UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

Filed by the Registrant  ¨                              Filed by a Party other than the Registrant  x

Check the appropriate box:

¨ Preliminary Proxy Statement

¨ Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

¨ Definitive Proxy Statement

x Definitive Additional Materials

¨ Soliciting Material Pursuant to §240.14a-12

COMMONWEALTH REIT

(Name of the Registrant as Specified In Its Charter)

CORVEX MANAGEMENT LP

KEITH MEISTER

RELATED FUND MANAGEMENT, LLC

RELATED REAL ESTATE RECOVERY FUND GP-A, LLC

RELATED REAL ESTATE RECOVERY FUND GP, L.P.

RELATED REAL ESTATE RECOVERY FUND, L.P.

RRERF ACQUISITION, LLC

JEFF T. BLAU

RICHARD O’TOOLE

DAVID R. JOHNSON

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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	(1)	Title of each class of securities to which transaction applies:
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	(3)	Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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	(2)	Form, Schedule or Registration Statement No.:
	(3)	Filing Party:
	(4)	Date Filed:

The Case for Change Now at CWH

Presentation to ISS

May 7, 2013

2

Disclaimer

Additional Information Regarding the Consent Solicitation

In connection with their solicitation of written consents, Corvex and Related have filed a definitive written consent solicitation statement with the U.S.

Securities

and

Exchange

Commission

(the

“SEC”)

to

solicit

written

consents

from

shareholders

of

the

Company.

Investors

and

security

holders

are

urged to read the definitive written consent solicitation statement and other relevant documents when they become available, because they

contain

important

information

regarding

the

consent

solicitation.

The

definitive

written

consent

solicitation

statement

and

all

other

relevant

documents are available, free of charge, on the SEC’s website at www.sec.gov.

The following persons are participants in connection with the written consent solicitation of the Company’s shareholders: Corvex Management LP, Keith

Meister, Related Fund Management, LLC, Related Real Estate Recovery Fund GP-A, LLC, Related Real Estate Recovery Fund GP, L.P., Related Real

Estate Recovery Fund, L.P., RRERF Acquisition, LLC, Jeff T. Blau, Richard O’Toole and David R. Johnson.  Information regarding the participants in the

consent solicitation and a description of their direct and indirect interests, by security holdings or otherwise, to the extent applicable, is available in the

definitive written consent solicitation statement filed with the SEC on April 10, 2013 and Supplement No. 1 thereto filed on April 12, 2013.

This presentation does not constitute either an offer to sell or a solicitation of an offer to buy any interest in any fund associated with Corvex Management

LP (“Corvex”) or Related Fund Management, LLC (“Related”).  Any such offer would only be made at the time a qualified offeree receives a confidential

offering memorandum and related subscription documentation. 

The information in this presentation is based on publicly available information about CommonWealth REIT (the “Company”). This document includes

certain forward-looking statements, estimates and projections prepared with respect to, among other things, general economic and market conditions,

changes in management, changes in the composition of the Company’s Board of Trustees, actions of the Company and its subsidiaries or competitors,

and the ability to implement business strategies and plans and pursue business opportunities.  Such forward-looking statements, estimates, and

projections reflect various assumptions concerning anticipated results that are inherently subject to significant uncertainties and contingencies and have

been included solely for illustrative purposes, including those risks and uncertainties detailed in the continuous disclosure and other filings of the

Company, copies of which are available on the U.S. Securities and Exchange Commission website (“EDGAR”) at www.sec.gov/edgar.  No

representations, express or implied, are made as to the accuracy or completeness of such forward-looking statements, estimates or projections or with

respect to any other materials herein.  Corvex and Related may buy, sell, cover or otherwise change the form of their investment in the Company for any

reason at any time, without notice, and there can be no assurances that they will take any of the actions described in this document.  Corvex and

Related disclaim any duty to provide any updates or changes to the analyses contained in this document, except as may be required by law. 

Shareholders and others should conduct their own independent investigation and analysis of the Company.  Except where otherwise indicated, the

information in this document speaks only as of the date set forth on the cover page.  Permission to quote third party reports in this presentation has

been neither sought nor obtained.

3

Introduction

Immediate Change is Needed

CWH’s corporate governance practices are “worst-in-class,”

in our view

–

In

fact,

in

response

to

our

efforts

at

reform,

CWH

is

conducting

an

accelerating

scorched

earth

campaign,

building

on

a

longstanding

tradition

of

disregarding

shareholder

rights

CWH’s corporate governance practices have yielded:

–

A Deeply Conflicted Management Structure;

–

Severe Financial and Operating Underperformance; and, most alarmingly,

–

We

are

pleased

to

present

to

ISS

our

case

for

change

at

Commonwealth

REIT

(1)

(1)

A

more

detailed

presentation,

“The

Case

for

Change

Now

at

CWH,”

was

filed

with

the

SEC

on

April

18,

2013.

CWH

stock

will

always

trade

at

a

substantial

discount

under

the

current

regime,

in

our

view

Trapped

inside

the

current

structure

and

under

the

supervision

of

the

current

trustees,

we

firmly

believe

the

capital

markets

will

never

credit

shareholders

for

the

true

fair

value

of

their

real

estate

assets,

whether

they

be

“CBD”,

“suburban”

or

otherwise 

Disenfranchised

Shareholders

On behalf of shareholders, Corvex and Related are soliciting consents to remove all

members of the board of trustees of Commonwealth REIT (“CWH” or the “Company”) in a

desperately needed referendum on CWH’s corporate governance and performance

4

Introduction

Immediate Change is Needed

We propose to effect Change

through Accountability:

Corvex/Related

propose

a

clear

plan

and

will

work

collaboratively

with

other

shareholders

to

restore

CWH

to

health

after

removal

of

the

current

board

We

have

already

identified

a

potential

interim

CEO

and

premier

property

management

company

to

oversee

the

transition,

and

have

also

engaged

Deutsche

Bank

to

provide

financial

advisory

services

including

with

respect

to

any

potential

financing

needs

We

believe

in

a

significantly

higher

NAV

per

share

after

removal

of

current

trustees,

but

this

will

never

be

achieved

without

eliminating

the

valuation

discount

currently

ascribed to the disenfranchising

corporate governance practices

in

place

today

Action

by

written

consent;

a

2/3

vote

will

remove

the

entire

board

of

trustees

and

hold

them

accountable

Path

for Shareholders:

Value

for Shareholders:

Plan

for Shareholders: 

5

Poor Corporate Governance

CWH’s Corporate Governance Policies Destined to Fail Shareholders

CWH’s corporate governance framework is “worst-in-class,”

in our view:

Managing

Trustees/President

of

CWH

own

<1%

of

CWH

stock,

but

own

100%

of

RMR

All executive officers of CWH are also officers of RMR

CWH’s so-called “independent”

trustees are severely conflicted, in our view

“Super-charged”

classified board: bylaws purport to require the board include two “managing

trustees”, such that it would take three years to replace a simple majority

Poison pill with slow hand provision

If less than the entire board is removed, vacancies will be filled by the remaining trustees

How

could

the

underpinnings

of

CWH’s

governance

framework

yield

anything

but

a

fundamental

misalignment

in

incentives

and

severe

underperformance?

“I’m

on

both

boards

and

I

can

say

there’s

no

conflict

of

interest.”

(1)

-

Adam Portnoy,

President/Managing Trustee, CWH; and

President/CEO/Part-Owner, REIT Management & Research (“RMR”),

External Adviser to CWH

(1)

“Whose

CommonWealth

Is

It

Anyway?”

Barron’s,

April

20,

2013

6

Poor Corporate Governance

Conflicted Board of Trustees

Significant overlap of board members across RMR entities, including so-called

“independent”

trustees 

In our view, the Portnoys and CWH’s “independent”

trustees are conflicted by any common

sense definition

2

of

3

“independent”

trustees

serve

on

other

Portnoy

boards

3 

“independent”

trustee

retired

from

RBC

capital

markets

division

in

2012,

a

division

which

regularly receives lucrative business from CWH (including the recent dilutive equity offering

for which RBC received over $2 million in fees) and RMR’s other entities

rd

Same Job, Different Company?

Travel Centers

Five Star

RMR Real Estate

Name

Title

CWH

HPT

SNH

GOV

SIR

of America

Senior Living

Income Fund

Senior

Management:

Adam D. Portnoy

President & Managing Trustee

Vern D. Larkin

Director of Internal Audit

Jennifer B. Clark

Secretary

Board

of

Directors:

Adam D. Portnoy

President & Managing Trustee

Barry D. Portnoy

Managing Trustee

William A. Lamkin

Partner at Ackrell Capital

Frederick N. Zeytoonjian

Founder & CEO of Turf Products

Joseph Morea

Retired RBC Banker

7

Poor Corporate Governance

Fundamental Misalignment of Incentives

$2.7

billion

of

net

acquisitions

and

capex

since

2007

(over

2x

CWH’s

recent

market

cap

(1)

),

while CWH book value per share essentially flat

Fees paid to RMR continue to grow, while CWH shareholder value continues to decline

RMR extracted nearly 30% of CWH’s market cap during 2007-2012, as CWH stock continued to

plummet

Over $2 billion of related party transactions in the last 5 years, to seed new platforms for RMR

(1)

Market

cap

of

$1.3

billion

based

on

a

closing

price

of

$15.85

on

February

25,

2013,

the

day

prior

to

Related

and

Corvex’s

first

public

filing.

RMR receives fees based on gross historical cost basis, gross collected rents

and construction costs, incentivizing growth through acquisitions regardless of

returns to CWH shareholders

'07-'12

2007

2008

2009

2010

2011

2012

Total

Fees Paid Out to RMR

$59.7

$63.2

$62.6

$62.2

$69.5

$77.3

$394.6

RMR Fees % Growth

--

5.9%

(1.0%)

(0.5%)

11.7%

11.2%

29.5%

RMR Fees as % of:

CWH Market Cap

4.5%

4.8%

4.7%

4.7%

5.2%

5.8%

29.7%

CWH Market Cap, Cumulative

4.5%

9.3%

14.0%

18.6%

23.9%

29.7%

29.7%

CWH Cumulative Stock Price Return

(37.4%)

(74.7%)

(46.0%)

(48.4%)

(66.3%)

(67.9%)

(67.9%)

8

Poor Corporate Governance

Actions Speak Louder Than Words

A massively dilutive equity offering executed at 48% below book value to repay debt trading

above par

A failed attempt to secretly change Maryland law to make it impossible to remove trustees

without cause

A March

1

bylaw

amendment

that

attempts

to

eliminate

shareholders’

right

to

action

by

written

consent to remove trustees

A contemplated sale of CWH’s 56% controlling interest in SIR at a potential discount rather

than at a control premium, which would also have the effect of preserving RMR’s fee stream

from SIR

An April 12 bylaw amendment that conflicts with 14 years of CWH’s own public disclosure

If

there

had

previously

been

any

doubt

as

to

where

the

trustees’

alleigances

lie,

these

actions

have

made

clear

it

is

with

the

Portnoys

and

not

shareholders

Value destructive actions and attempts by the trustees to disenfranchise CWH

shareholders, all undertaken after Corvex/Related attempts at reform, are

appalling:

9

Poor Corporate Governance

Dilutive Equity Offering

On March 5, 2013, CWH sold 34.5 million shares at $19.00 despite

protests from some of its

largest shareholders, a bona fide offer at substantial premium, and in our view no need to

issue equity

–

Increased CWH’s share count by 41% and diluted CWH’s NAV by over $6 per share

CWH’s use of proceeds for the equity offering was to repay debt trading at prices ranging

from 102% to 111% of par

–

Remarkably, CWH did not have any upcoming maturities or liquidity issues associated

with this debt or any debt

–

However,

equity

offering

increases

Company’s

equity

base,

creating

additional

capacity

to

do

acquisitions

and

thereby

pay

more

management

fees

to

RMR

We believe the recently completed equity offering serves as a clear example of

poor management, fundamentally misaligned incentives, and terrible capital

allocation

10

Poor Corporate Governance

March 1 Bylaw Amendment

On March 1, 2013, CWH announced its bylaws had been amended to “clarify that a

shareholder

seeking

to

take

action

to

remove

one

or

more

Trustees

must

comply”

with

the

3%

/ 3 year requirement

–

Far from a ‘clarification,’

this is an attempt to effectively eliminate a shareholder right

(action by written consent to remove trustees) granted in CWH’s Declaration of Trust

since 1986

–

But the Declaration of Trust supersedes the bylaws and can only be changed through a

shareholder vote

–

In our view, the trustees are clearly terrified of facing their own shareholders

We are litigating this matter in Maryland Court

–

We

and

our

legal

team

believe

the

board’s

attempted

‘clarification’

is

inconsistent

with

CWH’s

own

Declaration

of

Trust

and

thus

null

and

void

as

a

matter

of

law

Related

and

Corvex

believe

CWH’s

March

1   bylaw

amendment

is

invalid

and

a

desperate attempt to disenfranchise shareholders

st

11

Poor Corporate Governance

Failed Maryland House Bill Amendment

CWH used deceptive letters (which were later withdrawn) from a conflicted attorney in an

attempt to mislead Maryland senators into believing amendment had broad legal support and

was

ministerial,

when

in

fact

it

had

not

even

been

discussed

by

key

Maryland

bar

committee

(1)

Proposed amendment would have opened the door to make it impossible to remove trustees

without cause in many Maryland companies, even if shareholders had the explicit right to do so

in a company’s charter

CWH

again

couched

the

proposed

amendment

as

a

“clarification,”

which

we

believe

to

be

absurd

Existing Maryland law expressly contemplates the supposedly unclear situation the Portnoys

allege, and clearly provides for the removal of a staggered board without cause when

provided

for

in

a

company’s

charter

–

as

is

unequivocally

done

in

CWH’s

Declaration

of

Trust

The amendment quickly died once legislators became aware of CWH’s manipulative behavior

and

the

clear

fact

that

the

amendment

was

substantive

and

not

at

all

a

“clarification”

Current

trustees

would

rather

manipulate

the

Maryland

legislative

process

and

change

the

law

than

face

their

own

shareholders

One

of

the

Portnoys’

latest

legal

maneuvers

was

a

secret

attempt

(likely

using

CWH

money)

to

insert

an

11

th

hour

amendment

into

a

Maryland

House

Bill

(1)

The

proposed

amendment

was

not

even

discussed

by

the

Corporation

Law

Committee

of

the

Business

Law

Section

of

the

Maryland

State

Bar

Association,

a

group

which

typically

reviews

and

comments,

often

for

weeks

or

months

at

a

time,

on

all

changes

to

Maryland

corporate

and

REIT

law

before

changes

are

heard

by

the

General Assembly.

12

Poor Corporate Governance

April 12 Bylaw Amendment

On

April

12,

2013,

CWH

purported

to

“opt-in”

to

Section

3-803

of

the

Maryland

General

Corporation Law, which allows Maryland companies to adopt a classified board (something

CWH has had in place since 1986)

CWH

has

taken

the

view

that

“opting

in”

to

Section

3-803

enables

them

to

unilaterally

eliminate shareholders’

right to remove trustees without cause

–

We

and

our

lawyers

firmly

believe

that

they

are

wrong

In fact, CWH  recently sought to amend Section 3-803 to “clarify”

that a company opting-in to

Section 3-803 could eliminate shareholders right to remove trustees without cause. The

Maryland legislature did not approve the proposed amendment. Various senators noted

during hearing that CWH’s proposed amendment represented a substantive change in the

law, not a “clarification”

CWH’s erroneous interpretation of Section 3-803 conflicts with 14 years of public filings by

CWH,

which

not

once

mention

the

potential

effects

of

opting

into

Section

3-803,

notwithstanding extensive disclosure of Maryland law applicable to shareholder rights, and

CWH ’s continuous reminder to shareholders that trustees can be removed without cause by

a two-thirds vote

CWH’s latest bylaw amendment conflicts with 14 years of their own public

disclosure

13

History of Underperformance

Summary

CWH has in our view performed poorly in absolute terms and underperformed

its peers

(1)

on almost any metric over any relevant time period

Stock price performance:  -17%, -45%, -43%, -45%, and -53% return over the last 1 year, 2

years,

3

years,

5

years,

and

10

years,

respectively

(2)

Valuation:

Recent valuation nearly 40% below peers on an unlevered cap

rate basis

(3)

and

53%

and

41%

discount

on

a

price

/

forward

FFO

multiple

basis

for

the

last

year and 3 years, respectively

As

detailed

on

pp.

24-26

in

our

presentation,

“A

Case

for

Change

Now

at

CWH,”

April

18,

2013, CWH also underperforms on:

–

Cost structure

–

Acquisitions and return on investment

–

FFO / share growth

In

our

view,

there

is

absolutely

no

way

to

slice

and

dice

the

data

in

favor

of

the

Portnoys

–

their

performance

has

been

horrible

(1)

Select

peers

include

the

following

suburban

office

REITs:

Piedmont

Office

Realty

(PDM),

Highwoods

Properties

(HIW),

Mack-Cali

Realty

(CLI),

Brandywine

Realty

(BDN), and Parkway Properties (PKY).

(2)

Returns

data

calculated

through

February

25,

2013,

the

day

prior

to

Related

and

Corvex’s

first

public

filing.

(3)

Based

on

a

closing

price

of

$15.85

on

February

25,

2013,

the

day

prior

to

Corvex

and

Related’s

first

public

filing.

14

History of Underperformance

Total Returns –

3 years

CWH has underperformed its peers over the last 3 years

•

Like

CWH,

selected

peers

are

also

suburban

office

REITs

•

CWH has even underperformed CLI, ~80% of whose office markets

are either struggling or in

secular decline

HIW: 42.1%

PDM: 39.1%

CWH: (26.6%)

PKY: 6.9%

CLI: (2.7%)

BDN: 35.8%

RMZ: 52.5%

Note: Total returns include dividends

Source: SNL

1 year

3 year

PKY

65.5%

6.9%

BDN

25.2%

35.8%

HIW

15.5%

42.1%

PDM

15.3%

39.1%

CLI

1.5%

(2.7%)

Average

24.6%

24.2%

RMZ

10.6%

52.5%

CWH

(9.4%)

(26.6%)

: CWH –

Avg.

34.0%

50.8%

(60.0%)

(40.0%)

(20.0%)

0.0%

20.0%

40.0%

60.0%

80.0%

2/25/2010

7/12/2010

11/26/2010

4/12/2011

8/27/2011

1/11/2012

5/27/2012

10/11/2012

2/25/2013

PKY

BDN

HIW

PDM

CLI

CWH

RMZ

($ in millions, except per share values and TEV / sq. ft.)

Enterprise

Implied

G&A /

Current

Equity

value

nominal

TEV /

equity

Net debt /

P / FFO

TEV / EBITDA

Div

Ticker

Company

price

mkt cap

(TEV)

cap rate

Sq. Ft.

mkt cap

TEV

2013E

2014E

2013E

2014E

yield

CWH

CommonWealth REIT

$15.85

$1,338

$4,914

11.1%

$89

3.9%

76%

5.4x

5.5x

12.0x

12.3x

6.3%

HIW

Highwoods Properties Inc.

$35.35

$2,983

$4,999

6.6%

$144

1.3%

40%

13.1x

12.7x

15.6x

14.8x

4.8%

BDN

Brandywine Realty Trust

$12.96

$1,885

$4,689

7.1%

$176

1.3%

58%

9.0x

8.6x

14.1x

13.8x

4.6%

CLI

Mack-Cali Realty Corp.

$27.15

$2,715

$4,983

8.2%

$158

1.8%

44%

10.6x

10.5x

13.4x

13.3x

6.6%

PDM

Piedmont Office Realty Trust Inc.

$19.66

$3,294

$4,699

6.9%

$229

0.6%

30%

14.0x

13.5x

15.8x

15.1x

4.1%

PKY

Parkway Properties Inc.

$16.39

$920

$2,096

6.0%

$177

1.8%

37%

13.3x

12.4x

14.2x

13.7x

2.7%

High

$3,294

$4,999

8.2%

$229

1.8%

58%

14.0x

13.5x

15.8x

15.1x

6.6%

Mean

2,359

4,293

7.0%

177

1.4%

42%

12.0x

11.5x

14.6x

14.1x

4.6%

Median

2,715

4,699

6.9%

176

1.3%

40%

13.1x

12.4x

14.2x

13.8x

4.6%

Low

920

2,096

6.0%

144

0.6%

30%

9.0x

8.6x

13.4x

13.3x

2.7%

15

History of Underperformance

Summary Public Comparables

CWH trades at a significant discount to its peers on all key measures

(1)

Note:  Share price and estimates updated as of 2/25/2013, the day before Related and Corvex’s 13D filing.   Financial information as of Q4 2012.  Implied nominal cap rate is

calculated as GAAP LTM NOI / TEV.

(1)   CWH

implied

cap

rate

based

on

CWH

standalone

TEV

of

$4,914

million

(based

upon

CWH’s

enterprise

value

excluding

the

market

value

of

CWH’s

public

equity

stake

in

SIR

and

indebtedness

of

SIR)

and

estimate

of

comparable,

stabilized

NOI

of

$547

million

(derived

from

a

bottom-up

property-by-

analysis

conducted

by

Related,

Corvex and their advisors.)

(2)   CWH “Net debt / TEV”

includes CWH’s Series D and Series E Preferred Shares.  These preferred instruments have fixed cash coupons and fixed redemption amounts.

The

Series

E

is

not

convertible

to

common

stock.

The

Series

D

is

convertible

to

common

stock

at

a

conversion

price

of

$52.00

or

approximately

133%

greater

than

CWH’s recent stock price.  As such, we believe these preferred instruments are more similar to subordinated debt securities than common equity.

Source:  Company filings and FactSet.

(2)

16

Change Through Accountability

Path

for Shareholders

Given

entrenching

devices

in

CWH’s

documents,

shareholders

must

act

now

to

remove

the

board

or

face

at

least

three

more

years

of

mismanagement.

“All or None”: If less than the entire board is removed, vacancies will be filled by the

remaining trustees.

Path: action by written consent requires 2/3 vote to remove the entire board of trustees

–

Record

date

is

April

22,

in

our

and

our

attorneys’

view,

in

light

of

the

board’s

lack

of

response to our request for a record date

–

We and our lawyers believe CWH’s recent bylaw amendments, which would effectively

eliminate shareholder rights to remove trustees without cause, are invalid and a

desperate attempt to disenfranchise shareholders

We believe removing CWH’s entire board of trustees immediately is in the best

long-term interests of all shareholders, and the only near-term means for

shareholders to effect change

17

Change Through Accountability

Value

for Shareholders

Value: $35 per share potential NAV at 4/17/13 after removal of current trustees, and target stock

price of $44+ per share at 12/31/14

–

In our view, NAV represents current fair market value (if current trustees are removed)

based on bottom-up property-by-property valuation analysis led by Related, one of the

most

prominent

privately-owned

real

estate

firms

in

the

U.S.

(1)

–

We believe CWH could trade at a stock price of $44 or higher at 12/31/14 through

internalization of management, operational turnaround, improved capital allocation, and

multiple expansion

–

In

our

view,

potential

downside

of

-40%

or

greater

to

current

price

should

existing

trustees

remain

in

place,

due

to

market

overhangs

from

external

management,

poor

corporate

governance,

and

likelihood

of

continued

underperformance

(1)

See Appendix.

We believe our path will unlock significant value for all shareholders, whereas

the

status

quo

will

lead

to

continued

value

destruction

and

self

dealing

for

the

benefit of the Portnoys

18

Change Through Accountability

Plan

for Shareholders:  Strategy

Internalize management and adopt a market cost structure

Align management compensation with shareholder returns

–

While corporate management will be replaced, we anticipate current property level

employees will be hired to work at the new CWH

Amend

existing

Declaration

of

Trust

and

bylaws

to

conform

to

ISS

and

Glass

Lewis

best

practices

Cease all related party transactions

Cease all acquisition activity until CWH’s stock price exceeds its NAV

Use excess cash flow to buy back CWH stock until the Company’s stock price exceeds its

NAV

In

short,

manage

the

Company

to

maximize

long-term

CWH

shareholder

value,

not fees paid to RMR

We propose the following key elements as a starting point for the Company’s

new direction, subject to the approval of the new board elected by shareholders

19

Change Through Accountability

Plan

for Shareholders:  Board Transition

Once the current trustees are removed, CWH is required to promptly call a special meeting

during which all shareholders will elect new trustees

At that time, we hope and expect all CWH shareholders will collectively identify an

independent slate of highly qualified nominees –

including real estate industry veterans with

pristine credentials –

that are prepared to work for the best interests of all shareholders

Corvex/Related

are

committed

to

collaborating

with

fellow

shareholders

to

elect

an

independent

board

that

will

implement

ISS

and

Glass

Lewis

corporate

governance

best practices

In

particular,

Corvex/Related

are

committed

to

supporting

the

implementation

of

a

strict

policy

with

respect

to

related

party

transactions

–

With respect to material transactions with significant shareholders, we would demand

that any such transactions be approved by a majority of the shares not owned by any

such shareholder

–

Note that Related will not be managing the properties or incorporating them in any way

into its own portfolio

The

Declaration

of

Trust

contemplates

the

removal

of

the

entire

board

of

trustees and provides a roadmap for the transition

20

Change Through Accountability

Plan

for Shareholders:  New Corporate Governance Framework

Terminate CWH’s poison pill, and impose a strict policy of non-implementation of poison pills without

shareholder approval

Opt-out of every provision of the Maryland Unsolicited Takeovers Act

Annually elected board of trustees, with a majority being independent (based on ISS’s definition of

independence)

Majority vote for the removal of trustees with or without cause

Directors elected by majority of votes cast, with strict resignation policy; plurality voting to apply in contested

elections

Shareholders to fill trustee vacancies and permit them to both expand the size of the board and fill newly

created vacancies

Eliminate ownership / holding period requirements for the nomination of directors or making of other

shareholder proposals at the annual meeting

Eliminate ownership / holding period requirements for requesting

a record date

Shareholders to have the power to amend bylaws

No mandatory arbitration of shareholder disputes

Strict policy on related party transactions

We will only support trustees who commit to immediately upon their election

take steps to amend CWH’s charter and bylaws to conform to ISS and Glass

Lewis best practices:

21

Change Through Accountability

Plan

for Shareholders:  Corporate Management Transition

Mr. Lozier is a 30+ year real estate industry veteran:

–

Former CEO and co-founder of the Archon Group L.P., a subsidiary of Goldman Sachs,

During

Mr.

Lozier’s

tenure

at

Archon,

the

company

grew

from

320

employees

to

8,500

employees

managing

36,000

assets with a gross value of approximately $59 billion

–

Prior to Archon, Mr. Lozier was an employee of the J.E. Robert Company (“JER”)

managing the Goldman Sachs / JER joint venture for two years.  Mr. Lozier directed the

acquisition

efforts

of

the

joint

venture

between

GS

and

JER

from

1991-1995

Related/Corvex have identified a potential interim CEO, Jim Lozier, to help

transition CWH to internal management 

22

Change Through Accountability

Plan

for Shareholders:  Property Operations Transition

CBRE, the world’s largest commercial real estate services firm, has agreed to

provide interim property management services and leasing services to the CWH 

portfolio as necessary

CBRE

(1)

employs 42,000+ people in 430+ offices and manages more than 3.3 billion square feet of

commercial property and corporate facilities across the globe

Successfully

managed

transition

of

leasing

/

management

services

for

1.2

billion

square

feet

of

commercial properties in the U.S. over the previous nine years, including transitions done under

significant time pressure

(1)

Employees,

offices,

and

square

footage

under

management

includes

CBRE

affiliate

offices.

23

Change Through Accountability

Plan

for Shareholders:  Financial Transition

In connection with their scare tactics, current trustees have also emphasized

risk that a termination of RMR’s agreements could lead to a “change of

control”

under CWH’s credit agreements and other agreements

We, along with our financial advisor Deutsche Bank, have analyzed the Company’s credit

agreements

Deutsche

Bank

has

already

given

us

a

highly

confident

letter

for

any

necessary

refinancing

which may arise under CWH financing agreements as a result of the change of control,

positioning CWH for a smooth transition

24

Conclusions

Change Through Accountability

The

board

of

trustees

of

CWH

must

be

held

accountable,

and

removed

in

its

entirety

“Worst-in-class”

corporate governance, in our view, has produced a fundamental

misalignment

of

incentives,

destroyed

value,

and

disenfranchised

shareholders

CWH

has,

in

our

view,

performed

poorly

in

absolute

terms

and

underperformed

its

peers

on

almost

any

metric

over

any

relevant

time

period

Corvex/Related

have

proposed

a

clear

Path

and

Plan

to

unlocking

significant

Value

Stock Price

Related / Corvex

@ 2/25

NAV @ 4/17

Stock Price

$15.85

$34.92

% Change

--

120.3%

Diluted shares outstanding

84.4

118.3

Equity value

$1,338

$4,131

TEV

4,914

7,137

Cap Rate of Stabilized NOI

(3)

11.12%

7.66%

Cap Rate of LQA NOI

(4)

9.92%

6.83%

Price / LQA Normalized FFO

5.9x

13.0x

Price / GAAP Book Value per Share

0.43x

0.95x

Price / Square Foot

(5)

$89

$135

Dividend Yield @ Current $0.25 / Qtr

6.31%

2.86%

We believe NAV can be thought of as fair market value of the current portfolio, before benefit

from any other value enhancing actions (which we believe are plentiful)

Valuation was led by Related, one of the most well respected real estate developers,

operators, and investors in the U.S. with a 40 year history and a portfolio of over $15 billion of

real estate operating assets today

We believe CWH could trade at a stock price of $44 or higher at 12/31/14 through

internalization of management, operational turnaround, improved capital allocation, and

multiple expansion

Appendix

Valuation Summary

(1)

Includes value of SIR stake as of April 17, 2013.

(2)

Derived based on the sum of a bottom-up, property-by-property analysis conducted by Related, Corvex and their advisors.

(3)

Stabilized NOI of $547 million.

(4)

Wholly-owned LQA GAAP NOI of $487.3 million per CWH 4Q12 Supplemental.

(5)

Wholly-owned square feet per Company filings and Related / Corvex analysis.

(1)

With the removal of current trustees, we estimate an NAV per share of $35

today (4/17/13) based on bottom-up property-by-property analysis, and a target

stock price of $44 or higher at 12/31/14

(2)

25

Appendix

Share Repurchase Analysis

We believe accretive capital allocation could lead to a stock price of $44 by

12/31/14

26

Stabilized Cash NOI (after Non-Core Asset Sales)

$511.4

Cap Rate Assumed

7.50%

Implied CWH TEV

$6,818.7

PF Net Debt

2,331.2

Preferred Equity

655.0

Implied CWH Equity Value

$3,832.5

Implied CWH Share Price

$44.33

% Change to Current

96.5%

Memo: Shares Outstanding

86.5

Implied CWH Share Price

Non-Core Asset Sales

$44.33

$0.0

$150.0

$300.0

$450.0

$600.0

7.00%

$43.52

$46.34

$49.96

$54.78

$61.52

Cap

7.25%

41.10

43.70

47.05

51.51

57.74

Rate

7.50%

38.83

41.24

44.33

48.45

54.20

7.75%

36.71

38.93

41.78

45.58

50.90

8.00%

34.72

36.77

39.40

42.90

47.80

% Change to Current

Non-Core Asset Sales

$0.0

$150.0

$300.0

$450.0

$600.0

7.00%

92.9%

105.4%

121.5%

142.8%

172.7%

Cap

7.25%

82.2%

93.7%

108.5%

128.3%

155.9%

Rate

7.50%

72.1%

82.8%

96.5%

114.7%

140.3%

7.75%

62.7%

72.6%

85.2%

102.1%

125.6%

8.00%

53.9%

63.0%

74.6%

90.2%

111.9%

2012

2013E

2014E

Reported CAD

$131.4

Run-Rate

Target

Savings

Business Mgmt. Fees

$46.2

$35.0

$11.2

Property Mgmt Fees

36.8

25.8

11.0

Incremental CAD

$83.1

$60.8

$22.3

$22.3

$22.3

Reduction in Interest

43.2

43.2

43.2

Adjusted CAD

$196.9

$196.9

$206.7

Current Quarterly Dividend

$0.25

$0.25

Avg. Shares Outstanding

110.1

94.2

Annual Dividends Paid

$110.1

$94.2

2013E

2014E

CAD after Dividends Paid

$86.8

$112.6

Non-Core Asset Sales

300.0

300.0

Divested NOI

(9.0)

(27.0)

Share Repurchases

$377.8

$385.6

Share Repurchase Price Assumed

$23.00

$25.00

% Premium to Current Price

2.0%

10.8%

Shares Repurchased

16.4

15.4

% of Shares Outstanding (Current)

13.9%

13.0%

Beginning Shares

118.3

101.9

Ending Shares

101.9

86.5

Avg. Shares Outstanding

110.1

94.2

Note: Other upside drivers not modeled here include stronger end market growth, SIR appreciation, further multiple expansion, and additional cost efficiencies.

27

Appendix

Questions All CWH Shareholders Should be Asking

Have

current

trustees

created

value

for

CWH

shareholders?

Is it possible for existing trustees to fairly represent shareholders given their conflicts of interest?

Why have RMR’s fees gone up 30% since 2007 while CWH’s stock has declined 68%?

Why are the Portnoy REITs some of the last remaining externally managed equity REITs in the

public markets?

Will

CWH

ever

trade

at

a

peer

valuation

with

RMR

as

its

external

manager?

How

much

of

the

Portnoy

fortune

has

been

extracted

from

the

savings

of

retail

investors?

Why does CWH lag peers on nearly every relevant operational metric?

Why did CWH seek to sell equity at a 48% discount to book value to repay debt trading above

par with no maturities or liquidity needs?

Why did CWH sell its $240 million minority stake in GOV only after massively diluting

shareholders by issuing $650 million in new CWH equity at $19.00?

How can existing trustees defend selling equity at $19.00, a massive discount, at the same time

they ignored an offer at $27.00, a significant premium?

How

can

CWH

call

its

hand-picked

trustees

“independent?”

28

Appendix

Questions All CWH Shareholders Should be Asking (cont’d)

Why

haven’t

CWH’s

“independent”

trustees

formed

an

independent

committee

and

hired independent advisors?

How have CWH shareholders been compensated for the multiple new RMR platforms launched

with CWH’s assets?

Does

CWH

even

have

a

strategy,

or

is

it

simply

recycling

capital

to

create

the

appearance

of

doing

something?

Why does CWH refuse to hold Q&A on its conference calls and roadshows?

Why

are

the

Portnoys

trying

to

change

Maryland

law

rather

than

face

a

shareholder

vote?

Why

haven’t

current

trustees

prepared

a

detailed

presentation

of

their

own

demonstrating

how

much value they have created for CWH shareholders?

Why isn’t anyone in the REIT industry speaking up to defend the Portnoys?

How much CWH shareholder money have existing trustees already wasted in the last seven weeks

trying to further entrench themselves?

How

much

more

damage

will

be

inflicted

on

CWH

shareholders

in

the

next

3

years

if

current

trustees

are

not

removed

immediately?

29

Appendix

“Structural Change is Much Needed”

Citi

Research

has

stated

that

the

Company

has

a

flawed

structure

and

history

of

value destruction

30

Appendix

“External Manager RMR Causes Concern”

(1) For the 9 month period ended September 30, 2012, CWH reported a NOI margin of 57.7%.  CWH excluded 94 underperforming properties as discontinued properties in

its same store financials ending 12/31/2012, making the 9 months ended 9/30/2012 a more representative reflection of company performance.  CWH’s 57.7% NOI margin,

the lowest of its peers, compares to a peer average of 64.7% over the same time period, despite CWH’s greater scale.  The 7.0% difference between CWH margins and its

peers implies over $70 million of potential excess costs at CWH, a difference which has attracted the attention of market participants.

31

Appendix

“Acting in the best interest of RMR rather than as a fiduciary”

32

Appendix

Related & Corvex Overview

Related and Corvex collectively own 10.9 million shares of CWH (9.2% of

shares outstanding)

Related Companies

–

Related Fund Management, LLC is an affiliate of Related Companies (“Related”), one of

the most prominent privately-owned real estate firms in the United States

–

Formed 40 years ago, Related is a fully-integrated, highly diversified industry leader with

experience in virtually every aspect of development, acquisitions, management, finance,

marketing and sales

–

Related’s existing portfolio of real estate assets, valued at over $15 billion, is made up of

best-in-class mixed-use, residential, retail, office and affordable properties

Corvex Management

–

Value-based

investing

across

the

capital

structure

in

situations

with

clearly

identifiable

catalysts

–

Active investing to create asymmetric risk/reward opportunities

–

13D investments since inception include AboveNet (acquired by Zayo in March 2012),

Corrections Corporation of America (elected REIT status in February 2013), Ralcorp

(acquired by ConAgra in November 2012), and ADT (Keith Meister joined Board in

December 2012)