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NEWTON, Mass.--HRPT Properties Trust (NYSE: HRP) today announced that it has
entered into a series of agreements to sell 48 medical office, clinic
and biotech laboratory buildings (2.2 million sq. ft.) for $565
million.
As of December 31, 2007, HRP's historical investment in these
properties was approximately $397 million, and its depreciated book
carrying value of these properties was approximately $350 million;
accordingly, HRP expects to realize capital gains of approximately
$215 million as a result of these sales. HRP has owned these 48
buildings for an average of nine years.
HRP's aggregate capitalization rate for these sales based on $40.0
million per year of current net operating income from the buildings is
approximately 7.1%.
The purchaser of these properties is Senior Housing Properties
Trust (NYSE: SNH). SNH will pay an aggregate of approximately $554
million in cash at the closings and assume three mortgages on two
properties which total approximately $11 million. The sales are
scheduled to close in phases throughout the next 12 months.
HRP expects to use the proceeds from the sales to take advantage
of current favorable investment market conditions to purchase
properties with more potential for rent growth and at higher
capitalization rates than the properties being sold. As a result, HRP
believes it may be able to increase its funds from operation, or FFO,
per share in the future by reinvesting the proceeds from the sales in
higher yielding properties. Until new investments have been
identified, HRP plans to use the proceeds from the sales to reduce
debt amounts outstanding.
After completion of the sales announced today, HRP will continue
to own 45 properties with approximately 4.6 million sq. ft. which are
principally leased to tenants in medical related businesses, but which
generally are not used for medical office, clinical or biotech
laboratory purposes. A comparative description of HRP's owned
portfolio of properties before and after the sales announced today is
provided as a supplement to this press release.
SNH was formerly a 100% owned subsidiary of HRP which was spun off
to HRP shareholders in 1999. At the time of this spin off, HRP and SNH
entered an agreement which prohibited SNH from purchasing medical
office, clinic and biotech laboratory buildings. One of the agreements
announced today amends that 1999 agreement to permit SNH, rather than
HRP, to invest in these types of properties going forward.
Because both HRP and SNH are managed by Reit Management & Research
LLC, the sales prices for the properties to be sold were established
by reference to an appraisal report by a nationally recognized real
estate appraisal firm and the terms of the sales were negotiated by
special committees of each company's Board composed solely of
Independent Trustees representing each company.
Conference Call:
HRP is currently scheduled to host a conference call to discuss
its first quarter 2008 results on Thursday, May 8, 2008 at 10:00 a.m.
Eastern Time. During this conference call, Adam Portnoy, Managing
Trustee, and John Popeo, Chief Financial Officer, will also be
available to discuss and answer questions regarding these
transactions.
The conference call telephone number is 866-550-6338. Participants
calling from outside the United States and Canada should dial
347-284-6930. No pass code is necessary to access the call from either
number. Participants should dial in about 15 minutes prior to the
scheduled start of the call. A replay of the conference call will be
available through 1:00 p.m. Eastern Time on Thursday, May 15, 2008. To
hear the replay, dial 719-457-0820. The replay pass code is 6566440.
A live audio webcast of the conference call will also be available
in a listen only mode on HRP's web site, which is located at
www.hrpreit.com. Participants wanting to access the webcast should
visit the company's web site about five minutes before the call. The
archived webcast will be available for replay on HRP's web site for
about one week after the call.
HRPT Properties Trust is a real estate investment trust, or REIT,
which primarily owns office and industrial properties throughout the
United States, including approximately 17 million sq. ft. of leased
industrial and commercial lands in Oahu, HI. HRP is headquartered in
Newton, MA.
WARNING REGARDING FORWARD LOOKING STATEMENTS
THIS PRESS RELEASE CONTAINS FORWARD LOOKING STATEMENTS WITHIN THE
MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND
THE FEDERAL SECURITIES LAWS. THESE FORWARD LOOKING STATEMENTS ARE
BASED UPON HRP'S PRESENT BELIEFS AND EXPECTATIONS BUT THEY ARE NOT
GUARANTEED TO OCCUR AND THEY MAY NOT OCCUR FOR VARIOUS REASONS, SOME
OF WHICH ARE BEYOND HRP'S CONTROL. FOR EXAMPLE:
-- THIS PRESS RELEASE STATES THAT HRP HAS AGREED TO SELL 48
MEDICAL OFFICE, CLINIC AND BIOTECH LABORATORY BUILDINGS FOR
$565 MILLION AND THAT THESE SALES ARE EXPECTED TO BE COMPLETED
DURING THE NEXT 12 MONTHS. IN FACT, THESE SALES ARE SUBJECT TO
VARIOUS CONDITIONS TYPICAL OF COMMERCIAL REAL ESTATE SALES,
INCLUDING, WITH RESPECT TO CERTAIN PROPERTIES, CONSENTS OF
MORTGAGEES AND WAIVERS OF RIGHTS OF FIRST REFUSAL FROM
TENANTS. ALSO, SNH HAS A FINANCING CONTINGENCY RELATING TO
CERTAIN PROPERTIES. AS A RESULT OF THESE CONDITIONS, SOME OR
ALL OF THE PROPERTIES MAY NOT BE SOLD, THE PURCHASE PRICES
PAID TO HRP MAY BE CHANGED OR SOME OF THESE SALES MAY BE
ACCELERATED OR DELAYED.
-- THIS PRESS RELEASE STATES THAT HRP BELIEVES THAT CURRENT
MARKET CONDITIONS WILL CREATE OPPORTUNITIES FOR HRP TO
PURCHASE PROPERTIES WITH MORE POTENTIAL FOR RENT GROWTH AND AT
HIGHER CAPITALIZATION RATES THAN THE PROPERTIES TO BE SOLD.
THIS PRESS RELEASE ALSO STATES THAT HRP BELIEVES IT MAY BE
ABLE TO INCREASE ITS FFO PER SHARE IN THE FUTURE BY
REINVESTING THE PROCEEDS FROM THE SALES IN HIGHER YIELDING
PROPERTIES. IN FACT, HRP MAY BE UNABLE TO IDENTIFY PROPERTIES
TO PURCHASE WHICH HAVE GREATER RENT GROWTH POTENTIAL OR WHICH
ARE AVAILABLE TO PURCHASE AT HIGHER CAPITALIZATION RATES THAN
THE PROPERTIES BEING SOLD; AND, AS A RESULT, HRP'S SALES
DESCRIBED IN THIS PRESS RELEASE MAY BE DILUTIVE TO HRP'S
FUTURE FFO PER SHARE, RATHER THAN ACCRETIVE.
OTHER IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THOSE IN FORWARD LOOKING STATEMENTS ARE DESCRIBED MORE
FULLY UNDER "ITEM 1A. RISK FACTORS" IN OUR ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2007. YOU SHOULD NOT PLACE UNDUE
RELIANCE UPON ANY FORWARD LOOKING STATEMENTS. EXCEPT AS REQUIRED BY
LAW, WE UNDERTAKE NO OBLIGATION TO UPDATE OR REVISE ANY FORWARD
LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR
OTHERWISE.
A Maryland Real Estate Investment Trust with transferable shares
of beneficial interest listed on the New York Stock Exchange. No
shareholder, Trustee or officer is personally liable for any act or
obligation of the Trust.
HRPT PROPERTIES TRUST
SUPPLEMENTAL DATA
As of and for the three
months ended
December 31, 2007
-------------------------
Actual Pro Forma
(1)
------------ ------------
Size and geographic diversity: $6.4 billion $6.0 billion
invested in invested in
535 487
properties properties
(64.5 (62.3
million sq. million sq.
ft.) ft.)
located in located in
37 states 36 states
and and
Washington, Washington,
DC. DC.
Occupancy: 92.9% 92.7%
Avg. remaining lease term based on rents (2): 6.4 years 6.2 years
Property type and location based on property
level net operating income:
Office properties 80% 78%
Industrial and Other properties 20% 22%
------------ ------------
Total 100% 100%
Suburban properties 71% 70%
CBD properties 29% 30%
------------ ------------
Total 100% 100%
Metro Philadelphia, PA 12% 13%
Oahu, HI 10% 11%
Metro Washington, DC 10% 10%
Metro Boston, MA 9% 7%
Southern California 7% 5%
Metro Austin, TX 4% 4%
Other Markets 48% 50%
------------ ------------
Total 100% 100%
Tenants' credit characteristics based on
rents (2):
U.S. Government 14% 15%
Medical related tenants 20% --
Long term land leases (Oahu, HI) 7% 7%
Investment grade rated tenants (3) 22% 28%
Other tenants 37% 50%
------------ ------------
Total 100% 100%
---------------------------------------------
(1) Pro forma for the sale of 48 medical office, clinic and biotech
laboratory buildings for $565 million. (2) Rents calculated pursuant
to signed leases as of December 31, 2007, plus expense
reimbursements; includes some triple net rents and excludes lease
value amortization.
(3) Excludes investment grade rated tenants included above.
HRPT Properties Trust Timothy A. Bonang, 617-796-8222 Manager
of Investor Relations or Katherine L. Johnston, 617-796-8222
Investor Relations Analyst www.hrpreit.com
© Business Wire , 2010 - 05/06/2008 07:30 AM
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