American Health Properties, Inc. Announces Completion of $105 Million Kendall Exchange.

Expects to Close Merger With Health Care Property Investors, Inc.

in Early November

American Health Properties, Inc. (NYSE:AHE) today announced that it has completed the acquisition of replacement properties which, taking into account the other tax attributes of the Company, is expected to fully shelter taxable gain realized from the sale of the Kendall Regional Medical Center in Miami, Florida earlier this year. As previously announced, the Company recognized a book gain of approximately $54 million from that sale, but had structured the transaction as a Section 1031 exchange to shield the Company from any applicable tax.

Since the closing of the Kendall sale, the Company has acquired approximately $102.5 million of replacement properties, consisting of eleven buildings located in nine states. All but one of the replacement properties are medical office facilities which are occupied by significant health care operators, including Harvard Pilgrim Health Care, Inc. in Somerville, Massachusetts, the Scripps Clinic and Research Foundation in San Diego, California and the Franciscan Health System in the Cincinnati, Ohio area. One $9.5 million replacement property is a newly constructed state-of-the-art skilled nursing facility located in Las Vegas, Nevada, operated by Covenant Care, Inc., one of the Company's successful existing operators of such facilities.

The portfolio of replacement properties is expected to generate initial annual rental income of nearly $10.1 million, thus replacing almost all of the annual rentals formerly generated by the Kendall facility. Joseph P. Sullivan, Chairman, President and Chief Executive Officer of the Company stated: "With the completion of the 1031 exchange, the Company has now achieved one of its major goals for 1999. We have successfully shielded the Company from tax on the sale of the Kendall facility, thus increasing our net worth by approximately $54 million without issuing new equity, while acquiring an attractive portfolio of assets diversified geographically and by tenant. Those eleven assets are expected to provide the Company with greater potential for long term value. The completion of the exchange is a very positive step for the Company."

Mr. Sullivan also noted: "The completion of the Kendall exchange fulfills two significant conditions to the proposed merger with Health Care Property Investors, Inc. (NYSE:HCP). The merger remains subject to various customary conditions, including approval by stockholders of both companies. Each of the two companies has scheduled for November 3, 1999 a stockholder meeting to consider the merger. Assuming we receive the requisite vote, we expect to close the merger shortly thereafter."

American Health Properties, Inc. is a self-administered real estate investment trust with approximately $900 million of investments in health care real estate located in 22 States.

Cautionary Statement Regarding Future Results and Forward-Looking

Statements

This press release includes statements that are not purely historical and are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding the Company's expectations, beliefs, intentions or strategies regarding the future. All statements other than historical fact contained in this press release are forward-looking statements. All forward-looking statements included in this press release are based on information available to the Company on the date hereof, and the Company assumes no obligation to update such forward-looking statements. Although the Company believes that the assumptions and expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct or that the Company will take any actions that may presently be planned.