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

¨ Definitive Additional Materials

x 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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The Case for Change Now at CWH

Update on Recent Events

December 18, 2013

2

Disclaimer

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

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.

Additional

Information

Regarding

the

Consent

Solicitation

In

connection

with

their

solicitation,

Corvex

and

Related

have

filed

a

preliminary

solicitation

statement

with

the

U.S.

Securities

and

Exchange

Commission

(the

“SEC”)

to

(1)

solicit

written

consents

from

shareholders

of

the

Company

to

remove

the

entire

board

of

trustees

of

the

Company

(the

“Removal

Proposal”)

and

(2)

solicit

proxies

to

elect

five

new

trustees

at

a

special

meeting

of

shareholders

that

must

be

promptly

called

in

the

event

that

the

Removal

Proposal

is

successful.

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

preliminary

and

definitive

solicitation

statement

and

all

other

relevant

documents

will

be

available,

free

of

charge,

on

the

SEC’s

website

at

www.sec.gov.

The

following

persons

are

participants

in

the

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

solicitation

and

a

description

of

their

direct

and

indirect

interests,

by

security

holdings

or

otherwise,

to

the

extent

applicable,

is

available

in

the

preliminary

solicitation

statement

filed

with

the

SEC

on

December

3,

2013.

3

Agenda

CommonWealth REIT

Update on recent events

CWH corporate governance discussion

Side-by-side comparison of CWH and Corvex/Related governance

proposals

Update on Strategic Plan

We appreciate this opportunity to meet with you and provide an update on

CommonWealth (“CWH”

or the “Company”)

4

Update on Recent Events

The Arbitration Panel Has Spoken

On

November

18,

2013,

the

Arbitration

Panel

(“Panel”)

issued

an

award

that

ruled

in

our

favor

on

virtually

all

of

our

requests,

striking

down

the

illegal

bylaws

that

stripped

shareholders

of

their

right

to

vote

through

a

consent

solicitation

We

were

further

vindicated

when

the

Panel

also

ordered

a

clearly

defined

set

of

procedures

for

a

new

consent

solicitation

and:

After

two

weeks

of

live

testimony

and

reviewing

hundreds

of

exhibits,

we

believe

the

Panel

plainly

agreed

with

our

view

that

the

Portnoys

are

highly

incentivized

and

capable

of

continuing

their

campaign

of

shareholder

disenfranchisement

Prohibited

any

action

intended

to

impede

or

frustrate

the

new

solicitation,

and

Declared

it

would

remain

available

to

resolve

any

issues

or

disputes

in

the

new

consent

solicitation

-

Arbitration Panel, November 18, 2013

“There is no question that CWH’s Bylaws…erect a complex wall of procedural

hurdles  to any consent solicitation.”

5

Update on Recent Events

The Arbitration Panel Has Spoken

Contested Bylaws

3%/3yr holding requirement to request a record date

All shares must be held in certificated form to request

a record date

30 day period to respond to a record date request

60 day period to set a record date

90 day period to certify the results of the consent

solicitation

Selected details of the November 18 Arbitration Panel ruling:

Ruling

INVALID AS A MATTER OF LAW

INVALID AS A MATTER OF LAW

INVALID AS A MATTER OF LAW

INVALID AS A MATTER OF LAW

INVALID AS A MATTER OF LAW

The Panel also ruled that:

–

Corvex/Related

had

satisfied

onerous

“red

tape”

bylaw

requirements

–

Opting

into

Section

3-803

of

the

Maryland

Unsolicited

Takeovers

Act

(“MUTA”)

does

not

revoke

the

right

of

shareholders

to

remove

Trustees

without

cause,

as

claimed

by

the

Portnoys

Clearly

highlights

the

Portnoys’

motivation

for

secretly

lobbying

the

Maryland

legislature

to

amend

this

law

under

the

guise

of

a

“clarification”

6

Update on Recent Events

The Arbitration Panel Has Spoken

The Trustees’

misconduct over the past year is startling:

Approved a massively dilutive equity offering,

Passed unprecedented, illegal bylaw amendments,

Lobbied to amend Maryland law under the cover of darkness, and

Wasted over $30 million of shareholder money on year-long litigation process

In our view, the Trustees accomplished nothing

–

But

their

actions

say

more

about

their

true

intentions

than

their

promises

ever

can

We

and

the

Company

are

in

the

same

position

we

would

be

in

to

begin

with

had

the

Portnoys

simply

allowed

for

the

shareholder

vote

that

was

granted

to

shareholders

in

the

Company’s

Declaration

of

Trust

27

years

ago

The

Panel

recognized

that

shareholders

have

the

right

to

vote

in

a

consent

solicitation

to

remove

Trustees

without

cause

“at

any

time”

The

Panel

has

implemented

a

clearly

defined

set

of

procedures

to

hold

a

new

consent solicitation

These

actions

were

taken

to

prevent

shareholders

from

simply

holding

a

vote,

but

what

did

they

accomplish?

Shareholders are finally poised to take back CommonWealth and decide its

future

7

CommonWealth Corporate Governance Discussion

The Accountability Vacuum and Underperformance

Some

of

the

extraordinary

powers

the

Portnoys

and

their

hand-picked

board

members

have

include

the

ability

to:

As

a

result,

RMR

is

held

accountable

by

no

one

and,

in

our

view,

enjoys

complete

immunity

from

shareholders

Given

the

“Accountability

Vacuum”,

it

is

no

wonder

CWH

shares

have

underperformed

its

peers

by

such

a

wide

margin

for

so

long

In

our

opinion,

rampant

conflicts

create

an

“Accountability

Vacuum”

at

CWH;

and

underperformance

thrives

in

an

“Accountability

Vacuum”

We

believe

that,

by

definition,

there

can

be

no

accountability

when

a

manager

controls

its

own

“employer”

–

Purportedly

require

that

two

RMR

employees

always

be

on

the

five-member

board,

even

though

RMR

owns

virtually

no

equity

in

CWH

and

in

our

opinion

have

incentives

diametrically

opposed

to

those

of

shareholders

–

Exclusively amend the bylaws while shareholders cannot

–

Unilaterally stagger the board under MUTA, without shareholder approval

–

Require

a

shareholder

vote

of

75%

in

order

to

pass

proposals

not

recommended

by

the

Trustees

–

Reinstate hand-picked Trustees who fail to be re-elected by shareholders

8

CommonWealth Corporate Governance Discussion

But the Conflicts of Interest at CWH Underlie Another Basic Truth

We believe the Portnoys harbor a deep commitment to protecting its “Perpetual

Fee Streams”

and will attempt to mislead shareholders with “Check-the-Box”

reform rather than true accountability

Given

the

staggering

value

of

its

“Perpetual

Fee

Streams”,

we

believe

the

Portnoys

will

always

choose

“Check-the-Box”

corporate

governance

reform,

rather

than

voluntarily

agree

to

true

accountability

RMR’s

business

model,

in

our

view,

is

founded

on

creating

and

preserving

the

conflict

of

interest

at

its

externally

managed

REITs

in

order

to

manufacture

“Perpetual

Fee

Streams”,

regardless

of

the

impact

on

CWH’s

share

price

In

our

opinion,

the

profits

from

RMR’s

“Perpetual

Fee

Streams”

could

be

valued

at

~20x

cash

flow

(but

for

the

ability

of

the

Board

to

terminate

RMR

management

contracts),

given

the

highly

recurring

and

practically

infinite,

growing

nature

of

the

cash

flow

streams

under

the

protection

of

the

“Accountability

Vacuum”

The Portnoys own 100% of RMR

9

CommonWealth Corporate Governance Discussion

The Portnoys’

Governance Proposals Are A Case Study in “Check-the-Box”

After

the

countless

tactics

it

has

employed

over

the

past

year,

would

the

Portnoys

really

now

implement

meaningful

corporate

governance

enhancements

and

subject

themselves

to

true

accountability

knowing

full

well

they

have

severely

underperformed

for

years?

Would

they

really

put

at

risk

their

invaluable

“Perpetual

Fee

Stream”?

Is

it

appropriate

for

Joseph

Morea,

a

Trustee

who

was

reinstated

after

receiving

the

vote

of

only

14%

of

the

outstanding

shares,

to

be

“spearheading”

corporate

governance

reform?

What

impact

might

losing

the

consent

solicitation

have

on

the

Portnoys’

other,

much

larger

and

more

lucrative

externally

managed

REITs?

Are

the

Portnoys

aware

that

they

may

only

need

to

propose

misleading

“Check-the-Box”

governance

changes

just

to

win

votes

from

some

shareholders

and

remain

in

power

with

zero

real

improvement

in

corporate

governance

or

accountability?

On

the

following

pages,

we

review

and

highlight

the

realities

of

the

Portnoys’

“Check-the-Box”

governance

proposals

from

September

23,

2013,

and

compare

them

to

Corvex/Related’s

proposals

which

would

effect

tangible

change

on

CWH’s

governance

The

Portnoys’

“Check-the-Box”

proposals

create

the

illusion

of

reform,

but

bring

zero

incremental

accountability

Questions

shareholders

should

ask

themselves

while

conducting

such

a

review:

10

The Portnoys’

Corporate Governance Proposals

Why It’s All Smoke and Mirrors

Reality

Our Proposal

Annual Elections

•

Requires

a

total

of

four

annual

meetings

with

a

full

de-staggering

not

taking

place

until

May

2017

•

Remaining

Trustees

are

still

empowered

to

reinstate

a

trustee,

such

as

Joseph

Morea,

who

was

not

re-elected

but

reinstated

earlier

this

year

•

Bylaws

still

require

two

Managing

Trustees

to

be

employees

of

RMR

•

Current

Managing

Trustees

are

in

our

opinion

responsible

for

the

poor

state

of

CWH

•

MUTA

allows

RMR

to

unilaterally

re-

stagger

its

board

at

any

time

•

The

Portnoys

refuse

to

answer

whether

they

will

insist

on

impossible

procedural

requirements

to

nominate

Trustees,

including

twice-rejected

3%/3-year

rule

•

Does

not

clarify

when

they

deem

current

disputes

to

be

resolved

or

whether

future

disputes

with

other

shareholders

will

also

delay

implementation

of

their

proposals

Portnoys’

Proposal

Annual

election

of

Trustees

will

begin

in

2015

following

a

shareholder

vote

at

the

2014

Annual

Meeting

and

resolution

of

the

pending

disputes

with

Corvex/Related

Annual

Elections

at

the

next

(2014)

Annual

Meeting

11

The Portnoys’

Corporate Governance Proposals

Why It’s All Smoke and Mirrors (cont.)

Reality

Our Proposal

Board Composition

•

New

Trustees

to

be

nominated

by

a

committee

of

current

Trustees,

while

shareholders

continue

to

be

burdened

by

a

nearly

impossible

nomination

process

•

We

believe

the

Portnoys

have

already

revealed

their

true

intentions

by

refusing

to

answer

simple

questions

regarding

the

nomination

process

for

the

2014

Annual

Meeting

•

In

our

opinion,

the

Portnoys’

definition

of

independent

trustee

does

not

conform

to

any

respected

definition

of

the

term,

nor

does

their

27-year

history

convince

us

that

New

Trustees

will

be

truly

independent

•

With no material changes to

corporate

governance,

new

Trustees

will

be

no

more

accountable

to

shareholders

than

current

Trustees

Portnoys’

Proposal

•

Size

of

board

is

to

be

increased

such

that

the

ratio

of

independent

Trustees

to

total

Trustees

will

increase

from

the

current

60%

to

at

least

75%,

(i.e.

three

new

Trustees)

•

Lead

independent

trustee

will

be

designated

after

the

new

Trustees

join

the

board

•

Existing

Managing

Trustees

will

remain

•

Any

shareholder

can

nominate

or

bring

business

at

an

annual

meeting

(regardless

of

level

of

ownership

or

holding

period)

•

No

preferential

treatment

for

RMR

(which

currently

gets

two

board

seats

with

virtually

no

equity

interest

in

CWH)

•

No

requirement

that

nominating

shareholder

owns

ALL

shares in

record

certificated form

•

Plurality

vote

for

contested

elections

12

The Portnoys’

Corporate Governance Proposals

Why It’s All Smoke and Mirrors (cont.)

Reality

Our Proposal

RMR Management Agreement

•

Continues

to

primarily

incentivize

RMR

to

grow

assets

at

the

expense

of

shareholders

when

the

company

resumes

equity

issuance

•

Fees

still

structured

to

maintain

downside

protection

for

RMR

while

providing

upside

as

assets

grow

•

Incentive

Fee

benchmarks

are

to

be

determined

by

the

same

board

that

reinstated

a

trustee

who

only

received

support

from

14%

of

the

outstanding

shares

annually

and

can

therefore

be

manipulated

•

Stock

component

is

not

meaningful

•

CWH

will

still

be

externally

advised

by

a

conflicted

outside

party

that

is

not

subject

to

accountability

by

its

shareholders

and

owns

virtually

no

stock

in

the

Company

Portnoys’

Proposal

•

Beginning

in

2014,

base

business

management

fee

to

be

based

on

the

lower

of:

(i)

gross

historical

cost

of

real

estate

assets

or

(ii)

CWH’s

total

market

capitalization

•

10%

of

base

business

management

fees

will

be

paid

in

stock

•

Annual

incentive

fees

will

be

based

upon

total

returns

realized

by

shareholders

(i.e.,

appreciation

plus

dividends)

in

excess

of

benchmarks

Truly

independent

board

of

Trustees

will:

•

Form

an

independent

compensation

committee

•

Retain

independent

outside advisors

•

Set

compensation

policy

to

properly

align

incentives

with

shareholder

returns

in

accordance

with

industry-accepted

benchmarks

13

The Portnoys’

Corporate Governance Proposals

Why It’s All Smoke and Mirrors (cont.)

Reality

Our Proposal

Poison Pill

•

Company

will

continue

to

have

a

poison

pill

built

into

its

charter

and

bylaws

that

prohibit

stock

acquisitions

over

9.8

percent

•

Still

no

response

to

our

letter

request

for

a

waiver

despite

resolution

of

disputes

by

the

Arbitration

Panel

•

Company

can

always

unilaterally

implement

a

new

poison

pill

overnight

without

shareholder

approval

•

Does

not

clarify

when

they

deem

current

disputes

to

be

resolved

or

whether

future

disputes

with

other

shareholders

will

also

delay

implementation

of

their

proposals

Portnoys’

Proposal

•

Waiver

for

shareholders

who

demonstrate

no

threat

to

REIT

tax

status

•

No

new

poison

pills

without

a

shareholder

vote

Expiration

of

poison

pill

to

be

accelerated

from

October

17,

2014

to

a

date

soon

after

resolution

of

the

pending

disputes

with

Corvex/Related

14

The Portnoys Continue to Show Their True Intentions

The 2014 Annual Meeting

On

December

6,

2013,

after

the

November

18

Panel

ruling,

we

wrote

a

letter

to

the

board

requesting

formal

clarification

of

the

procedures

for

nominating

directors

at

the

2014

Annual

Meeting,

and

inquired

as

to

the

following:

Will

nominating

shareholders

be

required

to

comply

with

the

3%/3-year

requirement

that

the

Arbitration

Panel

decisively

struck

down

on

two

separate

occasions?

Will

nominating

shareholders

be

required

to

comply

with

unreasonable

information

requirements

such

as

presenting

all

of

their

shares

in

certificated

form?

Will

the

board

insist

that

two

members

of

the

five-member

board

must

be

RMR

employees

thereby

limiting

the

board

seats

up

for

election

in

2014

to

just

one

seat?

Shouldn’t

the

answer

to

each

question

be

an

obvious

“no”

in

light

of

both

the

Panel’s

November

18

ruling

as

well

as

the

Portnoys’

purported

claim

to

“understand

the

views

of”

shareholders

and

make

“meaningful

governance”

changes?

Would

shareholders

find

themselves

in

a

repeat

of

the

events

of

the

past

year

if

they

were

to

attempt

to

nominate

directors

at

the

2014

Annual

Meeting?

In the past year, the existence of the “Silent Bylaw”

at CWH has been revealed: 

shareholders must expend exorbitant sums to litigate against the

current

Trustees in order to exercise their fundamental right to vote

Why

not

simply

seek

minority

board

representation

at

the

Annual

Meeting?

Regrettably,

the

Trustees

refused

to

answer

these

simple

questions

15

The Portnoys Continue to Show Their True Intentions

Inescapable Conclusions from the Portnoys’

Actions

The

Portnoys

have

not

demonstrated

a

genuine

interest

in

true

governance

reform

and

remarkably

continue,

to

this

day,

to

generate

evidence

to

the

contrary

We

also

have

little

faith

that

that

the

Portnoys

have

“turned

over

a

new

leaf”

The

Board’s

supposed

gradual

journey

down

the

winding

road

to

true

governance

reform

is

a

red

herring,

in

our

view

designed

to

mislead

shareholders

into

voting

for

them

in

the

upcoming

consent

solicitation

We believe what drives the Portnoys’

actions is that they view control of CWH

as binary, either they have dominant control or they do not

In

other

words,

either

the

“Perpetual

Fee

Stream”

built

over

the

past

27

years

is

secure,

or

it

is

not

In our view:  the Portnoys’

governance proposals are not real,

the Portnoys’

intentions are not genuine,

and

the

board

has

demonstrated

once

again,

with

actions

taken

as

recently

as

last

week,

the

basic

truth

at

CWH:

“Perpetual

Fee

Streams”

are

a

powerful

motivator for dodging accountability

We

do

not

believe

that,

at

the

2014

Annual

Meeting

and

at

Annual

Meetings

to

follow,

shareholders

will

be

afforded

a

fair

and

unfettered

election

process

16

The Portnoys Continue to Show Their True Intentions

Inescapable Conclusions from the Portnoys’

Actions (cont.)

Underperformance

as

undisputedly

poor

as

it

is

at

CWH

is

rare

Existing

governance

policies

as

egregious

as

they

are

at

CWH

is

rare

How often do ISS and Glass Lewis support removal of an entire board?

Entrenchment

tactics

(e.g.,

secretly

lobbying

to

amend

the

law)

as

appalling

as

they

are

at

CWH is rare

In

how

many

other

instances

has

a

shareholder

been

forced

to

expend

exorbitant

sums

in

order

to

exercise a right plainly written in the company’s charter for 27 years?

Traditional channel of change via minority board representation highly unlikely to succeed

Management

actions

from

as

recently

as

last

week

belie

“turned

leaf”

intentions,

implying

another

contentious

battle

would

be

likely

at

the

Annual

Meeting

–

the

“Silent

Bylaw”

“Perpetual

Fee

Streams”

a

powerful

incentive

to

maintain

“Accountability

Vacuum”

In

the

meantime,

shareholders

will

likely

continue

suffering

from

the

same

operating,

strategic

planning,

and

share

price

underperformance

under

the

same

management

team

that

has

plagued

CWH for years

We believe the negative outcome of pursuing the traditional channel of change is already

knowable given the Portnoys’

long-term history and their most recent actions

While

the

removal

of

an

entire

board

is

not

a

decision

to

be

taken

lightly,

the

case for removal could not be easier to make than it is at CWH

17

Corvex/Related’s True Intentions

Track Record Provides Compelling Insight

Out

of

all

the

investments

in

public

companies

Corvex

made

since

inception,

including

the

8

in

which

13-D’s

were

filed,

none

have

resulted

in

a

proxy

battle,

litigation,

or

even

a

public

dispute,

with

the

exception

of

CWH

On

the

other

hand,

none

of

the

companies

in

which

Corvex

has

ever

invested

has

attempted

to

take

away

a

shareholder

right

that

is

plainly

written

into

its

charter

The

share

prices

of

the

companies

as

to

which

Corvex

filed

13-D’s

have

on

average

experienced

substantial

appreciation

during

the

period

of

Corvex’s

involvement

Corvex

prefers

constructive

engagement

Related’s

core

business

lies

in

real

estate

investment

and

operations

and

it

has

never

previously

engaged

in

a

hostile

proxy

battle

Related

prefers

constructive

engagement

Corvex and Related prefer constructive engagement, but as shareholders must

insist on true accountability and genuine corporate governance reform

Corvex

has

no

history

of

hostile

proxy

battles

or

litigation

with

companies

in

its

portfolio

and,

instead,

works

collaboratively

with

management

to

create

value

18

Corvex/Related’s Strategic Plan

Key Tenets of Plan Will Create Substantial Value

The

fair

and

unfettered

election

of

a

new

board

consisting

solely

of

truly

independent

Trustees

–

New board to have experience overseeing an internally managed public REIT

–

We welcome and are actively seeking out candidates from other large shareholders

Best-in-Class corporate governance to fill the “Accountability Vacuum”

–

Amend

existing

Declaration

of

Trust

and

bylaws

to

conform

to

ISS

and

Glass

Lewis

best

practices

Internalize management and align management compensation with shareholder returns

“Right the ship”

with basic operating strategies

–

We

believe

proper

staffing

levels

and

reinvestment

in

CWH’s

existing

portfolio

can

harvest

a

substantial amount of “low hanging fruit”

No poison pill

–

Adoption of a policy against new pills without shareholder approval

Cease

all

acquisition

activity

and

dilutive

capital

raises

until

stock

price

exceeds

its

NAV

Cease

all

related

party

transactions

not

approved

by

a

vote

of

disinterested

shareholders

Corvex and Related continue to propose the following Strategic Plan:

Although dramatically different from CWH’s existing plan, the implementation

of these principals will simply make CWH look like virtually every other member

of the S&P 500

19

Corvex/Related’s Strategic Plan

Our Key Principals of Best-in-Class Corporate Governance

Annual elections for all Trustees beginning at the next Annual Meeting (no staggered board)

–

Plurality vote for contested elections

A

conventional

notification

process

for

trustee

nominations

and

other

important

Company

business

–

i.e.,

elimination

of

unreasonably

burdensome

ownership/holding

period

requirements

and other procedural roadblocks

No changes to these provisions without a shareholder vote

Corvex/Related

simply

propose

to

grant

shareholders

the

most

basic

of

shareholder rights:

Without each of these simple but powerful changes to CWH’s governance,

there cannot be permanent accountability, and shareholders will be resigned to

the continuation of the downward spiral of CWH under Portnoy control

20

Corvex/Related’s

Strategic

Plan

Operating Strategies:  Updated Findings from the Field

Based

on

repeated

feedback

from

tenants,

brokers

and

owner/operators

across

CWH’s

markets

regarding

their

experience

with

RMR,

we

believe:

Many

leasing

brokers

representing

tenants

across

CWH’s

markets

steer

tenants

away

from

RMR-managed

properties

because

of

a

lack

of

attention

from

RMR

personnel

RMR

often

fails

to

execute

simple

asset

and

property

management

functions,

such

as

responding

to

tenant

work

requests,

and

challenging

real

estate

tax

assessments

“Blake

Schreck,

president

and

economic

development

director

for

the

Lenexa

Chamber

of

Commerce,

didn't

sound

unhappy

about

Southlake

Technology

Park

changing

hands.

He

echoed

multiple

local

commercial

real

estate

brokers,

who

indicated

that

CommonWealth's

slow

response

to

requests

for

lease

proposals

from

prospective

tenants

had

likely

cost

the

933,0000-square-foot

office

park

deals

and

contributed

to

its

48

percent

occupancy

rate.”

Kansas City Business Journal, October 23, 2013

Over

the

past

six

months,

representatives

from

Corvex

and/or

Related

have

independently

performed

detailed

site

visits

on

approximately

85%

of

the

portfolio

21

Corvex/Related’s Strategic Plan

Operating Strategies:  Updated Findings from the Field (cont.)

RMR

employees

appear

to

service

assets

for

CWH,

SIR,

GOV,

HPT,

SNH

and

the

Portnoys’

privately

owned

real

estate,

encompassing

office,

retail,

hospitality,

senior

housing,

land

and

other

property

types

Leasing

staff

is

half

the

appropriate

level

and

a

true

asset

management

department

is

non-

existent,

in

our

opinion

It

appears

that

the

deficient

staffing

levels

are

kept

low

not

because

RMR’s

staff

are

the

most

efficient

in

the

REIT

universe,

but

in

order

to

generate

profits

for

the

Portnoys,

a

problem

that

other,

internally-managed

REITs

do

not

have

Clearly,

assets

that

are

suffering

from

poor

management

should

only

be

sold

after

first

maximizing

value

for

CWH

shareholders

Opportunistic

funds

with

expensive

capital

(such

as

Oaktree

Capital

and

Garrison

Investment

Group)

were

among

the

largest

buyers

of

assets

in

the

last

round

of

CWH

dispositions

We

believe

there

are

too

few

employees

spread

over

too

many

assets

and

product types:

A

key tenet of our Strategic Plan continues to be the implementation of basic operating

strategies that “right the ship” and harvest a substantial amount of “low hanging fruit” for 

CWH shareholders, not opportunity funds

But implementation is impossible under the current externally managed structure

22

Corvex/Related’s Strategic Plan

Peaceful Transition of Authority –

“Plan A”

To

eliminate

the

already

miniscule

risks,

the

board

members

could

implement

the

following

to

protect

CommonWealth

and

its

shareholders:

We

also

point

out

that

the

Arbitration

Panel

will

remain

available

for

resolving

disputes

even

after

the

removal

of

the

Trustees

and

during

the

transition

to

a

newly

elected

board

While

we

wholeheartedly

dismiss

the

scare

tactics

employed

by

the

Portnoys,

that

a

removal

of

Trustees

will

cause

the

business

material

harm,

we

ironically

point

out

that

the

sitting

board

members

could

easily

preclude

any

of

their

imagined

disruptions

from

occurring

by

acting

responsibly

in

advance

of

a

consent solicitation

If

shareholders

are

concerned

that

the

Portnoys

and

the

incumbent

board

will

work

against

shareholder

interests,

perhaps

that

will

make

the

upcoming

vote

an

even

easier

one

to

decide

Agree

to

allow

nominations

of

replacement

Trustees

concurrently

with

the

removal

of

existing

Trustees

Request

waivers

under

existing

financing

agreements

regarding

a

change

in

control

or

arrange

for

replacement

facilities

RMR

could

remove

language

or

simply

agree

not

to

immediately

terminate

its

management

of

the

assets

in

the

event

of

a

change

in

control

23

Corvex/Related’s Strategic Plan

Disruptive Transition of Authority –

“Plan B”

In

the

event

the

Trustees

are

not

cooperative

in

transitioning

authority,

Related

and

Corvex,

clearly

incentivized

to

minimize

disruption

as

one

of

CWH’s

largest

shareholders,

have

a

plan

to

protect

the

Company

Shareholders

should

not

be

coerced

into

voting

for

the

current

board

out

of

fear

that

the

existing

Trustees

will

“burn

down

the

house”

on

the

way

out

the

door

Jim

Lozier,

a

30+

year

industry

veteran,

can

be

retained

to

lead

the

company

on

an

interim

basis

Mr.

Lozier

served

as

co-founder

and

CEO

of

the

Archon

Group

L.P.,

a

subsidiary

of

Goldman

Sachs,

from

its

formation

in

1996

until

2012

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

CBRE,

one

of

the

world’s

largest

integrated

real

estate

services

firms,

has

agreed

to

provide

interim

property

management

services

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

Related

and

Corvex

have

agreed

to

purchase

up

to

51%

of

the

bank

debt

in

order

to

prevent

acceleration

of

the

Company’s

debt

24

The Choice is Clear

Summarizing the Key Issues

Rampant

conflicts

•

A

company

controlled

by

its

managers,

who

own

little

stock

and

interested

primarily

in

fees

Accountability

vacuum

•

A

manager

that

answers

only

to

itself

Worst-in-class

corporate

governance

•

*All

out

efforts

to

deny

shareholders

their

fundamental

right

to

vote

Underperformance

•

Long

term

downward

spiral

driven

by

conflicts,

“Accountability

Vacuum”

and

poor

governance

Illusions

•

“Check-the-box”

governance

proposals

that

effect

zero

real

change

False

hope

•

Board’s

track

record

belie

the

notion

that

they

have

embarked

on

a

journey

of

true

governance

reform

Retaining

the

current

board

will

doom

CWH

to

repeat

its

tortured

history

Removing

the

current

board

will

enable

CWH

to

begin

a

new

chapter

as

a

new,

truly

independent

company

Alignment

of

incentives

•

Like

virtually

all

companies

in

the

S&P500,

CWH

should

have

its

own

internal

management

team,

compensated

to

increase

shareholder

value

Accountability

•

Annual

elections

to

hold

the

board

and

management

team

accountable

for

performance

Best-in-class

corporate

governance

•

We

support

a

new

board

that

will

implement

ISS/Glass

Lewis

best

practices

Real,

tangible

change

•

We

support

a

new

board

that

would

commit

to

implement

the

changes

above

immediately

•

We

support

a

CWH

that

is

truly

independent

and

would

cease

all

related

party

transactions

not

approved

by

disinterested

shareholders

Appendix

25

26

The

Portnoys’

September

23

rd

Proposals

Wall Street’s View

“Our

sense

is

RMR

is

making

the

structure

‘less

bad’

and

more

palatable

to

investors

ahead

of

a

possible

second

consent

solicitation

vote…

CWH’s

externally

managed

structure

is

a

relic

that

has

long

been

shunned

by

REIT

investors.

It

should

not

have

taken

this

long.

We

would

prefer

a

full

internalization.

Also,

there

are

too

many

executives

wearing

too

many

hats.

Adam

Portnoy

is

President

of

RMR

and

CEO

of

CWH.

Our

sense

is

a

dedicated

CWH

CEO

is

a

possibility

in

the

future,

but

that

internalization

is

“off

the

table”

likely

due

to

inherent

conflicts

in

negotiating

a

deal

and

valuing

the

manager.”

Citigroup, September 23, 2013

27

Flawed RMR Structure and Poor Corporate Governance

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

28

CommonWealth Corporate Governance Review

The Consequences of External Management and Poor Governance

Fees paid to RMR continue to grow, while CWH shareholder value is destroyed

CWH

paid

out

$395

million

in

fees

to

RMR

during

2007-2012

(nearly

30%

of

CWH’s

market

cap

as

of

2/25/13

(1)

),

while

CWH’s

share

price

plummeted

68%

during

this

time

'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%)

(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.

(2)

RMR fees paid per CWH public filings.

29

History of Underperformance

Track Record

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

its peers

(1)

on almost any metric over any relevant time period

-17%,

-45%,

-43%,

-45%,

and

-53%

CWH

stock

price

return

over

the

last

1

year,

2

years,

3

years,

5

years,

and

10

years,

respectively

(2)

Recent

valuation

nearly

40%

below

peers

on

unlevered

cap

rate

basis

(3)

53%

and

41%

discount

to

peers

on

a

price

/

forward

FFO

multiple

basis

for

last

year

and

3

years,

respectively

-23%

cash

available

for

distribution

per

share

(CAD

/

share)

growth

since

2010,

the

worst

performance

of

its

peers

$2.7

billion

of

net

acquisitions

and

capex

since

2007

(over

2x

CWH’s

recent

market

cap

(3)

),

while

CWH

book

value

per

share

is

essentially

flat

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 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.

30

History of Underperformance

Share Price Performance –

3 years

CWH has underperformed its peers over the last three years

Source: Factset

1 year

3 year

PKY

60.2%

(0.7%)

BDN

19.1%

15.4%

HIW

9.8%

21.4%

PDM

10.1%

16.1%

CLI

(5.0%)

(18.9%)

Average

18.8%

6.6%

CWH

(16.9%)

(42.9%)

CWH –

Avg.

35.7%

49.5%

HIW: 21.4%

PDM: 15.4%

CWH: (42.9%)

PKY: (0.7%)

CLI: (18.9%)

BDN: 16.1%

31

Dilutive Equity Offering

A Prime Example of RMR’s Conflict of Interest

Despite

protests

from

some

of

its

largest

shareholders,

a

bona

fide

offer

for

$27.00

per

share,

and

in

our

view

no

need

to

issue

equity,

on

March

5,

2013

CWH

sold

34.5

million

shares

at

$19.00

–

Transaction

increased

CWH’s

share

count

by

41%

and

diluted

CWH’s

NAV

by

over

$6

per

share

Why

did

CWH

sell

its

$240

million

minority

stake

in

GOV

only

after

issuing

new

CWH

shares

at

a

48%

discount

to

book

value?

–

Trustees

insulated

themselves

from

questioning

and

ignored

shareholder

demands

to

stop

offering

–

Canceled

investor

lunch

and

did

not

hold

Q&A

on

their

earnings

call

CWH’s

use

of

proceeds

for

the

equity

offering,

at

a

massive

discount,

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

equity

offering

completed

in

March

2013

serves

as

a

clear

example

of

poor

management,

skewed

incentives,

and

terrible

capital

allocation

32

Failed Maryland House Bill Amendment

A Desperate Tactic from an “All or Nothing”

Adversary

Proposed

amendment

would

have

opened

door

to

make

it

impossible

to

remove

Trustees

without

cause

in

many

Maryland

companies

(regardless

of

voting

threshold),

even

if

shareholders

had

explicit

right

to

do

so

in

a

company’s

charter

Similar

to

March

1st

bylaw

amendment,

CWH

couched

proposed

amendment

as

a

“clarification”

We

believe

notion

that

amendment

was

a

“clarification”

is

absurd,

a

view

confirmed

by

the

Arbitration

Panel,

as

existing

Maryland

law

expressly

contemplates

removal

of

staggered

board

without

cause

when

provided

for

in

a

company’s

charter

–

as

is

unequivocally

done

in

CWH’s

Declaration

of

Trust

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)

Fortunately

for

CWH

shareholders

and

all

shareholders

of

Maryland-based

corporations

and

trusts,

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

The

Portnoys

made

a

secret

attempt

(likely

using

CWH

money)

to

insert

an

11th

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 on all changes to Maryland corporate and REIT law before changes are heard by the General Assembly.

33

Corvex/Related’s Corporate Governance Proposals

A Simple Blueprint for Change

CommonWealth can then elect a board of Trustees that:

–

Is truly independent (per ISS’s definition)

–

Implements and can describe to shareholders the procedures designed to ensure its

independent Trustees can continue to operate independently

–

Is accountable to shareholders

–

Hires its own independent advisors when necessary

–

Systematically sets performance goals for the management team, measures its

performance, and holds it accountable for its failures

–

Objectively

benchmarks

its

corporate

governance

policies

against

peers

–

Challenges management’s thinking on material strategic issues when appropriate

In short, shareholders can elect an experienced, independent board charged

with being their advocate, a right that virtually all other public shareholders in

the S&P 500 enjoy

When control of CommonWealth is returned to shareholders the conflict of

interest between manager and owner will be eliminated, allowing CWH to join

the ranks of nearly every other company in the S&P 500