Health Care Property Investors, Inc. Announces Closing of $163.5 Million Real Estate Investment and $7 Million Real Estate Loan.

Business Editors

NEWPORT BEACH, Calif.--(BUSINESS WIRE)--Sept. 23, 2003

Health Care Property Investors, Inc. (NYSE:HCP), a health care real estate investment trust (REIT), announced today that the Company purchased four continuing care retirement communities from American Retirement Corporation (NYSE:ACR) for a total purchase price of $163.5 million. Prior to the closing, Health Care Property Investors, Inc. owned a 9.8% interest in the entities that owned the four facilities. The Company also closed a $7 million secured loan to American Retirement Corporation.

Two facilities are located in Texas, and the other two facilities are located in Arizona and Colorado. The communities were built between 1987 and 1989, contain a total of 1,170 units, and have a current occupancy level of 94%. Three of the facilities are leased to American Retirement Corporation. The fourth facility, located in Colorado, is leased to a third party that has contracted with American Retirement Corporation to manage the facility. The leases have a ten-year term and an annual lease rate of 9.5% with annual rent increases of 2.75%. The $7 million loan is secured by 27 acres of land adjacent to the two facilities located in Texas, carries an interest rate of LIBOR plus 3%, and has a term of three years.

American Retirement Corporation used the proceeds to repay $113 million in first mortgage debt on the properties. After giving credit for Health Care Property Investors' existing minority interest in the properties valued at $3 million, transaction costs and reserves, the remaining proceeds of $52 million were used to prepay a portion of Health Care Property Investors' existing mezzanine loan, including accrued interest.

At the conclusion of this transaction, Health Care Property Investors will have increased its total investment with American Retirement Corporation to $300 million which includes $209 million in owned and leased properties.

Commenting on the transaction, Health Care Property Investors' Chief Executive Officer, James F. Flaherty III, said, "We are very pleased to complete this transaction with American Retirement Corporation. By converting a portion of our mezzanine loan position into real estate ownership, we have negotiated a 'win-win' situation for both companies. This transaction allows us to own facilities that are among the finest within the senior housing industry on an accretive basis. These facilities have demonstrated leadership in their markets, have consistently maintained high occupancy and growing cash flows and are operated by the first class efforts of the American Retirement Corporation management team."

Additional details regarding the leases and the remaining mezzanine loan are outlined in the attached Supplemental Information.

Health Care Property Investors, Inc. (NYSE:HCP) is a self-administered equity real estate investment trust (REIT) that invests directly or through joint ventures in health care facilities. The Company's investment portfolio, as of June 30, 2003, consisted of 448 facilities in 44 states. The Company's investments include 31 hospitals, 175 long-term care facilities, 126 retirement and assisted living facilities, 85 medical office buildings and 31 other healthcare facilities. The Company commenced operations in 1985 and is headquartered in Newport Beach, CA. For more information on Health Care Property Investors, Inc., visit the Company's web site at www.hcpi.com.

Statements in this news release that are not historical may contain forward-looking statements subject to risks and uncertainties, such as competition for the acquisition and financing of health care facilities, the possibility that conditions to closing of real estate transactions are not satisfied, competition for lessees and mortgagors (including with respect to new leases and mortgages and the renewal or roll-over of existing leases), continuing operational difficulties in the assisted living sector, the ability to sell or lease facilities and the timing of sales and leasings, changes in health care regulations and other changes in the health care industry which affect the operations of our lessees or mortgagors, changes in the financial position of our lessees and mortgagors and changes in economic conditions, including changes in interest rates and the availability and cost of capital, which affect opportunities for profitable acquisitions, some of which are described from time to time in the SEC reports filed by the Company.

                 Health Care Property Investors, Inc.
                          September 23, 2003
                       Supplemental Information

                      Sale and Lease Transactions


--  Operator/Manager:               American Retirement Corporation

--  Purchase Price:                 $163.5 million

--  Properties:
          -- Broadway Plaza at Cityview, Fort Worth, Texas
             376 units
          -- Summit at Westlake Hills, Austin, Texas
             269 units
          -- Park Place, Denver, Colorado
             236 units
          -- Santa Catalina Villas, Tucson, Arizona
             289 units

--  Unit Summary:                   Units/Beds
                                    ----------
                --  ILF                 701
                --  ALF                 183
                --  SNF                 254
                --  Dementia             32
                                    -------
                Total                 1,170

--  Occupancy:                        94%

--  Square Feet:                      1,271,000

--  Lease Rate:                       9.5%

--  Annual Increase in Rent:          2.75%

--  Term:                             10 years

--  YTD NOI after Management
     Fees/Lease Payments:             1.14 x

--  Purchase Price Per Unit:          $140,000 Per Unit

--  Purchase Price Per Square Foot:   $129 Per Square Foot


                 Health Care Property Investors, Inc.
                          September 23, 2003
                       Supplemental Information

                       Mezzanine Loan Investment


--  Operator/Borrower:              American Retirement Corporation

--  Loan Commencement Date:                                 9/30/02

--  Interest Rate:                                            19.5%

--  Pay Rate:                                        9%, Increasing
                                                    55 Basis Points
                                                           Annually

--  Term:                                                   5 Years

--  Prepayment Allowable After:                             3 Years

                                           Original      Current
                                            Amounts      Amounts
                                           --------      -------
--  Outstanding Loan Amount Including
      Accrued Interest:                   $112.75 mm    $75.8 mm(1)

--  Number of Properties Securing
     Mezzanine Loan:                                9             5

--  Unit Summary:                               Units         Units
                                                -----         -----
     --  ILF                                    2,237         1,536
     --  ALF                                      339           156
     --  SNF                                      476           222
     --  Dementia                                  99            67
                                              -------       -------
     Total                                      3,151         1,981

--  Occupancy:                                    94%           92%

--  Square Feet:                            4,091,000     2,820,000

--  Accrued Interest At Prepayment Date:     $45.6 mm      $19.8 mm

--  Loan is subordinated to First
     Mortgage Debt of:                        $170 mm        $54 mm

--  First Mortgage Debt Average
     Interest Rate:                              7.2%          7.0%

--  NOI after Management Fees/Total Cash
     Principal and Interest Coverage:          1.28 x        1.53 x

--  NOI after Management
     Fees/Lease Payments:                      1.06 x        1.18 x

--  Debt Per Unit
     (First Mortgages and HCPI):              $93,400       $65,522

--  Debt Per Square Foot
     (First Mortgages and HCPI):               $69.60        $46.03

--  Outstanding Investment in Real Estate
     Owning Entities:                       $12.25 mm       $8.9 mm

(1) After accrual of $15 million from original loan balance
    adjusted to reflect pay down of $52 million as a result of
    this transaction.