HRPT PROPERTIES TRUST, 424B3, 1999-06-11

HRPT PROPERTIES TRUST
424B3, 1999-06-11
REAL ESTATE INVESTMENT TRUSTS

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Subject to Completion
Preliminary prospectus supplement dated June 4, 1999

PROSPECTUS SUPPLEMENT
(To prospectus dated June 15, 1998)
$75,000,000

HRPT Properties Trust
% Monthly Income Senior Notes due 2011
----------------
The notes bear interest at the rate of % per year. Interest on the notes
is payable monthly on the 15th day of each month beginning , 1999.
The notes mature on , 2011. We may not redeem the notes prior to
, 2003. From and after , 2003, we may redeem some
or all of the notes from time to time before they mature. The redemption price
will equal the outstanding principal of the notes being redeemed plus accrued
interest. The notes do not have the benefit of a sinking fund.

The notes are unsecured and rank equally with all of our other unsecured
senior indebtedness. The notes will be issued only in registered form in
denominations of $1,000.

----------------

<TABLE>
<CAPTION>
Per Note Total
---------- ------
<S> <C> <C>
Public Offering Price (1) ................................... % $
Underwriting Discount ....................................... % $
Proceeds, before expenses, to HRPT Properties Trust ......... % $
</TABLE>

(1) Plus accrued interest from , 1999, if settlement occurs after
that date

We have granted the Underwriters a 30-day option to purchase additional
notes in an aggregate principal amount up to $11,250,000 on the same terms and
conditions as these notes in order to satisfy overallotments, if any.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus supplement or the accompanying prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
The notes will be ready for delivery in book-entry form only through The
Depository Trust Company on or about June , 1999.
----------------

The Joint Book-Running Managers are:

Merrill Lynch & Co. Salomon Smith Barney
----------------

A.G. Edwards & Sons, Inc.
Legg Mason Wood Walker
Incorporated

Morgan Stanley Dean Witter
PaineWebber Incorporated
Prudential Securities
----------------

The date of this prospectus supplement is June , 1999.
<PAGE>

Table of Contents

<TABLE>
<CAPTION>
Page
-----
Prospectus Supplement
<S> <C>
Summary .................................................................. S-3
Recent Developments ...................................................... S-7
Capitalization ........................................................... S-10
Use of Proceeds .......................................................... S-10
The Company .............................................................. S-10
Financing Policy ......................................................... S-13
Lease Expirations ........................................................ S-14
The Tenants .............................................................. S-15
Management ............................................................... S-17
Description of the Notes ................................................. S-19
Certain Federal Income Tax Considerations ................................ S-25
Underwriting ............................................................. S-28
Ratings .................................................................. S-30
Legal Matters ............................................................ S-30
Experts .................................................................. S-30
Incorporation of Certain Information by Reference ........................ S-31
Where You Can Find More Information ...................................... S-31
Forward-Looking Statements ............................................... S-32
Glossary ................................................................. S-33
Prospectus
Available Information .................................................... ii
Incorporation of Certain Documents by Reference .......................... ii
The Company .............................................................. 1
Use of Proceeds .......................................................... 1
Ratio of Earnings to Fixed Charges ....................................... 1
Description of Debt Securities ........................................... 1
Description of Shares .................................................... 10
Description of Preferred Shares .......................................... 11
Description of Depositary Shares ......................................... 17
Description of Warrants .................................................. 19
Description of Convertible Subordinated Debentures ....................... 20
Limitation of Liability; Shareholder Liability ........................... 20
Redemption; Business Combinations and Control Share Acquisitions ......... 21
Plan of Distribution ..................................................... 24
Legal Matters ............................................................ 25
Experts .................................................................. 25
</TABLE>

In this prospectus supplement, the term "HRP" includes HRPT Properties
Trust and its consolidated subsidiaries. Unless otherwise noted, the information
contained in this prospectus supplement is as of June 1, 1999.

In presenting "adjusted" information in this prospectus supplement, we have
assumed that the offering has been completed and that we have applied the net
proceeds of the notes as we currently intend. Unless we state otherwise, we have
assumed throughout this prospectus supplement that the Underwriters'
overallotment option is not exercised.

S-2
<PAGE>

SUMMARY

This summary may not contain all of the information that is important to
you. You should carefully read this entire prospectus supplement and the
accompanying prospectus. You should also read the documents to which we have
referred you in "Incorporation of Certain Information by Reference."

THE COMPANY

HRPT Properties Trust ("HRP") is a real estate investment trust ("REIT")
that acquires, owns and leases office buildings and senior housing properties.
We currently own a total of 253 properties located in 36 states and the District
of Columbia. Sixty-nine percent (69%) of our investments are commercial office
buildings. We have a total market capitalization of $3.2 billion, including $2.0
billion of equity.

HRP Investment Portfolio
(at cost, dollars in millions)

[Tabular Representation of Pie Chart]

Type Amount Percentage
- ---- ------ ----------
Office $2,155 69%
Senior Housing $ 858 28%
Other $ 100 3%

HRP Capitalization
(book basis, dollars in millions)

[Tabular Representation of Pie Chart]

Type Amount Percentage
- ---- ------ ----------
Equity $1,826 60%
Debt $1,197 40%

Our ability to pay debt depends primarily upon our receipt of rents from
tenants. Our largest tenant is the U.S. Government which rents 29 office
buildings and other space throughout our office portfolio for annual rents
totaling $68.5 million. Our largest commercial tenant is Marriott International,
Inc., an investment grade rated company, which rents 14 retirement communities
for annual rents totaling $30.1 million. Over 74% of our rents come from
companies that are rated investment grade or are publicly owned. Moreover, only
31% of our revenues come from leases that expire before 2004.

<TABLE>
<CAPTION>
HRP Tenant Strength
Percentage of
Tenant Total Revenues
- ------ ---------------
<S> <C>
U.S. Government ................... 16.2%
Marriott International ............ 7.1
Other Investment Grade
Tenants ........................ 26.2
Other Publicly Owned Tenants 24.6
----
Total Investment Grade and
Publicly Owned Tenants ......... 74.1%
====
</TABLE>

<TABLE>
<CAPTION>
HRP Lease Maturities
Percentage of
Year Total Revenues
- -------------------------- ---------------
<S> <C>
1999 ................... 2.8%
2000 ................... 4.5
2001 ................... 9.3
2002 ................... 4.9
2003 ................... 9.7
2004-2009 .............. 30.5
After 2009 ............. 38.3
-----
Total .................. 100.0%
=====
</TABLE>

S-3

<PAGE>

FINANCING POLICIES

Throughout our operating history we have maintained a conservative balance
sheet:

Debt as a Percentage of Total Capital

<TABLE>
<CAPTION>
Book Basis Market Basis
------------ -------------
<S> <C> <C>
Since inception ................... 33.3% 26.8%
Past 10 years ..................... 33.1% 26.5%
Past 5 years ...................... 33.5% 26.8%
During 1998 ....................... 36.0% 31.1%
At March 31, 1999 ................. 38.1% 38.7%
</TABLE>

Since 1994 Moody's Investor Service, Standard & Poor's Rating Services and
Fitch IBCA, Inc. have rated our senior debt investment grade. In June 1998
Moody's upgraded the rating on our outstanding subordinated convertible debt to
investment grade. At the same time Moody's affirmed our senior debt rating at
Baa2. Also in June 1998 Standard & Poor's and Fitch affirmed the ratings on our
senior debt at BBB and BBB+, respectively; and Standard & Poor's placed our
senior debt on "positive outlook." These ratings were reaffirmed by each rating
agency as recently as March 1999 in connection with our issuance of Monthly
Income Senior Notes due 2009.

The notes have the benefit of financial covenants. The following table
shows our financial ratios compared to these covenants at March 31, 1999, and on
an adjusted basis, after giving effect to this offering and our intended
application of the net proceeds.

<TABLE>
<CAPTION>
Historical at Adjusted at
Covenant Required Ratio March 31, 1999 March 31, 1999
- ------------------------------------ ------------------ ---------------- ---------------
<S> <C> <C> <C>
Debt/Adjusted Total Assets ......... no more than 60% 35.1% 36.7%
Secured Debt/Adjusted
Total Assets ...................... no more than 40% less than 1% less than 1%
Consolidated Income Available
for Debt Service/Annual
Debt Service ...................... at least 1.5x 4.2x 3.6x
Total Unencumbered Assets/
Unsecured Debt .................... at least 200% 284.9% 272.9%
</TABLE>

PRINCIPAL PLACE OF BUSINESS

We are organized as a Maryland real estate investment trust. Our principal
place of business is 400 Centre Street, Newton, Massachusetts 02458 and our
telephone number is (617) 332-3990.

S-4
<PAGE>

THE OFFERING

The following is a brief summary of certain terms of this offering. For a
more complete description of the terms of the notes, including capitalized
terms, see "Description of the Notes" and "Glossary" in this prospectus
supplement and "Description of Debt Securities" in the accompanying prospectus.

<TABLE>
<S> <C>
Total Principal Amount ......... $75,000,000
Maturity Date .................. The notes will mature on , 2011, unless previously
redeemed.
Interest Payment Dates ......... The 15th day of each calendar month beginning on , 1999.
The first payment will include interest from the date of closing.
Ranking ........................ The notes are senior obligations of HRP. They are not secured by any of
our property or assets, and as a result you will be one of our unsecured
creditors. The notes are not obligations of any of our subsidiaries. The
notes will rank equally with all of our other unsecured senior
indebtedness, including indebtedness we incur in the future. However, the
notes will be effectively subordinated to any mortgages and other secured
indebtedness we incur, and to all indebtedness of our subsidiaries.
Optional Redemption ............ We may not redeem any of the notes prior to , 2003. From
and after , 2003, we may redeem some or all of the notes
from time to time before they mature. The redemption price will equal the
outstanding principal of the notes being redeemed plus accrued interest.
The notes will not have the benefit of a sinking fund.
Use of Proceeds ................ We estimate that our net proceeds from the offering will be approximately
$72.6 million. We intend to use these proceeds to repay part of our bank
borrowings and for general business purposes.
Limitations on Incurrence
of Debt ....................... Various covenants will apply to the notes, including the following:
(1) We will not incur Debt if the new Debt would cause total Debt to be
more than 60% of Adjusted Total Assets.
(2) We will not incur Secured Debt if the new
Secured Debt would cause total Secured Debt to
be more than 40% of Adjusted Total Assets.
(3) We will not incur Debt if the new Debt
would cause the ratio of Consolidated Income
Available for Debt Service to Annual Debt
Service for our most recently completed four
fiscal quarters to be less than 1.5 to 1,
determined on a pro forma basis after giving
effect to certain assumptions.
(4) We will maintain Total Unencumbered Assets
of at least 200% of Unsecured Debt.
</TABLE>

S-5
<PAGE>

SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION

The following table contains summary financial information with respect to
HRP. This information is derived from our audited and unaudited consolidated
financial statements that are incorporated by reference in this prospectus
supplement. Those statements and their footnotes contain more detailed
information that you should read in order to fully understand the following
summary information. For definitions of certain capitalized terms see "Glossary"
in this prospectus supplement. We consider FFO to be a measure of the financial
performance of an equity REIT that provides a relevant basis for comparison
among REITs. FFO does not represent cash flow from operating activities (as
determined in accordance with GAAP) and should not be considered as an
alternative to net income as an indicator of HRP's financial performance or to
cash flows as a measure of liquidity.

<TABLE>
<CAPTION>
Three Months Ended
Year Ended December 31, March 31,
-------------------------------------------------------------------- --------------------------
1994 1995 1996 1997 1998 1998 1999
------------ ------------- ------------- ------------- ------------- ------------ -------------
(in thousands, except per share amounts) (unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Operating Data:
Total revenues ............ $ 86,683 $ 113,322 $ 120,183 $ 208,863 $ 356,554 $ 71,952 $ 104,403
Net income ................ 49,919 64,236 73,254 114,000 144,516 31,381 47,603
Dividends ................. 76,317 83,954 94,299 144,271 190,341 40,377 50,119
Per Share:
Net income (basic and
diluted) ................ $ 0.95 $ 1.08 $ 1.11 $ 1.24 $ 1.21 $ 0.31 $ 0.36
Dividends ................. 1.33 1.38 1.42 1.46 1.52 0.38 0.38
Average shares
outstanding ............. 52,738 59,227 66,255 92,168 119,867 101,471 131,660
Other Data:
FFO ....................... $ 71,851 $ 84,638 $ 99,106 $ 146,312 $ 211,715 $ 44,269 $ 59,701
FFO per basic share ....... 1.36 1.43 1.50 1.59 1.77 0.44 0.45
FFO per diluted share ..... 1.36 1.43 1.49 1.57 1.74 0.43 0.45
Ratio of Earnings to
Fixed Charges ........... 6.7x 3.4x 4.3x 3.9x 3.2x 3.2x 3.0x
</TABLE>

<TABLE>
<CAPTION>
December 31, March 31, 1999
------------------------------------------------------------------- ---------------------------
1994 1995 1996 1997 1998 Actual Adjusted
----------- ------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance Sheet Data:
Real estate investments,
cost .................... $806,560 $1,019,477 $1,259,006 $2,184,445 $3,136,264 $3,101,043 $3,101,043
Real estate investments,
net ..................... 766,990 963,622 1,182,085 2,072,776 2,966,453 2,933,542 2,933,542
Total assets ............. 840,206 999,677 1,229,522 2,135,963 3,064,057 3,050,685 3,125,685
Total borrowings ......... 216,513 269,759 492,175 787,879 1,132,081 1,121,950 1,196,950
Total shareholders'
equity .................. 602,039 685,592 708,048 1,266,260 1,827,793 1,825,651 1,825,651
</TABLE>

S-6
<PAGE>

RECENT DEVELOPMENTS

From January 1, 1998 through the date hereof, we have engaged in the
following significant activities.

Investments

We have purchased 54 properties with 7.7 million square feet for a total
investment of $1 billion:

<TABLE>
<CAPTION>
Investments Over $20 Million (dollars in 000's)
Location Major Tenants Investment Square Feet
- ------------------------------ ----------------------------------------- ------------- ------------
<S> <C> <C> <C>
Philadelphia, PA ............. Mellon Bank, FMC Corporation $ 247,631 1,284,369
Philadelphia, PA ............. PNC Bank 115,560 825,374
Austin, TX (3 buildings) ..... Solectron Corporation, Raytheon Company 81,639 1,109,285
Washington, DC ............... Inter-American Development Bank 59,976 187,823
Wilmington, DE ............... Chase Manhattan Bank 44,090 256,924
Austin, TX (3 buildings) ..... Motorola, Inc. 41,105 210,682
Rockville, MD ................ U.S. Food and Drug Administration 32,536 187,616
Quincy, MA (2 buildings) ..... Putnam Investments, Inc. 31,919 222,726
Memphis, TN .................. U.S. Bankruptcy Court 22,173 203,089
Manchester, NH ............... Blue Cross/Blue Shield of NH 22,147 210,879
Bloomington, MN .............. General Dynamics 21,129 280,822
Alexandria, VA ............... The Eastern Group 21,091 114,767

Other Investments (dollars in 000's)
Location (metro area) Number of Buildings Investment Square Feet
- ------------------------------ ----------------------------------------- ----------- ------------
Pittsburgh, PA ............... Three buildings $ 34,752 427,424
Philadelphia, PA ............. Five buildings 31,913 264,310
Austin, TX ................... Three buildings 27,594 236,012
Minneapolis, MN .............. Two buildings 19,575 231,172
Boston, MA ................... Two buildings 15,604 138,111
Cincinnati, OH ............... One building 15,276 156,175
Dallas, TX ................... Two buildings 13,883 133,750
Other locations .............. 19 buildings 108,009 994,691
</TABLE>

Committed Acquisitions. We have entered purchase agreements to acquire 12
additional office properties for $145.5 million. We expect to buy these
properties during the remainder of 1999, subject to the satisfactory completion
of our due diligence.

Other Investment Activities. In the normal course of our business we
regularly evaluate opportunities to acquire properties. We currently have
several investment opportunities under consideration. We may acquire additional
properties involving material amounts in the future.

Financing

Common Shares. During February and March 1998 we sold 6,977,575 common
shares in four offerings to unit investment trusts sponsored by investment
banks. In June 1998 we sold 25 million shares in a public offering. These five
offerings raised a total of $612.4 million in gross proceeds ($580.3 million net
of expenses and underwriting discount).

Unsecured Debt. During February 1998 we issued $100 million of unsecured
senior notes that mature in February 2005 and $50 million of unsecured
Remarketed Reset Notes that mature in July 2007. The Remarketed Reset Notes
currently bear interest at LIBOR (reset quarterly) plus a spread, but the
spread, interest reset period and other terms may change in July 1999. In August
1998 we issued

S-7
<PAGE>

$160 million of unsecured senior notes that mature in August 2002. In November
1998 we issued $143 million of unsecured Monthly Income Senior Notes due in
2013. In March 1999 we issued $90 million of unsecured Monthly Income Senior
Notes due in 2009.

Bank Credit Facility. We use our bank credit facility (the "Bank Credit
Facility") for interim acquisition funding and for working capital until we
raise equity or long term debt. At January 1, 1998, the Bank Credit Facility
permitted borrowings up to $450 million and was scheduled to mature in March
2001. In April 1998 the Bank Credit Facility was expanded to permit borrowings
up to $500 million and its maturity was extended to April 2002. At June 1, 1999,
there was $25 million drawn under the Bank Credit Facility. In February 1999 we
amended the Bank Credit Facility to permit the possible spin off of our senior
housing properties as described below.

Possible Prepayment of Floating Rate Debt. Our outstanding unsecured senior
notes include $250 million of Remarketed Reset Notes due 2007 for which the
interest rate is reset quarterly based upon LIBOR and the spread over LIBOR is
reset annually. We have the right to prepay these notes without a premium in
July 1999 and periodically thereafter. We are now considering the possibility of
prepaying some of these notes in July 1999. Some or all of the proceeds of this
offering may be indirectly used to prepay these notes. This indirect use results
because we will initially use a portion of the proceeds of this offering to
repay amounts outstanding under the Bank Credit Facility and then we may draw
funds from the Bank Credit Facility to prepay these notes.

Asset Sales and Dispositions

$69.8 Million Reduction of Healthcare Investments. Since January 1, 1998,
we have sold 16 nursing homes for $93.8 million, including $82.5 million in
1999. In connection with the sale of 12 of the nursing homes we provided the
purchaser with a $60 million mortgage loan due in 2004. During this period we
have also received full repayments for $36.0 million of mortgages secured by ten
nursing homes, including $3.0 million in 1999.

Possible Senior Housing Spin Off. In December 1998 we filed a registration
statement with the SEC for a possible spin off of our senior housing assets and
an initial public offering by our subsidiary, Senior Housing Properties Trust
("SNH"). Pursuant to this proposed transaction, we would contribute 84 senior
housing properties which have a net book value of $625 million to SNH in return
for a payment of $250 million plus 26.2 million SNH common shares. Half of the
SNH shares we receive would be retained by us and half would be distributed to
our shareholders. Simultaneously with the payment from SNH and the distribution
of SNH shares, SNH would do an initial public offering to raise about $200
million, which would be used to acquire additional senior housing properties.
Because of present market conditions, the SNH transaction as described in the
SEC filing is not likely to occur. At this time, we are considering various
alternative transactions which would reposition our senior housing properties
into a separate publicly owned REIT. After we announced this possible senior
housing spin off, Moody's, Standard & Poor's and Fitch all affirmed our senior
debt rating.

S-8
<PAGE>

Other Matters

Improving Investment Grade Ratings. In June 1998 Moody's upgraded the
rating on our subordinated convertible debt to investment grade. At the same
time, Moody's affirmed our senior debt rating at Baa2. Also in June of 1998,
Standard & Poor's and Fitch affirmed our senior debt ratings as BBB and BBB+,
respectively; and Standard & Poor's placed our senior debt on "positive
outlook." In March 1999 Moody's, Standard & Poor's and Fitch each affirmed our
credit ratings.

Change of Name to "HRPT Properties Trust." On July 1, 1998, we changed our
name from "Health and Retirement Properties Trust" to "HRPT Properties Trust."
This name change is intended to call attention to the fact that we invest in
commercial office properties as well as senior housing real estate.

Trustees. On June 16, 1998, Patrick F. Donelan was elected as a Trustee.
Mr. Donelan filled a vacancy created by the death of Ralph J. Watts. Mr.
Donelan is currently a Director of Dresdner Kleinwort Benson and Executive Vice
President of Dresdner Kleinwort Benson North America LLC of New York, a
subsidiary of Dresdner Bank AG of Germany. At our May 1999 Annual Meeting of
Shareholders, Rev. Justinian Manning and Barry M. Portnoy were re-elected as
Trustees for an additional term ending in 2002.

S-9
<PAGE>

CAPITALIZATION

The following table sets forth HRP's capitalization at March 31, 1999 and
on an adjusted basis assuming completion of this offering and application of the
net proceeds of the notes as we currently intend.

<TABLE>
<CAPTION>
March 31, 1999
-------------------------------
(dollars in thousands,
except per share amounts)
Actual Adjusted
-------------- --------------
<S> <C> <C>
Debt:
Bank Credit Facility .................................... $ -- $ --
Mortgage debt payable ................................... 24,611 24,611
% Monthly Income Senior Notes due 2011 .............. -- 75,000
Senior notes payable, net ............................... 892,476 892,476
Convertible subordinated debentures ..................... 204,863 204,863
---------- ----------
Total debt ............................................ 1,121,950 1,196,950
---------- ----------
Shareholders' equity: ....................................
Preferred shares of beneficial interest, par value $.01
per share; 50,000,000 authorized; none issued ......... -- --
Common shares of beneficial interest, par value $.01
per share; 150,000,000 shares authorized, 131,893,126
shares issued and outstanding ......................... 1,319 1,319
Additional paid-in capital .............................. 1,971,146 1,971,146
Cumulative net income ................................... 612,417 612,417
Dividends ............................................... (753,592) (753,592)
Unrealized holding losses on investments ................ (5,639) (5,639)
---------- ----------
Total shareholders' equity ............................ 1,825,651 1,825,651
---------- ----------
Total capitalization ..................................... $2,947,601 $3,022,601
========== ==========
</TABLE>

USE OF PROCEEDS

We estimate that the net proceeds of this offering will be approximately
$72.6 million. We expect to use the net proceeds of this offering to repay
amounts outstanding under the Bank Credit Facility and for general business
purposes. The Bank Credit Facility bears interest at LIBOR plus a spread and
matures in April 2002. At June 1, 1999, borrowings outstanding on the Bank
Credit Facility were $25 million and the effective interest rate was 5.7% per
annum.

THE COMPANY

HRP is a REIT that acquires, owns and leases office buildings and senior
housing properties. HRP is organized as a Maryland real estate investment trust.
Our principal place of business is 400 Centre Street, Newton, Massachusetts
02458 and our telephone number is (617) 332-3990.

HRP is one of the largest publicly traded REITs in the United States. We
have a total market capitalization of $3.2 billion, including $2.0 billion of
equity. We currently own a total of 253 properties located in 36 states and the
District of Columbia. Three percent of our assets, at cost, is an investment in
another REIT, Hospitality Properties Trust ("HPT"), a NYSE listed company that
we formed in 1995.

S-10
<PAGE>

PROPERTIES

We have investments in 253 properties located in 36 states and the District
of Columbia.

Location of HRP Properties

[Map of the United States showing location of HRP Properties]

<TABLE>
<CAPTION>
Number of Investment
State Properties (in thousands)
- ------------------------------ --------------- -----------------
<S> <C> <C>
Alaska ....................... 1 $ 1,000
Arizona ...................... 9 64,856
California ................... 30 323,062
Colorado ..................... 10 56,480
Connecticut .................. 11 101,386
Delaware ..................... 1 44,146
District of Columbia ......... 5 207,644
Florida ...................... 10 148,577
Georgia ...................... 5 15,291
Illinois ..................... 2 98,743
Iowa ......................... 7 8,204
Kansas ....................... 4 8,466
Louisiana .................... 1 18,941
Maryland ..................... 8 191,215
Massachusetts ................ 33 239,305
Michigan ..................... 2 9,159
Minnesota .................... 3 40,703
Missouri ..................... 3 11,564
Nebraska ..................... 10 10,685
New Hampshire ................ 2 25,138

</TABLE>
<TABLE>
<CAPTION>
Number of Investment
State Properties (in thousands)
- ------------------------------ --------------- -----------------
<S> <C> <C>
New Jersey ................... 5 $ 42,954
New Mexico ................... 2 11,079
New York ..................... 6 185,243
North Carolina ............... 3 6,388
Ohio ......................... 3 20,526
Oklahoma ..................... 1 24,762
Pennsylvania ................. 17 555,001
Rhode Island ................. 1 8,010
South Dakota ................. 3 7,589
Tennessee .................... 1 22,287
Texas ........................ 22 272,387
Vermont ...................... 8 23,711
Virginia ..................... 7 111,549
Washington ................... 4 40,931
West Virginia ................ 1 4,898
Wisconsin .................... 8 33,903
Wyoming ...................... 4 17,564
--- ----------
Total ........................ 253 3,013,347
Investment in HPT ............................ 100,000
----------
Total Investments ............................ $3,113,347
==========
</TABLE>

S-11
<PAGE>

Commercial Office Properties

We began to invest in multi-tenant medical office buildings in the early
1990's. After the acquisition of a portfolio of 28 properties leased to the U.S.
Government, we developed the infrastructure to acquire and manage office
buildings on a nationwide basis. We believe that certain current business trends
have created favorable investment opportunities for commercial office
properties: some institutional investors have begun disposing of their direct
ownership of properties and investing in more liquid real estate securities;
purchasers of distressed properties in the early 1990's are now divesting their
improved assets; and many businesses are selling their owned real estate to
invest proceeds in core activities. Although there are other REITs and companies
that specialize in acquiring and owning commercial office properties, we believe
that these trends will afford us numerous investment opportunities at attractive
prices for several years. Moreover, unlike most REITs that focus upon commercial
office properties, our focus to date has been to acquire stabilized office
properties with long term leases to strong credit tenants, rather than
properties that afford immediate turnaround potential because of vacancies or
short term leases.

Government Office Properties

Most U.S. Government office space requirements are managed by the General
Services Administration ("GSA"). Most large GSA leases are written for initial
terms of 10 to 20 years plus tenant renewal options totaling an additional 5 to
20 years. Many GSA leases, including leases for some of our properties, permit
the Government to terminate by notice given any time after a so-called "firm
term." The weighted average remaining firm term for our Government tenants is
approximately six years. From 1980 to September 1996 the amount of space leased
by the GSA increased from 139 million square feet to 146 million square feet.
This increase in U.S. Government leased space occurred despite a declining
civilian Government work force, as federal civilian employment decreased
approximately 9% from 2.2 million employees in 1980 to 2.0 million employees in
1995. We believe that the GSA's long term demand for leased space will continue
to be strong as a result of federal budget pressure to limit capital
expenditures and the need to use funds available for capital expenditures to
modernize the GSA inventory of owned buildings, over half of which exceed 50
years of age. Based upon the Government's investments in tenant improvements to
our properties, the high cost of relocation and the stability of the missions
and space requirements of the Government agencies that occupy our properties, we
believe that there is a high probability of GSA lease renewals for our
properties through their renewal options, and in many cases beyond those
periods. Moreover, because of the locations of many of these Government leased
properties and the high standards to which they have been developed, we may be
able to lease or sell most of these properties to commercial users in the event
the Government terminates or fails to renew any of these leases.

Senior Housing Properties

The population of the United States is aging. According to information from
the U.S. Census Bureau, the segment of the U.S. population age 65 and over is
increasing and is expected to increase sharply through the year 2020. We believe
that the demand for services provided at senior housing properties, retirement
communities, assisted living centers and nursing homes should increase as the
population ages. Certain recent federal and state legislation seeks to limit the
amount of growth in Government expenditures for Medicare and Medicaid. These
limitations may adversely affect the profitability of tenant operating companies
and might, in certain circumstances, affect their ability to pay rent. These
Government funding limitations will likely also make it less profitable to
construct new healthcare facilities and this may increase the value of existing
facilities. We believe that the net effect of these demographic and legislative
changes will be to make it less profitable to provide services and facilities
for Government funded patients and more profitable to provide

S-12
<PAGE>

services and facilities for non-Government funded patients. We have responded to
these changes in four ways: (i) by selling our nursing homes which are overly
dependent upon Medicare and Medicaid revenues; (ii) by focusing on new
investments in senior housing properties that are not directly dependent upon a
high percentage of Medicaid or Medicare revenues, including retirement housing
and assisted living facilities; (iii) by encouraging and making funding
available to our tenants to improve the properties that they lease from us in
order to attract a greater amount of non-Government revenues; and (iv) whenever
possible, by making new senior housing investments in properties leased to well
capitalized operators.

Equity Investment in HPT

HRP has invested $100 million and owns 4,000,000 common shares of
beneficial interest of HPT, which constitute 7.1% of the total HPT common shares
outstanding. HPT is a REIT in the business of owning hotels and leasing them to
independent hotel operating companies. HPT was organized in February 1995 as an
outgrowth of our relationship with Host Marriott Corporation and Marriott
International, Inc. ("Marriott"), which arose from our previous investment in
retirement communities leased to Marriott. In August 1995 HPT completed an
initial public offering of shares and on June 3, 1999 had a total equity market
capitalization of $1.6 billion. HPT currently owns or has commitments to
purchase 204 hotels, which are located in 35 states and contain 27,683 rooms. We
receive dividends on our HPT shares at the current annual rate of $2.72 per
share. Our financial reports include our share of HPT's operating results under
the equity method of accounting. HPT shares are listed on the NYSE, and on June
3, 1999 the last reported sale price for HPT common shares was $27 per share.

FINANCING POLICY

We consider making equity offerings when, in our judgment, doing so will
improve our capital structure while not materially adversely affecting the
market value of our shares or impeding our ability to increase regularly our per
share dividend rate. In addition to the use of equity, we utilize short term and
long term borrowings to finance investments and to pay operating expenses. Our
unsecured senior indebtedness has been rated investment grade by Standard &
Poor's, Moody's and Fitch. The borrowing guidelines established in our Bank
Credit Facility and by our Board of Trustees prohibit a debt to book
capitalization ratio of greater than .50 to 1, except in certain limited
circumstances. After completion of this offering and the application of the net
proceeds, our as adjusted debt to book capitalization ratio will be
approximately .40 to 1. As of June 1, 1999, approximately $204.8 million of our
total debt consisted of subordinated convertible debentures, convertible into
common shares at $18.00 per share. If these debentures were converted into
common shares, our as adjusted debt to book capitalization ratio would be
approximately .33 to 1. We may in the future choose to modify our debt to book
capitalization guidelines. We cannot assure you that any debentures will be
converted or that equity or debt capital will be available in the future on
reasonable terms to fund our operations or growth.

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<PAGE>

LEASE EXPIRATIONS

The following table sets forth the percentage of our annual revenues
represented by leases that expire in the years indicated.

<TABLE>
<CAPTION>
Percentage of
Year Annual Revenues (1) Annual Revenues
- --------------------------------------- ----------------------- ----------------
(dollars in thousands)
<S> <C> <C>
1999 ............................ $ 12,011 2.8%
2000 ............................ 19,073 4.5
2001 ............................ 39,605 9.3
2002 ............................ 20,703 4.9
2003 ............................ 40,979 9.7
2004 ............................ 31,372 7.4
2005 ............................ 32,577 7.7
2006 ............................ 38,076 9.0
2007 ............................ 18,155 4.3
2008 and thereafter (2) ......... 170,844 40.4
-------- -----
Totals: ......................... $423,395 100.0%
======== =====

- ---------------------
<FN>
(1) Annual revenues represent March 1999 revenues annualized. Most of our
commercial office buildings and properties leased to the U.S. Government are
leased on a gross or modified gross lease basis. Most of our senior housing
properties are leased on a net lease basis. Accordingly, the revenues
received from our commercial and Government office properties are not
necessarily indicative of net operating income from those properties, and
our revenues and percentage of total revenues are not necessarily indicative
of our net operating income or FFO likely to be realized.

(2) Includes the pro rata share of HPT's FFO. All of HPT's leases expire after
2008. We report income and FFO derived from our investment in HPT using the
equity method of accounting. We believe the pro rata share of HPT's FFO
included above is an appropriate means to reflect our lease expirations.
</FN>
</TABLE>

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<PAGE>

THE TENANTS

Our financial condition depends, in large part, upon the financial
condition of our tenants. Our largest tenants are the U.S. Government and
Marriott. Almost 50% of our annual revenues are derived from tenants whose
unsecured obligations are rated investment grade. Another 25% of our revenues
come from other public companies that are not rated investment grade but for
whom credit evaluation information is readily available.

<TABLE>
<CAPTION>
Percentage of
Tenant Annual Revenues (1) Annual Revenues
- -------------------------------------------- ----------------------- ----------------
(dollars in thousands)
<S> <C> <C>
U.S. Government ...................... $ 68,535 16.2%
Marriott ............................. 30,141 7.1
Other Investment Grade Tenants ....... 111,054 26.2
Other Publicly Owned Tenants (2) ..... 104,237 24.6
-------- -----
Subtotal Investment Grade and Publicly
Owned Tenants ....................... $313,967 74.1
======== =====
Other Tenants ........................ 109,428 25.9
-------- -----
Totals: .............................. $423,395 100.0%
======== =====

(2) Includes the pro rata share of HPT's FFO. HPT's senior debt is rated
investment grade by Standard & Poor's (BBB-) and by Moody's (Baa3). However,
our investment in HPT is an equity investment and not a debt obligation of
HPT. We report income and FFO derived from our investment in HPT using the
equity method of accounting. We believe the pro rata share of HPT's FFO
should be included in the percentage of revenues derived from publicly owned
companies, as all of HPT's hotels are currently operated by affiliates of
publicly owned companies.
</FN>
</TABLE>

U.S. Government. Most of our U.S. Government leases are undertaken by the
GSA and assigned to other Government agencies including the U.S. Department of
Veterans Affairs, Internal Revenue Service, U.S. Department of Agriculture,
National Institute of Standards and Technology, U.S. Defense Information
Systems, and U.S. Department of Energy. All of these leases are general
obligations of the U.S. Government.

Marriott International. Marriott is a NYSE listed company with an equity
market capitalization of $9.1 billion as of June 3, 1999. In addition to its
retirement housing and assisted living properties, some of which are leased from
us, Marriott owns and operates hotels and other businesses on a worldwide basis
and has reported revenues for 1998 of approximately $8 billion. Marriott has
unconditionally guaranteed its lease obligations to us. Marriott's senior credit
obligations are rated investment grade by Standard & Poor's (BBB) and Moody's
(Baa2).

Investment Grade Tenants. We lease office space to the following additional
investment grade companies or their subsidiaries: Aetna Inc., AT&T Corp., Bell
Atlantic Corporation, Bristol-Myers Squibb Co., Capital Cities Media, Inc.,
Chase Manhattan Corp., Cigna Corp., Druck Corporation, Eastman Kodak Co.,
Fidelity Investments, FMC Corporation, Ford Motor Credit Corp., GMAC Corp.,
Goldman, Sachs & Co., HEALTHSOUTH Corp., Hoechst AG, IBM Corp., Laidlaw, Inc.,
Legg Mason Wood Walker, Incorporated, The Limited, Marsh McLennan, Inc., Mellon
Bank Corp., Merck & Co., Inc., MCI WorldCom, Inc., Merrill Lynch & Co., Mobile
Corp., Motorola, Inc., New York Life Insurance Company, Northern Telecom Ltd.,
Oracle Corp., Pitney Bowes, Inc., PNC Bank Corp., Raytheon Company, Reynolds &
Reynolds, SBC Communications, Inc., Siemans Energy &

S-15
<PAGE>

Automation, SmithKline Beecham Corporation, Solectron Corp., Staples, Inc.,
USF&G Corporation, US Sprint Communications, Co., Wells Fargo & Co. and World
Financial Network National Bank.

Certain of our properties are leased to not-for-profit entities that are
investment grade rated: two medical office buildings in Boston, Massachusetts
are principally leased to affiliates of Boston's Beth Israel Deaconess Medical
Center and Boston's Children's Medical Center; and Cedars Sinai Medical Center,
a not-for-profit hospital based in Los Angeles, is the largest tenant in two
medical office buildings and garages which we own that are attached to that
hospital.

Other Public Company Tenants. We also lease to the following publicly owned
tenants or their subsidiaries: Advanced Micro Devices, Inc., Alliance
Pharmaceutical Corp., ARV Assisted Living Inc., Brookdale Living Communities,
Inc., Corvas International, Inc., CytoTherapeutics, Inc., Danka Business Systems
plc, Focal, Inc., General Dynamics Corporation, Genesis Health Ventures, Inc.,
Grubb and Ellis Company, IBAH Inc., Integrated Health Services, Inc., Laboratory
Corp. of America Holdings, Mariner Post-Acute Network Inc., Manpower
International, MedPartners, Inc., NCO Group, Inc., Nestle USA, Inc., Neurocrine
Biosciences Inc., Nextel Communications, Ohio Casualty Corporation, Owens &
Minor, Inc., Paging Network, Inc., Paychex, Inc., PSW Technologies, Inc., Quest
Diagnostics Incorporated, Silicon Graphics, Inc., Sun Healthcare Group, Inc.,
Sun Microsystems, Inc., Unilab Corp., United Healthcare Corporation and
Westinghouse Electric Corporation.

Other Tenants. Our other tenants include over 400 privately owned
businesses located in our office buildings and 11 private companies in our
senior housing buildings. Many of these tenants include law firms, accounting
firms and other professional service businesses which are not publicly owned or
investment grade rated, but which are often considered "credit tenants" in the
real estate industry.

S-16
<PAGE>

MANAGEMENT

The Trustees and executive officers of HRP are as follows:

<TABLE>
<CAPTION>
Name Age Position
- ------------------------------ ----- -------------------------------------------------
<S> <C> <C>
Barry M. Portnoy 53 Managing Trustee
Gerard M. Martin 64 Managing Trustee
Bruce M. Gans, M.D. 52 Trustee
Rev. Justinian Manning, C.P. 73 Trustee
Patrick F. Donelan 57 Trustee
David J. Hegarty 42 President, Chief Operating Officer and Secretary
Ajay Saini 39 Treasurer and Chief Financial Officer
John A. Mannix 43 Executive Vice President
David M. Lepore 38 Senior Vice President
</TABLE>

Barry M. Portnoy was our founder and has been a Trustee since our
organization in 1986. Mr. Portnoy also serves as a Managing Trustee of HPT. Mr.
Portnoy was a partner in the law firm of Sullivan & Worcester LLP from 1978
through March 1997, and chairman of that firm from 1994 through March 1997.

Gerard M. Martin was our founder and has been a Trustee since our
organization in 1986. Mr. Martin also serves as a Managing Trustee of HPT.

Dr. Bruce M. Gans has been Senior Vice President for Continuing Care,
Chairman of Physical Medicine and Rehabilitation at the North Shore Long Island
Jewish Health System and Professor of Physical Medicine and Rehabilitation at
the Albert Einstein College of Medicine since April 5, 1999. Prior to assuming
these positions, Dr. Gans was a Professor and Chairman of the Department of
Physical Medicine and Rehabilitation at Wayne State University and a Senior Vice
President of the Detroit Medical Center.

The Reverend Justinian Manning, C.P. has been, since September 1990, the
pastor of St. Gabriel's parish in Brighton, Massachusetts. He is also on the
Board of Directors of Charlesview, a low and moderate income housing program. He
is past Treasurer and a former Director of St. Paul's Benevolent, Educational
and Missionary Institute, a New Jersey corporation, which oversees foundations
in Massachusetts, Connecticut, New York, Pennsylvania, Maryland and Florida and
the Institute's Overseas Missions. He was formerly on the Board of Directors of
St. Paul's Monastery Manor, in Pittsburgh, Pennsylvania, a congregate housing
facility. He belonged to the Provincial Council of the Passionist Provincialate
and is the former Director of Consolidation for the Community.

Patrick F. Donelan has been a Director since 1998 of Dresdner Kleinwort
Benson and an Executive Vice President since 1996 of Dresdner Kleinwort Benson
North America LLC, a New York based banking institution, which is a subsidiary
of Dresdner Bank AG of Germany. Prior to 1996 Mr. Donelan was Chairman of
Kleinwort Benson North America, Inc., a subsidiary of Kleinwort Benson Ltd. of
England, which was acquired by Dresdner Bank AG in 1995.

David J. Hegarty is our President, Chief Operating Officer and Secretary.
He has served us in various capacities since 1987, prior to which he was an
audit manager with Ernst & Young LLP. Mr. Hegarty is a certified public
accountant.

Ajay Saini is our Treasurer and Chief Financial Officer. Mr. Saini has
served us in various capacities since June 1990, prior to which he was employed
by Ernst & Young LLP. Mr. Saini is a certified public accountant.

S-17
<PAGE>

John A. Mannix is our Executive Vice President. Mr. Mannix served as Vice
President with our investment advisor from 1989 to 1998. Mr. Mannix is
responsible for acquisitions of medical office, biotechnology and commercial
office properties. Mr. Mannix is a member of the Urban Land Institute, Building
Owners and Managers Association ("BOMA") and the Greater Boston Real Estate
Board's Real Estate Finance Association.

David M. Lepore is our Senior Vice President. Mr. Lepore is responsible
for building operations, leasing and acquisition diligence for our properties.
Mr. Lepore has been employed in various capacities by our investment advisor
since 1992. Prior to 1992 he was employed by The Beacon Companies. Mr. Lepore
is a member of BOMA and is a certified Real Property Administrator.

Our Declaration of Trust provides that a majority of the Board of Trustees
will at all times consist of Independent Trustees. Dr. Gans, Mr. Donelan and
Rev. Manning are our Independent Trustees. The Independent Trustees are not
affiliated with any of our tenants or with our investment advisor, REIT
Management & Research, Inc. (the "Advisor"). All major investment and policy
decisions affecting us are made by our Board of Trustees.

All of our day to day operations are conducted by the Advisor pursuant to
an investment advisory contract. The Advisor is owned by Messrs. Portnoy and
Martin. Messrs. Portnoy, Martin, Hegarty, Saini, Mannix and Lepore, as well as
all other personnel involved in our operations, are employees of the Advisor. We
pay the Advisor an annual advisory fee calculated on the basis of total assets
under management (.7% of the first $250 million, plus .5% of additional assets),
and an annual incentive fee for each year equal to 15% of the annual increase in
our diluted funds from operations (as defined in the investment advisory
contract) per share, but no more than $.01 per share, times the weighted average
number of shares outstanding on a diluted basis in each year. With respect to
our office properties, certain property management services, which are beyond
the scope of the investment advisory contract, are provided under property
management contracts by the Advisor. We believe that the fees paid for property
management services (approximately 3% of gross revenues from the affected
properties) are at or below the levels that we would pay on an arms' length
basis for similar services in the market generally. Prior to our decision to
invest in commercial office properties, affiliates of the Advisor had invested
in commercial real estate for their own account. Now that we are investing in
these types of properties, the Advisor has agreed that it will not purchase or
sell any commercial office real estate without first offering it to us. The
investment advisory contract and the various property management contracts have
all been approved on our behalf by our Independent Trustees. All incentive fees
earned by the Advisor are paid in common shares. We believe that our total
administrative costs are at or below industry averages.

S-18
<PAGE>

DESCRIPTION OF THE NOTES

The following description of the particular terms of the notes supplements,
and to the extent inconsistent with, replaces the description of the general
terms and provisions of debt securities set forth under "Description of Debt
Securities" in the accompanying prospectus to which reference is hereby made. We
have provided a Glossary at the end of this prospectus supplement to define
certain capitalized words used in discussing the terms of the notes.

General

We will issue the notes under an Indenture dated as of July 9, 1997 and a
Supplemental Indenture dated as of , 1999 (together, the "Indenture")
between us and State Street Bank and Trust Company, as Trustee. The Indenture
is subject to, and governed by, the Trust Indenture Act of 1939, as amended.
This prospectus supplement briefly outlines some of the provisions of the
Indenture. These summaries are not complete. If you would like more information
on these provisions, review the copy of the Indenture that we have filed with
the Securities and Exchange Commission. See "Incorporation of Certain
Information By Reference" and "Where You Can Find More Information" in this
prospectus supplement and "Available Information" in the accompanying prospectus
for information about how to locate these documents. You may also review the
Indenture at the Trustee's corporate trust office at Two International Place,
Boston, Massachusetts 02110. All section references appearing below are to
sections of the Indenture.

The notes will be a separate series under the Indenture, initially in the
aggregate principal amount of $75,000,000. This series may be "reopened" and we
may from time to time issue additional notes of the same series. The notes will
mature (unless previously redeemed) on , 2011. The notes will be
issued only in fully registered form without coupons, in denominations of $1,000
and integral multiples thereof. The notes will be evidenced by a global note in
book-entry form, except under the limited circumstances described below under
"--Book Entry System and Form of Notes."

The notes will be senior unsecured obligations of HRP and will rank equally
with each other and with all of our other unsecured and unsubordinated
indebtedness outstanding from time to time. The notes will be effectively
subordinated to our mortgages and other secured indebtedness, and to
indebtedness and other liabilities of our Subsidiaries. Accordingly, such prior
indebtedness will have to be satisfied in full before you will be able to
realize any value from the secured or indirectly held properties.

As of March 31, 1999, on an adjusted basis after giving effect to the
issuance of the notes and the application of the proceeds from the sale of the
notes, our total outstanding indebtedness (including under the Bank Credit
Facility) was approximately $1.2 billion, of which approximately 97.9% was
unsecured, and the indebtedness of our Subsidiaries was $25 million. In
addition, our Subsidiaries (with certain exceptions) are guarantors of our Bank
Credit Facility. The Bank Credit Facility is currently an unsecured revolving
credit facility in the amount of $500 million. We and our Subsidiaries may incur
additional indebtedness, including secured indebtedness, subject to the
provisions described below under "--Certain Covenants--Limitations on Incurrence
of Debt."

Except as described under "--Certain Covenants" and "--Merger,
Consolidation or Sale" below and under "Description of Debt Securities--Merger,
Consolidation or Sale" and "--Certain Covenants" in the accompanying prospectus,
the Indenture does not contain any other provisions that would limit our ability
to incur indebtedness or that would afford you protection in the event of (1) a
highly leveraged or similar transaction involving us or any of our affiliates,
(2) a change of control, or (3) a reorganization, restructuring, merger or
similar transaction involving us that may

S-19
<PAGE>

adversely affect you. In addition, subject to the limitations set forth under
"--Certain Covenants" and "--Merger, Consolidation or Sale" below or under
"Description of Debt Securities--Merger, Consolidation or Sale" and "--Certain
Covenants" in the accompanying prospectus, we may, in the future, enter into
certain transactions such as the sale of all or substantially all of our assets
or a merger or consolidation that would increase the amount of our indebtedness
or substantially reduce or eliminate our assets, which might have an adverse
effect on our ability to service our indebtedness, including the notes. We have
no present intention of engaging in a highly leveraged or similar transaction.

Interest and Maturity

The notes will bear interest at the rate per annum set forth on the cover
page of this prospectus supplement from , 1999 or from the
immediately preceding Interest Payment Date (as defined below) to which interest
has been paid. Interest is payable in arrears on the 15th of each month (the
"Interest Payment Dates"), commencing , 1999, to the persons in
whose names the notes are registered in the security register applicable to the
notes at the close of business on the first day of each month (the "Regular
Record Dates") immediately before the Interest Payment Dates regardless of
whether the Regular Record Date is a Business Day. Accrued interest is also
payable on the date of maturity or earlier redemption of the notes (the
"Maturity Date"). Interest on the notes will be computed on the basis of a
360-day year of twelve 30-day months.

Optional Redemption of the Notes

We may not redeem the notes prior to , 2003. From and after
, 2003, we may redeem some or all of the notes from time to time
before they mature. The redemption price will equal the outstanding principal
of the notes being redeemed plus accrued interest.

We are required to give notice of such a redemption not less than 30 days
nor more than 60 days prior to the redemption date by first class mail to each
holder's address appearing in the securities register maintained by the Trustee.
In the event we elect to redeem less than all of the notes, the particular notes
to be redeemed will be selected by the Trustee by such method as the Trustee
shall deem fair and appropriate.

We are not required to make any sinking fund or redemption payments prior
to the stated maturity of the notes.

Certain Covenants

Limitations on Incurrence of Debt. We will not, and will not permit any
Subsidiary to, incur any Debt if, immediately after giving effect to the
incurrence of such additional Debt and the application of the proceeds thereof,
the aggregate principal amount of all outstanding Debt of HRP and its
Subsidiaries on a consolidated basis determined in accordance with GAAP is
greater than 60% of the sum ("Adjusted Total Assets") of (without duplication)
(1) the Total Assets of HRP and its Subsidiaries as of the end of the calendar
quarter covered in HRP's Annual Report on Form 10-K, or the Quarterly Report on
Form 10-Q, as the case may be, most recently filed with the SEC (or, if such
filing is not permitted under the Securities Exchange Act of 1934, as amended,
with the Trustee) prior to the incurrence of such additional Debt and (2) the
purchase price of any real estate assets or mortgages receivable acquired, and
the amount of any securities offering proceeds received (to the extent that such
proceeds were not used to acquire real estate assets or mortgages receivable or
used to reduce Debt), by HRP or any Subsidiary since the end of such calendar
quarter, including those proceeds obtained in connection with the incurrence of
such additional Debt.

S-20
<PAGE>

In addition to the above limitations on the incurrence of Debt, we will
not, and will not permit any Subsidiary to, incur any Secured Debt if,
immediately after giving effect to the incurrence of such additional Secured
Debt and the application of the proceeds thereof, the aggregate principal amount
of all outstanding Secured Debt of HRP and its Subsidiaries on a consolidated
basis is greater than 40% of Adjusted Total Assets.

In addition to the above limitations on the incurrence of Debt, we will
not, and will not permit any Subsidiary to, incur any Debt if the ratio of
Consolidated Income Available for Debt Service to the Annual Debt Service for
the four consecutive fiscal quarters most recently ended prior to the date on
which such additional Debt is to be incurred shall have been less than 1.5x, on
a pro forma basis after giving effect thereto and to the application of the
proceeds therefrom, and calculated on the assumption that (1) such Debt and any
other Debt incurred by HRP and its Subsidiaries since the first day of such
four-quarter period and the application of the proceeds therefrom, including to
refinance other Debt, had occurred at the beginning of such period; (2) the
repayment or retirement of any other Debt by HRP and its Subsidiaries since the
first date of such four-quarter period had been repaid or retired at the
beginning of such period (except that, in making such computation, the amount of
Debt repaid under any revolving credit facility shall be computed based upon the
average daily balance of such Debt during such period); (3) in the case of
Acquired Debt or Debt incurred in connection with any acquisition since the
first day of such four-quarter period, the related acquisition had occurred as
of the first day of such period with appropriate adjustments with respect to
such acquisition being included in such pro forma calculation; and (4) in the
case of any acquisition or disposition by HRP or its Subsidiaries of any asset
or group of assets since the first day of such four-quarter period, whether by
merger, stock purchase or sale, or asset purchase or sale, such acquisition or
disposition or any related repayment of Debt had occurred as of the first day of
such period with the appropriate adjustments with respect to such acquisition or
disposition being included in such as adjusted calculation. If the Debt giving
rise to the need to make the foregoing calculation or any other Debt incurred
after the first day of the relevant four-quarter period bears interest at a
floating rate then, for purposes of calculating the Annual Debt Service, the
interest rate on such Debt will be computed on a pro forma basis as if the
average interest rate which would have been in effect during the entire such
four-quarter period had been the applicable rate for the entire such period.

Maintenance of Total Unencumbered Assets. We and our Subsidiaries will
maintain Total Unencumbered Assets of not less than 200% of the aggregate
outstanding principal amount of the Unsecured Debt of HRP and its Subsidiaries
on a consolidated basis.

See "Description of Debt Securities--Certain Covenants" in the accompanying
prospectus for a description of additional covenants applicable to us.

Merger, Consolidation or Sale

We may consolidate with, or sell, lease or convey all or substantially all
of our assets to, or merge with or into, any other entity, provided that:

(1) either we are the continuing entity, or the successor entity (if other
than us) formed by or resulting from any such consolidation or merger or
which shall have received the transfer of such assets is an entity
organized and existing under the laws of the United States or any state
thereof and shall expressly assume the due and punctual payment of the
principal of (and premium, if any, on) and any interest on all of the
notes and the due and punctual performance and observance of all of the
covenants and conditions contained in the Indenture to be performed by
us;

S-21
<PAGE>

(2) immediately after giving effect to such transaction and treating any
indebtedness which becomes an obligation of HRP or any Subsidiary as a
result thereof as having been incurred by HRP or such Subsidiary at the
time of such transaction, no event of default under the Indenture, and no
event which after notice or the lapse of time, or both, would become such
an event of default, shall have occurred and be continuing; and

(3) an officers' certificate and legal opinion covering such conditions are
delivered to the Trustee.

Events of Default, Notice and Waiver

The Indenture provides that the following events are "events of default"
with respect to the notes:

(1) default for 30 days in the payment of any installment of interest payable
on any note when due and payable;

(2) default in the payment of the principal of (or premium, if any, on) any
note when due and payable;

(3) default in the performance, or breach, of any covenant of HRP contained
in the Indenture (other than a covenant added to the Indenture solely for
the benefit of a series of debt securities other than the notes), which
continues for 60 days after written notice as provided in the Indenture;

(4) default under any bond, debenture, note, mortgage, indenture or
instrument under which there may be issued or by which there may be
secured or evidenced any indebtedness for money borrowed by HRP (or by
any Subsidiary, the repayment of which HRP has guaranteed or for which
HRP is directly responsible or liable as obligor or guarantor) having an
aggregate principal amount outstanding of at least $20,000,000, whether
such indebtedness now exists or shall hereafter be incurred or created,
which default shall have resulted in such indebtedness becoming or being
declared due and payable prior to the date on which it would otherwise
have become due and payable, without such indebtedness having been
discharged or such acceleration having been rescinded or annulled within
a period of 10 days after written notice to HRP by the Trustee or to HRP
and the Trustee by the holders of at least 25% in principal amount of the
outstanding notes as provided in the Indenture; or

(5) certain events of bankruptcy, insolvency or reorganization, or court
appointment of a receiver, liquidator or trustee of HRP or any
Significant Subsidiary or for all or substantially all of either of their
property.

Upon the acceleration of notes in accordance with the terms of the
Indenture following the occurrence of an event of default, the principal amount
of the notes, plus accrued and unpaid interest thereon will become due and
payable. See "Description of Debt Securities--Events of Default, Notice and
Waiver" in the accompanying prospectus for a description of rights, remedies and
other matters relating to events of default.

Discharge, Defeasance and Covenant Defeasance

The provisions of the Indenture relating to defeasance and covenant
defeasance described under "Description of Debt Securities--Discharge,
Defeasance and Covenant Defeasance" in the accompanying prospectus will apply to
the notes.

S-22
<PAGE>

Book-Entry System and Form of Notes

The notes will be issued in the form of a single fully registered global
note without coupons that will be deposited with The Depository Trust Company,
New York, New York, and registered in the name of its nominee, Cede & Co. This
means that we will not issue certificates to each owner of notes. One global
note will be issued to DTC, which will keep a computerized record of its
participants (for example, your broker) whose clients have purchased the notes.
The participant will then keep a record of its clients who purchased the notes.
Unless it is exchanged in whole or in part for a certificated note, the global
note may not be transferred, except that DTC, its nominees, and their successors
may transfer the global note as a whole to one another.

Beneficial interests in the global note will be shown on, and transfers of
the global note will be made only through, records maintained by DTC and its
participants.

DTC has provided us with the following information: DTC is a
limited-purpose trust company organized under the New York Banking Law, a
"banking organization" within the meaning of the New York Banking Law, a member
of the United States Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered under the provisions of Section 17A of the Securities Exchange Act of
1934, as amended. DTC holds securities that its participants ("Direct
Participants") deposit with DTC. DTC also records the settlement among Direct
Participants of securities transactions, such as transfers and pledges, in
deposited securities through computerized records for Direct Participants'
accounts. This eliminates the need to exchange certificates. Direct Participants
include securities brokers and dealers (including the Underwriters), banks,
trust companies, clearing corporations and certain other organizations.

DTC's book-entry system is also used by other organizations such as
securities brokers and dealers, banks and trust companies that work through a
Direct Participant. The rules that apply to DTC and its Direct Participants are
on file with the SEC.

DTC is owned by a number of its Direct Participants and by the NYSE, The
American Stock Exchange, Inc. and the National Association of Securities
Dealers, Inc.

We expect that, pursuant to procedures established by DTC, ownership of
beneficial interests in the notes evidenced by the global note will be shown on,
and the transfer of that ownership will be effected only through, records
maintained by DTC or its nominee (with respect to beneficial interests of Direct
Participants) and records of Direct Participants (with respect to beneficial
interests of persons who hold through Direct Participants). Neither we nor the
Trustee will have any responsibility or liability for any aspect of the records
of DTC or for maintaining, supervising or reviewing any records of DTC or any of
its Direct Participants relating to beneficial ownership interests in the notes.
The laws of some states require that certain purchasers of securities take
physical delivery of such securities in definitive form. Such limits and laws
may impair your ability to own, pledge or transfer beneficial interests in the
global note.

So long as DTC or its nominee is the registered owner of the global note,
DTC or such nominee, as the case may be, will be considered the sole owner or
holder of the notes represented by the global note for all purposes under the
Indenture. Except as described below, as an owner of a beneficial interest in
notes evidenced by the global note you will not be entitled to have any of the
individual notes represented by such global note registered in your name, you
will not receive or be entitled to receive physical delivery of any such notes
in definitive form and you will not be considered the owner or holder thereof
under the Indenture for any purpose, including with respect to the giving of any
direction, instructions or approvals to the Trustee thereunder. Accordingly, you
must rely on the procedures of DTC and, if you are not a Direct Participant, on
the procedures of the Direct Participant through which you own your interest, to
exercise any rights of a "holder" under the Indenture. We understand that, under
existing industry practice, if we request any action

S-23
<PAGE>

of holders or if an owner of a beneficial interest in a global note desires to
give or take any action which a holder is entitled to give or take under the
Indenture, DTC would authorize the Direct Participants holding the relevant
beneficial interest to give or take such action, and such Direct Participants
would authorize beneficial owners through such Direct Participants to give or
take such actions or would otherwise act upon the instructions of beneficial
owners holding through them.

Payments of principal of, any premium, if any, and any interest or
additional amount on individual notes represented by a global note registered in
the name of the holder of the global note or its nominee will be made by the
Trustee to or at the direction of the holder of the global note or its nominee,
as the case may be, as the registered owner of the global note under the
Indenture. Under the terms of the Indenture, we and the Trustee may treat the
persons in whose name notes, including a global note, are registered as the
owners thereof for the purpose of receiving such payments. Consequently, neither
we nor the Trustee has or will have any responsibility or liability for the
payment of such amounts to beneficial owners of notes (including principal,
premium, if any, and interest or additional amount).

We believe, however, that it is currently the policy of DTC to immediately
credit the accounts of relevant Direct Participants with such payments in
amounts proportionate to their respective holdings of beneficial interests in
the relevant security as shown on the records of DTC. Payments by Direct
Participants to the beneficial owners of notes will be governed by standing
instructions and customary practice and will be the responsibility of DTC's
Direct Participants. Redemption notices with respect to any notes will be sent
to the holder of the global note (i.e., DTC, its nominee or any subsequent
holder). If less than all of the notes of any series are to be redeemed, we
expect the holder of the global note to determine the amount of interest of each
Direct Participant in the notes to be redeemed by lot. Neither we, the Trustee,
any paying agent nor the security registrar for such notes will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the global note
for such notes.

Neither we nor the Trustee will be liable for any delay by the holder of a
global note or DTC in identifying the beneficial owners of notes and we and the
Trustee may conclusively rely on, and will be protected in relying on,
instructions from the holder of a global note or DTC for all purposes.

The notes, which are represented by the global note, will be exchangeable
for certificated notes with the same terms in authorized denominations only if:

o DTC notifies us that it is unwilling or unable to continue as depositary or
if DTC ceases to be a clearing agency registered under applicable law and a
successor depositary is not appointed by us within 90 days; or

o we determine not to require all of the notes to be represented by a global
note and notify the Trustee of our decision, in which case we will issue
individual notes in denominations of $1,000 and integral multiples thereof.

Same-Day Settlement and Payment

The Underwriters will make settlement for the notes in immediately
available funds. We will make all payments of principal and interest in respect
of the notes in immediately available funds.

The notes will trade in DTC's Same-Day Funds Settlement System until
maturity or until the notes are issued in certificated form, and secondary
market trading activity in the notes will therefore be required by DTC to settle
in immediately available funds. We expect that secondary trading in the
certificated securities, if any, will also be settled in immediately available
funds. No assurance can be given as to the effect, if any, of settlement in
immediately available funds on trading activity in the notes.

S-24
<PAGE>

CERTAIN FEDERAL INCOME TAX CONSIDERATIONS

The following summary of certain United States Federal income tax
consequences of the purchase, ownership and disposition of the notes is based
upon the Internal Revenue Code of 1986, as amended (the "Tax Code"), United
States treasury regulations, and rulings and decisions now in effect, all of
which are subject to change (including changes in effective dates) or possible
differing interpretations. The following discussion deals only with notes held
as capital assets and does not purport to deal with persons in special tax
situations, such as financial institutions, banks, insurance companies,
regulated investment companies, dealers in securities or currencies, persons
holding notes as a hedge against currency risks or as a position in a "straddle"
for tax purposes, or persons whose functional currency is not the United States
dollar. It also does not deal with holders other than original purchasers
(except where otherwise specifically noted). Before purchasing the notes, you
should consult your own tax advisor concerning the application of United States
Federal income tax laws to your particular situation as well as any consequences
of the purchase, ownership and disposition of the notes arising under the laws
of any other taxing jurisdiction.

"U.S. Holder" means a beneficial owner of a note that is for United States
Federal income tax purposes:

(1) a citizen or resident of the United States,

(2) a corporation or partnership (or other entity treated as a corporation or
partnership for United States Federal income tax purposes) created or
organized in or under the laws of the United States, any State thereof or
the District of Columbia (unless otherwise provided by United States
treasury regulations),

(3) an estate the income of which is subject to United States Federal income
taxation regardless of its source,

(4) a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United
States persons have the authority to control all substantial decisions of
the trust (or certain electing trusts in existence on August 20, 1996 to
the extent provided in United States treasury regulations), or

(5) any other person whose income or gain in respect of a note is effectively
connected with the conduct of a United States trade or business.

"Non-U.S. Holder" means a beneficial owner of a note that is not a U.S.
Holder.

The Notes

For United States Federal income tax purposes, each note will be treated as
indebtedness issued by HRP.

U.S. Holders

If you are a U.S. Holder:

Payments of Interest. Interest on a note will generally be includible in
your gross income as ordinary interest income at the time such payments are
received or accrued in accordance with your regular method of tax accounting.
Such interest will be treated as U.S. source income for United States Federal
income tax purposes. Purchase price for a note that is allocable to prior
accrued interest may be treated as offsetting a portion of the interest income
from the next scheduled interest payment on the note.

Disposition of a Note. Upon the sale, exchange, redemption, retirement or
other disposition of a note, you generally will recognize taxable gain or loss
in an amount equal to the difference, if any,

S-25
<PAGE>

between the amount realized upon such sale, exchange, redemption, retirement, or
other disposition (other than amounts representing accrued and unpaid interest
which will be taxable as interest income) and your adjusted tax basis in the
note. Such gain or loss generally will be capital gain or loss, and will be
long-term capital gain or loss if you have held the note for more than one year
at the time of disposition; preferential rates of tax may apply to gains
recognized upon the disposition of notes held for more than one year.

Gain or Income Received by a Foreign Corporation. A foreign corporation
whose income or gain in respect of a note is effectively connected with the
conduct of a United States trade or business, in addition to being subject to
regular United States Federal income tax, may be subject to a branch profits tax
equal to 30% of its "effectively connected earnings and profits" within the
meaning of the Tax Code, for the taxable year, as adjusted for certain items,
unless it qualifies for a lower rate under an applicable tax treaty (as modified
by the branch profits tax rules under the Tax Code).

Non-U.S. Holders

If you are a non-U.S. Holder:

General. Generally, you will not be subject to United States Federal income
taxes on payments of principal, premium (if any), or interest on a note, or on
any gain upon disposition or retirement of a note, if (1) you do not own
directly or indirectly 10% or more of the shares of beneficial interest of HRP
and (2) the last United States payor in the chain of payment (the "Withholding
Agent") has received from you in the year in which a payment of interest or
principal occurs, or in either of the two preceding calendar years, a statement
signed by you under penalties of perjury certifying that you are not a U.S.
Holder and providing your name and address. You may make this statement on an
Internal Revenue Service Form W-8 or a substantially similar form, and you must
inform the Withholding Agent of any change in the information on the statement
within 30 days of such change. If you hold a note through a securities clearing
organization or certain other financial institutions, the organization or
institution may provide a signed statement to the Withholding Agent. However, in
such case, the signed statement must be accompanied by a copy of the IRS Form
W-8 or the substitute form you provided to the organization or institution.
Interest received or gain recognized by you which does not qualify for exemption
from taxation will be subject to United States Federal income tax and
withholding tax at a rate of 30% unless reduced or eliminated by an applicable
tax treaty.

New Treasury Regulations. United States treasury regulations issued on
October 6, 1997 alter the withholding rules on interest paid to a non-U.S.
Holder of a note. Under administrative guidance, these new regulations are
generally effective with respect to interest paid after December 31, 2000.
Withholding will generally be excused under these new regulations if you own
(directly or indirectly) less than 10% of the shares of beneficial interest of
HRP and if you execute the necessary IRS Form W-8. Moreover, under the new
regulations, to obtain a reduced rate of withholding under an income tax treaty,
you generally will be required to provide an IRS Form W-8 certifying your
entitlement to benefits under the treaty. The new regulations also provide
special rules to determine whether, for purposes of determining the
applicability of a tax treaty, interest paid to a non-U.S. Holder that is an
entity should be treated as paid to the entity or to those holding the ownership
interests in that entity, and whether such entity or such holders in the entity
are entitled to benefits under the tax treaty. The new regulations also alter
the information reporting and backup withholding rules applicable to non-U.S.
Holders and, among other things, provide certain presumptions under which a
non-U.S. Holder is subject to backup withholding and information reporting until
certification of non-U.S. status is received from such non-U.S. Holder. The
foregoing

S-26
<PAGE>

is not intended to be a complete discussion of the new regulations, and we urge
you to consult your tax advisor regarding the effect of the new regulations on
an investment in the notes.

Estate Taxes. The notes will not be includable in your estate unless you
own directly or indirectly 10% or more of the shares of beneficial interest of
HRP or, at the time of your death, payments in respect of the notes would have
been effectively connected with your conduct of a trade or business in the
United States.

Backup Withholding

Backup withholding of United States Federal income tax at a rate of 31% may
apply to payments made in respect of the notes if you are not an "exempt
recipient" and you fail to provide certain identifying information (such as your
taxpayer identification number) in the required manner. Generally, individuals
are not exempt recipients, whereas corporations and certain other entities
generally are exempt recipients. If you are a U.S. Holder, payments made to you
in respect of the notes must be reported to the IRS, unless you are an exempt
recipient or establish an exemption. Compliance with the identification
procedures described in the preceding section would establish an exemption from
backup withholding for you if you are a non-U.S. Holder and are not an exempt
recipient.

In addition, if you sell a note through a broker, the broker must withhold
31% of your entire sales proceeds, unless either (1) the broker determines that
the seller is a corporation or other exempt recipient or (2) you provide, in the
required manner, certain identifying information and, if you are a non-U.S.
Holder, you certify that you are a non-U.S. Holder (and certain other conditions
are met). Such a sale must also be reported by the broker to the IRS, unless
either (1) the broker determines that you are an exempt recipient or (2) you
certify your non-U.S. status (and certain other conditions are met).
Certification of your non-U.S. status if you are a non-U.S. Holder would be made
normally on an IRS Form W-8 under penalties of perjury, although in certain
cases it may be possible to submit other documentary evidence.

Any amounts withheld under the backup withholding rules from a payment to
you would be allowed as a refund or a credit against your United States Federal
income tax, provided you furnish the required information to the IRS.

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<PAGE>

UNDERWRITING

Subject to the terms and conditions contained in the purchase agreement, we
have agreed to sell to Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Salomon Smith Barney Inc., A.G. Edwards & Sons, Inc., Legg Mason Wood Walker,
Incorporated, Morgan Stanley & Co. Incorporated, PaineWebber Incorporated and
Prudential Securities Incorporated (the "Underwriters"), and the Underwriters
have severally agreed to purchase the respective principal amount of notes set
forth opposite their names below. In the purchase agreement, the several
Underwriters have agreed, subject to the terms and conditions set forth in the
purchase agreement, to purchase all of the notes offered in this prospectus
supplement if any of the notes are purchased. In the event of a default by an
Underwriter, the purchase agreement provides that, in certain circumstances, the
purchase commitments of the non-defaulting Underwriters may be increased or the
purchase agreement may be terminated.

<TABLE>
<CAPTION>
Principal
Underwriter Amount of Notes
- ---------------------------------------------------- ----------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated ............................... $
Salomon Smith Barney Inc. ....................
A.G. Edwards & Sons, Inc. ....................
Legg Mason Wood Walker, Incorporated .........
Morgan Stanley & Co. Incorporated ............
PaineWebber Incorporated .....................
Prudential Securities Incorporated ........... -----------
Total ............................................ $75,000,000
===========
</TABLE>

The Underwriters have advised us that they propose initially to offer the
notes to the public at the public offering price set forth on the cover page of
this prospectus supplement, and to certain dealers at such price less a
concession not in excess of % of the principal amount thereof. The
Underwriters may allow, and those dealers may reallow, a discount not in excess
of % of the principal amount thereof on sales to certain other dealers. After
the initial public offering, the public offering price, concession and discount
may be changed.

We have granted to the Underwriters an option to purchase additional notes
up to an aggregate principal amount of $11,250,000, at the public offering price
plus accrued interest, if any, less the underwriting discount shown on the cover
page of this prospectus supplement, solely to cover overallotments, if any. The
option may be exercised at any time within 30 days after the date of this
prospectus supplement. To the extent that the option is exercised, each
Underwriter will be committed, subject to certain conditions, to purchase
additional notes proportionate to the Underwriter's initial commitment as
indicated in the preceding table.

The following table shows the per note and total underwriting discount to
be paid by us to the Underwriters. This information is presented assuming either
no exercise or full exercise by the Underwriters of their overallotment option.

<TABLE>
<CAPTION>
Per Note Without Option With Option
---------- ---------------- ------------
<S> <C> <C> <C>
Public offering price ...................... % $ $
Underwriting discount ...................... % $ $
Proceeds, before expenses, to HRP .......... % $ $
</TABLE>

We estimate that we will spend approximately $2.4 million for printing,
rating agency, trustee, legal, accounting, underwriting discount and other
expenses related to the offering of the notes.

S-28
<PAGE>

The notes constitute a new issue of securities with no established trading
market. We do not intend to list the notes on any national securities exchange.
No assurance can be given as to whether or not a trading market for the notes
will develop or as to the liquidity of any trading market for the notes which
may develop.

Until the distribution of the notes is completed, rules of the SEC may
limit the ability of the Underwriters to bid for and purchase the notes. As an
exception to these rules, the Underwriters are permitted to engage in certain
transactions that stabilize the price of the notes. Such transactions consist of
bids or purchases for the purpose of pegging, fixing or maintaining the price of
the notes.

If the Underwriters create a short position in the notes in connection with
this offering, i.e., they sell more notes than are set forth on the cover page
of this prospectus supplement, the Underwriters may reduce that short position
by purchasing notes in the open market.

In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of such purchases.

Neither we nor any of the Underwriters make any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the notes. In addition, neither we nor
any of the Underwriters make any representation that the Underwriters will
engage in such transactions or that such transactions, once commenced, will not
be discontinued without notice.

We have agreed to indemnify the Underwriters against certain liabilities,
including liabilities under the Securities Act of 1933, as amended, or to
contribute to payments the Underwriters may be required to make in respect
thereof.

In the ordinary course of their respective businesses, the Underwriters and
their affiliates have engaged in, and may in the future engage in, commercial
banking and investment banking transactions with us.

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<PAGE>

RATINGS

This prospectus supplement refers to ratings currently assigned to certain
of HRP's debt. A rating assigned to debt reflects the applicable rating agency's
assessment of the likelihood that the debt holders will receive the payments of
interest and principal required to be made. The rating is not a recommendation
to purchase, hold, or sell the notes or any other debt of HRP, and the rating is
not intended as a comment regarding the marketability of the notes or any other
debt of HRP, any market price or suitability for a particular investor. There is
no assurance that any rating will remain for any given period of time or that
any rating will not be lowered or withdrawn entirely by a rating agency if in
the rating agency's judgment circumstances warrant that action. Each rating
should be evaluated independently of any other rating.

LEGAL MATTERS

Sullivan & Worcester LLP, Boston, Massachusetts, our lawyers, have issued
an opinion about the legality of the notes. Brown & Wood LLP, New York, New
York, the Underwriters' lawyers, will also issue an opinion for the
Underwriters. Sullivan & Worcester LLP and Brown & Wood LLP will rely, as to
certain matters of Maryland law, upon an opinion of Ballard Spahr Andrews &
Ingersoll, LLP, Baltimore, Maryland. Barry M. Portnoy was a partner and chairman
of the firm of Sullivan & Worcester LLP until March 31, 1997 and is one of our
Managing Trustees. Mr. Portnoy is also a Managing Trustee of HPT and a director
and 50% owner of REIT Management & Research, Inc., the investment advisor to
HRP, and a director and/or significant shareholder of certain of HRP's tenants.
Sullivan & Worcester LLP represents HPT, REIT Management & Research, Inc., these
tenants and their affiliates on various matters.

EXPERTS

The consolidated financial statements and financial statement schedules of
HRPT Properties Trust included or incorporated by reference in its Annual Report
on Form 10-K for the year ended December 31, 1998, have been audited by Ernst &
Young LLP, independent auditors, as set forth in their reports thereon included
or incorporated by reference therein and incorporated herein by reference which,
as to the years 1998, 1997 and 1996, are based in part on the report of Arthur
Andersen LLP, independent public accountants. The financial statements and
financial statement schedules referred to above are incorporated herein by
reference in reliance upon such reports given upon the authority of such firms
as experts in accounting and auditing.

S-30
<PAGE>

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

The SEC allows us to "incorporate by reference" the information we file
with them, which means that we may disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus supplement, and information that we
subsequently file with the SEC will automatically update and supersede this
information. We incorporate by reference the documents listed below which were
filed with the SEC under the Securities Exchange Act of 1934, as amended
("Exchange Act"):

o Annual Report on Form 10-K for the year ended December 31, 1998;

o Quarterly Report on Form 10-Q for the quarter ended March 31, 1999; and

o Current Reports on Form 8-K dated March 5, 1999, March 11, 1999 and March
19, 1999.

We also incorporate by reference each of the following documents that we
will file with the SEC after the date of this prospectus supplement but before
the end of the notes offering:

o Reports filed under Sections 13(a) and (c) of the Exchange Act;

o Definitive proxy or information statements filed under Section 14 of the
Exchange Act in connection with any subsequent shareholders' meeting; and

o Any reports filed under Section 15(d) of the Exchange Act.

You may request a copy of any of the filings (excluding exhibits), at no
cost, by writing or telephoning us at the following address:

Investor Relations
HRPT Properties Trust
400 Centre Street
Newton, Massachusetts 02458
(617) 332-3990

WHERE YOU CAN FIND MORE INFORMATION

You may read and copy any material that we file with the SEC at the SEC's
Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. You may
obtain information on the operation of the Public Reference Room by calling the
SEC at 1-800-SEC-0330. You may access our electronic filings on the SEC's
Internet site, http://www.sec.gov, which contains reports, proxy and information
statements and other information regarding issuers that file electronically with
the SEC.

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<PAGE>

FORWARD-LOOKING STATEMENTS

This prospectus supplement contains forward-looking statements. We have
based these statements on our current expectations or projections about future
events and on assumptions we have made. These forward-looking statements are
subject to certain risks and uncertainties which could cause actual results or
events to differ materially from those we anticipate or project. Prospective
purchasers should not place undue reliance on these forward-looking statements.
We undertake no obligation to update or revise any forward-looking statements as
a result of new information, future events or otherwise.

----------------

You should rely only on the information contained or incorporated by
reference in this prospectus supplement or the accompanying prospectus. We have
not, and the Underwriters have not, authorized any other person to provide you
with different information. If anyone provides you with different or
inconsistent information, you should not rely on it. We are not, and the
Underwriters are not, making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted. You should assume that
the information appearing in this prospectus supplement or the accompanying
prospectus, as well as information we have previously filed with the SEC and
incorporated by reference, is accurate as of the date on the front cover of this
prospectus supplement only. Our business, financial condition, results of
operations and prospects may have changed since that date.

----------------

The Amended and Restated Declaration of Trust establishing HRP, dated July
1, 1994, a copy of which, together with all amendments thereto, 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 HRP
shall be held to any personal liability, jointly or severally, for any
obligation of, or claim against, HRP. All persons dealing with HRP, in any way,
shall look only to the assets of HRP for the payment of any sum or the
performance of any obligation.

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<PAGE>

GLOSSARY

"Acquired Debt" means Debt of a person or entity (1) existing at the time
such person or entity becomes a Subsidiary or (2) assumed in connection with the
acquisition of assets from such person or entity, in each case, other than Debt
incurred in connection with, or in contemplation of, such person or entity
becoming a Subsidiary or such acquisition. Acquired Debt is deemed to be
incurred on the date of the related acquisition of assets from any person or
entity or the date the acquired person or entity becomes a Subsidiary.

"Annual Debt Service" as of any date means the maximum amount which is
expensed in any 12-month period for interest on Debt of HRP and its
Subsidiaries.

"Business Day" means any day other than a Saturday or Sunday or a day on
which banking institutions in The City of New York or in the city in which the
Corporate Trust Office of the Trustee is located are required or authorized to
close.

"Capital Stock" means, with respect to any entity, any capital stock
(including preferred stock), shares, interests, participation or other ownership
interests (however designated) of such entity and any rights (other than debt
securities convertible into or exchangeable for capital stock), warrants or
options to purchase any thereof.

"Consolidated Income Available for Debt Service" for any period means
Earnings from Operations of HRP and its Subsidiaries plus amounts which have
been deducted, and minus amounts which have been added, for the following
(without duplication): (1) interest on Debt of HRP and its Subsidiaries, (2)
provision for taxes of HRP and its Subsidiaries based on income, (3)
amortization of debt discount and deferred financing costs, (4) provisions for
gains and losses on properties and property depreciation and amortization, (5)
the effect of any noncash charge resulting from a change in accounting
principles in determining Earnings from Operations for such period and (6)
amortization of deferred charges.

"Debt" of HRP or any Subsidiary means, without duplication, any
indebtedness of HRP or any Subsidiary, whether or not contingent, in respect of

(1) borrowed money or evidenced by bonds, notes, debentures or similar
instruments,

(2) indebtedness for borrowed money secured by any encumbrance existing on
property owned by HRP or any Subsidiary, to the extent of the lesser of
(x) the amount of indebtedness so secured and (y) the fair market value
of the property subject to such encumbrance,

(3) the reimbursement obligations, contingent or otherwise, in connection
with any letters of credit actually issued (other than letters of credit
issued to provide credit enhancement or support with respect to other
indebtedness of HRP or any Subsidiary otherwise reflected as Debt
hereunder) or amounts representing the balance deferred and unpaid of the
purchase price of any property or services, except any such balance that
constitutes an accrued expense or trade payable, or all conditional sale
obligations or obligations under any title retention agreement,

(4) the principal amount of all obligations of HRP or any Subsidiary with
respect to redemption, repayment or other repurchase of any Disqualified
Stock, or

(5) any lease of property by HRP or any Subsidiary as lessee which is
reflected on HRP's consolidated balance sheet as a capitalized lease in
accordance with GAAP, to the extent, in the case of items of indebtedness
under (1) through (3) above, that any such items (other than letters of
credit) would appear as a liability on HRP's consolidated balance sheet
in accordance with GAAP.

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<PAGE>

Debt also includes, to the extent not otherwise included, any obligation by
HRP or any Subsidiary to be liable for, or to pay, as obligor, guarantor or
otherwise (other than for purposes of collection in the ordinary course of
business), Debt of another person or entity (other than HRP or any Subsidiary)
(it being understood that Debt shall be deemed to be incurred by HRP or any
Subsidiary whenever HRP or such Subsidiary shall create, assume, guarantee or
otherwise become liable in respect thereof).

"Disqualified Stock" means, with respect to any entity, any Capital Stock
of such entity which by the terms of such Capital Stock (or by the terms of any
security into which it is convertible or for which it is exchangeable or
exercisable), upon the happening of any event or otherwise (1) matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise
(other than Capital Stock which is redeemable solely in exchange for common
stock or shares), (2) is convertible into or exchangeable or exercisable for
Debt or Disqualified Stock, or (3) is redeemable at the option of the holder
thereof, in whole or in part (other than Capital Stock which is redeemable
solely in exchange for common stock or shares), in each case on or prior to the
stated maturity of the notes.

"Earnings from Operations" for any period means net earnings excluding
gains and losses on sales of investments, extraordinary items and property
valuation losses, as reflected in the financial statements of HRP and its
Subsidiaries for such period, determined on a consolidated basis in accordance
with GAAP.

"Funds From Operations" or "FFO" means net income (computed in accordance
with GAAP), before gain or loss on sale of properties and extraordinary items,
depreciation and other non-cash items and includes HRP's pro rata share of the
FFO of HPT, a former subsidiary of HRP, which is now a separate publicly traded
REIT in which we maintain a minority equity interest.

"GAAP" means generally accepted accounting principles.

"Ratio of Earnings to Fixed Charges" for any period means HRP's earnings
divided by fixed charges. For this purpose, earnings have been calculated by
adding fixed charges to income before income taxes and extraordinary items.
Fixed charges consist of interest costs including amortization of deferred
financing costs.

"Secured Debt" means Debt secured by any mortgage, lien, charge, pledge or
security interest of any kind.

"Significant Subsidiary" means any Subsidiary which is a "significant
subsidiary" (within the meaning of Regulation S-X, promulgated by the SEC under
the Securities Act of 1933, as amended) of HRP.

"Subsidiary" means any corporation or other entity of which a majority of
(1) the voting power of the voting equity securities or (2) the outstanding
equity interests of which are owned, directly or indirectly, by HRP or one or
more other Subsidiaries of HRP. For the purposes of this definition, "voting
equity securities" means equity securities having voting power for the election
of directors, whether at all times or only so long as no senior class of
security has such voting power by reason of any contingency.

"Total Assets" as of any date means the sum of (1) the Undepreciated Real
Estate Assets and (2) all other assets of HRP and its Subsidiaries determined in
accordance with GAAP (but excluding accounts receivable and intangibles).

"Total Unencumbered Assets" means the sum of (1) those Undepreciated Real
Estate Assets not subject to an encumbrance for borrowed money and (2) all other
assets of HRP and its Subsidiaries not subject to an encumbrance for borrowed
money determined in accordance with GAAP (but excluding accounts receivable and
intangibles).

S-34
<PAGE>

"Undepreciated Real Estate Assets" as of any date means the cost (original
cost plus capital improvements) of real estate assets of HRP and its
Subsidiaries on such date, before depreciation and amortization, determined on a
consolidated basis in accordance with GAAP.

"Unsecured Debt" means Debt which is not secured by any of the properties
of HRP or any Subsidiary.

S-35
<PAGE>

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$75,000,000

HRPT Properties Trust

% Monthly Income Senior Notes due 2011

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PROSPECTUS SUPPLEMENT
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The Joint Book-Running Managers are:

Merrill Lynch & Co. Salomon Smith Barney

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A.G. Edwards & Sons, Inc.

Legg Mason Wood Walker
Incorporated

Morgan Stanley Dean Witter

PaineWebber Incorporated

Prudential Securities

June , 1999

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