HRPT Properties Trust (NYSE: HRP) today announced that Chief Judge Susan Oki Mollway of the U.S. District Court in Hawaii ruled that a law intended to lower rents HRP may charge for its industrial and commercial lands in Hawaii violates the U.S. Constitution and is unenforceable.

The law, known as Act 189, was passed by the Hawaii Legislature during its 2009 session and became effective in July 2009. Thereafter, HRP brought suit in the U.S. District Court to have the law declared unconstitutional. A hearing seeking summary judgment was held in December 2009, but the Court then determined to allow the parties to conduct discovery. After completion of discovery, a second hearing was held on May 10. Chief Judge Mollway’s decision is the result of that second hearing.

The Court ruling finds that Act 189 violates the U.S. Constitution’s Contract Clause which prohibits state laws changing historical contract rights. Chief Judge Mollway’s ruling also finds that Act 189 violates the U.S. Constitution’s Equal Protection Clause because it singles out and targets HRP for the benefit of its lessees and does not serve any legitimate general public purpose.

HRP stated that it does not know whether the defendants intend to appeal Chief Judge Mollway’s decision to the U.S. Court of Appeals for the Ninth Circuit.

HRPT Properties Trust is a real estate investment trust which primarily owns office and industrial properties located throughout the United States. HRP is headquartered in Newton, MA.

WARNING REGARDING FORWARD LOOKING STATEMENTS

THE FOREGOING PRESS RELEASE INCLUDES FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND OTHER SECURITIES LAWS. THESE FORWARD LOOKING STATEMENTS AND THEIR IMPLICATIONS ARE BASED UPON HRP’S PRESENT INTENT AND BELIEFS, BUT THEY ARE NOT GUARANTEED TO OCCUR. THESE FORWARD LOOKING STATEMENTS AND THEIR IMPLICATIONS MAY NOT OCCUR FOR VARIOUS REASONS, SOME OF WHICH ARE BEYOND HRP’S CONTROL. FOR EXAMPLE:

  • THIS PRESS RELEASE STATES THE U.S. DISTRICT COURT IN HAWAII RULED THAT ACT 189, A LAW INTENDED TO LOWER RENTS HRP MAY CHARGE FOR ITS LANDS IN HAWAII, HAS BEEN DECLARED UNCONSTITUTIONAL AND UNENFORCEABLE. AN IMPLICATION OF THIS STATEMENT MAY BE THAT HRP MAY CHARGE HIGHER RENTS THAN IT NOW CHARGES. IN FACT, THE RENTS HRP CAN OR WILL CHARGE FOR ITS HAWAII LANDS ARE SET IN EXISTING CONTRACT TERMS AND PERIODICALLY WILL BE DETERMINED BY MARKET CONDITIONS WHICH ARE BEYOND HRP’S CONTROL. AS A RESULT, THE RENTS WHICH HRP CAN OR WILL CHARGE FOR ITS PROPERTIES IN HAWAII IN THE FUTURE MAY BE EQUAL TO, OR GREATER OR LESS THAN, THE RENTS HRP NOW RECEIVES.
  • THIS PRESS RELEASE STATES THAT HRP DOES NOT KNOW WHETHER THE DEFENDANTS IN THE LITIGATION DISCUSSED INTEND TO APPEAL CHIEF JUDGE MOLLWAY’S DECISION. THE RESULTS OF LITIGATION, INCLUDING APPEALS, ARE DIFFICULT TO PREDICT. LITIGATION IS DISTRACTING TO MANAGEMENT AND EXPENSIVE. ACCORDINGLY, HRP MAY INCUR EXPENSES AS A RESULT OF THE CONTINUATION OF THIS LITIGATION WHETHER OR NOT THE DECISION ANNOUNCED TODAY IS AFFIRMED ON APPEAL.

FOR THESE REASONS, AMONG OTHERS, INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE UPON THE FORWARD LOOKING STATEMENTS IN THIS PRESS RELEASE OR THEIR IMPLICATIONS. ALSO, BY MAKING FORWARD LOOKING STATEMENTS HRP DOES NOT INTEND TO IMPLY THAT IT WILL UPDATE THESE FORWARD LOOKING STATEMENTS AS A RESULT OF CHANGED CIRCUMSTANCES, EXCEPT AS HRP MAY BE REQUIRED TO DO BY APPLICABLE LAW.

A Maryland Real Estate Investment Trust with transferable shares of beneficial interest listed on the New York Stock Exchange. No shareholder, Trustee or officer is personally liable for any act or obligation of the Trust.

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