When the deal was announced in April, the purchase price was at nearly $250 million but HRPT says that the price was adjusted as a result of matters disclosed during diligence and changes in Hallwood's working capital, pursuant to contract terms.

In addition to the $247-million equity purchase price, HRPT assumed approximately $207 million of Hallwood mortgage debt. Approximately $100 million of this mortgage debt was repaid simultaneously with the equity closing; the balance of this mortgage debt may be prepaid in 2005 and 2008.

Based upon HRPT's projected income and expenses of the Hallwood properties, as well as capital costs, HRPT expects its acquisition of Hallwood will be accretive to its funds from operations per share.

The Hallwood properties which HRPT acquired include 5.2 million sf of office and industrial buildings. The largest concentration of these properties--representing about 30% of the total sf--are located in the Atlanta area. The largest single tenant at the Hallwood properties--representing approximately 23% of total rents--is the US government.

HRPT has funded the Hallwood equity purchase price and the repayment of Hallwood debt using cash on hand and drawings under its unsecured revolving bank credit facility. After the closing of the Hallwood purchase, HRPT owns approximately 42 million sf of office and industrial properties.

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