1173942--3/17/2006--WINDROSE_MEDICAL_PROPERTIES

related topics

{investment, property, distribution}

{loan, real, estate}

{provision, law, control}

{stock, price, share}

{acquisition, growth, future}

{tax, income, asset}

{interest, director, officer}

{condition, economic, financial}

{competitive, industry, competition}

{debt, indebtedness, cash}

{regulation, change, law}

{personnel, key, retain}

{loss, insurance, financial}

{regulation, government, change}

{cost, contract, operation}

Our real estate investments are concentrated in specialty medical properties, making us more vulnerable economically than if our investments were diversified. Adverse trends in the healthcare industry may negatively affect our tenants ability to make lease payments and our ability to make distributions to our shareholders. Our tenants are subject to fraud and abuse laws, the violation of which by a tenant may jeopardize the tenant s ability to make rent payments to us. Risks Relating to Our Business, Growth Strategy and Organizational Structure We may be unable to acquire or may be delayed in acquiring specialty medical properties. Dependence on our tenants for lease payments may adversely impact our ability to make distributions to our shareholders. We do not know if our tenants will renew their existing leases, and if they do not, we may be unable to lease the properties on as favorable terms, or at all. Failure to properly manage our rapid growth could distract our management or increase our expenses. Certain of our properties may not have efficient alternative uses. Our business is highly competitive and we may be unable to compete successfully. Our use of debt financing subjects us to significant risks, including refinancing risk and the risk of insufficient cash available for distribution. Conflicts of interest could result in an executive officer or a trustee acting other than in our best interest. Holders of our outstanding Series A preferred shares have dividend, liquidation, and other rights that are senior to the rights of the holders of our common shares. Provisions of Maryland law, our Declaration of Trust and our Bylaws may deter changes in management and third-party acquisition proposals or cause dilution. Three of our executive officers have agreements that provide them with benefits in the event their employment is terminated following a change in control of our company, which could deter a change in control that could be beneficial to our shareholders. Our board of trustees may change our investment and operational policies without a vote of our shareholders. A significant number of our properties are located in two geographic locations, making us vulnerable to changes in economic conditions in that particular market. We depend on key personnel, the loss of which may threaten our ability to operate our business successfully. Our board of trustees and management make decisions on our behalf, and shareholders have limited management rights. Shares available for future sale may have an adverse effect on the price of our common shares. We are the sole general partner of our operating partnership and may become liable for the debts and other obligations of this partnership beyond the amount of our investment. The market value of our common shares could decrease based on our performance, market perception and condition and rising interest rates. Loss of our tax status as a REIT would have significant adverse consequences to us and the value of our common shares. Failure to make required distributions would subject us to tax. Risks Relating to Real Estate Investments Illiquidity of real estate investments could significantly impede our ability to respond to adverse changes in the performance of our properties and harm our financial condition. Our acquisitions and development properties may under perform forecasted results or we may be limited in our ability to finance future acquisitions, which may harm our financial condition and operating results, and we may not be able to make the distributions required to maintain our REIT status. Properties with limited operating history may not achieve forecasted results, which could hinder our ability to make distributions to our shareholders. If we suffer losses that are not covered by insurance or that are in excess of our insurance coverage limits, we could lose investment capital and anticipated profits. Capital expenditures for property renovation may be greater than forecasted and may adversely impact our ability to make distributions to shareholders. All of our medical properties are subject to property taxes that may increase in the future and adversely affect our business. Our financial performance and the price of our common shares will be affected by risks associated with the real estate industry. Costs associated with complying with the Americans with Disabilities Act may adversely affect our financial condition and operating results. Our ownership of properties through ground leases exposes us to the loss of such properties upon breach or termination of the ground leases. Development and construction risks could adversely affect our profitability.

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1173942--3/17/2006--WINDROSE_MEDICAL_PROPERTIES_TRUST