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SNH Announces Financial Results For The Periods Ended June 30, 2002

July 31, 2002

NEWTON, Mass.--(BUSINESS WIRE)--July 31, 2002: Senior Housing Properties Trust (NYSE: SNH) today announced its financial results for the quarter and six months ended June 30, 2002, as follows (in thousands, except per share data):

                    Quarter Ended June 30,   Six Months Ended June 30,
                        2002       2001           2002          2001

Total revenues        $30,378   $66,236         $59,085      $133,813
Income before
 discontinued
 operations            13,067     3,053          24,707         5,943
Net income             10,596     2,750          22,216         5,586
Funds from
 operations (FFO)      21,934    11,048          41,455        21,346
Cash available for
 distribution (CAD)    20,588    10,935          38,959        21,132
Weighted average
 shares outstanding    58,424    25,917          54,362        25,917

Per share data:
Income before
 discontinued

 operations             $0.22     $0.12           $0.45         $0.23
Net income               0.18      0.11            0.41          0.22
Funds from
 operations (FFO)        0.38      0.43            0.76          0.82
Cash available for
 distribution (CAD)      0.35      0.42            0.72          0.82

The character of revenues reported in the 2001 and 2002 periods displayed above are not comparable. In 2001, the three months and six months period revenues include $54.9 million and $111.1 million, respectively, of operating revenues derived from nursing homes which were repossessed from former tenants. At year end 2001, SNH completed a spin off of its subsidiary which operated these properties and the 2002 period includes rental income received for the properties previously operated for SNH's account as well as rents from new investments made in 2002. In addition, in the quarter ended June 30, 2002, one nursing home was closed and is held for sale. As a result, an impairment write-down of $2.5 million was recorded as a loss from discontinued operations and prior periods have been restated to be comparable.

On June 27, 2002, SNH entered into a new, unsecured $250.0 million revolving bank credit facility to replace its previous secured facility which had been scheduled to mature in September 2002. The new credit facility matures in November 2005 and may be extended to November 2006. The new credit facility permits borrowings up to $250.0 million and includes a feature under which the maximum drawing may be expanded to $500.0 million, in certain circumstances. The interest rate on borrowings under the new credit facility are set at spreads above LIBOR which depend upon SNH's debt leverages and credit ratings.

Commenting upon these results, David J. Hegarty, President, issued the following statements:

"During the second quarter SNH replaced its soon to mature, secured, revolving bank credit facility with a new, extended term, lower cost, unsecured revolver. SNH believes that very few REITs which are not yet investment grade rated have been able to obtain unsecured bank credit. SNH sincerely appreciates the vote of confidence in our management from the banking community demonstrated by this new loan facility. This new, unsecured line of credit should improve SNH's ability to increase investments."

"A few days ago, our former subsidiary and current tenant, Five Star Quality Care, Inc., announced that it expects to report a loss for the quarter ended June 30, 2002. Based upon a review of Five Star's financial condition and expected results, SNH believes Five Star will honor its lease obligations to SNH for the foreseeable future. SNH also believes that the expected Five Star results will not materially adversely effect the possibility of future sale and lease or financing transactions between SNH and Five Star."

Senior Housing Properties Trust is a real estate investment trust headquartered in Newton, MA that owns 111 senior housing properties located in 28 states.

THIS PRESS RELEASE CONTAINS FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND THE FEDERAL SECURITIES LAWS. FORWARD LOOKING STATEMENTS ARE BASED UPON SNH'S MANAGEMENT'S CURRENT BELIEFS AND EXPECTATIONS, BUT THEY ARE NOT GUARANTEED TO OCCUR. FOR EXAMPLE, MR. HEGARTY'S STATEMENTS ABOUT USE OF THE NEW BANK CREDIT FACILITY TO EXPAND INVESTMENTS IMPLIES THAT SNH WILL EXPAND ITS INVESTMENTS; IN FACT, HOWEVER, SNH MAY BE UNABLE TO MAKE NEW INVESTMENTS BECAUSE PURCHASES AT PRICES SNH DEEMS ACCEPTABLE ARE NOT AVAILABLE OR FOR OTHER REASONS. SIMILARLY, MR. HEGARTY'S STATEMENTS THAT SNH EXPECTS FIVE STAR TO HONOR ITS LEASE OBLIGATIONS OR THAT SNH EXPECTS TO DO ADDITIONAL TRANSACTIONS WITH FIVE STAR MAY PROVE INACCURATE. FIVE STAR MAY INCUR ADDITIONAL LOSSES AND BECOME UNABLE TO PAY ITS RENT TO SNH; SNH AND FIVE STAR MAY NOT DO ANY ADDITIONAL TRANSACTIONS. INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS.

                    Senior Housing Properties Trust
                         Financial Information
                 (in thousands, except per share data)

                              Quarter Ended       Six Months Ended
                                 June 30,              June 30,
                             2002       2001       2002        2001
Revenues:
 Rental income              $28,261    $11,084    $54,796    $ 22,215
 Facilities'
  operations (1)               --       54,900       --       111,109
 FF&E reserve
  income (2)                  1,838       --        3,502        --
 Interest and
  other income                  279        252        787         489
   Total revenues            30,378     66,236     59,085     133,813
Expenses:
 Interest (including
  amortization of
  deferred financing
  fees of $205, $0, $424
  and $0 respectively)        6,439      1,840     13,821       4,000

 Depreciation                 8,098      4,916     15,226       9,639
 Facilities'
  operations (1)               --       53,096       --       107,894
 General and
  administrative
 - Recurring                  2,071      1,063      3,925       2,108
 - Related to
   foreclosures
   and lease
   terminations (1)            --        2,206       --         4,167
   Total                     16,608     63,121     32,972     127,808
Income before
 distributions on
 trust preferred
 securities and
 discontinued
 operations                 $13,770    $ 3,115    $26,113    $  6,005
Distributions on
 trust preferred
 securities                     703         62      1,406          62
Income before
 discontinued
 operations                 $13,067    $ 3,053    $24,707    $  5,943
Loss from
 discontinued
 operations (3)               2,471        303      2,491         357
Net income                  $10,596    $ 2,750    $22,216    $  5,586

Funds from
 operations (FFO) (4):
Net income                  $10,596    $ 2,750    $22,216    $  5,586
Add:
 Depreciation expense         8,098      4,916     15,226       9,639
 Deferred percentage
  rent (5)                      769        841      1,522       1,533
 Other non-cash items          --           32       --            64
 General and
  administrative
  expense related
  to foreclosures
  and lease
  terminations                 --        2,206       --         4,167
 Loss from
  discontinued
  operations                  2,471        303      2,491         357
FFO                         $21,934    $11,048    $41,455    $ 21,346

Cash available
 for distribution
 (CAD) (4):
FFO                         $21,934    $11,048    $41,455    $ 21,346
Add:
 Amortization of
  deferred finance
  costs and other
  non-cash items                247       --          519        --
 Straight line
  rent adjustment               245       (113)       487        (214)
Less:
 FF&E reserve income(2)      (1,838)      --       (3,502)       --
 CAD                        $20,588    $10,935    $38,959    $ 21,132

Weighted average
 shares outstanding          58,424     25,917     54,362      25,917

Per share data:
 Income before
  discontinued
  operations                $  0.22    $  0.12    $  0.45    $   0.23
 Net income                 $  0.18    $  0.11    $  0.41    $   0.22
 FFO                        $  0.38    $  0.43    $  0.76    $   0.82
 CAD                        $  0.35    $  0.42    $  0.72    $   0.82


Balance Sheet Data:                    June 30, 2002 December 31, 2001

Assets
Real estate properties                 $ 1,169,794     $   593,199
Accumulated depreciation                  (108,670)       (124,252)
                                         1,061,124         468,947
Cash and cash equivalents                   15,536         352,026

Restricted cash                             14,664          10,201
Other assets                                24,517          36,129
                                       $ 1,115,841     $   867,303
Liabilities and Shareholders' Equity
Revolving bank credit facility         $    26,000     $      --
Senior unsecured notes                     243,677         243,607
Secured debt and capital leases             33,125           9,100
Other liabilities                           24,299          12,578
Trust preferred securities                  27,394          27,394
Shareholders' equity                       761,346         574,624
                                       $ 1,115,841     $   867,303

Senior Housing Properties Trust
Notes to
Financial Information

1. During 2001, SNH operated facilities for its own account through its wholly-owned subsidiary, Five Star Quality Care, Inc. On December 31, 2001, SNH spun off Five Star to SNH's shareholders and entered a lease with Five Star for these facilities. These operations had been repossessed from bankrupt former tenants. As a result of these tenant bankruptcies and the establishment of operating systems for the repossessed facilities, SNH incurred certain non-recurring general and administrative expenses during 2001, which are separately identified on these financial statements.

2. One of SNH's leases provides that a percentage of revenues be escrowed for future capital expenditures at the leased facilities. These FF&E reserve escrows are owned by SNH and are reported by SNH as additional rent. CAD excludes FF&E reserve income.

3. During the quarter, one of SNH's tenants closed a facility. Under the terms of the lease, the rent payable to SNH allocated to this facility will be reallocated to the remaining operating facilities, resulting in no impact on SNH's rental income. However, when this property is sold, the annual rent will be reduced by 10% of the net proceeds from the sale. SNH has classified this real estate asset as held for sale and has recorded a loss from discontinued operations related to this property, which includes historical depreciation expense as well as an impairment loss write-down of $2.5 million based on SNH's estimate of fair value, net of selling costs, of the real estate associated with this property. For the 2001 periods, amounts were reclassified from depreciation expense and facilities' operations revenues and expenses to the loss from discontinued operations.

4. SNH computes FFO as net income plus depreciation, amortization, non-recurring items and results from discontinued operations. SNH computes CAD as FFO plus non-cash expenses (including amortization of deferred finance costs and administrative expenses to be settled in our common shares) and straight line rent adjustments, less FF&E reserve income. In calculating FFO and CAD, SNH also adds percentage rents deferred pursuant to SAB 101 described in Note 5 below. SNH's method of computing FFO and CAD may not be comparable to FFO or CAD reported by other REITs that define the terms differently. SNH considers FFO and CAD to be appropriate measures of performance for a REIT, along with cash flow from operating activities, financing activities and investing activities, because they provide investors with an indication of a REIT's operating performance and its ability to incur and service debt, make capital expenditures, pay distributions and fund other cash needs. FFO and CAD are important factors considered by SNH's Board of Trustees in determining the amounts of distributions to shareholders. FFO and CAD do not represent cash generated by operating activities in accordance with generally accepted accounting principles, or GAAP, and should not be considered as alternatives to net income or cash flow from operating activities as measures of financial performance or liquidity.

5. The Securities and Exchange Commission Staff Accounting Bulletin No. 101 generally requires SNH to defer recognition of percentage rental income for the first, second and third quarters to the fourth quarter. Although recognition of revenue is deferred for purposes of calculating net income, SNH's calculations of FFO and CAD include estimated percentage rental amounts on a quarterly basis and these estimates are adjusted at year-end.

                    Senior Housing Properties Trust
                            Additional Data

              SNH has determined to publish the following
             additional data which is intended to respond
         to frequently asked questions (dollars in thousands)


            # of     # Units/  Dollars  % of    Current  % of
          Properties   Beds   Invested Dollars  Annual  Current
                                       Invested  Rent    Annual
                                               Revenues   Rent
                                                        Revenues
Facility Type(1)

IL
 Communities  45     11,521   $935,189   79.9%  $94,130  81.2%
Stand alone
 SNF          61      6,168    186,872   16.0%   13,049  11.2%
Hospitals      2        364     43,517    3.7%    8,700   7.5%
Stand alone
 AL            3        196      4,216    0.4%      164   0.1%

Total        111     18,249 $1,169,794  100.0% $116,043 100.0%

                                                                Rent
Tenant/Operator                                               Coverage
Five Star/                                                       (2)
 Marriott     31      7,491   $609,717   52.1%  $63,000  54.3%  1.2x
Marriott      14      4,030    325,472   27.8%   31,130  26.8%  1.6x
HealthSouth    2        364     43,517    3.7%    8,700   7.5%  3.1x
Five Star     55      5,110    141,421   12.1%    7,000   6.1%  2.5x
Genesis        1        150     13,007    1.2%    1,483   1.3%  2.1x
Integrated     1        140     15,598    1.3%    1,200   1.0%  2.0x
5 private
 companies     7        964     21,062    1.8%    3,530   3.0%  2.1x

Total        111     18,249 $1,169,794  100.0% $116,043 100.0%


                   Last 12 Months Ended May 31, 2002

              Occupancy   Rent      %Private Pay  %Medicare  %Medicaid
                        Coverage(2)
Total Portfolio  89.7%    1.7x          76.1%       13.6%       10.3%
(weighted
 average
 by rent)

(1) IL communities means senior living properties where the majority of living units are independent living apartments. Stand alone SNF means skilled nursing facilities. Stand alone AL means an assisted living facility.

(2) Rent coverage is calculated as operating cash flow from facility operations, before subordinated charges and capex reserves, divided by rent payable to SNH. Coverage is calculated based upon the last twelve months ended May 31, 2002 operating results or the most recent tenant operating results available to SNH.

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