Filed Pursuant to Rule 424(b)(5)
File No. 333-26887
PROSPECTUS SUPPLEMENT
(To Prospectus Dated May 30, 1997)
1,481,799 Shares
Health and Retirement Properties Trust
Common Shares of Beneficial Interest
Health and Retirement Properties Trust (the "Company" or "HRP") is a
real estate investment trust (a "REIT"), which invests primarily in healthcare
related real estate and office buildings leased to various agencies of the
United States Government. The Company's common shares of beneficial interest
(the "Shares") offered hereby (this "Offering") are being issued and sold by the
Company. The Shares are traded on the New York Stock Exchange (the "NYSE") under
the symbol "HRP." On March 24, 1998 the last reported sale price for the Shares
on the NYSE was $20.4375 per Share.
Wheat First Securities, Inc. (the "Underwriter") has agreed to purchase
the Common Stock offered hereby from the Company at a price of $19.415625 per
share, resulting in aggregate proceeds to the Company of $28,695,053.71, after
deducting estimated expenses of $75,000 payable by the Company, subject to the
terms and conditions set forth in the Underwriting Agreement. The Underwriter
intends to sell the Common Stock to Van Kampen American Capital for an aggregate
price of $29,072,896.37. Van Kampen American Capital intends to deposit the
Common Stock, together with the common stock of other entities also acquired
from the Underwriter, into the Wheat First Union REIT Income & Growth Trust,
Series 1 (the "Trust"), in exchange for Units in the Trust. The Company has
agreed to indemnify the Underwriter against certain liabilities, including
liabilities under the Securities Act of 1933, as amended (the "Securities Act").
See "Underwriting."
--------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
--------------------------
The Shares are offered by the Underwriter subject to prior sale, when,
as and if accepted by the Underwriter and subject to certain conditions. It is
expected that delivery of the Shares will be made on or about March 27, 1998,
through the facilities of The Depository Trust Company, New York, New York.
--------------------------
WHEAT FIRST UNION
--------------------------
The date of this Prospectus Supplement is March 24, 1998
<PAGE>
References in this Prospectus Supplement to the "Company" or "HRP"
include consolidated subsidiaries unless the context indicates otherwise. Unless
otherwise noted, the data set forth below with respect to the Company's
investments and tenants is presented as of December 31, 1997 and without giving
effect to acquisitions which occurred or may occur after that date.
THE COMPANY
The Company is one of the largest publicly traded REITs in the United
States with an equity market capitalization of approximately $2.0 billion at
December 31, 1997. The Company has investments of approximately $2.2 billion in
217 properties located in 33 states and the District of Columbia. The Company
principally invests in healthcare related real estate and office buildings
leased to various agencies of the United States Government. In addition, 5% of
the Company's assets, at cost, is an equity investment in Hospitality Properties
Trust ("HPT"), a NYSE listed REIT formed by the Company which invests in hotels.
The principal executive offices of the Company are located at 400
Centre Street, Newton, Massachusetts 02158; and its telephone number is (617)
332-3990.
USE OF PROCEEDS
The net proceeds to the Company from the sale of the Shares offered
hereby, after deducting expenses related to this Offering, are approximately
$28.7 million. The net proceeds from this Offering are expected to be used to
reduce amounts outstanding under the Company's Bank Credit Facility, with any
remaining net proceeds to be used for general business purposes. Outstanding
amounts under the Company's Bank Credit Facility bear interest, at the Company's
option, at LIBOR plus a margin or prime, and the Bank Credit Facility expires in
2001. At December 31, 1997, the effective interest rate on outstanding amounts
under the Bank Credit Facility was 6.82% per annum.
S-2
<PAGE>
UNDERWRITING
Under the terms and subject to the conditions set forth in the Purchase
Agreement dated the date hereof (the "Underwriting Agreement"), between Wheat
First Securities, Inc. (the "Underwriter") and the Company, the Underwriter has
agreed to purchase and the Company has agreed to sell to the Underwriter
1,481,799 Shares at the price set forth on the cover page of this Prospectus
Supplement.
The Underwriting Agreement provides that the obligation of the
Underwriter to pay for and accept delivery of the Shares offered hereby is
subject to the approval of certain legal matters by counsel for the Underwriter
and to certain other conditions. The Underwriter is obligated to take and pay
for all of the Shares offered hereby if any such shares are taken.
The Underwriter intends to sell the Common Stock to Van Kampen American
Capital, which intends to deposit the Common Stock, along with the common stock
of other entities purchased from the Underwriter with the Trustee of the Trust
in exchange for units in the Trust. The Underwriter is not an affiliate of Van
Kampen American Capital or the Trust. The Underwriter intends to sell the Common
Stock to Van Kampen American Capital at an aggregate purchase price of
$29,072,896.37. It is anticipated that the Underwriter will also participate in
the distribution of the units in the Trust and will receive compensation of
3.25% of the public offering price of the units sold by it.
The Shares are listed on the New York Stock Exchange under the symbol
"HRP."
Pursuant to the Underwriting Agreement, the Company has agreed to
indemnify the Underwriter against certain liabilities, including liabilities
under the Securities Act, or to contribute to payments the Underwriter may be
required to make in respect thereof.
In the ordinary course of business, the Underwriter may from time to
time provide investment banking, commercial banking and financial advisory
services to the Company and its affiliates for which customary compensation will
be received.
LEGAL MATTERS
Certain legal matters with respect to the Shares offered by the Company
have been passed upon for the Company by Sullivan & Worcester LLP, Boston,
Massachusetts and for the Underwriter by Hunton & Williams, Richmond, Virginia.
Sullivan & Worcester LLP and Hunton & Williams will rely, as to all matters of
Maryland law, upon the opinion of Piper & Marbury L.L.P., Baltimore, Maryland.
Barry M. Portnoy was a partner in the firm of Sullivan & Worcester LLP until
March 31, 1997 and is a Managing Trustee of the Company and of HPT, a director
and 50% shareholder of HRPT Advisors, Inc. and REIT Management & Research, Inc.
and a director and/or significant shareholder of certain lessees of the Company.
Sullivan & Worcester LLP represents HPT, the other entities referred to above,
such lessees and certain of their affiliates on various matters.
S-3
<PAGE>
EXPERTS
In addition to the matters referred to in the accompanying Prospectus
under the caption "Experts," the following financial statements have been
audited by the following independent public accountants:
The consolidated financial statements and financial statement schedules
of the Company included or incorporated by reference in the Company's Annual
Report of Form 10-K for the year ended December 31, 1997, have been audited by
Ernst & Young LLP, independent auditors, as set forth in their reports thereon
included therein and incorporated herein by reference which, as to the years
1997 and 1996, is based in part on the report of Arthur Andersen LLP,
independent public accountants. Such consolidated financial statements are
incorporated herein by reference in reliance upon such reports given upon the
authority of such firms as experts in accounting and auditing.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents, which have been filed with the Commission
pursuant to the Exchange Act, are hereby incorporated in this Prospectus and
specifically made a part hereof by reference: (i) the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1997, as amended (the "Annual
Report"), (ii) the Company's Current Reports on Form 8-K dated February 11,
1998, February 12, 1998, February 17, 1998, February 18, 1998, February 19,
1998, February 27, 1998, March 19, 1998 and March 24, 1998; (iii) the
consolidated financial statements of Marriott International, Inc. ("MII"), at
and for the fiscal year ended January 2, 1998, as contained in MII's Annual
Report on Form 10-K for the year ended January 2, 1998 (Commission File No.
1-12188), and (iv) the description of the Company's Common Shares contained in
the Company's Registration Statement on Form 8-A dated November 8, 1986, as
amended by Form 8 dated July 30, 1991. All documents filed by the Company
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act (i) subsequent
to the date of this Prospectus and prior to the termination of the offering of
the Offered Shares and (ii) subsequent to the date of filing of the registration
statement of which this Prospectus forms a part and prior to effectiveness of
such registration statement shall be deemed to be incorporated by reference into
this Prospectus and to be a part hereof from the respective dates of filing of
such documents.
Any statement contained herein or in a document incorporated or deemed
to be incorporated herein by reference shall be deemed to be modified or
superseded for purposes of this Prospectus Supplement to the extent that a
statement contained herein, or in any other subsequently filed document that
also is or is deemed to be incorporated herein by reference, modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus Supplement.
The Company will provide without charge to each person to whom this
Prospectus Supplement is delivered, upon the written or oral request of such
person, a copy of any and all of the information that has been incorporated by
reference in this Prospectus Supplement (excluding exhibits unless such exhibits
are specifically requested or such exhibits are specifically incorporated by
reference into the information that this Prospectus Supplement incorporates).
Requests for such copies should be made to the Company at its principal
executive offices, 400 Centre Street, Newton, MA 02158, Attention: Investor
Relations, telephone (617) 332-3990.
FORWARD LOOKING STATEMENTS
THIS PROSPECTUS SUPPLEMENT CONTAINS FORWARD LOOKING STATEMENTS. SUCH
STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES WHICH COULD CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE ANTICIPATED OR PROJECTED.
S-4
<PAGE>
PROSPECTIVE PURCHASERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE
FORWARD LOOKING STATEMENTS WHICH SPEAK ONLY AS OF THE DATE HEREOF. THE COMPANY
UNDERTAKES NO OBLIGATION TO PUBLISH REVISED FORWARD LOOKING STATEMENTS TO
REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE HEREOF OR TO REFLECT THE
OCCURRENCE OF PRESENTLY UNANTICIPATED EVENTS.
--------------------------
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 "HEALTH AND RETIREMENT
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.
S-5
<PAGE>
No dealer, salesman or other person has been authorized to give any
information or to make any representation not contained or incorporated by
reference in this Prospectus Supplement and Prospectus. If given or made, such
information or representation must not be relied upon as having been authorized
by the Company or the Underwriter. This Prospectus Supplement and the Prospectus
do not constitute an offer to sell, or solicitation of an offer to buy, Common
Shares in any jurisdiction to any person to whom it is unlawful to make such
offer or solicitation in such jurisdiction. Neither the delivery of this
Prospectus Supplement or the Prospectus nor any sale made hereunder or
thereunder shall, under any circumstances, create any implication that there has
been no change in the affairs of the Company since the date hereof.
TABLE OF CONTENTS
Page
Prospectus Supplement
The Company..................................................S-2
Use of Proceeds..............................................S-2
Underwriting.................................................S-3
Legal Matters................................................S-3
Experts......................................................S-4
Incorporation of Certain Information by Reference............S-4
Forward Looking Statements...................................S-4
Prospectus
Available Information.......................................(ii)
Incorporation of Certain Documents by
Reference.................................................(ii)
The Company....................................................1
Use of Proceeds................................................1
Ratio of Earnings to Fixed Changes.............................1
Description of Debt Securities.................................1
Description of Shares.........................................12
Description of Preferred Shares...............................13
Description of Depositary Shares..............................18
Description of Warrants.......................................22
Description of Convertible Subordinated
Debentures..................................................22
Limitation of Liability; Shareholder Liability................23
Redemption; Business Combinations
and Control Share Acquisitions..............................23
Plan of Distribution..........................................26
Legal Matters.................................................27
Experts.......................................................28
1,481,799 Shares
HEALTH AND RETIREMENT
PROPERTIES TRUST
Common Shares
of Beneficial Interest
PROSPECTUS SUPPLEMENT
WHEAT FIRST UNION
March 24, 1998
