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HEALTH AND REHABILITATION PROPERTIES TRUST RESPONDS TO UNUSUALLY LARGE TRADING VOLUME

 HEALTH AND REHABILITATION PROPERTIES TRUST RESPONDS TO
 UNUSUALLY LARGE TRADING VOLUME
 NEWTON, Mass., April 2 /PRNewswire/ -- Mark J. Finkelstein, president of Health and Rehabilitation Properties Trust (NYSE: HRP), commented today on the unusually large trading volume in HRP's shares as follows:
 "We believe that the large trading volume in our shares is related to uncertainty created by the continuing scrutiny and press coverage of the rehabilitation industry in general and of New MediCo Health Care System in particular. Investments in properties operated by the Continuing Health Companies, which are affiliated with New MediCo, comprise approximately 40 percent of HRP's investment portfolio. Recent press coverage has focused on testimony given at Congressional hearings held in February, which focused on alleged abuses by rehabilitation providers including New MediCo. HRP has learned that additional press coverage of the head injury industry and REIT of the industry is planned and may be forthcoming.
 "HRP is closely monitoring the reports on rehabilitation providers. We emphasize that at this stage we are dealing with allegations only. However, we take seriously allegations made in these reports. We have reviewed and are monitoring very closely our investments in the properties operated by the Continuing Health Companies. We believe cash flow coverage of the Continuing Health Companies' obligations to HRP remains strong. Because these developments are so recent, HRP is unable to predict the ultimate outcome or ultimate impact on rent/debt service coverage. However, I intend to recommend that the Trustees maintain the current quarterly dividend of 31 cents per share.
 HRP believes that its investments in properties operated by the Continuing Health Companies are adequately secured. All obligations of the Continuing Health Companies to HRP are cross guaranteed, subject to cross default provisions and secured by, among other things, the pledge of 2 million of HRP's shares and $11 million of accounts receivable. HRP also has a stand-by management agreement with a subsidiary of Greenery Rehabilitation Group, Inc. related to certain of the properties operated by the Continuing Health Companies. Although HRP might be adversely affected if a Continuing Health Company were to default, the adverse consequences of a default could be offset by the re-lease or sale of the properties operated by any defaulting Continuing Health Company, and HRP believes that these properties would very attractive investment opportunities for other operators."
 HRP is a real estate investment trust headquartered in Newton, Mass.
 -0- 4/2/92
 /CONTACT: Mark J. Finkelstein, president, or David J. Hegarty, treasurer, of HRPT, 617-332-3990/
 (HRP) CO: Health and Rehabilitation Properties Trust ST: Massachusetts IN: HEA SU:


SH-PB -- NE018 -- 4618 04/02/92 17:39 EST
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Publication:PR Newswire
Date:Apr 2, 1992
Words:434
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