Filed pursuant to Rule 425 and deemed filed pursuant to Rule 14a-12

Filing Person:  Health Care Property Investors, Inc.

Subject Company: CNL Retirement Properties, Inc.

File Number:  000-32607

 

 

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Town Hall Meeting

May 4, 2006

 

[LOGO]

 



 

Disclaimer

 

Health Care Property Investors, Inc. (“HCP”) will file a Form S-4, CNL Retirement Properties, Inc. will file a proxy statement and both companies will file other relevant documents concerning the proposed merger transaction with the Securities and Exchange Commission (“SEC”). INVESTORS ARE URGED TO READ THE FORM S-4 AND PROXY STATEMENT WHEN THEY BECOME AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. You will be able to obtain the documents free of charge at the website maintained by the SEC at www.sec.gov. In addition, you may obtain documents filed with the SEC by HCP free of charge through HCP’s website at www.hcpi.com. You may obtain documents filed with the SEC by CNL Retirement Properties, Inc. (“CNL”) free of charge through CRP’s website www.cnlretirement.com/retirementprop/ or by contacting CNL Client Services at 1-800-650-0650.

 

Health Care Property Investors, Inc. and CNL Retirement Properties, Inc. and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from CNL shareholders in connection with the merger. Information about the directors and executive officers of HCP and their ownership of HCP’s stock is set forth in the proxy statement for HCP’s 2006 Annual Meeting of Shareholders. Information about the directors and executive officers of CNL and their ownership of CNL stock is set forth in the proxy statement for CNL’s 2005 Annual Meeting of Shareholders. Investors may obtain additional information regarding the interests of such participants by reading the Form S-4 and proxy statement for the merger when they become available.

 

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HCP Overview

 



 

HCP Overview

 

                  HCP is the largest, most diversified healthcare real estate platform

 

                  Largest healthcare REIT in the United States – over $6 billion market capitalization

 

                  Well-defined investment philosophy coupled with disciplined investment process

 

                  Diversified portfolio with assets in multiple sectors, geographies and investment products

 

                  Healthcare is the largest industry in the U.S.

 

                  Growing at a faster rate than the economy

 

                  Aging population will drive demand

 

                  Potential for consolidation of fragmented ownership of healthcare real estate

 

                  Sector undergoing “institutionalization”

 

                  Broad spectrum of property types

 

4



 

Healthcare REIT Capitalization*

 

[CHART]

 


*As of April 19, 2006, from CitiGroup Research

 

Dividends Paid on Common Stock

 

[CHART]

 


* Projected Per HCP press release, February 6, 2006.

 

Healthcare REIT Portfolios*

 

[CHART]

 


*                 As of February 1, 2006 except for HR which is as of December 31, 2005 and HCP which is as of March 31, 2006. For HCP, includes pro rata share of HCP MOP, LLC. Based on Bank of America research and company reports.

 

HCP Portfolio

 

[CHART]

 

5



 

Healthcare Industry Driven by Strong Demand

 

U.S. Population Over 65 Years Old is Growing

 

[CHART]

 

Source:  U.S. Census Bureau, Statistical Abstract of the United States:  2004-2005.

 

Disproportionate Healthcare Spending by the Elderly

 

[CHART]

 

Source: Skilled Nursing Facilities: The Phoenix Rises Again, Friedman, Billings, Ramsey & Co. Inc., Healthcare Research, December 20, 2004.

 

Healthcare Expenditures Rising as a % of GDP

 

[CHART]

 

Source:  Centers for Medicare and Medicaid, February 2006.

 

U.S. Healthcare Expenditures

 

[CHART]

 


Source: CMS February 2006

* Includes program administration, dentist services, home health care and other expenditures.

 

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U.S. Real Estate Industry

 

Commercial Real Estate Market:

12% Owned by Public REITs

 

$3 Trillion Market

 

[CHART]

 

Healthcare Real Estate Market:

2% Owned by Public REITs

 

$750 Billion Market

 

[CHART]

 

Sources:  Health Forum LLC, ASHA, Irving Levin Associates; PREI, August 2004

 

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Broad Spectrum of Healthcare Real Estate

 

Medical Office Buildings

 

                  Office buildings containing physicians’ offices and examination rooms

 

                  Require more extensive plumbing, electrical and mechanical systems typical office buildings

 

 

 

Senior Housing

 

                  Range of property types with different levels of service

 

                  Independent living facilities (ILFs) offer limited services

 

                  Assisted living facilities (ALFs) offer personal care and support services

 

                  Continuing care retirement communities (CCRCs) provide the full spectrum of senior housing options

 

                  Residents are the primary source of payment

 

 

 

Hospitals

 

                  Specialized facilities providing a wide range of healthcare services

 

                  Real estate intensive operating business

 

 

 

Skilled Nursing Facilities

 

                  Licensed residential facilities that offer nursing and medical care

 

                  Medicare and Medicaid programs are primary payers

 

 

 

Laboratory / Office Buildings

 

                  Buildings customized for research and development

 

                  Higher floor loads

 

                  Enhanced mechanical systems

 

                  Tenants include life science companies and scientific institutions

 

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Medical Office Buildings

 

Capitalize on not-for-profit hospitals’ drive to monetize non-core estate

 

[GRAPHIC]

[GRAPHIC]

Transaction Value:

 

$111 million

 

 

 

 

 

 

 

Going-in Yield:

 

8.2%

 

 

 

 

 

 

 

Size:

 

4 properties/481,000 sf plus garage

 

 

 

 

 

[GRAPHIC]

[GRAPHIC]

Opportunity

 

 

 

 

 

                  Acquisition of portfolio of on-campus MOBs

 

 

 

 

 

                  Campus anchored by leading not-for-profit hospital system

 

 

 

Swedish MOB

Seattle, WA

 

 

Going In Yield vs. 10-Year Treasury: 400 bps

 

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Senior Housing

 

Acquire desirable portfolios as operators segment real estate from operations

 

[GRAPHIC]

[GRAPHIC]

Transaction Value:

 

$252 million

 

 

 

 

 

 

 

Lease Rate:

 

7.06%

 

 

 

 

 

 

 

Size:

 

12 properties/957 units

 

 

 

 

 

 

 

Operator/Tenant:

 

Aegis

 

 

 

 

 

[GRAPHIC]

[GRAPHIC]

Opportunity

 

 

 

 

 

                  Located in markets with high barriers to entry

 

 

 

 

 

                  High quality assets with 100% private pay

 

 

 

 

 

                  Newer facilities that are less than five year old

 

 

 

 

 

                  Strong regional operator

 

 

 

Aegis Senior Housing Portfolio

California, Washington, Nevada

 

 

Going In Lease Rate vs. 10-Year Treasury: 300 bps

 

10



 

Laboratory / Other

 

Acquire purpose-built facilities with a more established tenant base

 

[GRAPHIC]

 

Transaction Value:

 

$40 million

 

 

 

 

 

 

 

Lease Rate:

 

9.00%

 

 

 

 

 

 

 

Size:

 

207,766 sf

 

 

 

 

 

 

 

Opportunity

 

 

 

 

 

                  Class A office/lab campus, in market with limited supply

 

 

 

 

 

                  Underwritten assuming conversion of office space to lab use

 

 

 

 

 

                  Capacity for additional development

Élan

San Diego, CA

 

 

Going In Lease Rate vs. 10-Year Treasury:  500 bps

 

11



 

Investment Triangle

 

Opportunistic

 

Profitable

Growth

 

Diversified

Conservative

 

12



 

Diversified Revenue Base

 

Portfolio of Operators*

 

[CHART]

 


*   As of March 31, 2006 based on Investment

 

13



 

Conservative Balance Sheet

 

Market Capitalization *

 

[CHART]

 

Debt Maturity Schedule*

 

Year

 

Principal Due

 

2006

 

$

4

mm

2007 **

 

151

 

2008

 

26

 

2009

 

11

 

2010

 

272

 

2011 +

 

1,283

 

 

 

$

1,747

mm

 

                  Weighted average cost of debt

 

  Unsecured debt:  6.11%

 

  Mortgage debt:   6.49%

 


*   As of March 31, 2006

** Excludes credit facility, and term loan repaid April 2006.

 

14



 

Forward Looking Statements

 

Some of the statements in this presentation may be “forward looking statements” and HCP intends such forward looking statements to be covered by the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995. Investors are cautioned that, while forward looking statements reflect HCP’s good faith belief and best judgment based upon current information, they are not guarantees of future performance and are subject to known and unknown risks and uncertainties as more fully described in news releases and SEC reports filed by HCP. Actual results may differ materially from the expectations contained in the forward looking statements as a result of various factors.

 

Market Data

 

This presentation includes market and industry data that HCP has obtained from market research, publicly available information and industry publications. These sources generally state that the information that they provide has been obtained from sources believed to be reliable, but that the accuracy and completeness of such information is not guaranteed. The market and industry data is often based on industry surveys and preparers’ experience in the industry. Similarly, although HCP believes that the surveys and market research that others have performed are reliable, HCP has not independently verified this information.

 

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