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HEALTH AND REHABILITATION PROPERTIES TRUST ANNOUNCES PURCHASE OF SEATTLE, WASHINGTON FACILITY AND LEASE EXTENSION WITH SUN HEALTH CARE

 NEWTON, Mass., Sept. 7 /PRNewswire/ -- Health and Rehabilita tion Properties Trust (NYSE: HRP) today announced that it has entered into letters of intent to purchase a Skilled Nursing and Rehabilitation Center in Seattle, Wash. for $5 million and to lease that facility to Sun Healthcare Group, Inc. (NYSE: SHG). Simultaneously, existing leases from HRP to SHG for three Nursing Facilities which had been scheduled to expire in May, 1997 were extended through Dec. 31, 2005.
 The Seattle, Wash. facility incudes 143 beds and is currently owned and operated by Greenery Rehabilitation Group, Inc. (NYSE: GRG). In August, GRG announced its agreement to merge into Horizon Healthcare Corp. (NYSE: HHC). At that time HHC announced that it was considering divesting certain GRG operations which did not fit within its long term operating strategies. Both GRG and HHC have agreed to the sale of the Seattle facility to HRP.
 HRP currently leases three Skilled Nursing facilities in Connecticut to HHC, which facilities are subleased by HHC to SHG. The Base Rent payable by HHC and SHG to HRP for the three Connecticut facilities is approximately $1.9 million per annum; in addition SHG pays HRP Additional Rent for these three facilities based upon increases in net patient revenues equal to approximately $180,000 per annum. The new lease arrangement between HRP and SHG will be a master lease through Dec. 31, 2005 for all four facilities, including the Seattle Center, and provides for Base Rent of approximately $2.5 million per annum and a revised formula for Additional Rent starting in 1995. SHG will have lease renewal options totaling an additional 20 years; and HHC will be relieved of any further responsibilities for the Connecticut leases and subleases.
 Commenting on this transaction, David J. Hegarty, executive vice president of HRP, issued the following statement:
 "When it began operations in 1989, with only seven nursing homes in Connecticut and Washington State, Sun Healthcare Group was the smallest, and perhaps the weakest, tenant in HRP's portfolio. Today Sun operates over 50 facilities in nine states; and with the completion of its $40 million initial public offering in July, 1993, Sun became a major long term care operator. HRP is pleased to extend and expand its relationship with Sun."
 The transaction described above is subject to various conditions, including health regulatory approvals for the change of licensee of the Seattle facility from GRG to SHG. The transaction is expected to close on or about Nov. 1, 1993.
 HRP is a Real Estate Investment Trust which owns and leases, or provides mortgage financing for, healthcare facilities. Upon completion of this transaction HRP will have approximately $447 million invested in 89 Healthcare facilities located in 22 states.
 -0- 9/7/93
 /CONTACT: Mark J. Finkelstein, president of HRPT, or David J. Hegarty, executive vice president and CFO of HRPT, 617-332-3990/
 (HRP SHG GRG HHC)


CO: HRPT; Sun Healthcare Group, Inc.; Greenery Rehabilitation Group ST: Washington, Connecticut IN: HEA SU: TNM

JL-DJ -- NE005 -- 9239 09/07/93 10:06 EDT
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Publication:PR Newswire
Date:Sep 7, 1993
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