Filed Pursuant to Rule 424(b)(5)
File No. 333-43573
PROSPECTUS SUPPLEMENT
- ---------------------
(To prospectus dated January 15, 1998)
2,750,000 Shares
Hospitality Properties Trust
Common Shares of Beneficial Interest
----------------
We are offering for sale 2,750,000 common shares of beneficial interest.
Our common shares are listed on the New York Stock Exchange under the symbol
"HPT." The last reported sale price for the common shares on November 11, 1998
was $26.6875 per share.
----------------
<TABLE>
<CAPTION>
Per Share Total
--------- ------------
<S> <C> <C>
Public Offering Price ..................................... $ 26.6875 $73,390,625
Underwriting Discount ..................................... $ 1.37 $ 3,767,500
Proceeds, before expenses, to Hospitality Properties Trust $ 25.3175 $69,623,125
</TABLE>
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.
We have granted the underwriter a 30-day option to purchase up to an
additional 412,500 shares in order to satisfy overallotments, if any.
We expect that the common shares will be ready for delivery in New York,
New York on or about November 17, 1998.
----------------
Merrill Lynch & Co.
----------------
The date of this prospectus supplement is November 11, 1998.
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
Page
-----
<S> <C>
Prospectus Supplement
The Company ............................................................... S-3
Recent Developments ....................................................... S-4
Price Range of Shares ..................................................... S-6
Dividends ................................................................. S-6
Use of Proceeds ........................................................... S-6
Federal Income Tax and ERISA Consequences ................................. S-7
Underwriting .............................................................. S-9
Legal Matters ............................................................. S-10
Experts ................................................................... S-10
Incorporation of Certain Information by Reference ......................... S-11
Where You Can Find More Information ....................................... S-11
Forward-Looking Statements ................................................ S-12
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 ............................................ 2
Description of Shares ..................................................... 11
Description of Preferred Shares ........................................... 11
Description of Depositary Shares .......................................... 17
Description of Warrants ................................................... 20
Limitation of Liability; Shareholder Liability ............................ 20
Redemption; Trustees; Business Combinations and Control Share Acquisitions 21
Plan of Distribution ...................................................... 25
Legal Matters ............................................................. 26
Experts ................................................................... 26
</TABLE>
In this prospectus supplement, the term "HPT" includes Hospitality
Properties Trust and its consolidated subsidiaries.
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 Underwriter has 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
Underwriter is 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 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.
S-2
<PAGE>
THE COMPANY
Hospitality Properties Trust ("HPT") is a real estate investment trust
("REIT") formed to acquire, own and lease hotels. We currently own or have
entered agreements to acquire a total of 167 hotels with 22,367 rooms costing
approximately $1.8 billion. Our business strategy is to invest in high quality
hotels leased to experienced hotel operators for minimum rents which exceed our
cost of capital. The average age of our hotels is six years. We believe that
our hotels are among the newest, best designed and best located hotels in their
respective market segments.
HPT Investments by Hotel Brand
Summerfield Suites(R)
15 hotels/1,822 rooms
$240 million .................................. 14%
Residence Inn by Marriott(R)
31 hotels/3,961 suites
$335 million .................................. 19%
Courtyard by Marriott(R)
63 hotels/8,982 rooms
$621 million .................................. 35%
Wyndham(R)
12 hotels/2,321 rooms
$183 million .................................. 10%
Sumner Suites(R)
14 hotels/1,641 suites
$140 million .................................. 8%
Candlewood(R)
32 hotels/3,640 suites
$241 milion ................................... 14%
One of our principal business objectives is to achieve growth in cash flow
from dependable and diverse revenue sources. To achieve this objective, we seek
to operate as follows: invest in high quality properties operated by
unaffiliated hotel operating companies; use moderate debt leverage to fund
additional investments; design leases which require minimum rents which provide
positive spreads over our cost of investment capital; and pursue
diversification so that we receive our rents from diverse properties and
operators.
Most other public hotel REITs seek to control the operations of hotels in
which they invest by leasing their properties to affiliated tenants. These
other hotel REITs generally design their affiliated leases to capture
substantially all net operating revenues from their hotels as cash available
for distribution (CAD). Our leases are designed so that net operating revenues
from our hotels may exceed our rents by considerable coverage margins.
HPT is organized as a Maryland real estate investment trust. Its principal
place of business is 400 Centre Street, Newton, Massachusetts 02458 and its
telephone number is (617) 964-8389.
S-3
<PAGE>
RECENT DEVELOPMENTS
From January 1, 1998 through the date hereof, we have engaged in the
following significant activities.
Investments
Closed Acquisitions for $489 Million. Since January 1998, we have
purchased 43 hotels (5,207 rooms/suites) for $489 million.
o 15 Summerfield Suites[RegTM] hotels (1,822 rooms/suites) for $240 million.
These hotels are leased on a combined basis to a subsidiary of Summerfield
Hotel Corporation. Summerfield is a 100% owned subsidiary of Patriot
American Hospitality, Inc. ("Patriot"), a publicly owned company listed on
the NYSE. This lease has an initial term ending in 2015. Under the lease
we are entitled to receive minimum rent of $25 million per year plus
percentage rent based upon increases in total sales at these hotels.
o 23 Candlewood[RegTM] hotels (2,586 rooms/suites) for $168 million. We have
agreed to purchase two combinations of Candlewood hotels. Each combination
of Candlewood hotels is leased to a subsidiary of Candlewood Hotel
Corporation ("Candlewood"), a publicly held company listed on Nasdaq. The
first purchase agreement involved our buying 15 hotels for $100 million.
We purchased five of these 15 hotels during 1997, and we purchased the
remaining 10 hotels between January and April 1998. The lease for the
first combination expires in 2011. The second purchase agreement, entered
into in May 1998, involved our buying 17 hotels for $141 million. As of
November 6, 1998, we have acquired 13 of these 17 hotels. The lease for
the second combination expires in 2011. Under both leases we are entitled
to receive annual minimum rents equal to 10% of the hotel purchase prices
plus percentage rent based upon increases in total sales at these hotels.
o Two Residence Inn by Marriott[RegTM] and Three Courtyard by
Marriott[RegTM] hotels (799 rooms/ suites) for $81 million. We currently
own four combinations of Marriott hotels. We purchased three of these
combinations involving 28 Residence Inn by Marriott[RegTM] and 57
Courtyard by Marriott[RegTM] hotels in 1995, 1996 and 1997. All of our
Marriott hotels are leased to or managed by subsidiaries of Marriott
International Inc. ("Marriott"), a publicly owned company listed on the
NYSE. We entered into an agreement to purchase the fourth combination of
Marriott hotels (six Residence Inn by Marriott[RegTM] and three Courtyard
by Marriott[RegTM] hotels) in 1997. We have now acquired eight of the nine
hotels in this fourth combination. The lease term for this fourth
combination of Marriott hotels is through 2012. Under the leases for these
hotels we are entitled to receive annual minimum rent equal to 10% of our
purchase price plus percentage rent based upon increases in total sales at
these hotels.
Committed Acquisitions for $48 Million. We have entered into agreements,
described above, to acquire an additional five hotels (621 rooms/suites) for
$48 million. These five hotels include four Candlewood[RegTM] hotels and one
Courtyard by Marriott[RegTM] hotel. When we acquire these hotels, we will add
them to the combination leases described above. We expect to buy four of these
hotels during 1998 and the remaining hotel in early 1999.
Other Investment Activities. In the normal course of our business, we
regularly evaluate opportunities to acquire and lease hotels. We currently have
several such investment opportunities under consideration. However, other than
the transactions described above, none of these investment opportunities has
matured to the point where we have entered into a purchase agreement. We may
agree to acquire and lease additional hotels involving material amounts before
the end of 1998.
S-4
<PAGE>
Financing
Investment Grade Ratings. In February 1998, HPT became the first and is
today the only hotel REIT to have its senior unsecured debt rated investment
grade by Moody's Investors Service (Baa3) and Standard and Poor's (BBB-).
Issuance of Unsecured Notes. During February 1998, we issued $150 million
of unsecured 7% Senior Notes which mature in February 2008. During November
1998, we agreed to issue $100 million of 81/4% Monthly Income Senior Notes
which mature in November 2005. We expect to receive $97.5 million of net
proceeds (after underwriters' discount) on or about November 12, 1998. We
expect to use such net proceeds to repay a portion of the amount outstanding on
our bank credit facility. In connection with our public offering of the notes
maturing in 2005, we granted to our underwriters a 30-day option to purchase
additional notes on the same terms and conditions as the initial issuance. The
option covers to up to $15 million principal amount of notes and may be
exercised in order to satisfy overallotments, if any. We cannot predict whether
the underwriters will exercise the option.
Prepayment of All Secured Debt. At the end of 1997, certain of our
properties were encumbered by $125 million of mortgage debt and our revolving
credit facility was secured by mortgages on other properties. In February 1998,
we prepaid all of our secured obligations, and we now have no secured debt
outstanding.
Expanded Revolving Credit Facility. In June 1998, we closed a $300 million
unsecured, four-year, revolving credit facility with a syndicate of 14 banks
(the "Credit Facility"). The Credit Facility is priced at a spread over LIBOR
and expires in 2002.
$135 Million of Common Equity. During 1998, we sold 3.9 million common
shares of beneficial interest in offerings to five unit investment trusts
sponsored by certain investment banks. These offerings raised a total of $135
million of gross proceeds ($128 million net after underwriters' discounts).
S-5
<PAGE>
PRICE RANGE OF SHARES
HPT's common shares are listed on the NYSE under the symbol "HPT." The
following table sets forth the range of high and low closing sales prices per
common share on the NYSE on a quarterly basis from August 15, 1995, the initial
public offering date, through the date indicated.
<TABLE>
<CAPTION>
Price Range
of Common Shares
-----------------------
High Low
<S> <C> <C>
1995:
3rd quarter (from August 15) ................ $ 26-3/8 $ 24-5/8
4th quarter ................................. 26-3/4 24-3/4
1996:
1st quarter ................................. $ 27-3/4 $ 25-5/8
2nd quarter ................................. 26-3/4 24-3/4
3rd quarter ................................. 26-7/8 25-1/2
4th quarter ................................. 29-1/2 25-5/8
1997:
1st quarter ................................. $ 33 $ 28-3/8
2nd quarter ................................. 32-1/8 29-3/8
3rd quarter ................................. 35-15/16 30-7/16
4th quarter ................................. 38-5/16 31-3/4
1998:
1st quarter ................................. $ 36-3/4 $ 32-1/16
2nd quarter ................................. 35-5/8 29-7/8
3rd quarter ................................. 34-9/16 24-13/16
4th quarter (through November 11, 1998) ..... 29-15/16 25-5/16
</TABLE>
DIVIDENDS
We pay regular quarterly dividends on our common shares. The current
quarterly dividend rate is $0.66 per share. The following chart shows the
history of our dividend rate since 1996. The dividends shown are generally paid
in the quarter following the quarter to which they relate.
<TABLE>
<CAPTION>
1996 1997 1998
--------- --------- ---------
<S> <C> <C> <C>
First Quarter ........... $ .58 $ .59 $ .64
Second Quarter .......... .58 .61 .65
Third Quarter ........... .59 .62 .66
Fourth Quarter .......... .59 .63 --
Total ....................... $ 2.34 $ 2.45
</TABLE>
USE OF PROCEEDS
We estimate that the proceeds of this offering of common shares after the
underwriting discount will be approximately $70 million. We expect to use the
net proceeds of this offering to repay a portion of amounts outstanding under
the Credit Facility and for general business purposes. The Credit Facility
bears interest at LIBOR plus a spread and matures on March 19, 2002. At
September 30, 1998, the effective interest rate on the Credit Facility was
6.76% per annum. Until we use the proceeds of this offering, they will be
deposited in interest-bearing accounts or invested in short-term securities,
including securities which may not be investment grade rated.
S-6
<PAGE>
FEDERAL INCOME TAX AND ERISA CONSEQUENCES
The following description of certain federal income tax considerations and
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
considerations relating to HPT supplements and updates the more detailed
description of these matters in our Annual Report on Form 10-K for the year
ended December 31, 1997, which we incorporate in this prospectus supplement by
reference. Sullivan & Worcester LLP, Boston, Massachusetts, has rendered a
legal opinion that the discussions in this section and in the sections of our
1997 Annual Report captioned "Federal Income Tax Considerations" and "ERISA
Plans, Keogh Plans and Individual Retirement Accounts" are accurate in all
material respects and, taken together, fairly summarize the federal income tax
and ERISA issues discussed in those sections and the opinions of counsel
referred to in those sections represent Sullivan & Worcester LLP's opinions on
those subjects. Specifically, subject to qualifications and assumptions
contained in its opinion and in our 1997 Annual Report, Sullivan & Worcester
LLP has given opinions to the effect (1) that HPT has been organized in
conformity with the requirements for federal tax qualification as a REIT, that
HPT has qualified as a REIT for its taxable years 1995, 1996 and 1997, and that
our current and currently anticipated investments and our current plan of
operation will enable us to continue to meet the requirements for federal tax
qualification and taxation as a REIT, and (2) that under the "plan assets"
regulations promulgated by the Department of Labor under ERISA, the common
shares are publicly offered securities and the assets of HPT will not be deemed
to be "plan assets" under ERISA.
Subject to the detailed discussion contained in our 1997 Annual Report, we
believe that we have qualified, and we intend to remain qualified, as a REIT
under the Internal Revenue Code of 1986, as amended (the "Tax Code"). As a
REIT, we generally will not be subject to federal income tax on our net income
distributed as dividends to our shareholders. Distributions to you generally
will be includable in your income as dividends to the extent such distributions
do not exceed current or accumulated earnings; distributions in excess of
current or accumulated earnings generally will be treated for tax purposes as a
return of capital to the extent of your basis in your common shares, and will
reduce such basis.
The Taxpayer Relief Act of 1997 provided that for certain noncorporate
U.S. shareholders, long-term capital gains taken into account on or after May
7, 1997 were taxed at varying maximum rates of 20%, 25%, or 28%, depending
generally upon the type of property disposed of and the holding period in such
property at the time of disposition. Generally, gains from the sale of property
held for more than 18 months were taxed at the 20% rate, gains from the sale of
property held more than one year but not more than 18 months were taxed at the
28% rate, and gains attributable to depreciation with respect to real estate
held more than 18 months were taxed at the 25% rate. The Internal Revenue
Service Restructuring and Reform Act of 1998 reduced these holding period
requirements for the 20% and 25% maximum rates from more than 18 months to more
than one year, effective generally for amounts properly taken into account on
or after January 1, 1998. Thus, gains from the sale of property held for more
than one year are now generally taxed at the 20% (rather than 28%) maximum
rate, with a special 25% maximum rate for gains attributable to real estate
depreciation. Accordingly, we expect that if we pay any 1998 capital gain
dividends, they will be subject to the maximum rates of 20% and 25% for an
eligible noncorporate U.S. shareholder. Similarly, capital gain on common
shares held for over one year will generally be long-term capital gains taxed
at a 20% maximum rate for an eligible noncorporate U.S. shareholder.
We intend to conduct our affairs so that our assets will not be deemed to
be "plan assets" of any individual retirement account, employee benefit plan
subject to Title 1 of ERISA, or other qualified retirement plan subject to
Section 4975 of the Tax Code which acquires our common shares.
S-7
<PAGE>
Before you purchase our common shares, we advise you to consult your own
professional advisor regarding the specific federal, state, local, foreign and
other tax and ERISA consequences to you of the purchase, ownership and sale of
the common shares offered in this offering.
S-8
<PAGE>
UNDERWRITING
Subject to the terms and conditions contained in the underwriting
agreement, we have agreed to sell to Merrill Lynch, Pierce, Fenner & Smith
Incorporated (the "Underwriter"), and the Underwriter has agreed to purchase
from us, 2,750,000 common shares of beneficial interest. In the underwriting
agreement, the Underwriter has agreed, subject to the terms and conditions set
forth in the underwriting agreement, to purchase all of the common shares if
any of the common shares are purchased.
The Underwriter has advised us that it proposes initially to offer the
common shares 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 $.70 per common share. The Underwriter may allow,
and such dealers may reallow, a discount not in excess of $.10 per share to
certain other dealers. After the initial public offering, the public offering
price and concession may be changed.
We have granted to the Underwriter an option to purchase up to an
aggregate of 412,500 additional common shares, at the public offering price
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.
The following table shows the per share and total underwriting discount to
be paid by us to the Underwriter. This information is presented assuming either
no exercise or full exercise by the Underwriter of its overallotment option.
<TABLE>
<CAPTION>
Per Share Without Option With Option
--------- -------------- ------------
<S> <C> <C> <C>
Public offering price ...................... $ 26.6875 $73,390,625 $84,399,219
Underwriting discount ...................... $ 1.37 $ 3,767,500 $ 4,332,625
Proceeds, before expenses, to HPT .......... $ 25.3175 $69,623,125 $80,066,594
</TABLE>
We estimate that we will spend approximately $500,000 for printing, legal,
accounting, transfer agent, NYSE listing and other expenses related to the
offering of the common shares.
Until the distribution of the common shares is completed, rules of the SEC
may limit the ability of the Underwriter to bid for and purchase common shares.
As an exception to these rules, the Underwriter is permitted to engage in
certain transactions that stabilize the price of the common shares. Such
transactions consist of bids or purchases for the purpose of pegging, fixing or
maintaining the price of the common shares.
If the Underwriter creates a short position in the common shares in
connection with this offering, i.e., it sells more common shares than are set
forth on the cover page of this prospectus supplement, the Underwriter may
reduce that short position by purchasing common shares 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 the Underwriter makes 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 common shares. In addition, neither we nor
the Underwriter makes any representation that the Underwriter will engage in
such transactions or that such transactions, once commenced, will not be
discontinued without notice.
We have agreed to indemnify the Underwriter against certain liabilities,
including liabilities under the Securities Act of 1933, as amended, or to
contribute to payments the Underwriter may be required to make in respect
thereof.
S-9
<PAGE>
We have agreed that for a period of 30 days from the date of this
prospectus supplement we will not, without prior and written consent of the
Underwriter, offer, sell or otherwise dispose of any common shares or any other
security convertible into or exercisable for common shares (except for the
common shares offered in this offering and common shares issued pursuant to our
Incentive Share Award Plan).
In the ordinary course of its business, the Underwriter and its affiliates
have engaged in, and may in the future engage in, commercial banking and
investment banking transactions with us.
LEGAL MATTERS
Sullivan & Worcester LLP, Boston, Massachusetts, our lawyers, have issued
an opinion about the legality of the common shares. Brown & Wood LLP, New York,
New York, the Underwriter's lawyers, will also issue an opinion for the
Underwriter. 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 in 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 HRPT Properties Trust and a
director and 50% owner of REIT Management & Research, Inc., the investment
advisor to HPT. Sullivan & Worcester LLP represents HRPT Properties Trust, REIT
Management & Research, Inc. and certain of their affiliates on various matters.
EXPERTS
In addition to the matters referred to in the accompanying Prospectus
under the caption "Experts," the (i) consolidated financial statements and
related schedule of HPT for the years ended December 31, 1997, 1996 and 1995
appearing in HPT's Current Report on Form 8-K dated February 11, 1998 and (ii)
financial statements of HMH HPT Courtyard, Inc., a significant lessee as of
January 3, 1997 and January 2, 1998 and for the two fiscal years ended January
2, 1998 and the period from March 24, 1995 (inception) to December 29, 1995
appearing in HPT's Annual Report on Form 10-K for the year ended December 31,
1997, and incorporated by reference in this prospectus supplement and the
accompanying prospectus and elsewhere in the related registration statement,
have been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their reports with respect thereto. Such reports are incorporated
herein and in the registration statement by reference in reliance upon the
authority of said firm as experts in giving said reports.
In addition, the combined financial statements of SC Suites Summerfield
Partnerships as of January 2, 1998 and January 3, 1997 and for the years ended
January 2, 1998, January 3, 1997 and December 29, 1995, appearing in HPT's
Current Report on Form 8-K dated April 15, 1998, and incorporated by reference
in this prospectus supplement and the accompanying prospectus and elsewhere in
the related registration statement, have been audited by Ernst & Young LLP,
independent auditors, as indicated in their report with respect thereto. Such
report is incorporated herein and in the registration statement by reference in
reliance on their report given on their authority as experts in accounting and
auditing.
S-10
<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, 1997;
o Quarterly Reports on Form 10-Q for the quarters ended March 31, 1998, June
30, 1998, and September 30, 1998;
o Current Reports on Form 8-K dated February 11, 1998, February 12, 1998,
February 13, 1998, February 18, 1998, February 20, 1998, February 24,
1998, April 15, 1998, April 16, 1998, April 21, 1998, October 29, 1998,
November 6, 1998 and November 11, 1998.
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 stockholders' 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
Hospitality Properties Trust
400 Centre Street
Newton, Massachusetts 02458
(617) 964-8389
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.
S-11
<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.
----------------
The Declaration of Trust of HPT, amended and restated on August 21, 1995,
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 "Hospitality Properties Trust" refers to the trustees
under the Declaration of Trust, as so amended, collectively as trustees, but
not individually or personally, and that no trustee, officer, shareholder,
employee or agent of HPT shall be held to any personal liability, jointly or
severally, for any obligation of, or claim against, HPT. All persons dealing
with HPT, in any way, shall look only to the assets of HPT for the payment of
any sum or the performance of any obligation.
S-12
<PAGE>
================================================================================
2,750,000 Shares
Hospitality Properties Trust
Common Shares of Beneficial Interest
-------------------------
PROSPECTUS SUPPLEMENT
-------------------------
Merrill Lynch & Co.
November 11, 1998
================================================================================
