Welcome to the Senior Housing Properties Trust third quarter 2011 financial results conference call. This call is being recorded. At this time for opening remarks and introductions, I would like to turn the call over to the Vice President of Investor Relations, Mr. Tim Bonang.

Joining on today’s call are David Hegarty, President and Chief Operating Officer and Rick Doyle, Chief Financial Officer. Today’s call includes a presentation by management followed by a question and answer session. I would also note that the recording and retransmission of today’s conference call is strictly prohibited without prior written consent of Senior Housing. Before we begin today’s call I would like to state that today’s conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. These forward-looking statements are based on Senior Housing’s present beliefs and expectations as of today, October 27, 2011. The company undertakes no obligation to revise or publically release the results of any revisions to the forward-looking statements made in today’s conference call other through filings with the Securities & Exchange Commission or SEC regarding this reporting period. In addition, this call may contain non-GAAP numbers including funds from operations or FFO. A reconciliation of FFO to net income and the components to calculate AFFO, CAD, or FAD are available in our supplemental operating and financial data package found on our website at www.SNHReit.com. Actual results may differ materially from those projected in any forward-looking statements. Additional information concerning factors that could cause those differences is contained in our Form 10Q to be filed with the SEC. Investors are cautioned not to place undue reliance on any forward-looking statements. Now, I’d like to turn the call over to Dave Hegarty.

I’m happy to report another active quarter for Senior Housing Properties Trust. One in which we increased the dividend and positioned ourselves for continued long term dividend growth. For the third quarter 2011 we reported normalized funds from operations, or normalized FFO of $0.43 per share, and this compares with $0.42 per share that we reported for the same period a year ago. And for the nine months ended September 30, 2011 we reported normalized FFO of $1.30 per share versus a $1.27 per share a year ago. Now, let me review some of the highlights for the quarter. In October, our board of trustees raised the quarterly dividend payment by $0.01 per share to $0.38 per share. On an annualized basis we’re paying $1.52 per share. This represents an 88% payout ratio of our third quarter’s normalized FFO. The dividend was increased based on the growth opportunities in the pipeline and our board’s confidence in the company’s cash flows. As Tim just stated, in our supplemental we provide the components to calculate funds available for distribution or FAD and we believe if you were to calculate our payout ratio on a FAD basis, it would be in the low 90% range. The dividend is our highest priority and we’ve always maintained sufficient cash flows to sustain the dividend and prudently grow it over time. Currently our dividend is an attractive yield for investors at about 6.8% per annum. We continue to be active on the acquisition front. We have announced over $1 billion of acquisitions this year and since the beginning of third quarter we have acquired or are under agreement to acquire 33 properties in the private pay senior living and medical office spaces for an aggregate purchase price of over $800 million. During the quarter we acquired…

For the third quarter we generated normalized FFO of $65.4 million, up 22% from $53.5 million for the same period a year ago. On a per share basis normalized FFO was $0.43, up 2.4% compared to $0.42 a year ago. Earlier this month our board declared a quarterly dividend of $0.38 per share from last quarter’s dividend payment which represents a payout ratio of 88% of our third quarter’s normalized FFO. Percentage rent revenue from our senior living tenants for the third quarter increased 7% to $2.9 million versus the same period last year. Looking firs to the income statement, total revenues increased $32.3 million in the third quarter or 40% to $113.3 million compared to $81 million during the same period last year. During the quarter we recognized $10.7 million of residence fees and services at our managed communities. Residence fees and services are the revenues earned at the 13 senior living communities we have acquired since June 2011 that are leased to our TRS. Depreciation expense increased quarter-over-quarter by $6.3 million or 28% to $28.8 million. Property operating expenses increased $15.2 million to $19.8 million which is in line with our expectations. Property operating expenses are primarily related to our medical office buildings but now include expenses incurred at our managed senior living communities. We recorded $11.2 million of property operating expenses for our medical office portfolio and $8.6 million of senior living operating expenses for the third quarter. General and administrative expense increased $1.1 million to $6.6 million. Our G&A was 5.8% of revenues and 20 basis points of average total assets consistent with prior reporting periods. The quarterly increase in revenues, depreciation expense, property operating expenses and G&A primarily relates to the 68 properties we acquired since July 1, 2010 and the purchase of approximately $42…

(Operator Instructions) Your first question comes from Jana Galen – Bank of America Merrill Lynch. Jana Galen – Bank of America Merrill Lynch: Given that you have about $550 million of acquisitions under contract, can you kind of walk us through how you’re thinking about your intended capital structure for these transactions?

As you obviously know, we raised the equity recently so that paid down our line of credit almost to zero and so we have the capital available to close on everything we’ve committed to close on. We would expect to access the debt markets when the market is open and fluid. I think again, our transactions probably aren’t closing for say another 30 to 45 days or so, so we’ve got time. We’ll keep an eye on the window for possible debt. That will probably be a major source of financing for the next several months. I think we’ll try to keep the balance of debt and equity still – right now it’s around plus or minus 40% and that’s on a net book basis not a gross assets basis, so just taking it off the financial statements so I think it’s still running at a pretty conservative level. Jana Galen – Bank of America Merrill Lynch: Then I was hoping if you could let us know for the Five Star lease number for those 25 properties, are they primarily assisted living or are they more rehab, or skilled nursing?

It’s a combination of all three. They do include some skilled nursing in there, maybe one third and the rest is [ILMAL] properties/communities.

And there’s no rehab in that particular lease.

Your next question comes from Todd Stender – Wells Fargo Securities. Todd Stender – Wells Fargo Securities: Just looking at the bridge loan to Five Star, if Five Star pays down the balance, do I have this right, the loan itself goes down it’s not like it’s an existing or outstanding line of credit?

No, they can’t borrow and re-borrow. They actually borrowed the maximum they can Todd. As of September 30th $48 million is outstanding and there’s no availability for Five Star to borrow anymore. Todd Stender – Wells Fargo Securities: So if that goes to $28 million, they can’t bring that back up.

They can’t bring it back up, it just keeps going on down until it’s fully paid. Todd Stender – Wells Fargo Securities: Just looking at your pending acquisitions, most of which or several of which have the assumption of debt, is this normal would you say or are we in the middle of something where we’re just seeing more distressed or more motivated sellers because of debt maturities?

Not necessarily at this point. I mean, I do think that’s something that’s going to continue to play for the next year or two where CMBS debt or other debt is coming due and people have to do something. But in our case, we evaluate each thing and our preference is to pay off debt if it is economically feasible. So what we’ve determined to assume is debt where the prepayment penalties are too onerous or they’re in a lock out, or something of that nature. It’s not voluntary that we’re assuming this debt, it’s more that if we want to buy these assets it’s something we have to do. I would say that there probably are some cases where things are being triggered by debt maturities and I know in some cases debt has already matured and extended for one or two times, for one or two years let’s say, and I think the lenders are starting to get tired of extending. But the bulk of these transactions are just either investors have reached their maturity date for the investment and want to exit. There are a couple of individual situations where maybe the investor is strained from other debts that they have that is forcing them to sell but that’s not the case certainly with Vi. That’s another different situation. Todd Stender – Wells Fargo Securities: If you can just comment on the current pricing on the initial lease yields just looking at the difference between assisted living and independent living, and any improvement in pricing with independent living because maybe it’s more economically sensitive right now?

I really don’t think cap rates have changed that much. I do think it’s been a little quieter for competition in the marketplace. So maybe to some degree maybe cap rates have moved up a little bit if we had a number of transactions to point to. We are seeing on occasion deals that have come to market and they did not get the pricing that they wanted or expected that have been pulled from the market. So maybe we are running up against some resistance where cap rates will move up a bit, but I really haven’t seen a great shift in any valuations at the moment. Todd Stender – Wells Fargo Securities: Just looking, in your disclosures o f medical office portfolio are much improved so thank you. I wondered if we could see in the future how you’re thinking about breaking out the RIDEA portfolio of maybe just looking at rental rates, maybe some cap ex expectations, any color about that?

Yes, obviously we’ve just so far dipped our toes into RIDEA structures so I don’t think the material would be particularly meaningful yet. But we are really going to be an operator in the space going forward so I do believe when we close these transactions we’re going to enhance our disclosure and provide more operating type statistics and data that will help you evaluate the results of those operations.

Your next question comes from Jerry Doctrow – Stifel Nicolaus. Jerry Doctrow – Stifel Nicolaus: A couple of things, you did provide sort of bits and pieces of data on sort of the existing TRS or RIDEA stuff and I just want to clarify that. There’s an occupancy number on page seven which is a company profile and it was a little unclear to me on the footnote whether that was quarter end or the average since you owned them and I’m just trying to sort of sort of what the number is if you will. It’s like 82.8%.

That’s the averages since we’ve owned them Jerry. Jerry Doctrow – Stifel Nicolaus: Again, I understand that you don’t have that much of that stuff yet [inaudible] public disclosures going forward but I think Rick you said, and this was I calculated as well, when you take the expenses, all the property operating expenses and you subtracted out the MOBs which you gives us detail, it’s like $8.6 million on the senior housing side which is only like a 19.8% operating margin. I was wondering if, I mean it sounded a little light, whether there are start up costs or other things in there and where that margin you think might be headed as we sort of settle down?

You’re absolutely right, there are some start up costs there that we have to hit right away and we do feel that that margin will increase up to about the 30% to 35% mark.

I also think too that one of the difficulties of providing meaningful data to everybody so that they can follow this through is that these transactions are closing in phases. For instances, the Bell properties, some of the properties closed in June, some in July, one in August and there’s still a couple more out there that may not close for another seven more months. I would say those assets that are yet to close also had the highest profit margins and highest occupancy levels of the group. Our return on the assets at the moment is probably lower than what the original whole package was underwritten and described as. Once those properties come into the fold then we’ll have the full economic benefit of all of that and we should, I would say meet or exceed published cap rates and so on. Jerry Doctrow – Stifel Nicolaus: While we’re sort of on that how about just capex spendings? With Bell particularly since that’s on the books now and on Vi as well. But particularly on Bell, are there capex needs that we should be thinking about that are meaningful once you get those properties on the books?

When we bought those assets we knew what we were getting and across the whole portfolio there are really very little significant projects at this time.

Yes, there are no immediate needs, these properties are just five years old on average and stuff and I think it’s just going to be the normal $750 to $1,000 per unit maintenance capex. Jerry Doctrow – Stifel Nicolaus: I don’t know if you can give us any more color on Vi? I mean again, particularly that one is so big that a month one way or another is actually going to make a difference to the numbers. I mean are we talking right at year end, are we talking a month, December 1st or something, any sense at this point?

I would say probably unlikely December 1st. I would say probably for your analysis I would assume probably the end of the month if we can get it closed during December earlier, we will do so and we’d love to do so. Jerry Doctrow – Stifel Nicolaus: The other thing that I think Rick touched on, the refinancing, obviously you’ve got the $225 that you’re going to refinance earlier in the year plus some of those mortgages have to get refinanced and you indicated you might want to term out some of the debt you’ll put on the line as these acquisitions close. I think Rick alluded to that you’re looking at options there so kind of two questions. One, any more color on sort of financing? Are there prepayment penalties or whatever on that, that make it unlikely you’ll do it too early? Then second, maybe just remind me kind of where you are with rating agencies and that sort of stuff and any expectation you have for unsecured debt costs?

On the $225 million that’s due in January there is a make whole provision up to the last day but we will be looking from now to then that we might even refinance that prior to maturity. We do have about $550 million of pending acquisitions that have assumed debt to those and we do have the capacity today on our revolver to close on all those with the assumption of debt. Some of those acquisitions, like the Vi property located in New York, that’s $100 million that’s going to be pushed out probably to the second half of 2012 so there’s some time before we need financing for that. Initially, that’s what we normally do is to acquire these properties, tow them on the line of credit and figure out how we’re going to finance them on a long term basis. Jerry Doctrow – Stifel Nicolaus: Where do you stand with rating agencies and that sort of thing? Do you have any sense of where if you did $500 million worth of $10 year paper today, any sense where those costs would be?

We recently have had conversations with them and they’re very comfortable with our position at the moment and they know that if we did take on some more debt they’re not concerned about it.

The pricing on that is tough to tell now because there’s not a lot of activity in the market to really price it out so we don’t know where the pricing would be. Not too long ago we would say, or maybe still say, that a 10 year note would probably be sub below 6%. Jerry Doctrow – Stifel Nicolaus: The just last thing I have, just acquisition levels, I think David you indicated that Commonwealth was kind of done. You also indicated that you thought there was a pretty rich environment maybe for acquisitions so any sense about acquisition volume maybe for next year, or typical acquisition volume? Then sort of mix and kind of cap rates? My assumption is there won’t be more MOBs at 9.2/9.5 kind of where you were with Commonwealth so just your thinking about cost and mix volume maybe?

Well, I’d say we still see plenty of activity. I’d say the larger deals that we’re seeing at the moment are on the senior living side of things. I couldn’t have told you that this year we’d do a billion dollars. I never would have predicted that at the beginning of the year so you just never know how successful you’ll be but I always feel that we’re going to customarily do $150 to $200 of better and butter one offs and small portfolios of transactions. Again, I think that we’d probably do at least a couple hundred million of that type of product, of the one offs and small portfolios and hope that we do better than that. As far as cap rates or rates that we would expect to earn on any type of investments, I think we’re probably going to average around the 8% level on a current basis, maybe even higher on a GAAP basis and that’s because certainly if you’re dealing with the one offs and so on you’re not going to get the premiums that would attract a real competition from all the other healthcare REITs and some of the other private REITs and others. Certainly in senior living that’s true too, one offs are going to get a higher cap rate for sure.

Your next question comes from [Jarrell Golotti] – Morgan Stanley. [Jarrell Golotti] – Morgan Stanley: I just wanted to pick up on the transaction pipeline question that Jerry was asking about. So specifically, you had mentioned on the 2Q call that you had a $1 billion pipeline. Is that still the size that you’re seeing going forward or has that diminished considering you’ve already announced two thirds of that since your 2Q call?

We’re always looking at I’d say several hundreds of millions of dollars of opportunities at any given time. I think the big deals at this point have been announced but I would expect again we should be able to do a number of individual transactions and then hopefully land one or two of the large ones for say a couple hundred million. I think I’m a little uncomfortable with the term pipeline since deals that are likely to happen I wouldn’t say that is a billion, deals we’re looking at and so on we’re looking at certainly I’d say a half of billion right now. How many of those are actually going to come up to fruition I couldn’t tell you right now because I’m not sure how lucky we’ll be. [Jarrell Golotti] – Morgan Stanley: Considering all the macro headwinds, has this affected your view on using a TRS RIDEA structure on future acquisitions? And also, has it affected your view on performance for this structure in the near term?

No, I think fundamentally the story still makes sense. I believe that maybe things have deferred a bit from when people expected things to really take off but I do think that fundamentally over the next several years the RIDEA format is going to be positive, have greater growth than otherwise we could obtain. So the fact that we’re running in to some more headwinds economically I don’t think undermines the thesis. So I don’t expect any real change in our strategy. [Jarrell Golotti] – Morgan Stanley: Also, in the near term you don’t expect your expectations performance to be affected as much or do you think it hasn’t changed?

It really hasn’t changed. I think we had bottomed out anyways. The timing could be deferred maybe another six months or something like that but the fact that our transactions in and of themselves take six months to a year to ultimately be all consummated and closed, that we will be picking up from there. I do expect that the economy is picking up, albeit slowly but I do think it’s picking up from here. [Jarrell Golotti] – Morgan Stanley: The NIC map data which you referenced earlier came out earlier this week and it said that independent living is up 40 sequentially, assisted living is up 10 bips. True, this is not on a same store basis but it seems like it’s getting better for IL versus AL on that basis. So do you expect that independent living will pick up meaningful in a near term whereas assisted living will stay rather flat?

No, I think both sectors will pick up. I think assisted living really hasn’t had as big of a dip because it’s a need driven business more than independent living is. But I do think independent living has lagged because it took a bigger dip but it should come back. Now, I mean our investment with the Vi properties is about three quarters independent living and one quarter assisted living so obviously we are making a significant bet on the IL coming back as it has in the past and that’s typically the greater margin business too once it does come back. We are obviously, very optimistic and putting a lot of money on the bet that independent living will come back strongly. [Jarrell Golotti] – Morgan Stanley: One last question on transaction velocity, from your previous commentary you said that it seems like it’s pretty much eased up so you expect this to be the normal transaction velocity say for the next year or so?

Yes, I would say so. I don’t think we’re going to change our strategy for the next year or so. [Jarrell Golotti] – Morgan Stanley: That’s true for SNH and you think it’s true just for the senior housing market as a whole?

Obviously, I really can’t comment on what other companies will do for strategy for the next year or so but I do think that the fundamentals are going to pick up and that it just has to give the lack of new inventory coming online. Absorption is picking up and I think it’s more a little bit of patience for it all to be of fruit and it’s just taking a little bit longer but I do think everybody will continue on with their basic strategies.

(Operator Instructions) Your next question comes from Frank Morgan – RBC Capital Markets. Frank Morgan – RBC Capital Markets: Two questions here, first I’m curious have you talked with your SNF operators about the cut that is now going into effect, the 11% cut on that and really the impact on coverage, and really the mitigation strategies that they’re developing to deal with that? That’s the first question. The second question, you were starting to talk a little bit about the lack of capacity development but are you seeing any kind of pick up on either side maybe either on the assisted living or dementia side versus the independent living side from a development standpoint and would that be having any impact on the overall growth in occupancy here or absorption?

First off the question about the cuts in Medicare rate reimbursement, one of the things and obviously I didn’t discuss it in our prepared remarks because we feel our exposure is about 4% of our NOI from Medicare/Medicaid based facilities. So in our view if we sold them tomorrow and wiped them out of our portfolio we’d still be able to comfortably pay our dividend. But we have talked to our operators and clearly they’re feeling an impact since October 1st in the rate. Many of them have mitigated some of the damage, probably about a third or so of the rate reductions and I think people are obviously anxious to see what’s going to come in December or further cuts if any. There will be cuts probably anyways. We believe that the affect on the coverage ratios, there will be some affect but it won’t be significant enough to impact the ability to pay the rent to us. It might be 50 basis points or 75 basis points drop in the skilled nursing component of their coverage. As far as new development, no I do believe there are many developers out in the wings that are very anxious to try and get development. However, I commonly hear the theme that they just cannot raise enough money to go out and do it and have the staying power to fill up and so on. So again, that’s the key to it all is when the capital starts flowing and it’s not flowing as of now and I don’t anticipate it to open up certainly for the next six months anyways. We obviously think it’s going to be better for existing operators in this environment.

That concludes the questions. I’d like to turn this over to Mr. Hegarty.

Thank you all for joining us today and we will be in Dallas for the NAREIT Conference in November and we look forward to meeting many of you at that conference. Thank you, have a good day.