8-K

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): April 16, 2004

HRPT PROPERTIES TRUST
(Exact name of registrant as specified in its charter)

Maryland
(State or other jurisdiction of incorporation) 1-9317
(Commission file number) 04-6558834
(I.R.S. employer identification number)

400 Centre Street, Newton, Massachusetts
(Address of principal executive offices) 02458
(Zip code)

Registrant’s telephone number, including area code:  617-332-3990

Item 5. Other Events.

As we previously announced, on April 16, 2004, we entered into agreements to acquire Hallwood Realty Partners, L.P. Hallwood Realty is a publicly traded limited partnership which owns a portfolio of office and warehouse/industrial properties located in seven metropolitan areas.

The agreements provide, among other things, for (1) our subsidiary’s acquisition of 330,432 of Hallwood Realty’s units of limited partner interest, or units, which together represent 20.7% of the currently outstanding units, and the general partnership interest in Hallwood Realty, and (2) the merger of another of our subsidiaries with Hallwood Realty, as a result of which holders of units and holders of options to purchase units will be paid cash consideration. The total cash purchase price for the general and limited partnership interests is approximately $250 million, subject to adjustment in certain circumstances. The agreements for the merger and the partnership interest acquisition are Exhibits 2.1 and 2.2 to this report.

In connection with entering into the agreements, HWG, LLC, the sole member of Hallwood Realty's general partner and the current holder of the 330,432 units to be purchased by us, agreed to vote those units in favor of the merger and against actions or agreements that would violate the agreements or be reasonably expected to impede or discourage the merger. In addition, we were granted a proxy to vote the units in accordance with that agreement.

Upon closing the transaction, we expect to assume approximately $208 million of Hallwood Realty’s outstanding secured debt and to prepay approximately $100 million of the debt at or shortly after the closing. Prepayment of this debt may require premiums according to contractual formulas.

The remaining debt consists of two mortgage loans. One of these loans has an effective interest rate of 8.7% and a scheduled repayment date in October, 2005. The second loan has an effective interest rate of 7.3% and a scheduled repayment date in April, 2008. After the scheduled repayment dates, these loans may be repaid without payment of a premium. We intend to repay these loans at or shortly after their respective scheduled repayment dates. The interest rates applicable to the principal amounts of these loans are fixed until three months after the applicable scheduled repayment dates, at which time they increase in accordance with contractual formulas. As of December 31, 2003, the outstanding principal amounts of these loans were approximately $77.9 million and $31.4 million, respectively.

Hallwood Realty’s properties are currently leased to approximately 500 tenants. Eight tenants are individually responsible for more than 1% of the total portfolio rents. The three largest tenants are: (i) the U.S. Government for 23% of the total rents; (ii) Ford Motor Company for 8% of the total rents; and (iii) M&T Bank for 7% of the total rents. Current lease terms vary considerably and expire between 2004 and 2020. As of April 12, 2004, occupancy of the Hallwood Realty properties was reported to be approximately 87%, and the states in which Hallwood Realty owned real estate and the annualized current rent of the portfolio by state were as follows (dollars in thousands):

Location1	Annualized  Current Rents2
Georgia (2 properties)	$26,440
Michigan (3 properties)	13,045
Maryland (2 properties)	8,988
Washington (3 properties)	6,980
California (4 properties)	5,874
Ohio (1 property)	2,994
TOTALS (15 properties)	$64,321

¹ Some properties include multiple buildings in one location.

² Annualized rent is rents pursuant to signed leases as of April 12, 2004, plus expense reimbursements; includes some triple net lease rents, and excludes FAS 141 lease value amortization.

The transactions are subject to various conditions to closing, including those customary in real estate transactions, approval by holders of a majority of the units and obtaining consents from certain lenders. We currently expect the transactions to close during July, 2004. However, there can be no assurance that the conditions to closing will be satisfied or that the closing will occur. We expect to fund the acquisition with cash on hand and by borrowing under our revolving unsecured bank credit agreement.

WARNING REGARDING FORWARD LOOKING STATEMENTS

THIS FORM 8-K CONTAINS FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND THE FEDERAL SECURITIES LAWS. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON OUR CURRENT BELIEFS AND EXPECTATIONS, BUT THEY ARE NOT GUARANTEED TO OCCUR. THESE FORWARD LOOKING STATEMENTS MAY NOT OCCUR FOR VARIOUS REASONS. FOR EXAMPLE:

• THE PURCHASE PRICE PAYABLE BY US ON ACCOUNT OF THE PURCHASE OF THE INTERESTS IN HALLWOOD REALTY IS STATED AS $250 MILLION. HOWEVER, THIS PRICE IS SUBJECT TO ADJUSTMENT BASED ON CONTRACT TERMS.

• THE TABLE WHICH DESCRIBES THE ANNUALIZED RENTS AT THE PROPERTIES MAY IMPLY THAT THOSE RENTS AND THE OCCUPANCY OF THOSE PROPERTIES WILL CONTINUE. OCCUPANCIES MAY CHANGE BECAUSE LEASES EXPIRE, TENANTS DEFAULT OR NEW LEASES ARE ENTERED INTO. THE RENTS MAY CHANGE BECAUSE OF CHANGING OCCUPANCY OR BECAUSE OF CHANGING RENT RATES. DURING THE PAST FEW YEARS BOTH THE OCCUPANCIES AND RENTAL RATES FOR OFFICE AND WAREHOUSE/INDUSTRIAL PROPERTIES HAVE GENERALLY DECLINED BECAUSE OF DETERIORATING MARKET CONDITIONS. THESE DECLINES MAY CONTINUE OR EVEN ACCELERATE.

• THE LISTING OF THE LARGEST TENANTS AT THE PROPERTIES AND THEIR ANNUALIZED RENTS MAY IMPLY THAT THESE TENANTS WILL REMAIN AT THESE PROPERTIES AND THAT THEY WILL CONTINUE TO PAY RENTS. SOME OF THESE TENANTS MAY RELOCATE FROM THESE BUILDINGS, AND SOME OF THESE TENANTS MAY BECOME UNWILLING OR UNABLE TO PAY THEIR RENTS. ALSO, MOST OF THE U.S. GOVERNMENT LEASES AFFORD THE GOVERNMENT AN OPTION TO TERMINATE ITS LEASES BEFORE THE STATED EXPIRATIONS, AND WE DO NOT KNOW IF AND WHEN THE GOVERNMENT MAY EXERCISE THESE OPTIONS.

• WE EXPECT TO PREPAY A SIGNIFICANT AMOUNT OF HALLWOOD REALTY’S EXISTING DEBT; HOWEVER, WE MAY DECIDE NOT TO PREPAY, OR MAY BE UNABLE TO PREPAY, SOME OR ALL OF THIS DEBT BECAUSE OF CHANGING MARKET CONDITIONS, BECAUSE LOWER COST FINANCING IS NOT AVAILABLE TO US OR BECAUSE ACCEPTABLE PREPAYMENT TERMS CAN NOT BE NEGOTIATED WITH THE AFFECTED LENDERS.

• WE EXPECT THIS TRANSACTION TO CLOSE IN OR ABOUT JULY, 2004. THE CLOSING OF THIS TRANSACTION MAY BE DELAYED. ALSO, THIS TRANSACTION MAY NOT CLOSE BECAUSE A MAJORITY OF THE HOLDERS OF HALLWOOD REALTY’S UNITS DO NOT APPROVE THIS TRANSACTION,

BECAUSE ANOTHER BUYER MAKES A PROPOSAL WHICH HALLWOOD REALTY PREFERS OR FOR SOME OTHER REASONS.

THERE ARE LIKELY OTHER REASONS WHY FORWARD LOOKING STATEMENTS IN THIS FORM 8-K MAY NOT OCCUR. INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS.

Item 7. Financial Statements and Exhibits.

(c) Exhibits

2.1 Agreement and Plan of Merger, dated as of April 16, 2004, by and among HRPT Properties Trust, HWP LP Acquisition LLC, Hallwood Realty, LLC and Hallwood Realty Partners, L.P. (incorporated by reference to Exhibit 1 to the filing on Schedule 13D by HRPT Properties Trust, Reit Management & Research LLC and Reit Management & Research Trust relating to units of limited partner interest of Hallwood Realty Partners, L.P.)

2.2 Purchase Agreement, dated as of April 16, 2004, by and among HRPT Properties Trust, HRP GP, LLC, Hallwood Realty, LLC, Hallwood Commercial Real Estate, LLC, HWG, LLC, HWG Realty Investors, LLC, HWG 98 Advisors, Inc., HWG 95 Advisors, Inc. and The Hallwood Group Incorporated. (incorporated by reference to Exhibit 2 to the filing on Schedule 13D by HRPT Properties Trust, Reit Management & Research LLC and Reit Management & Research Trust relating to units of limited partner interest of Hallwood Realty Partners, L.P.)

10.1 Third Amendment, dated as of March 23, 2004, to Credit Agreement, dated as of April 30, 2001, by and among HRPT Properties Trust, each of the financial institutions signatory thereto and Wachovia Bank, National Association, as Agent. (filed herewith)

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.

HRPT PROPERTIES TRUST


By: /s/ Adam D. Portnoy     
       Name:  Adam D. Portnoy
       Title:   Executive Vice President

Date: April 26, 2004

EX-10.1

EXHIBIT 10.1

THIRD AMENDMENT TO CREDIT AGREEMENT

        THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) dated as of March 23, 2004 by and among HRPT PROPERTIES TRUST (the “Borrower”), each of the Lenders party hereto, and WACHOVIA BANK, NATIONAL ASSOCIATION, as Agent (the “Agent”).

        WHEREAS, the Borrower, the Lenders and the Agent have entered into that certain Credit Agreement dated as of April 30, 2001 (as amended and in effect immediately prior to the date hereof, the “Credit Agreement”);

        WHEREAS, pursuant to that certain First Amendment to Credit Agreement dated as of December 19, 2002 (the “First Amendment”) by and among, the Borrower, certain of the Lenders and the Agent, the parties thereto established a credit facility (the “Tranche B Facility”) in favor of the Borrower; and

        WHEREAS, the parties hereto desire to amend the Credit Agreement to eliminate the Tranche B Facility and to modify the maturity date of the credit facility remaining under the Credit Agreement, all on the terms and conditions contained herein.

        NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties hereto hereby agree as follows:

        Section 1.       Amendments Regarding Credit Agreement.

        (a)        The Credit Agreement is amended by deleting each of the definitions added to the Credit Agreement pursuant to the First Amendment.

        (b)        Section 1.1. of the Credit Agreement is hereby amended by restating the definitions of “Note” and “Termination Date” in their entirety as follows:

        “Note”means a Revolving Note, a Bid Rate Note or a Swingline Note.

        “Termination Date” means April 28, 2006, or such earlier date to which the Termination Date may be shortened pursuant to Section 2.13.

        (c)        The Credit Agreement is amended by deleting Section 2.17., Section 3.6.(e) and Exhibits Q, R and S in their entirety.

        (d)        The Credit Agreement is amended by deleting Section 2.13. in its entirety and substituting in its place the following:

         Section 2.13.  Earlier Termination Date.

        The Borrower may request that the Agent and the Lenders shorten the current Termination Date by one (1) year by executing and delivering to the Agent no later than January 31, 2005, a written request (a “Cancellation Request”) substantially in the form of Exhibit M (with the dates referenced therein appropriately revised). Once given, a Cancellation Request shall be irrevocable by, and binding on, the Borrower. The Agent shall forward to each Lender a copy of such Cancellation Request delivered to the Agent promptly after receipt thereof. If the Borrower fails to deliver a Cancellation Request to the Agent by such date, then the Termination Date shall remain unchanged.

        (e)        The Credit Agreement is amended by deleting Section 2.16 in its entirety and substituting in its place the following:

        Section 2.16. Increase of Commitments.

        With the prior consent of the Agent (which shall not be unreasonably withheld or delayed), the Borrower shall have the right at any time and from time to time during the period beginning on the Effective Date to but excluding the Termination Date to request increases in the aggregate amount of the Commitments (provided that after giving effect to any increases in the Revolving Commitments pursuant to this Section, the aggregate amount of the Revolving Commitments may not exceed $840,000,000) by providing written notice to the Agent, which notice shall be irrevocable once given. Each such increase in the Commitments must be in an aggregate minimum amount of $50,000,000 and integral multiples of $10,000,000 in excess thereof. No Lender shall be required to increase its Commitment and any new Lender becoming a party to this Agreement in connection with any such requested increase must be an Eligible Assignee. If a new Lender becomes a party to this Agreement, or if any existing Lender agrees to increase its Commitment, such Lender shall on the date it becomes a Lender hereunder (or increases its Commitment, in the case of an existing Lender) (and as a condition thereto) purchase from the other Lenders its Commitment Percentage (as determined after giving effect to the increase of Commitments) of any outstanding Revolving Loans, by making available to the Agent for the account of such other Lenders at the Principal Office, in same day funds, an amount equal to the sum of (A) the portion of the outstanding principal amount of such Revolving Loans to be purchased by such Lender plus (B) the aggregate amount of payments previously made by the other Lenders under Section 2.4.(j) which have not been repaid plus (C) interest accrued and unpaid to and as of such date on such portion of the outstanding principal amount of such Revolving Loans. The Borrower shall pay to the Lenders amounts payable, if any, to such Lenders under Section 4.4. as a result of the prepayment of any such Revolving Loans. No increase of the Commitments may be effected under this Section if (x) a Default or Event of Default shall be in existence on the effective date of such increase or (y) any representation or warranty made or deemed made

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by the Borrower or any other Loan Party in any Loan Document to which any such Loan Party is a party is not (or would not be) true or correct on the effective date of such increase (except for representations or warranties which expressly relate solely to an earlier date). In connection with any increase in the aggregate amount of the Commitments pursuant to this subsection, (a) any Lender becoming a party hereto shall execute such documents and agreements as the Agent may reasonably request and (b) the Borrower shall make appropriate arrangements so that each new Lender, and any existing Lender increasing its Commitment, receives a new or replacement Note, as appropriate, in the amount of such Lender’s Commitment within 2 Business Days of the effectiveness of the applicable increase in the aggregate amount of Commitments.

        (f)        The Credit Agreement is amended by deleting Section 3.6.(c) in its entirety and substituting in its place the following:

        (c)       Maturity Fee. If the Termination Date is not shortened in accordance with Section 2.13., the Borrower agrees to pay to the Agent for the account of each Lender a fee equal to one-quarter of one percent (0.25%) of the amount of such Lender’s Commitment (whether or not utilized). Such fee shall be due and payable in full on January 31, 2005.

        (g)        The parties hereto agree that Section I.G of the First Amendment shall no longer be effective.

        (h)        The parties hereto agree that the Tranche B Revolving Notes, Tranche B Bid Rate Notes and the Tranche B Swingline Note are hereby terminated and of no further force or effect. Each of the parties hereto who holds any such notes agrees to mark such notes “Cancelled” and return the original thereof to the Borrower.

        Section 2.       Conditions Precedent. The effectiveness of this Amendment is subject to receipt by the Agent of each of the following, each in form and substance satisfactory to the Agent:

        (a)        A counterpart of this Amendment duly executed by the Borrower and the each of the Lenders; and

        (b)        Such other documents, instruments and agreements as the Agent may reasonably request.

        Section 3.       Representations. The Borrower represents and warrants to the Agent and the Lenders that:

        (a)       Authorization. The Borrower has the right and power, and has taken all necessary action to authorize it, to execute and deliver this Amendment and to perform its obligations hereunder and under the Credit Agreement, as amended by this Amendment, in accordance with their respective terms. This Amendment has been duly executed and delivered by a duly

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authorized officer of the Borrower and each of this Amendment and the Credit Agreement, as amended by this Amendment, is a legal, valid and binding obligation of the Borrower enforceable against the Borrower in accordance with its respective terms except as (i) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors rights generally and (ii) the availability of equitable remedies may be limited by equitable principles of general applicability.

        (b)       Compliance with Laws, etc. The execution and delivery by the Borrower of this Amendment and the performance by the Borrower of this Amendment and the Credit Agreement, as amended by this Amendment, in accordance with their respective terms, do not and will not, by the passage of time, the giving of notice or otherwise: (i) require any Governmental Approval or violate any Applicable Law (including all Environmental Laws) relating to the Borrower or any other Loan Party; (ii) conflict with, result in a breach of or constitute a default under the organizational documents of the Borrower or any other Loan Party, or any indenture, agreement or other instrument to which the Borrower or any other Loan Party is a party or by which it or any of its respective properties may be bound; or (iii) result in or require the creation or imposition of any Lien upon or with respect to any property now owned or hereafter acquired by the Borrower or any other Loan Party.

        (c)       No Default. No Default or Event of Default has occurred and is continuing as of the date hereof or will exist immediately after giving effect to this Amendment.

        Section 4.       Reaffirmation of Representations by Borrower. The Borrower hereby repeats and reaffirms all representations and warranties made by the Borrower to the Agent and the Lenders in the Credit Agreement and the other Loan Documents to which it is a party on and as of the date hereof with the same force and effect as if such representations and warranties were set forth in this Amendment in full.

        Section 5.       Certain References. Each reference to the Credit Agreement in any of the Loan Documents shall be deemed to be a reference to the Credit Agreement as amended by this Amendment.

        Section 6.       Expenses and Fees. The Borrower shall reimburse the Agent upon demand for all costs and expenses (including reasonable attorneys’ fees and expenses) incurred by the Agent in connection with the preparation, negotiation and execution of this Amendment and the other agreements and documents executed and delivered in connection herewith.

        Section 7.       Benefits. This Amendment shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns.

        Section 8.       GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.

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        Section 9.       Effect. Except as expressly herein amended, the terms and conditions of the Credit Agreement and the other Loan Documents remain in full force and effect. The amendments contained herein shall be deemed to have prospective application only, unless otherwise specifically stated herein.

        Section 10.       Counterparts. This Amendment may be executed in any number of counterparts, each of which shall be deemed to be an original and shall be binding upon all parties, their successors and assigns.

        Section 11.       Definitions. All capitalized terms not otherwise defined herein are used herein with the respective definitions given them in the Credit Agreement.

[Signatures on Next Page]

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        IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to Credit Agreement to be executed as of the date first above written.

HRPT Properties Trust


By:  /s/John C. Popeo
        Name: John C. Popeo
        Title: Treasurer

[Signatures Continued on Next Page]

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[Signature Page to Third Amendment to Credit Agreement dated as of March 23, 2004 with HRPT Properties Trust]

WACHOVIA BANK, NATIONAL ASSOCIATION, as Agent and as a Lender


By:  /s/David Blackman
        Name: David Blackman
        Title: Director

FLEET NATIONAL BANK


By: /s/James B. McLaughlin
        Name: James B. McLaughlin
        Title: Managing Director

WELLS FARGO BANK, NATIONAL ASSOCIATION


By: /s/Frederick G. Bright
        Name: Frederick G. Bright
        Title: Vice President

COMMERZBANK AG, NEW YORK AND GRAND CAYMAN BRANCHES


By: /s/James Brett
        Name: James Brett
        Title: Assistant Treasurer

By: /s/Ralph C. Marra, Jr.
        Name: Ralph C. Marra, Jr.
        Title: Vice President


THE BANK OF NEW YORK


By: /s/David V. Fowler
        Name: David V. Fowler
        Title: Managing Director

[Signatures Continued on Next Page]

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[Signature Page to Third Amendment to Credit Agreement dated as of March 23, 2004 with HRPT Properties Trust]

AMSOUTH BANK


By:  /s/David G. Ellis
        Name: David G. Ellis
        Title: Assistant Vice President


CITIZENS BANK OF MASSACHUSETTS


By:  /s/Daniel R. Ouellette
        Name: Daniel R. Ouellette
        Title: Senior Vice President


SUNTRUST BANK


By:  /s/Blake K. Thompson
        Name: Blake K. Thompson
        Title: Vice President


THE GOVERNOR AND COMPANY OF THE BANK OF IRELAND


By:  /s/Gwen Evans
        Name: Gwen Evans
        Title: Manager


By:  /s/Iain Donovan
        Name: Iain Donovan
        Title: Manager

[Signatures Continued on Next Page]

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[Signature Page to Third Amendment to Credit Agreement dated as of March 23, 2004 with HRPT Properties Trust]

PNC BANK, NATIONAL ASSOCIATION


By:  /s/James A. Colella
        Name: James A. Colella
        Title: Vice President


CHEVY CHASE BANK, F.S.B.


By:  /s/Ronald Huffman
        Name: Ronald Huffman
        Title: Vice President


EASTERN BANK


By:  /s/Richard Muraida
        Name: Richard Muraida
        Title: Senior Vice President


NATIONAL BANK OF EGYPT, NEW YORK BRANCH


By:  /s/Hassan Eissa
        Name: Hassan Eissa
        Title: General Manager


By:  /s/Carmelo L. Foti
        Name: Carmelo L. Foti
        Title: Vice President

[Signatures Continued on Next Page]

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[Signature Page to Third Amendment to Credit Agreement dated as of March 23, 2004 with HRPT Properties Trust]

RZB FINANCE LLC


By:  /s/John A. Valiska
        Name: John A. Valiska
        Title: Group Vice President


By:  /s/Christoph Hoedl
        Name: Christoph Hoedl
        Title: Vice President


BANK LEUMI USA


By:  /s/Charles C. D'Amico
        Name: Charles C. D'Amico
        Title: Vice President


BANK ONE, N.A.


By:  /s/Patricia Leung
        Name: Patricia Leung
        Title: Director, Capital Markets


COMERICA BANK


By:  /s/Jessica L. Kempf
        Name: Jessica L. Kempf
        Title: Assistant Vice President

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[Signature Page to Third Amendment to Credit Agreement dated as of March 23, 2004 with HRPT Properties Trust]

BANK OF MONTREAL


By:  /s/
        Name:
        Title: Vice President


SOVEREIGN BANK


By:  /s/T. Gregory Donohue
        Name: T. Gregory Donohue
        Title: Senior Vice President


ALLIED IRISH BANKS PLC


By:  /s/Ronald K. Rapp
        Name: Ronald K. Rapp
        Title: Senior Vice President


By:  /s/Kathryn Murdoch
        Name: Kathryn Murdoch
        Title: Vice President

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