Fitch Affirms Senior Housing Properties Trust 'BB+' Senior Unsecured Debt Rating.

NEW YORK -- Fitch Ratings has affirmed the 'BB+' senior unsecured debt rating of Senior Housing Properties Trust (SNH). Fitch also affirms the 'BB-' rating of trust preferred securities issued by SNH Capital Trust I, a wholly owned financing subsidiary of SNH. The Outlook remains Stable.

The ratings reflect SNH's solid and consistent coverage metrics. The company exhibits sound financial flexibility through its primarily unencumbered asset base and substantial availability under its $250 million bank line of credit. It also possesses minimal near-term requirements with regard to lease expirations and debt maturities as only 1% of leases and less than 10% of debt comes due in the next five years. SNH is well positioned within its peer group in the health care real estate investment trust (REIT) industry in deriving a majority of its revenue (84%) from facilities that are 'primarily private pay,' meaning these properties constitute at least 80% private pay resources and are not subject to the annual renewal process of the federal government relating to Medicare reimbursements. The company's portfolio features four different components of the health care facilities industry and is allocated as a percentage of revenue in the following manner: independent living facilities (57%); assisted living facilities (27%); nursing homes (11%); and hospitals (6%) and is geographically diverse with properties in 32 states with only Florida (13%) and Texas (10%) representing more than 10% of total investment. As of March 31, 2005, SNH's portfolio had an overall occupancy of approximately 88% and was broken down into 91% occupancy for independent living, 84% occupancy for assisted living, and 88% occupancy for nursing homes, which compares favorably with the average for the health care REIT peer group.

The ratings acknowledge the very high tenant concentration of the company's top tenant (Five Star Quality Care, Inc. (NYSE:FVE)), which represents 61% of SNH's total revenues. In addition, SNH has 11 tenants in total. Moreover, Five Star, which was initially created by Senior Housing Properties Trust to operate properties, currently has approximately 66% of its total properties and 49% of its revenues coming from SNH facilities, so there is a certain degree of interdependence between the two companies. Furthermore, Sunrise, who manages the properties in one of the two leases that SNH has with Five Star (another 20% of Five Star's properties and 44% of its revenue), has its own separate lease with SNH and is actually SNH's number two tenant in terms of concentration at 20% of revenue. Although the company has shifted its focus away from skilled nursing facilities over the past five years, SNH still has some exposure to the variable nature of changing Medicare and Medicaid reimbursement policies that are annually set by the government.

The interest coverage ratio for the quarter ended March 31, 2005 was 3.2 times (x). The fixed-charge coverage ratio for this period was 2.9x after accounting for the $3.7 million of capital improvements on the most recent cash flow statement. Both of these measures compare favorably to Fitch's health care REIT universe. Debt leverage stood at 32.9% of undepreciated book capitalization at the end of first quarter of 2005, which is also in line with comparable companies. As of Dec. 31, 2004, Fitch estimates the company also had a solid unencumbered asset coverage of unsecured debt of 3.0x.

Senior Housing Properties Trust, headquartered in Newton, MA, is a $1.6 billion (undepreciated book as of March 31, 2005) owner of health care related facilities located in 32 states. The company is externally managed by RMR (REIT Management & Research). As of March 31, 2005, the portfolio consisted of 181 properties containing 22,546 units/beds.

Fitch's rating definitions are available on the agency's public web site, www.fitchratings.com. Published ratings, criteria and methodologies, and relevant policies and procedures are also available from this site, at all times. This document will remain on the public site for seven days. The issuer did not participate in the ratings process other than through the medium of its public disclosure.