snh_8k.htm
UNITED
STATES
SECURITIES AND
EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT TO
SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of Report
(Date of earliest event reported): June 12, 2008 (June
11, 2008)
SENIOR HOUSING
PROPERTIES TRUST
(Exact Name of
Registrant as Specified in Its Charter)
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Maryland
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001-15319
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04-3445278
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(State or
Other Jurisdication of Incorporation)
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(Commission
File Number)
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(I.R.S.
Employer Identification No.)
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400
Centre Street, Newton, Massachusetts 02458
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(Address
of Principal Executive Offices) (Zip
Code)
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617-796-8350
(Registrant's Telephone
Number, Including Area Code)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o Written communications pursuant to
Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
1.01 Entry into a Material Definitive Agreement.
As previously
reported, Senior Housing Properties Trust, or we, have entered into a series of
agreements to purchase up to 48 medical office, clinic and biotech laboratory
buildings from HRPT Properties Trust, or HRPT, and certain of its
subsidiaries. At the time we reported those agreements, we also
reported that we intended to enter into an amendment to our advisory agreement
with our manager, Reit Management & Research LLC, or RMR, and to enter into
a new property management agreement with RMR, with respect to any of the 48
buildings we acquire from HRPT. On June 11, 2008, we entered into
that amendment and the property management agreement.
Under the
advisory agreement, RMR originates and presents investment and divestment
opportunities to us and provides management and administrative services to
us. The advisory agreement provides, among other things, that RMR is
entitled to a management fee at an annual rate equal to a percentage of our
average invested capital, determined as specified in the
agreement. The percentage applied to our existing investments at the
time we were spun off from HRPT is 0.5%. The annual percentage for the first
$250.0 million of investments made after our spin off from HRPT is 0.7%, and the
percentage for investments above that amount is 0.5%. In addition,
RMR receives an incentive fee based upon increases in our funds from operations
per share, as defined in the agreement. The incentive fee is paid in
our common shares.
Our average
invested capital for purposes of determining the management fees we pay to RMR
is principally based on our historical cost of our acquisitions. The
amendment provides that the portion of management fees based on our average
invested capital with respect to any of the 48 properties which we acquire from
HRPT will be based on HRPT’s historical costs of those properties rather than
our higher purchase prices, so that the management fees we will pay to RMR will
generally equal the fees that are currently being paid by HRPT to RMR with
respect to these properties.
Under the new
property management agreement, RMR has agreed to provide property management and
certain other services with respect to any of the 48 properties which we acquire
from HRPT. Fees payable to RMR under the agreement will be based on a
formula, which generally includes 3% of gross collected rents as a property
management fee and 5% of gross construction costs as a construction management
fee. RMR will also be entitled to certain cost
reimbursements. The agreement, like our advisory agreement, will be
subject to the annual review and approval of the compensation committee of our
board of trustees, which consists solely of our Independent
Trustees.
RMR is
beneficially owned by Messrs. Barry M. Portnoy and Adam D. Portnoy,
who are also our Managing Trustees and directors of RMR. Mr. Adam
Portnoy is president of RMR, and our executive officers are also executive
officers of RMR. The terms of the amendment to the advisory agreement
and the new management agreement were approved by the compensation committee of
our board of trustees.
Other information
with respect to our advisory agreement with RMR and with respect to our
relationships with RMR and with HRPT is provided in our Annual Report on Form
10-K for the
year ended
December 31, 2007 and proxy statement for our 2008 annual meeting of
shareholders, both of which have been filed with the Securities and Exchange
Commission.
The descriptions
of the amendment to the advisory agreement and the new management agreement
contained above in this Item are qualified in their entirety by reference to the
copies of the amendment and the management agreement which are filed as Exhibits
10.1 and 10.2, respectively, to this Current Report on Form 8-K, and
incorporated herein by reference.
FORWARD LOOKING
STATEMENTS
THIS FORM 8-K
CONTAINS FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995 AND OTHER FEDERAL SECURITIES
LAWS. WHENEVER WE USE WORDS SUCH AS “BELIEVE”, “EXPECT”,
“ANTICIPATE”, “INTEND”, “PLAN”, “ESTIMATE” OR SIMILAR EXPRESSIONS, WE ARE MAKING
FORWARD LOOKING STATEMENTS. THESE FORWARD LOOKING STATEMENTS ARE
BASED UPON OUR PRESENT INTENT, BELIEFS OR EXPECTATIONS, BUT FORWARD LOOKING
STATEMENTS ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR. ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY OUR FORWARD
LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS.
FOR EXAMPLE, THIS
FORM 8-K STATES THAT WE HAVE AGREED TO PURCHASE MEDICAL OFFICE, CLINIC AND
BIOTECH LABORATORY BUILDINGS. OUR OBLIGATION TO COMPLETE THE CURRENTLY PENDING
PURCHASES IS SUBJECT TO VARIOUS CONDITIONS TYPICAL OF LARGE COMMERCIAL REAL
ESTATE PURCHASES, INCLUDING, WITH RESPECT TO CERTAIN PROPERTIES, OBTAINING
CONSENTS FROM MORTGAGEES AND WAIVERS OF RIGHTS OF FIRST REFUSAL FROM
TENANTS. ALSO, WE HAVE FINANCING CONTINGENCIES RELATING TO CERTAIN
PROPERTIES. AS A RESULT OF ANY FAILURE OF THESE CONDITIONS, SOME
PROPERTIES MAY NOT BE PURCHASED.
OTHER IMPORTANT
FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN
FORWARD LOOKING STATEMENTS ARE DESCRIBED MORE FULLY UNDER “ITEM 1A. RISK
FACTORS” IN OUR ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31,
2007.
YOU SHOULD NOT
PLACE UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS.
EXCEPT AS
REQUIRED BY LAW, WE UNDERTAKE NO OBLIGATION TO UPDATE OR REVISE ANY FORWARD
LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR
OTHERWISE.
Item
9.01 Financial Statements and Exhibits.
(d) Exhibits.
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10.1
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First
Amendment to Amended and Restated Advisory Agreement, dated as of June 11,
2008, between Senior Housing Properties Trust and Reit Management &
Research LLC.
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10.2
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Master
Management Agreement, dated as of June 11, 2008, between Senior Housing
Properties Trust and Reit Management & Research
LLC.
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SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
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SENIOR
HOUSING PROPERTIES TRUST
By:
/s/
Richard A. Doyle
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Richard A.
Doyle
Treasurer and Chief Financial Officer
Dated: June 12, 2008
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