UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________ to ______________
Commission File Number 1-9317
HRPT PROPERTIES TRUST
(Exact name of registrant as specified in its charter)
Maryland 04-6558834
(State or other jurisdiction of incorporation) (IRS Employer Identification No.)
400 Centre Street, Newton, Massachusetts 02458
(Address of principal executive offices) (Zip Code)
617-332-3990
(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 [ ]
Number of Common Shares outstanding at May 10, 2001:
130,644,447 shares of beneficial interest, $0.01 par value.
HRPT PROPERTIES TRUST
FORM 10-Q
MARCH 31, 2001
INDEX
Page
----
PART I Financial Information
Item 1. Financial Statements (unaudited)
Consolidated Balance Sheets - March 31, 2001 and
December 31, 2000 1
Consolidated Statements of Income - Three Months Ended
March 31, 2001 and 2000 2
Consolidated Statements of Cash Flows - Three Months Ended
March 31, 2001 and 2000 3
Notes to Consolidated Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 6
Item 3. Quantitative and Qualitative Disclosures About Market Risk 8
PART II Other Information
Item 5. Other Events 9
Item 6. Exhibits and Reports on Form 8-K 9
Signatures 12
CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except per share amounts)
March 31, December 31,
2001 2000
-------------- --------------
(unaudited) (note 1)
ASSETS
Real estate properties, at cost:
Land $ 299,545 $ 300,548
Buildings and improvements 2,243,499 2,245,475
----------- -----------
2,543,044 2,546,023
Less accumulated depreciation 174,447 160,015
----------- -----------
2,368,597 2,386,008
Real estate mortgages receivable, net 1,300 6,449
Equity investments 310,618 314,099
Cash and cash equivalents 85,754 92,681
Restricted cash 17,952 23,126
Rents receivable, net 39,849 38,335
Other assets, net 47,681 39,445
----------- -----------
$ 2,871,751 $ 2,900,143
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Senior notes payable, net $ 757,362 $ 757,314
Mortgage notes payable, net 342,578 343,089
Convertible subordinated debentures -- 202,547
Accounts payable and accrued expenses 27,144 40,611
Deferred rents 4,773 6,059
Security deposits 6,873 6,611
Due to affiliates 16,244 14,700
Commitments and contingencies
Shareholders' equity:
Preferred shares of beneficial interest, $0.01 par value: 50,000,000
shares authorized, 8,000,000 shares and zero shares issued and
outstanding at March 31, 2001, and December 31, 2000,respectively 193,277 --
Common shares of beneficial interest, $0.01 par value: 150,000,000
shares uthorized, 130,965,147 shares and 131,948,847 shares issued
and outstanding at March 31, 2001, and December 31, 2000,
respectively
1,310 1,319
Additional paid-in capital 1,963,839 1,971,679
Cumulative net income 846,744 820,948
Cumulative common distributions (1,285,129) (1,258,739)
Unrealized holding losses on investments (3,264) (5,995)
----------- -----------
Total shareholders' equity 1,716,777 1,529,212
----------- -----------
$ 2,871,751 $ 2,900,143
=========== ===========
See accompanying notes
1
CONSOLIDATED STATEMENTS OF INCOME
(amounts in thousands, except per share amounts)
(unaudited)
Three Months Ended March 31,
--------------------------------
2001 2000
--------------- -------------
Revenues:
Rental income $ 96,714 $ 99,395
Interest and other income 3,116 859
--------- ---------
Total revenues 99,830 100,254
--------- ---------
Expenses:
Operating expenses 35,035 33,827
Interest 24,199 25,098
Depreciation and amortization 16,157 15,874
General and administrative 4,093 4,697
Impairment of assets (3,955) --
--------- ---------
Total expenses 75,529 79,496
--------- ---------
Income before equity in earnings of equity investments
and extraordinary item 24,301 20,758
Equity in earnings of equity investments 3,312 5,692
--------- ---------
Income before extraordinary item 27,613 26,450
Extraordinary item - early extinguishment of debt (1,817) --
--------- ---------
Net income 25,796 26,450
Preferred distributions (2,030) --
--------- ---------
Net income available for common shareholders $ 23,766 $ 26,450
========= =========
Weighted average common shares outstanding 131,593 131,921
========= =========
Basic and diluted earnings per common share:
Income before extraordinary item $ 0.19 $ 0.20
Extraordinary item - early extinguishment of debt (0.01) --
--------- ---------
Net income $ 0.18 $ 0.20
========= =========
See accompanying notes
2
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
(unaudited)
Three Months Ended March 31,
--------------------------------
2001 2000
------------ -----------
Cash flows from operating activities:
Net income $ 25,796 $ 26,450
Adjustments to reconcile net income to cash provided by operating
activities:
Depreciation 14,803 14,855
Amortization 1,354 1,019
Amortization of bond discounts 352 37
Impairment of assets (3,955) --
Equity in earnings of equity investments (3,312) (5,692)
Distributions from equity investments 6,643 10,445
Extraordinary item 1,817 --
Change in assets and liabilities:
Increase in rents receivable and other assets (10,445) (10,387)
Decrease in accounts payable and accrued expenses (13,441) (11,152)
Decrease in deferred rents (1,286) (1,521)
Increase in security deposits 262 133
Increase in due to affiliates 1,544 3,464
--------- ---------
Cash provided by operating activities 20,132 27,651
--------- ---------
Cash flows from investing activities:
Real estate acquisitions and improvements (7,271) (3,638)
Proceeds from repayment of real estate mortgages receivable 9,104 3,507
Proceeds from sale of real estate 10,444 --
Decrease in restricted cash 5,174 --
--------- ---------
Cash provided by (used for) investing activities 17,451 (131)
--------- ---------
Cash flows from financing activities:
Repurchase of common shares (7,849) --
Proceeds from issuance of preferred shares 193,277 --
Proceeds from borrowings -- 35,000
Payments on borrowings (203,358) (28,296)
Deferred finance costs incurred (190) (5)
Distributions to common shareholders (26,390) (42,211)
--------- ---------
Cash used for financing activities (44,510) (35,512)
--------- ---------
Decrease in cash and cash equivalents (6,927) (7,992)
Cash and cash equivalents at beginning of period 92,681 13,206
--------- ---------
Cash and cash equivalents at end of period $ 85,754 $ 5,214
========= =========
Supplemental cash flow information:
Interest paid (excluding capitalized interest of $356 and $466,
respectively) $ 28,944 $ 27,933
Non-cash financing activities:
Issuance of common shares $-- $ 215
See accompanying notes
3
HRPT PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 1. Basis of Presentation
The unaudited quarterly financial statements of HRPT Properties Trust
and its subsidiaries (the "Company") have been prepared in accordance with
accounting principles generally accepted in the United States for interim
financial information and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by accounting principles generally accepted in the United
States for complete financial statements. In the opinion of management, all
adjustments (consisting only of normal recurring adjustments) considered
necessary for a fair presentation have been included. Operating results for
interim periods are not necessarily indicative of the results that may be
expected for the full year.
The balance sheet at December 31, 2000, has been derived from the
December 31, 2000, audited financial statements but does not include all of the
information and footnotes required by accounting principles generally accepted
in the United States for complete financial statements.
Reclassifications have been made to the prior year's financial
statements to conform to the current year's presentation.
Note 2. Comprehensive Income
The following is a reconciliation of net income to comprehensive income
for the three months ended March 31, 2001 and 2000:
Three Months Ended March 31,
-------------------------------
2001 2000
----------- -----------
Net income $ 25,796 $ 26,450
Other comprehensive income:
Unrealized holding gains (losses) on
investments 2,731 (831)
-------- --------
Comprehensive income $ 28,527 $ 25,619
======== ========
At March 31, 2001, the Company's investments in marketable equity
securities were included in other assets and had a fair value of $8,075 and
unrealized holding losses of $3,264. At May 10, 2001, these investments had a
fair value of $8,408 and unrealized holding losses of $2,931.
Note 3. Equity Investments
The Company's financial statements included the following equity
investments:
Equity in Earnings Equity Investments
--------------------------------- -------------------------------
Three Months Ended March 31,
--------------------------------- March 31, December 31,
2001 2000 2001 2000
---- ---- ---- ----
SNH $1,308 $3,727 $205,527 $208,062
HPT 2,004 1,965 105,091 106,037
$3,312 $5,692 $310,618 $314,099
At March 31, 2001, the Company owned 12,809,238 common shares or 49.4%
of Senior Housing Properties Trust ("SNH") with a carrying value of $205,527 and
a fair value based on quoted market prices of $144,360.
4
HRPT PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(dollars in thousands, except per share amounts)
At March 31, 2001, the Company owned 4,000,000 common shares or 7.1% of
Hospitality Properties Trust ("HPT") with a carrying value of $105,091 and a
fair value based on quoted market prices of $105,600.
Note 4. Real Estate Properties and Mortgages Receivable, net
During the three months ended March 31, 2001, the Company sold three
properties for net cash proceeds of $10,444 and funded $7,271 of improvements to
its existing properties. In addition, the Company received $9,104 from the full
repayment of a real estate mortgage that was secured by two properties. In
connection with this repayment, the Company reversed impairment loss reserves
recorded during 1999 totaling $3,955.
Note 5. Indebtedness
During February 2001 the Company redeemed at par all $40,000 of its
7.25% convertible subordinated debentures due October 2001. In March 2001 the
Company redeemed at par all $162,000 of its outstanding 7.50% convertible
subordinated debentures due October 2003. The redemptions were funded using cash
on hand and proceeds from the preferred share offering discussed in Note 6. In
connection with these redemptions, the Company recognized an extraordinary loss
of $1,817 from the write-off of deferred financing fees.
In April 2001 the Company entered into a new $425,000 unsecured
revolving credit facility (the "New Credit Facility"). The New Credit Facility
bears interest at LIBOR plus a premium and matures in April 2005. The New Credit
Facility includes an accordian feature which allows it to be expanded, in
certain circumstances, by up to $200,000. The Company's $500,000 unsecured
revolving credit facility which was scheduled to mature in 2002, was terminated
by the Company in April 2001. In connection with this termination, the Company
will recognize an extraordinary loss of approximately $320 from the write-off of
deferred financing fees during the second quarter of 2001.
Note 6. Shareholders' Equity
In February 2001 the Company issued 8,000,000 series A cumulative
redeemable preferred shares in a public offering for net proceeds of $193,277.
Each series A preferred share requires dividends of $2.46875 per annum, payable
in equal quarterly payments. Each series A preferred share has a liquidation
preference of $25.00 and is redeemable, at the Company's option, for $25.00 plus
accrued and unpaid dividends at any time on or after February 22, 2006. On April
9, 2001, the Company announced a distribution on these series A cumulative
redeemable preferred shares of $0.5555 per share which will be paid on or about
May 15, 2001, to shareholders of record as of May 1, 2001.
On April 4, 2001, the Company declared a distribution on its common
shares with respect to the quarter ended March 31, 2001, of $0.20 per common
share, or approximately $26,100, which will be distributed on or about May 25,
2001, to shareholders of record on April 24, 2001.
The Board of Trustees has authorized the Company to repurchase up to 14
million common shares. During the three months ended March 31, 2001, the Company
repurchased 983,700 common shares for $7,849, including transaction costs.
Subsequent to March 31, 2001, through May 10, 2001, the Company repurchased an
additional 322,200 common shares for $2,737, including transaction costs.
In May 2001 the Company's three independent trustees were each awarded
500 common shares under the Company's 1992 Incentive Share Award Plan as part of
their annual fees. The shares awarded to the trustees vest immediately.
5
HRPT PROPERTIES TRUST
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
This discussion includes references to Funds from Operations ("FFO").
FFO, as defined in the White Paper on Funds From Operations which was approved
by the Board of Governors of the National Association of Real Estate Investment
Trusts ("NAREIT") in March 1995 and as clarified from time to time, is "net
income (computed in accordance with generally accepted accounting principles),
excluding gains (or losses) from sales of property, plus depreciation and
amortization, and after adjustment for unconsolidated partnerships and joint
ventures. Adjustments for unconsolidated partnerships and joint ventures will be
calculated to reflect funds from operations on the same basis." We consider FFO
to be an appropriate measure of performance for an equity REIT, along with cash
flow from operating activities, financing activities and investing activities,
because it provides investors with an indication of an equity REIT's ability to
incur and service debt, make capital expenditures, pay distributions and fund
other cash needs. We compute FFO in accordance with the standards established by
NAREIT including adjustments for our pro rata share of FFO of Hospitality
Properties Trust ("HPT") and Senior Housing Properties Trust ("SNH"), but
excluding unusual and non-recurring items, certain non-cash items, and gains on
sales of undepreciated properties, which may not be comparable to FFO reported
by other REITs that define the term differently. FFO does not represent cash
generated by operating activities in accordance with GAAP and should not be
considered as an alternative to net income, determined in accordance with GAAP,
as an indication of financial performance or the cash flow from operating
activities, determined in accordance with GAAP, or as a measure of liquidity.
RESULTS OF OPERATIONS
Three Months Ended March 31, 2001, Compared to Three Months Ended March 31, 2000
Total revenues for the three months ended March 31, 2001, decreased to
$99.8 million from $100.3 million for the three months ended March 31, 2000.
Rental income decreased in 2001 by $2.7 million and interest and other income
increased in 2001 by $2.3 million, compared to the prior period. Rental income
decreased primarily because of the sale of three properties in 2001 and four
properties during 2000 and a decline in property occupancy to 96% in the 2001
period from 98% in the 2000 period. Interest and other income increased
primarily as a result of higher cash balances invested in 2001 compared to 2000,
resulting primarily from a preferred share offering completed in February 2001
and a debt financing completed in December 2000.
Total expenses for the three months ended March 31, 2001, decreased to
$75.5 million from $79.5 million for the three months ended March 31, 2000.
Included in total expenses for the 2001 period is the reversal of an impairment
loss reserve recorded during 1999 totaling $4.0 million. Operating expenses
increased by $1.2 million primarily as a result of higher utility costs and real
estate taxes, offset by a decrease in operating expenses from the sale of
properties during 2000 and 2001. Interest expense decreased by $899,000 during
2001 compared to the prior year period, as a result of lower average borrowings
outstanding. Depreciation and amortization increased by $283,000 and general and
administrative expenses decreased by $604,000. The decrease in general and
administrative expenses is due primarily to lower legal and professional fees.
Equity in earnings of equity investments decreased by $2.4 million for
the three months ended March 31, 2001, compared to the same period in 2000. The
decrease is due to lower earnings from SNH resulting from its settlement of
tenant bankruptcies and its sale of properties in 2000.
Net income before preferred distributions decreased to $25.8 million,
or $0.20 per common share, for the 2001 period, from $26.5 million, or $0.20 per
common share, for the 2000 period. The change is due primarily to assets sold
during 2000 and the decrease in property occupancy, the write-off of deferred
financing fees associated with the convertible subordinated debentures which
were repaid during 2001 and the decrease in equity in earnings of SNH, offset by
the reversal of an impairment loss reserve in 2001 and the increase in interest
earned on financing proceeds received in December 2000 and interest earned on
proceeds of the series A preferred shares issued during February 2001.
6
HRPT PROPERTIES TRUST
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations - continued
FFO for the three months ended March 31, 2001, was $42.3 million, or
$0.32 per common share, and $46.1 million, or $0.35 per common share, for the
2000 period. The decrease in FFO is due primarily to assets sold during 2000 and
the decrease in property occupancy, the decrease in equity in earnings of SNH
and dividends on series A preferred shares, offset by the increase in interest
earned on larger cash balances.
LIQUIDITY AND CAPITAL RESOURCES
Total assets were $2.9 billion at March 31, 2001, and December 31,
2000.
During the three months ended March 31, 2001, we sold three properties
for net cash proceeds of $10.4 million. We also funded $7.3 million of
improvements to our existing properties and received $9.1 million from the full
repayment of a real estate mortgage that was secured by two properties. In
connection with this repayment, we reversed an impairment loss reserve recorded
during 1999 of $4.0 million.
At March 31, 2001, we owned 12.8 million, or 49.4%, of the common
shares of beneficial interest of SNH with a carrying value of $205.5 million and
a market value of $144.4 million, and 4.0 million, or 7.1%, of the common shares
of beneficial interest of HPT with a carrying value of $105.1 million and a
market value of $105.6 million.
During February 2001 we redeemed at par all $40 million of our 7.25%
convertible subordinated debentures due October 2001. In March 2001 we redeemed
at par all $162 million of our outstanding 7.50% convertible subordinated
debentures due October 2003. We funded these redemptions using cash on hand and
proceeds from the preferred share offering discussed below. In connection with
these redemptions, we recognized an extraordinary loss of $1.8 million from the
write-off of deferred financing fees.
In February 2001 we completed a $200 million public offering of 9 7/8%
series A cumulative redeemable preferred shares raising net proceeds of $193.3
million. Approximately half of the net proceeds were used to redeem all of our
outstanding convertible subordinated debentures. The remaining proceeds are
available to repurchase some of our common shares and for general business
purposes, including the repayment of additional debt. On April 9, 2001, we
announced a distribution on our series A cumulative redeemable preferred shares
of $0.5555 per share which will be distributed on or about May 15, 2001, to
shareholders of record as of May 1, 2001. This distribution relates to the
period from (but excluding) the original issue date through May 15, 2001, which
is for less than one full quarter.
Our Board of Trustees has authorized the repurchase of up to 14 million
common shares. During the three months ended March 31, 2001, we repurchased
983,700 common shares for $7.8 million, including transaction costs. Subsequent
to March 31, 2001, and through May 10, 2001, we repurchased 322,200 common
shares for $2.7 million, including transaction costs.
At March 31, 2001, we had $85.8 million of cash and cash equivalents,
zero outstanding on our unsecured revolving credit facility and $2.3 billion
available on our $3 billion effective shelf registration statement. Cash and
cash equivalents increased in 2001 primarily due to excess proceeds received
from a debt financing during December 2000 and the preferred share offering
described above. We expect to use these excess proceeds to repurchase some of
our common shares or for general business purposes, including the possible
repayment of additional debt and property acquisitions.
In April 2001 we entered into a new $425 million unsecured revolving
credit facility (the "New Credit Facility"). The New Credit Facility bears
interest at LIBOR plus a premium and matures in April 2005. This New Credit
Facility replaces our $500 million unsecured revolving credit facility which was
scheduled to mature in 2002. The New Credit Facility includes an accordian
feature which allows it to be expanded, in certain circumstances, by up to $200
million. Our credit facility is available for property acquisitions, working
capital and for general business purposes.
7
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations - continued
There can be no assurances that debt or equity financing will be
available to fund future business activities, but we do expect that financing
will be available. As of March 31, 2001, our debt as a percentage of total book
capitalization was approximately 39%.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market changes in interest rates. We manage our
exposure to this market risk through our monitoring of available financing
alternatives. Our strategy to manage exposure to changes in interest rates is
unchanged from December 31, 2000. Furthermore, we do not foresee any significant
changes in our exposure to fluctuations in interest rates or in how this
exposure is managed in the near future. At March 31, 2001, our total outstanding
debt of $1.1 billion consisted of the following fixed rate notes:
Amount Coupon Maturity
Unsecured senior notes:
$160.0 million 6.875% 2002
150.0 million 6.75% 2002
100.0 million 6.70% 2005
90.0 million 7.875% 2009
30.0 million 8.875% 2010
20.0 million 8.625% 2010
65.0 million 8.375% 2011
143.0 million 8.50% 2013
Secured notes:
$3.5 million 9.12% 2004
10.9 million 8.40% 2007
17.4 million 7.02% 2008
11.3 million 8.00% 2008
9.9 million 7.66% 2009
259.5 million 6.814% 2011
44.0 million 6.794% 2029
No principal repayments are due on the unsecured senior notes until
maturity. If all of the unsecured senior notes and secured notes were to be
refinanced at interest rates which are one percentage point higher than shown
above, our per annum interest cost would increase by approximately $11.1
million. The secured notes are secured by 25 of our office properties located in
12 office complexes and require principal and interest payments through
maturity.
The market prices, if any, of each of our fixed rate obligations as of
March 31, 2001, are sensitive to changes in interest rates. Typically, if market
rates of interest increase, the current market price of a fixed rate obligation
will decrease. Conversely, if market rates of interest decrease, the current
market price of a fixed rate obligation will typically increase. Based on the
balances outstanding at March 31, 2001, and discounted cash flow analyses, a
hypothetical immediate one percentage point change in interest rates would
change the fair value of our fixed rate debt obligations by approximately $34.1
million.
Each of our obligations for borrowed money has provisions that allow us
to make repayments earlier than the stated maturity date. In some cases, we are
not allowed to make early repayment prior to a cutoff date and in other cases we
are allowed to make prepayments only at a premium to face value. In any event,
these prepayment rights may afford us the opportunity to mitigate the risk of
refinancing at maturity at higher rates by refinancing at lower rates prior to
maturity.
8
HRPT PROPERTIES TRUST
Item 3. Quantitative and Qualitative Disclosures About Market Risk - continued
In April 2001 we entered into a new $425 million unsecured revolving
credit facility which will expire in April 2005. This new revolving credit
facility will replace our $500 million unsecured revolving credit facility which
had zero outstanding at March 31, 2001. We borrow in U.S. dollars and borrowings
under the new facility are subject to interest at LIBOR plus a premium.
Accordingly, we are vulnerable to changes in U.S. dollar based short term rates,
specifically LIBOR.
During the past several months, short-term U.S. dollar based interest
rates have fluctuated. We are unable to predict the direction or amount of
interest rate changes during the next year. As of March 31, 2001, we had zero
outstanding under our revolving credit facility and we did not have any interest
rate cap or other hedge agreements to protect against future rate increases, but
we may enter such agreements in the future. Also, we may incur additional debt
at floating or fixed rates, which would increase our exposure to market changes
in interest rates.
Part II Other Information
Item 5. Other Events
New Credit Facility - As previously announced, on April 30, 2001, we entered
into a new unsecured senior revolving credit facility with a group of banks in
the initial amount of $425 million. The new credit facility includes an
accordion feature, which allows us to seek additional lender commitments to
expand the facility by up to $200 million to create a total facility of $625
million. The new credit facility matures on April 30, 2005 and replaced our
previous $500 million unsecured senior revolving credit facility, which was
scheduled to mature in April 2002. Interest under the new credit facility is
generally calculated at LIBOR plus spreads which vary based on our credit
ratings, and we are also required to pay a facility fee on the aggregate lender
commitments. The proceeds of the new credit facility are available for our
general business purposes, including acquisitions. The new credit facility
documentation has several covenants, including covenants to maintain a minimum
consolidated net worth and which prohibit us and our subsidiaries from incurring
debt which would result in our total debt to exceed 55% of our total asset value
(each as determined under definitions contained in the new credit facility). A
copy of the new credit facility is filed as an exhibit to this Report. If you
want more information concerning the new credit facility, you should refer to
that exhibit.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
10.1 Credit Agreement, dated as of April 30, 2001, by and among the
Company; Each of the financial institutions initially a
signatory thereto together with their assignees; First Union
National Bank, as Agent; First Union Securities, Inc., as Lead
Arranger; Fleet National Bank, as Co-Lead Arranger; Wells
Fargo Bank, National Association, as Syndication Agent; and
each of Commerzbank Aktiengesellschaft New York Branch, The
Bank of New York and Fleet National Bank, as Documentation
Agents. (filed herewith)
9
HRPT PROPERTIES TRUST
Item 6. Exhibits and Reports on Form 8-K - continued
(b) Reports on Form 8-K:
1. Current Report on Form 8-K, dated December 15, 2000, filing
as exhibits, (a) Loan and Security Agreement, dated December
15, 2000, entered into by and between Cedars LA LLC, Herald
Square LLC, Indiana Avenue LLC, Bridgepoint Property Trust,
Lakewood Property Trust and 1600 Market Street Property
Trust, collectively as Borrowers, and Merrill Lynch Mortgage
Lending, Inc., as Lender, (b) Promissory Note in the amount
of $260,000,000, dated December 15, 2000, issued by Cedars
LA LLC, Herald Square LLC, Indiana Avenue LLC, Bridgepoint
Property Trust, Lakewood Property Trust and 1600 Market
Street Property Trust, collectively as Borrowers, to Merrill
Lynch Mortgage Lending, Inc., as Lender, (c) Deed of Trust,
Assignment of Leases and Rents, Security Agreement and
Fixture Filing, dated December 15, 2000, made by Bridgepoint
Property Trust in favor of William Z. Fairbanks, Jr. and for
the benefit of Merrill Lynch Mortgage Lending, Inc., (d)
Deed of Trust, Assignment of Leases and Rents, Security
Agreement and Fixture Filing, dated December 15, 2000, made
by Lakewood Property Trust in favor of William Z. Fairbanks,
Jr. and for the benefit of Merrill Lynch Mortgage Lending,
Inc., (e) Deed of Trust, Assignment of Leases and Rents,
Security Agreement and Fixture Filing, dated December 15,
2000, made by Herald Square LLC to Lawyers Title Realty
Services, Inc. for the benefit of Merrill Lynch Mortgage
Lending, Inc., (f) Deed of Trust, Assignment of Leases and
Rents, Security Agreement and Fixture Filing, dated December
15, 2000, made by Indiana Avenue LLC to Lawyers Title Realty
Services, Inc. for the benefit of Merrill Lynch Mortgage
Lending, Inc., (g) Deed of Trust, Assignment of Leases and
Rents, Security Agreement and Fixture Filing, dated December
15, 2000, made by Cedars LA LLC to Lawyers Title Company for
the benefit of Merrill Lynch Mortgage Lending, Inc., (h)
Open-End Leasehold Mortgage, Assignment of Leases and Rents,
Security Agreement and Fixture Filing, dated December 15,
2000, made by 1600 Market Street Property Trust, as
Mortgagor, to and for the benefit of Merrill Lynch Mortgage
Lending, Inc., as Mortgagee, (i) Exceptions to Non-Recourse
Guaranty, dated December 15, 2000, entered into by Hub
Realty College Park I, LLC, as Guarantor, for the benefit of
Merrill Lynch Mortgage Lending, Inc., as Lender, in
reference to $260,000,000 loan, (j) Loan and Security
Agreement, dated December 15, 2000, entered into by and
between Franklin Plaza Property Trust, as Borrower, and
Merrill Lynch Mortgage Lending, Inc., as Lender, (k)
Promissory Note in the amount of $44,000,000, dated December
15, 2000, issued by Franklin Plaza Property Trust, as
Borrower, to Merrill Lynch Mortgage Lending, Inc., as
Lender, (l) Open-End Leasehold Mortgage, Assignment of
Leases and Rents, Security Agreement and Fixture Filing,
dated December 15, 2000, made by Franklin Plaza Property
Trust, as Mortgagor, to and for the benefit of Merrill Lynch
Mortgage Lending, Inc., as Mortgagee and, (m) Exceptions to
Non-Recourse Guaranty, dated December 15, 2000, entered into
by Hub Realty College Park I, LLC, as Guarantor, for the
benefit of Merrill Lynch Mortgage Lending, Inc., as Lender,
in reference to $44,000,000 loan (Item 7).
2. Current Report on Form 8-K, dated February 12, 2001,
relating to an offering of series A cumulative redeemable
preferred shares. (Item 5).
3. Current Report on Form 8-K, dated February 16, 2001,
relating to the sale of 8,000,000 shares of series A
cumulative redeemable preferred shares, and filing as
exhibits, (a) Purchase Agreement, dated as of February 16,
2001 by and among HRPT Properties Trust and the several
underwriters named therein relating to 8,000,000 9 7/8%
Series A Cumulative Redeemable Preferred Shares, (b)
Articles Supplementary relating to the 9 7/8% Series A
Cumulative Redeemable Preferred Shares, (c) Form of
temporary 9 7/8% Series A Cumulative Redeemable Preferred
Share Certificate, (d) Opinion of Sullivan & Worcester LLP
re: tax matters, (e) Computation of Ratio of Earnings to
Fixed Charges, and (f) Consent of Sullivan & Worcester LLP.
(Items 5 and 7).
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HRPT PROPERTIES TRUST
CERTAIN IMPORTANT FACTORS
THIS QUARTERLY REPORT ON FORM 10-Q CONTAINS FORWARD LOOKING STATEMENTS
WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND
THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. THESE FORWARD LOOKING
STATEMENTS APPEAR IN A NUMBER OF PLACES IN THIS foRM 10-Q AND INCLUDE REFERENCES
TO PROPERTY ACQUISITIONS AND SALES, DEBT FINANCING POSSIBILITIES, INCLUDING THE
REPAYMENT OF ADDITIONAL DEBT, POSSIBLE SHARE REPURCHASES AND OTHER MATTERS.
THESE FORWARD LOOKING STATEMENTS ARE BASED UPON OUR CURRENT BELIEFS AND
EXPECTATIONS, BUT THEY ARE NOT GUARANTEED AND THEY MAY NOT OCCUR. FOR EXAMPLE,
WE MAY BE UNABLE TO CONCLUDE DEBT FINANCINGS ON ACCEPTABLE TERMS. SIMILARLY WE
MAY DECIDE TO REPURCHASE SHARES AT ANY TIME OR WE MAY DECIDE NOT TO DO SO.
INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE UPON FORWARD LOOKING
STATEMENTS.
The Amended and Restated Declaration of Trust establishing the Company,
dated July 1, 1994, a copy of which, together with all amendments thereto (the
"Declaration"), is duly filed in the Office of the Department of Assessments and
Taxation of the State of Maryland, provides that the name "HRPT Properties
Trust" refers to the trustees under the Declaration collectively as trustees,
but not individually or personally, and that no trustee, officer, shareholder,
employee or agent of the Company shall be held to any personal liability,
jointly or severally, for any obligation of, or claim against, the Company. All
persons dealing with the Company, in any way, shall look only to the assets of
the Company for the payment of any sum or the performance of any obligation.
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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.
HRPT PROPERTIES TRUST
By: /s/ John A. Mannix
John A. Mannix
President and Chief Operating Officer
Dated: May 15, 2001
By: /s/ John C. Popeo
John C. Popeo
Treasurer and Chief Financial Officer
Dated: May 15, 2001
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