American Health Properties, Inc. announces distribution of targeted stock.

DENVER--(BUSINESS WIRE)--June 29, 1995--Consistent with its previously announced plan to separate the economic attributes of its core portfolio and its psychiatric portfolio, the Board of Directors of American Health Properties, Inc. (NYSE:AHE) declared a distribution to the holders of its Common Stock of depositary shares representing a new class of Psychiatric Group Preferred Stock.

Shareholders will receive one depositary share for every ten shares of Common Stock held of record at the close of business on July 14, 1995. The distribution of the depositary shares will be made on July 25, 1995.

A total of approximately 2.1 million depositary shares will be distributed to holders of Common Stock. Depositary shares will be evidenced by depositary receipts each representing a one-tenth interest in one share of Psychiatric Group Preferred Stock, par value $0.01 per share. Cash will be issued in lieu of fractional depositary shares. The depositary shares have been approved for quotation on the National Association of Securities Dealers Automated Quotations National Market System under the symbol "AHEPZ." The Common Stock will continue to trade on the New York Stock Exchange under the symbol "AHE."

The Psychiatric Group Preferred Stock will represent the Company's investments in psychiatric hospitals (the "Psychiatric Group") and the Common Stock will represent the Company's core investments in acute care hospitals, rehabilitation hospitals, long-term care facilities and a medical office building (the "Core Group"). The assets, liabilities and expenses of the Company have been allocated between the two portfolios. In the future, in addition to consolidated financial statements, the Company will publish separate financial statements for each Group. Dividends and other payouts or distributions with respect to the Common Stock and Psychiatric Group Preferred Stock are expected to be a function of the individual financial performance of the Core Group and the Psychiatric Group, respectively.

The Company anticipates that the distribution will enhance shareholder value by allowing the market to separately value the Common Stock and the Psychiatric Group Preferred Stock and by permitting investors to make separate investment decisions with respect to each Group. This should facilitate the Company's ability to raise additional equity, as needed, through sales of Common Stock, and should also facilitate the ability of the Company to use its Common Stock to make acquisitions of health care investments for its Core Group.

The Board of Directors expects to declare the Company's second quarter dividend at its regularly scheduled Board meeting in mid-July. A dividend will be declared on both the Common Stock and the Psychiatric Group Preferred Stock. The Board anticipates that the aggregate dividend on the two classes of stock will be the same as the Company's past quarterly dividend on the Common Stock. By way of example, if the distribution of Psychiatric Group Stock had been made effective January 1, 1995, the dividend for the first quarter of 1995 of $.575 per share would have been designated as a dividend of $.495 per share on the Common Stock and $.08 per share (on a current share basis) relating to the Psychiatric Group Preferred Stock. In accordance with the Company's practice, the record date for the second quarter dividends should be approximately July 28, 1995, and the payment date should be approximately August 11, 1995, for the shareholders of both classes of stock.

AHE is a real estate investment trust (REIT) specializing in quality health care facilities. The Company's investments include twenty-seven acute care, rehabilitation, psychiatric, long-term care and medical office properties located in fourteen states.

CONTACT: American Health Properties, Inc., Denver

Joseph P. Sullivan or Victor C. Streufert, 303/796-9793