UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 7,
2009 (July 7, 2009)
SENIOR
HOUSING PROPERTIES TRUST
(Exact Name of Registrant as Specified in Its Charter)
Maryland
|
|
001-15319
|
|
04-3445278
|
(State or Other Jurisdiction of Incorporation)
|
|
(Commission File Number)
|
|
(I.R.S. Employer Identification No.)
|
400 Centre Street, Newton, Massachusetts 02458
(Address of Principal Executive Offices) (Zip Code)
617-796-8350
(Registrants Telephone Number, Including Area Code)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
o
Written communications pursuant to Rule 425
under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4(c))
FORWARD LOOKING STATEMENTS
THIS CURRENT REPORT ON FORM 8-K
CONTAINS STATEMENTS WHICH CONSTITUTE FORWARD LOOKING STATEMENTS WITHIN THE
MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND
OTHER FEDERAL SECURITIES LAWS. WHENEVER WE USE WORDS SUCH AS BELIEVE, EXPECT,
ANTICIPATE, INTEND, PLAN, ESTIMATE OR SIMILAR EXPRESSIONS, WE ARE
MAKING FORWARD LOOKING STATEMENTS.
THESE FORWARD LOOKING STATEMENTS ARE BASED UPON OUR PRESENT INTENT, BELIEFS
OR EXPECTATIONS WITH RESPECT TO OUR AGREEMENTS TO PURCHASE CERTAIN MEDICAL
OFFICE, CLINIC AND BIOTECH LABORATORY BUILDINGS, OR MOBS, BUT FORWARD LOOKING
STATEMENTS ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR.
OUR
ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY
OUR FORWARD LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS. FOR EXAMPLE, OUR
OBLIGATIONS TO COMPLETE THE CURRENTLY PENDING MOB PURCHASES ARE SUBJECT TO
VARIOUS CONDITIONS TYPICAL OF LARGE COMMERCIAL REAL ESTATE PURCHASES. AS A
RESULT OF ANY FAILURE OF THESE CONDITIONS, SOME OF THE PROPERTIES MAY NOT
BE PURCHASED OR SOME OF THESE PURCHASES MAY BE ACCELERATED OR DELAYED.
OTHER IMPORTANT FACTORS THAT
COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN OUR FORWARD
LOOKING STATEMENTS ARE DESCRIBED MORE FULLY UNDER ITEM 1A. RISK FACTORS IN
OUR ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2008.
YOU
SHOULD NOT PLACE UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS.
EXCEPT AS REQUIRED BY LAW, WE DO NOT INTEND TO UPDATE OR
CHANGE ANY FORWARD LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE
EVENTS OR OTHERWISE.
Explanatory Note
As previously reported in our Current Report on Form 8-K
dated May 9, 2008, or the May 9 Current Report, filed by Senior
Housing Properties Trust, or SNH, or us or we, we agreed to purchase up to 48
MOBs from HRPT Properties Trust, or HRP, pursuant to a series of purchase and
sale agreements, or the Purchase Agreements, dated as of May 5, 2008. The Purchase Agreements are more fully
described in the May 9 Current Report.
Financial statements and pro forma financial information required by
Items 9(a) and (b) of Form 8-K in connection with the matters
reported in the May 9 Current Report were reported by us in the May 9
Current Report and amended in our Current Report on Form 8-K/A dated May 22,
2008, in our Current Report on Form 8-K/A dated September 29, 2008,
in our Current Report on Form 8-K dated December 17, 2008 and in our
Current Report on Form 8-K dated April 8, 2009. As of the date of this Current Report on Form 8-K,
we have purchased 40 MOBs from HRP, one of which we have subsequently
1
sold to a third party.
One of the remaining
buildings with an allocated value of $3.0 million is no longer subject to our
Purchase Agreements.
Our agreements
to acquire these 47 MOBs and our relationships with HRP are described more
fully in our Annual Report on Form 10-K for the year ended December 31,
2008.
This Current Report on Form 8-K provides
updated unaudited pro forma financial statements reflecting the purchase of 40
of the MOBs, as well as the sale of one of these MOBs and the pending
acquisitions of the remaining seven MOBs subject to the Purchase
Agreements. The updated pro forma
financial statements also reflect unrelated properties we have purchased
through July 6, 2009.
Item 9.01. Financial
Statements and Exhibits.
Pro Forma Financial Data
This
Current Report on Form 8-K includes pro forma financial data for us, which
includes the 40 MOBs that have been acquired and the seven MOBs proposed to be
acquired from HRP as well as the one MOB that we sold to a third party, and
other acquisitions we have completed since April 1, 2009 (balance sheet)
and January 1, 2008 (statements of income). Because changes will likely occur in
occupancy, rents and expenses with respect to the properties to be acquired and
because some or all of the acquisitions may not be completed, the pro forma
financial data presented should not be considered as a projection of future results. Differences could also result from changes in
our portfolio of investments, in interest rates, in our capital structure and
for other reasons.
Between
June 1, 2008 and March 31, 2009, we acquired 38 of the MOBs
containing 1.6 million square feet for approximately $366.0 million, excluding
closing costs. Subsequent to March 31, 2009, we acquired two additional
MOBs and sold one MOB containing 193,000 square feet and 25,000 square feet,
respectively, for approximately $50.8 million, excluding closing costs, and
$3.1 million, respectively, and we expect the closings of the remaining seven
acquisitions to occur before May 2010. We and HRP may mutually agree to
accelerate the closings of these acquisitions.
We funded these acquisitions using cash on hand, proceeds from equity
issuances, borrowings under our revolving credit facility and by assuming three
mortgage loans on two properties totaling $10.8 million with a weighted average
interest rate of 7.1% per annum and a weighted average maturity in 2018.
2
Between
January 1, 2008 and July 6, 2009, we acquired the following other
properties from unrelated parties (dollars in thousands):
Date
Acquired
|
|
Location
|
|
Number of
Properties
|
|
Units
|
|
Purchase
Price
|
|
1/1/08
|
|
WI
|
|
5
|
|
568
|
|
$
|
66,767
|
|
2/7/08
|
|
TX
|
|
2
|
|
98
|
|
10,292
|
|
2/17/08
|
|
NE
|
|
1
|
|
138
|
|
9,338
|
|
3/1/08
|
|
MN
|
|
1
|
|
228
|
|
48,549
|
|
3/31/08
|
|
CA, DE, MD
|
|
10
|
|
660
|
|
137,445
|
|
8/1/08
|
|
AL
|
|
2
|
|
112
|
|
14,734
|
|
8/21/08
|
|
GA, IL, TX, UT
|
|
4
|
|
NA
|
(1)
|
100,009
|
|
9/1/08
|
|
IN
|
|
8
|
|
451
|
|
62,268
|
|
9/30/08
|
|
NY
|
|
1
|
|
NA
|
(2)
|
18,647
|
|
11/1/08
|
|
IN
|
|
1
|
|
252
|
|
30,529
|
|
|
|
|
|
35
|
|
2,507
|
|
$
|
498,578
|
|
(1)
On August 21,
2008, we acquired four wellness centers with a total of 458,000 square feet.
(2)
On September 30,
2008, we acquired one medical office building from an unaffiliated party with a
total of 89,000 square feet.
We
funded these acquisitions using cash on hand, proceeds from equity issuances,
borrowings under our revolving credit facility and by assuming 15 mortgage
loans for $50.5 million on eight of these properties.
Certain
properties acquired by us, or proposed to be acquired from HRP, are leased to
various tenants, including Five Star Quality Care, Inc., or Five Star, on
a long term basis under net leases that transfer substantially all of the properties
operating and holding costs to the tenants. The other leases, consisting solely
of MOBs, are modified gross leases or full service leases. We have previously provided summary financial
data and other information regarding Five Star in our Quarterly Report on Form 10-Q
for the quarter ended March 31, 2009 and in our Annual Report on Form 10-K
for the fiscal year ended December 31, 2008. Our other tenants with net
leases are engaged in a range of industries including health services,
biotechnology research, and pharmaceutical research and manufacturing with no
significant concentration in any particular industry. The majority of these net lease tenants are
privately owned. Certain leases are
guaranteed by affiliates of the tenants.
As of the date of this Current Report on Form 8-K, we believe that
each tenant is current in its rent payments.
Five of the significant net lease tenants are: Five Star, Scripps
Research Institute, or Scripps; Fallon Community Health Plan, or Fallon Clinic;
Health Insurance Plan of New York, or HIP; and EPIX Pharmaceuticals, Inc.,
or EPIX. Scripps is one of the largest
non-profit health research institutes in the Country and is located in La
Jolla, California. Fallon Clinic is one
of the largest multi-specialty group practices providing healthcare services in
central Massachusetts.
HIP is one of
the largest health insurance companies providing clinical services in the New
York City area. EPIX
is a biopharmaceutical company focused on discovering and
developing novel therapeutics. EPIX is
listed on NASDAQ Global Market under the symbol EPIX.
3
SENIOR HOUSING PROPERTIES
TRUST
Introduction to Unaudited
Pro Forma Condensed Consolidated Financial Statements
The
following unaudited pro forma condensed consolidated balance sheet as of March 31,
2009, reflects our financial position as if the transactions described in the
footnotes to the unaudited pro forma condensed consolidated financial
statements were completed on March 31, 2009. The unaudited pro forma condensed
consolidated statement of income for the quarter ended March 31, 2009 and
the year ended December 31, 2008, presents our results of operations as if
the transactions described in the notes to the unaudited pro forma condensed
consolidated financial statements were completed on January 1, 2008. These unaudited pro forma condensed consolidated
financial statements should be read in conjunction with our financial
statements for the quarter ended March 31, 2009, included in our Quarterly
Report on Form 10-Q, our financial statements for the year ended December 31,
2008, included in our Annual Report on Form 10-K, the historical financial
statements included in our Current Report on Form 8-K dated May 9,
2008 and in our Current Report on Form 8-K/A dated May 22, 2008 and
the unaudited pro forma condensed consolidated financial statements included in
our Current Report on Form 8-K/A dated September 29, 2008, Current Report on
Form 8-K dated December 17, 2008 and Current Report on Form 8-K dated April 8,
2009.
The
unaudited pro forma financial statements assume the acquisitions of 47 medical
office, clinic and biotech laboratory buildings, or MOBs, from HRPT Properties
Trust, or HRP, are financed with cash on hand, proceeds from equity issuances,
borrowings under our revolving credit facility and by assuming three mortgage
loans on two of the properties. We
expect to eventually fund these acquisitions with a mix of long term capital
determined based upon market conditions.
These unaudited pro forma financial statements are provided for
informational purposes only and upon completion of the planned long term
financing for these acquisitions our financial position and results of our
operations will be significantly different than what is presented in these
unaudited pro forma financial statements.
In the opinion of management, all adjustments necessary to reflect the
effects of the transactions described above have been included in the pro forma
financial statements.
The
allocation of the purchase price of the acquisitions of the MOBs from HRP and
the other property acquisitions described in the notes to the unaudited pro
forma condensed consolidated financial statements and reflected in these
unaudited pro forma condensed consolidated financial statements is based upon
preliminary estimates of the fair value of assets acquired and liabilities assumed. A final determination of the fair values of
the MOBs acquired or to be acquired will be based on the actual net tangible
and intangible assets and liabilities assumed that exist as of the dates of the
completion of the transactions.
Consequently, amounts preliminarily allocated to assets acquired and
liabilities assumed could change significantly from those used in the unaudited
pro forma financial statements.
These
unaudited pro forma financial statements are not necessarily indicative of the
expected results of operations for any future period. Differences will result if the acquisitions
of the MOBs from HRP are not completed as planned. Differences could also result from future
changes in our portfolio of investments, changes in interest rates, changes in
our capital structure, changes in property level operating expenses, changes in
property level revenues including rents expected to be received on leases in
place or signed during and after 2009 or for other reasons. Consequently, actual future results are
likely to be different than amounts presented in the unaudited pro forma
financial statements related to these transactions.
F-1
SENIOR HOUSING PROPERTIES TRUST
Unaudited Pro Forma Condensed
Consolidated Balance Sheet
March 31, 2009
(dollars in thousands)
|
|
|
|
Pro
Forma Adjustments
|
|
|
|
|
|
Historical
|
|
MOBs
Acquired
(A)
|
|
MOBs
Pending
(B)
|
|
MOB
Sold
(C)
|
|
Pro
Forma
|
|
ASSETS:
|
|
|
|
|
|
|
|
|
|
|
|
Real estate properties,
at cost
|
|
$
|
2,838,751
|
|
$
|
47,484
|
|
$
|
127,134
|
|
$
|
(3,090
|
)
|
$
|
3,010,279
|
|
Less accumulated
depreciation
|
|
398,946
|
|
|
|
|
|
|
|
398,946
|
|
|
|
2,439,805
|
|
47,484
|
|
127,134
|
|
(3,090
|
)
|
2,611,333
|
|
Cash and cash
equivalents
|
|
5,566
|
|
|
|
|
|
|
|
5,566
|
|
Restricted cash
|
|
4,777
|
|
|
|
|
|
|
|
4,777
|
|
Deferred financing fees,
net
|
|
5,303
|
|
|
|
|
|
|
|
5,303
|
|
Acquired real estate
leases, net
|
|
30,636
|
|
3,373
|
|
20,649
|
|
|
|
54,658
|
|
Other assets
|
|
22,455
|
|
|
|
|
|
|
|
22,455
|
|
|
|
$
|
2,508,542
|
|
$
|
50,857
|
|
$
|
147,783
|
|
$
|
(3,090
|
)
|
$
|
2,704,092
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS EQUITY:
|
|
|
|
|
|
|
|
|
|
|
|
Unsecured revolving
credit facility
|
|
$
|
181,000
|
|
$
|
50,771
|
|
$
|
144,565
|
|
$
|
(3,090
|
)
|
$
|
373,246
|
|
Senior unsecured notes
due 2012 and 2015, net of discount
|
|
322,053
|
|
|
|
|
|
|
|
322,053
|
|
Secured debt and
capital leases
|
|
150,665
|
|
|
|
|
|
|
|
150,665
|
|
Acquired real estate
lease obligations, net
|
|
8,166
|
|
86
|
|
3,218
|
|
|
|
11,470
|
|
Other liabilities
|
|
27,259
|
|
|
|
|
|
|
|
27,259
|
|
Shareholders equity
|
|
1,819,399
|
|
|
|
|
|
|
|
1,819,399
|
|
|
|
$
|
2,508,542
|
|
$
|
50,857
|
|
$
|
147,783
|
|
$
|
(3,090
|
)
|
$
|
2,704,092
|
|
See accompanying notes to unaudited pro forma condensed consolidated
financial statements.
F-2
SENIOR HOUSING PROPERTIES TRUST
Unaudited Pro Forma
Condensed Consolidated Statement of Income
Three Months Ended March 31, 2009
(amounts in thousands, except per share amounts)
|
|
Historical
|
|
MOBs
Acquired
(D)
|
|
MOBs
Pending
(E)
|
|
Pro
Forma
Adjustments
|
|
|
Pro
Forma
|
|
REVENUES:
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental income
|
|
$
|
68,377
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
68,377
|
|
MOB rental income
|
|
|
|
1,642
|
|
2,939
|
|
220
|
|
(F)
|
4,801
|
|
Interest and other
income
|
|
208
|
|
|
|
|
|
|
|
|
208
|
|
Total revenues
|
|
68,585
|
|
1,642
|
|
2,939
|
|
220
|
|
|
73,386
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses
|
|
2,955
|
|
736
|
|
320
|
|
(3
|
)
|
(G)
|
4,008
|
|
Interest
|
|
10,776
|
|
|
|
|
|
629
|
|
(H)
|
11,405
|
|
Depreciation
|
|
18,389
|
|
|
|
|
|
1,339
|
|
(I)
|
19,728
|
|
Acquisition costs
|
|
112
|
|
|
|
|
|
|
|
|
112
|
|
General and
administrative
|
|
4,820
|
|
|
|
|
|
179
|
|
(J)
|
4,999
|
|
Total expenses
|
|
37,052
|
|
736
|
|
320
|
|
2,144
|
|
|
40,252
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before loss on
sale of properties
|
|
31,533
|
|
906
|
|
2,619
|
|
(1,924
|
)
|
|
33,134
|
|
Loss on sale of
properties
|
|
|
|
|
|
|
|
(365
|
)
|
(K)
|
(365
|
)
|
Net income
|
|
$
|
31,533
|
|
$
|
906
|
|
$
|
2,619
|
)
|
$
|
(2,289
|
)
|
|
$
|
32,769
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding
|
|
117,853
|
|
|
|
|
|
2,545
|
|
(L)
|
120,398
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before loss on
sale of properties
|
|
$
|
0.27
|
|
|
|
|
|
|
|
|
$
|
0.28
|
|
Net income
|
|
$
|
0.27
|
|
|
|
|
|
|
|
|
$
|
0.27
|
|
See accompanying notes to unaudited pro forma
condensed consolidated financial statements.
F-3
SENIOR HOUSING PROPERTIES TRUST
Unaudited Pro Forma
Condensed Consolidated Statement of Income
Year Ended December 31, 2008
(amounts in thousands, except per share amounts)
|
|
Historical
|
|
MOBs
Acquired
(M)
|
|
MOBs
Pending
(N)
|
|
Pro
Forma
Adjustments
|
|
Pro
Forma
|
|
REVENUES:
|
|
|
|
|
|
|
|
|
|
|
|
Rental income
|
|
$
|
233,210
|
|
$
|
|
|
$
|
|
|
$
|
15,264
|
(O)
|
$
|
248,474
|
|
MOB rental income
|
|
|
|
32,118
|
|
11,594
|
|
5,301
|
(P)
|
49,013
|
|
Interest and other
income
|
|
2,327
|
|
|
|
|
|
|
|
2,327
|
|
Total revenues
|
|
235,537
|
|
32,118
|
|
11,594
|
|
20,565
|
|
299,814
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses
|
|
2,792
|
|
10,777
|
|
1,297
|
|
560
|
(Q)
|
15,426
|
|
Interest
|
|
40,154
|
|
|
|
|
|
5,482
|
(R)
|
45,636
|
|
Depreciation
|
|
60,831
|
|
|
|
|
|
16,962
|
(S)
|
77,793
|
|
General and
administrative
|
|
17,136
|
|
|
|
|
|
2,580
|
(T)
|
19,716
|
|
Impairment of assets
|
|
8,379
|
|
|
|
|
|
|
|
8,379
|
|
Total expenses
|
|
129,292
|
|
10,777
|
|
1,297
|
|
25,584
|
|
166,950
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before gain
(loss) on sale of properties
|
|
106,245
|
|
21,341
|
|
10,297
|
|
(5,019
|
)
|
132,864
|
|
Gain (loss) on sale of
properties
|
|
266
|
|
|
|
|
|
(365
|
) (U)
|
(99
|
)
|
Net income
|
|
$
|
106,511
|
|
$
|
21,341
|
|
$
|
10,297
|
|
$
|
(5,384
|
)
|
$
|
132,765
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding
|
|
105,153
|
|
|
|
|
|
15,245
|
(V)
|
120,398
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
Income before gain
(loss) on sale of properties
|
|
$
|
1.01
|
|
|
|
|
|
|
|
$
|
1.10
|
|
Net income
|
|
$
|
1.01
|
|
|
|
|
|
|
|
$
|
1.10
|
|
See accompanying notes to unaudited pro forma
condensed consolidated financial statements.
F-4
SENIOR
HOUSING PROPERTIES TRUST
Notes to Unaudited Pro Forma Condensed Consolidated
Financial Statements
(dollars
in tables in thousands, or as otherwise stated)
Unaudited Pro Forma
Condensed Consolidated Balance Sheet Adjustments
(A)
Represents the
impact of our completed acquisition from HRP of two MOBs which were acquired
subsequent to March 31, 2009 and related financing. These acquisitions were funded with
borrowings under our revolving credit facility.
The value of in-place leases and the fair market value of above or below
market leases and customer relationships for the two MOBs acquired subsequent
to March 31, 2009 is as follows:
Acquired assets other than real estate:
|
|
|
|
|
|
|
|
Origination Costs
|
|
$
|
1,548
|
|
Above Market Leases
|
|
1,825
|
|
Total
|
|
$
|
3,373
|
|
|
|
|
|
Assumed liabilities:
|
|
|
|
|
|
|
|
Below Market Leases
|
|
$
|
86
|
|
Included in the March 31, 2009 historical numbers are 38 MOBs that
were acquired between June 2008 and March 31, 2009 from HRP for
approximately $366.0 million, excluding closing costs, including the assumption
of three mortgage loans that encumber two properties totaling $10.8 million at
a weighted average interest rate of 7.1% per annum. The March 31, 2009 historical column
also includes one MOB acquired in September 2008 from an unaffiliated
party for $18.6 million, excluding closing costs. Intangible lease assets and liabilities
recorded by us for these acquisitions totaled $31.0 million and $4.8 million,
respectively.
(B)
Represents the
impact of our pending acquisitions of the remaining seven MOBs we expect to
acquire from HRP and relating financings.
These pending acquisitions are expected to be funded with borrowings
under our revolving credit facility. The
estimated purchase prices of these seven MOBs are subject to change based on
contractual terms of the applicable purchase agreement. The funding of these acquisitions is subject
to change based on capital market conditions at the time of the closings. The value of in-place leases and the fair
market value of above or below market leases and customer relationships for the
seven pending MOBs is as follows:
Pending assets to be acquired other than real
estate:
|
|
|
|
|
|
|
|
Origination Costs
|
|
$
|
5,615
|
|
Above Market Leases
|
|
15,034
|
|
Total MOBs
|
|
$
|
20,649
|
|
|
|
|
|
Assumed liabilities:
|
|
|
|
|
|
|
|
Below Market Leases
|
|
$
|
3,218
|
|
F-5
SENIOR
HOUSING PROPERTIES TRUST
Notes
to Unaudited Pro Forma Condensed Consolidated Financial Statements
(dollars
in tables in thousands, or as otherwise stated)
(C)
In May 2009,
we sold one MOB that was classified as held for sale to an unaffiliated party
for $3.1 million. We used the net
proceeds from the sale to repay borrowings outstanding under our revolving
credit facility.
Unaudited Pro Forma Condensed
Consolidated Statement of Income Adjustments for the Quarter Ended March 31,
2009
(D)
Represents the impact on
rental income, reimbursement income and operating expenses for the quarter
ended March 31, 2009 of the historical results of the two MOBs acquired by
us subsequent to March 31, 2009 and prorated results of the one MOB
acquired by us in January 2009, as if these acquisitions occurred on January 1,
2009. Included in rental income,
interest expense, depreciation and general and administrative expenses in the
historical column are $10.4 million, $184,000, $2.6 million and $6,000,
respectively, of the 38 MOBs acquired from HRP and the one MOB acquired from an
unaffiliated party prior to March 31, 2009. A management fee of 3% of gross rents is
included in property operating expenses.
(E)
Represents the
impact on rental income, reimbursement income and operating expenses for the
quarter ended March 31, 2009 of the historical results of our pending acquisitions
from HRP of seven MOBs as if these acquisitions occurred on January 1, 2009. A management fee of 3% of gross rents is
included in property operating expenses.
(F)
Represents the
rental income adjustment for the sale of one MOB to an unaffiliated party for
$3.1 million in May 2009 and the straight-line rent adjustment for the two
MOBs acquired subsequent to March 31, 2009 and seven MOBs pending
acquisition from HRP. Also includes the
preliminary amortization of capitalized above and below market lease values for
these acquired and pending acquisitions.
The adjustments are as follows:
MOB Sold to Unaffiliated Party
|
|
$
|
(91
|
)
|
MOBs Acquired from HRP (Straight-line)
|
|
169
|
|
MOBs Pending from HRP (Straight-line)
|
|
437
|
|
MOBs Acquired from HRP (Above Market Leases)
|
|
(77
|
)
|
MOBs Pending from HRP (Above Market Leases)
|
|
(301
|
)
|
MOBs Acquired from HRP (Below Market Leases)
|
|
3
|
|
MOBs Pending from HRP (Below Market Leases)
|
|
80
|
|
Total
|
|
$
|
220
|
|
(G)
Represents the
property operating expenses adjustment for the sale of one MOB to an
unaffiliated party in May 2009. The
adjustment represents the full quarter impact assuming we sold this property on
January 1, 2009.
(H)
Represents the
impact on interest expense for the quarter ended March 31, 2009, from
$195.3 million outstanding on our revolving credit facility at our current
interest rate of
F-6
SENIOR
HOUSING PROPERTIES TRUST
Notes
to Unaudited Pro Forma Condensed Consolidated Financial Statements
(dollars
in tables in thousands, or as otherwise stated)
1.3% per annum drawn in connection with the purchase of the two
acquired MOBs subsequent to March 31, 2009 and seven pending MOBs
described in Notes (A) and (B), respectively and the impact on interest
expense for our sale of one MOB in May 2009 described in Note (C) used
to repay borrowings outstanding under our revolving credit facility as if this
sale occurred on January 1, 2009.
The additional net interest expense is as follows:
MOBs Acquired
|
|
$
|
166
|
|
MOBs Pending
|
|
473
|
|
May 2009 Sale of MOB Reduction in Interest
Expense
|
|
(10
|
)
|
Total
|
|
$
|
629
|
|
(I)
Represents the impact on depreciation expense for the quarter ended March 31,
2009, of properties acquired by us in 2009 described in Note (D) and the
impact of the acquisitions of the seven pending MOBs described in Note
(E). Also includes the preliminary
amortization of capitalized origination costs for these acquired and pending
MOBs. The additional depreciation
expense is as follows:
MOBs Acquired from HRP
|
|
$
|
339
|
|
MOBs Pending from HRP
|
|
817
|
|
MOBs Acquired from HRP
(Origination Costs)
|
|
63
|
|
MOBs Pending from HRP
(Origination Costs)
|
|
120
|
|
Total
|
|
$
|
1,339
|
|
(J)
Represents the impact on general and administrative expenses for the
quarter ended March 31, 2009, of properties acquired by us in 2009
described in Note (D) and the impact of the acquisitions of the seven
pending MOBs described in Note (E). The
increase in general and administrative expense represents the management fees
payable to Reit Management & Research LLC, or RMR. The management fees paid by us to RMR with
respect to the acquired and pending MOBs from HRP will be the same as the
management fees that are currently being paid by HRP with respect to these MOBs
and they will not increase as a result of our purchase prices being higher than
HRPs historical costs of these MOBs.
The additional general and administrative expenses are as follows:
MOBs Acquired from HRP
|
|
$
|
51
|
|
MOBs Pending from HRP
|
|
128
|
|
Total
|
|
$
|
179
|
|
(K)
In May 2009,
we sold one MOB that was classified as held for sale to an unaffiliated party
for $3.1 million and recognized a loss on sale of $365,000.
(L)
In February 2009,
we issued 5.9 million of our common shares in an underwritten public offering,
raising net proceeds of $96.8 million.
We used the net proceeds from this offering to repay borrowings
outstanding on our revolving credit facility and for
F-7
SENIOR HOUSING PROPERTIES TRUST
Notes to Unaudited Pro Forma Condensed Consolidated Financial
Statements
(dollars in tables in thousands, or as otherwise stated)
general business purposes, including funding, in part, the acquisitions
described in Note (D). The adjustment to
our weighted average shares outstanding shows the effect on our weighted
average shares outstanding for the quarter ended March 31, 2009, as if we
issued the additional shares on January 1, 2009.
Unaudited Pro Forma
Condensed Consolidated Statement of Income Adjustments for the Year Ended December 31,
2008
(M)
Represents the impact on
rental income, reimbursement income and operating expenses for the year ended December 31,
2008 of the historical results of the three MOBs acquired by us subsequent to December 31,
2008 and pro rated results of the 37 MOBs acquired by us between June and December 31,
2008, as if these acquisitions occurred on January 1, 2008. Included in rental income, interest expense,
depreciation, general and administrative expenses and impairment of assets in
the historical column are $12.3 million, $346,000, $3.3 million, $16,000 and
$1.4 million, respectively, of the 37 MOBs acquired from HRP and the one MOB
acquired from an unaffiliated party since June 1, 2008 from the date of
acquisition through December 31, 2008.
A management fee of 3% of gross rents is included in property operating
expenses.
(N)
Represents the
impact on rental income, reimbursement income and operating expenses for the
year ended December 31, 2008 of the historical results of our pending
acquisitions from HRP of seven MOBs as if these acquisitions occurred on January 1,
2008. A management fee of 3% of gross
rents is included in property operating expenses.
(O)
During the year
ended December 31, 2008, we purchased 30 senior living properties with a
total of 2,507 units and four wellness centers with a total of 458,000 square
feet for approximately $379.3 million and $100.0 million, respectively, from
nine unaffiliated parties. We leased these
properties for initial rent of $39.4 million.
We funded these acquisitions using cash on hand, proceeds from equity
issuances in December 2007 and February and June 2008,
borrowings under our revolving credit facility and the assumption of 15
mortgage loans that encumber eight of these senior living properties totaling
$50.5 million at a weighted average interest rate of 6.5% per annum. The adjustment to rental income represents
the full year impact assuming we acquired these 30 senior living properties and
four wellness centers on January 1, 2008.
(P)
Represents the
rental income adjustment for the one MOB acquired from an unaffiliated party on
September 30, 2008, the sale of one MOB to an unaffiliated party for $3.1
million in May 2009 and the straight-line rent adjustment for the 40
acquired MOBs and seven pending MOBs from HRP.
Also includes the preliminary amortization of capitalized above and
below market lease values for these acquired and pending acquisitions.
F-8
The adjustments are as
follows:
SENIOR HOUSING PROPERTIES TRUST
Notes to Unaudited Pro Forma Condensed Consolidated Financial
Statements
(dollars in tables in thousands, or as otherwise stated)
MOBs Acquired from Unaffiliated Party
|
|
$
|
1,832
|
|
MOB Sold to Unaffiliated Party
|
|
(319
|
)
|
MOBs Acquired from HRP (Straight-line)
|
|
3,147
|
|
MOBs Pending from HRP (Straight-line)
|
|
1,746
|
|
MOBs Acquired from HRP (Above Market Leases)
|
|
(309
|
)
|
MOBs Pending from HRP (Above Market Leases)
|
|
(1,203
|
)
|
MOBs Acquired from Unaffiliated Party (Above
Market Leases)
|
|
(41
|
)
|
MOBs Acquired from HRP (Below Market Leases)
|
|
85
|
|
MOBs Pending from HRP (Below Market Leases)
|
|
322
|
|
MOBs Acquired from Unaffiliated Party (Below
Market Leases)
|
|
41
|
|
Total
|
|
$
|
5,301
|
|
(Q)
Represents the
property operating expenses adjustment for the sale of one MOB to an
unaffiliated party in May 2009 and the one MOB acquired from an
unaffiliated party on September 30, 2008.
These adjustments represent the full year impact assuming they occurred
on January 1, 2008. The adjustments
are as follows:
MOB Sold to Unaffiliated Party
|
|
$
|
(9
|
)
|
MOB Acquired from Unaffiliated Party
|
|
569
|
|
Total
|
|
$
|
560
|
|
(R)
Represents the
impact on interest expense for the year ended December 31, 2008, from $218.2
million outstanding on our revolving credit facility at our current interest
rate of 1.3% per annum drawn in connection with the purchase of the 40 acquired
MOBs and seven pending MOBs described in Notes (M) and (N), respectively,
and the impact on interest expense for our sale of one MOB to an unaffiliated
party for $3.1 million in May 2009 described in Note (C) used to
repay borrowings outstanding under our revolving credit facility as if this
sale occurred on January 1, 2008.
Also includes the interest expense on the assumption of three mortgage
loans that encumber two of the MOBs totaling $10.8 million at a weighted
average interest rate of 7.1% per annum described above in Note (A) and
the assumption of 15 mortgage loans that encumber eight of the senior living
properties totaling $50.5 million at a weighted average interest rate of 6.5%
per annum described above in Note (O).
The additional net interest expense is as follows:
MOBs Acquired
|
|
$
|
917
|
|
MOBs Acquired Debt Assumption
|
|
461
|
|
MOBs Pending
|
|
1,942
|
|
2009 Sale of Property Reduction in Interest
Expense
|
|
(40
|
)
|
Senior Living Properties Acquired Debt
Assumption
|
|
2,202
|
|
Total
|
|
$
|
5,482
|
|
(S)
Represents the impact on depreciation expense for the year ended December 31,
2008, of properties acquired by us during the year ended December 31, 2008
described in Note (O) and the impact of the acquisitions of the 40
acquired MOBs and seven pending MOBs described in Notes (M) and (N),
respectively, as if these transactions occurred on January 1, 2008. Also includes the preliminary amortization of
capitalized
F-9
SENIOR HOUSING PROPERTIES TRUST
Notes to Unaudited Pro Forma Condensed Consolidated Financial
Statements
(dollars in tables in thousands, or as otherwise stated)
origination costs for these acquired and
pending MOB acquisitions. The additional
depreciation expense is as follows:
2008 Senior Living and
Wellness Center Acquisitions
|
|
$
|
4,681
|
|
MOBs Acquired from HRP
|
|
7,645
|
|
MOBs Pending from HRP
|
|
3,363
|
|
MOBs Acquired from
Unaffiliated Party
|
|
342
|
|
MOBs Acquired from HRP
(Origination Costs)
|
|
346
|
|
MOBs Pending from HRP
(Origination Costs)
|
|
480
|
|
MOBs Acquired from
Unaffiliated Party (Origination Costs)
|
|
105
|
|
Total
|
|
$
|
16,962
|
|
(T)
Represents the impact on general and administrative expenses for the year
ended December 31, 2008, of properties acquired by us during the year
ended December 31, 2008 described in Note (O) and the impact of the
acquisitions of the 40 acquired MOBs and seven pending MOBs described in Notes (M) and
(N), respectively, as if these acquisitions occurred on January 1,
2008. The increase in general and
administrative expense represents the management fees payable to RMR. The management fees paid by us to RMR with
respect to the acquired and pending MOBs from HRP will be the same as the
management fees that are currently being paid by HRP with respect to these MOBs
and they will not increase as a result of our purchase prices being higher than
HRPs historical costs of these MOBs.
The additional general and administrative expenses are as follows:
2008 Senior Living and
Wellness Center Acquisitions
|
|
$
|
912
|
|
MOBs Acquired from HRP
|
|
1,085
|
|
MOBs Pending from HRP
|
|
513
|
|
MOBs Acquired from
Unaffiliated Party
|
|
70
|
|
Total
|
|
$
|
2,580
|
|
(U)
In May 2009,
we sold one MOB that was classified as held for sale to an unaffiliated party
for $3.1 million and recognized a loss on sale of $365,000. This adjustment assumes this sale occurred on
January 1, 2008.
(V)
In February 2008,
June 2008 and February 2009, we issued 6.2 million, 19.6 million and
5.9 million of our common shares in underwritten public offerings, raising net
proceeds of $129.4 million, $393.7 million and $96.8 million,
respectively. We used the net proceeds
from these offerings to repay borrowings outstanding on our revolving credit
facility and for general business purposes, including funding, in part, the
acquisitions described in Notes (M) and (O). The adjustment to our weighted average shares
outstanding shows the effect on our weighted average shares outstanding for the
year ended December 31, 2008, as if we issued the additional shares on January 1,
2008.
F-10
Exhibits
T
he Company hereby files the following
exhibits:
10.1
|
|
Second
Amendment to Purchase Agreement dated May 20, 2009 by and between Hub
Properties Trust and Senior Housing Properties Trust (Amelia Building,
Norfolk, Virginia).
|
|
|
|
10.2
|
|
Second
Amendment to Purchase Agreement dated May 20, 2009 by and between Hub
Properties Trust and Senior Housing Properties Trust (1145 19
th
Street, N.W., Washington, D.C.).
|
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.
|
SENIOR HOUSING PROPERTIES TRUST
|
|
|
|
|
|
|
|
By:
|
/s/
Richard A. Doyle
|
|
|
Richard
A. Doyle
|
|
|
Treasurer
and Chief Financial Officer
|
|
|
Dated:
July 7, 2009
|
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