Thomas Properties Group, Inc. Announces Second Quarter 2009 Results

Thomas Properties Group, Inc. (Nasdaq: TPGI) reported today the results of operations for the quarter ended June 30, 2009.

The results of operations presented in this release include TPGI’s results of operations for the three months ended June 30, 2009 and 2008. The consolidated net loss for the three months ended June 30, 2009 was $(2,746,000) or $(0.11) per share compared to consolidated net income of $4,948,000 or $0.14 per share for the three months ended June 30, 2008. The consolidated net loss for the six months ended June 30, 2009 was $(2,920,000) or $(0.12) per share compared to consolidated net income of $5,167,000 or $0.09 per share for the six months ended June 30, 2008.

After tax cash flow (a non-GAAP financial measure) for the three months ended June 30, 2009 was $2,828,000 or $0.11 per share compared to after tax cash flow of $11,955,000 or $0.50 per share for the three months ended June 30, 2008. After tax cash flow for the six months ended June 30, 2009 was $8,209,000 or $0.33 per share compared to after tax cash flow of $18,399,000 or $0.78 per share for the six months ended June 30, 2008. We define after tax cash flow (ATCF) as net income (loss) excluding the following items: noncontrolling interests, income taxes, non-cash charges for depreciation and amortization and asset impairment, amortization of loan costs, non-cash compensation expense, straight-line rent adjustments and adjustments to reflect the fair market value of rent. ATCF is further described in note (c) to the financial statements below.

The decrease in our ATCF is largely attributable to:

• Lower revenue resulting from the expiration of 375,000 square feet of the Conrail lease at Two Commerce Square. Two thirds of this space is currently leased at market rates (which are lower than the rates paid by Conrail at expiration) and one third of the space is currently vacant;
• Higher interest expense, primarily at the Murano condominium project, where interest is being expensed in 2009 because we have completed construction of the project but was capitalized during the first half of 2008; and
• Lower revenue resulting from a reduction in sales volume of Murano condominium units.

Commenting on TPGI’s activities during the quarter, Jim Thomas, Chairman & CEO, said, "While the adverse economic conditions continue, TPGI has accomplished a number of achievements in the past quarter, including:

• Initiated an accelerated marketing program at Murano that culminated in the sale of 40 condominium units on June 27, and has added momentum to the sales program resulting in the sale of an additional eight units thereafter, the gains from which will be recognized in the third quarter of 2009 as the transactions close. The net proceeds from these sales are expected to be applied against the construction loan balance, reducing that obligation to approximately $46.4 million; and
• Increased our ownership interest in City National Plaza (CNP) from 21.25% to 25% through the redemption of a minority partner’s interest based on a $725 million value for CNP. Our share of the redemption price is $4.95 million payable in July 2012 pursuant to a note bearing interest at 5.75% annually. This redemption eliminated the minority partner’s right to "put” its interest to TPG/CalSTRS at fair market value and also eliminated its right of approval of any sale or financing of CNP; and
• Leased 33,000 square feet (one-sixth of the total space) of the recently completed Four Points Centre office complex in northwest Austin, even though the project is in a highly overbuilt area.”

Teleconference and Webcast

TPGI will hold a quarterly earnings conference call on Thursday, August 6, 2009 at 10:00 a.m. Pacific Time. To participate in the call, dial (800) 901-5259 and (617) 786-4514 internationally, and provide confirmation code 85059976.

A live webcast (listen only mode) of the conference call will also be available at this time. A hyperlink to the live webcast will be available from the Investor Relations section of our website at www.tpgre.com. A replay of the call will be available through August 26, 2009, by calling (888) 286-8010 and (617) 801-6888 internationally, and providing confirmation code 42023880. The replay will also be available on Thomas Properties Group, Inc.'s web site at www.tpgre.com.

The webcast is also being distributed through the Thomson StreetEvents Network to both institutional and individual investors. Individual investors can listen to the call at www.fulldisclosure.com, Thomson/CCBN’s individual investor portal, powered by StreetEvents. Institutional investors can access the call via Thomson’s password-protected event management site, StreetEvents (www.streetevents.com).

About Thomas Properties Group, Inc.

Thomas Properties Group, Inc., with headquarters in Los Angeles, is a full-service real estate company that owns, acquires, develops and manages primarily office, as well as mixed-use and residential, properties on a nationwide basis. The company's primary areas of focus are the acquisition and ownership of premier properties, property development and redevelopment, and property and investment management activities. The company seeks to capitalize on opportunities for above-average risk-adjusted investment returns from real estate, while managing the volatility associated with the real estate industry, through joint-venture ownership structures. For more information on Thomas Properties Group, Inc., visit www.tpgre.com.

Forward-Looking Statements

Statements made in this press release or during the quarterly earnings conference call that are not historical may contain forward-looking statements. Although TPGI believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, these statements are subject to numerous risks and uncertainties. Factors that could cause actual results to differ materially from TPGI’s expectations include actual and perceived trends in various national and economic conditions that affect global and regional markets for commercial real estate services (including interest rates), the availability of credit and equity investors to finance commercial real estate transactions, our ability to enter into or renew leases at favorable rates, which can be impacted by the financial condition of our tenants, risks associated with the success of our development and property redevelopment projects, general volatility in the securities and credit markets, and the impact of tax laws affecting real estate. For a discussion of some of the factors that may cause our results to differ from management’s expectations, see the information under the captions "Risk Factors” and "Management’s Discussion and Analysis of Financial Condition and Results of Operations - Factors That May Influence Future Results of Operations” in our Form 10-K for the year ended December 31, 2008, which is filed with the SEC. TPGI disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.