Equity Commonwealth (EQC) 8-K Results of Operations and Financial Condition

Exhibit 99.1

400 Centre Street, Newton, MA 02458-2076


tel: (617) 332-3990     fax: (617) 332-2261  

FOR IMMEDIATE RELEASE	Contact:
	Timothy A. Bonang
	Manager of Investor Relations
	(617) 796-8149
	www.hrpreit.com

HRPT Properties Trust Announces Results for the Periods

Ended June 30, 2007

Newton, MA (August 7, 2007): HRPT Properties Trust (NYSE: HRP) today announced financial results for the quarter and six months ended June 30, 2007.

Results for the quarter ended June 30, 2007:

Net income available for common shareholders was $16.1 million for the quarter ended June 30, 2007, compared to $22.3 million for the same quarter last year.  Net income available for common shareholders per share, basic and diluted, (EPS) for the quarters ended June 30, 2007 and 2006 was $0.08 and $0.11, respectively.

Funds from operations (FFO) available for common shareholders for the quarter ended June 30, 2007, were $62.6 million, or $0.30 per share basic, $0.29 per share diluted, compared to FFO available for common shareholders for the quarter ended June 30, 2006, of $62.7 million, or $0.30 per share basic and diluted.

The weighted average number of basic and diluted common shares outstanding totaled 211,720,711 and 240,913,369, respectively, for the quarter ended June 30, 2007, and 209,967,870 for the quarter ended June 30, 2006.

Results for the six months ended June 30, 2007:

Net income available for common shareholders was $33.8 million for the six months ended June 30, 2007, compared to $153.7 million for the same period last year.  Net income available for common shareholders per share, basic and diluted, (EPS) for the six months ended June 30, 2007 and 2006 was $0.16 and $0.73, respectively.  Net income for the six months ended June 30, 2006 included a $116.3 million, or $0.55 per share, gain on sale of equity investments.

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.

Funds from operations (FFO) available for common shareholders for the six months ended June 30, 2007, were $123.8 million, or $0.59 per share basic, $0.57 per share diluted, compared to FFO available for common shareholders for the six months ended June 30, 2006, of $127.4 million, or $0.61 per share basic and diluted.

The weighted average number of basic and diluted common shares outstanding totaled 211,167,789 and 240,360,447, respectively, for the six months ended June 30, 2007, and 209,914,544 for the six months ended June 30, 2006.

Occupancy and Leasing Results:

As of June 30, 2007, 92.9% of HRPT’s total square feet was leased, compared to 92.8% as of March 31, 2007, and 93.6% leased as of June 30, 2006.

HRPT signed new leases for 814,000 square feet and lease renewals for 1,107,000 square feet during the quarter ended June 30, 2007, for weighted average rental rates that were 3% above prior rents for the same space.  Average lease terms for leases signed during the second quarter of 2007 were 7.9 years.  Commitments for tenant improvement and leasing commission (TI/LC) costs for leases signed during the quarter ended June 30, 2007, totaled $18.22 per square foot on a weighted average basis.

Investing Activities:

During the second quarter of 2007, HRPT acquired one office building with 75,000 square feet of space for $17.1 million plus closing costs, and 14 industrial properties with 3,294,000 square feet of space for $125.5 million plus closing costs.

Conference Call:

On Tuesday, August 7, 2007, at 5:00 p.m. Eastern Time, Adam Portnoy, managing trustee, and John Popeo, chief financial officer, will host a conference call to discuss the second quarter 2007 results.

The conference call telephone number is (877) 502-9272.  Participants calling from outside the United States and Canada should dial (913) 981-5581.  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 midnight, Monday, August 13, 2007.  To hear the replay, dial (719) 457-0820.  The replay pass code is 6621431.

A live audio webcast of the conference call will also be available in a listen only mode on HRPT’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 HRPT’s web site for about one week after the call.

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Supplemental Data:

A copy of HRPT’s Second Quarter 2007 Supplemental Operating and Financial Data is available for download at HRPT’s web site.

HRPT Properties Trust is a real estate investment trust, or REIT, which primarily owns office buildings located throughout the United States.  As of June 30, 2007, HRPT owned 524 properties with 63.6 million square feet, including approximately 17 million square feet of leased industrial and commercial lands in Oahu, HI.  HRPT is headquartered in Newton, Massachusetts.

Please see the pages attached hereto for a more detailed statement of our operating results and financial condition, along with an explanation of our calculation of FFO.

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HRPT Properties Trust

Consolidated Statements of Income and Funds from Operations

(amounts in thousands, except per share data)

	Quarter Ended June 30,						Six Months Ended June 30,
	2007			2006			2007			2006
Rental income	$	209,995		$	197,957		$	415,045		$	387,516
Expenses:
Operating expenses	81,166			75,959			161,167			147,762
Depreciation and amortization	45,786			40,379			89,297			78,045
General and administrative	9,125			8,540			17,703			16,413
Total expenses	136,077			124,878			268,167			242,220
Operating income	73,918			73,079			146,878			145,296
Interest income	568			310			1,027			1,545
Interest expense (including amortization of debt discounts, premiums and deferred financing fees of $1,025, $1,105, $2,122 and $2,243, respectively)	(42,301		)	(41,854		)	(82,572		)	(83,148		)
Loss on early extinguishment of debt	(711		)	—			(711		)	(1,659		)
Equity in earnings of equity investments	—			—			—			3,136
Gain on sale of equity investments	—			—			—			116,287
Income from continuing operations	31,474			31,535			64,622			181,457
Loss from discontinued operations	—			(21		)	—			(108		)
Net income	31,474			31,514			64,622			181,349
Preferred distributions	(15,401		)	(9,234		)	(30,802		)	(20,742		)
Excess redemption price paid over carrying value of preferred shares	—			—			—			(6,914		)
Net income available for common shareholders	$	16,073		$	22,280		$	33,820		$	153,693
Calculation of Funds from Operations, or FFO (1):
Net income	$	31,474		$	31,514		$	64,622		$	181,349
Plus: depreciation and amortization	45,786			40,401			89,297			78,152
Loss on early extinguishment of debt:
Add: amount included in total expenses	711			—			711			1,659
Less: portion settled in cash	—			—			—			—
Less: gain on sale of equity investments	—			—			—			(116,287		)
Less: equity in earnings of equity investments	—			—			—			(3,136		)
Plus: FFO from equity investments	—			—			—			6,426
FFO	77,971			71,915			154,630			148,163
Less: preferred distributions	(15,401		)	(9,234		)	(30,802		)	(20,742		)
FFO available for common shareholders	$	62,570		$	62,681		$	123,828		$	127,421
Weighted average common shares outstanding – basic	211,721			209,968			211,168			209,915
Weighted average common shares outstanding – diluted (2)	240,914			209,968			240,361			209,915
Per common share:
Income from continuing operations available for commonshareholders – basic and diluted	$	0.08		$	0.11		$	0.16		$	0.73
Loss from discontinued operations – basic and diluted	$	—		$	—		$	—		$	—
Net income available for common shareholders – basic and diluted	0.08			0.11			0.16			0.73
FFO available for common shareholders – basic	0.30			0.30			0.59			0.61
FFO available for common shareholders – diluted	0.29			0.30			0.57			0.61
Common distributions paid	0.21			0.21			0.42			0.42

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(1)We compute FFO as shown in the calculations above.  Our calculations of FFO differ from the National Association of Real Estate Investment Trusts, or NAREIT, definition because we add loss on early extinguishment of debt unless settled in cash.  We consider FFO to be an appropriate measure of performance for a REIT, along with net income and cash flow from operating, investing and financing activities.  We believe that FFO provides useful information to investors because by excluding the effects of certain historical amounts, such as depreciation expense and gains or losses on sales of properties, FFO can facilitate a comparison of operating performance among REITs.  FFO does not represent cash generated by operating activities in accordance with generally accepted accounting principles, or GAAP, and should not be considered an alternative to net income or cash flow from operating activities as a measure of financial performance or liquidity.  FFO is one important factor considered by our Board of Trustees in determining the amount of distributions to shareholders.  Other important factors include, but are not limited to, requirements to maintain our status as a REIT, limitations in our revolving credit facility and public debt covenants, the availability of debt and equity capital to us and our expectations of future capital requirements and operating performance.

(2)At June 30, 2007, we had 15,180 series D preferred shares that were convertible into 29,193 common shares.  The effect of our series D convertible preferred shares on income from continuing operations and net income available for common shareholders per share is anti-dilutive to income but dilutive to FFO for the quarter and six months ended June 30, 2007.  Set forth below is the calculation of diluted net income available for common shareholders, diluted FFO available for common shareholders and diluted weighted average common shares outstanding.

	Quarter Ended June 30,				Six Months Ended June 30,
	2007		2006		2007		2006
Net income available for common shareholders	$	16,073	$	22,280	$	33,820	$	153,693
Add - Series D convertible preferred distributions	6,167		—		12,334		—
Net income available for common shareholders – diluted	$	22,240	$	22,280	$	46,154	$	153,693
FFO available for common shareholders	$	62,570	$	62,681	$	123,828	$	127,421
Add - Series D convertible preferred distributions	6,167		—		12,334		—
FFO available for common shareholders – diluted	$	68,737	$	62,681	$	136,162	$	127,421
Weighted average common shares outstanding – basic	211,721		209,968		211,168		209,915
Effect of Series D preferred shares	29,193		—		29,193		—
Weighted average common shares outstanding – diluted	240,914		209,968		240,361		209,915

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HRPT Properties Trust

Consolidated Balance Sheets

(amounts in thousands, except share data)

	June 30,			December 31,
	2007			2006
				(audited)
ASSETS
Real estate properties:
Land	$	1,167,702		$	1,143,109
Buildings and improvements	4,821,438			4,619,164
	5,989,140			5,762,273
Accumulated depreciation	(736,336		)	(668,460		)
	5,252,804			5,093,813
Acquired real estate leases	163,224			167,879
Cash and cash equivalents	29,026			17,783
Restricted cash	16,571			21,635
Rents receivable, net of allowance for doubtful accounts of $5,830 and $4,737, respectively	182,980			172,566
Other assets, net	106,284			102,273
Total assets	$	5,750,889		$	5,575,949
LIABILITIES AND SHAREHOLDERS’ EQUITY
Revolving credit facility	$	212,000		$	40,000
Senior unsecured debt, net	1,991,241			1,941,173
Mortgage notes payable, net	410,892			416,058
Accounts payable and accrued expenses	87,111			93,734
Dividends payable	—			44,111
Acquired real estate lease obligations	40,942			41,833
Rent collected in advance	22,736			19,592
Security deposits	16,076			15,972
Due to affiliates	8,193			12,708
Total liabilities	2,789,191			2,625,181
Shareholders’ equity:
Preferred shares of beneficial interest, $0.01 par value:
50,000,000 shares authorized;
Series B preferred shares; 8 3/4% cumulative redeemable at par on or after September 12, 2007; 12,000,000 shares issued and outstanding, aggregate liquidation preference $300,000	289,849			289,849
Series C preferred shares; 7 1/8% cumulative redeemable at par on or after February 15, 2011; 6,000,000 shares issued and outstanding, aggregate liquidation preference $150,000	145,015			145,015
Series D preferred shares; 6 1/2% cumulative convertible; 15,180,000 shares issued and outstanding, aggregate liquidation preference $379,500	368,270			368,270
Common shares of beneficial interest, $0.01 par value:
300,000,000 shares authorized; 211,946,590 and 210,051,590 shares issued and outstanding, respectively	2,119			2,101
Additional paid in capital	2,798,279			2,774,461
Cumulative net income	1,767,976			1,703,354
Cumulative common distributions	(2,159,689		)	(2,115,299		)
Cumulative preferred distributions	(250,121		)	(216,983		)
Total shareholders’ equity	2,961,698			2,950,768
Total liabilities and shareholders’ equity	$	5,750,889		$	5,575,949

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