UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2009

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

Commission File Number 1-34364

GOVERNMENT PROPERTIES INCOME TRUST

(Exact Name of Registrant as Specified in Its Charter)

Maryland		26-4273474
(State or Other Jurisdiction of Incorporation or Organization)		(IRS Employer Identification No.)

400 Centre Street, Newton, Massachusetts 02458

(Address of Principal Executive Offices) (Zip Code)

617-219-1440

(Registrant’s Telephone Number, Including Area Code)

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 o

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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

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. (Check one):

Large accelerated filer o		Accelerated filer o

Non-accelerated filer x		Smaller reporting company o
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

Number of registrant’s common shares of beneficial interest, $0.01 par value per share, outstanding as of November 4, 2009: 21,481,350

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GOVERNMENT PROPERTIES INCOME TRUST

FORM 10-Q

SEPTEMBER 30, 2009

INDEX

		Page
PART I	Financial Information

Item 1.	Condensed Consolidated Financial Statements (unaudited)

	Condensed Consolidated Balance Sheet — September 30, 2009 and December 31, 2008	1

	Condensed Consolidated Statement of Income — Three and Nine Months Ended September 30, 2009 and 2008	2

	Condensed Consolidated Statement of Cash Flows — Nine Months Ended September 30, 2009 and 2008	3

	Notes to Condensed Consolidated Financial Statements	4

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21

Item 4T.	Controls and Procedures	21

	Warning Concerning Forward Looking Statements	22

	Statement Concerning Limited Liability	23

PART II	Other Information

Item 1A.	Risk Factors	24

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24

Item 6.	Exhibits	24

	Signatures	25

References in this Form 10-Q to “we”, “us” and “our” refers to Government Properties Income Trust and its consolidated subsidiaries, unless otherwise noted.

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PART I Financial Information

Item 1. Financial Statements

GOVERNMENT PROPERTIES INCOME TRUST

CONDENSED CONSOLIDATED BALANCE SHEET

(amounts in thousands, except share data)

(unaudited)

	September 30,			December 31,
	2009			2008
ASSETS
Real estate properties:
Land	$	68,719		$	65,719
Buildings and improvements	439,612			424,756
	508,331			490,475
Accumulated depreciation	(109,484		)	(100,034		)
	398,847			390,441
Acquired real estate leases, net	9,964			10,071
Cash and cash equivalents	2,294			97
Restricted cash	—			1,334
Deferred leasing costs, net	1,431			1,757
Deferred financing costs, net	5,766			—
Rents receivable	10,647			14,593
Due from affiliates	5,109			—
Other assets, net	4,809			1,481
Total assets	$	438,867		$	419,774

LIABILITIES AND SHAREHOLDERS’ EQUITY
Mortgage notes payable	$	—		$	134
Secured revolving credit facility	65,375			—
Accounts payable and accrued expenses	3,150			3,036
Due to affiliates	1,820			—
Acquired real estate lease obligations, net	2,550			3,151
	72,895			6,321
Shareholders’ equity:
Common shares of beneficial interest, $.01 par value: 21,481,350 shares issued and outstanding	215			—
Additional paid in capital	357,628			—
Cumulative net income	8,129			—
Ownership interest	—			413,453
Total shareholders’ equity	365,972			413,453

Total liabilities and shareholders’ equity	$	438,867		$	419,774

See accompanying notes.

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GOVERNMENT PROPERTIES INCOME TRUST

CONDENSED CONSOLIDATED STATEMENT OF INCOME

(amounts in thousands, except per share data)

(unaudited)

	Three Months Ended September 30,						Nine Months ended September 30,
	2009			2008			2009			2008
Rental income	$	19,656		$	18,438		$	58,304		$	55,957

Expenses
Real estate taxes	2,031			2,011			6,250			5,951
Utility expenses	1,799			1,787			4,843			4,696
Other operating expenses	2,889			3,096			8,600			8,768
Depreciation and amortization	3,828			3,552			11,189			10,570
Acquisition costs	207			—			207			—
General and administrative	1,246			746			2,859			2,238
Total expenses	12,000			11,192			33,948			32,223

Operating income	7,656			7,246			24,356			23,734

Interest income	1			6			45			31
Interest expense (including amortization of deferred financing fees of $562, $ -, $989 and $ -, respectively)	(1,472		)	(25		)	(3,832		)	(127		)
Net income	$	6,185		$	7,227		$	20,569		$	23,638

Weighted average common shares outstanding	21,455			—			12,852			—

Earnings per common share:
Net income	$	0.29		$	—		$	1.60		$	—

See accompanying notes.

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GOVERNMENT PROPERTIES INCOME TRUST

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(amounts in thousands)

(unaudited)

	Nine Months Ended September 30,
	2009			2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	20,569		$	23,638
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	11,936			10,301
Share based compensation expense	249			—
Change in assets and liabilities:
(Increase) decrease in restricted cash	1,334			(741		)
(Increase) decrease in deferred leasing costs	(1		)	(316		)
(Increase) decrease in rents receivable	(4,101		)	300
(Increase) decrease in due from affiliates	(5,109		)	—
(Increase) decrease in other assets	172			1,272
Increase (decrease) in accounts payable and accrued expenses	402			359
Increase (decrease) in due to affiliates	1,820			—

Cash provided by operating activities	27,271			34,813

CASH FLOWS FROM INVESTING ACTIVITIES:
Real estate acquisitions and improvements	(23,308		)	(1,669		)
Cash used for investing activities	(23,308		)	(1,669		)

CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of mortgage loans	(134		)	(2,055		)
Borrowings on secured revolving credit facility	293,500			—
Costs of establishing secured revolving credit facility	(6,755		)	—
Payments on secured revolving credit facility	(228,125		)	—
Proceeds from issuance of common stock, net	205,511			—
Equity distributions	(265,763		)	(30,881		)
Cash used for financing activities	(1,766		)	(32,936		)

Increase (Decrease) in cash and cash equivalents	2,197			208
Cash and cash equivalents at beginning of period	97			66
Cash and cash equivalents at end of period	$	2,294		$	274

SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid	$	2,728		$	123

Non-cash operating activities:
Equity distributions	$	8,047		$	—

Non-cash financing activities:
Issuance of common shares pursuant to our Share Award Plan	$	(250	)	$	—

See accompanying notes.

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GOVERNMENT PROPERTIES INCOME TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 1. Basis of Presentation

The accompanying condensed consolidated financial statements of Government Properties Income Trust and its subsidiaries, GOV, the Company, we or us, have been prepared without audit. Certain information and footnote disclosures required by accounting principles generally accepted in the United States, or GAAP, for complete financial statements have been condensed or omitted. We believe the disclosures made are adequate to make the information presented not misleading. However, the accompanying condensed consolidated financial statements should be read in conjunction with the Combined Financial Statements of Certain Government Properties (wholly owned by HRPT Properties Trust) as of December 31, 2008 and 2007 and for the three years in the period ending December 31, 2008 and notes thereto contained in our Prospectus, dated June 2, 2009, or the Prospectus, filed with Securities and Exchange Commission, or the SEC, in accordance with Rule 424(b) of the Securities Act of 1933, as amended, or the Securities Act, which is accessible on the SEC’s website at www.sec.gov . In the opinion of our management, all adjustments, which include only normal recurring adjustments considered necessary for a fair presentation, have been included. All intercompany transactions and balances between the Company and its subsidiaries have been eliminated. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. Because of the significant changes resulting from our initial public offering, or IPO, in June 2009, the financial results reported are not indicative of our expected future results. In preparing these condensed consolidated financial statements, we evaluated events that occurred through November 4, 2009, the date of issuance of these condensed consolidated financial statements, for potential recognition or disclosure.

We own 30 properties located in 15 states and the District of Columbia containing approximately 3.6 million square feet. U.S. and state government agencies are our primary tenants. These condensed consolidated financial statements are presented as if we were a legal entity separate from HRPT Properties Trust, or HRP; although we did not exist until February 17, 2009 and thereafter we were a wholly owned consolidated subsidiary of HRP until June 8, 2009.

Note 2. Organization

HRP organized us as a 100% owned subsidiary on February 17, 2009 as a Maryland real estate investment trust, or REIT. At the time of our organization, we issued 9.95 million common shares of beneficial interest, par value $.01 per share, or our common shares, to HRP.

For a substantial part of the periods presented, we and our initial properties were wholly owned by HRP. On April 24, 2009, we acquired 100% ownership of our properties by means of a contribution from HRP to our subsidiary. On June 2, 2009, we priced our IPO of 10 million common shares. The sale of these shares closed on June 8, 2009, or the Closing Date, and we became a separate publicly owned company. On June 30, 2009, our

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underwriters exercised their over allotment option and we sold an additional 1.5 million common shares.

Note 3. Summary of Significant Accounting Policies

Basis of Presentation. Prior to our IPO, HRP directly or indirectly owned us, and we have presented transactions at HRP’s historical basis. Historically, substantially all of the rental income received by HRP from tenants at our properties were deposited in and commingled with HRP’s general funds. HRP paid certain capital investments and other cash requirements of our properties and us, and HRP allocated general and administrative costs to our properties and us based on its historical costs of our properties as a percentage of HRP’s historical cost of all of HRP’s properties until the Closing Date. Thereafter, we have recorded general and administrative expenses at our direct cost. We believe that HRP’s method for allocating general and administrative expenses prior to the Closing Date is reasonable.

Real Estate Properties. As required by GAAP, we have generally adopted the accounting treatment and policies for our properties and business which were previously employed by HRP. We record our properties at cost to HRP and provide depreciation on real estate investments on a straight line basis over estimated useful lives ranging up to 40 years. We and HRP estimated the purchase price allocations and the useful lives of our properties. In some circumstances, we and HRP engaged independent real estate appraisal firms to provide market information and evaluations that are relevant to our purchase price allocations and determinations of useful lives; however, we are ultimately responsible for the purchase price allocations and determinations of useful lives.

We and HRP allocated the purchase prices of our properties to land, building and improvements based on determinations of the relative fair values of these assets assuming the properties are vacant. We and HRP determined the fair value of each property using methods similar to those used by independent appraisers. We and HRP allocated a portion of the purchase price of our properties to above market and below market leases based on the present value (using an interest rate which reflects the risks associated with in place leases at the time each property was acquired by us or HRP) of the difference between (i) the contractual amounts to be paid pursuant to the in place leases and (ii) our estimates of fair market lease rates for the corresponding leases, measured over a period equal to the remaining terms of the respective leases. We and HRP allocated a portion of the purchase price to in place leases and tenant relationships in an amount equal to the excess of (i) the purchase price paid for each property, after adjusting existing in place leases to market rental rates, over (ii) the estimated fair value of the property, as if vacant. We and HRP allocated this aggregate value between in place lease values and tenant relationships based on our evaluation of the specific characteristics of each tenant’s lease. However, we have not separated the value of tenant relationships from the value of in place leases because such value and related amortization expense is immaterial in the accompanying financial statements. In making these allocations, we considered factors such as estimated carrying costs during the expected lease up periods, including real estate taxes, insurance and other operating income and expenses and costs, such as leasing commissions, legal and other related expenses, to execute similar leases in current market conditions at the time a property was acquired by us or HRP. If the value of

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tenant relationships becomes material in the future, we may separately allocate those amounts and amortize the allocated amount over the estimated life of the relationships.

We amortize capitalized above market lease values (presented as acquired real estate leases in our condensed consolidated balance sheet) and below market lease values (presented as acquired real estate lease obligations in our condensed consolidated balance sheet) as a reduction or increase, respectively, to rental income over the remaining terms of the associated leases. Such amortization resulted in increases to rental income of approximately $70,000 and $85,000 during both the three months ended September 30, 2009 and 2008, respectively, and $240,000 and $267,000 during the nine months ended September 30, 2009 and 2008, respectively. We amortize the value of in place leases, exclusive of the value of above market and below market in place leases, over the remaining periods of the associated leases. Such amortization amounted to approximately $306,000 and $294,000 during both the three months ended September 30, 2009 and 2008, respectively, and $894,000 and $863,000 during the nine months ended September 30, 2009 and 2008, respectively. When a lease is terminated prior to its stated expiration, we will write off the unamortized amounts relating to that lease.

Due From Affiliates . Due from affiliates represents rent collected by HRP on our behalf, which was subsequently transferred to us.

Due To Affiliates . Due to affiliates represent amounts due to Reit Management and Research, LLC, or RMR, our manager, for expenses incurred pursuant to our business management and property management agreements with RMR.

Income Taxes. Prior to the Closing Date, our operations were included in HRP’s income tax returns. HRP is a real estate investment trust under the Internal Revenue Code of 1986, as amended, or the Code. Accordingly, HRP is not subject to Federal income taxes provided it distributes its taxable income and meets certain other requirements to qualify as a real estate investment trust. However, HRP is subject to certain state and local taxes.

We are also a real estate investment trust under the Code. Accordingly, we are not subject to Federal income taxes provided we distribute our taxable income and meet certain other requirements to qualify as a real estate investment trust. We are, however, subject to certain state and local taxes.

Ownership Interest. Prior to the Closing Date, HRP provided the funds used in our investment activities. Amounts invested in or advanced to us by HRP did not carry interest, and had no specific repayment terms. HRP currently owns 46.3% of our outstanding common shares.

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Note 4. New Accounting Pronouncements

In June 2009, the Financial Accounting Standards Board, or FASB, issued The FASB Accounting Standards Codification TM , or the Codification. The Codification is the single source of authoritative nongovernmental U.S. generally accepted accounting principles and is effective for financial statements issued for interim and annual periods ending after September 15, 2009. The adoption of this standard did not cause any change to our current accounting practices.

Effective June 30, 2009, we adopted the Subsequent Events Topic of the Codification. This Topic establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before the financial statements are issued. It requires the disclosure of the date through which an entity has evaluated subsequent events and whether that date represents the date the financial statements were issued or were available to be issued.

The Business Combinations Topic of the Codification establishes principles and requirements for how an acquirer shall recognize and measure in its financial statements the identifiable assets acquired, liabilities assumed, any noncontrolling interest in the acquiree and goodwill acquired in a business combination principally by expanding the definition of what constitutes a business combination, making it more likely that our acquisitions will be accounted for as business combinations, and by requiring the immediate expensing of acquisition costs incurred in connection with such transactions. This Topic is effective for fiscal years beginning after December 15, 2008 and the adoption affects our consolidated financial statements, principally by requiring us to expense acquisition costs.

Effective June 30, 2009, we adopted the Interim Disclosures about Fair Value of Financial Instruments subtopic of the Financial Instruments Topic of the Codification. Please see Note 9, “Fair Value of Financial Instruments” for relevant disclosures.

In April 2009, the FASB issued the following Topics: Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly; Recognition and Presentation of Other-Than-Temporary Impairments; and, Interim Disclosures about Fair Value of Financial Instruments. The first Topic provides additional guidance for estimating fair value when the volume and level of activity for the assets or liabilities have significantly decreased. This topic also includes guidance on identifying circumstances that indicate a transaction is not orderly. The Other-Than-Temporary Impairments Topic amends existing other than temporary impairment guidance in GAAP for debt securities to make the guidance more operational and to improve the presentation and disclosure of other than temporary impairments of debt and equity securities. The Interim Disclosures about Fair Value of Financial Instruments Topic requires disclosure about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. Each of these Topics is effective for interim and annual reporting periods ending after June 15, 2009. The adoption of these Topics did not cause any significant changes to our disclosures in our consolidated financial statements.

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Note 5. Real Estate Properties

We generally lease space in our properties on a gross lease or modified gross lease basis pursuant to noncancelable, fixed term operating leases expiring between 2010 and 2020. These leases require us to pay all or some property operating expenses and to provide all or most property management services. During the three months ended September 30, 2009, we executed one lease for 10,080 square feet and made a commitment for approximately $1,512 of leasing related costs. Committed but unspent tenant related obligations based on executed leases as of September 30, 2009, were approximately $727,000.

During August of 2009, we purchased one industrial property for $18.2 million, plus closing costs. We funded this transaction with cash on hand and by borrowing under our secured revolving credit facility. We allocated approximately $626,000 of our acquisition expenses to acquired real estate leases and approximately $522,000 to acquired real estate lease obligations.

In September 2009, we entered into an agreement to acquire a property for $36.5 million that contains 136,000 square feet of space that is leased to the U.S. Government. Pursuant to such agreement, as of September 30, 2009, we made a refundable deposit in the amount of $3.5 million, which has been included in other assets on our balance sheet. On October 29, 2009, the agreement with the seller was terminated and the deposit was refunded.

Note 6. Related Person Transactions

As described in Notes 1, 2 and 3 above, we were formerly 100% owned by HRP and HRP continues to own 46.3% of our outstanding common shares.

We have no employees. All of our officers are employees of RMR. RMR manages our business under the general direction of our Trustees pursuant to a business management agreement. Pursuant to this agreement, we pay business management base fees in cash to RMR, plus an incentive fee, which is settled in our common shares, each based on a formula. RMR is beneficially owned by Barry M. Portnoy, one of our and HRP’s Managing Trustees, and Adam D. Portnoy, our President and the other Managing Trustee of us and of HRP. Prior to the Closing Date, HRP allocated to us amounts that it paid to RMR pursuant to its business management agreement containing similar terms to our agreement with RMR. Our business management base fees, including amounts allocated to us by HRP, during the three months ended September 30, 2009 and 2008 were approximately $654,000 and $626,000, respectively; and $1.9 million during the nine months ended September 30, 2009 and 2008. These fees are included in general and administrative expenses in our condensed consolidated statements of income.

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We also have a property management agreement with RMR pursuant to which RMR manages our properties and we pay RMR fees generally equal to 3% of the gross rents received at our properties. Prior to the Closing Date, HRP allocated to us amounts that it paid to RMR pursuant to its property management agreement containing similar terms to the property management agreement we have with RMR. These property management fees, including amounts allocated to us by HRP, totaled approximately $574,000 and $539,000 for the three months ending September 30, 2009 and 2008, respectively; and $1.72 million and $1.65 million during the nine months ended September 30, 2009 and 2008, respectively. These property management fees are included in other operating expenses in our condensed consolidated statements of income.

Note 7. Tenant Concentration and Segment Information

We operate in only one business segment: ownership of properties having space that is primarily leased to government tenants. The U.S. Government is responsible for approximately 90.4% and 90.1% of our rental income as of September 30, 2009 and 2008, respectively.

Note 8. Indebtedness

At September 30, 2009 and December 31, 2008, outstanding indebtedness included the following (dollars in thousands):

	September 30,		December 31,
	2009		2008

Mortgage note payable, due in 2009 at 5.17%	$	—	$	134
Secured revolving credit facility, due in 2012	65,375		—
	$	65,375	$	134

In January 2009, the mortgage note payable due in 2009 was paid in full.

In April 2009, we entered a $250 million secured revolving credit facility that is secured by 29 of our properties and is available for acquisitions, working capital and general business purposes. The facility expires April 24, 2012, and we have the option to extend the maturity date by one year if we pay an extension fee and satisfy certain other conditions. Interest is calculated at a floating rate based upon LIBOR or another specified index, subject to a floor, plus a spread, or margin, which will vary depending upon our debt leverage. The weighted average annual interest rate for this facility was 5.39% for the period from April 24, 2009 to September 30, 2009. As of September 30, 2009, we had $65.4 million drawn and $184.6 million available to be drawn under this secured revolving credit facility.

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all amounts payable upon the occurrence and continuation of certain events of default, including upon a change of control. We believe we were in compliance with all of these covenants under our secured revolving credit facility agreement as of September 30, 2009.

Note 9. Fair Value of Financial Instruments

Financial instruments include cash and cash equivalents, restricted cash, rents receivable, mortgage notes payable, accounts payable, secured revolving credit facility, other accrued expenses and security deposits. At September 30, 2009 and December 31, 2008, the fair values of financial instruments were not materially different from their carrying values.

Note 10. Shareholders’ Equity

We have common shares available for issuance under the terms of our 2009 Incentive Share Award Plan, or the Award Plan. During the quarter ended September 30, 2009, 31,500 common shares with an aggregate market value of $694,000 were awarded to our officers and certain employees of RMR pursuant to this plan. All of our trustees were each awarded 1,250 common shares in 2009 with an aggregate market value of $138,000 as part of their annual fees. The shares awarded to our trustees vested immediately. The shares awarded to our officers and certain employees of RMR vest in five annual installments beginning on the date of grant. We include the value of awarded common shares in general and administrative expenses at the time the awards vest. At September 30, 2009 1,968,650 of our common shares remain available for issuance under the Award Plan.

Note 11. Subsequent Events

In October 2009, we declared a common share distribution of $0.50 per common share, or approximately $10,741,000. This distribution includes a regular quarterly distribution of $0.40 per common share ($1.60 per share per year) with respect to the quarter ended September 30, 2009, plus an additional $0.10 reflecting our first 22 days as a public company during the prior quarter. This dividend will be paid on or about November 25, 2009 to shareholders of record on October 23, 2009.

In September 2009, we entered into an agreement to acquire a property for $36.5 million that contains 136,000 square feet of space that is leased to the U.S. Government. On October 29, 2009, the agreement with the seller was terminated.

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

The following discussion and tables should be read in conjunction with the financial statements and notes thereto included in this quarterly report and in our Prospectus, which is accessible on the SEC’s website at www.sec.gov .

OVERVIEW

We own 30 properties, located in 15 states and the District of Columbia, containing approximately 3.6 million rentable square feet, of which approximately 97.1% is leased to the U.S. Government and four state governments. As of September 30, 2009 and 2008, 99.6% of the total rentable square feet of our properties was leased.

Property Operations

Leasing market conditions in most U.S. markets are weak. However, the historical experience of our manager, RMR, has been that tenants that are governmental agencies frequently renew leases to avoid the costs and disruptions that may result from relocating their operations. We believe that the expected increase in government regulation resulting from the current economic recession will increase the U.S. Government’s demand for leased office space. Similarly, we believe that budgetary pressures may cause an increased demand for leased space, as opposed to government owned space, among government tenants generally. For these and other reasons we believe that occupancy at our government leased properties may outperform national market averages. However, there are too many variables for us to reasonably project what the financial impact of market conditions will be on our results for future periods.

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Lease renewals and rental rates at which available space in our properties may be relet in the future will depend, in part, on prevailing market conditions at that time. Lease expirations at our properties by year, as of September 30, 2009, are as follows (square feet and dollars in thousands):

Year (1)	Expirations of Occupied Square Feet(2)	Percent of Total		Cumulative % of Total		Rental Income Expiring(3)		Percent of Total		Cumulative % of Total
2009	—	0.0	%	0.0	%	$	—	0.0	%	0.0	%
2010	69	1.9	%	1.9	%	1,395		1.8	%	1.8	%
2011	598	16.6	%	18.5	%	11,160		14.5	%	16.3	%
2012	729	20.2	%	38.7	%	23,513		30.5	%	46.8	%
2013	969	26.8	%	65.5	%	15,760		20.4	%	67.2	%
2014	261	7.1	%	72.6	%	5,468		7.1	%	74.3	%
2015	457	12.8	%	85.4	%	8,352		10.8	%	85.1	%
2016	196	5.4	%	90.8	%	4,312		5.6	%	90.7	%
2017	138	3.8	%	94.6	%	2,101		2.7	%	93.4	%
2018 and thereafter	194	5.4	%	100.0	%	5,096		6.6	%	100.0	%
Total	3,611	100.0	%			$	77,157	100.0	%
Weighted average remaining lease term (in years)	4.2					4.2

(1) The year of lease expiration is pursuant to current contract terms. Some government tenants have the right to vacate their space before the stated expirations of their leases. As of the date of this report, U.S. Government tenants occupying approximately 14.8% of our rentable square feet and responsible for approximately 12.2% of our rental income as of September 30, 2009 have currently exercisable rights to terminate their leases before the stated expirations. Also in 2010, 2011, and 2012, early termination rights become exercisable by other U.S. Government tenants who currently occupy approximately 7.1%, 2.7%, and 1.2% of our rentable square feet, respectively, and are responsible for approximately 6.1%, 4.6%, and 1.3% of our rental income as of September 30, 2009 , respectively. In addition, two of our state government tenants have currently exercisable rights to terminate their leases if these states do not annually appropriate rent amounts in their respective annual budgets. These two tenants occupy approximately 3.7% of our rentable square feet and are responsible for approximately 2.7% of our rental income as of September 30, 2009. No termination rights have been exercised by our tenants during the past three years.

(2) Square feet occupied is pursuant to signed leases as of September 30, 2009, and includes (i) space being fitted out for occupancy and (ii) space, if any, which is leased but is not occupied.

(3) R ental income is the annualized rents from our tenants pursuant to signed leases as of September 30, 2009, plus estimated expense reimbursements; and excludes lease value amortization.

The U. S. Government was responsible for approximately 90.4% and 90.1% of our rental income as of September 30, 2009 and 2008, respectively.

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Investment Activities

During August of 2009, we purchased one industrial property for $18.2 million, excluding closing costs. We funded this transaction with cash on hand and by borrowing under our secured revolving credit facility. At the time of acquisition, this property was 100% leased and yielded approximately 11.1% of the aggregate purchase price, based on estimated annual net operating income, or NOI, which we define as property GAAP rental income less property operating expenses, on the date of closing.

Financing Activities

In April 2009, we entered a $250 million senior secured credit facility with Bank of America, N.A. and a syndicate of other lenders. This facility is secured by 29 of our properties. Amounts outstanding under this facility bear interest at a floating rate based upon LIBOR, subject to a floor, or another specified index, plus a spread or margin which will vary depending upon our leverage. This facility matures on April 24, 2012, and we have the right to extend the facility for an additional year to April 24, 2013, upon payment of a fee and satisfaction of certain other conditions required under the agreement.

Our secured revolving credit facility agreement contains a number of covenants which restrict our ability to incur debts in excess of calculated amounts, restrict our ability to make distributions under certain circumstances and generally require us to maintain certain financial ratios. Our secured revolving credit facility provides for acceleration upon the occurrence and continuation of certain events of default, including upon a change of control. We believe we were in compliance with all of our covenants under this secured revolving credit facility agreement as of September 30, 2009.

The full amount of our $250 million secured credit facility was borrowed when this facility was entered in April 2009 and that amount was distributed to HRP; HRP is not obligated to repay these amounts. In June 2009, we completed our IPO, including the full exercise of the underwriters’ over allotment option, raising net proceeds of $215.6 million. We used the IPO net proceeds of $215.6 million to repay amounts outstanding under our secured revolving credit facility. We subsequently borrowed approximately $31.0 million to pay for acquisitions, certain operating expenses, loan origination costs, IPO costs and for working capital purposes. As of September 30, 2009, the aggregate principal amount outstanding under our secured revolving credit facility was $65.4 million and $184.6 million was available to us for future borrowings.

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RESULTS OF OPERATIONS

Three Months Ended September 30, 2009, Compared to Three Months Ended September 30, 2008

	Three Months Ended September 30,
	2009			2008			$ Change			% Change
	(in thousands, except per share data)

Rental income	$	19,656		$	18,438		$	1,218		6.6	%

Expenses:
Real estate taxes	2,031			2,011			20			1.0	%
Utility expenses	1,799			1,787			12			0.7	%
Other operating expenses	2,889			3,096			(207		)	(6.7	)%
Depreciation and amortization	3,828			3,552			276			7.8	%
Acquisition costs	207			—			207			100.0	%
General and administrative	1,246			746			500			67.0	%
Total expenses	12,000			11,192			808			7.2	%

Operating income	7,656			7,246			410			5.7	%

Interest income	1			6			(5		)	(83.3	)%
Interest expense (including amortization of deferred financing fees of $562 and $ -, respectively)	(1,472		)	(25		)	(1,447		)	5788.0	%
Net income	$	6,185		$	7,227		$	(1,042	)	(14.4	)%

Weighted average common shares outstanding	21,455			—			21,455			—

Earnings per common share:
Net income	$	0.29		na			na			na

Rental income. The increase in rental income primarily reflects the effects of a property acquisition in the current quarter as well as rent increases from new leases and leases renewed during 2008 at our properties, net of one lease renewed at a rate lower than its historical rate. The increase also includes contractual expense reimbursements based upon changes in the consumer price index and changes in real estate tax expense.

Real estate taxes . The increase in real estate taxes reflects increases in both assessed values for some of our properties and increased tax rates.

Utility expenses . The increase in utility expenses reflects utility rate increases at some of our properties.

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Other operating expenses . The decrease in other operating expenses primarily reflects the decrease in repairs and maintenance expense in the three months ended September 30, 2009 as compared to the same period in 2008.

Depreciation and amortization . The increase in depreciation and amortization reflects improvements made to some of our properties during 2008, depreciation related to the current quarter acquisition and the amortization of leasing costs incurred during 2008.

Acquisition costs. The increase in acquisition costs reflects the costs associated with our acquisition during the three months ended September 30, 2009 as compared to no acquisitions during the same period in 2008.

General and administrative . The increase in general and administrative expense primarily reflects the increased costs for legal, accounting, trustees fees and internal audit expenses as a result of our becoming a public company, separate from HRP, including share grant awards.

Interest income. The decrease in interest income is the result of our having a lower average amount of investable cash during the three months ended September 30, 2009.

Interest expense . The increase in interest expense reflects our borrowing under our secured revolving credit facility. Interest expense for 2009 also includes the amortization of deferred financing fees we incurred in connection with entering our secured revolving credit facility in 2009.

Net income . Our net income for the three months ended September 30, 2009 decreased as compared to the three months ended September 30, 2008 as a result of the changes noted above.

Nine Months Ended September 30, 2009, Compared to Nine Months Ended September 30, 2008

	Nine Months Ended September 30,
	2009			2008			$ Change			% Change
	(in thousands, except per share data)

Rental income	$	58,304		$	55,957		$	2,347		4.2	%

Expenses:
Real estate taxes	6,250			5,951			299			5.0	%
Utility expenses	4,843			4,696			147			3.1	%
Other operating expenses	8,600			8,768			(168		)	(1.9	)%
Depreciation and amortization	11,189			10,570			619			5.9	%
Acquisition costs	207			—			207			100.0	%
General and administrative	2,859			2,238			621			27.8	%
Total expenses	33,948			32,223			1,725			5.4	%

Operating income	24,356			23,734			622			2.6	%

Interest income	45			31			14			45.2	%
Interest expense (including amortization of deferred financing fees of $989 and $ -, respectively)	(3,832		)	(127		)	(3,705		)	(2,917	)%
Net income	$	20,569		$	23,638		$	(3,069	)	(13.0	)%

Weighted average common shares outstanding	12,852			—			12,852			—

Earnings per common share:
Net income	$	1.60		na			na			na

Rental income. The increase in rental income reflects rent increases from new leases and leases renewed during 2008 at our properties, net of a reduction in rental income from the renewal of one lease at a rate lower than the historical rate. The increase also includes contractual expense reimbursements based upon changes in the consumer price index and increases in real estate tax expense.

Real estate taxes . The increase in real estate taxes reflects increases in both assessed values for some of our properties and increased tax rates.

Utility expenses . The increase in utility expenses reflects utility rate increases at some of our properties.

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Other operating expenses . The decrease in other operating expenses primarily reflects the decrease in repairs and maintenance expense in the nine months ended September 30, 2009 as compared to the same period in 2008.

Depreciation and amortization . The increase in depreciation and amortization reflects improvements made to some of our properties during 2008 and depreciation related to the current quarter acquisition.

Acquisition costs. The increase in acquisition costs reflects the costs associated with our acquisition during 2009 as compared to no acquisitions during the period in 2008.

General and administrative . The increase in general and administrative expense primarily reflects the increased costs for legal, accounting and trustees fees, internal audit expenses as a result of our becoming a public company separate from HRP, including share grant awards.

Interest income. The increase in interest income is the result of our having a larger amount of investable cash during the 2009 period than in the 2008 period.

Interest expense . The increase in interest expense reflects our borrowing $250 million under our secured revolving credit facility from April 24, 2009 until June 8, 2009, and lesser borrowings thereafter. Interest expense for 2009 also includes the amortization of deferred financing fees we incurred in connection with entering our secured revolving credit facility in 2009.

Net income . Our net income for the nine months ended September 30, 2009 decreased as compared to the nine months ended June 30, 2008 as a result of the changes noted above.

LIQUIDITY AND CAPITAL RESOURCES

Our Operating Liquidity and Resources .

Rental income from our properties is our principal source of funds to meet operating expenses and pay distributions on our common shares. This flow of funds has historically been sufficient to pay operating expenses, debt service relating to our properties and distributions. We believe that our operating cash flow will be sufficient to meet our operating expenses, debt service and distributions on our common shares.

Our future cash flows from operating activities will depend primarily upon our ability to:

· maintain or increase the occupancy of, and the current rent rates at, our properties;

· control operating cost increases at our properties; and

· purchase additional properties which produce positive cash flows from operations.

We believe that leasing market conditions in many U.S. markets will continue to be weak for the next two to three years. However, the historical experience of RMR has been that government tenants frequently renew leases to avoid the costs and disruptions that may

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result from relocating their operations. We believe that the expected increase in government regulation resulting from the current economic recession will increase the U.S. Government’s demand for leased office space. Similarly, we believe that budgetary pressures may cause an increased demand for leased space, as opposed to government owned space, among government tenants generally. For these and other reasons we believe that occupancy at our government leased properties may outperform national market averages. However, there are too many variables for us to reasonably project what the impact of market conditions will be on our results for future periods.

We generally do not intend to purchase “turn around” properties, or properties which do not generate positive cash flows. Our future purchases of properties which generate positive cash flow cannot be accurately projected because such purchases depend upon available opportunities which come to our attention.

We intend to pay regular quarterly distributions to holders of our common shares. Our expected quarterly distribution is $0.40 per common share. On an annualized basis, we expect to distribute $1.60 per common share. We intend to maintain this distribution rate until at least the second quarter of 2010. However, the timing and amount of our distributions will be at the discretion of our board of trustees and will depend on various factors that our board of trustees deems relevant, including our results of operations, our financial condition, our capital requirements, our funds from operations, our cash available for distribution, restrictive covenants in our financial or other contractual arrangements, economic conditions and restrictions under Maryland law. In October 2009, we declared a common share distribution of $0.50 per common share, or approximately $10,741,000. This distribution includes a regular quarterly distribution of $0.40 per common share ($1.60 per share per year) with respect to the quarter ended September 30, 2009, plus an additional $0.10 per common share with respect to our first 22 days as a public company during the prior quarter. This dividend will be paid on or about November 25, 2009 to shareholders of record on October 23, 2009.

Cash flows provided by (used for) our operating, investing and financing activities were $27.3 million, ($23.3) million and ($1.8) million, respectively, for the nine month period ended September 30, 2009, and $34.8 million, ($1.7) million and ($32.9) million, respectively, for the nine month period ended September 30, 2008. Changes in our operating and financing cash flows between 2009 and 2008 are primarily related to our properties operations, our net borrowings, our distributions to HRP prior to the Closing Date, our IPO and our use of net proceeds from our IPO. The 2009 change in investing cash flow was primarily the result of our one acquisition. The remainder of the cash flow changes in 2009 and the changes in 2008 were related to building and tenant improvements.

Our Investment and Financing Liquidity and Resources .

In order to fund acquisitions and to accommodate cash needs that may result from timing differences between our receipt of rents and our desire or need to make distributions or pay operating or capital expenses, we maintain a $250 million secured revolving credit facility from a syndicate of financial institutions. At September 30, 2009, there was $65.4 million outstanding and $184.6 million available for borrowings under our secured revolving credit facility, and we had cash and cash equivalents of $2.3 million. We expect to use cash balances, borrowings under our secured revolving credit facility and net proceeds from

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offerings of equity or debt securities to fund our future operations, distributions to our shareholders and any future property acquisitions.

When significant amounts are outstanding under our secured revolving credit facility or the maturity date of that credit facility approaches, we intend to explore alternatives for repaying or refinancing such amounts. Such alternatives may include incurring term debt, issuing new equity securities and extending the maturity date of our secured revolving credit facility. Although there has been a significant recent reduction in the amount of capital available for real estate business on a global basis and we can provide no assurance that we will be successful in consummating any particular type of financing, we believe that we will have access to financing, such as debt and equity offerings, to fund any future acquisitions and capital expenditures and to pay our obligations.

The completion and the costs of our future financings will depend primarily upon market conditions. In particular, the feasibility and cost of any future debt financings will depend primarily on credit markets and our then current creditworthiness. We have no control over market conditions. Potential lenders in future debt transactions will evaluate our ability to fund required debt service and repay balances when they become due by reviewing our business practices and plans and our ability to maintain our earnings, to ladder our debt maturities and to balance our use of debt and equity capital so that our financial performance and leverage ratios afford us flexibility to withstand any reasonably anticipated adverse changes. We intend to conduct our business activities in a manner which will afford us reasonable access to capital for investment and financing activities.

During the three and nine months ended September 30, 2009 and 2008, cash expenditures made and capitalized at our properties for tenant improvements, leasing costs, building improvements and development and redevelopment activities were as follows (amounts in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2009		2008		2009		2008

Tenant improvements	$	224	$	425	$	1,012	$	768
Leasing costs	$	1	$	22	$	1	$	316
Building improvements (1)	$	154	$	—	$	310	$	30
Development, redevelopment and other activities (2)	$	—	$	—	$	—	$	623

(1) Building improvements generally include expenditures to replace obsolete building components and expenditures that extend the useful life of existing assets.

(2) Development, redevelopment and other activities generally include non-recurring expenditures that we believe increase the value of our existing properties.

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We have committed to fund expenditures in connection with leasing space during the three months ended September 30, 2009 as follows:

	New		Renewals	Total
Square feet leased during the period	10,080		—	10,080
Total commitments for tenant improvements and leasing costs	$	1,512	—	$	1,512
Leasing costs per square foot	$	0.15	—	$	0.15
Average lease term (years)	6.3		—	6.3
Leasing costs per square foot per year	$	0.02	—	$	0.02

A $134,000 mortgage secured by one of our properties was repaid by HRP in January 2009.

We have no commercial paper, swaps, hedges, joint ventures or off balance sheet arrangements as of September 30, 2009.

Debt Covenants

Our principal debt obligation at September 30, 2009 is our secured revolving credit facility. Our secured revolving credit facility agreement contains a number of covenants which restrict our ability to incur debts in excess of calculated amounts, restrict our ability to make distributions under certain circumstances and generally require us to maintain certain financial ratios. Our secured revolving credit facility provides for acceleration of payment of all amounts outstanding upon the occurrence and continuation of certain events of default or upon a change of control. We believe we were in compliance with all of our covenants under our secured revolving credit facility agreement at September 30, 2009.

Related Person Transactions

Until the Closing Date, we were 100% owned by HRP and HRP allocated general and administrative expense, presented under the “Results of Operations” above, to our properties based on the historical cost of our properties as a percentage of HRP’s historical cost of its real estate investments. RMR is beneficially owned by Barry M. Portnoy, one of our and HRP’s Managing Trustees, and Adam D. Portnoy, our President and the other Managing Trustee of us and of HRP. We do not have any employees nor do we have administrative office separate from RMR. Employees of RMR provide services for us that might otherwise be provided by our employees. Similarly, RMR provides office space to us and each of our executive officers is an executive officer of RMR.

For more information about our related person transactions, including our transactions with HRP, management contracts with RMR and the risks which may arise from these or other related person transactions, please see Note 6 “Related Person Transactions” to our Condensed Consolidated Financial Statements in this report, our Prospectus and our other filings made with the SEC, and in particular, the sections entitled “Risk Factors” and “Certain Relationships and Related Person Transactions” in our Prospectus, which are available at the SEC’s website at www.sec.gov .

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to risks associated with market changes in interest rates. We manage our exposure to this market risk by monitoring available financing alternatives. Other than as described below, we do not foresee any significant changes in our exposure to fluctuations in interest rates or in how we manage this exposure in the near future.

On April 24, 2009, we entered a $250 million secured credit facility that matures on April 24, 2012. Repayments under this facility may be made at any time without penalty. We borrow under this facility in U.S. dollars and borrowings bear interest at a floating rate based upon LIBOR, subject to a floor, or another specified index, plus a spread or margin, which will vary depending upon our debt leverage. Accordingly, we are exposed to changes in U.S. dollar based short term rates, specifically LIBOR, if the increase exceeds the LIBOR floor amount. A change in interest rates would not affect the value of our outstanding floating rate debt, but would affect our operating results.

On September 30, 2009, the one month LIBOR rate was 0.2456% per annum compared to our LIBOR floor amount of 2.00% per annum. As a result, the one month LIBOR rate would have to increase 1.7544%, or 714%, before a change in LIBOR would affect our operating results.

Assuming the LIBOR increases above our LIBOR floor amount, our exposure to fluctuations in interest rates will increase or decrease in the future with increases or decreases in the outstanding amount of our secured revolving credit facility and any other floating rate debt that we may incur.

Item 4T. Controls and Procedures

As of the end of the period covered by this report, our management carried out an evaluation, under the supervision and with the participation of our Managing Trustees, President and Treasurer and Chief Financial Officer of the effectiveness of our disclosure controls and procedures pursuant to the Securities Exchange Act of 1934, as amended, or the Exchange Act, Rules 13a-15 and 15d-15. Based upon that evaluation, our Managing Trustees, President and Treasurer and Chief Financial Officer concluded that our disclosure controls and procedures are effective.

There have been no changes in our internal control over financial reporting during the quarter ended September 30, 2009 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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GOVERNMENT PROPERTIES INCOME TRUST

WARNING CONCERNING FORWARD LOOKING STATEMENTS

THIS QUARTERLY REPORT ON FORM 10-Q CONTAINS STATEMENTS AND IMPLICATIONS WHICH CONSTITUTE FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND OTHER FEDERAL SECURITIES LAWS. WHENEVER WE USE WORDS SUCH AS “BELIEVE”, “EXPECT”, “ANTICIPATE”, “INTEND”, “PLAN”, “ESTIMATE” OR SIMILAR EXPRESSIONS, WE ARE MAKING FORWARD LOOKING STATEMENTS. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON OUR PRESENT INTENT, BELIEFS OR EXPECTATIONS, BUT FORWARD LOOKING STATEMENTS ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR. FORWARD LOOKING STATEMENTS IN THIS REPORT RELATE TO VARIOUS ASPECTS OF OUR BUSINESS, INCLUDING:

· OUR ABILITY TO PAY DISTRIBUTIONS TO SHAREHOLDERS AND THE EXPECTED AMOUNTS THEREOF,

· OUR FUTURE ACQUISITIONS AND SALES OF PROPERTIES,

· THE CREDIT QUALITY OF OUR TENANTS,

· THE LIKELIHOOD THAT OUR TENANTS WILL PAY RENT, RENEW LEASES, SIGN NEW LEASES OR BE AFFECTED BY CYCLICAL ECONOMIC CONDITIONS,

· OUR ABILITY TO PAY INTEREST ON AND PRINCIPAL OF OUR DEBT,

· OUR POLICIES AND PLANS REGARDING INVESTMENTS AND FINANCINGS,

· THE FUTURE AVAILABILITY OF BORROWINGS UNDER OUR SECURED REVOLVING CREDIT FACILITY,

· OUR ABILITY TO RAISE EQUITY OR DEBT CAPITAL, AND

· OTHER MATTERS.

OUR ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY OUR FORWARD LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS. FACTORS THAT COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR FORWARD LOOKING STATEMENTS AND UPON OUR BUSINESS, RESULTS OF OPERATIONS, FINANCIAL CONDITION, FUNDS FROM OPERATIONS, CASH AVAILABLE FOR DISTRIBUTION, CASH FLOWS, LIQUIDITY AND PROSPECTS INCLUDE, BUT ARE NOT LIMITED TO:

· CHANGES IN THE ECONOMY AND THE CAPITAL MARKETS,

· COMPETITION WITHIN THE REAL ESTATE INDUSTRY,

· ACTUAL AND POTENTIAL CONFLICTS OF INTEREST WITH OUR MANAGING TRUSTEES AND RMR AND THEIR AFFILIATES, AND

· CHANGES IN FEDERAL, STATE AND LOCAL LEGISLATION, GOVERNMENTAL REGULATIONS, ACCOUNTING TREATMENT, TAX LAWS AND SIMILAR MATTERS.

FOR EXAMPLE:

· IF THE AVAILABILITY OF DEBT CAPITAL REMAINS RESTRICTED OR BECOMES MORE RESTRICTED, WE MAY BE UNABLE TO REFINANCE OR REPAY OUR DEBT OBLIGATIONS WHEN THEY BECOME DUE OR ON TERMS WHICH ARE AS FAVORABLE AS WE NOW HAVE,

· WE MAY BE UNABLE TO IDENTIFY PROPERTIES WHICH WE WANT TO BUY OR TO NEGOTIATE ACCEPTABLE PURCHASE PRICES,

· OUR ABILITY TO MAKE FUTURE DISTRIBUTIONS DEPENDS UPON OUR FUTURE EARNINGS, AND

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· OTHER RISKS MAY ADVERSELY IMPACT US, AS DESCRIBED MORE FULLY IN THE PROSPECTUS DATED JUNE 2, 2009, UNDER “RISK FACTORS”, WHICH IS ACCESSIBLE ON THE SEC’S WEBSITE AT WWW.SEC.GOV.

THESE RESULTS COULD OCCUR DUE TO MANY DIFFERENT CIRCUMSTANCES, SOME OF WHICH ARE BEYOND OUR CONTROL, SUCH AS GOVERNMENT TENANTS’ NEEDS FOR LEASED SPACE, OR CHANGES IN THE CAPITAL MARKETS OR THE ECONOMY GENERALLY. STATEMENTS CONTAINED ELSEWHERE IN THIS QUARTERLY REPORT ON FORM 10-Q IDENTIFY OTHER IMPORTANT FACTORS THAT COULD CAUSE DIFFERENCES FROM OUR FORWARD LOOKING STATEMENTS.

YOU SHOULD NOT PLACE UNDUE RELIANCE UPON OUR FORWARD LOOKING STATEMENTS.

EXCEPT AS REQUIRED BY LAW, WE UNDERTAKE NO OBLIGATION TO UPDATE OR CHANGE ANY FORWARD LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.

STATEMENT CONCERNING LIMITED LIABILITY

THE AMENDED AND RESTATED DECLARATION OF TRUST ESTABLISHING GOVERNMENT PROPERTIES INCOME TRUST, DATED JUNE 8, 2009, AS FILED WITH THE STATE DEPARTMENT OF ASSESSMENTS AND TAXATION OF MARYLAND, PROVIDES THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF GOVERNMENT PROPERTIES INCOME TRUST SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, GOVERNMENT PROPERTIES INCOME TRUST. ALL PERSONS DEALING WITH GOVERNMENT PROPERTIES INCOME TRUST IN ANY WAY SHALL LOOK ONLY TO THE ASSETS OF GOVERNMENT PROPERTIES INCOME TRUST FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.

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Part II. Other Information

Item 1A. Risk Factors.

For a discussion of the potential risks and uncertainties, which impact us, see the information under the heading “Risk Factors” in our Prospectus, which is accessible on the SEC’s website at www.sec.gov . There have been no material changes to the risk factors disclosed in the Prospectus.

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

On September 22, 2009, pursuant to our Incentive Share Award Plan we granted an aggregate of 31,350 common shares of beneficial interest, par value $0.01 per share, to our trustees and officers and certain employees of our manager, RMR, valued at $22.14 per common share, the closing price of our common shares on the New York Stock Exchange on that day. We made these grants pursuant to an exemption from registration contained in Section 4(2) of the Securities Act of 1933, as amended.

The effective date of our registration statement filed on Form S-11 under the Securities Act (File No. 333-157455) relating to our IPO was June 2, 2009. A total of 11,500,000 of our common shares, including the underwriters’ full over allotment, were sold in our IPO. Merrill Lynch, Pierce, Fenner & Smith Incorporated, Wachovia Capital Markets, LLC and Morgan Stanley & Co. Incorporated acted as joint bookrunning managers of our IPO.

The IPO and the full underwriters’ over allotment was completed in June 2009. The aggregate offering price for our common shares sold was $230 million. The underwriting discounts were $14.4 million and the net proceeds totaled $215.6 million. We used the net proceeds of our IPO to repay $215.6 million of the $250 million then outstanding under our secured revolving credit facility.

Item 6. Exhibits

10.1 2009 Incentive Share Award Plan. ( filed herewith )

10.2 Form of Restricted Share Agreement. ( filed herewith )

31.1 Rule 13a-14(a) Certification. (filed herewith)

31.2 Rule 13a-14(a) Certification. (filed herewith)

31.3 Rule 13a-14(a) Certification. (filed herewith)

32.1 Section 1350 Certification. (furnished herewith)

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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.

	GOVERNMENT PROPERTIES INCOME TRUST


	By:	/s/ Adam D. Portnoy
		Adam D. Portnoy
		Managing Trustee and President
		Dated: November 4, 2009


	By:	/s/ David M. Blackman
		David M. Blackman
		Treasurer and Chief Financial Officer
		(principal financial and accounting officer)
		Dated: November 4, 2009

Exhibit 10.1

GOVERNMENT PROPERTIES INCOME TRUST

2009 INCENTIVE SHARE AWARD PLAN

Government Properties Income Trust (the “Company”) hereby adopts the Government Properties Income Trust 2009 Incentive Share Award Plan (as amended from time to time, the “Plan”), effective as of June 11, 2009.

I. PURPOSE

The Plan is intended to advance the interests of the Company and its subsidiaries by providing a means of rewarding selected officers, employees and Trustees of the Company, employees of its manager and others rendering valuable services to the Company or its subsidiaries, through grants of the Company’s Shares.

II. DEFINITIONS

Terms that are capitalized in the text of the Plan have the meanings set forth below:

(a) “Board” means the Board of Trustees of the Company.

(b) “Company” means Government Properties Income Trust, a Maryland real estate investment trust.

(d) “Key Person” means an employee, consultant, manager, Trustee, officer or other person providing services to the Company, to a subsidiary of the Company or to the Manager on behalf of the Company.

(e) “Manager” means the person or entity serving as manager to the Company.

(f) “Participant” means a person to whom Shares have been granted, or any other person who becomes owner of the Shares by reason of such person’s death or incapacity.

(g) “Securities Act” means the Securities Act of 1933, as amended.

(h) “Share Agreement” means an agreement between the Company and a Participant regarding Shares issued to the Participant pursuant to the Plan.

(i) “Shares” means the Company’s common shares of beneficial interest, par value $.01 per share.

(j) “Trustee” means a member of the Board.

III. SHARES SUBJECT TO THE PLAN

Subject to the provisions of Section VII, the total number of Shares which may be granted under the Plan is 2,000,000 Shares. A holder of Shares granted under the Plan, whether or not vested, shall have all of the rights of a shareholder of the Company, including the right to vote the Shares and the right to receive any distributions, unless the Board shall otherwise determine. Certificates representing Shares and statements representing Shares issued in book-entry form may be imprinted with a legend to the effect that the Shares represented may not be sold, exchanged, transferred, pledged, hypothecated or otherwise disposed of except in accordance with the terms of the Securities Act and the applicable Share Agreement, if any. Shares subject to awards under the Plan which are forfeited shall again be available for grant under the Plan.

IV. METHOD OF GRANTING SHARES

Grants of Shares to any person shall be made by action of the Board, and shall be made solely in accordance with the instructions of the Board as to the selection of persons to whom Shares are to be granted, the amount and timing of each such grant, and the extent, if any, to which vesting restrictions or other conditions shall apply to the granted Shares. If a person to whom such a grant of Shares has been made fails to execute and deliver to the Company a Share Agreement within ten (10) days after it is submitted to him or her, the grant of Shares related to such Share Agreement may be cancelled by the Company, acting by the Board, at its option without further notice to the Participant. Nothing in this Section IV shall prevent the Board from delegating its authority to make grants to a committee pursuant to Section V.

V. ADMINISTRATION OF THE PLAN

The Plan shall be administered by the Board or, in the discretion of the Board, a committee designated by the Board and composed of at least two (2) members of the Board. All references in the Plan to the Board shall be understood to refer to such committee or the Board, whoever shall administer the Plan. As of the effective date of the Plan, the Board has delegated its authority to administer the Plan to the Compensation Committee of the Company pursuant to the written charter for such committee; however, the Board may revoke or rescind this delegation of authority in whole or in part at any time. All questions of interpretation and application of the Plan and of grants of Shares shall be determined by the Board or its designated committee in its sole discretion, and its determination shall be final and binding upon all persons, including the Company and all Participants. Without limiting the generality of the foregoing, the Board or the designated committee is authorized to adopt and approve from time to time the forms and, subject to the terms of the Plan, the terms and conditions of any Share Agreement. If it determines to do so, the Board or its designated committee may grant Shares under this Plan which are not subject to a Share Agreement.

For so long as Section 16 of the Exchange Act is applicable to the Company, each member of any committee designated to administer the Plan shall be a “non-employee director” or the equivalent within the meaning of Rule 16b-3 under the Exchange Act and, for so long as Section 162(m) of the Internal Revenue Code of 1986, as amended from time to time (the “Code”), is applicable to the Company, an “outside director” within the meaning of Section 162(m) of the Code and the regulations thereunder.

With respect to persons subject to Section 16 of the Exchange Act, grants under the Plan are intended to be exempt from the provisions of Section 16(b) of the Exchange Act pursuant to Rule 16b-3 or its successor under the Exchange Act.

VI. ELIGIBLE PERSONS

The persons eligible to receive grants of Shares shall be those persons selected by the Board or designated committee from among Key Persons who contribute to the business of the Company and its subsidiaries.

VII. CHANGES IN CAPITAL STRUCTURE

In the event that the outstanding Shares are hereafter changed for a different number or kind of Shares or other securities of the Company, or are otherwise affected by reason of a merger, sale of assets, reorganization, recapitalization, exchange of shares, stock split, combination of shares or dividend payable in shares or other securities or any similar corporate transaction, a corresponding adjustment shall be made in the number and kind of Shares or other

securities covered by outstanding grants of Shares, and for which Shares may be granted under the Plan.

VIII. DURATION, AMENDMENT AND TERMINATION OF PLAN

Shares may be granted under the Plan from time to time until the close of business on the tenth anniversary of its effective date. Subject to any shareholder approval that may be required under applicable law or the rules of any stock exchange on which the Shares are listed, the Board hereafter may at any time amend or extend the Plan, including amendments to change the number of shares subject to the Plan. The Plan may be terminated at any time by action of the Board without, however, affecting the rights of a Participant or the Company as to Shares granted prior to such termination.

IX. MISCELLANEOUS

A. Nonassignability of Shares . Shares subject to a Share Agreement shall not be assignable or transferable by a Participant except in accordance with the terms of the applicable Share Agreement.

B. No Guarantee of Employment . Neither the award of Shares nor a Share Agreement shall give any person the right to continue in the employment of, or to continue to act as an officer or Trustee of, or to serve in any other capacity with, the Company, any subsidiary or the Manager, or give the Company, any subsidiary or the Manager the right to require such person to continue in any such capacity.

C. Tax Withholding . To the extent required by law, the Company shall withhold or cause to be withheld income and other taxes incurred by a Participant by reason of a grant of Shares, and as a condition to the receipt of any grant such a Participant shall agree that if the amount payable to him by the Company in the ordinary course is insufficient to pay such taxes, he or she shall upon request of the Company pay to the Company an amount sufficient to satisfy its tax withholding obligations.

D. Compliance with Law . This Plan, the granting and vesting of Shares hereunder, and the other obligations of the Company under this Plan and any Share Agreement, shall be subject to all applicable federal and state laws, rules and regulations, and to such approvals by any regulatory or governmental agency as may be required. The Company, in its reasonable discretion, may postpone the issuance or delivery of Shares until completion of any required action under any state or federal law, rule or regulation as the Company may consider appropriate in order to comply with the applicable laws, and may require any Participant to make such representations and furnish such information as it may consider appropriate in connection

with the issuance or delivery of Shares in compliance with applicable laws, rules and regulations. No provisions of this Plan shall be interpreted or construed to obligate the Company to register any Shares under federal or state law.

E. Governing Law . The validity, construction and effect of this Plan, any rules and regulations relating to this Plan and any Share Agreement shall be determined in accordance with the laws of the State of Maryland without giving effect to principles of conflict of laws.

Exhibit 10.2

GOVERNMENT PROPERTIES INCOME TRUST

RESTRICTED SHARE AGREEMENT

This Restricted Share Agreement (this “Agreement”) is made as of September 16, 2009 between (the “Employee”) and Government Properties Income Trust (the “Company”).

In consideration of the mutual promises and covenants contained in this Agreement, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Grant of Shares . The Company hereby grants to the Employee, effective as of the date of this Agreement, «GOV» shares of its common shares. The shares so granted are hereinafter referred to as the “Shares,” which term shall also include any shares of the Company issued to the Employee by virtue of his or her ownership of the Shares, by share dividend, share split, recapitalization or otherwise.

2. Vesting; Repurchase of Shares .

(a) The Shares shall vest one-fifth as of the date hereof, a further one-fifth on the September 16 of the year first following the date of this Agreement, a further one-fifth on the September 16 of the second year following the date of this Agreement, a further one-fifth on the September 16 of the third year following the date of this Agreement and the final one-fifth on the September 16 of the fourth year following the date of this Agreement. Any Shares not vested as of any date are herein referred to as “Unvested Shares.”

(b) In the event the Employee ceases to render significant services, whether as an employee or otherwise, to (i) the Company, (ii) the entity which is the advisor, manager or shared services provider to the Company or an entity controlled by, under common control with or controlling such entity (collectively, the “Manager”), or (iii) an affiliate of the Company (which shall be deemed for such purpose to include any other entity to which the Manager is the advisor, manager or shared services provider), t he Company shall have the right and option to purchase from the Employee, for an amount equal to $.01 per share (as adjusted for any share split or combination, share dividend, recapitalization or similar event) all or any portion of the Unvested Shares as of the date the Employee ceases to render such services. The Company may exercise such purchase option by delivering or mailing to the Employee (or his estate), at any time after the Employee has ceased to render such services, a written notice of exercise of such option. Such notice shall specify the number of Unvested Shares to be purchased. The price to be paid for the Unvested Shares to be repurchased may be payable, at the option of the Company, by wire transfer of immediately available funds or in cash (by check) or any other reasonable method.

3. Legends . Each certificate or share statement relating to the Shares shall prominently bear legends in substantially the following terms:

“GOVERNMENT PROPERTIES INCOME TRUST IS A MARYLAND REAL ESTATE INVESTMENT COMPANY (THE “COMPANY”). THE SHARES COVERED BY THIS CERTIFICATE ARE ISSUED AND SHALL BE HELD SUBJECT TO ALL OF THE PROVISIONS OF THE AMENDED AND RESTATED DECLARATION OF TRUST OF THE COMPANY, AS AMENDED FROM TIME TO TIME (THE “DECLARATION OF TRUST”) AND THE AMENDED AND RESTATED BYLAWS ADOPTED BY THE COMPANY, AS AMENDED FROM TIME TO TIME (THE “BYLAWS”). THE HOLDER OF THE SHARES COVERED BY THIS CERTIFICATE AND EVERY TRANSFEREE OR ASSIGNEE THEREOF BY ACCEPTING OR HOLDING THE SAME AGREES TO BE BOUND BY ALL OF THE PROVISIONS OF THE DECLARATION OF TRUST AND BYLAWS.

PURSUANT AND SUBJECT TO THE TERMS OF THE DECLARATION OF TRUST, THE COMPANY HAS THE AUTHORITY TO CREATE ONE OR MORE ADDITIONAL CLASSES OR SERIES OF SHARES AND ISSUE ADDITIONAL SHARES OF ANY EXISTING CLASS OR SERIES OF SHARES. THE COMPANY WILL FURNISH A FULL STATEMENT OF (i) THE AUTHORITY OF THE COMPANY TO CREATE ADDITIONAL CLASSES OR SERIES OF SHARES AND ISSUE ADDITIONAL SHARES OF ANY EXISTING CLASS OR SERIES OF SHARES, (ii) THE TERMS OF ANY EXISTING CLASS OR SERIES OF SHARES, AND (iii) SUCH OTHER INFORMATION AS IS REQUIRED BY APPLICABLE LAW, WITHOUT CHARGE TO ANY SHAREHOLDER UPON REQUEST TO THE SECRETARY OF THE COMPANY.

THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON OWNERSHIP AND TRANSFER WHICH ARE OR MAY HEREAFTER BE CONTAINED IN THE DECLARATION OF TRUST OR IN THE BYLAWS, INCLUDING PROVISIONS OF THE DECLARATION OF TRUST WHICH PROHIBIT THE OWNERSHIP OF MORE THAN 9.8% OF ANY CLASS OR SERIES OF THE COMPANY’S SHARES OF BENEFICIAL INTEREST BY ANY PERSON OR GROUP. THIS DESCRIPTION OF THE RESTRICTIONS UPON OWNERSHIP OR TRANSFER OF THE COMPANY’S SECURITIES IS NOT COMPLETE. A MORE COMPLETE DESCRIPTION OF THESE RESTRICTIONS AND OF VARIOUS RIGHTS AND OBLIGATIONS OF SHAREHOLDERS APPEARS IN THE DECLARATION OF TRUST OR BYLAWS, AS APPLICABLE, AND IN CERTAIN OTHER AGREEMENTS WHICH MAY FROM TIME TO TIME BE ENTERED INTO BY THE COMPANY AFFECTING THE RIGHTS AND OBLIGATIONS OF SHAREHOLDERS. COPIES OF THE DECLARATION OF TRUST, BYLAWS AND AGREEMENTS AFFECTING THE RIGHTS AND OBLIGATIONS OF SHAREHOLDERS AS IN EFFECT FROM TIME TO TIME WILL BE SENT WITHOUT CHARGE TO ANY SHAREHOLDER UPON REQUEST TO THE SECRETARY OF THE COMPANY.

THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). SUCH SHARES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER THE ACT OR AN OPINION OF THE COMPANY’S COUNSEL THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT.

THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED PURSUANT TO AN INCENTIVE PLAN MAINTAINED BY THE COMPANY. THESE SHARES MAY BE SUBJECT TO TRANSFER AND/OR VESTING RESTRICTIONS, AND UNVESTED SHARES ARE SUBJECT TO REPURCHASE RIGHTS CONTAINED IN THE PLAN, THE RELATED GRANT OF SHARES OR AN AGREEMENT BETWEEN THE COMPANY AND THE INITIAL HOLDER OF THESE SHARES. A COPY OF APPLICABLE RESTRICTIONS AND

REPURCHASE RIGHTS WILL BE FURNISHED TO THE HOLDER OF THIS CERTIFICATE WITHOUT CHARGE UPON REQUEST TO THE SECRETARY OF THE COMPANY.”

4. Tax Withholding To the extent required by law, the Company shall withhold or cause to be withheld income and other taxes incurred by the Employee by reason of a grant of Shares, and the Employee agrees that he or she shall upon request of the Company pay to the Company an amount sufficient to satisfy its tax withholding obligations from time to time (including as Shares become vested) as the Company may request.

5. Termination . This Agreement shall continue in full force and effect until the earliest to occur of the following, at which time except as otherwise specified below this Agreement shall terminate: (a) the date on which all repurchase rights referred to in Section 2 hereof have terminated; or (b) except to the extent specified in such notice, upon notice of termination by the Company to the Employee pursuant to action taken by the Company’s Board of Trustees.

6. Miscellaneous .

(a) Amendments . Neither this Agreement nor any provision hereof may be changed or modified except by an agreement in writing executed by the Employee and the Company.

(b) Binding Effect of the Agreement . This Agreement shall inure to the benefit of, and be binding upon , the Company, the Employee and their respective estates, heirs, executors, transferees, successors, assigns and legal representatives.

(c) Provisions Separable . In the event that any of the terms of this Agreement shall be or become or is declared to be illegal or unenforceable by any court or other authority of competent jurisdiction, such terms shall be null and void and shall be deemed deleted from this Agreement, and all the remaining terms of this Agreement shall remain in full force and effect.

(d) Notices . Any notice in connection with this Agreement shall be deemed to have been properly delivered if it is in writing and is delivered by hand or by facsimile or sent by registered certified mail, postage prepaid, to the party addressed as follows, unless another address has been substituted by notice so given:

To the Employee:	To his address as set forth on the signature page hereof.

To the Company:	Government Properties Income Trust
	400 Centre Street
	Newton, MA 02458
	Attn: Secretary

(e) Construction . The headings and subheadings of this Agreement have been inserted for convenience only, and shall not affect the construction of the provisions

hereof. All references to sections of this Agreement shall be deemed to refer as well to all subsections which form a part of such section.

(f) Employment Agreement . This Agreement shall not be construed as an agreement by the Company, any affiliate or advisor of the Company to employ the Employee, nor is the Company, any affiliate or advisor of the Company obligated to continue employing the Employee by reason of this Agreement or the grant of shares to the Employee hereunder.

(g) Applicable Law . This Agreement shall be construed and enforced in accordance with the laws of The Commonwealth of Massachusetts.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement, or caused this Agreement to be executed under seal, as of the date first above written.

	GOVERNMENT PROPERTIES INCOME TRUST

	By:
	Title:

	EMPLOYEE:


	NAME:
	ADDRESS:

EXHIBIT 31.1

CERTIFICATION PURSUANT TO EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a)

I, Adam D. Portnoy, certify that:

1. I have reviewed this Quarterly Report of Government Properties Income Trust;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) [paragraph omitted in accordance with Exchange Act Rule 13a-14(a)];

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	November 4, 2009	/s/ Adam D. Portnoy
		Adam D. Portnoy
		Managing Trustee and President

EXHIBIT 31.2

CERTIFICATION PURSUANT TO EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a)

I, David M. Blackman, certify that:

1. I have reviewed this Quarterly Report of Government Properties Income Trust;

b) [paragraph omitted in accordance with Exchange Act Rule 13a-14(a)];

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	November 4, 2009	/s/ David M. Blackman
		David M. Blackman
		Treasurer and Chief Financial Officer

EXHIBIT 31.3

CERTIFICATION PURSUANT TO EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a)

I, Barry M. Portnoy, certify that:

1. I have reviewed this Quarterly Report of Government Properties Income Trust;

b) [paragraph omitted in accordance with Exchange Act Rule 13a-14(a)];

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	November 4, 2009	/s/ Barry M. Portnoy
		Barry M. Portnoy
		Managing Trustee

Exhibit 32.1

Certification Pursuant to 18 U.S.C. Sec. 1350

(Section 906 of the Sarbanes – Oxley Act of 2002)

In connection with the filing by Government Properties Income Trust (the “Company”) of the Quarterly Report on Form 10-Q for the period ended September 30, 2009 (the “Report”), each of the undersigned hereby certifies, to the best of his knowledge:

1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Barry M. Portnoy		/s/ Adam D. Portnoy
Barry M. Portnoy		Adam D. Portnoy
Managing Trustee		Managing Trustee and President


		/s/ David M. Blackman
		David M. Blackman
		Treasurer and Chief Financial Officer

Date: November 4, 2009