Termed Funds From Operations (FFO), the earnings along with the net income numbers, reflect the $2-million write-off of an equity investment in Summerville Senior Living, an assisted-living company. The write-off is being reported as a part of FFO in accordance with NAREIT standards. In addition to the equity investment in SSL, the REIT loaned $13.5 million to the company, which has ten leased facilities in California held as collateral and owns five facilities that are leased to SSL.

"The company's increases in revenue, income fromoperations, and FFO in the third quarter of 2000 continue to be positively impacted by the $1-billion acquisition of American Health Properties in 1999, an additional $190 million in acquisitions during that year, and growth from the balance of the company's portfolio," says Kenneth B. Roath, chairman/CEO of Health Care Property Investors. "These increases were offset in part, however, by lower managed-facility income during the third quarter, higher interest expense from rate increases and lower rental revenue on certain assets."

As a result of the write-off, the net income figures are diluted, although they also reflect $431,000 in property sales made during the quarter.