Skip to main content

HRPT Properties Trust Agrees to Sell 48 Medical Office, Clinic and Biotech Laboratory Buildings for $565 Million

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, HRPs 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.

HRPs 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 HRPs 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 companys 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 HRPs web site, which is located at www.hrpreit.com. Participants wanting to access the webcast should visit the companys web site about five minutes before the call. The archived webcast will be available for replay on HRPs 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 HRPS PRESENT BELIEFS AND EXPECTATIONS BUT THEY ARE NOT GUARANTEED TO OCCUR AND THEY MAY NOT OCCUR FOR VARIOUS REASONS, SOME OF WHICH ARE BEYOND HRPS 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, HRPS SALES DESCRIBED IN THIS PRESS RELEASE MAY BE DILUTIVE TO HRPS 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
ActualPro Forma (1)
Size and geographic diversity: $6.4 billion invested in 535 properties (64.5 million sq. ft.) located in 37 states and Washington, DC. $6.0 billion invested in 487 properties (62.3 million sq. ft.) located in 36 states and Washington, 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.

Contacts:

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

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.