SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 10, 2000
HRPT PROPERTIES TRUST
(Exact name of registrant as specified in charter)
Maryland 1-9317 04-6558834
(State or other jurisdiction (Commission (I.R.S. employer
of incorporation) file number) identification number)
400 Centre Street, Newton, Massachusetts 02458
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: 617-332-3990
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CERTAIN IMPORTANT FACTORS
This current report contains forward looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These forward looking
statements appear in a number of places in this current report and include
references to the future business activities and prospects of Senior Housing
Properties Trust (SNH), a minority owned former subsidiary of HRPT Properties
Trust (HRPT), to a possible disposition by HRPT of its ownership in SNH, as well
as references to possible property sales or joint venture proceeds which might
be realized by HRPT, to future possible capital gains, and to the security and
amounts of future dividends. These forward looking statements are not
guaranteed. They are based upon HRPT's present expectations and assumptions.
These expectations and assumptions involve risks and uncertainties, some of
which may be beyond HRPT's control. For example, HRPT may be unable to sell
properties or enter joint ventures on acceptable terms, other parties to sales
contracts may withdraw or default, HRPT may or may not repurchase any shares or
HRPT may be unable to maintain its tenant occupancies or lease rents. Investors
are cautioned not to place undue reliance upon forward looking statements as
events described or implied in such statements may not occur.
THE THIRD AMENDMENT AND RESTATEMENT OF DECLARATION OF TRUST OF THE COMPANY,
DATED JULY 1, 1994 A COPY OF WHICH, TOGETHER WITH ALL AMENDMENTS THERETO (THE
"DECLARATION"), IS DULY FILED IN THE OFFICE OF THE DEPARTMENT OF ASSESSMENTS AND
TAXATION OF THE STATE OF MARYLAND, PROVIDES THAT THE NAME "HRPT PROPERTIES
TRUST" REFERS TO THE TRUSTEES UNDER THE DECLARATION COLLECTIVELY AS TRUSTEES,
BUT NOT INDIVIDUALLY OR PERSONALLY, AND THAT NO TRUSTEE, OFFICER, SHAREHOLDER,
EMPLOYEE OR AGENT OF THE TRUST SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY
OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, THE TRUST. ALL PERSONS
DEALING WITH THE TRUST, IN ANY WAY, SHALL LOOK TO THE ASSETS OF THE TRUST FOR
THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.
Item 5. Other Events.
(a) New Dividend Rate.
On July 11, 2000, HRPT Properties Trust (the "Company" or "HRPT")
announced its new dividend rate of $0.20 per share per quarter (representing an
annualized rate of $0.80 per share). The quarterly dividend declared on that
date will be paid to shareholders of record at the close of business on July 26,
2000, and is expected to be distributed on or about August 25, 2000. The new
rate represents a reduction from the dividend rate previously paid by the
Company of $0.32 per share per quarter (representing an annualized rate of $1.28
per share).
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In connection with the Company's announcement, John A. Mannix,
President of HRPT, issued the following statement:
"The previous dividend rate was set in 1999 when HRPT
distributed to shareholders a majority interest in its subsidiary
Senior Housing Properties Trust (NYSE:SNH) which owns nursing homes and
other senior living properties. Two nursing home company tenants of SNH
which were responsible for about half of SNH rents filed for bankruptcy
in early 2000, and, in April 2000, the dividends which HRPT received
from its retained minority interest in SNH were reduced by over $15
million per year.
"HRPT continues to believe that its retained ownership of SNH
represents a potentially valuable asset. However, we recognize that SNH
faces material business challenges in the short term. SNH expects to
assume operating responsibility for over 50 nursing homes and it is
unclear how successful those future operations may be. It may be
appropriate for HRPT to dispose of its investment in SNH in the future.
In these circumstances, the new HRPT dividend rate announced today has
been established by HRPT's Board at a level which the Board believes
may be sustained without dependence upon future dividends from SNH.
"The new dividend may be adjusted in the future because of
REIT tax considerations or otherwise, especially if currently planned
property sales produce significant capital gains. Nonetheless, HRPT's
Board determined to adopt what it believes is a conservative dividend
pay out percentage of cash flow at least until the future direction of
SNH is clarified and the results of HRPT's current property sales
efforts are known."
(b) Status of Business Initiatives.
As previously reported, in December 1999 the Company announced that:
* The Company had decided to explore the possible sales of up to
ten of its office properties from which the Company then
expected to realized aggregate proceeds of approximately $150
to $160 million.
* The Company had commenced discussions, which were in
preliminary stages, regarding two separate joint ventures in
which part interests in some of its larger properties may be
sold to investors. If those joint ventures were successfully
concluded, the Company stated that based on the preliminary
discussions it expected to realize aggregate net proceeds of
between $200 million and $400 million.
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* The Company's Board of Trustees had authorized a share buy
back program for up to ten percent of its fully diluted common
shares outstanding, or approximately 14 million common shares.
Under that program, if commenced, shares would be purchased in
open market transactions or in privately negotiated
transactions during the calendar year 2000 at prices
acceptable to the Company in its discretion. The Company
stated that it did not intend to increase debt leverage to
purchase shares, but, instead, intended to use proceeds of
asset sales or joint ventures, if any, to fund share
purchases.
* That if the above described dispositions do occur, the Company
expected to use the net proceeds to prepay debt, to
selectively purchase new investments and to fund the share buy
back program.
The Company has announced the following progress report of this
business plan:
"HRPT has either sold or entered contracts or letters of
intent to sell properties for a total of $72 million. We are actively
marketing several additional properties for sale. At this time, we
expect that property sales totaling at least the $150-160 million
projected last December will be concluded before the end of 2000.
"We pointed out last December that finding a joint investor
who shares HRPT's business philosophy of investing for long term income
with a conservative debt structure might not be easy. We continue to
have discussions with possible investors. Frankly, however, at this
time, we do not know if these efforts will be successfully concluded
during the current year.
"HRPT has not purchased any new properties during the first
six months of 2000. In light of the rising interest rate environment we
have decided that repaying debt should have a priority call on
available cash. HRPT has not purchased any shares under the previously
authorized share buy back program. Our Board determined to leave in
effect the current authorization for a share buy back program so that
it may be implemented depending upon the timing and amounts of property
sales or joint venture proceeds, and upon market conditions. However,
at this time, HRPT does not expect that the full authorization of up to
14 million shares or any preset amount of share buy backs will be
completed during 2000."
As noted in the Company's previous report, there is no assurance that
asset sales or joint ventures will occur or, if they occur, when or at what
price and on what terms they will occur.
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(c) Redemption of Remarketed Reset Notes.
On July 10, 2000, the Company completed its optional redemption of all
of its outstanding Remarketed Reset Notes due July 9, 2007. At the time of the
redemption, $222.5 million of those notes were outstanding and bore interest at
a rate, which was subject to periodic resets, at a spread over LIBOR (effective
rate of 7.52% per annum immediately prior to the redemption date). The
redemption price was 100% of the principal amount of the notes redeemed, plus
accrued and unpaid interest to the redemption date. The redemption was funded
with a drawing under the Company's $500 million bank revolving credit facility,
which matures in April 2002. Drawings under the credit facility currently bear
interest at a spread over LIBOR. At July 14, 2000, the credit facility had an
outstanding balance of $391 million and an effective interest rate on
outstanding loans of 7.40% per annum.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HRPT PROPERTIES TRUST
By: /s/ John Popeo
John Popeo
Treasurer and Chief
Financial Officer
Date: July 18, 2000
