-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Md/Wz6bui1QrorPQSNBzF7hcT2KchWAqbfZW6pslSzFFEBCKjQ46aaoIVzBuZAbs B0Qunqx/dXO5iOohyHC15g== 0000908737-97-000556.txt : 19971216 0000908737-97-000556.hdr.sgml : 19971216 ACCESSION NUMBER: 0000908737-97-000556 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19971001 ITEM INFORMATION: FILED AS OF DATE: 19971212 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HEALTH & RETIREMENT PROPERTIES TRUST CENTRAL INDEX KEY: 0000803649 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 046558834 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 001-09317 FILM NUMBER: 97737731 BUSINESS ADDRESS: STREET 1: 400 CENTRE ST CITY: NEWTON STATE: MA ZIP: 02158 BUSINESS PHONE: 6173323990 MAIL ADDRESS: STREET 1: 400 CENTRE STREET CITY: NEWTON STATE: MA ZIP: 02158 FORMER COMPANY: FORMER CONFORMED NAME: HEALTH & REHABILITATION PROPERTIES TRUST DATE OF NAME CHANGE: 19920703 8-K/A 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K/A CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): October 1, 1997 HEALTH AND RETIREMENT PROPERTIES TRUST (Exact name of registrant as specified in its charter) Maryland 1-9317 04-6558834 (State or other (Commission (IRS Employer jurisdiction of ) File Number) Identification No.) incorporation) 400 Centre Street, Newton, MA 02158 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 617-332-3990 Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (a) Financial Statements Under Rule 3-14 of Regulation S-X Audited Statement of Revenue and Certain Expenses for Seven West Associates, LLC for the Period January 28, 1996 through January 25, 1997 Audited Historical Summary of Gross Income and Direct Operating Expenses for Two Medical Office Buildings and Two Parking Structures for the Year Ended December 31, 1996. As previously disclosed on Form 8-K dated October 16, 1997, Health and Retirement Properties Trust and subsidiaries (the "Company") acquired two medical office buildings and two garages located in Los Angeles, California and a medical office building located in New York City, New York. Neither the Company nor its affiliates were related to any of the sellers of these properties. The factors considered by the Company in determining the purchase price paid for these properties include, among others, the following: (i) the historical and projected rents received and likely to be received from the properties, (ii) the historic and expected operating expenses, including real estate taxes, incurred and expected to be incurred at the properties, (iii) the credit quality and nature of the existing tenants (iv) the existing lease terms and renewal options of the leases in place, (v) the market demand for similar space, the rent rates being paid compared to existing rents being paid in the building, and opportunities for alternative and new tenancies, (vi) the physical location and condition of the properties, the need for repairs and likely cost of repairs, (vii) the expected tenant inducements (such as free rent, tenant improvement allowances, etc.) which might be necessary to fill vacant space or renew leases, and (viii) the pricing of comparable properties as evidenced by recent arms-length market sales. The Company, after investigation of the properties, is not aware of any material factors, other than those enumerated above, which would cause the financial information reported not to be necessarily indicative of future operating results. (b) Pro Forma Financial and Other Data Pro Forma Balance Sheet as of September 30, 1997 Pro Forma Statement of Income for the Nine Months Ended September 30, 1997 Pro Forma Statement of Income for the Year Ended December 31, 1996 (c) Exhibits 23.1 Consent of Ernst & Young LLP 23.2 Consent of Deloitte & Touche LLP 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. HEALTH AND RETIREMENT PROPERTIES TRUST By: /s/ Ajay Saini Ajay Saini, Treasurer and Chief Financial Officer Date: December 12, 1997 REPORT OF INDEPENDENT AUDITORS To the Board of Trustees Health & Retirement Properties Trust We have audited the accompanying Historical Summary of Gross Income and Direct Operating Expenses (the "Historical Summary") for two medical office buildings and two parking structures (the "Property") owned by Wright-Carlyle Partners ("W-C") for the year ended December 31, 1996. This Historical Summary is the responsibility of the Property's management. Our responsibility is to express an opinion on the Historical Summary based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Historical Summary is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Historical Summary. An audit also includes assessing the basis of accounting used and significant estimates made by management, as well as evaluating the overall presentation of the Historical Summary. We believe that our audit provides a reasonable basis for our opinion. The accompanying Historical Summary was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in Form 8-K of Health & Retirement Properties Trust as described in Note 1, and are not intended to be a complete presentation of the Property's revenues and expenses. In our opinion, the Historical Summary referred to above presents fairly, in all material respects, the gross income and direct operating expenses described in Note 1 of the Property for the period ended December 31, 1996, in conformity with generally accepted accounting principles. /s/ Ernst & Young LLP Boston, Massachusetts September 12, 1997 Historical Summary of Gross Income and Direct Operating Expenses for Two Medical Office Buildings and Two Parking Structures Owned By Wright-Carlyle Partners For the year ended December 31, 1996 Gross Income Rental $12,395,034 Parking 3,516,004 ----------- 15,911,038 ----------- Direct Operating Expenses Rental Property Operating Expenses 2,719,424 Parking Operating Expenses 860,001 Real Estate Taxes and Insurance 631,087 General and Administrative 870,987 ----------- 5,081,499 ----------- Gross Income in Excess of Direct Operating Expenses $10,829,539 =========== See accompanying notes. Notes to Historical Summary of Gross Income and Direct Operating Expenses 1. General Information and Summary of Significant Accounting Policies: Wright-Carlyle Partners (a general partnership) ("W-C") owns and operates a leasehold interest in two medical office buildings and two parking structures located in Los Angeles, California (the "Property"). The partners are Carlyle Real Estate Limited Partnership - IX ("Carlyle") and Medical Office Buildings, Ltd. ("MOB"). Carlyle and MOB are both general partners. Effective March 28, 1997, MOB acquired Carlyle's partnership interest in W-C and, thereafter, entered into a Contribution Agreement with Health & Retirement Properties Trust ("HRPT") under which MOB contributed to a new partnership its interest in the Property. The accompanying Historical Summary has been prepared in accordance with Rule 3-14 of Regulation S-X of the Securities and Exchange Commission for inclusion in Form 8-K of HRPT. Accordingly, certain historical expenses which may not be comparable to the expenses expected to be incurred in the proposed future operations of the Property have been excluded. Excluded expenses consist of depreciation and amortization, interest expense, and ground lease costs not directly related to the future operations of the Property. Rental income is recognized on a straight line basis over the term of the related leases. 2. Leases W-C, as lessor, has entered into non-cancelable operating leases at the Property. Minimum future rentals under the leases in effect at December 31, 1996 are summarized as follows: Year ---- 1997 $ 10,957,000 1998 9,031,000 1999 5,610,000 2000 2,541,000 2001 1,711,000 Thereafter 1,748,000 ------------- $ 31,598,000 ============= The leases on the Property are generally for a term of at least 6 months and provide for operating expense, real estate tax escalations and, in certain cases, increases in minimum rent. 3. Related Party Transactions W-C has contracted with Wright Runstad Associates Limited Partnership, an affiliated company, to provide services related to building management and leasing. W-C paid or accrued the following for the year ended December 31, 1996: Management fee $393,000 Lease commissions 89,000 Reimbursables 411,000 -------- $893,000 ======== [Deloitte & Touche LLP Letterhead] INDEPENDENT AUDITORS' REPORT Seven West Associates, LLC: We have audited the accompanying statement of revenues and certain expenses of Seven West Associates, LLC, formerly Seven West 34th Street Development Corp., (the "Company") for the period January 28, 1996 through January 25, 1997. This financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. The accompanying statement of revenues and certain expenses was prepared in compliance with the rules and regulations of the Securities and Exchange Commission (for inclusion in the filing of form 8-K of Health and Retirement Properties Trust, the acquirer) and as described in Note 1, are not intended to be a complete presentation of the Seven West Associates, LLC's revenue and expenses. In our opinion, such financial statement presents fairly, in all material respects, the revenues and certain expenses, as described in Note 1, for the period January 28, 1996 through January 25, 1997 in conformity with generally accepted accounting principles. /s/ Deloitte & Touche LLP April 9, 1997 SEVEN WEST ASSOCIATES, LLC STATEMENT OF REVENUES AND CERTAIN EXPENSES PERIOD JANUARY 28, 1996 THROUGH JANUARY 25, 1997 REVENUES Rent from properties $12,176,341 Reimbursement of operating costs 2,097,348 Interest Income 81,695 Other 5,449 ----------- Total 14,360,833 ----------- CERTAIN EXPENSES Rental property operating expenses 2,761,348 Real estate taxes and insurance 2,058,962 General and administrative 34,219 ----------- Total 4,854,529 ----------- REVENUES IN EXCESS OF CERTAIN EXPENSES $ 9,506,304 =========== See notes to financial statement SEVEN WEST ASSOCIATES, LLC NOTES TO FINANCIAL STATEMENT PERIOD JANUARY 28, 1996 THROUGH JANUARY 25, 1997 1. GENERAL INFORMATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Seven West Associates, LLC, formerly, Seven West 34th Street Development Corp. (the "Company") is wholly-owned by Orchid Properties, Inc. The Company owns and operates an office building and related land in New York City. The accompanying statement of revenues and certain expenses is presented in conformity with Rule 3-14 of Regulation S-X of the Securities and Exchange Commission. Accordingly, the statement is not representative of the actual operations for the period January 28, 1996 through January 25, 1997 as certain expenses which may not be comparable to the expenses expected to be incurred in the proposed future operations of the Company have been excluded. Expenses excluded consist of interest, depreciation and amortization and other costs not directly related to the future operations of the Company. Rental income is recognized on a straight line basis over the term of the related leases. 2. LEASES The Company, as lessor, have entered into non-cancelable operating leases involving land and building. The leases expire through the year 2011 and provide for aggregate minimum rentals as follows: Year Ending January 25, 1998 $ 12,326,317 1999 12,580,977 2000 12,580,977 2001 12,718,544 2002 13,265,927 Thereafter 87,894,074 ------------- Total $ 151,366,816 ============= The leases also provide for payment by the tenants of certain occupancy related expenses, and certain leases contain renewal options. As of January 25, 1997, approximately 51% all of the rentable space has been leased to a single tenant HEALTH AND RETIREMENT PROPERTIES TRUST Unaudited Pro Forma Financial Statements The following unaudited pro forma balance sheet as of September 30, 1997 and the statement of income for the nine months ended September 30, 1997 and the year ended December 31, 1996, present the financial position and the results of operations of the Company as if the transactions described in the Notes to unaudited financial statements were consummated on January 1, 1996. This unaudited pro forma financial statement should be read in connection with, and is qualified in its entirety by reference to, the separate financial statements of the Company and of the Seller of the Government Office Properties, each for the year ended December 31, 1996, included in the Company's Current Report on Form 8-K dated February 17, 1997 and the financial statements of the Company for the quarter ended September 30, 1997 included in the Company's Quarterly Report on Form 10-Q. This unaudited pro forma financial statement is not necessarily indicative of the expected results of operations of the Company for any future period. Differences could result from, among other considerations, future changes in the Company's portfolio of investments, changes in interest rates, changes in the capital structure of the Company, delays in the acquisition of certain properties and changes in property level operating expenses.
Health and Retirement Properties Trust Pro Forma Balance Sheets September 30, 1997 (dollars in thousands) (unaudited) Recent West 34th Acquisi- Historical Street (A) tions (B) Pro Forma ---------- --------- --------- ---------- ASSETS Real estate properties, at cost: Land, buildings and improvements ................................ $1,621,522 $ 110,750 $ 202,200 $1,934,472 ---------- --------- --------- ---------- 1,621,522 110,750 202,200 1,934,472 Less accumulated depreciation ................................... 99,746 0 0 99,746 ---------- --------- --------- ---------- 1,521,776 110,750 202,200 1,834,726 Real estate mortgages, net .......................................... 116,941 0 0 116,941 Investment in Hospitality Properties Trust .......................... 102,465 0 0 102,465 Cash and cash equivalents ........................................... 71,765 (46,368) (8,764) 16,633 Interest and rent receivables ....................................... 19,722 0 0 19,722 Deferred interest and finance costs, net and other assets ........... 18,625 (4,901) (250) 13,474 ========== ========= ========= ========== $1,851,294 $ 59,481 $ 193,186 $2,103,961 ========== ========= ========= ========== LIABILITIES AND SHAREHOLDERS' EQUITY Bank notes payable .................................................. $ 100,000 $ 59,000 $ 191,000 $ 350,000 Senior notes and bonds payable, net ................................. 200,000 0 0 200,000 Mortgage notes payable .............................................. 26,941 0 0 26,941 Convertible subordinated debentures ................................. 211,650 0 0 211,650 Accounts payable and accrued expenses ............................... 35,616 481 1,436 37,533 Prepaid rents ....................................................... 7,077 0 0 7,077 Security deposits ................................................... 2,872 0 750 3,622 Due to affiliates ................................................... 1,336 0 0 1,336 Dividend payable .................................................... 36,571 0 0 36,571 Shareholders' equity: ............................................... 0 Preferred shares, $.01 par value: none issued .................... 0 0 0 0 Common shares of beneficial interest, $.01 par value: 125 million shares authorized, 98.7 million shares and 98.8 million pro forma shares issued and outstanding, respectively 988 0 0 988 Additional paid-in capital ....................................... 1,370,730 0 0 1,370,730 Cumulative net income ............................................ 383,775 0 0 383,775 Dividends ........................................................ (526,262) 0 0 (526,262) ---------- --------- --------- ---------- Total shareholders' equity .............................. 1,229,231 0 0 1,229,231 ---------- --------- --------- ---------- $1,851,294 $ 59,481 $ 193,186 $2,103,961 ========== ========= ========= ========== 0 0 0 0 See accompanying notes
Health and Retirement Properties Trust Proforma Statements of Income Year Ended December 31, 1996 (amounts in thousands, except per share data) (unaudited) HRPT GPI ------------------ ------------------- Recent Acquisi- Acquisi- West 34th Acquisi- Pro Forma Historical tions (H) Historical tions (I) CSMC (J) Street (K) tions (L) Adjustments Pro Forma -------- -------- -------- -------- -------- -------- -------- -------- -------- Revenues: Rental income $ 98,039 $ 31,212 $ 36,523 $ 15,055 $ 15,911 $ 14,361 $ 21,057 $ 0 $232,158 Interest income 22,144 (396) 780 0 0 0 0 0 22,528 -------- -------- -------- -------- -------- -------- -------- -------- -------- Total revenues 120,183 30,816 37,303 15,055 15,911 14,361 21,057 0 254,686 -------- -------- -------- -------- -------- -------- -------- -------- -------- Expenses: Operating 3,776 1,600 8,657 5,605 5,081 4,855 8,880 1,073 (M) 39,527 Interest 22,545 15,947 28,730 8,313 7,053 3,835 8,388 (45,086)(N) 49,725 Depreciation and amortization 22,106 6,467 6,357 1,174 2,441 2,492 3,109 932 (O) 45,078 General and administrative 7,055 1,402 5,570 0 543 554 692 (3,486)(M) 12,330 -------- -------- -------- -------- -------- -------- -------- -------- -------- Total expenses 55,482 25,416 49,314 15,092 15,118 11,736 21,069 (46,567) 146,660 -------- -------- -------- -------- -------- -------- -------- -------- -------- Income before equity income and extraordinary item 64,701 5,400 (12,011) (37) 793 2,625 (12) 46,567 108,026 Equity in earnings of Hospitality Properties Trust 8,860 8,860 Gain on equity transaction of Hospitality Properties Trust 3,603 0 0 0 0 0 0 0 3,603 -------- -------- -------- -------- -------- -------- -------- -------- -------- Income before gain (loss) on sale of properties and extraordinary item $ 77,164 $ 5,400 $(12,011) $ (37) $ 793 $ 2,625 $ (12) $ 46,567 $120,489 -------- -------- -------- -------- -------- -------- -------- -------- -------- Average shares outstanding 66,255 98,838 Per share data: Net income $ 1.16 $ 1.22 See accompanying notes
Health and Retirement Properties Trust Proforma Statements of Income Nine months ended September 30, 1997 (amounts in thousands, except per share data) (unaudited) Second Third Quarter Quarter Recent Acquisi- Acquisi- West 34th Acquisi- Historical GPI (C) CSMC (D) tions(E) tions(E) Street(F) tions(G) Pro Forma ------- ------- ------- ------- ------- ------- ------- -------- Revenues: Rental income $129,518 $12,235 $ 6,831 $ 2,948 $ 3,179 $10,771 $18,900 $184,382 Interest income 16,177 (268) 0 0 0 0 0 15,909 ------- ------- ------- ------- ------- ------- ------- ------- Total revenues 145,695 11,967 6,831 2,948 3,179 10,771 18,900 200,291 ------- ------- ------- ------- ------- ------- ------- ------- Expenses: Operating 16,961 3,732 1,910 0 954 3,641 7,593 34,791 Interest 24,955 (1,366) 3,232 1,087 1,463 2,876 7,847 40,094 Depreciation and amortization 26,633 3,365 1,119 627 501 1,869 2,902 37,016 General and administrative 8,148 1,579 249 139 111 415 645 11,286 ------- ------- ------- ------- ------- ------- ------- ------- Total expenses 76,697 7,310 6,510 1,853 3,029 8,801 18,987 123,187 ------- ------- ------- ------- ------- ------- ------- ------- Income before equity in earnings of income Hospitality Properties Trust and before extraordinary item 68,998 4,657 321 1,095 150 1,970 (87) 77,104 Equity in earnings of Hospitality Properties Trust 6,683 0 0 0 0 0 0 6,683 ------- ------- ------- ------- ------- ------- ------- ------- Net income before extraordinary item $ 75,681 $ 4,657 $ 321 $ 1,095 $ 150 $ 1,970 $ (87) $ 83,787 ------- ------- ------- ------- ------- ------- ------- ------- Average shares outstanding 89,918 98,838 Per share data: Net income $ 0.84 $ 0.85 See accompanying notes
Notes To Unaudited Pro Forma Financial Statements Pro Forma Balance Sheet Adjustments at September 30, 1997. A. Represents the acquisition, on October 1, 1997, of a medical office property located at 7 West 34th Street in New York, New York ("West 34th Street"). This acquisition was funded with available cash and by drawing under the Company's existing revolving line of credit. B. Represents the Company's acquisitions, during November 1997 and December 1997, of a medical office property located in Pennsylvania, a medical office property located in Colorado, a medical office property located in Maryland, a medical office property located in Rhode Island, five commercial office properties located in Austin, Texas and three medical office properties located in Anaheim, California (collectively, "Recent Acquisitions"). The Recent Acquisitions were funded with available cash and by drawings under the Company's existing revolving line of credit. Pro Forma Statement of Income adjustments for the Nine months Ended September 30, 1997. C. Represents the increase in rental income, operating expenses, depreciation and amortization and general and administrative expenses arising from the Company's acquisition of the government office properties ("GPI") from Government Property Investors, Inc. ("Seller"). Also reflects the decrease in interest expense arising from the Company's issuance of its shares pursuant to a common stock offering in March 1997, proceeds of which were used in part to repay amounts then outstanding under the Company's revolving line of credit, net of an increase in interest expense related to the Company's assumption of certain debt in connection with the acquisition of the GPI. D. Represents the increase in rental income, operating expenses, depreciation and amortization and general and administrative expenses arising from the Company's acquisition of two medical office properties and two parking structures located in Los Angeles, California, ("CSMC") as well as the increase in interest expense due to the use of the Company's revolving line of credit to fund this acquisition. E. Represents the increase in rental income, operating expenses, depreciation and amortization and general and administrative expenses arising from the Company's acquisition of a 200 unit retirement housing property located in Spokane, Washington and 20 medical office clinics and ancillary structures located in Massachusetts and three medical and two commercial office buildings located in Pennsylvania as well as the increase in interest expense due to the use of the Company's revolving line of credit to fund these acquisitions. F. Represents the increase in rental income, operating expenses, depreciation and amortization and general and administrative expenses arising from the Company's acquisition of West 34th Street, as well as the increase in interest expense due to the use of the Company's revolving line of credit to fund the acquisition. G. Represents the increase in rental income, operating expenses, depreciation and amortization and general and administrative expenses arising from the Company's Recent Acquisitions as well as the increase in interest expense due to the use of the Company's revolving line of credit to fund these acquisitions. Pro Forma Statement of Income adjustments for the Year Ended December 31, 1996. H. Represents the increase in rental income, operating expenses, interest expense, depreciation and amortization and general and administrative expenses arising from the Company's acquisitions completed during 1996 and certain acquisitions completed during the nine months ended September 30, 1997, assuming the contractual rents were in effect since January 1, 1996. Property level expense adjustments represent annualized historical operating expenses for gross leased properties acquired. Depreciation expense adjustments assume an average building life of 40 years. Also assumes a reduction in interest income from the use of cash on hand to fund, in part, these acquisitions. I. Represents the increase in rental income, operating expenses, interest expense, depreciation and amortization and general and administrative expenses arising from the Seller's acquisitions completed during 1996 and acquisitions completed by the Company during the nine months ended September 30, 1997, assuming the contractual rents were in effect since January 1, 1996. Property level expense adjustments are established for the purpose of this pro-forma presentation as equal to percentage of rents which is the same percentage of rents as was represented by property level operating expenses for the properties which were owned by the Seller during 1996. Depreciation expense adjustments assume an average building life of 40 years. J. Represents the historical rental income and operating expenses for the Company's acquisition of CSMC. Also represents adjustments resulting from the acquisition for interest expense due to the use of the Company's revolving line of credit to fund the acquisition, depreciation expense adjustments assuming an average building life of 40 years as well as increases in general and administrative expenses. K. Represents the historical rental income and operating expenses for the Company's acquisition of West 34th Street. Also represents adjustments resulting from the acquisition for interest expense due to the use of the Company's revolving line of credit to fund the acquisition, depreciation expense assuming an average building life of 40 years as well as increase in general and administrative expenses. L. Represents the increase in rental income, operating expenses, depreciation and amortization and general and administrative expenses arising from the Recent Acquisitions, as well as the increase in interest expense due to the use of the Company's revolving line of credit to fund these acquisitions. M. Represents the net reduction in operating and administrative expenses arising from the differences in the Company's cost structure (which include the full year's effect of general and administrative and property management services) and the cost structure of GPI (which included the employment of separate property management companies for certain of the government office properties under separate fee arrangements and cost related to administrative financial, acquisition and other activities performed by GPI's management) and the cost structure of the other properties acquired in 1997. N. Represents the reduction of interest expense arising from the Company's repayment of the GPI mortgage and affiliate debt, excluding $27,588 of mortgage debt that was not repaid in connection with the acquisition of GPI O. Represents the effect on the depreciation expense arising from the adjustment of GPI's historical basis in existing assets to the Company's basis at acquisition. EX-23.1 2 Exhibit 23.1 Consent of Independent Auditors We consent to the incorporation by reference in Post-effective Amendment No.1 to the Registration Statement (Form S-3 No. 33-62135) of Health and Retirement Properties Trust and in the related Prospectus; in the Registration Statement (Form S-3 No. 333-26887) of Health and Retirement Properties Trust and in the related Prospectus; and in Registration Statement (Form S-3 No. 333-34823) of Health and Retirement Properties Trust and in the related Prospectus, of our report dated September 12, 1997, with respect to the Historical Summary of Gross Income and Direct Operating Expenses of two medical office buildings and two parking structures owned by Wright-Carlyle Partners, included in this Form 8-K. /s/ Ernst & Young LLP ERNST & YOUNG LLP Boston, Massachusetts December 11, 1997 EX-23.2 3 Exhibit 23.2 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in the Registration Statements of the Health and Retirement Properties Trust on Forms S-3, Registration Nos. 333-34823, 333-26887 and 33-62135 of our report dated April 9, 1997, as included in this Form 8-K. /s/ Deloitte & Touche DELOITTE & TOUCHE New York, New York December 11, 1997 -----END PRIVACY-ENHANCED MESSAGE-----