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Exhibit No. 99.1
HEALTHCARE REALTY
TRUST
N E W S R E L E A S E
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HEALTHCARE REALTY TRUST SIGNS
DEFINITIVE AGREEMENT TO
ACQUIRE CAPSTONE CAPITAL CORPORATION
NASHVILLE, TENNESSEE and BIRMINGHAM, ALABAMA, June 8, 1998 -- Healthcare
Realty Trust Incorporated (NYSE:HR) and Capstone Capital Corporation (NYSE:CCT)
announced today the signing of a definitive agreement pursuant to which
Healthcare Realty Trust will acquire Capstone Capital in a stock-for-stock
merger in which the stockholders of Capstone Capital will receive a fixed ratio
of .8518 share of Healthcare Realty Trust common stock in exchange for each
share of Capstone Capital common stock. In addition, holders of Capstone Capital
preferred stock will receive one share of Healthcare Realty Trust voting
preferred stock in exchange for each share of Capstone Capital preferred stock.
The proposed transaction, valued at approximately $900 million (including the
assumption of $268 million in debt and issuance of $75 million in preferred
stock), will add Capstone Capital's 159 properties to Healthcare Realty Trust's
existing portfolio of 91 properties, reinforcing Healthcare Realty Trust's
position as the nation's leading provider of integrated real estate services to
the healthcare industry. Healthcare Realty Trust will maintain its current Board
of Directors and existing headquarters in Nashville. The definitive purchase
agreement has non-compete and consulting agreements with certain key officers
and directors of Capstone Capital.
The transaction, approved by the Boards of Directors of both companies, is
subject to approval of the shareholders of both companies and the registration
of shares to be issued in connection with the transaction. The transaction will
be treated as a purchase for financial accounting purposes, will be a tax-free
exchange to Capstone shareholders and is expected to close by the end of the
third quarter. When completed, Healthcare Realty Trust is expected to have a
market capitalization in excess of $1.1 billion based upon today's
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Healthcare Realty to Purchase Capstone Capital
June 8, 1998
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closing share price and will own 250 properties in 68 markets, leased to 66
healthcare providers. This transaction will expand Healthcare Realty Trust's
client relationships to include most major for-profit healthcare providers in
the United States. Healthcare Realty Trust will operate in 24 new markets and
will enjoy an increased presence in four out of the top five states for each of
the predecessor companies. A number of Capstone properties can be managed by
Healthcare Realty Trust`s management division.
David R. Emery, Healthcare Realty Trust's Chairman and Chief Executive
Officer commented, "The combination of the two companies will enable Healthcare
Realty Trust to further its strategic goals and will provide a unique
opportunity to expand our portfolio of high-quality properties affiliated with
leading healthcare providers. We expect to provide property management services
to many of the acquired properties and to provide property management and real
estate services to other properties of Capstone's clients. It is anticipated
that the acquisition will be accretive to Healthcare Realty Trust's funds from
operations for 1998 and 1999 and at the closing of the transaction, the
debt-to-book capitalization will be less than 30%."
Richard M. Scrushy, Capstone's Chairman stated, "We are pleased to be able
to align our shareholders with such a quality company as Healthcare Realty
Trust; and in doing so, create a significant platform from which the combined
companies will be better able to serve the ever-growing real estate needs of the
healthcare industry. We are extremely happy with what we have accomplished at
Capstone, growing it from assets of $100 million in 1994 to over $750 million
today while delivering solid returns to our shareholders. However, we believe
that the rapidly changing real estate market requires scale to drive down
capital costs and delivery of the broad range of professional real estate
services that Healthcare Realty Trust can provide. While Capstone would
eventually achieve the desired scale, this merger allows us to accomplish many
of our goals instantly, which is good for our shareholders."
John W. McRoberts, Capstone's President and Chief Executive Officer
commented, "We are excited over the prospects of bringing together these two
quality companies. The
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Healthcare Realty to Purchase Capstone Capital
June 8, 1998
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combined entity will have a market capitalization in excess of $1.1 billion and
will be a major player in the healthcare REIT industry. The synergies produced
through overhead reductions, enhanced access to capital markets and increased
revenue through property management services will all work to create value for
the shareholders."
Healthcare Realty Trust is a real estate investment trust that integrates
owning, managing and developing income-producing real estate properties
associated with the delivery of healthcare services throughout the United
States. The Company's portfolio currently is comprised of seven facility types,
located in 44 markets nationwide, and operated pursuant to contractual
arrangements with 19 healthcare providers. Since commencing operations in June
1993, the Company has invested or committed to invest, over $523 million in 91
income-producing real estate properties, totaling over 4.4 million square feet.
The Company currently provides property management services for 281 properties,
totaling over 6.3 million square feet, and third-party asset management services
for 247 properties, totaling over 1.2 million square feet.
Capstone Capital Corporation is a self-administered real estate investment
trust (REIT) that owns, leases and provides mortgage financing to properties
associated with the delivery of healthcare services. Since commencing operations
in June 1994, Capstone has invested $715 million in 159 properties located in 30
states. The Company's portfolio is diversified by operator, facility type, and
healthcare industry segment.
Forward-looking statements contained in this press release are made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements may be significantly impacted by
certain risks and uncertainties described in the Company's Annual Report on Form
10-K filed with the Securities and Exchange Commission for the year ended
December 31, 1997.
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For further information, please contact:
David R. Emery John W. McRoberts
Chairman and Chief Executive Officer President and Chief Executive Officer
Healthcare Realty Trust Capstone Capital Corporation
(615) 269-8175 (205) 968-0011
Timothy G. Wallace
Executive Vice President, Chief Financial Officer
Healthcare Realty Trust
(615) 269-8175
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