8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC  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):  December 31, 2013

SENIOR HOUSING PROPERTIES TRUST

(Exact Name of Registrant as Specified in Its Charter)

Maryland

(State or Other Jurisdiction of Incorporation)

001-15319	04-3445278
(Commission File Number)	(IRS Employer Identification No.)

Two Newton Place, 255 Washington Street, Suite 300 Newton, Massachusetts	02458-1634
(Address of Principal Executive Offices)	(Zip Code)

617-796-8350

(Registrant’s 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:

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

In this Current Report on Form 8-K, the terms “we”, “us” and “our” refer to Senior Housing Properties Trust and its applicable subsidiaries and “Five Star” refers to Five Star Quality Care, Inc. and its applicable subsidiaries.

Item 8.01.  Other Events.

On December 31, 2013, we closed the previously announced sale of two rehabilitation hospitals for approximately $90 million.  The hospitals were sold to HSRE-TST III, LLC, a joint venture comprised of affiliates of The Sanders Trust, LLC and Harrison Street Real Estate Capital, LLC.

The two hospitals sold are New England Rehabilitation Hospital located in Woburn, Massachusetts and Braintree Rehabilitation Hospital located in Braintree, Massachusetts.  We acquired these hospitals in 2002 and leased the hospitals’ real estate assets to Five Star under one of our combination leases with Five Star, Lease No. 2.  Concurrently with the sale, Five Star transferred the operations of the two hospitals and several in-patient and out-patient locations in eastern Massachusetts affiliated with these hospitals to entities affiliated with Reliant Hospital Partners, LLC.

Pursuant to the terms of our previously announced amendment of Lease No. 2, that lease terminated with respect to the two hospitals, and the annual rent to be paid to us by Five Star was reduced by $9.5 million, upon the closing of the sale of the hospitals.

A copy of our press release announcing the closing of the sale is attached as Exhibit 99.1 hereto.

Information Regarding Certain Relationships and Related Transactions

Five Star was formerly our 100% owned subsidiary; Five Star is our largest tenant; we are Five Star’s largest stockholder; and Five Star manages several senior living communities for us.  In 2001, we distributed substantially all of Five Star’s then outstanding common shares to our shareholders.  As of December 31, 2013, we owned 4,235,000 shares of common stock of Five Star, or approximately 8.8% of Five Star’s outstanding shares of common stock.  One of our Managing Trustees, Mr. Barry Portnoy, is also a managing director of Five Star.

Reit Management & Research LLC, or RMR, provides management services to both us and Five Star.  One of our Managing Trustees, Mr. Barry Portnoy, is chairman, majority owner and an employee of RMR.  Our other Managing Trustee, Mr. Adam Portnoy, is the son of Mr. Barry Portnoy, and an owner, president, chief executive officer and a director of RMR.  Each of our executive officers is also an officer of RMR, and our President and Chief Operating Officer, Mr. David Hegarty, is a director of RMR.  Five Star’s president and chief executive officer and its chief financial officer and treasurer are officers of RMR.  Our Independent Trustees serve as independent directors or independent trustees of other public companies to which RMR provides management services, but not Five Star.  Mr. Barry Portnoy serves as a managing director or managing trustee of those companies, including Five Star, and Mr. Adam Portnoy serves as a managing trustee of a majority of those companies, but not Five Star.  In addition, officers of RMR serve as officers of those companies.

For further information about these and other such relationships and related person transactions, please see our Annual Report on Form 10-K for the year ended December 31, 2012, or our Annual Report, our definitive Proxy Statement for the Annual Meeting of Shareholders held on May 9, 2013, or our Proxy Statement, our Quarterly Report on Form 10-Q for the quarter ended September 30, 2013, or our Quarterly Report, our Current Report on Form 8-K dated December 23, 2013 and our other filings with the Securities and Exchange Commission, or the SEC, including Note 5 to the Consolidated Financial Statements included in our Annual Report, the sections captioned “Business”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Related Person Transactions” and “Warning Concerning Forward Looking Statements” of our Annual Report, the section captioned “Related Person Transactions and Company Review of Such Transactions” and the information regarding our Trustees and executive officers in our Proxy Statement, Note 10 to the Condensed Consolidated Financial Statements included in our Quarterly Report and the sections captioned “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Related Person Transactions” and “Warning Concerning Forward Looking Statements” of our Quarterly Report.  In addition, please see the section captioned “Risk Factors” of our Annual Report for a description of risks that may arise from these transactions and relationships. Our filings with the SEC, including our Annual Report, our Proxy Statement and our Quarterly Report, are available at the SEC’s website at www.sec.gov. Copies of certain of our agreements with these related parties are publicly available as exhibits to our public filings with the SEC and accessible at the SEC’s website.

Item 9.01.  Financial Statements and Exhibits.

(d)  Exhibits.

99.1Press Release dated January 2, 2014.

2

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 hereunto duly authorized.

SENIOR HOUSING PROPERTIES TRUST
By:	/s/ Richard A. Doyle
Name:  Richard A. Doyle
Title:    Treasurer and Chief Financial Officer

Dated:  January 2, 2014

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Contact:

Timothy A. Bonang, Vice President, Investor Relations

(617) 796-8234

www.snhreit.com

Senior Housing Properties Trust Closes Sale of Two Hospitals for $90 Million

Expects to Recognize Gain on Sale of Over $30 Million

 _____________________________________________________________________________

Newton, MA (January 2, 2014):  Senior Housing Properties Trust (NYSE: SNH) today announced that on December 31, 2013 it closed the previously announced sale of two rehabilitation hospitals for $90 million and expects to recognize a gain on sale of over $30 million.  The hospitals were sold to a joint venture comprised of affiliates of The Sanders Trust, LLC of Birmingham, AL and Harrison Street Real Estate Capital, LLC of Chicago, IL.

The two hospitals sold are New England Rehabilitation Hospital located in Woburn, MA and Braintree Rehabilitation Hospital located in Braintree, MA.  These hospitals were acquired by SNH in 2002; and the hospitals’ real estate assets were leased to Five Star Quality Care, Inc. (NYSE: FVE) under SNH’s FVE Lease No. 2.  With the sale, FVE transferred its operating rights and obligations to entities affiliated with Reliant Hospital Partners, LLC (Reliant), a private company located in Richardson, TX, which will operate the hospitals.

A large majority of the revenues at the sold hospitals are paid by Medicare.  With the completion of this sale, only 2% of SNH’s total revenues (based upon revenues for the three months ended September 30, 2013) are derived from the ownership of healthcare facilities where Medicare and Medicaid represent a majority of revenues.  The two hospitals were leased by SNH to FVE under a combination lease which also includes 51 senior living properties.  The rent reduction which SNH will experience as a result of this sale will be $9.5 million per year.  With this rent reduction, the total of all rent received by SNH from FVE under the four combination leases with FVE represents only 26% of SNH’s total revenues (based upon revenues for the three months ended September 30, 2013).

David Hegarty, President and Chief Operating Officer of SNH, made the following statement concerning the transaction:

“With this sale our decade plus plan, to reduce SNH’s exposure to possible future reductions in government funded Medicare and Medicaid programs, is nearly complete.  Now, 98% of SNH’s revenues have limited exposure to government funding.  We are pleased that we were able to complete the sale of these two hospitals ahead of our expected timeframe of mid-year 2014.”

Senior Housing Properties Trust is a real estate investment trust, or REIT, which owns independent and assisted living communities, medical office buildings, nursing homes and wellness centers throughout the United States.  SNH is headquartered in Newton, MA.

WARNING REGARDING FORWARD LOOKING STATEMENTS

THIS PRESS RELEASE CONTAINS FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND OTHER SECURITIES LAWS.  THESE FORWARD LOOKING STATEMENTS ARE BASED UPON SNH’S CURRENT BELIEFS AND EXPECTATIONS, BUT THEY ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR FOR VARIOUS REASONS, INCLUDING SOME WHICH ARE BEYOND SNH’S CONTROL. FOR EXAMPLE:

·THIS PRESS RELEASE STATES THAT SNH EXPECTS TO RECOGNIZE A GAIN ON SALE OF OVER $30 MILLION.  IN FACT, SNH HAS NOT RECEIVED ALL INVOICES FOR SERVICES ASSOCIATED WITH THIS SALE AND SNH’S FOURTH QUARTER RESULTS HAVE NOT BEEN AUDITED.  THEREFORE, THE GAIN ON SALE MAY END UP BEING MORE OR LESS THAN $30 MILLION.

·THIS PRESS RELEASE STATES THAT WITH THE HOSPITALS’ SALE, ONLY 2% OF SNH’S TOTAL REVENUES (BASED UPON REVENUES FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2013) WILL BE FROM THE OWNERSHIP OF HEALTHCARE FACILITIES WHERE MEDICARE AND MEDICAID REPRESENT A MAJORITY OF REVENUES.  THE IMPLICATION OF THIS STATEMENT MAY BE THAT SNH IS ONLY NOMINALLY EXPOSED TO MEDICARE AND MEDICAID PROGRAM REVENUES.  HOWEVER: (I) SOME RESIDENTS AT SNH OWNED FACILITIES MAY BECOME ELIGIBLE FOR MEDICARE AND MEDICAID REVENUES BECAUSE THEIR PRIVATE RESOURCES BECOME EXHAUSTED; (II) THE MEDICARE AND MEDICAID PROGRAMS MAY BE CHANGED TO PROVIDE PAYMENTS FOR ADDITIONAL RESIDENTS OR PATIENTS OF SNH OWNED HEALTHCARE FACILITIES; OR (III) SNH MAY IN THE FUTURE ACQUIRE HEALTHCARE FACILITIES WHERE A MAJORITY OF THE REVENUES ARE RECEIVED FROM THE MEDICARE AND MEDICAID PROGRAMS.  ACCORDINGLY, SNH CANNOT PROVIDE ANY ASSURANCE THAT ITS FUTURE REVENUES FROM FACILITIES WHERE THE MAJORITY OF REVENUES ARE RECEIVED FROM THE MEDICARE AND MEDICAID PROGRAMS WILL NOT INCREASE AS A PERCENTAGE OF SNH’S TOTAL REVENUES.

·THIS PRESS RELEASE STATES THAT WITH THE HOSPITALS’ SALE, THE TOTAL OF ALL RENTS RECEIVED BY SNH FROM FVE UNDER THE FOUR SNH COMBINATION LEASES WITH FVE WILL REPRESENT ONLY 26% OF SNH’S TOTAL REVENUES (BASED UPON REVENUES FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2013).  AN IMPLICATION OF THIS STATEMENT IS THAT SNH’S CONCENTRATED CREDIT RISK ASSOCIATED WITH FVE’S OPERATIONS IS 26% AND MAY BE FURTHER REDUCED.  HOWEVER:  (I) IN ADDITION TO

LEASING PROPERTIES FROM SNH, FVE ALSO MANAGES CERTAIN PROPERTIES FOR SNH’S TAXABLE SUBSIDIARIES; AND (II) SNH MAY IN THE FUTURE LEASE ADDITIONAL PROPERTIES TO FVE, INCREASE THE NUMBER OF SENIOR  LIVING COMMUNITIES MANAGED BY FVE OR ENTER OTHER COMMERCIAL ARRANGEMENTS WITH FVE.  ACCORDINGLY, SNH’S EXPOSURE TO FVE’S OPERATIONS MAY BE CONSIDERED TO BE GREATER THAN 26% OF SNH’S REVENUES AND THAT EXPOSURE MAY INCREASE IN THE FUTURE.

FOR THESE AND OTHER REASONS, INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS IN THIS PRESS RELEASE.

EXCEPT AS REQUIRED BY APPLICABLE LAW, SNH DOES NOT INTEND TO UNDERTAKE ANY OBLIGATION TO UPDATE THE FORWARD LOOKING STATEMENTS IN THIS PRESS RELEASE AS A RESULT OF NEW INFORMATION WHICH MAY COME TO SNH’S ATTENTION, FUTURE EVENTS OR OTHERWISE.

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