803649--2/23/2010--HRPT_PROPERTIES

related topics

{investment, property, distribution}

{tax, income, asset}

{debt, indebtedness, cash}

{loan, real, estate}

{stock, price, share}

{interest, director, officer}

{provision, law, control}

{acquisition, growth, future}

{condition, economic, financial}

{capital, credit, financial}

{stock, price, operating}

Risks Related to Our Business Financial markets are still recovering from a period of disruption and recession, and we are unable to predict if and when the economy will stabilize or improve. We may be unable to access the capital necessary to repay debts, invest in our properties or fund acquisitions. If the current high unemployment rate in the U.S. continues or worsens, the occupancy and rents at our properties may decline. We are currently dependent upon economic conditions in our four core markets: Metro Philadelphia, Pennsylvania; Oahu, Hawaii; Metro Washington, DC and Metro Boston, Massachusetts. Increasing interest rates may adversely affect us and the value of your investment in our shares. Changes in the government's requirements for leased space may adversely affect us. Our acquisitions may not be successful. Acquisition and ownership of real estate is subject to environmental and climate change risks. Real estate ownership creates risks and liabilities. We have substantial debt obligations and may incur additional debt. Risks Related to Our Organization and Structure Ownership limitations and anti-takeover provisions in our declaration of trust, bylaws and rights agreement, as well as certain provisions of Maryland law, may prevent shareholders from receiving a takeover premium or implementing changes. We may change our operational and investment policies without shareholder approval. Our rights and the rights of our shareholders to take action against our trustees and officers are limited. Disputes with GOV, SNH and RMR and shareholder litigation against us or our trustees and officers may be referred to arbitration proceedings. Risks Related to Our Taxation The loss of our tax status as a REIT for U.S. federal income tax purposes could have significant adverse consequences. Distributions to shareholders generally will not qualify for reduced tax rates. Risks Related to Our Relationship with RMR Our management structure and our manager's other activities may create conflicts of interest. Our management agreements with RMR were negotiated between affiliated parties and may not be as favorable to us as they would have been if negotiated between unaffiliated parties. Our management agreements with RMR may discourage our change of control. The potential for conflicts of interest as a result of our management structure may provoke dissident shareholder activities that result in significant costs. We depend upon RMR to manage our business and implement our growth strategy. Provisions in RMR's management agreements with us and with other entities managed by RMR and in transaction agreements between us and certain of those entities may restrict our investing activities and create conflicts of interest. Risks Related to Our Securities Any notes we may issue will be effectively subordinated to the debts of our subsidiaries and to our secured debt. Our notes may permit redemption before maturity, and our noteholders may be unable to reinvest proceeds at the same or a higher rate. There may be no public market for notes we may issue and one may not develop. Conversion of our series D preferred shares will dilute the ownership interests of existing shareholders. There is no assurance that we will continue to make distributions. Rating agency downgrades may increase our cost of capital.

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803649--2/23/2010--HRPT_PROPERTIES_TRUST