HCPI reported FFO of $199.21 million, or $3.43 per diluted share of common stock for the year ended Dec. 31, compared with FFO of $179.375 million and FFO per share of $3.32 for the previous year.

Net income also climbed for the year, totaling $112.48 million, or $1.93 per share, compared with $96 million, or $1.78 per share, the year before. Revenue for 2002 totaled $359.576 million, compared with $328.116 million in 2001.

The healthcare REIT's chairman and CEO, Kenneth B. Roath, attributed the increase in FFO to the achievement of investment goals, as well as the positive effect of lower interest costs on the company's revolving lines of credit. During the year, HCPI completed $417 million in new investments and its expansion into retirement living facilities and wellness centers, furthering its diversification. The company now has 463 facilities, with 96 health care operators and approximately 650 tenants in 43 states.

Roath pointed to challenges the company faces in 2003, including recent events in the long-term care sector that will result in lower rents for some facilities in 2003. Reductions in Medicare and Medicaid reimbursement rates will intensify pressure on already low margins, he said.

Health Care Property Investors invests directly or through joint ventures in health care facilities. Its investments include 184 long-term care facilities, 101 assisted-living facilities, 90 medical office buildings and wellness centers, 22 acute-care hospitals, 35 physician group practice clinics, nine freestanding rehabilitation facilities, eight healthcare laboratory and biotech research facilities and 14 retirement living communities. The company's stock closed at $37.55 Tuesday, down four cents for the day and below its 52-week high of $45.08.