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NEWTON, MA-HRPT Properties Trust is slightly down in leasing over the quarter, but making some plays for capital. The company in a conference call pointed to its closing numbers and discussed an IPO which would hopefully bring cashflow.

The FFO for common shareholders for Q4 was $0.27 per share basic and diluted, which is the same year-over-year from 2007. While FFO for the entire year ending Dec. 31st, 2008 is $1.11 per share basic and $1.08 per share diluted, as opposed to ’07 which closed the year at $1.16 per share basic and $1.12 per share diluted.

As of year-end occupancy was down to 90.4% from 90.6% as of Sept. 30th, 2008. Specifically, Boston same store NOI declined 23.3% in 2008 and seems to be the only market for HRPT experiencing significant roll downs through 2009.

Lease renewals totaled 638,000 square feet, while new leases picked up 221,000 square feet over the Q4 ’08, for weighted average rental rates that were 6% above prior rents for the same space, according to a release. The average term of leases signed of the last quareter of 2008 was just under six years. Adam Portnoy, managing trustee for HRPT, said, “Pace of new leasing activity and leasing of currently vacant space has slowed significantly in the beginning of 2008.”

Seven office properties with 830,000 square feet were acquired–for $134.3 million–by HRPT, which divested itself of nine properties totaling 424,000 square feet–at a total price of $114 million. Both total sale and purchases prices exclude closing costs.

Portnoy explained a move for HRPT in the first quarter of this year, which could enhance its liquidity. The HRPT subsidiary–Government Property Income Trust–filed a preliminary registration statement with the SEC of an IPO of 10-million common shares. He said, HRPT will transfer 29 properties to the subsidiary in the near term. All 29 properties are 100% leased, 25 by the Federal government and four by state governments. These properties are located in Washington, DC, as well as 14 states.

Portnoy continued, that the company is negotiating a credit facility with a group of banks to be secured by these properties which could make available a $350-million credit facility. If the IPO is successful, he explained, the money obtained could be used to repay the amount outstanding on HRPT’s unsecured revolving credit facility and possibly the amount under the new credit facility. HRP expects to retain 49.9% of the company, which will then trade on the NYSE.

Portnoy, on the call, pointed to two things which this could accomplish: it would provide added liquidity and regardless of the IPO’s completion, may bring $250 million in proceeds secured by line of credit of properties; payback the amount outstanding on the company’s revolver and effectively extend its debt maturities.

Looking to the future, John Popeo, CFO of HRPT, said that over the coming year it will be “more work” to keep tenants, saying companies will have to “spend more money to keep the tentnts” and “even with that [companies are] going to see occupancy drop.”

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