General Form for Registration of Securities on
Form 10.

Results of Operations

      During 2004, the Company borrowed and has subsequently repaid a note
payable to Franklin Street with an original principal amount of $68,500,000 and
interest equal to the rate paid by Franklin Street on its line of credit. The
proceeds of the loan were used to acquire the Property. During 2004 the Company
repaid $9,061,000 of the principal and the remainder was repaid during 2005 with
the final payment on the loan being made on August 8, 2005. The average interest
rate during the time the loan was outstanding was 5.59%. As a result, interest
expense was significant in 2004 and 2005 until the note payable was repaid. No
interest has been paid since the note payable was repaid and it is not
anticipated that the Company will make any further borrowings.

      The Property is currently 100% leased to one tenant pursuant to a lease
that was in place prior to the acquisition of the Property and expires on
December 31, 2009. However, provided that the landlord and the tenant agree as
to the terms, the lease may be extended beyond its current December 31, 2009
expiration for two consecutive renewal terms of five years each with at least 24
months' prior written notice. Base rents during both option periods will be at
an amount equal to the then current fair market rental value, but in no event
less than the rental rate being then being paid by the tenant.

Comparison of the three months ended September 30, 2006 to the three months
ended September 30, 2005.

   Revenue

      Total revenue increased $0.2 million to $2.8 million for the three months
ended September 30, 2006, as compared to $2.6 million for the three months ended
September 30, 2005. This increase was primarily due to an increase in recovery
of expenses of $0.2 million. The majority of the operating expenses, real estate
taxes and insurance expenses represent amounts recoverable by the Company.

   Expenses

      Total expenses decreased approximately $0.3 million to $1.9 million for
the three months ended September 30, 2006 as compared to $2.2 million for the
three months ended September 30, 2005. This decrease was predominately
attributable to a $0.5 million decrease in interest expense resulting from there
being no interest expense in the three months ended September 30, 2006 compared
to $0.5 million of interest expense associated with the note payable on the
Property for the three months ended September 30, 2005. The note was used to
purchase the Property in October 2004 and was repaid by proceeds from the sale
of Preferred Stock, which was completed in August 2005. The decrease of expenses
was partially offset by an increase of $0.2 million to $0.5 million in real
estate taxes and insurance for the three months ended September 30, 2006
compared to $0.3 million for the three months ended September 30, 2005.


                                       9
<PAGE>

Comparison of the nine months ended September 30, 2006 to the nine months ended
September 30, 2005.

   Revenue

      Total revenue increased $0.3 million, to $8.2 million for the nine months
ended September 30, 2006, as compared to $7.9 million for the nine months ended
September 30, 2005. This increase was primarily due to an increase in recovery
of expenses of $0.3 million. The majority of the operating expenses, real estate
taxes and insurance expenses represent amounts recoverable by the Company.

   Expenses

      Total expenses decreased by approximately $5.0 million to $5.3 million for
the nine months ended September 30, 2006 as compared to $10.3 million for the
nine months ended September 30, 2005. This decrease was predominately
attributable to a $5.3 million decrease in interest expense resulting from there
being no interest expense in the nine months ended September 30, 2006 compared
to $5.3 million of interest expense associated with the note payable on the
Property for the nine months ended September 30, 2005. The note was used to
purchase the Property in October 2004 and was repaid by proceeds from the sale
of Preferred Stock, which was completed in August 2005. The decrease of expenses
was partially offset by an increase of $0.2 million to $2.4 million in rental
operating expenses for the nine months ended September 30, 2006 compared to $2.2
million for the nine months ended September 30, 2005 and an increase of $0.1
million to $1.2 million in real estate taxes and insurance for the nine months
ended September 30, 2006 compared to $1.1 million for the nine months ended
September 30, 2005.


Liquidity and Capital Resources

      Cash and cash equivalents were $8.5 million at September 30, 2006 and $8.8
million at December 31, 2005. This $0.3 million decrease is attributable to $4.8
million provided by operating activities offset by $5.1 million used for
financing activities. For the nine months ended September 30, 2006 our cash
provided by net income plus depreciation and amortization and straight-line rent
exceeded distributions paid, and we anticipate net income plus depreciation and
amortization will continue to exceed distributions in the future.

      Management believes that the existing cash and cash equivalents as of
September 30, 2006 of $8.5 million 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 $4.8 million is primarily
attributable to a net income of approximately $3.2 million plus the add-back of
$1.9 million of depreciation and amortization and a decrease in accounts payable
and accrued expenses of approximately $0.3 million.

   Financing Activities

      Cash used for financing activities of $5.1 million was attributable to
distributions to stockholders.

   Sources and Uses of Funds

      The Company's principal demands on liquidity are cash for operations and
dividends paid to equity holders. As of September 30, 2006, we had approximately
$2.3 million in accrued liabilities and no long-term debt. 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.


                                       10
<PAGE>

   Related Party Transactions

      We have in the past engaged in and currently engage in transactions with
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. 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,
effective at the end of the notice period. For the nine months ended September
30, 2006 and September 30, 2005, management fees paid were $81,000 and $82,000,
respectively. The related party transactions described below are not expected to
impact the Company's results of operations, financial position, or liquidity for
fiscal year 2006 or for future periods.

      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
placement of the Preferred Stock in August 2005, Franklin Street was not and is
not currently entitled to share in earnings or any related dividend of the
Company.

      The following is a summary of related party transactions that occurred
during the nine months ended September 30, 2005, and 2006, respectively.

      o     We paid syndication fees of $6,110,000 in the nine months ended
            September 30, 2005 to FSP for services related to syndication of our
            Preferred Stock, which were for its efforts to identify potential
            accredited investors and subsequently complete the sale of Preferred
            Stock to them. No syndication fees were paid to FSP in 2006 because
            the placement of Preferred Stock was completed in 2005.

      o     During 2004, we borrowed and have subsequently repaid a note payable
            to FSP with an original principal amount of $68,500,000 and interest
            equal to the rate paid by FSP on its line of credit. The proceeds of
            the loan were used to acquire the Property. During 2004, we repaid
            $9,061,000 of the principal and the remainder was repaid during 2005
            with the final payment on the loan being made on August 8, 2005.
            During the nine months ended September 30, 2005, we repaid
            approximately $59,439,000 of the remaining principal. Interest
            incurred during the nine months ended September 30, 2005 was
            approximately $998,000. The average interest rate during the time
            the loan was outstanding was 5.59%. No interest payments were made
            to FSP in 2006 because the loan was repaid in 2005.

      o     We paid commitment fees of approximately $4,327,000 in the nine
            months ended September 30, 2005 to FSP for obtaining the first
            mortgage loan on the Property. Such amounts are included in interest
            expense in the financial statements. No commitment fees were paid to
            FSP in 2006 because the loan was repaid in 2005.

      o     We made distributions of approximately $782,000 during the nine
            months ended September 30, 2005 to FSP relating to earnings of the
            Company attributed to the common stock prior to the completion of
            the offering of Preferred Stock. No distributions were paid to FSP
            in 2006 because subsequent to the final closing of the sale of
            shares of the Preferred Stock in August 2005, FSP was not and is not
            currently entitled to share in earnings or any related dividend of
            the Company.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We were not a party to any derivative financial instruments at or during the
nine months ended September 30, 2006.

The Company had no outstanding loans at or during the nine months ended
September 30, 2006 and therefore is not subject to interest rate sensitivity.

Item 4. Controls and Procedures.

Our management, with the participation of the Company's President (the principal
executive officer) and Chief Operating Officer (the principal financial
officer), evaluated the effectiveness of our disclosure controls and procedures
(as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of
September 30, 2006. Based on this evaluation, the Company's President and Chief
Operating Officer concluded that, as of September 30, 2006, our disclosure
controls and procedures were (1) designed to ensure that material information


                                       11
<PAGE>

relating to us is made known to our President and Chief Operating Officer by
others as appropriate to allow timely decisions regarding required disclosure,
particularly during the period in which this report was being prepared and (2)
effective, in that they provide reasonable assurance that information required
to be disclosed by us in the reports that we file or submit under the Exchange
Act is recorded, processed, summarized and reported within the time periods
specified in the SEC's rules and forms.

No change to our internal control over financial reporting (as defined in Rules
13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the quarter
ended September 30, 2006 that has materially affected, or is reasonably likely
to materially affect, our internal control over financial reporting.


                                       12
<PAGE>

                           PART II - OTHER INFORMATION


Item 1. Legal Proceedings

      From time to time, we are 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

The following important factors, among others, could cause actual results to
differ materially from those indicated by forward-looking statements made in
this Quarterly Report on Form 10-Q and presented elsewhere by management from
time to time. The following risk factors contain no material changes from the
risk factors previously disclosed in our General Form for Registration of
Securities on Form 10, as amended.

The Property is currently occupied by a single tenant.

      One tenant, Tenet Hospitals, leases 100% of the Property's rentable space.
The financial position of the Company may be adversely affected by financial
difficulties experienced by this tenant or its parent, Tenet Healthcare
Corporation (NYSE: THC), which guarantees the lease, or any future tenant of the
Property, including a bankruptcy, insolvency or a general downturn in the
business of the tenant or the reduction in any funding source of the tenant, or
in the event any such tenant terminates or does not renew its lease. Tenet
Hospitals has informed us that it has hired a broker to assist it in evaluating
its alternatives for future space requirements, which space requirements may
include downsizing or leaving the Property. Because Tenet Hospitals is not
required to give us notice of its intention to exercise its first option to
extend the term of the lease until December 31, 2007, at this time we are not
able to predict what Tenet Hospitals' space requirements will be nor are we able
to predict whether rents will be above or below the current expiring rents in
the event that Tenet Hospitals remains at the Property.

      In its filings with the SEC, Tenet Healthcare Corporation reported that,
among other risks facing companies in the health care industry, it faces risks
associated with being a highly leveraged company, including the risk of default
for failing to comply with the covenants in its debt instruments. During the
past several years, Tenet Healthcare Corporation and its subsidiaries have also
been subject to a number of claims and lawsuits, including an SEC investigation
and a federal securities class action lawsuit. The results of claims, lawsuits
and investigations cannot be predicted, and it is possible that the ultimate
resolution of these matters, individually or in the aggregate, may have a
material adverse effect on the business, financial position, results of
operations or cash flows of Tenet Healthcare Corporation and its subsidiaries.
In addition, Tenet Healthcare Corporation recently reported a net loss on a
continuing operations basis of $.06 per share for the third quarter of 2006.
Additional information about Tenet Healthcare Corporation, including the risks
and uncertainties that it believes may affect its financial condition, is
available in its SEC filings.

We face the risk that a tenant may default or declare bankruptcy or, if we are
not able to collect sufficient rents from the Property, we may suffer
significant operating losses or a reduction in cash available for future
distributions. The major risks of ownership of the Property include:

      o     the failure of any tenant to meet its obligations under its lease,
            either due to a business failure or a default under the terms of the
            lease;

      o     the possibility that an existing tenant will not renew its lease
            upon the expiration of the lease term at rent levels and terms
            favorable to us; and

      o     in the event that an existing tenant or a subsequent tenant
            terminates or does not renew its lease, the possibility that a new
            tenant or tenants cannot be found who will rent the Property at rent
            levels sufficient for the Company to pay dividends to the holders of
            Preferred Stock.

      At any time, a tenant could seek the protection of the bankruptcy laws,
which could result in termination and rejection of such tenant's lease and
thereby cause a reduction in our cash flow.

      If any of the risks described above occur, the Property may not generate
income sufficient to meet operating expenses and to fund adequate reserves for
capital expenditures. The occupancy of the Property may also be adversely
affected by various factors such as financial difficulties encountered by


                                       13
<PAGE>

tenants, an increase in local unemployment, excessive building resulting in an
oversupply of space, adverse characteristics of the area in which the Property
is located or management inadequacies.

The Property competes against other office buildings in the Dallas, Texas area,
which could require us to decrease rental rates and could adversely affect our
cash flow.

      The Property may encounter substantial competition from 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 be more attractive to tenants. In order
to maintain or increase rental revenues following the expiration of our lease
with Tenet Hospitals, 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 less 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 there is not currently significant
existing property competition, our competitors may decide to enter the market
and build new buildings to compete with our Property. Not only do we compete
with other landlords and developers, but we are also affected by larger market
forces (including changes in interest rates and tax treatment) and individual
decisions beyond our control which may affect our ability to compete.

We face the risk that operating expenses could exceed rental income, which could
adversely affect our cash flow and the value of the Property.

      Rental income from the Property may fluctuate from time to time, based
upon occupancy and rental levels. In contrast, certain expenses related to real
estate ownership, such as real estate taxes, utility costs, maintenance costs
and insurance, tend to increase rather than decrease, and mortgage payments
(which do not presently exist and are not contemplated) usually are fixed over
specified periods. In the event of termination of any lease, the Company will
continue to be responsible for all operating expenses attributable to the space
covered by such lease. There can be no assurance that the Company will be able
to locate new tenants for any space vacated by existing tenants or receive
satisfactory rents from any such tenants. The termination of one or more leases,
whether by reason of the financial failure of the tenants or the expiration of
such leases without renewal or replacement, would be likely to cause at least a
temporary reduction in the Company's cash flow and might result in a decrease in
the market value of the Property.

We face the risk of possible future capital expenditures.

      If a tenant or tenants fail to continue in occupancy, possible renovation
of the Property could require large expenditures of money by the Company in
order to make the vacated space suitable for other tenants. In such case, all or
a portion of the Property may need to be renovated or reconfigured to attract a
new tenant or tenants. The Company has established operating/capital reserves of
approximately $4,815,000 in anticipation of future capital needs of the
Property. If a lease expires and new tenants occupy the Property, some tenant
improvement work would likely be required. Although the Company has established
operating/capital reserves in anticipation of such expense, it is possible that
the Company may not have sufficient funds to pay such costs and there is no
guarantee that an institutional lender would be willing to advance such funds to
the Company.

We face the risk of the occurrence of a casualty at the Property.

      The occurrence of a fire or other major casualty could materially and
adversely affect the operation of the Property and could result in a default
under any outstanding loan documents (which do not presently exist and are not
contemplated) or in the liquidation of the Company if it were not practicable to
rebuild or restore the Property or if any lender did not consent thereto. Even
if it were practicable to restore the damage caused by a major casualty,
operations of the Property would be suspended for a period of time, and the
economic benefits of an investment in the Preferred Stock would be adversely
affected. The Company believes that the Property is and will continue to be
adequately insured, and it is the policy of the Company to insure its property
against rent loss, fire and other perils in a manner customary in the industry
in an amount sufficient in the judgment of the Company to rebuild the Property,
exclusive of the value of the land and certain other normal and customary
exclusions. Nevertheless, in the event of any substantial loss affecting the
Property, disputes could arise as regards the then value of the Property for
purposes of insurance claims. Moreover, there are certain types of losses
(generally of a catastrophic nature, such as earthquakes, floods, terrorism and
acts of war, or of an environmental nature, including the presence of bacteria
or toxic mold) which are either uninsurable or not economically insurable; if
such a loss occurs with respect to the Property, the Company could lose both its
investment and possibility of profit with respect thereto.


                                       14
<PAGE>

The holders of shares of Preferred Stock have limited control of the Company.

      The directors of the Company have sole authority for the operation and
management of the Company and the Property. The holders of shares of Preferred
Stock are dependent on the capabilities of the board of directors or persons or
entities retained by it, such as the local management agent. Holders of
Preferred Stock have only limited voting rights and have no right to vote for
the election of directors except as described below. The affirmative vote of the
holders of a majority of the shares of Preferred Stock, voting as a separate
class, is required for (i) the merger of the Company with any other entity, (ii)
the sale of the Property or (iii) any amendment to the Company's charter. In
addition, the affirmative vote of the holders of 66.67% of the shares of
Preferred Stock is required for any change in the authorized capital stock of
the Company. The holders of a majority of the outstanding shares of Preferred
Stock may remove one or more members of the board of directors without cause and
replace such member or members with a person or persons designated by such
holders. Thereafter, the holders of shares of Preferred Stock will, at each
meeting of stockholders to elect directors, vote as one class together with the
holders of Common Stock for the election of directors. The holders of shares of
Preferred Stock have no redemption or conversion rights.

The holders of shares of Preferred Stock face the risk of dilution.

      The Company, with the approval of the holders of at least 66.67% of the
shares of Preferred Stock, may dilute the interests of the holders of shares of
Preferred Stock by issuing additional shares of stock in the Company for such
cash or other consideration as may be determined at the time of the transaction.
While such provisions are intended to provide a source of additional funds to
the Company if the Property encounters financial difficulties, such a
transaction would reduce the economic benefits available to holders of shares of
Preferred Stock.

Holders of shares of Preferred Stock face certain restrictions relating to the
transfer of shares of Preferred Stock.

      The Company may require that, in order to transfer shares of Preferred
Stock, the transferor deliver to the Company an opinion of counsel to the effect
that the transfer will not violate state or federal securities laws, and such
holder will then be responsible for paying counsel's fees for the opinion. The
transfer of the shares of Preferred Stock may also be restricted by the
securities laws of certain states. Although it may be possible under certain
circumstances to dispose of an investment in the Company, no market currently
exists for the shares of Preferred Stock, and it is unlikely that a ready market
for such disposition will exist at any time in the future. Even if a holder of
shares of Preferred Stock is able to sell his or her share(s) to an unrelated
third party, a holder seeking to transfer his, her or its interest most probably
would incur substantial legal and other costs in connection with the
transaction. The transfer of shares of Preferred Stock is further restricted by
provisions of the Company's charter designed to preserve the Company's status as
a REIT.

There are conflicts of interest, which may occupy the time and attention of the
Company's directors and officers.

      The Company is subject to numerous potential conflicts of interest with
Franklin Street and its affiliates. The Company is subject to potential
conflicts of interest arising from other real estate activities of Franklin
Street and its affiliates, including other real estate activities in the greater
Dallas, Texas area. The officers and directors of the Company, who are
affiliates of Franklin Street, will not be spending full time, or a major
portion of their time, in connection with the management of the Property, and
will be actively engaged in supervising the development, construction,
renovation, acquisition and/or operation of other properties that may be in
competition with the Property. Further, Franklin Street and its affiliates are
and will be actively engaged in the ownership and operation of other projects,
which may affect their ability to perform their respective obligations to the
Company. Franklin Street holds the sole outstanding share of Common Stock and
has the right to elect all of the members of the board of directors, except as
described above. For a discussion of the fees paid to affiliated entities,
including fees paid in connection with the offering of Preferred Stock, please
see "Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations".

Holders of shares of Preferred Stock face a lack of diversification.

      The Company has been formed to invest in, own and operate only the
Property. The Company does not plan at this point in time to engage in any other
business. Thus, the success of the Company will depend entirely upon its
investment in the Property. The Company will not have the benefit of reducing
risk by diversifying its funds among a portfolio of properties.


                                       15
<PAGE>

Provisions in the Company's charter limit the liability of directors.

         The Company's charter contains certain provisions which are intended to
eliminate the Company's directors' liability for money damages, except to the
extent of:

      o     any breach of the director's duty of loyalty to the Company and its
            stockholders,

      o     acts and omissions not in good faith or which involve intentional
            misconduct or a knowing violation of law,

      o     unlawful payments of dividends or unlawful stock repurchases,
            redemptions or other distributions and

      o     any transaction from which the director derived an improper personal
            benefit.

      Therefore, holders of shares of Preferred Stock may have a more limited
right of action against the directors of the Company than he, she or it would
have if there were not such limitations.

We are dependent on key personnel that are not employed by us.

      We depend on the efforts of George J. Carter, our President and a
Director; Barbara J. Fournier, our Chief Operating Officer, Treasurer,
Secretary, a Vice President and a Director; R. Scott MacPhee, an Executive Vice
President and a Director; William W. Gribbell, an Executive Vice President and a
Director; and Janet Prier Notopoulos, a Vice President and a Director. The
foregoing officers and directors have years of experience in the real estate
business, and, if one or more of them were to resign, our operations could be
adversely affected. We do not have any employees.

Our level of distributions may fluctuate.

      The lease with Tenet Hospitals expires on December 31, 2009 and may be
extended beyond its current December 31, 2009 expiration for two consecutive
renewal terms of five years each with at least 24 months' prior written notice.
Because real estate occupancy levels and rental rates can fluctuate, there is no
predictable recurring level of revenue from such activities. As a result, when
the lease with Tenet Hospitals expires the amount of cash available for
distribution may fluctuate, which may result in our not being able to maintain
or grow distribution levels in the future.

The Property may significantly decrease in value.

      The Property may decline in value. To the extent the Property declines in
value, our holders of Preferred Stock could lose some or all the value of their
investments. The value of our Preferred Stock may be adversely affected if the
Property declines in value since the Property represents the majority of the
tangible assets held by us. Moreover, if changes in the Property's condition or
changes in market conditions force us to sell the Property for a price less than
its initial purchase price or its carrying cost or to lease the Property at a
rental rate less than the rate of the lease being terminated, our results of
operations would be adversely affected and such negative results of operations
may result in lower distributions being paid to holders of our Preferred Stock.

We face risks in owning and operating the Property.

      An investment in us is subject to the risks incident to the ownership and
operation of real estate-related assets. These risks include the fact that real
estate investments are generally illiquid, as well as the risks normally
associated with:

      o     changes in general and local economic conditions;
      o     the supply or demand for similar types of property in this market;
      o     changes in market rental rates;
      o     the impact of environmental protection laws; and
      o     changes in tax, real estate and zoning laws.

      Certain significant costs, such as real estate taxes, utilities, insurance
and maintenance costs, generally are not reduced even when a property's rental
income is reduced. In addition, environmental and tax laws, interest rate
levels, the availability of financing and other factors may affect real estate
values and property income. Furthermore, the supply of commercial space
fluctuates with market conditions.


                                       16
<PAGE>

We may encounter significant delays in reletting vacant space, resulting in
losses of income.

      When the lease with Tenet Hospitals expires, we will incur expenses and
may not be able to re-lease the space on the same terms. The type of expenses
that we may incur during a period of vacancy and to re-lease the space include,
but are not limited to, operating expenses, brokerage commissions and the costs
associated with any necessary tenant or common area improvements. The amount of
these expenses cannot be determined at this time. The actual amount of expenses
will depend on the market conditions in effect at the time of the lease
expiration. The lease with Tenet Hospitals expires on December 31, 2009 and may
be extended beyond its current December 31, 2009 expiration for two consecutive
renewal terms of five years each with at least 24 months' prior written notice.
If we are unable to re-lease space promptly, if the terms are significantly less
favorable than anticipated or if the costs are higher, we may have to reduce,
postpone or discontinue distributions to the holders of our Preferred Stock.

There is limited potential for an increase in leased space gains at our
Property.

      Because the Property is currently 100% leased to one tenant, we anticipate
that future increases in revenue from the Property will be the result of rental
rate increases provided for in new leases or rental rate increases as leases
expire. The lease with Tenet Hospitals expires on December 31, 2009 and,
provided that the Company and Tenet Hospitals agree on the terms, the lease may
be extended beyond its current December 31, 2009 expiration for two consecutive
renewal terms of five years each with at least 24 months' prior written notice.
If there is a soft economic market at the time of a lease expiration, it may be
difficult to lease space or realize increased revenues when vacant space is
re-leased.

We are subject to possible liability relating to environmental matters, and we
cannot assure you that we have identified all possible liabilities.

      Under various federal, state and local laws, ordinances and regulations,
an owner or operator of real property may become liable for the costs of removal
or remediation of certain hazardous substances released on or in its property.
Such laws may impose liability without regard to whether the owner or operator
knew of, or caused, the release of such hazardous substances. The presence of
hazardous substances on a property may adversely affect the owner's ability to
sell such property or to borrow using such property as collateral, and it may
cause the owner of the property to incur substantial remediation costs. In
addition to claims for cleanup costs, the presence of hazardous substances on
the property could result in the owner incurring substantial liabilities as a
result of a claim by a private party for personal injury or a claim by an
adjacent property owner for property damage.

      In addition, we cannot assure you that:

      o     future laws, ordinances or regulations will not impose any material
            environmental liability;

      o     the current environmental conditions of our Property will not be
            affected by the condition of properties in the vicinity of such
            properties (such as the presence of leaking underground storage
            tanks) or by third parties unrelated to us;

      o     tenants will not violate their leases by introducing hazardous or
            toxic substances into our Property that could expose us to liability
            under federal or state environmental laws; or

      o     environmental conditions, such as the growth of bacteria and toxic
            mold in heating and ventilation systems or on walls, will not occur
            at our property and pose a threat to human health.

We are subject to compliance with the Americans With Disabilities Act and fire
and safety regulations, any of which could require us to make significant
capital expenditures.

      The Property is required to comply with the Americans With Disabilities
Act (ADA), and the regulations, rules and orders that may be issued thereunder.
The ADA has separate compliance requirements for "public accommodations" and
"commercial facilities," but generally requires that buildings be made
accessible to persons with disabilities. Compliance with ADA requirements might
require, among other things, removal of access barriers and noncompliance could
result in the imposition of fines by the U.S. government or an award of damages
to private litigants.

      In addition, we are required to operate the property in compliance with
fire and safety regulations, building codes and other land use regulations, as
they may be adopted by governmental agencies and bodies and become applicable to
our Property. Compliance with such requirements may require us to make
substantial capital expenditures, which expenditures would reduce cash otherwise
available for distribution to the holders of shares of our Preferred Stock.


                                       17
<PAGE>

Contingent or unknown liabilities acquired in the acquisition of the Property
could require us to make substantial payments.

      The Property was acquired subject to liabilities and without any recourse
with respect to liabilities, whether known or unknown. As a result, if
liabilities were asserted against us based upon the Property, we might have to
pay substantial sums to settle them, which could adversely affect our results of
operations and financial condition and our cash flow and ability to make
distributions to the holders of shares of our Preferred Stock. Unknown
liabilities with respect to the Property acquired might include:

      o     liabilities for clean-up or remediation of environmental conditions;

      o     claims of tenants, vendors or other persons dealing with the former
            owners of the Property; and

      o     liabilities incurred in the ordinary course of business.

We would incur adverse tax consequences if we failed to qualify as a REIT.

      The provisions of the tax code governing the taxation of real estate
investment trusts are very technical and complex, and although we believe we are
organized and will operate in a manner that will enable us to meet such
requirements, no assurance can be given that we will always succeed in doing so.

      If in any taxable year we do not qualify as a real estate investment
trust, we would be taxed as a corporation and distributions to holders of shares
of our Preferred Stock would not be deductible by us in computing our taxable
income. In addition, if we were to fail to qualify as a real estate investment
trust, we could be disqualified from treatment as a real estate investment trust
in the year in which such failure occurred and for the next four taxable years
and, consequently, we would be taxed as a regular corporation during such years.
Failure to qualify for even one taxable year could result in a significant
reduction of our cash available for distribution to holders of shares of our
Preferred Stock or could require us to incur indebtedness or liquidate
investments in order to generate sufficient funds to pay the resulting federal
income tax liabilities.

There is no public trading market for our securities.

      There is no public trading market for our Preferred Stock or Common Stock,
and we cannot assure you that any market will develop or that, if such a market
develops, there will be any liquidity in such a market for our Preferred Stock
or Common Stock.

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

None.

Item 3. Defaults Upon Senior Securities

None.

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

None.

Item 5. Other Information

None.


                                       18
<PAGE>

                     PART II - OTHER INFORMATION (Continued)

Item 6. Exhibits

      31.1  Certification of the President (Principal Executive Officer) of the
            Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of
            2002.

      31.2  Certification of the Chief Operating Officer (Principal Financial
            Officer) of the Registrant pursuant to Section 302 of the
            Sarbanes-Oxley Act of 2002.

      32.1  Certification of the President (Principal Executive Officer) of the
            Registrant 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 the Chief Operating Officer (Principal Financial
            Officer) of the Registrant pursuant to 18 U.S.C. Section 1350, as
            adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


                                       19
<PAGE>

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 Galleria North Corp.


<TABLE>
<CAPTION>
           Date                          Signature                          Title
           ----                          ---------                          -----


<S>                           <C>                            <C>
Date:  November 13, 2006      /s/ George J. Carter           President (Principal Executive Officer)
                              -----------------------
                              George J. Carter


Date:  November 13, 2006      /s/ Barbara J. Fournier        Chief Operating Officer
                              -----------------------        (Principal Financial Officer)
                              Barbara J. Fournier
</TABLE>


                                       20