HEALTH CARE PROPERTY INVESTORS INC (Form: 10-Q, Received: 08/04/2004 06:15:11)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

For the quarterly period ended June 30, 2004.

¨	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission file number 1-8895

HEALTH CARE PROPERTY INVESTORS, INC.

(Exact name of registrant as specified in its charter)

Maryland

33-0091377

(State or other jurisdiction of

incorporation of organization)

(I.R.S. Employer

Identification No.)

3760 Kilroy Airport Way, Suite 300

Long Beach, CA 90806

(Address of principal executive offices)

(562) 733-5100

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes x No ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes x No ¨

As of July 30, 2004, there were 132,704,423 shares of $ 1.00 par value common stock outstanding.

HEALTH CARE PROPERTY INVESTORS, INC.

INDEX



PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements:

	Condensed Consolidated Balance Sheets June 30, 2004 and December 31, 2003	3

	Condensed Consolidated Statements of Income Three and Six Months Ended June 30, 2004 and 2003	4

	Condensed Consolidated Statement of Stockholders’ Equity Six Months Ended June 30, 2004	5

	Condensed Consolidated Statements of Cash Flows Six Months Ended June 30, 2004 and 2003	6

	Notes to Condensed Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21

Item 4.	Controls and Procedures	21

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	22

Item 4.	Submission of Matters to a Vote of Security Holders	22

Item 6.	Exhibits and Reports on Form 8-K	23

Signatures		29

Health Care Property Investors, Inc.

Condensed Consolidated Balance Sheets

(In thousands)


	June 30, 2004			December 31, 2003
	June 30, 2004			December 31, 2003
	(Unaudited)
Assets
Real estate investments:
Buildings and improvements	$	2,745,553		$	2,682,206
Accumulated depreciation		(512,906	)		(486,421	)

		2,232,647			2,195,785
Construction in progress		35,589			64,303
Land		277,835			283,352

		2,546,071			2,543,440
Loans receivable, net		168,569			184,360
Loans to joint venture partners		80,380			83,253
Investments in and advances to unconsolidated joint ventures		72,339			172,450
Accounts receivable, net of allowance of $1,219 and $1,580, respectively		17,077			16,471
Cash and cash equivalents		11,549			17,768
Other assets		22,839			18,215

Total assets	$	2,918,824		$	3,035,957

Liabilities and stockholders’ equity
Bank notes payable	$	154,000		$	198,000
Senior notes payable		1,013,902			1,050,476
Mortgage notes payable		124,769			158,808
Accounts payable and accrued expenses		54,813			55,055
Deferred revenue		14,735			16,080
Minority interests in joint ventures		13,714			12,931
Minority interests convertible into common stock		103,473			103,990
Stockholders’ equity:
Preferred stock		285,173			285,173
Common stock		132,631			131,040
Additional paid-in capital		1,384,437			1,355,299
Cumulative net income		1,267,468			1,179,049
Cumulative dividends		(1,618,241	)		(1,497,727	)
Other equity		(12,050	)		(12,217	)

Total stockholders’ equity		1,439,418			1,440,617

Total liabilities and stockholders’ equity	$	2,918,824		$	3,035,957

See accompanying Notes to Condensed Consolidated Financial Statements.

Health Care Property Investors, Inc.

Condensed Consolidated Statements of Income

(Unaudited)

(In thousands, except per share data)


	Three Months Ended June 30,						Six Months Ended June 30,
	2004			2003			2004			2003
Revenues:
Rental income	$	95,350		$	82,724		$	182,581		$	157,895
Equity income from unconsolidated joint ventures		849			22			2,086			164
Interest and other income		10,987			9,671			20,141			19,671

		107,186			92,417			204,808			177,730

Expenses:
Interest		20,618			22,411			42,466			43,688
Real estate depreciation and amortization		21,076			18,390			41,558			36,610
Operating expenses for medical office buildings		10,192			7,415			19,241			14,735
General and administrative		8,394			5,662			15,698			10,904
Impairments		1,216			—			1,216			—

		61,496			53,878			120,179			105,937

Income from operations		45,690			38,539			84,629			71,793
Minority interests		(3,289	)		(2,264	)		(6,153	)		(4,259	)

Income from continuing operations		42,401			36,275			78,476			67,534

Discontinued operations:
Operating income from discontinued operations		143			3,011			1,895			5,679
Gain (loss) on real estate dispositions and impairments		(960	)		(2,372	)		8,048			(8,635	)

		(817	)		639			9,943			(2,956	)

Net income		41,584			36,914			88,419			64,578
Dividends to preferred stockholders		(5,282	)		(4,848	)		(10,565	)		(11,073	)
Preferred stock redemption charges		—			(11,771	)		—			(11,771	)

Net income applicable to common shares	$	36,302		$	20,295		$	77,854		$	41,734

Basic earnings per common share:
Income from continuing operations applicable to common shares	$	0.28		$	0.16		$	0.52		$	0.37
Discontinued operations		—			0.01			0.07			(0.02	)

Net income applicable to common shares	$	0.28		$	0.17		$	0.59		$	0.35

Diluted earnings per common share:
Income from continuing operations applicable to common shares	$	0.28		$	0.16		$	0.51		$	0.37
Discontinued operations		(0.01	)		0.01			0.08			(0.03	)

Net income applicable to common shares	$	0.27		$	0.17		$	0.59		$	0.34

Shares used to calculate earnings per share:
Basic		131,653			121,456			131,196			120,307
Diluted		132,856			122,436			132,778			121,240

See accompanying Notes to Condensed Consolidated Financial Statements.

Health Care Property Investors, Inc.

Condensed Consolidated Statement of Stockholders’ Equity

(Unaudited)

(In thousands)


	Preferred stock			Common stock
	Number of shares	Amount		Number of shares	Par value		Additional paid-in capital		Cumulative net income		Cumulative dividends			Other equity			Total stockholders’ equity
Balance, December 31, 2003	11,820	$	285,173	131,040	$	131,040	$	1,355,299	$	1,179,049	$	(1,497,727	)	$	(12,217	)	$	1,440,617
Exercise of stock options	—		—	1,088		1,088		15,682		—		—			—			16,770
Issuance of restricted stock, net	—		—	46		46		2,025		—		—			(2,071	)		—
Other issuances of stock	—		—	457		457		10,814		—		—			—			11,271
Net income	—		—	—		—		—		88,419		—			—			88,419
Preferred stock dividends	—		—	—		—		—		—		(10,565	)		—			(10,565	)
Common stock dividends	—		—	—		—		—		—		(109,949	)		—			(109,949	)
Amortization of deferred compensation	—		—	—		—		617		—		—			1,721			2,338
Payments on notes receivable from officers	—		—	—		—		—		—		—			236			236
Other comprehensive income	—		—	—		—		—		—		—			281			281

Balance, June 30, 2004	11,820	$	285,173	132,631	$	132,631	$	1,384,437	$	1,267,468	$	(1,618,241	)	$	(12,050	)	$	1,439,418

See accompanying Notes to Condensed Consolidated Financial Statements.

Health Care Property Investors, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)


	Six Months Ended June 30,
	2004			2003
Cash flows from operating activities:
Net income	$	88,419		$	64,578
Adjustments to reconcile net income to net cash provided by operating activities:
Real estate depreciation and amortization		41,558			36,610
Real estate depreciation in discontinued operations		918			2,929
Amortization of deferred compensation and debt issuance costs		4,041			3,409
Joint venture adjustments		270			587
Gain on real estate dispositions		(10,269	)		(3,017	)
Impairment losses on real estate		3,437			11,652
Changes in:
Accounts receivable		(606	)		3,512
Loans and other assets		(5,406	)		(8,123	)
Payables, accruals and deferred income		(2,492	)		10,210

Net cash provided by operating activities		119,870			122,347

Cash flows from investing activities:
Acquisition and construction of real estate		(162,034	)		(38,342	)
Proceeds from the sale of real estate properties, net		108,965			12,848
Distributions from (investments in) joint ventures, net		81,571			29
Principal payments on (issuance of) loans and other investment activity, net		24,754			(10,590	)

Net cash provided by (used in) investing activities		53,256			(36,055	)

Cash flows from financing activities:
Net change in bank notes payable		(44,000	)		(94,600	)
Repayment of senior notes payable		(87,000	)		(35,000	)
Issuance of senior notes		50,000			197,536
Cash proceeds from issuing common stock		27,547			68,647
Redemption of preferred stock		—			(99,415	)
Payments on mortgages		(2,549	)		(10,745	)
Dividends paid		(121,632	)		(111,121	)
Other financing activities		(1,711	)		1,470

Net cash used in financing activities		(179,345	)		(83,228	)

Net (decrease) increase in cash and cash equivalents		(6,219	)		3,064

Cash and cash equivalents, beginning of period		17,768			8,495

Cash and cash equivalents, end of period	$	11,549		$	11,559

Supplemental disclosure of cash flow information
Interest paid, net of capitalized interest	$	45,192		$	48,241

Interest capitalized	$	881		$	281

Mortgages included with real estate dispositions	$	31,397		$	—

Minority interest converted into common stock	$	494		$	4,021

See accompanying Notes to Condensed Consolidated Financial Statements.

HEALTH CARE PROPERTY INVESTORS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1) ORGANIZATION AND BASIS OF PRESENTATION

Health Care Property Investors, Inc. is a real estate investment trust (“REIT”) that, together with its consolidated subsidiaries and joint ventures (collectively, “HCP” or the “Company”), invests directly, or through joint ventures and mortgage loans, in health care related properties located throughout the United States.

The accompanying unaudited interim condensed consolidated financial statements include the accounts of Health Care Property Investors, Inc. and its consolidated subsidiaries and joint ventures. All significant intercompany balances and transactions have been eliminated in consolidation. The interim financial information reflects all adjustments, consisting only of normal recurring adjustments, which, in the opinion of management, are necessary for a fair presentation of financial condition and results of operations for the periods presented. These unaudited financial statements should be read in conjunction with the Company’s consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2003 (the “2003 Annual Report”).

Certain information and disclosures normally included in financial statements prepared in conformity with U.S. generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for any subsequent quarter or the full year. Certain prior period amounts have been reclassified to conform to the current period presentation.

Management is required to make estimates and assumptions in the preparation of financial statements in conformity with U.S. generally accepted accounting principles. These estimates and assumptions affect the reported amounts of assets and liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. The Company’s 2003 Annual Report includes a summary of significant accounting policies and estimates. Actual results could differ materially from those estimates.

Principles of Consolidation

In the first quarter of 2003, the Company adopted Interpretation No. 46, “Consolidation of Variable Interest Entities, an Interpretation of Accounting Research Bulletin No. 51” (FIN 46), for variable interest entities created after January 31, 2003. On January 1, 2004, the Company adopted FIN 46 for variable interest entities created before February 1, 2003. Accordingly, the Company presently consolidates all variable interest entities in which it absorbs a majority of the entity’s expected losses, receives a majority of the entity’s expected residual returns, or both, as a result of ownership, contractual or other financial interests in the entity. For entities that do not qualify as variable interest entities, the Company consolidates those entities that are majority owned and controlled. The adoption of FIN 46 in 2004 for variable interest entities created before February 1, 2003, resulted in the consolidation of five joint ventures effective January 1, 2004, that were previously accounted for under the equity method. The consolidation of these joint ventures did not have a significant effect on the Company’s consolidated balance sheet or statement of income.

The Company has eleven consolidated partnerships that have a limited life. As of June 30, 2004, the estimated settlement value of the minority interests is $6.0 million, which is approximately $4.0 million more than the carrying amount.

Federal Income Taxes

HCP has made an election to qualify, and believes it operates so as to qualify, as a REIT for federal income tax purposes. Accordingly, HCP generally will not be subject to federal income tax as long as distributions to its shareholders equal or exceed its taxable income. However, under the Tax Relief Extension Act of 1999, which became effective on January 1, 2001, HCP is permitted to participate in certain previously precluded activities and still maintain its REIT qualification. These activities must be conducted by entities which elect to be treated as taxable REIT subsidiaries (“TRSs”). Accordingly, the Company is subject to federal and state income taxes on the income generated within the TRSs. During the three months ended June 30, 2004, income tax expense related to activities of the Company’s TRSs approximated $0.5 million, and is included in general and administrative expenses.

Stock Split

As of March 2, 2004, each shareholder of record on February 4, 2004, received one additional share of common stock for each share they owned on such record date resulting from a 2-for-1 stock split in the form of a stock dividend declared on January 22, 2004. The stock split has been reflected in all periods presented.

(2) INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED JOINT VENTURES

HCP Medical Office Portfolio, LLC

The Company is the managing member of HCP Medical Office Portfolio, LLC (“HCP MOP”), and has a 33% equity interest therein. The joint venture is engaged in the acquisition and operation of medical office building properties. Summarized unaudited condensed financial information of HCP MOP follows:


	June 30, 2004		December 31, 2003
	(In thousands)
Real estate investments, net	$	456,731	$	465,639
Other assets		27,731		11,193

Total assets	$	484,462	$	476,832

Notes payable	$	312,405	$	25,423
Other liabilities		14,282		13,372
Other member’s capital		105,709		293,485
HCP capital		52,066		144,552

Total liabilities and members’ capital	$	484,462	$	476,832


	Six Months Ended June 30, 2004
	(In thousands)
Rental and other income	$	42,177

Net income	$	5,312

HCP’s equity income	$	1,753

Fees earned by HCP	$	1,551

Distributions received	$	93,506

HCP MOP acquired 100 properties from MedCap Properties, LLC (“MedCap”) in October 2003 for $460 million, including the assumption of $26 million of mortgage debt at the acquisition date. On January 20, 2004, HCP MOP completed $288 million of mortgage financings of which $254 million is at a weighted average fixed rate of 5.57% and the balance is at a floating rate based on one-month LIBOR plus 1.75%. The Company received $92 million of distributions from the financing.

In connection with the acquisition of properties by HCP MOP from MedCap, the Company acquired five medical office buildings, four of which were under construction. Construction of these properties was completed in the second quarter of 2004. At December 31, 2003, the Company expected these assets to be acquired by HCP MOP upon completion of construction; however, the Company ultimately retained ownership of these assets following the completion of the construction. Accordingly, such assets, with a carrying value of $37.6 million, were reclassified to construction in progress from investment in and advances to unconsolidated joint ventures at December 31, 2003.

Tenant improvements, lease acquisition costs and operating expenses of HCP MOP are funded through property operations. The Company may be required to provide additional funding if the joint venture does not have sufficient funds to cover these expenditures. At June 30, 2004, investments and advances to unconsolidated joint ventures in the Company’s consolidated balance sheet includes outstanding advances to HCP MOP of $10.3 million.

Other Unconsolidated Joint Ventures

As of June 30, 2004, the Company had (i) a 45%-50% interest in four joint ventures that each operates an assisted living facility and (ii) a 9.8% interest in five joint ventures (subsidiaries of American Retirement Corporation or “ARC”) that each own a retirement living community (the “ARC JVs”). Summarized unaudited condensed combined financial information of the unconsolidated joint ventures follows:


	June 30, 2004			December 31, 2003
	(In thousands)
Real estate investments, net	$	234,837		$	256,769
Other assets		2,822			4,662

Total assets	$	237,659		$	261,431

Notes payable	$	15,711		$	15,636
Mortgage notes payable		55,062			55,532
Accounts payable		2,062			2,189
Entrance fee liabilities and deferred life estate obligations		159,673			154,494
Other partners’ (deficit) capital		(3,710	)		5,286
HCP capital		8,861			28,294

Total liabilities and partners’ capital	$	237,659		$	261,431


	Six Months Ended June 30,
	2004			2003
	(In thousands)
Rental and other income	$	9,048		$	17,824

Net income	$	2,150		$	3,901

HCP’s equity income	$	333		$	529

Distributions received	$	433		$	1,042

As of June 30, 2004, the Company has guaranteed approximately $7.0 million out of a total of $15.7 million of notes payable for four of the joint ventures. Additionally, the properties owned by the ARC JVs secure $55.1 million of first mortgages. These mortgages have variable and fixed interest rates ranging from 1.1% to 9.6% and maturity dates ranging from May 2005 to June 2025.

At June 30, 2004 and December 31, 2003, the Company had a loan of $79.1 million and $76.2 million, respectively, to a subsidiary of ARC that was collateralized by the facilities held by the joint ventures. At June 30, 2004 and December 31, 2003, the Company had an additional secured loan to ARC of $0.5 million and $7.0 million, respectively. These loans are included in loans to joint venture partners on the Company’s consolidated balance sheets.

The Company’s maximum exposure to losses for joint ventures at June 30, 2004 is the carrying amount of the joint venture investments of $72.3 million and an additional $7.0 million resulting from the guarantee of notes payable discussed above. The Company’s exposure may increase if required to provide any additional funding to HCP MOP.

See note 10 to the Condensed Consolidated Financial Statements regarding subsequent events related to ARC.

(3) LOANS RECEIVABLE, NET

Loans receivable consist of the following:


	June 30, 2004		December 31, 2003
	(In thousands)
Secured	$	147,415	$	160,647
Unsecured		21,154		23,713

	$	168,569	$	184,360

Loans to joint venture partners consist of the following:


	June 30, 2004		December 31, 2003
	(In thousands)
ARC	$	79,603	$	83,253
Other		777		—

	$	80,380	$	83,253

(4) RENTAL INCOME

Rental income consists of the following:


	Three Months Ended June 30,				Six Months Ended June 30,
	(In thousands)
	2004		2003		2004		2003
Triple net	$	67,920	$	62,403	$	130,563	$	117,222
Medical office buildings		27,430		20,321		52,018		40,673

	$	95,350	$	82,724	$	182,581	$	157,895

(5) DISCONTINUED OPERATIONS

The Company sold 21 facilities during the six-month period ended June 30, 2004, and has seven properties at June 30, 2004, that it intends to sell within one year. The operating results for these 28 facilities, with revenues of $0.5 million and $4.6 million during the three and six-month periods ended June 30, 2004, respectively, are included in discontinued operations. For the three and six-month periods ended June 30, 2003, 53 facilities with revenues of $6.9 million and $14.1 million, respectively, were included in discontinued operations.

(6) REVENUE CONCENTRATION

Listed below are operators which represent five percent or more of consolidated revenue less operating expenses:


	Total Investment at June 30, 2004		Percentage of Revenue Less Operating Expenses for the Six Months Ended June 30, 2004
	(In thousands)
Tenet Healthcare Corporation (“Tenet”)	$	423,838	14.3%
American Retirement Corporation (“ARC”)		296,494	9.7
Emeritus Corporation (“Emeritus”)		183,163	5.9

	$	903,495	29.9%

See Note 9 to the Condensed Consolidated Financial Statements regarding contingencies related to Tenet and HealthSouth.

(7) EQUITY

During the six months ended June 30, 2004, the Company raised $10.8 million from sales of common stock under its Dividend Reinvestment and Stock Purchase Plan (“DRIP”) at an average sales price per share of $25.12.

On April 26, 2004, the Company announced that its Board of Directors declared a quarterly common stock cash dividend of $0.4175 per share. The common stock cash dividend was paid on May 21, 2004, to stockholders of record as of the close of business on May 6, 2004.

On July 23, 2004, the Company announced that its Board of Directors declared a quarterly common stock cash dividend of $0.4175 per share. The common stock cash dividend will be paid on August 19, 2004, to stockholders of record as of the close of business on August 4, 2004.

Other equity consists of the following:


	June 30, 2004		December 31, 2003
	(In thousands)
Unamortized balance of deferred compensation	$	12,050	$	11,700
Notes receivable from officers and directors for purchase of common stock		—		236
Accumulated other comprehensive loss		—		281

Total other equity	$	12,050	$	12,217

Comprehensive income for the six months ended June 30, 2004 and 2003 was $88.7 million and $65.0 million, respectively.

(8) EARNINGS PER COMMON SHARE

Basic earnings per common share is computed by dividing net income applicable to common shares by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share is calculated including the effect of potentially dilutive securities. Options to purchase 1,103,000 and 400,000 shares of common stock that had an exercise price in excess of the average market price of the common stock during the three-month periods ended June 30, 2004 and 2003, respectively, were not included because they are not dilutive. Additionally, 5,259,000 and 3,130,000 shares of common stock issuable upon conversion of non-managing member units were not included for the three and six–month periods ended June 30, 2004 and 2003, respectively, since they are not dilutive.


	Three Months Ended June 30,
	2004						2003
			(In thousands, except per share data)
	Income		Shares	Per Share Amount			Income		Shares	Per Share Amount
Basic earnings per common share:
Net income applicable to common shares	$	36,302	131,653	$	0.28		$	20,295	121,456	$	0.17
Dilutive options and unvested restricted stock		—	1,203		(0.01	)		—	980		—

Diluted earnings per common share:
Net income applicable to common shares	$	36,302	132,856	$	0.27		$	20,295	122,436	$	0.17


	Six Months Ended June 30,
	2004						2003
			(In thousands, except per share data)
	Income		Shares	Per Share Amount			Income		Shares	Per Share Amount
Basic earnings per common share:
Net income applicable to common shares	$	77,854	131,196	$	0.59		$	41,734	120,307	$	0.35
Dilutive options and unvested restricted stock		—	1,582		—			—	933		(0.01	)

Diluted earnings per common share:
Net income applicable to common shares	$	77,854	132,778	$	0.59		$	41,734	121,240	$	0.34

(9) COMMITMENTS AND CONTINGENCIES

At June 30, 2004, the Company had contractual commitments to construct $22.4 million of health care real estate and capital projects.

One of the Company’s hospitals located in Tarzana, California, and operated by Tenet under a lease expiring in February 2009 is affected by State of California Senate Bill 1953 (SB 1953), which requires compliance with certain seismic safety building standards for acute care hospital facilities by January 1, 2013. The Company and Tenet are currently reviewing the SB 1953 compliance of this hospital, multiple plans of action to cause such compliance, the estimated time for completing the same and the cost of performing necessary remediation of the property. The Company cannot currently estimate the potential costs of SB 1953 compliance with respect to the affected hospital or the final allocation of such costs between the Company and the operator. Rent on the hospital in 2003 was $10.8 million and $4.1 million for the six months ended June 30, 2004. The carrying amount of the hospital is $79.2 million at June 30, 2004.

On March 12, 2004, James G. Reynolds, the Company’s former Executive Vice President and Chief Financial Officer, filed a lawsuit against the Company and Kenneth B. Roath, the Company’s Chairman, and James F. Flaherty III, the Company’s Chief Executive Officer and a director. The lawsuit was filed in Superior Court of California, County of Orange and is styled James G. Reynolds vs. Health Care Property Investors, Inc., Kenneth B. Roath and James Flaherty, III, et al . Reynolds, alleges, among other things, breach of oral contract, promissory fraud, defamation, wrongful constructive termination, infliction of emotional distress and age discrimination. In his complaint, Reynolds claims that he was promised an employment contract providing that, in the event he was terminated in breach of contract, he would receive two years of salary and bonus, and accelerated vesting of all unvested stock options and restricted stock as if he had been employed through and including five years after the date of such termination. He claims that age discrimination caused some of the employment decisions affecting his job duties in that he was constructively terminated. The Company filed a demurer on April 27, 2004, which was granted by the court with leave to amend. A first amended complaint was then filed with essentially the same allegations as before, and the Company again filed a demurer. A hearing on that demurer is presently set for August 13, 2004. Reynolds also claims that he was promised a supplemental executive retirement plan and an enhanced operational role in the Company. He further claims that he is owed $200,000 of unpaid wages relating to an alleged unpaid bonus for 2001 performance. Reynolds seeks unspecified compensatory, consequential and punitive damages relating to his claims. This matter is proceeding through discovery and the parties have agreed to non-binding mediation on August 24, 2004. The Company believes that Reynolds’ claims are not meritorious and is contesting them. While the Company accrued an immaterial charge related to such claims during the six months ended June 30, 2004, the Company’s ultimate liability, if any, cannot be reasonably estimated at this time. Furthermore, any such loss that the Company incurs may be partially offset through recoveries under its various insurance coverages. Nevertheless, there can be no assurance that the Company’s ultimate loss will not exceed amounts accrued.

According to public disclosures by Tenet and HealthSouth, these operators are experiencing significant legal, financial and regulatory difficulties. The Company cannot predict the impact, if any, of the outcome of these uncertainties on the Company’s consolidated financial statements. The failure or inability of these operators to pay their obligations could materially reduce revenues, net income, and cash flows, which could in turn reduce the amount of cash available for the payment of dividends, cause the Company’s stock price to decline, and cause the Company to incur impairment charges or a loss on the sale of the properties.

The Company is from time to time a party to legal proceedings, lawsuits and other claims in the ordinary course of business. These claims, even if not meritorious, could force the Company to spend significant financial resources. While the resolution of any of the aforementioned contingencies could materially and adversely affect the Company’s results of operations and cash flows in the period recorded, the Company is not aware of any legal proceedings, claims, or other contingencies that would have, individually or taken together, a material adverse effect on its business, prospects, or financial condition.

(10) SUBSEQUENT EVENTS

On July 13, 2004, the Company issued $37.0 million of 6.0% fixed rate medium-term senior notes maturing on June 15, 2014.

On July 15, 2004, the Company acquired substantially all of ARC’s interest in three continuing care retirement centers and one assisted living facility for $113 million, including transaction costs. Prior to the acquisition, the Company owned a 9.8% equity interest in three of the four entities that owned these facilities. All of the facilities have been leased to ARC. In addition, the Company closed a $5.7 million secured loan to ARC. ARC used a portion of the transaction proceeds to repay an $82.6 million mezzanine loan to the Company, including accrued interest.

On July 30, 2004, the Company acquired 11 assisted living facilities from Emeritus Corporation for $84 million, including $56 million of assumed debt, through a sale-leaseback transaction. Emeritus used $17 million of the proceeds to repay mezzanine and other debt to the Company.

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CAUTIONARY LANGUAGE REGARDING FORWARD LOOKING STATEMENTS

Statements in this Quarterly Report that are not historical factual statements are “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The statements include, among other things, statements regarding the intent, belief or expectations of the Company and its officers and can be identified by the use of terminology such as “may,” “will,” “expect,” “believe,” “intend,” “plan,” “estimate,” “should” and other comparable terms or the negative thereof. In addition, the Company from time to time makes forward-looking oral and written public statements concerning our expected future operations and other developments. Readers are cautioned that, while forward-looking statements reflect the Company’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. Actual results may differ materially from the expectations contained in the forward-looking statements as a result of various factors. In addition to risks and other factors set forth in this Quarterly Report, the Company’s Annual Report on Form 10-K for the year ended December 31, 2003, and other documents filed with the Securities and Exchange Commission, readers should consider the following:

(a)	Legislative, regulatory, or other changes in the health care industry at the local, state or federal level which increase the costs of or otherwise affect the operations of the Company lessees;

(b)	Changes in the reimbursement available to our tenants and mortgagors by governmental or private payors, including changes in Medicare and Medicaid payment levels and the availability and cost of third party insurance coverage;

(c)	Competition for tenants and mortgagors, including with respect to new leases and mortgages and the renewal or rollover of existing leases;

(d)	Availability of suitable health care facilities to acquire at a favorable cost of capital and the competition for such acquisition and financing of health care facilities;

(e)	The ability of the Company’s tenants and mortgagors to operate the Company properties in a manner sufficient to maintain or increase revenues and to generate sufficient income to make rent and loan payments;

(f)	The financial weakness of operators in the long-term care and assisted living sectors, including the bankruptcies of certain of the Company’s tenants, which results in uncertainties in our ability to continue to realize the full benefit of such operators’ leases;

(g)	Changes in national or regional economic conditions, including changes in interest rates and the availability and the Company’s cost of capital;

(h)	The risk that the Company will not be able to sell or lease facilities that are currently vacant;

(i)	The potential costs of SB 1953 compliance with respect to the Company’s hospital in Tarzana, California;

(j)	The financial, legal and regulatory difficulties of two significant operators, Tenet and HealthSouth; and

(k)	The potential impact of existing and future litigation matters.

The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

OVERVIEW

Health Care Property Investors, Inc., is a real estate investment trust (“REIT”) that, together with its consolidated subsidiaries and joint ventures (collectively, “HCP” or the “Company”) invests in health care related properties located throughout the United States. Generally, the Company acquires health care facilities and leases them on a long-term basis to health care providers; however, the Company also leases medical office space to providers and physicians on a shorter term basis. In addition, the Company provides mortgage financing on health care facilities.

As of June 30, 2004, the Company had investments in 538 properties located in 43 states, excluding assets which are held for sale. These properties include 30 hospitals, 178 long-term care facilities, 121 assisted and living and continuing care retirement communities (“CCRs”), 185 medical office buildings (“MOBs”) and 24 other health care facilities. The Company’s total investment in these properties, which represents the undepreciated historical cost of real estate and the net carrying amount of unconsolidated joint ventures and mortgage loans, was approximately $3.3 billion at June 30, 2004.

APPLICATION OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Certain of the Company’s critical accounting policies are complex and involve judgments by management, including the use of estimates and assumptions, which affect the reported amounts of assets, liabilities, revenues and expenses and the related disclosures. As a result, changes in these estimates and assumptions could significantly affect the Company’s financial position or results of operations. Actual results may differ from these estimates under different assumptions or conditions. The significant and critical accounting policies used in the preparation of the Company’s financial statements are described in the 2003 Annual Report.

RESULTS OF OPERATIONS

Three Months Ended June 30, 2004 Compared to Three Months Ended June 30, 2003

Income from continuing operations applicable to common shares for the three months ended June 30, 2004 and 2003, was $37.1 million, or $0.28 per diluted share and $19.7 million, or $0.16 per diluted share, respectively.

Rental income consists of revenue earned under triple net and medical office building lease arrangements. Triple net rental income increased 8.8% to $67.9 million for the three months ended June 30, 2004, compared to $62.4 million in the year ago period. This increase was primarily attributable to acquisitions, lease resets, and contractual escalators. Medical office building rental income was $27.4 million for the three months ended June 30, 2004, an increase of 35.0% from $20.3 million in the year ago period. Medical office building operating expenses were $10.2 million for the three months ended June 30, 2004, an increase of 37.5% from $7.4 million in the year ago period. These increases were primarily attributable to the purchase of thirteen properties from MedCap Properties, LLC in October 2003 and completion of four development properties during the second quarter of 2004.

Equity income from unconsolidated joint ventures was $0.8 million for the three months ended June 30, 2004, compared to $22,000 in the year ago period. The increase was primarily due to the Company’s investment in HCP MOP in October 2003. During the three months ended June 30, 2004, the Company recognized $0.8 million in equity income from HCP MOP. At June 30, 2004, 105 properties were held by unconsolidated joint ventures, including HCP MOP, compared to 19 properties at June 30, 2003.

Interest and other income was $11.0 million for the three months ended June 30, 2004, an increase of 13.6% from $9.7 million for the same period a year ago. The increase in interest and other income was primarily due to fees earned from the HCP MOP joint venture of $0.8 million and the amortization of loan discounts, net of the impact of a partial repayment of a loan to American Retirement Corporation (“ARC”) and a change in the Company’s accrual rate on the remaining balance of that loan. During the third quarter of 2003, ARC repaid $52 million of outstanding principal and interest. Partially offsetting this repayment was an increase in the accrual rate on the remaining $76 million balance from 13.25% during the three months ended June 30, 2003, to 16.5% during the three months ended June 30, 2004. The accrual rate on the loan was increased during the third quarter of 2003 based on the Company’s evaluation of the sufficiency of the net assets collateralizing the loan.

Interest expense was $20.6 million for the three months ended June 30, 2004, a decrease of 8.0% from $22.4 million for the three months ended June 30, 2003. The decrease was primarily due to the repayment of certain mortgages and senior notes and a reduction of amounts outstanding on the Company’s line of credit.

General and administrative expenses were $8.4 million for the three months ended June 30, 2004, an increase of 48.3% from $5.7 million for the three months ended June 30, 2003. The increase in general and administrative expenses was primarily due to higher employee compensation and related costs, $0.7 million in expenses associated with the Company’s move of its corporate office to Long Beach, CA, and $0.5 million in income tax expense on income from certain assets held in a taxable REIT subsidiary.

Impairment losses included in continuing operations were $1.2 million and zero for the three months ended June 30, 2004 and 2003, respectively. Impairment losses during the three-month period ended June 30, 2004 were due to flood damage in one of the Company’s facilities.

Real estate depreciation and amortization was $21.1 million for the three months ended June 30, 2004, an increase of 14.6% from $18.4 million in the year ago period. The increase was due to the acquisition of properties totaling $239.1 million during 2003, and $132.7 million during the six months ended June 30, 2004.

Losses from discontinued operations for the three months ended June 30, 2004, was $0.8 million or $0.01 per diluted share compared to income from discontinued operations for the three months ended June 30, 2003, of $0.6 million, or $0.01 per diluted share. The decrease in income from discontinued operations for the three months ended June 30, 2004, is due to operating income from discontinued operations of $0.1 million compared to $3.0 million in the year ago period, net of impairment losses included in discontinued operations of $1.2 million compared $2.8 million in the year ago period.

The Company reviews for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable by comparing the carrying amount of the asset to the expected undiscounted cash flows to be generated from the asset. Changes in the expected undiscounted cash flows, such as a change resulting from the expected use for the asset, may cause the Company to record additional impairment losses.

Six Months Ended June 30, 2004 Compared to Six Months Ended June 30, 2003

Income from continuing operations applicable to common shares for the six months ended June 30, 2004 and 2003, was $67.9 million, or $0.51 per diluted share and $44.7 million, or $0.37 per diluted share, respectively.

Rental income consists of revenue earned under triple net and medical office building lease arrangements. Triple net income increased 11.4% to $130.6 million for the six months ended June 30, 2004, compared to $117.2 million in the year ago period. The increase was primarily attributable to acquisitions, lease resets, and contractual escalators. Medical office building rental income was $52.0 million for the six months ended June 30, 2004, an increase of 27.9% from $40.7 million in the year ago period. Medical office building operating expenses were $19.2 million for the six months ended June 30, 2004, an increase of 30.6% from $14.7 million in the year ago period. The increases were primarily attributable to the purchase of thirteen properties from MedCap Properties, LLC in October 2003 and completion of development properties during the second quarter of 2004.

Equity income from unconsolidated joint ventures was $2.1 million for the six months ended June 30, 2004, compared to $0.2 million in the year ago period. The increase was primarily due to the Company’s investment in HCP MOP in October 2003. During the six months ended June 30, 2004, the Company recognized $1.8 million in equity income from HCP MOP. At June 30, 2004, 105 properties were held by unconsolidated joint ventures, including HCP MOP, compared to 19 properties at June 30, 2003.

Interest and other income was $20.1 million for the six months ended June 30, 2004, an increase of 2.4% from $19.7 million in the year ago period. The increase in interest and other income was primarily due to the $1.6 million in fees the Company recognized related to HCP MOP for the six months ended June 30, 2004, net of the partial repayment of a loan to American Retirement Corporation (“ARC”) and a change in the Company’s accrual rate on the remaining balance of that loan. During the third quarter of 2003, ARC repaid $52 million of outstanding principal and interest. Partially offsetting this repayment was an increase in the accrual rate on the remaining $76 million balance from 13.25% during the six months ended June 30, 2003, to 16.5% during the six months ended June 30, 2004. The accrual rate on the loan was increased during the third quarter of 2003 based on the Company’s evaluation of the sufficiency of the net assets collateralizing the loan.

Interest expense was $42.5 million for the six months ended June 30, 2004, a decrease of 2.8% from $43.7 million for the six months ended June 30, 2003. The decrease was primarily due to the repayment of certain mortgages and senior notes and a reduction of amounts outstanding on the Company’s line of credit.

General and administrative expenses were $15.7 million for the six months ended June 30, 2004, an increase of 44.0% from $10.9 million for the six months ended June 30, 2003. The increase in general and administrative expenses is primarily due to higher employee compensation and related costs, $0.7 million in expenses associated with the Company’s move of its corporate offices to Long Beach, CA, and $0.5 million in income tax expense on income from certain assets held in a taxable REIT subsidiary.

Real estate depreciation and amortization was $41.6 million for the six months ended June 30, 2004, an increase of 13.5% from $36.6 million in the year ago period. The increase is due to the acquisition of properties totaling $239.1 million during 2003, and $132.7 million during the six months ended June 30, 2004.

Income from discontinued operations for the six months ended June 30, 2004, was $9.9 million and for the six months ended June 30, 2003, was a loss of $3.0 million. The increase in income from discontinued operations for the six months ended June 30, 2004, is due to a net gain on real estate dispositions and impairments of $8.0 million compared to a net loss on real estate dispositions and impairments of $8.6 million in the year ago period.

See Note 9 to the Condensed Consolidated Financial Statements regarding commitments and contingencies.

LIQUIDITY AND CAPITAL RESOURCES

Net cash flows from operating activities represent the primary source of liquidity to fund distributions. The Company’s cash flows from operations are dependent upon the occupancy level of multi-tenant buildings, the tenant’s performance on its lease obligations and the rental rates on leases. Material changes in any of these factors could have a material adverse impact on the Company’s results of operations. In order to qualify as a REIT for federal income tax purposes, the Company must distribute at least 90% of its taxable income to its shareholders. Accordingly, the Company intends to continue to make regular quarterly distributions to holders of its common and preferred stock. During the first six months of 2004, the Company issued dividends totaling $109.9 million and $10.6 million to holders of common and preferred stock, respectively. The Company believes that its liquidity and capital resources are adequate to finance its operations for the foreseeable future.

Net cash provided by operating activities was $119.9 million for the six months ended June 30, 2004, compared to $122.3 million in the year ago period. The decrease in cash flow from operations reflects increased rental income offset by higher costs and expenses, and changes in receivables, payables, accruals and deferred income.

Net cash provided by investing activities was $53.3 million for the six months ended June 30, 2004, and principally includes: (i) $98.2 million from the sale of seven medical office buildings and ten other health care related facilities, (ii) the acquisition of a health care laboratory and biotech research facility located in San Diego, California for a purchase price of $40 million, (iii) the acquisition of 9 long-term care facilities for $63 million, (iv) the acquisition of a medical office building in June 2004 for $22 million, (v) $92 million received from HCP MOP upon the completion of certain mortgage financing, and (vi) principal payments on loans and other investment activity of $25 million.

Net cash used in financing activities was $179.3 million for the six months ended June 30, 2004, and principally includes: (i) the repayment of $87.0 million of senior notes, (ii) payment of common and preferred dividends aggregating $121.6 million, and (iii) net repayments on the Company’s revolving line of credit of $44 million. These uses were partially offset by proceeds of $27.5 million and $50 million from common stock and senior note issuances, respectively.

During the six months ended June 30, 2004, the Company issued and sold 429,000 shares of common stock under the Dividend Reinvestment and Stock Purchase Plan (“DRIP”) at an average price per share of $25.12 for proceeds of $10.8 million.

Debt

Because the Company’s anticipated distributions will not allow it to retain sufficient cash to repay all of its debt as it comes due using only cash flows provided by operating activities, the Company intends to repay maturing debt with proceeds from debt and/or equity offerings. In addition, the Company anticipates making future investments in facilities, which will be dependent on the availability of cost-effective sources of capital. The Company uses the public debt and equity markets as its principal source of financing. Our senior debt is rated BBB+ by both Standard & Poor’s and Fitch and Baa2 by Moody’s.

As of June 30, 2004, the Company has the following outstanding debt:

Revolving line of credit —The Company has a revolving line of credit totaling $490 million which expires October 2005. Borrowings under the line of credit were $154.0 million at June 30, 2004. The weighted average annual interest rate at June 30, 2004 was 1.97%.

Mortgage notes payable —At June 30, 2004, the Company had a total of approximately $124.8 million in mortgage notes payable secured by 29 health care facilities with a carrying amount of approximately $221.5 million. Interest rates on the mortgage notes ranged from 2.75% to 10.63% with a weighted average rate of 8.03% at June 30, 2004.

Senior notes —At June 30, 2004, the Company had a total of $1.0 billion in aggregate principal amount of senior notes outstanding. Interest rates on the notes ranged from 6.00% to 9.10% with a weighted average rate of 6.55% at June 30, 2004.

At June 30, 2004, stockholders’ equity totaled $1.4 billion and the Company’s equity securities had a market value of $3.2 billion. Total debt represents 26.4% and 47.3% of total market and book capitalization, respectively.

Preferred stock

At June 30, 2004, the Company had outstanding 4,000,000 shares of 7.25% Series E cumulative redeemable preferred stock (issuance value of $100 million) and 7,820,000 shares of 7.10% Series F cumulative redeemable preferred stock (issuance value of $195.5 million).

Shelf registrations

As of June 30, 2004, the Company had $1.5 billion available for future issuances of debt and equity securities under shelf registration statements filed with the Securities and Exchange Commission. These securities may be issued from time to time in the future based on our needs and the then-existing market conditions.

Letters of credit and depositor accounts

At June 30, 2004, the Company held approximately $14.4 million in depository accounts and $37.1 million in irrevocable letters of credit from commercial banks to secure a number of tenants’ lease obligations and borrowers’ loan obligations. The Company may draw upon the letters of credit or depository accounts if there are defaults under the related leases or loans. Amounts available under letters of credit could change based upon facility operating conditions and other factors and such changes may be material.

Off-Balance Sheet Arrangements

HCP Medical Office Portfolio, LLC

The Company is the managing member of HCP MOP and has a 33% equity interest therein. The Company accounts for this investment under the equity method. The joint venture is engaged in the acquisition and operation of medical office building properties. Tenant improvements, lease acquisition costs and operating expenses are generally funded through operations. The Company may be required to provide additional funding if the joint venture does not have sufficient funds to cover these expenditures.

Summarized unaudited condensed financial information of HCP MOP follows:


	June 30, 2004		December 31, 2003
	(In thousands)
Real estate investments, net	$	456,731	$	465,639
Other assets		27,731		11,193

Total assets	$	484,462	$	476,832

Notes payable	$	312,405	$	25,423
Other liabilities		14,282		13,372
Other member’s capital		105,709		293,485
HCP capital		52,066		144,552

Total liabilities and members’ capital	$	484,462	$	476,832


	Six Months Ended June 30, 2004
	(In thousands)
Rental and other income	$	42,177

Net income	$	5,312

HCP’s equity income	$	1,753

Fees earned by HCP	$	1,551

Distributions received	$	93,506

On January 20, 2004, HCP MOP completed $288 million of mortgage financings of which $254 million is at a weighted average fixed rate of 5.57% and the balance is at a floating rate based on one-month LIBOR plus 1.75%. The Company received $92 million of distributions in connection with the financing.

The Company’s revenue from HCP MOP, including fees earned, represented less than 2.0% of revenue less operating expenses for the three and six months ended June 30, 2004. The investment in HCP MOP of $52.9 million represented less that 5% of stockholders’ equity at June 30, 2004.

Other Unconsolidated Joint Ventures


	June 30, 2004			December 31, 2003
	(In thousands)
Real estate investments, net	$	234,837		$	256,769
Other assets		2,822			4,662

Total assets	$	237,659		$	261,431

Notes payable	$	15,711		$	15,636
Mortgage notes payable		55,062			55,532
Accounts payable		2,062			2,189
Entrance fee liabilities and deferred life estate obligations		159,673			154,494
Other partners’ (deficit) capital		(3,710	)		5,286
HCP capital		8,861			28,294

Total liabilities and partners’ capital	$	237,659		$	261,431


	Six Months Ended June 30,
	2004		2003
	(In thousands)
Rental and other income	$	9,048	$	17,824

Net income	$	2,150	$	3,901

HCP’s equity income	$	333	$	529

Distributions to HCP	$	433	$	1,042

At June 30, 2004 and December 31, 2003, the Company had a loan of $79.1 million and $76.2 million, respectively, to a subsidiary of ARC that was collateralized by the facilities held by the joint ventures. At June 30, 2004, and December 31, 2003, the Company had an additional secured loan to ARC of $0.5 million and $7.0 million, respectively.

The Company’s revenue from joint ventures, excluding HCP MOP, represented less than 1% of its revenue less operating expenses for the three and six months ended June 30, 2004.

On July 15, 2004, the Company acquired substantially all of ARC’s interest in three continuing care retirement centers and one assisted living facility for $113 million, including transaction costs. Prior to the acquisition, the Company owned a 9.8% equity interest in three of the four entities that owned these facilities. All of the facilities have been leased to ARC. In addition, the Company closed a $5.7 million secured loan to ARC. ARC used a portion of the transaction proceeds to repay an $82.6 mezzanine loan to the Company, including accrued interest.

Revenue Concentration

Tenet, ARC, and Emeritus accounted for approximately 14.3%, 9.7%, and 5.9% of the Company’s revenue less operating expenses for the six months ended June 30, 2004. No single other tenant or operator accounted for more than 5% of the Company’s revenue less operating expenses for the six months ended June 30, 2004. Cash flow coverage for rents of the seven hospitals operated by Tenet was 2.5x for the twelve month period ended March 31, 2004, compared to 2.9x for the full year 2003, including the effect of certain Medicare settlements related to 2003 and prior years, and 5.1x for the full year 2002. Cash flow coverages are calculated by the Company based on property level information provided by Tenet without verification and generally are compiled one quarter in arrears. The Company leases nine rehabilitation hospitals to HealthSouth. HealthSouth has indicated that its previously issued financial statements should not be relied upon.

According to public disclosures, Tenet and HealthSouth are experiencing significant legal, financial and regulatory difficulties. The Company cannot predict with certainty the impact, if any, of the outcome of these uncertainties on its consolidated financial statements. The failure or inability of these operators to pay their obligations could materially reduce the Company’s revenues, net income, and cash flows, which could in turn reduce the amount of cash available for the payment of dividends, cause the Company’s stock price to decline, and could cause the Company to incur impairment charges or a loss on the sale of the properties.

Contractual Obligations

As of June 30, 2004, the Company’s contractual payment obligations were as follows:


	Six Months		2005-2006		2007-2008		More than Five Years		Total
	(In thousands)
Contractual Obligations:
Long-Term Debt	$	15,860	$	388,540	$	150,004	$	587,786	$	1,142,190
Line of Credit		—		154,000		—		—		154,000
Construction Commitments		24,200		—		—		—		24,200

	$	40,060	$	542,540	$	150,004	$	587,786	$	1,320,390

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our investments are financed by the sale of common and preferred stock, long-term and medium-term debt, internally generated cash flows, and some short-term bank debt.

We generally have fixed base rent on our leases; in addition, there can be additional rent based on a percentage of increased revenue over specified base period revenue of the properties and/or increases based on inflation indices or other factors. Financing costs are comprised of dividends on common and preferred stock, interest on long-term and medium-term debt and short-term interest on bank debt.

On a more limited basis, we have provided mortgage loans to operators of health care facilities in the normal course of business. All of the mortgage loans receivable have fixed interest rates or interest rates with periodic fixed increases. Therefore, the mortgage loans receivable are all considered to be fixed rate loans, and the current interest rate (the lowest rate) is used in the computation of market risk provided in the following table, if material.

We may assume existing mortgage notes payable as part of an acquisition transaction. Currently we have two mortgage notes payable with variable interest rates and the remaining mortgage notes payable have fixed interest rates or interest rates with fixed periodic increases. The variable rate loans are at interest rates below the current prime rate of 4.25%, and fluctuations are tied to the prime rate or to a rate currently below the prime rate.

At June 30, 2004, we are exposed to market risks related to fluctuations in interest rates on $3.9 million of variable rate mortgage notes payable, $25.0 million of variable rate senior notes payable, and $154.0 million of variable rate bank notes payable on our total investment in the Company’s properties of $3.3 billion.

At June 30, 2004, the Company also has $200 million principal amount of 6.875% Mandatory Par Put Remarketed Securities (MOPPRS) due June 8, 2015, which are subject to mandatory tender on June 8, 2005. The MOPPRS contain an option exercisable by the Remarketing Dealer, which derives its value from the yield on ten-year U.S. treasury relative to a fixed strike rate of 5.565%. Generally, the value of the option to the Remarketing Dealer increases as treasury rates decline and the option’s value to the Remarketing Dealer decreases as treasury rates rise. The value of this option to the Remarketing Dealer currently approximates $ 15 to $20 million. On June 8, 2005, the Company may be required to repurchase the outstanding MOPPRS at par plus accrued interest, which the Company believes would likely occur if the then current yield on the ten-year treasury is above 5.565%. Additionally, in the event that ten-year treasury yield is less than 5.565%, the Remarketing Dealer may redeem the securities on June 8, 2005, at par plus accrued interest, and reissue the senior notes at a premium (determined by reference to the value of the option) to par. The coupon interest rate on the reissued notes would be set at an applicable credit spread plus 5.565%.

Fluctuation in the interest rate environment will not affect our future earnings and cash flows on our fixed rate debt until that debt matures and must be replaced or refinanced. Interest rate changes will affect the fair value of the fixed rate instruments. Conversely, changes in interest rates on variable rate debt would change our future earnings and cash flows, but not affect the fair value on those instruments, other than MOPPRS as described above. Assuming a one percentage point increase in the interest rate related to the variable rate debt including the mortgage notes payable, senior notes payable and the Company’s bank notes payable, and assuming no change in the outstanding balance as of year end, interest expense for 2004 would increase by approximately $1.8 million, or $0.01 per common share on a diluted basis.

Item 4. CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Also, we have investments in certain unconsolidated entities. As we do not control or manage these entities, excluding HCP MOP, our disclosure controls and procedures with respect to such entities are necessarily substantially more limited than those we maintain with respect to our consolidated subsidiaries.

As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2004. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level.

There has been no change in our internal controls over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Item 4. Submission of Matters to a Vote of Security Holders

The Company held its Annual Meeting of Stockholders on May 7, 2004. At the Annual Meeting, the Company’s stockholders approved three proposals, each as more fully described below, and elected ten directors to the Company’s Board of Directors. At the Annual Meeting, there were present in person or by proxy 123,449,981 votes, representing approximately 94% of the total outstanding eligible votes. The proposals considered at the Annual Meeting were voted on as follows:

1. A proposal to amend the Company’s charter to increase the total number of shares of common stock which the Company has the authority to issue from two hundred million (200,000,000) shares to seven hundred fifty million (750,000,000) shares was approved by the Company’s stockholders. The proposal received 84,673,754 votes in favor and 38,030,172 votes against. There were 746,055 abstentions and 0 broker non-votes.

2. A proposal to amend the Company’s charter to declassify its Board of Directors and provide for the annual election of all directors was approved by the Company’s stockholders. The proposal received 120,462,612 votes in favor and 2,044,527 votes against. There were 942,842 abstentions and 0 broker non-votes.

3. The following directors were elected to one year terms of office expiring at the 2005 Annual Meeting of Stockholders and until their successors are duly elected and qualified and received the number of votes set forth opposite their names, with no abstentions or broker non-votes.


Directors	Affirmative Votes	Against or Withheld
Mary A. Cirillo	121,794,788	1,655,193
Robert R. Fanning, Jr.	121,708,625	1,741,356
James F. Flaherty III	121,917,348	1,532,633
David B. Henry	122,003,583	1,446,398
Michael D. McKee	121,720,604	1,729,933
Harold M. Messmer, Jr.	121,957,178	1,492,803
Peter L. Rhein	121,727,809	1,722,172
Kenneth B. Roath	121,933,416	1,516,565
Richard M. Rosenberg	121,066,129	2,383,852
Joseph P. Sullivan	122,288,114	1,161,867

4. A proposal to ratify the selection of Ernst & Young LLP as the Company’s independent public accountants for the fiscal year ending December 31, 2004, was approved by the Company’s stockholders. The proposal received 121,743,458 votes in favor and 1,330,677 votes against. There were 375,846 abstentions and 0 broker non-votes.

Item 6. Exhibits and Reports on Form 8-K

Exhibits:


3.1		Articles of Restatement of HCPI.

3.2		Third Amended and Restated Bylaws of HCPI.

4.1		Indenture, dated as of September 1, 1993, between HCPI and The Bank of New York, as Trustee, with respect to the Series C and D Medium Term Notes, the Senior Notes due 2006 and the Mandatory Par Put Remarketed Securities due 2015 (incorporated by reference to exhibit 4.1 to HCPI’s registration statement on Form S-3 dated September 9, 1993).

4.2		Indenture, dated as of April 1, 1989, between HCPI and The Bank of New York for Debt Securities (incorporated by reference to exhibit 4.1 to HCPI’s registration statement on Form S-3 dated March 20, 1989).

4.3		Form of Fixed Rate Note (incorporated by reference to exhibit 4.2 to HCPI’s registration statement on Form S-3 dated March 20, 1989).

4.4		Form of Floating Rate Note (incorporated by reference to exhibit 4.3 to HCPI’s registration statement on Form S-3 dated March 20, 1989).

4.5		Registration Rights Agreement dated November 20, 1998 between HCPI and James D. Bremner (incorporated by reference to exhibit 4.8 to HCPI’s annual report on Form 10-K for the year ended December 31, 1999). This exhibit is identical in all material respects to two other documents except the parties thereto. The parties to these other documents, other than HCPI, were James P. Revel and Michael F. Wiley.

4.6		Registration Rights Agreement dated January 20, 1999 between HCPI and Boyer Castle Dale Medical Clinic, L.L.C. (incorporated by reference to exhibit 4.9 to HCPI’s annual report on Form 10-K for the year ended December 31, 1999). This exhibit is identical in all material respects to 13 other documents except the parties thereto. The parties to these other documents, other than HCPI, were Boyer Centerville Clinic Company, L.C., Boyer Elko, L.C., Boyer Desert Springs, L.C., Boyer Grantsville Medical, L.C., Boyer-Ogden Medical Associates, LTD., Boyer Ogden Medical Associates No. 2, LTD., Boyer Salt Lake Industrial Clinic Associates, LTD., Boyer-St. Mark’s Medical Associates, LTD., Boyer McKay-Dee Associates, LTD., Boyer St. Mark’s Medical Associates #2, LTD., Boyer Iomega, L.C., Boyer Springville, L.C., and—Boyer Primary Care Clinic Associates, LTD. #2.


4.7		Form of Deposit Agreement (including form of Depositary Receipt with respect to the Depositary Shares, each representing one-one hundredth of a share of our 8.60% Cumulative Redeemable Preferred Stock, Series C) (incorporated by reference to exhibit 4.8 to HCPI’s quarterly report on Form 10-Q for the period ended March 31, 2001) dated as of March 1, 2001 by and among HCPI, Wells Fargo Bank Minnesota, N.A. and the holders from time to time of the Depositary Shares described therein.

4.8		Indenture, dated as of January 15, 1997, between American Health Properties, Inc. and The Bank of New York, as trustee (incorporated herein by reference to exhibit 4.1 to American Health Properties, Inc.’s current report on Form 8-K (file no. 001-09381), dated January 21, 1997).

4.9		First Supplemental Indenture, dated as of November 4, 1999, between HCPI and The Bank of New York, as trustee (incorporated by reference to HCPI’s quarterly report on Form 10-Q for the period ended September 30, 1999).

4.10		Dividend Reinvestment and Stock Purchase Plan, dated November 9, 2000 (incorporated by reference to exhibit 99.1 to HCPI’s registration statement on Form S-3 dated November 13, 2000, registration number 333-49796).

4.11		Registration Rights Agreement dated August 17, 2001 between HCPI, Boyer Old Mill II, L.C., Boyer-Research Park Associates, LTD., Boyer Research Park Associates VII, L.C., Chimney Ridge, L.C., Boyer-Foothill Associates, LTD., Boyer Research Park Associates VI, L.C., Boyer Stansbury II, L.C., Boyer Rancho Vistoso, L.C., Boyer-Alta View Associates, LTD., Boyer Kaysville Associates, L.C., Boyer Tatum Highlands Dental Clinic, L.C., Amarillo Bell Associates, Boyer Evanston, L.C., Boyer Denver Medical, L.C., Boyer Northwest Medical Center Two, L.C., and Boyer Caldwell Medical, L.C. (incorporated by reference to exhibit 4.12 to HCPI’s annual report on Form 10-K for the year ended December 31, 2001).

4.12		Acknowledgment and Consent dated as of June 12, 2002 by and among Merrill Lynch Private Finance Inc., The Boyer Company, L.C., HCPI/Utah, LLC, certain unitholders HCPI/Utah, LLC and HCPI (incorporated by reference to exhibit 4.14 to HCPI’s quarterly report on Form 10-Q for the period ended June 30, 2002).

4.13		Acknowledgment and Consent dated as of June 12, 2002 by and among Merrill Lynch Private Finance Inc., The Boyer Company, L.C., HCPI/Utah II, LLC, certain unitholders HCPI/Utah II, LLC and HCPI (incorporated by reference to exhibit 4.14 to HCPI’s quarterly report on Form 10-Q for the period ended June 30, 2002).

4.14		Officers’ Certificate pursuant to Section 301 of the Indenture dated as of September 1, 1993 between HCPI and the Bank of New York, as Trustee, establishing a series of securities entitled “6.00% Senior Notes due March 1, 2015” (incorporated by reference to exhibit 3.1 to HCPI’s current report on form 8-K (file no. 001-08895), dated February 25, 2003.)

4.15		Registration Rights Agreement dated October 1, 2003 between HCPI, Charles Crews, Charles A. Elcan, Thomas W. Hulme, Thomas M. Klaritch, R. Wayne Price, Glenn T. Preston, Janet Reynolds, Angela M. Playle, James A. Croy, John Klaritch as Trustee of the 2002 Trust F/B/O Erica Ann Klaritch, John Klaritch as Trustee of the 2002 Trust F/B/O Adam Joseph Klaritch, John Klaritch as Trustee of the 2002 Trust F/B/O Thomas Michael Klaritch, Jr. and John Klaritch as Trustee of the 2002 Trust F/B/O Nicholas James Klaritch (incorporated by reference to exhibit 4.16 to HCPI’s quarterly report on Form 10-Q for the period ended September 30, 2003).

4.16		Amended and Restated Dividend Reinvestment and Stock Purchase Plan, dated October 23, 2003 (incorporated by reference to HCPI’s registration statement on Form S-3 dated December 5, 2003, registration number 333-110939).

4.17		Specimen of Stock Certificate representing the Series E Cumulative Redeemable Preferred Stock, par value $1.00 per share (incorporated herein by reference to exhibit 4.1 of HCPI’s 8-A12B filed on September 12, 2003).

4.18		Specimen of Stock Certificate representing the Series F Cumulative Redeemable Preferred Stock, par value $1.00 per share (incorporated herein by reference to exhibit 4.1 of HCPI’s 8-A12B filed on December 2, 2003).


4.19		Form of Floating Rate Note (incorporated by reference to exhibit 4.3 to HCPI’s Current Report on Form 8-K dated November 19, 2003).

4.20		Form of Fixed Rate Note (incorporated by reference to exhibit 4.4 to HCPI’s Current Report on Form 8-K dated November 19, 2003).

10.1		Amendment No. 1, dated as of May 30, 1985, to Partnership Agreement of Health Care Property Partners, a California general partnership, the general partners of which consist of HCPI and certain affiliates of Tenet (incorporated by reference to exhibit 10.1 to HCPI’s annual report on Form 10-K for the year ended December 31, 1985).

10.2		HCPI Second Amended and Restated Directors Stock Incentive Plan (incorporated by reference to exhibit 10.43 to HCPI’s quarterly report on Form 10-Q for the period ended March 31, 1997).*

10.3		HCPI Second Amended and Restated Stock Incentive Plan (incorporated by reference to exhibit 10.44 to HCPI’s quarterly report on Form 10-Q for the period ended March 31, 1997).*

10.4		First Amendment to Second Amended and Restated Directors Stock Incentive Plan, effective as of November 3, 1999 (incorporated by reference to exhibit 10.1 to HCPI’s quarterly report on Form 10-Q for the period ended September 30, 1999).*

10.5		Second Amendment to Second Amended and Restated Directors Stock Incentive Plan, effective as of January 4, 2000 (incorporated by reference to exhibit 10.15 to HCPI’s annual report on Form 10-K for the year ended December 31, 1999).*

10.6		First Amendment to Second Amended and Restated Stock Incentive Plan effective as of November 3, 1999 (incorporated by reference to exhibit 10.3 to HCPI’s quarterly report on Form 10-Q for the period ended September 30, 1999).*

10.7		HCPI 2000 Stock Incentive Plan, effective as of May 7, 2003 (incorporated by reference to HCPI’s Proxy Statement regarding HCPI’s annual meeting of shareholders held May 7, 2003).*

10.8		HCPI Second Amended and Restated Directors Deferred Compensation Plan (incorporated by reference to exhibit 10.45 to HCPI’s quarterly report on Form 10-Q for the period ended September 30, 1997).*

10.9		Second Amendment to Second Amended and Restated Directors Deferred Compensation Plan, effective as of November 3, 1999 (incorporated by reference to exhibit 10.2 to HCPI’s quarterly report on Form 10-Q for the period ended September 30, 1999).*

10.10		Fourth Amendment to Second Amended and Restated Director Deferred Compensation Plan, effective as of January 4, 2000 (incorporated by reference to exhibit 10.17 to HCPI’s annual report on Form 10-K for the year ended December 31, 1999).*

10.11		Employment Agreement dated October 13, 2000 between HCPI and Kenneth B. Roath (incorporated by reference to exhibit 10.11 to HCPI’s annual report on Form 10-K for the year ended December 31, 2000).*

10.12		Various letter agreements, each dated as of October 16, 2000, among HCPI and certain key employees of the Company (incorporated by reference to exhibit 10.12 to HCPI’s annual report on Form 10-K for the year ended December 31, 2000).*

10.13		HCPI Amended and Restated Executive Retirement Plan (incorporated by reference to exhibit 10.13 to HCPI’s annual report on Form 10-K for the year ended December 31, 2001).*

10.14		Stock Transfer Agency Agreement between HCPI and The Bank of New York dated as of July 1, 1996 (incorporated by reference to exhibit 10.40 to HCPI’s quarterly report on Form 10-Q for the period ended September 30, 1996).


10.15		Amended and Restated Limited Liability Company Agreement dated November 20, 1998 of HCPI/Indiana, LLC (incorporated by reference to exhibit 10.15 to HCPI’s annual report on Form 10-K for the year ended December 31, 1998).

10.16		Amended and Restated Limited Liability Company Agreement dated January 20, 1999 of HCPI/Utah, LLC (incorporated by reference to exhibit 10.16 to HCPI’s annual report on Form 10-K for the year ended December 31, 1998).

10.17		Revolving Credit Agreement, dated as of November 3, 1999, among HCPI, each of the banks identified on the signature pages hereof, The Bank of New York, as agent for the banks and as issuing bank, and Bank of America, N.A. and Wells Fargo Bank, N.A., as co-documentation agents, with BNY Capital Markets, Inc., as lead arranger and Book Manager (incorporated by reference to exhibit 10.4 to HCPI’s quarterly report on Form 10-Q for the period ended September 30, 1999).

10.18		364-Day Revolving Credit Agreement, dated as of November 3, 1999 among HCPI, each of the banks identified on the signature pages hereof, The Bank of New York, as agent for the banks, and Bank of America, N.A. and Wells Fargo Bank, N.A., as co-documentation agents, with BNY Capital Markets, Inc., as lead arranger and book manager (incorporated by reference to exhibit 10.5 to HCPI’s quarterly report on Form 10-Q for the period ended September 30, 1999).

10.19		Cross-Collateralization, Cross-Contribution and Cross-Default Agreement, dated as of July 20, 2000, by HCP Medical Office Buildings II, LLC, and Texas HCP Medical Office Buildings, L.P., for the benefit of First Union National Bank (incorporated by reference to exhibit 10.20 to HCPI’s annual report on Form 10-K for the year ended December 31, 2000).

10.20		Cross-Collateralization, Cross-Contribution and Cross-Default Agreement, dated as of August 31, 2000, by HCP Medical Office Buildings I, LLC, and Meadowdome, LLC, for the benefit of First Union National Bank (incorporated by reference to exhibit 10.21 to HCPI’s annual report on Form 10-K for the year ended December 31, 2000).

10.21		Amended and Restated Limited Liability Company Agreement dated August 17, 2001 of HCPI/Utah II, LLC (incorporated by reference to exhibit 10.21 to HCPI’s annual report on Form 10-K for the year ended December 31, 2001).

10.22		First Amendment to Amended and Restated Limited Liability Company Agreement dated October 30, 2001 of HCPI/Utah II, LLC (incorporated by reference to exhibit 10.22 to HCPI’s annual report on Form 10-K for the year ended December 31, 2001).

10.23		Amendment No. 1, dated as of October 29, 2001, to the 364-Day Revolving Credit Agreement, dated as of November 3, 1999 among HCPI, each of the banks identified on the signature pages thereto, The Bank of New York, as agent for the banks, and Bank of America, N.A. and Wells Fargo Bank, N.A., as co-documentation agents, with BNY Capital Markets, Inc., as lead arranger and book manager (incorporated by reference to exhibit 10.23 to HCPI’s annual report on Form 10-K for the year ended December 31, 2001).

10.24		Employment Agreement dated October 8, 2002 between HCPI and James F. Flaherty III (incorporated by reference to exhibit 10.24 to HCPI’s quarterly report on Form 10-Q for the period ended September 30, 2002).*

10.25		Amendment to Employment Agreement dated October 8, 2002 between HCPI and Kenneth B. Roath (incorporated by reference to exhibit 10.25 to HCPI’s quarterly report on Form 10-Q for the period ended September 30, 2002).*

10.26		Revolving Credit Agreement, dated as of October 11, 2002, among HCPI, each of the banks identified on the signature pages hereof, The Bank of New York, as agent for the banks and as issuing bank, Bank of America, N.A. and Wachovia Bank, N.A., as syndicating agents, Wells Fargo Bank, N.A., as documentation agent, with Credit Suisse First Boston, Deutsche Bank A.G. and Fleet National Bank as managing agents, and BNY Capital Markets, Inc., as lead arranger and book runner (incorporated by reference to exhibit 10.26 to HCPI’s quarterly report on Form 10-Q for the period ended September 30, 2002).


10.27		Settlement Agreement and General Release between HCPI and Devasis Ghose (incorporated by reference to exhibit 10.27 to HCPI’s annual report on Form 10-K for the year ended December 31, 2002).*

10.28		Amended and Restated Limited Liability Company Agreement dated as of October 2, 2003 of HCPI/Tennessee, LLC (incorporated by reference to exhibit 10.28 to HCPI’s quarterly report on Form 10-Q for the period ended September 30, 2003).

10.29		Employment Agreement dated October 1, 2003 between HCPI and Charles A. Elcan (incorporated by reference to exhibit 10.29 to HCPI’s quarterly report on Form 10-Q for the period ended September 30, 2003).*

10.30		Form of Restricted Stock Agreement for employees and consultants effective as of May 7, 2003, as approved by the Compensation Committee of the Board of Directors of the Company, relating to the Company’s Amended and Restated 2000 Stock Incentive Plan (incorporated by reference to exhibit 10.30 to HCPI’s annual report on Form 10-K for the year ended December 31, 2003).*

10.31		Form of Restricted Stock Agreement for directors effective as of May 7, 2003, as approved by the Compensation Committee of the Board of Directors of the Company, relating to the Company’s Amended and Restated 2000 Stock Incentive Plan (incorporated by reference to exhibit 10.31 to HCPI’s annual report on Form 10-K for the year ended December 31, 2003).*

10.32		Form of Performance Award Letter for employees effective as of May 7, 2003, as approved by the Compensation Committee of the Board of Directors of the Company, relating to the Company’s Amended and Restated 2000 Stock Incentive Plan (incorporated by reference to exhibit 10.32 to HCPI’s annual report on Form 10-K for the year ended December 31, 2003).*

10.33		Form of Stock Option Agreement for eligible participants effective as of May 7, 2003, as approved by the Compensation Committee of the Board of Directors of the Company, relating to the Company’s Amended and Restated 2000 Stock Incentive Plan (incorporated by reference to exhibit 10.33 to HCPI’s annual report on Form 10-K for the year ended December 31, 2003).*

10.34		Amended and Restated Executive Retirement Plan effective as of May 7, 2003 (incorporated by reference to exhibit 10.34 to HCPI’s annual report on Form 10-K for the year ended December 31, 2003).*

31.1		Certification by James F. Flaherty III, the Company’s Chief Executive Officer, Pursuant to Securities Exchange Act Rules 13a-14 and 15d-14, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification by Mark A. Wallace, the Company’s Chief Financial Officer, Pursuant to Securities Exchange Act Rules 13a-14 and 15d-14, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification by James F. Flaherty III, the Company’s Chief Executive Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification by Mark A. Wallace, the Company’s Chief Financial Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*	Management Contract or Compensatory Plan or Arrangement.

For the purposes of complying with the amendments to the rules governing Form S-8 (effective July 13, 1990) under the Securities Act of 1933, the undersigned registrant hereby undertakes as follows, which undertaking shall be incorporated by reference into registrant’s Registration Statement on Form S-8 Nos. 33-28483 and 333-90353 filed May 11, 1989 and November 5, 1999, respectively, Form S-8 Nos. 333-54786 and 333-54784 each filed February 1, 2001, and Form S-8 No. 333-108838 filed September 16, 2003.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in

the Securities Act of 1933 and is therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue

b) Reports on Form 8-K:

None

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Date: August 3, 2004		H EALTH C ARE P ROPERTY I NVESTORS , I NC . (Registrant)
		/s/ Mark A. Wallace
		Mark A. Wallace Senior Vice President and Chief Financial Officer (Principal Financial Officer)

		/s/ George P. Doyle
		George P. Doyle Vice President and Chief Accounting Officer (Principal Accounting Officer)

EXHIBIT 3.1

HEALTH CARE PROPERTY INVESTORS, INC.

ARTICLES OF RESTATEMENT

HEALTH CARE PROPERTY INVESTORS, INC., a Maryland corporation (the “Corporation”), having its principal office in the State of Maryland at c/o The Corporation Trust Incorporated, 300 East Lombard Street, Baltimore, Maryland 21202 hereby certifies to the State Department of Assessments and Taxation of Maryland (the “Department”) that:

FIRST : The Corporation desires to and does hereby restate in its entirety the charter of the Corporation (the “Charter”) as currently in effect pursuant to Section 2-608 of the Maryland General Corporation Law (the “MGCL”).

SECOND : The following provisions are all the provisions of the Charter currently in effect, as restated herein:

ARTICLE I

NAME

The name of this corporation shall be HEALTH CARE PROPERTY INVESTORS, INC.

ARTICLE II

PURPOSES

The purpose for which this corporation is formed is to engage in the ownership of real property and any other lawful act or activity for which corporations may be organized under the General Corporation Law of Maryland as now or hereinafter in force.

ARTICLE III

PRINCIPAL OFFICE AND RESIDENT AGENT

The post office address of the principal office of the corporation in the State of Maryland is c/o The Corporation Trust Incorporated, 300 East Lombard Street, Baltimore, Maryland 21202. The name of the resident agent of the corporation in the State of Maryland is The Corporation Trust Incorporated and the post office address is 300 East Lombard Street, Baltimore, Maryland 21202, but this corporation may maintain an office or offices in such other place or places as may be from time to time fixed by its Board of Directors or as may be fixed by the Bylaws of the corporation.

ARTICLE IV

CAPITAL STOCK

Section 1 . The total number of shares of capital stock which the corporation shall have the authority to issue is Eight Hundred Million (800,000,000), of which Seven Hundred Fifty Million (750,000,000) shall be shares of Common Stock having a par value of $1.00 per share and Fifty Million (50,000,000) shall be shares of Preferred Stock having a par value of $1.00 per share. The aggregate par value of all of said shares shall be Eight Hundred Million Dollars ($800,000,000).

Section 2 . The Board of Directors shall have authority to issue the Preferred Stock from time to time in one or more series and by resolution shall designate with respect to any series of Preferred Stock:

(1) the number of shares constituting such series and the distinctive designation thereof;

(2) the voting rights, if any, of such series;

(3) the rate of dividends payable on such series, the time or times when such dividends will be payable, the preference to, or any relation to, the payment of dividends to any other class or series of stock and whether the dividends will be cumulative or non-cumulative;

(4) whether there shall be a sinking or similar fund for the purchase of shares of such series and, if so, the terms and provisions that shall govern such fund;

(5) the rights of the holders of shares of such series upon the liquidation, dissolution or winding up of the corporation;

(6) the rights, if any, of holders of shares of such series to convert such shares into or to exchange such shares for, shares of any other class or classes or any other series of the same or of any other class or classes of stock of the corporation, the price or prices or rate or rates of exchange, with such adjustments as shall be provided, at which such shares shall be convertible or exchangeable, whether such rights of conversion or exchange shall be exercisable at the option of the holder of the shares of the corporation or upon the happening of a specified event and any other terms or conditions of such conversion or exchange; and

(7) any other preferences, powers and relative participating, optional or other special rights and qualifications, limitations or restrictions of shares of such series.

Section 3 . Pursuant to the authority vested in the Board of Directors under Section 2 of this Article IV, the Board of Directors has classified, and authorized the issuance of, shares of Preferred Stock in separate series as follows:

(a) 4,140,000 shares of Preferred Stock as a separate series designated as “7.25% Series E Cumulative Redeemable Preferred Stock” (the “Series E Preferred Stock”) and having the preferences, rights, voting powers, restrictions, limitations, qualifications, terms and conditions of redemption and other terms and conditions set forth on Exhibit I attached hereto and incorporated herein by reference.

(c) 7,820,000 shares of Preferred Stock as a separate series designated as “7.1% Series F Cumulative Redeemable Preferred Stock” (the “Series F Preferred Stock”) and having the preferences, rights, voting powers, restrictions, limitations, qualifications, terms and conditions of redemption and other terms and conditions set forth on Exhibit II attached hereto and incorporated herein by reference.

ARTICLE V

PROVISIONS FOR DEFINING, LIMITING AND REGULATING

CERTAIN POWERS OF THE CORPORATION AND

THE BOARD OF DIRECTORS AND STOCKHOLDERS

Section 1 . The Board of Directors shall have the authority without stockholder approval to designate capital gain allocation to holders of any series or all series of Preferred Stock.

Section 2 . The affirmative vote of the holders of not less than 90% of the outstanding shares of “voting stock” (as hereinafter defined) of the corporation

shall be required for the approval or authorization of any “Business Combination” (as hereinafter defined) of the corporation with any “Related Person” (as hereinafter defined). However, such 90% voting requirement shall not be applicable if (1) the Board of Directors of the corporation by unanimous vote or written consent shall have expressly approved in advance the acquisition of outstanding shares of voting stock of the corporation that caused the Related Person to become a Related Person or shall have approved the Business Combination prior to the Related Person involved in the Business Combination having become a Related Person; or (2) the Business Combination is solely between the corporation and another corporation, one hundred percent of the voting stock of which is owned directly or indirectly by the corporation.

For purposes of this Article V, Section 2:

(i) The term “Business Combination” shall mean (a) any merger or consolidation of the corporation with or into a Related Person, (b) any sale, lease, exchange, transfer or other disposition, including without limitation a mortgage or any other security device, of all or any “Substantial Part” (as hereinafter defined) of the assets of the corporation (including without limitation any voting securities of a subsidiary) to a Related Person, (c) any merger or consolidation of a Related Person with or into the corporation, (d) any sale, lease, exchange, transfer or other disposition of all or any Substantial Part of the assets of a Related Person to the corporation, (e) the issuance of any securities (other than by way of pro rata distribution to all stockholders) of the corporation to a Related Person, and (f) any agreement, contract or other arrangement providing for any of the transactions described in this definition of Business Combination.

(ii) The term “Related Person” shall mean and include any individual, corporation, partnership or other person or entity which, together with its “Affiliates” and “Associates” (as defined on October 1, 1982 in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), “Beneficially Owns” (as defined on October 1, 1982 in Rule 13d-3 under the Exchange Act) in the aggregate 10% or more of the outstanding voting stock of the corporation, and any Affiliate or Associate of any such individual, corporation, partnership or other person or entity.

(iii) The term “Substantial Part” shall mean more than 10% of the book value of the total assets of the corporation as of the end of its most recent fiscal year ending prior to the time the determination is being made.

(iv) Without limitation, any shares of Common Stock of the corporation that any Related Person has the right to acquire pursuant to any agreement, or upon exercise of conversion rights, warrants or options, or otherwise, shall be deemed beneficially owned by the Related Person.

(v) The term “voting stock” shall mean the outstanding shares of capital stock of the corporation entitled to vote generally in the election of directors. In a vote required by or provided for in this Article V, Section 2, each share of voting stock shall have the number of votes granted to it generally in the election of directors.

Section 3 . The number of Board of Directors shall be not less than three (3) nor more than ten (10) until changed by an amendment to the Bylaws.

The number of Directors may be increased or decreased from time to time in such manner as shall be provided in the Bylaws, provided that the number shall not be reduced to less than three (3). In case of any increase in the number of Directors, the additional Directors may be elected by the stockholders at any annual or special meeting, or by the Directors as shall be provided by the Bylaws. A Director may be removed by the vote or written consent of the holders of two-thirds of the outstanding shares or by a unanimous vote of all other members of the Board of Directors. Special meetings of the stockholders may be called in a manner consistent with the Bylaws of the corporation for the purpose of removing a Director.

Section 4 . If the Board of Directors shall, at any time and in good faith, be of the opinion that direct or indirect ownership of at least 9.9% or more of the voting shares of stock of the corporation has or may become concentrated in the hands of one “beneficial owner” (as defined on October 1, 1982 in Rule 13d-3 under the Exchange Act), the Board of Directors shall have the power (i) by lot or other means deemed equitable by them to call for the purchase from any stockholder of the corporation a number of voting shares sufficient, in the opinion of the Board of Directors, to maintain or bring the direct or indirect ownership of voting shares of stock of the corporation of such beneficial owner to no more than 9.9% of the outstanding voting shares of stock of the corporation, and (ii) to refuse to transfer or issue voting shares of stock of the corporation to any person whose acquisition of such voting shares would, in the opinion of the Board of Directors, result in the direct or indirect ownership of more than 9.9% of the outstanding voting shares of stock of the corporation. The purchase price for any voting shares of stock shall be equal to the fair market value of the shares reflected in the closing sales price for the shares, if then listed on a national securities exchange, or the average of the closing sales prices for the shares if then listed on more than one national securities exchange, or if the shares are not then listed on a national securities exchange, the latest bid quotation for the shares if then traded over-the-counter on the last business day immediately preceding the day on which notices of such acquisition are sent, or, if no such closing sales prices or quotations are available, then the purchase price shall be equal to the net asset value of such stock as determined by the Board of Directors in accordance with the provisions of applicable law. Payment of the purchase price shall be made in cash by the corporation at such time and in such manner as may be determined by the Board of Directors of the corporation. From and after the date

fixed for purchase by the Board of Directors, the holder of any shares so called for purchase shall cease to be entitled to distributions, voting rights and other benefits with respect to such shares, excepting only the right to payment of the purchase price fixed as aforesaid. If the Board of Directors fails to grant an exemption from the ownership limitation described in this Section 4, then any transfer of shares, options, warrants or other securities convertible into voting shares that would create a beneficial owner of more than 9.9% of the outstanding shares of stock of this corporation shall be deemed void ab initio and the intended transferee shall be deemed never to have had an interest therein. If the foregoing provision is determined to be void or invalid by virtue of any legal decision, statute, rule or regulation, then the transferee of such shares, options, warrants or other securities convertible into voting shares shall be deemed, at the option of the corporation, to have acted as agent on behalf of the corporation in acquiring such shares and to hold such shares on behalf of the corporation.

Section 5 . The holders of stock of the corporation shall have no preemptive or preferential right to subscribe for or purchase any stock or securities of the corporation.

Section 6 . Restrictions on Ownership and Transfer to Preserve Tax Benefits.

(a) Definitions . For the purposes of Section 6 of this Article V, the following terms shall have the following meanings:

“Beneficial Ownership” shall mean ownership of Common Stock by a Person who is or would be treated as an owner of such Common Stock either actually or constructively through the application of Section 544 of the Code, as modified by Section 856(h)(1)(B) of the Code. The terms “Beneficial Owner,” “Beneficially Own,” “Beneficially Owns” and “Beneficially Owned” shall have the correlative meanings.

“Charitable Beneficiary” shall mean one or more beneficiaries of a Trust, as determined pursuant to Subsection 6(c)(vi) of this Article V.

“Code” shall mean the Internal Revenue Code of 1986, as amended. All section references to the Code shall include any successor provisions thereof as may be adopted from time to time.

“Common Stock” shall mean that Common Stock that may be issued pursuant to Article IV, Section 1, of the Articles of Restatement.

“Constructive Ownership” shall mean ownership of Common Stock by a Person who is or would be treated as an owner of such Common Stock either actually or constructively through the application of Section 318 of the Code, as modified by Section 856(d)(5) of the Code. The terms “Constructive Owner,” “Constructively Own,” “Constructively Owns” and “Constructively Owned” shall have the correlative meanings.

“Corporation” shall have the meaning set forth in the preamble to the Articles of Restatement.

“Filing Date” shall mean the date this Amendment to the Articles of Restatement is filed with the Department.

“Individual” means an individual, a trust qualified under section 401(a) or 501(c)(17) of the Code, a portion of a trust permanently set aside for or to be used exclusively for the purposes described in section 642(c) of the Code, or a private foundation within the meaning of section 509(a) of the Code.

“IRS” means the United States Internal Revenue Service.

“Market Price” shall mean the last reported sales price reported on the New York Stock Exchange of the Common Stock on the trading day immediately preceding the relevant date, or if the Common Stock is not then traded on the New York Stock Exchange, the last reported sales price of the Common Stock on the trading day immediately preceding the relevant date as reported on any exchange or quotation system over which the Common Stock may be traded, or if the Common Stock is not then traded over any exchange or quotation system, then the market price of the Common Stock on the relevant date as determined in good faith by the Board of Directors of the Corporation.

“Ownership Limit” shall mean 9.8% (by value or by number of shares, whichever is more restrictive) of the outstanding Common Stock of the Corporation. The number and value of shares of outstanding Common Stock of the Corporation shall be determined by the Board of Directors in good faith, which determination shall be conclusive for all purposes hereof.

private foundation within the meaning of Section 509(a) of the Code, joint stock company or other entity; but does not include an underwriter acting in a capacity as such in a public offering of shares of Common Stock provided that the ownership of such shares of Common Stock by such underwriter would not result in the Corporation being “closely held” within the meaning of Section 856(h) of the Code, or otherwise result in the Corporation failing to qualify as a REIT.

“Purported Beneficial Transferee” shall mean, with respect to any purported Transfer (or other event) which results in a transfer to a Trust, as provided in Subsection 6(b)(ii) of this Article V, the Purported Record Transferee, unless the Purported Record Transferee would have acquired or owned shares of Common Stock for another Person who is the beneficial transferee or owner of such shares, in which case the Purported Beneficial Transferee shall be such Person.

“Purported Record Transferee” shall mean, with respect to any purported Transfer (or other event) which results in a transfer to a Trust, as provided in Subsection 6(b)(ii) of this Article V, the record holder of the shares of Common Stock if such Transfer had been valid under Subsection 6(b)(i) of this Article V.

“REIT” shall mean a real estate investment trust under Sections 856 through 860 of the Code.

“Restriction Termination Date” shall mean the first day on which the Board of Directors of the Corporation determines that it is no longer in the best interests of the Corporation to attempt to, or continue to, qualify as a REIT.

“Transfer” shall mean any sale, transfer, gift, assignment, devise or other disposition of Common Stock, including (i) the granting of any option or entering into any agreement for the sale, transfer or other disposition of Common Stock or (ii) the sale, transfer, assignment or other disposition of any securities (or rights convertible into or exchangeable for Common Stock), whether voluntary or involuntary, whether such transfer has occurred of record or beneficially or Beneficially or Constructively (including but not limited to transfers of interests in other entities which result in changes in Beneficial or Constructive Ownership of Common Stock), and whether such transfer has occurred by operation of law or otherwise.

“Trust” shall mean each of the trusts provided for in Subsection 6(c) of this Article V.

“Trustee” shall mean any Person unaffiliated with the Corporation, or a Purported Beneficial Transferee, or a Purported Record Transferee, that is appointed by the Corporation to serve as trustee of a Trust.

(b) Restriction on Ownership and Transfers.

(i) From the Filing Date and prior to the Restriction Termination Date:

(A) except as provided in Subsection 6(i) of this Article V, no Person shall Beneficially Own Common Stock in excess of the Ownership Limit;

(B) except as provided in Subsection 6(i) of this Article V, no Person shall Constructively Own Common Stock in excess of the Ownership Limit; and

(C) no Person shall Beneficially or Constructively Own Common Stock to the extent that such Beneficial or Constructive Ownership would result in the Corporation being “closely held” within the meaning of Section 856(h) of the Code, or otherwise failing to qualify as a REIT (including but not limited to ownership that would result in the Corporation owning (actually or Constructively) an interest in a tenant that is described in Section 856(d)(2)(B) of the Code if the income derived by the Corporation (either directly or indirectly through one or more partnerships or limited liability companies) from such tenant would cause the Corporation to fail to satisfy any of the gross income requirements of Section 856(c) of the Code).

(ii) If, during the period commencing on the Filing Date and prior to the Restriction Termination Date, any Transfer or other event occurs that, if effective, would result in any Person Beneficially or Constructively Owning Common Stock in violation of Subsection 6(b)(i) of this Article V, (i) then that number of shares of Common Stock that otherwise would cause such Person to violate Subsection 6(b)(i) of this Article V (rounded up to the nearest whole share) shall be automatically transferred to a Trust for the benefit of a Charitable Beneficiary, as described in Subsection 6(c), effective as of the close of business on the business day prior to the date of such Transfer or other event, and such Purported Beneficial Transferee shall thereafter have no rights in such shares or (ii) if, for any reason, the transfer to the Trust described in clause (i) of this sentence is not automatically effective as provided therein to prevent any Person from Beneficially or Constructively Owning Common Stock in violation of Subsection 6(b)(i) of this Article V, then the Transfer of that number of shares of Common Stock that otherwise would cause any Person to violate Subsection 6(b)(i) shall, subject to Section 9, be void ab initio , and the Purported Beneficial Transferee shall have no rights in such shares.

(iii) Subject to Section 9 of this Article V and notwithstanding any other provisions contained herein, during the period commencing on the Filing Date and prior to the Restriction Termination Date, any Transfer of Common Stock that, if effective, would result in the capital stock of the Corporation being beneficially owned by less than 100 Persons (determined without reference to any rules of attribution) shall be void ab initio , and the intended transferee shall acquire no rights in such Common Stock.

(iv) It is expressly intended that the restrictions on ownership and Transfer described in this Subsection 6(b) of Article V shall apply to restrict the rights of any members or partners in limited liability companies or partnerships to exchange their interest in such entities for Common Stock of the Company.

(i) Upon any purported Transfer or other event described in Subsection 6(b)(ii) of this Article V, such Common Stock shall be deemed to have been transferred to the Trustee in his capacity as trustee of a Trust for the exclusive benefit of one or more Charitable Beneficiaries. Such transfer to the Trustee shall be deemed to be effective as of the close of business on the business day prior to the purported Transfer or other event that results in a transfer to the Trust pursuant to Subsection 6(b)(ii). The Trustee shall be appointed by the Corporation and shall be a Person unaffiliated with the Corporation, any Purported Beneficial Transferee, and any Purported Record Transferee. Each Charitable Beneficiary shall be designated by the Corporation as provided in Subsection 6(c)(vi) of this Article V.

(ii) Common Stock held by the Trustee shall be issued and outstanding Common Stock of the Corporation. The Purported Beneficial Transferee or Purported Record Transferee shall have no rights in the shares of Common Stock held by the Trustee. The Purported Beneficial Transferee or Purported Record Transferee shall not benefit economically from ownership of any shares held in trust by the Trustee, shall have no rights to dividends and shall not possess any rights to vote or other rights attributable to the shares of Common Stock held in the Trust.

(iii) The Trustee shall have all voting rights and rights to dividends with respect to Common Stock held in the Trust, which rights shall be exercised for the exclusive benefit of the Charitable Beneficiary. Any dividend or distribution paid prior to the discovery by the Corporation that shares of Common Stock have been transferred to the Trustee shall be paid to the Trustee upon demand, and any dividend or distribution declared but unpaid shall be paid when

due to the Trustee with respect to such Common Stock. Any dividends or distributions so paid over to the Trustee shall be held in trust for the Charitable Beneficiary. The Purported Record Transferee and Purported Beneficial Transferee shall have no voting rights with respect to the Common Stock held in the Trust and, subject to Maryland law, effective as of the date the Common Stock has been transferred to the Trustee, the Trustee shall have the authority (at the Trustee’s sole discretion) (i) to rescind as void any vote cast by a Purported Record Transferee with respect to such Common Stock prior to the discovery by the Corporation that the Common Stock has been transferred to the Trustee and (ii) to recast such vote in accordance with the desires of the Trustee acting for the benefit of the Charitable Beneficiary; provided, however, that if the Corporation has already taken irreversible corporate action, then the Trustee shall not have the authority to rescind and recast such vote. Notwithstanding the provisions of this Article V, until the Corporation has received notification that the Common Stock has been transferred into a Trust, the Corporation shall be entitled to rely on its share transfer and other stockholder records for purposes of preparing lists of stockholders entitled to vote at meetings, determining the validity and authority of proxies and otherwise conducting votes of stockholders.

(iv) Within 20 days of receiving notice from the Corporation that shares of Common Stock have been transferred to the Trust, the Trustee of the Trust shall sell the shares of Common Stock held in the Trust to a person, designated by the Trustee, whose ownership of the shares of Common Stock will not violate the ownership limitations set forth in Subsection 6(b)(i). Upon such sale, the interest of the Charitable Beneficiary in the shares of Common Stock sold shall terminate and the Trustee shall distribute the net proceeds of the sale to the Purported Record Transferee and to the Charitable Beneficiary as provided in this Subsection 6(c)(iv). The Purported Record Transferee shall receive the lesser of (i) the price paid by the Purported Record Transferee for the shares of Common Stock in the transaction that resulted in such transfer to the Trust (or, if the event which resulted in the transfer to the Trust did not involve a purchase of such shares of Common Stock at Market Price, the Market Price of such shares of Common Stock on the day of the event which resulted in the transfer of such shares of Common Stock to the Trust) and (ii) the price per share received by the Trustee (net of any commissions and other expenses of sale) from the sale or other disposition of the shares of Common Stock held in the Trust. Any net sales proceeds in excess of the amount payable to the Purported Record Transferee shall be immediately paid to the Charitable Beneficiary together with any dividends or other distributions thereon. If, prior to the discovery by the Corporation that shares of such Common Stock have been transferred to the Trustee, such shares of Common Stock are sold by a Purported Record Transferee then (x) such shares of Common Stock shall be deemed to have been sold on behalf of the Trust and (y) to the extent that the Purported Record Transferee received an amount for such shares of Common Stock that exceeds the amount that such Purported Record Transferee was entitled to receive pursuant to this Subsection 6(c)(iv), such excess shall be paid to the Trustee upon demand.

(v) Common Stock transferred to the Trustee shall be deemed to have been offered for sale to the Corporation, or its designee, at a price per share equal to the lesser of (i) the price paid by the Purported Record Transferee for the shares of Common Stock in the transaction that resulted in such transfer to the Trust (or, if the event which resulted in the transfer to the Trust did not involve a purchase of such shares of Common Stock at Market Price, the Market Price of such shares of Common Stock on the day of the event which resulted in the transfer of such shares of Common Stock to the Trust) and (ii) the Market Price on the date the Corporation, or its designee, accepts such offer. The Corporation shall have the right to accept such offer until the Trustee has sold the shares of Common Stock held in the Trust pursuant to Subsection 6(c)(iv). Upon such a sale to the Corporation, the interest of the Charitable Beneficiary in the shares of Common Stock sold shall terminate and the Trustee shall distribute the net proceeds of the sale to the Purported Record Transferee and any dividends or other distributions held by the Trustee with respect to such Common Stock shall thereupon be paid to the Charitable Beneficiary.

(vi) By written notice to the Trustee, the Corporation shall designate one or more nonprofit organizations to be the Charitable Beneficiary of the interest in the Trust such that (i) the shares of Common Stock held in the Trust would not violate the restrictions set forth in Subsection 6(b)(i) in the hands of such Charitable Beneficiary and (ii) each Charitable Beneficiary is an organization described in Sections 170(b)(1)(A), 170(c)(2) and 501(c)(3) of the Code.

(d) Remedies For Breach . If the Board of Directors or a committee thereof or other designees if permitted by the MGCL shall at any time determine in good faith that a Transfer or other event has taken place in violation of Subsection 6(b) of this Article V or that a Person intends to acquire, has attempted to acquire or may acquire beneficial ownership (determined without reference to any rules of attribution), Beneficial Ownership or Constructive Ownership of any shares of the Corporation in violation of Subsection 6(b) of this Article V, the Board of Directors or a committee thereof or other designees if permitted by the MGCL shall take such action as it deems advisable to refuse to give effect or to prevent such Transfer, including, but not limited to, causing the Corporation to redeem shares of Common Stock, refusing to give effect to such Transfer on the books of the Corporation or instituting proceedings to enjoin such Transfer; provided, however, that any Transfers (or, in the case of events other than a Transfer, ownership or Constructive Ownership or Beneficial Ownership) in violation of Subsection 6(b)(i) of this Article V, shall automatically result in the transfer to a Trust as described in Subsection 6(b)(ii) and any Transfer in violation of Subsection 6(b)(iii) shall, subject to Section 9, automatically be void ab initio irrespective of any action (or non-action) by the Board of Directors.

(e) Notice of Restricted Transfer . Any Person who acquires or attempts to acquire shares in violation of Subsection 6(b) of this Article V, or any Person who is a Purported Beneficial Transferee such that an automatic transfer to a Trust results under Subsection 6(b)(ii) of this Article V, shall immediately give written notice to the Corporation of such event and shall provide to the Corporation such other information as the Corporation may request in order to determine the effect, if any, of such Transfer or attempted Transfer on the Corporation’s status as a REIT.

(f) Owners Required to Provide Information . From the Filing Date and prior to the Restriction Termination Date, each Person who is a beneficial owner or Beneficial Owner or Constructive Owner of shares of Common Stock and each Person (including the stockholder of record) who is holding shares of Common Stock for a beneficial owner or Beneficial Owner or Constructive Owner shall, on demand, provide to the Corporation a completed questionnaire containing the information regarding their ownership of such shares, as set forth in the regulations (as in effect from time to time) of the U.S. Department of Treasury under the Code. In addition, each Person who is a beneficial owner or Beneficial Owner or Constructive Owner of shares of Common Stock and each Person (including the stockholder of record) who is holding shares of Common Stock for a beneficial owner or Beneficial Owner or Constructive Owner shall, on demand, be required to disclose to the Corporation in writing such information as the Corporation may request in order to determine the effect, if any, of such stockholder’s actual and constructive ownership of shares of Common Stock on the Corporation’s status as a REIT and to ensure compliance with the Ownership Limit, or as otherwise permitted by the Board of Directors.

(g) Remedies Not Limited . Nothing contained in this Article V (but subject to Section 9 of this Article V) shall limit the authority of the Board of Directors to take such other action as it deems necessary or advisable to protect the Corporation and the interests of its stockholders by preservation of the Corporation’s status as a REIT.

(h) Ambiguity . In the case of an ambiguity in the application of any of the provisions of this Section 6 of this Article V, including any definition contained in Subsection 6(a), the Board of Directors shall have the power to determine the application of the provisions of this Section 6 with respect to any situation based on the facts known to it (subject, however, to the provisions of Section 9 of this Article V). In the event Section 6 requires an action by the Board of Directors and the Articles of Restatement or this Amendment to the Articles of Restatement fail to provide specific guidance with respect to such action, the Board of Directors shall have the power to determine the action to be taken so long as such action is not contrary to the provisions of Section 6. Absent a decision to the contrary by the Board of Directors (which the Board may make

in its sole and absolute discretion), if a Person would have (but for the remedies set forth in Subsection 6(b)(ii)) acquired Beneficial or Constructive Ownership of Common Stock in violation of Subsection 6(b)(i), such remedies (as applicable) shall apply first to the shares of Common Stock which, but for such remedies, would have been actually owned by such Person, and second to shares of Common Stock which, but for such remedies, would have been Beneficially Owned or Constructively Owned (but not actually owned) by such Person, pro rata among the Persons who actually own such shares of Common Stock based upon the relative number of the shares of Common Stock held by each such Person.

(i) Exceptions.

(i) Subject to Subsection 6(b)(i)(C) of this Article V, the Board of Directors, in its sole discretion, may exempt a Person from the limitation on a Person Beneficially Owning shares of Common Stock in excess of the Ownership Limit if the Board determines that such exemption will not cause any Individual’s Beneficial Ownership of shares of Common Stock to violate the Ownership Limit or that any such violation will not cause the Corporation to fail to qualify as a REIT under the Code.

(ii) Subject to Subsection 6(b)(i)(C) of this Article V, the Board of Directors, in its sole discretion, may exempt a Person from the limitation on a Person Constructively Owning Common Stock in excess of the Ownership Limit, as set forth in Subsection 6(b)(i)(B), of this Article V, if the Board determines that such Person does not and will not own, actually or Constructively, an interest in a tenant of the Corporation (or a tenant of any entity owned in whole or in part by the Corporation) that would cause the Corporation to own, actually or Constructively, more than a 9.8% interest (as set forth in Section 856(d)(2)(B) of the Code) in such tenant or that any such ownership would not cause the Corporation to fail to qualify as a REIT under the Code.

(iii) In granting a person an exemption under (i) or (ii) above, the Board of Directors may require such Person to make certain representations or undertakings or to agree that any violation or attempted violation of such representations or undertakings (or other action which is contrary to the restrictions contained in Subsection 6(b) of this Article V) will result in such Common Stock being transferred to a Trust in accordance with Subsection 6(b)(ii) of this Article V. Prior to granting any exception pursuant to Subsection 6(i)(i) or (ii) of this Article V, the Board of Directors may require a ruling from the IRS, or an opinion of counsel, in either case in form and substance satisfactory to the Board of Directors in its sole discretion, as it may deem necessary or advisable in order to determine or ensure the Corporation’s status as a REIT.

Section 7 . Legends . Each certificate for Common Stock and Preferred Stock shall bear the following legends:

Classes of Stock

THE CORPORATION IS AUTHORIZED TO ISSUE CAPITAL STOCK OF MORE THAN ONE CLASS, CONSISTING OF COMMON STOCK AND ONE OR MORE CLASSES OF PREFERRED STOCK. THE BOARD OF DIRECTORS IS AUTHORIZED TO DETERMINE THE PREFERENCES, LIMITATIONS AND RELATIVE RIGHTS OF ANY CLASS OF PREFERRED STOCK BEFORE THE ISSUANCE OF SHARES OF SUCH CLASS OF PREFERRED STOCK. THE CORPORATION WILL FURNISH, WITHOUT CHARGE, TO ANY STOCKHOLDER MAKING A WRITTEN REQUEST THEREFOR, A COPY OF THE CORPORATION’S ARTICLES OF RESTATEMENT AND A WRITTEN STATEMENT OF THE DESIGNATIONS, RELATIVE RIGHTS, PREFERENCES, CONVERSION OR OTHER RIGHTS, VOTING POWERS, RESTRICTIONS, LIMITATIONS AS TO DIVIDENDS AND OTHER DISTRIBUTIONS, QUALIFICATIONS AND TERMS AND CONDITIONS OF REDEMPTION OF THE STOCK OF EACH CLASS WHICH THE CORPORATION HAS THE AUTHORITY TO ISSUE AND, IF THE CORPORATION IS AUTHORIZED TO ISSUE ANY PREFERRED OR SPECIAL CLASS IN SERIES, (i) THE DIFFERENCES IN THE RELATIVE RIGHTS AND PREFERENCES BETWEEN THE SHARES OF EACH SERIES TO THE EXTENT SET, AND (ii) THE AUTHORITY OF THE BOARD OF DIRECTORS TO SET SUCH RIGHTS AND PREFERENCES OF SUBSEQUENT SERIES. REQUESTS FOR SUCH WRITTEN STATEMENT MAY BE DIRECTED TO THE SECRETARY OF THE CORPORATION AT ITS PRINCIPAL OFFICE.

Restriction on Ownership and Transfer

THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON BENEFICIAL AND CONSTRUCTIVE OWNERSHIP AND TRANSFER FOR THE PURPOSE OF THE CORPORATION’S MAINTENANCE OF ITS STATUS AS A REAL ESTATE INVESTMENT TRUST UNDER THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”). SUBJECT TO CERTAIN FURTHER RESTRICTIONS AND EXCEPT AS EXPRESSLY PROVIDED IN THE CORPORATION’S ARTICLES OF RESTATEMENT, (i) NO PERSON MAY BENEFICIALLY OR CONSTRUCTIVELY OWN SHARES OF THE CORPORATION’S COMMON STOCK IN EXCESS OF 9.8% (BY VALUE OR BY NUMBER OF SHARES, WHICHEVER IS MORE RESTRICTIVE) OF THE OUTSTANDING COMMON STOCK OF THE CORPORATION; (ii) NO PERSON MAY BENEFICIALLY OR CONSTRUCTIVELY OWN SHARES OF COMMON STOCK THAT WOULD RESULT IN THE CORPORATION BEING “CLOSELY HELD” UNDER SECTION 856(h) OF THE CODE OR OTHERWISE CAUSE THE CORPORATION TO FAIL TO QUALIFY AS A

REIT; AND (iii) NO PERSON MAY TRANSFER SHARES OF COMMON STOCK IF SUCH TRANSFER WOULD RESULT IN THE CAPITAL STOCK OF THE CORPORATION BEING OWNED BY FEWER THAN 100 PERSONS. ANY PERSON WHO BENEFICIALLY OR CONSTRUCTIVELY OWNS OR ATTEMPTS TO BENEFICIALLY OR CONSTRUCTIVELY OWN SHARES OF COMMON STOCK IN VIOLATION OF THE ABOVE LIMITATIONS MUST IMMEDIATELY NOTIFY THE CORPORATION. IF ANY OF THE RESTRICTIONS ON TRANSFER OR OWNERSHIP ARE VIOLATED, THE SHARES OF COMMON STOCK REPRESENTED HEREBY WILL BE AUTOMATICALLY TRANSFERRED TO THE TRUSTEE OF A TRUST FOR THE BENEFIT OF ONE OR MORE CHARITABLE BENEFICIARIES. IN ADDITION, THE CORPORATION MAY REDEEM SHARES UPON THE TERMS AND CONDITIONS SPECIFIED BY THE BOARD OF DIRECTORS IN ITS SOLE DISCRETION IF THE BOARD OF DIRECTORS DETERMINES THAT OWNERSHIP OR A TRANSFER OR OTHER EVENT MAY VIOLATE THE RESTRICTIONS DESCRIBED ABOVE. FURTHERMORE, UPON THE OCCURRENCE OF CERTAIN EVENTS, ATTEMPTED TRANSFERS IN VIOLATION OF THE RESTRICTIONS DESCRIBED ABOVE MAY BE VOID AB INITIO. ALL TERMS IN THIS LEGEND THAT ARE DEFINED IN THE ARTICLES OF RESTATEMENT OF THE CORPORATION SHALL HAVE THE MEANINGS ASCRIBED TO THEM IN THE ARTICLES OF RESTATEMENT OF THE CORPORATION, AS THE SAME MAY BE AMENDED FROM TIME TO TIME, A COPY OF WHICH, INCLUDING THE RESTRICTIONS ON TRANSFER AND OWNERSHIP, WILL BE FURNISHED TO EACH HOLDER OF SHARES OF COMMON STOCK ON REQUEST AND WITHOUT CHARGE. REQUESTS FOR SUCH A COPY MAY BE DIRECTED TO THE SECRETARY OF THE CORPORATION AT ITS PRINCIPAL OFFICE.

Section 8 . Severability . If any provision of this Article V or any application of any such provision is determined to be invalid by any federal or state court having jurisdiction over the issues, the validity of the remaining provision shall not be affected and other applications of such provisions shall be affected only to the extent necessary to comply with the determination of such court.

Section 9 . New York Stock Exchange . Nothing in this Article V shall preclude the settlement of any transaction entered into through the facilities of the New York Stock Exchange. The shares of Common Stock that are the subject of such a transaction shall continue to be subject to the provisions of this Article V after such settlement.

ARTICLE VI

AMENDMENTS AND EXTRAORDINARY ACTIONS

Section 1 . Notwithstanding any other provisions of these Articles or the Bylaws of the corporation (and notwithstanding any provision of law requiring a different proportion of the votes entitled to be cast by the stockholders in order to take or approve any such action) the affirmative vote of two-thirds of all votes entitled to be cast by the stockholders upon the matter shall be required to repeal any provision of, or adopt an amendment inconsistent with, Section 2, Section 3 or Section 4 of Article V.

Section 2 . The corporation reserves the right from time to time to amend, alter or repeal any provision contained in these Articles of Incorporation in the manner now or hereafter prescribed by statute, and all rights conferred on stockholders herein are subject to this reservation.

Section 3 . Except as specifically required in Sections 2 and 3 of Article V and in Section 1 of this Article VI of the charter of the corporation, notwithstanding any provision of law requiring a greater proportion of the votes entitled to be cast by the stockholders in order to take or approve any action, such action shall be valid and effective if taken or approved by the affirmative vote of a majority of all votes entitled to be cast by the stockholders on the matter.

ARTICLE VII

PERPETUAL EXISTENCE

The period of the existence of the corporation is to be perpetual.

ARTICLE VIII

LIMITATION ON PERSONAL LIABILITY OF DIRECTORS AND OFFICERS

A director or officer shall not be personally liable to the corporation or its stockholders for money damages unless (i) it is proved that the person actually received an improper benefit or profit in money, property, or services, for the amount of the benefit or profit in money, property, or services actually received or (ii) a judgment or other final adjudication adverse to the person is entered in a proceeding, based on a finding in the proceeding that the person’s action, or failure to act, was the result of active and deliberate dishonesty and was material to the cause of action adjudicated in the proceeding.

If the General Corporation Law of the State of Maryland is hereafter amended to authorize corporate action further limiting or eliminating the personal liability of directors or officers or expanding such liability, then the liability of directors or officers to the corporation or its stockholders shall be limited or eliminated to the fullest extent permitted by the Maryland General Corporation Law, as so amended from time to time. Any repeal or modification of this Article VIII by the stockholders of the corporation shall be prospective only, and shall not adversely affect any limitation on the personal liability of a director or officer of the corporation existing at the time of such repeal or modification.

THIRD : These Articles of Restatement do not amend the Charter.

FOURTH : Under Section 2-608(c) of the MGCL, upon any restatement of the Charter, the Corporation may omit from such restatement all provisions thereof that relate solely to a class of stock if, at the time, there are no shares of the class outstanding and the Corporation has no authority to issue any shares of such class. There are no shares of the Corporation’s 7 ⁷ / 8 % Series A Cumulative Redeemable Preferred Stock (the “Series A Preferred Stock”), 8.70% Series B Cumulative Redeemable Preferred Stock (the “Series B Preferred Stock”), 8.60% Series C Cumulative Redeemable Preferred Stock (the “Series C Preferred Stock”) and Series D Junior Participating Preferred Stock (the “Series D Preferred Stock”) outstanding and the Corporation has no authority to issue any shares of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or Series D Preferred Stock. All Charter provisions that relate solely to the Corporation’s Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock have been omitted from the foregoing restatement of the Charter.

FIFTH : The foregoing restatement of the Charter has been approved by a majority of the entire Board of Directors.

SIXTH : The current address of the principal office of the Corporation is as set forth in Article III of the foregoing restatement of the Charter.

SEVENTH : The name and address of the Corporation’s current resident agent is as set forth in Article III of the foregoing restatement of the Charter.

EIGHTH : There are currently ten directors of the Corporation, and the names of those directors currently in office are as follows: Mary A. Cirillo, Robert R. Fanning, Jr., James F. Flaherty III, David B. Henry, Harold M. Messmer, Jr., Michael D. McKee, Peter L. Rhein, Kenneth B. Roath, Richard M. Rosenberg and Joseph P. Sullivan.

NINTH : The undersigned President acknowledges these Articles of Restatement to be the corporate act of the Corporation and, as to all matters or facts required to be verified under oath, the undersigned President acknowledges that to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the Corporation has caused these Articles of Restatement to be signed in its name and on its behalf by its President and attested to by its Secretary on this 2nd day of August, 2004.

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EXHIBIT I

HEALTH CARE PROPERTY INVESTORS, INC.

7.25% SERIES E CUMULATIVE REDEEMABLE PREFERRED STOCK

The number of shares, designation, preferences, rights, voting powers, restrictions, limitations, qualifications, terms and conditions of redemption and other terms and conditions of the separate series of Preferred Stock of Health Care Property Investors, Inc. (the “Corporation”) designated as the 7.25% Series E Cumulative Redeemable Preferred Stock are as follows (collectively, the “Series E Terms”):

A. Designation and Number . A series of Preferred Stock, designated the “7.25% Series E Cumulative Redeemable Preferred Stock” (the “Series E Preferred Stock”), is hereby established. The number of shares of the Series E Preferred Stock shall be 4,140,000. The Series E Preferred Stock shall be considered a class of stock of the Corporation which is separate from the Corporation’s common stock, par value $1.00 per share (the “Common Stock”).

B. Maturity . The Series E Preferred Stock has no stated maturity and will not be subject to any sinking fund or mandatory or other redemption, except as provided in Paragraphs F and H.

C. Rank . The Series E Preferred Stock will, with respect to dividend rights and rights upon liquidation, dissolution or winding up of the Corporation, rank (i) senior to the Common Stock of the Corporation and to all equity securities issued by the Corporation ranking junior to the Series E Preferred Stock with respect to dividend rights or rights upon liquidation, dissolution or winding up of the Corporation; (ii) on a parity with all equity securities issued by the Corporation the terms of which specifically provide that such equity securities rank on a parity with the Series E Preferred Stock with respect to dividend rights or rights issued by the Corporation upon liquidation, dissolution or winding up of the Corporation; and (iii) junior to all equity securities the terms of which specifically provide that such equity securities rank senior to the Series E Preferred Stock with respect to dividend rights or rights upon liquidation, dissolution or winding up of the Corporation. The term “equity securities” does not include convertible debt securities, which will rank senior to the Series E Preferred Stock prior to conversion.

D. Dividends .

(1) Holders of shares of the Series E Preferred Stock are entitled to receive, when, as, and if declared by the Board of Directors, out of funds of the Corporation legally available for the payment of dividends, cumulative preferential cash dividends at the rate of 7.25% of the Liquidation Preference (as defined below) per annum per share (equivalent to $1.8125 per annum per share). Dividends on the Series E Preferred Stock shall be cumulative from the date of original issue and shall be payable quarterly in arrears on or about the last day of each March, June, September and December, or, if not a business day, the next succeeding business day (each, a “Dividend Payment Date”). The first dividend on the Series E Preferred

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Stock is scheduled to be paid on December 31, 2003. Any dividend payable on the Series E Preferred Stock, including dividends payable for any partial dividend period which will be prorated (including the first dividend), will be computed on the basis of a 360-day year consisting of twelve 30-day months. Dividends will be payable to holders of record as they appear in the stock records of the Corporation at the close of business on the applicable record date, which shall be the 15th day of the calendar month in which the applicable Dividend Payment Date falls or on such other date designated by the Board of Directors of the Corporation for the payment of dividends that is not more than 30 nor less than 10 days prior to such Dividend Payment Date (each, a “Dividend Record Date”). Notwithstanding any provision to the contrary contained herein, each outstanding share of Series E Preferred Stock shall be entitled to receive, and shall receive, a dividend with respect to any Dividend Record Date equal to the dividend paid with respect to each other share of Series E Preferred Stock which is outstanding on such date.

(2) No dividends on shares of Series E Preferred Stock shall be declared by the Board of Directors or paid or set apart for payment by the Corporation at such time as the terms and provisions of any agreement of the Corporation, including any agreement relating to its indebtedness, prohibits such declaration, payment or setting apart for payment or provides that such declaration, payment or setting apart for payment would constitute a breach thereof or a default thereunder, or if such declaration or payment shall be restricted or prohibited by law.

(3) Notwithstanding the foregoing, dividends on the Series E Preferred Stock will accrue whether or not the Corporation has earnings, whether or not there are funds legally available for the payment of such dividends and whether or not such dividends are declared. Accrued but unpaid dividends on the Series E Preferred Stock will not bear interest and holders of the Series E Preferred Stock will not be entitled to any dividends in excess of full cumulative dividends described above. Any dividend payment made on the Series E Preferred Stock shall first be credited against the earliest accrued but unpaid dividend due with respect to such shares that remains payable.

(4) If, for any taxable year, the Corporation elects to designate as a “capital gain dividend” (as defined in Section 857 of the Internal Revenue Code of 1986, as amended (the “Code”)) any portion (the “Capital Gains Amount”) of the dividends (as determined for federal income tax purposes) paid or made available for the year to holders of all classes of the Corporation’s stock (the “Total Dividends”), then the portion of the Capital Gains Amount that shall be allocable to the holders of Series E Preferred Stock shall be in proportion to the amount that the total dividends (as determined for federal income tax purposes) paid or made available to the holders of the Series E Preferred Stock for the year bears to the Total Dividends. A similar allocation will be made with respect to any undistributed long-term capital gains of the Corporation which are to be included in its stockholders’ long-term capital gains, based on the allocation of the Capital Gains Amount which would have resulted if such undistributed long-term capital gains had been distributed as “capital gains dividends” by the Corporation to its stockholders.

(5) No full dividends will be declared or paid or set apart for payment on any class or series of Preferred Stock ranking, as to dividends, on a parity with or junior to the Series

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E Preferred Stock (other than a dividend in shares of any class of stock ranking junior to the Series E Preferred Stock as to dividends and upon liquidation) for any period unless full cumulative dividends have been or contemporaneously are declared and paid, or declared and a sum sufficient for the payment thereof is set apart for such payment, on the Series E Preferred Stock for all past dividend periods and the then current dividend period. When dividends are not paid in full (or a sum sufficient for such full payment is not so set apart) upon the Series E Preferred Stock and the shares of any other class or series of Preferred Stock ranking on a parity as to dividends with the Series E Preferred Stock all dividends declared upon the Series E Preferred Stock and any other class or series of Preferred Stock ranking on a parity as to dividends with the Series E Preferred Stock shall be declared pro rata so that the amount of dividends declared per share of Series E Preferred Stock and such other class or series of Preferred Stock shall in all cases bear to each other the same ratio that accrued dividends per share on the Series E Preferred Stock and such other class or series of Preferred Stock (which shall not include any accrual in respect of unpaid dividends for prior dividend periods if such Preferred Stock does not have a cumulative dividend) bear to each other.

(6) Except as provided in the immediately preceding paragraph, unless full cumulative dividends on the Series E Preferred Stock have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof is set apart for payment for all past dividend periods and the then current dividend period, no dividends (other than in shares of Common Stock or other shares of capital stock of the Corporation ranking junior to the Series E Preferred Stock as to dividends and upon liquidation) shall be declared or paid or set aside for payment nor shall any other distribution be declared or made upon the Common Stock, or any other capital stock of the Corporation ranking junior to or on a parity with the Series E Preferred Stock as to dividends or upon liquidation, nor shall any shares of Common Stock, or any other shares of capital stock of the Corporation ranking junior to or on a parity with the Series E Preferred Stock as to dividends or upon liquidation be redeemed, purchased or otherwise acquired for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any such shares of any such stock) by the Corporation (except by conversion into or exchange for other capital stock of the Corporation ranking junior to the Series E Preferred Stock as to dividends and upon liquidation, pursuant to Paragraph H of this Article THIRD to ensure the Corporation’s continued status as a REIT (as defined herein), or pursuant to comparable Charter provisions with respect to other classes or series of the Corporation’s stock).

E. Liquidation Preference . Upon any liquidation, dissolution or winding up of the affairs of the Corporation, voluntary or involuntary, the holders of shares of Series E Preferred Stock will be entitled to be paid out of the assets of the Corporation legally available for distribution to its stockholders a liquidation preference of $25 per share (the “Liquidation Preference”), plus an amount equal to any accrued and unpaid dividends to the date of payment, before any distribution of assets is made to holders of Common Stock or any other class or series of capital stock of the Corporation that ranks junior to the Series E Preferred Stock as to liquidation rights. If, upon any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the amounts payable with respect to the Series E Preferred Stock and any other shares of Preferred Stock of the Corporation ranking as to any such distribution on a parity with the Series E Preferred Stock are not paid in full, the holders of the Series E Preferred Stock and

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of such other shares of Preferred Stock of the Corporation will share ratably in any such distribution of assets of the Corporation in proportion to the full respective preferential amounts to which they are entitled. After payment to the holders of the Series E Preferred Stock of the full preferential amounts of the liquidating distribution to which they are entitled, the holders of the Series E Preferred Stock will be entitled to no further participation in any distribution of assets by the Corporation.

If such payment shall have been made in full to all holders of shares of Series E Preferred Stock (and any equity securities ranking on a parity with the Series E Preferred Stock as to rights upon liquidation, dissolution or winding up of the Corporation), the remaining assets of the Corporation shall be distributed among the holders of any other classes or series of stock ranking junior to the Series E Preferred Stock upon liquidation, dissolution or winding up, according to their respective rights and preferences and in each case according to their respective number of shares. The consolidation or merger of the Corporation with or into any other corporation, or the sale, lease or conveyance of all or substantially all of the property or business of the Corporation, shall not be deemed to constitute a liquidation, dissolution or winding up of the Corporation.

In determining whether a distribution (other than upon voluntary or involuntary liquidation) by dividend, redemption or other acquisition of shares of stock of the Corporation or otherwise is permitted under the MGCL, no effect shall be given to amounts that would be needed if the Corporation would be dissolved at the time of the distribution to satisfy the preferential rights upon distribution of holders of shares of stock of the Corporation whose preferential rights upon distribution are superior to those receiving the distribution.

F. Redemption .

(1) The Series E Preferred Stock is not redeemable prior to September 15, 2008. To ensure that the Corporation remains a qualified real estate investment trust (“REIT”) for federal and state income tax purposes, however, the Series E Preferred Stock shall be subject to the provisions of Paragraph H of this Article THIRD pursuant to which Series E Preferred Stock owned by a stockholder in violation of the restrictions set forth in Paragraph H of this Article THIRD or certain other limitations shall automatically be transferred to a Trust (as defined in Paragraph H of this Article THIRD) for the benefit of a Charitable Beneficiary (as defined in Paragraph H of this Article THIRD) and the Corporation shall have the right to purchase such shares, as provided in Paragraph H of this Article THIRD. On and after September 15, 2008, the Corporation, at its option, upon not less than 30 nor more than 60 days’ written notice, may redeem shares of the Series E Preferred Stock, in whole or in part, at any time or from time to time, for cash at a redemption price of $25 per share, plus all accrued and unpaid dividends thereon to the date fixed for redemption, without interest, to the extent the Corporation has funds legally available therefor. Holders of Series E Preferred Stock to be redeemed shall surrender such Series E Preferred Stock at the place designated in such notice and shall be entitled to the redemption price and any accrued and unpaid dividends payable upon such redemption following such surrender. If notice of redemption of any shares of Series E Preferred Stock has been given and if the funds necessary for such redemption have been set aside by the Corporation in trust for the benefit of the holders of any shares of Series E Preferred

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Stock so called for redemption, then from and after the redemption date dividends will cease to accrue on such shares of Series E Preferred Stock, such shares of Series E Preferred Stock shall no longer be deemed outstanding and all rights of the holders of such shares will terminate, except the right to receive the redemption price. If less than all of the outstanding Series E Preferred Stock is to be redeemed, the Series E Preferred Stock to be redeemed shall be selected pro rata (as nearly as may be practicable without creating fractional shares) or by any other equitable method determined by the Corporation.

(2) Unless full cumulative dividends on all shares of Series E Preferred Stock shall have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof set apart for payment for all past dividend periods and the then current dividend period, no shares of Series E Preferred Stock shall be redeemed unless all outstanding shares of Series E Preferred Stock are simultaneously redeemed and the Corporation shall not purchase or otherwise acquire directly or indirectly any shares of Series E Preferred Stock (except by exchange for capital stock of the Corporation ranking junior to the Series E Preferred Stock as to dividends and upon liquidation); provided, however, that the foregoing shall not prevent the purchase by the Corporation of shares of Series E Preferred Stock in order to ensure that the Corporation continues to meet the requirements for qualification as a REIT for federal and state income tax purposes, or the purchase or acquisition of shares of Series E Preferred Stock pursuant to a purchase or exchange offer made on the same terms to holders of all outstanding shares of Series E Preferred Stock. So long as no dividends are in arrears, the Corporation shall be entitled at any time and from time to time to repurchase shares of Series E Preferred Stock in open-market transactions duly authorized by the Board of Directors and effected in compliance with applicable laws.

(3) Notice of redemption will be given by publication in a newspaper of general circulation in the City of New York, such publication to be made once a week for two successive weeks commencing not less than 30 nor more than 60 days prior to the redemption date. A similar notice furnished by the Corporation will be mailed, postage prepaid, not less than 30 nor more than 60 days prior to the redemption date, addressed to the respective holders of record of the Series E Preferred Stock to be redeemed at their respective addresses as they appear on the stock transfer records of the transfer agent. No failure to give such notice or any defect therein or in the mailing thereof shall affect the validity of the proceedings for the redemption of any shares of Series E Preferred Stock except as to the holder to whom notice was defective or not given. Each notice shall state: (i) the redemption date; (ii) the redemption price; (iii) the number of shares of Series E Preferred Stock to be redeemed; (iv) the place or places where the Series E Preferred Stock is to be surrendered for payment of the redemption price; and (v) that dividends on the shares to be redeemed will cease to accrue on such redemption date. If less than all of the Series E Preferred Stock held by any holder is to be redeemed, the notice mailed to such holder shall also specify the number of shares of Series E Preferred Stock held by such holder to be redeemed.

(4) Immediately prior to any redemption of Series E Preferred Stock, the Corporation shall pay, in cash, any accumulated and unpaid dividends through the redemption date, unless a redemption date falls after a Dividend Record Date and on or prior to the corresponding Dividend Payment Date, in which case each holder of Series E Preferred Stock at

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the close of business on such Dividend Record Date shall be entitled to the dividend payable on such shares on the corresponding Dividend Payment Date notwithstanding the redemption of such shares on or before such Dividend Payment Date.

(5) From and after the redemption date (unless default shall be made by the Corporation in providing for the payment of the redemption price plus accumulated and unpaid dividends, if any), dividends shall cease to accumulate on the shares of Series E Preferred Stock called for redemption and all rights of the holders thereof (except the right to receive the redemption price plus accumulated and unpaid dividends, if any) shall cease.

(6) Any shares of Series E Preferred Stock that shall at any time have been redeemed shall, after such redemption, have the status of authorized but unissued Preferred Stock, without designation as to class or series until such shares are once more designated as part of a particular class or series of Preferred Stock by the Board of Directors.

G. Voting Rights .

(1) Holders of the Series E Preferred Stock will not have any voting rights, except as set forth below.

(2) Whenever dividends on any shares of Series E Preferred Stock shall be in arrears for six or more quarterly periods, whether or not consecutive, the holders of such shares of Series E Preferred Stock (voting separately as a class with all other classes or series of Preferred Stock upon which like voting rights have been conferred and are exercisable) will be entitled to vote for the election of a total of two additional directors of the Corporation at a special meeting called by the holders of record of at least 25% of the Series E Preferred Stock or the holders of any other series of Preferred Stock so in arrears, unless such request is received less than 90 days before the date fixed for the next annual or special meeting of stockholders, or at the next annual meeting of stockholders, and at each subsequent annual meeting, until all dividends accumulated on such shares of Series E Preferred Stock for the past dividend periods and the then current dividend period shall have been fully paid or declared and a sum sufficient for the payment thereof set aside for payment. In such case, the entire Board of Directors of the Corporation will be increased by two directors.

(3) So long as any shares of Series E Preferred Stock remain outstanding, the Corporation shall not, without the consent or the affirmative vote of the holders of at least two-thirds of the shares of the Series E Preferred Stock outstanding at the time, given in person or by proxy, either in writing or at a meeting (such Series E Preferred Stock voting separately as a class): (i) authorize, create or issue, or increase the authorized or issued amount of, any class or series of stock ranking prior to such Series E Preferred Stock with respect to the payment of dividends, or the distribution of assets on liquidation, dissolution or winding up, or reclassify any authorized stock of the Corporation into any such shares, or create, authorize or issue any obligation or security convertible into or evidencing the right to purchase any such shares or (ii) repeal, amend, or otherwise change any of the provisions applicable to the Series E Preferred Stock in any manner which materially and adversely affects the powers, preferences, voting power or other rights or privileges of the Series E Preferred Stock or the holders thereof;

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provided, however, that any increase in the amount of the authorized Preferred Stock or the creation or issuance of any other classes or series of Preferred Stock, or any increase in the amount of authorized shares of the Series E Preferred Stock or of any other class or series of Preferred Stock, in each case ranking on a parity with or junior to the Series E Preferred Stock, shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers.

(4) The foregoing voting provisions will not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required would occur, all outstanding shares of Series E Preferred Stock shall have been redeemed or called for redemption upon proper notice and sufficient funds shall have been deposited in trust to effect such redemption.

(5) Anything herein to the contrary notwithstanding, the holders of shares of Series E Preferred Stock will not have any voting rights with respect to, and the consent of the holders of Series E Preferred Stock is not required for, the taking of any corporate action, including any merger or consolidation involving the Corporation or a sale of all or substantially all of the assets of the Corporation, irrespective of the effect of such merger, consolidation or sale may have upon the powers, preferences, voting powers or other rights or privileges of the Series E Preferred Stock or the holders thereof.

(6) Except as expressly stated in these Series E Terms, the Series E Preferred Stock will not have any relative, participating, optional or other special voting rights and powers.

H. Restrictions on Ownership and Transfer to Preserve Tax Benefit .

(1) Definitions . For the purposes of Paragraph H of these Series E Terms, the following terms shall have the following meanings:

“Beneficial Ownership” shall mean ownership of Series E Preferred Stock by a Person who is or would be treated as an owner of such Series E Preferred Stock either actually or constructively through the application of Section 544 of the Code, as modified by Section 856(h)(1)(B) of the Code. The terms “Beneficial Owner,” “Beneficially Owns” and “Beneficially Owned” shall have the correlative meanings.

“Charitable Beneficiary” shall mean one or more beneficiaries of a Trust, as determined pursuant to Subparagraph H(3)(f) of these Series E Terms, each of which shall be an organization described in Sections 170(b)(1)(A), 170(c)(2) and 501(c)(3) of the Code.

“Code” shall mean the Internal Revenue Code of 1986, as amended. All section references to the Code shall include any successor provisions thereof as may be adopted from time to time.

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“Constructive Ownership” shall mean ownership of Series E Preferred Stock by a Person who is or would be treated as an owner of such Series E Preferred Stock either actually or constructively through the application of Section 318 of the Code, as modified by Section 856(d)(5) of the Code. The terms “Constructive Owner,” “Constructively Owns” and “Constructively Owned” shall have the correlative meanings.

“Individual” means an individual, a trust qualified under Section 401(a) or 501(c)(17) of the Code, a portion of a trust permanently set aside for or to be used exclusively for the purposes described in Section 642(c) of the Code, or a private foundation within the meaning of Section 509(a) of the Code, provided that a trust described in Section 401(a) of the Code and exempt from tax under Section 501(a) of the Code shall be excluded from this definition.

“IRS” shall mean the United States Internal Revenue Service.

“Market Price” shall mean the last reported sales price reported on the New York Stock Exchange of the Series E Preferred Stock on the trading day immediately preceding the relevant date, or if the Series E Preferred Stock is not then traded on the New York Stock Exchange, the last reported sales price of the Series E Preferred Stock on the trading day immediately preceding the relevant date as reported on any exchange or quotation system over which the Series E Preferred Stock may be traded, or if the Series E Preferred Stock is not then traded over any exchange or quotation system, then the market price of the Series E Preferred Stock on the relevant date as determined in good faith by the Board of Directors of the Corporation.

“Ownership Limit” shall mean 9.8% (by value or by number of shares, whichever is more restrictive) of the outstanding Series E Preferred Stock of the Corporation. The number and value of shares of outstanding Series E Preferred Stock of the Corporation shall be determined by the Board of Directors in good faith, which determination shall be conclusive for all purposes hereof.

“Person” shall mean an individual, corporation, partnership, limited liability company, estate, trust (including a trust qualified under Section 401(a) or 501(c)(17) of the Code), a portion of a trust permanently set aside for or to be used exclusively for the purposes described in Section 642(c) of the Code, association, private foundation within the meaning of Section 509(a) of the Code, joint stock company or other entity; but does not include an underwriter acting in a capacity as such in a public offering of shares of Series E Preferred Stock provided that the ownership of such shares of Series E Preferred Stock by such underwriter would not result in the Corporation being “closely held” within the meaning of Section 856(h) of the Code, or otherwise result in the Corporation failing to qualify as a REIT.

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“Purported Beneficial Transferee” shall mean, with respect to any purported Transfer (or other event) which results in a transfer to a Trust, as provided in Subparagraph H(2)(b) of these Series E Terms, the Purported Record Transferee, unless the Purported Record Transferee would have acquired or owned shares of Series E Preferred Stock for another Person who is the beneficial transferee or beneficial owner of such shares, in which case the Purported Beneficial Transferee shall be such Person.

“Purported Record Transferee” shall mean, with respect to any purported Transfer (or other event) which results in a transfer to a Trust, as provided in Subparagraph H(2)(b) of these Series E Terms, the record holder of the Series E Preferred Stock if such Transfer had been valid under Subparagraph H(2)(a) of these Series E Terms.

“REIT” shall mean a real estate investment trust under Sections 856 through 860 of the Code and, for purposes of taxation of the Corporation under applicable state law, comparable provisions of the law of such state.

“Restriction Termination Date” shall mean the first day after the date hereof on which the Board of Directors of the Corporation determines that it is no longer in the best interests of the Corporation to attempt to, or continue to, qualify as a REIT.

“Transfer” shall mean any sale, issuance, transfer, gift, assignment, devise or other disposition of Series E Preferred Stock as well as any other event that causes any Person to Beneficially Own or Constructively Own Series E Preferred Stock, including (i) the granting of any option or entering into any agreement for the sale, transfer or other disposition of Series E Preferred Stock or (ii) the sale, transfer, assignment or other disposition of any securities (or rights convertible into or exchangeable for Series E Preferred Stock), whether voluntary or involuntary, whether such transfer has occurred of record or of beneficial ownership or Beneficial Ownership or Constructive Ownership (including but not limited to transfers of interests in other entities which result in changes in Beneficial or Constructive Ownership of Series E Preferred Stock), and whether such transfer has occurred by operation of law or otherwise.

“Trust” shall mean each of the trusts provided for in Subparagraph H(3) of these Series E Terms.

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(2) Restriction on Ownership and Transfers .

(a) Prior to the Restriction Termination Date:

(i) except as provided in Subparagraph H(9) of these Series E Terms, no Person shall Beneficially Own Series E Preferred Stock in excess of the Ownership Limit;

(ii) except as provided in Subparagraph H(9) of these Series E Terms, no Person shall Constructively Own Series E Preferred Stock in excess of the Ownership Limit;

(iii) no Person shall Beneficially or Constructively Own Series E Preferred Stock which, taking into account any other capital stock of the Corporation Beneficially or Constructively Owned by such Person, would result in the Corporation being “closely held” within the meaning of Section 856(h) of the Code, or otherwise failing to qualify as a REIT (including but not limited to Beneficial or Constructive Ownership that would result in the Corporation owning (actually or Constructively) an interest in a tenant that is described in Section 856(d)(2)(B) of the Code if the income derived by the Corporation (either directly or indirectly through one or more subsidiaries) from such tenant would cause the Corporation to fail to satisfy any of the gross income requirements of Section 856(c) of the Code or comparable provisions of any applicable state law).

(b) If prior to the Restriction Termination Date, any Transfer (whether or not such Transfer is the result of a transaction entered into through the facilities of the New York Stock Exchange (“NYSE”)) or other event occurs that, if effective, would result in any Person Beneficially or Constructively Owning Series E Preferred Stock in violation of Subparagraph H(2)(a) of these Series E Terms, (1) then that number of shares of Series E Preferred Stock that otherwise would cause such Person to violate Subparagraph H(2)(a) of these Series E Terms (rounded up to the nearest whole share) shall be automatically transferred to a Trust for the benefit of a Charitable Beneficiary, as described in Subparagraph H(3), effective as of the close of business on the business day prior to the date of such Transfer or other event, and such Purported Beneficial Transferee shall thereafter have no rights in such shares or (2) if, for any reason, the transfer to the Trust described in clause (1) of this sentence is not automatically effective as provided therein to prevent any Person from Beneficially or Constructively Owning Series E Preferred Stock in violation of Subparagraph H(2)(a) of these Series E Terms, then the Transfer of that number of shares of Series E Preferred Stock that otherwise would cause any Person to violate Subparagraph H(2)(a) shall be void ab initio, and the Purported Beneficial Transferee shall have no rights in such shares.

(c) Notwithstanding any other provisions contained herein, prior to the Restriction Termination Date, any Transfer of Series E Preferred Stock (whether or not such Transfer is the result of a transaction entered into through the facilities of the NYSE) that, if effective, would result in the capital stock of the Corporation being beneficially owned by less than 100 Persons (determined without reference to any rules of attribution) shall be void ab initio, and the intended transferee shall acquire no rights in such Series E Preferred Stock.

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(3) Transfers of Series E Preferred Stock in Trust .

(a) Upon any purported Transfer or other event described in Subparagraph H(2)(b) of these Series E Terms, such Series E Preferred Stock shall be deemed to have been transferred to the Trustee in his capacity as trustee of a Trust for the exclusive benefit of one or more Charitable Beneficiaries. Such transfer to the Trustee shall be deemed to be effective as of the close of business on the business day prior to the purported Transfer or other event that results in a transfer to the Trust pursuant to Subparagraph H(2)(b). The Trustee shall be appointed by the Corporation and shall be a Person unaffiliated with the Corporation, any Purported Beneficial Transferee or any Purported Record Transferee. Each Charitable Beneficiary shall be designated by the Corporation as provided in Subparagraph H(3)(f) of these Series E Terms.

(b) Series E Preferred Stock held by the Trustee shall be issued and outstanding Series E Preferred Stock of the Corporation. The Purported Beneficial Transferee or Purported Record Transferee shall have no rights in the shares of Series E Preferred Stock held by the Trustee. The Purported Beneficial Transferee or Purported Record Transferee shall not benefit economically from ownership of any shares held in trust by the Trustee, shall have no rights to dividends and shall not possess any rights to vote or other rights attributable to the shares of Series E Preferred Stock held in the Trust.

(c) The Trustee shall have all voting rights and rights to dividends with respect to Series E Preferred Stock held in the Trust, which rights shall be exercised for the exclusive benefit of the Charitable Beneficiary. Any dividend or distribution paid to or on behalf of the Purported Record Transferee or Purported Beneficial Transferee prior to the discovery by the Corporation that shares of Series E Preferred Stock have been transferred to the Trustee shall be paid to the Trustee upon demand, and any dividend or distribution declared but unpaid shall be paid when due to the Trustee with respect to such Series E Preferred Stock. Any dividends or distributions so paid over to the Trustee shall be held in trust for the Charitable Beneficiary.

The Purported Record Transferee and Purported Beneficial Transferee shall have no voting rights with respect to the Series E Preferred Stock held in the Trust and, subject to Maryland law, effective as of the date the Series E Preferred Stock has been transferred to the Trustee, the Trustee shall have the authority (at the Trustee’s sole discretion) (i) to rescind as void any vote cast by a Purported Record Transferee with respect to such Series E Preferred Stock prior to the discovery by the Corporation that the Series E Preferred Stock has been transferred to the Trustee and (ii) to recast such vote in accordance with the desires of the Trustee acting for the benefit of the Charitable Beneficiary; provided, however, that if the Corporation has already taken irreversible corporate action, then the Trustee shall not have the authority to rescind and recast such vote. Notwithstanding any other provision of these Series E Terms to the contrary, until the Corporation has received notification that the Series E Preferred Stock has been transferred into a Trust, the Corporation shall be entitled to rely on its share transfer and other stockholder records for purposes of preparing lists of stockholders entitled to vote at meetings, determining the validity and authority of proxies and otherwise conducting votes of stockholders.

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(d) Within 20 days of receiving notice from the Corporation that shares of Series E Preferred Stock have been transferred to the Trust, the Trustee of the Trust shall sell the shares of Series E Preferred Stock held in the Trust to a Person, designated by the Trustee, whose ownership of the shares of Series E Preferred Stock will not violate the ownership limitations set forth in Subparagraph H(2)(a). Upon such sale, the interest of the Charitable Beneficiary in the shares of Series E Preferred Stock sold shall terminate and the Trustee shall distribute the net proceeds of the sale to the Purported Record Transferee and to the Charitable Beneficiary as provided in this Subparagraph H(3)(d). The Purported Record Transferee shall receive the lesser of (1) the price paid by the Purported Record Transferee for the shares of Series E Preferred Stock in the transaction that resulted in such transfer to the Trust (or, if the event which resulted in the transfer to the Trust did not involve a purchase of such shares of Series E Preferred Stock at Market Price, the Market Price of such shares of Series E Preferred Stock on the day of the event which resulted in the transfer of such shares of Series E Preferred Stock to the Trust) and (2) the price per share received by the Trustee (net of any commissions and other expenses of sale) from the sale or other disposition of the shares of Series E Preferred Stock held in the Trust. Any net sales proceeds in excess of the amount payable to the Purported Record Transferee shall be immediately paid to the Charitable Beneficiary together with any dividends or other distributions thereon. If, prior to the discovery by the Corporation that shares of such Series E Preferred Stock have been transferred to the Trustee, such shares of Series E Preferred Stock are sold by a Purported Record Transferee then (i) such shares of Series E Preferred Stock shall be deemed to have been sold on behalf of the Trust and (ii) to the extent that the Purported Record Transferee received an amount for such shares of Series E Preferred Stock that exceeds the amount that such Purported Record Transferee was entitled to receive pursuant to this Subparagraph H(3)(d), such excess shall be paid to the Trustee upon demand.

(e) Series E Preferred Stock transferred to the Trustee shall be deemed to have been offered for sale to the Corporation, or its designee, at a price per share equal to the lesser of (i) the price paid by the Purported Record Transferee for the shares of Series E Preferred Stock in the transaction that resulted in such transfer to the Trust (or, if the event which resulted in the transfer to the Trust did not involve a purchase of such shares of Series E Preferred Stock at Market Price, the Market Price of such shares of Series E Preferred Stock on the day of the event which resulted in the transfer of such shares of Series E Preferred Stock to the Trust) and (ii) the Market Price on the date the Corporation, or its designee, accepts such offer. The Corporation shall have the right to accept such offer until the Trustee has sold the shares of Series E Preferred Stock held in the Trust pursuant to Subparagraph H(3)(d). Upon such a sale to the Corporation, the interest of the Charitable Beneficiary in the shares of Series E Preferred Stock sold shall terminate and the Trustee shall distribute the net proceeds of the sale to the Purported Record Transferee and any dividends or other distributions held by the Trustee with respect to such Series E Preferred Stock shall thereupon be paid to the Charitable Beneficiary.

(f) By written notice to the Trustee, the Corporation shall designate one or more nonprofit organizations to be the Charitable Beneficiary of the interest in the Trust such that the Series E Preferred Stock held in the Trust would not violate the restrictions set forth in Subparagraph H(2)(a) in the hands of such Charitable Beneficiary.

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(4) Remedies For Breach . If the Board of Directors or a committee thereof or other designees if permitted by the MGCL shall at any time determine in good faith that a Transfer or other event has taken place in violation of Subparagraph H(2) of these Series E Terms or that a Person intends to acquire, has attempted to acquire or may acquire beneficial ownership (determined without reference to any rules of attribution), Beneficial Ownership or Constructive Ownership of any shares of Series E Preferred Stock of the Corporation in violation of Subparagraph H(2) of these Series E Terms, the Board of Directors or a committee thereof or other designees if permitted by the MGCL shall take such action as it deems advisable to refuse to give effect or to prevent such Transfer, including, but not limited to, causing the Corporation to redeem shares of Series E Preferred Stock, refusing to give effect to such Transfer on the books of the Corporation or instituting proceedings to enjoin such Transfer; provided, however, that any Transfers (or, in the case of events other than a Transfer, ownership or Constructive Ownership or Beneficial Ownership) in violation of Subparagraph H(2)(a) of these Series E Terms, shall automatically result in the transfer to a Trust as described in Subparagraph H(2)(b) and any Transfer in violation of Subparagraph H(2)(c) shall automatically be void ab initio irrespective of any action (or non-action) by the Board of Directors.

(5) Notice of Restricted Transfer . Any Person who acquires or attempts to acquire shares of Series E Preferred Stock in violation of Subparagraph H(2) of these Series E Terms, or any Person who is a Purported Beneficial Transferee such that an automatic transfer to a Trust results under Subparagraph H(2)(b) of these Series E Terms, shall immediately give written notice to the Corporation of such event and shall provide to the Corporation such other information as the Corporation may request in order to determine the effect, if any, of such Transfer or attempted Transfer on the Corporation’s status as a REIT.

(6) Owners Required To Provide Information . Prior to the Restriction Termination Date each Person who is a beneficial owner or Beneficial Owner or Constructive Owner of Series E Preferred Stock and each Person (including the stockholder of record) who is holding Series E Preferred Stock for a beneficial owner or Beneficial Owner or Constructive Owner shall provide to the Corporation such information that the Corporation may request, in good faith, in order to determine the Corporation’s status as a REIT.

(7) Remedies Not Limited . Nothing contained in these Series E Terms (but subject to Subparagraph H(13) of these Series E Terms) shall limit the authority of the Board of Directors to take such other action as it deems necessary or advisable to protect the Corporation and the interests of its stockholders by preservation of the Corporation’s status as a REIT.

(8) Ambiguity . In the case of an ambiguity in the application of any of the provisions of this Paragraph H of these Series E Terms, including any definition contained in Subparagraph H(1), the Board of Directors shall have the power to determine the application of the provisions of this Paragraph H with respect to any situation based on the facts known to it (subject, however, to the provisions of Subparagraph H(13) of these Series E Terms). In the event Paragraph H requires an action by the Board of Directors and these Series E Terms fail to

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provide specific guidance with respect to such action, the Board of Directors shall have the power to determine the action to be taken so long as such action is not contrary to the provisions of Paragraph H. Absent a decision to the contrary by the Board of Directors (which the Board of Directors may make in its sole and absolute discretion), if a Person would have (but for the remedies set forth in Subparagraph H(2)) acquired Beneficial or Constructive Ownership of Series E Preferred Stock in violation of Subparagraph H(2)(a), such remedies (as applicable) shall apply first to the shares of Series E Preferred Stock which, but for such remedies, would have been actually owned by such Person, and second to shares of Series E Preferred Stock which, but for such remedies, would have been Beneficially Owned or Constructively Owned (but not actually owned) by such Person, pro rata, among the Persons who actually own such shares of Series E Preferred Stock based upon the relative number of the shares of Series E Preferred Stock held by each such Person.

(9) Exceptions .

(a) Subject to Subparagraph H(2)(a)(iii), the Board of Directors, in its sole discretion, may exempt (prospectively or retroactively) a Person from the limitation on a Person Beneficially Owning shares of Series E Preferred Stock in violation of Subparagraph H(2)(a)(i) if the Board of Directors determines that such exemption will not cause any Individual’s Beneficial Ownership of such shares of Series E Preferred Stock to violate Subparagraph H(2)(a)(i) and that any such violation will not cause the Corporation to fail to qualify as a REIT under the Code.

(b) Subject to Subparagraph H(2)(a)(iii), the Board of Directors, in its sole discretion, may exempt (prospectively or retroactively) a Person from the limitation on a Person Constructively Owning Series E Preferred Stock in violation of Subparagraph H(2)(a)(ii), if the Board of Directors determines that such Person does not and will not own, actually or Constructively, an interest in a tenant of the Corporation (or a tenant of any entity owned in whole or in part by the Corporation) that would cause the Corporation to own, actually or Constructively, more than a 9.8% interest (as set forth in Section 856(d)(2)(B) of the Code) in such tenant and that any such ownership would not cause the Corporation to fail to qualify as a REIT under the Code. Notwithstanding the foregoing, but subject to Subparagraph H(2)(a)(iii), a Person’s ownership of such an interest in a tenant shall not prevent the Board of Directors, in its sole discretion, from exempting such Person from the limitation on a Person Constructively Owning Series E Preferred Stock in violation of Subparagraph H(2)(a)(ii) if the Board of Directors determines that the resulting application of Section 856(d)(2)(B) of the Code would affect the characterization of less than 0.5% of the gross income (as such term is used in Section 856(c)(2) of the Code) of the Corporation in any taxable year, after taking into account the effect of this sentence with respect to all other Series E Preferred Stock to which this sentence applies.

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E Preferred Stock in excess of such percentage ownership of Series E Preferred Stock will be in violation of the Ownership Limit, and, provided further, that the new Ownership Limit would not allow five or fewer Persons to Beneficially Own more than 49% in value of the outstanding capital stock of the Company.

(d) In granting a person an exemption under Subparagraph H(9)(a) or (b) above, the Board of Directors may require such Person to make certain representations or undertakings or to agree that any violation or attempted violation of such representations or undertakings (or other action which is contrary to the restrictions contained in Subparagraph H(2)(a) of these Series E Terms) will result in such Series E Preferred Stock being transferred to a Trust in accordance with Subparagraph H(2)(b) of these Series E Terms. In granting any exception pursuant to Subparagraph H(9)(a) or (b) of these Series E Terms, the Board of Directors may require a ruling from the IRS, or an opinion of counsel, in either case in form and substance satisfactory to the Board of Directors in its sole discretion, as it may deem necessary or advisable in order to determine or ensure the Corporation’s status as a REIT.

(10) Preemptive Rights . No holder of shares of Series E Preferred Stock shall have any preemptive or preferential right to subscribe for or to purchase any additional shares of any series, or any bonds or convertible securities of any nature.

(11) Legends . Each certificate for Series E Preferred Stock shall bear the following legends:

CLASSES OF STOCK

“THE CORPORATION IS AUTHORIZED TO ISSUE MORE THAN ONE CLASS OF CAPITAL STOCK CONSISTING OF COMMON STOCK AND ONE OR MORE SERIES OF PREFERRED STOCK. THE BOARD OF DIRECTORS IS AUTHORIZED TO DETERMINE THE PREFERENCES, LIMITATIONS AND RELATIVE RIGHTS OF EACH SERIES OF PREFERRED STOCK BEFORE THE ISSUANCE OF ANY SUCH SERIES OF PREFERRED STOCK. THE CORPORATION WILL FURNISH, WITHOUT CHARGE, TO ANY STOCKHOLDER MAKING A REQUEST THEREFOR, A COPY OF THE CORPORATION’S CHARTER AND A FULL STATEMENT WITH RESPECT TO DESIGNATIONS AND ANY PREFERENCES, CONVERSION OR OTHER RIGHTS, VOTING POWERS, RESTRICTIONS, LIMITATIONS AS TO DIVIDENDS AND OTHER DISTRIBUTIONS, QUALIFICATIONS AND TERMS AND CONDITIONS OF REDEMPTION OF THE STOCK OF EACH CLASS WHICH THE CORPORATION HAS THE AUTHORITY TO ISSUE AND, SINCE THE CORPORATION IS AUTHORIZED TO ISSUE PREFERRED STOCK IN SERIES, (i) THE DIFFERENCES IN THE RELATIVE RIGHTS AND PREFERENCES BETWEEN THE SHARES OF EACH SERIES TO THE EXTENT SET, AND (ii) THE AUTHORITY OF THE BOARD OF DIRECTORS TO SET SUCH RIGHTS AND PREFERENCES OF SUBSEQUENT SERIES. REQUEST FOR SUCH WRITTEN STATEMENT MAY BE DIRECTED TO THE SECRETARY OF THE CORPORATION AT ITS PRINCIPAL OFFICE.”

RESTRICTION ON OWNERSHIP AND TRANSFER

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“THE SHARES OF SERIES E PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON BENEFICIAL AND CONSTRUCTIVE OWNERSHIP AND TRANSFER FOR THE PURPOSE OF THE CORPORATION’S MAINTENANCE OF ITS STATUS AS A REAL ESTATE INVESTMENT TRUST UNDER THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”). SUBJECT TO CERTAIN FURTHER RESTRICTIONS AND EXCEPT AS EXPRESSLY PROVIDED IN THE ARTICLES SUPPLEMENTARY FOR THE SERIES E PREFERRED STOCK, (i) NO PERSON MAY BENEFICIALLY OWN SHARES OF THE CORPORATION’S SERIES E PREFERRED STOCK IN EXCESS OF 9.8% (BY VALUE OR BY NUMBER OF SHARES, WHICHEVER IS MORE RESTRICTIVE) OF THE OUTSTANDING SERIES E PREFERRED STOCK OF THE CORPORATION; (ii) NO PERSON MAY CONSTRUCTIVELY OWN SHARES OF THE CORPORATION’S SERIES E PREFERRED STOCK IN EXCESS OF 9.8% (BY VALUE OR BY NUMBER OF SHARES, WHICHEVER IS MORE RESTRICTIVE) OF THE OUTSTANDING SERIES E PREFERRED STOCK OF THE CORPORATION; (iii) NO PERSON MAY BENEFICIALLY OR CONSTRUCTIVELY OWN SERIES E PREFERRED STOCK THAT, TAKING INTO ACCOUNT ANY OTHER CAPITAL STOCK OF THE CORPORATION BENEFICIALLY OR CONSTRUCTIVELY OWNED BY SUCH PERSON, WOULD RESULT IN THE CORPORATION BEING “CLOSELY HELD” UNDER SECTION 856(h) OF THE CODE OR OTHERWISE CAUSE THE CORPORATION TO FAIL TO QUALIFY AS A REIT; AND (iv) NO PERSON MAY TRANSFER SERIES E PREFERRED STOCK IF SUCH TRANSFER WOULD RESULT IN THE CAPITAL STOCK OF THE CORPORATION BEING OWNED BY FEWER THAN 100 PERSONS. ANY PERSON WHO BENEFICIALLY OR CONSTRUCTIVELY OWNS OR ATTEMPTS TO BENEFICIALLY OR CONSTRUCTIVELY OWN SERIES E PREFERRED STOCK WHICH CAUSES OR WILL CAUSE A PERSON TO BENEFICIALLY OR CONSTRUCTIVELY OWN SERIES E PREFERRED STOCK IN EXCESS OF THE ABOVE LIMITATIONS MUST IMMEDIATELY NOTIFY THE CORPORATION. IF ANY OF THE RESTRICTIONS ON TRANSFER OR OWNERSHIP ARE VIOLATED, THE SERIES E PREFERRED STOCK REPRESENTED HEREBY IN EXCESS OF SUCH RESTRICTIONS WILL BE AUTOMATICALLY TRANSFERRED TO THE TRUSTEE OF A TRUST FOR THE BENEFIT OF ONE OR MORE CHARITABLE BENEFICIARIES. IN ADDITION, THE CORPORATION MAY REDEEM SHARES UPON THE TERMS AND CONDITIONS SPECIFIED BY THE BOARD OF DIRECTORS IN ITS SOLE DISCRETION IF THE BOARD OF DIRECTORS DETERMINES THAT OWNERSHIP OR A TRANSFER OR OTHER EVENT MAY VIOLATE THE RESTRICTIONS DESCRIBED ABOVE. FURTHERMORE, UPON THE OCCURRENCE OF CERTAIN EVENTS, ATTEMPTED TRANSFERS IN VIOLATION OF THE RESTRICTIONS DESCRIBED ABOVE MAY BE VOID AB INITIO. ALL TERMS IN THIS LEGEND WHICH ARE DEFINED IN THE ARTICLES SUPPLEMENTARY FOR THE SERIES E PREFERRED STOCK SHALL HAVE THE MEANINGS ASCRIBED TO THEM IN SUCH ARTICLES SUPPLEMENTARY, AS THE SAME MAY BE AMENDED FROM TIME TO TIME, A COPY OF WHICH, INCLUDING THE RESTRICTIONS ON TRANSFER AND OWNERSHIP, WILL BE FURNISHED TO EACH HOLDER OF SERIES E PREFERRED STOCK ON REQUEST AND WITHOUT CHARGE. REQUESTS FOR SUCH A COPY MAY BE DIRECTED TO THE SECRETARY OF THE CORPORATION AT ITS PRINCIPAL OFFICE.”

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(12) Severability . If any provision of this Paragraph H or any application of any such provision is determined to be invalid by any federal or state court having jurisdiction over the issues, the validity of the remaining provisions shall not be affected and other applications of such provision shall be affected only to the extent necessary to comply with the determination of such court.

(13) NYSE . Nothing in this Paragraph H shall preclude the settlement of any transaction entered into through the facilities of the NYSE. The shares of Series E Preferred Stock that are the subject of such transaction shall continue to be subject to the provisions of this Paragraph H after such settlement.

(14) Applicability of Paragraph H . The provisions set forth in this Paragraph H shall apply to the Series E Preferred Stock notwithstanding any contrary provisions of the Series E Preferred Stock provided for elsewhere in these Series E Terms.

I. Conversion . The Series E Preferred Stock is not convertible into or exchangeable for any other property or securities of the Corporation.

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EXHIBIT II

HEALTH CARE PROPERTY INVESTORS, INC.

7.1% SERIES F CUMULATIVE REDEEMABLE PREFERRED STOCK

The number of shares, designation, preferences, rights, voting powers, restrictions, limitations, qualifications, terms and conditions of redemption and other terms and conditions of the separate series of Preferred Stock of Health Care Property Investors, Inc. (the “Corporation”) designated as the 7.1% Series F Cumulative Redeemable Preferred Stock are as follows (collectively, the “Series F Terms”):

A. Designation and Number . A series of Preferred Stock, designated the “7.1% Series F Cumulative Redeemable Preferred Stock” (the “Series F Preferred Stock”), is hereby established. The number of shares of the Series F Preferred Stock shall be 7,820,000. The Series F Preferred Stock shall be considered a class of stock of the Corporation which is separate from each of the Corporation’s common stock, par value $1.00 per share (the “Common Stock”), and the Series E Preferred Stock (as defined below).

B. Maturity . The Series F Preferred Stock has no stated maturity and will not be subject to any sinking fund or mandatory or other redemption, except as provided in Paragraphs F and H.

C. Rank . The Series F Preferred Stock will, with respect to dividend rights and rights upon liquidation, dissolution or winding up of the Corporation, rank (i) senior to the Common Stock of the Corporation, and to all equity securities issued by the Corporation ranking junior to the Series F Preferred Stock with respect to dividend rights or rights upon liquidation, dissolution or winding up of the Corporation; (ii) on a parity with the Corporation’s 7.25% Series E Cumulative Redeemable Preferred Stock (the “Series E Preferred Stock”), and with all equity securities issued by the Corporation the terms of which specifically provide that such equity securities rank on a parity with the Series F Preferred Stock with respect to dividend rights or rights issued by the Corporation upon liquidation, dissolution or winding up of the Corporation; and (iii) junior to all equity securities the terms of which specifically provide that such equity securities rank senior to the Series F Preferred Stock with respect to dividend rights or rights upon liquidation, dissolution or winding up of the Corporation. The term “equity securities” does not include convertible debt securities, which will rank senior to the Series F Preferred Stock prior to conversion.

D. Dividends .

(1) Holders of shares of the Series F Preferred Stock are entitled to receive, when, as, and if declared by the Board of Directors, out of funds of the Corporation legally available for the payment of dividends, cumulative preferential cash dividends at the rate of 7.10% of the Liquidation Preference (as defined below) per annum per share (equivalent to $1.775 per annum per share). Dividends on the Series F Preferred Stock shall be cumulative from the date of original issue and shall be payable quarterly in arrears on or about the last day of

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each March, June, September and December, or, if not a business day, the next succeeding business day (each, a “Dividend Payment Date”). The first dividend on the Series F Preferred Stock is scheduled to be paid on March 31, 2004. Any dividend payable on the Series F Preferred Stock, including dividends payable for any partial dividend period which will be prorated (including the first dividend), will be computed on the basis of a 360-day year consisting of twelve 30-day months. Dividends will be payable to holders of record as they appear in the stock records of the Corporation at the close of business on the applicable record date, which shall be the 15th day of the calendar month in which the applicable Dividend Payment Date falls or on such other date designated by the Board of Directors of the Corporation for the payment of dividends that is not more than 30 nor less than 10 days prior to such Dividend Payment Date (each, a “Dividend Record Date”). Notwithstanding any provision to the contrary contained herein, each outstanding share of Series F Preferred Stock shall be entitled to receive, and shall receive, a dividend with respect to any Dividend Record Date equal to the dividend paid with respect to each other share of Series F Preferred Stock which is outstanding on such date.

(2) No dividends on shares of Series F Preferred Stock shall be declared by the Board of Directors or paid or set apart for payment by the Corporation at such time as the terms and provisions of any agreement of the Corporation, including any agreement relating to its indebtedness, prohibits such declaration, payment or setting apart for payment or provides that such declaration, payment or setting apart for payment would constitute a breach thereof or a default thereunder, or if such declaration or payment shall be restricted or prohibited by law.

(3) Notwithstanding the foregoing, dividends on the Series F Preferred Stock will accrue whether or not the Corporation has earnings, whether or not there are funds legally available for the payment of such dividends and whether or not such dividends are declared. Accrued but unpaid dividends on the Series F Preferred Stock will not bear interest and holders of the Series F Preferred Stock will not be entitled to any dividends in excess of full cumulative dividends described above. Any dividend payment made on the Series F Preferred Stock shall first be credited against the earliest accrued but unpaid dividend due with respect to such shares that remains payable.

(4) If, for any taxable year, the Corporation elects to designate as a “capital gain dividend” (as defined in Section 857 of the Internal Revenue Code of 1986, as amended (the “Code”)) any portion (the “Capital Gains Amount”) of the dividends (as determined for federal income tax purposes) paid or made available for the year to holders of all classes of the Corporation’s stock (the “Total Dividends”), then the portion of the Capital Gains Amount that shall be allocable to the holders of Series F Preferred Stock shall be in proportion to the amount that the total dividends (as determined for federal income tax purposes) paid or made available to the holders of the Series F Preferred Stock for the year bears to the Total Dividends. A similar allocation will be made with respect to any undistributed long-term capital gains of the Corporation which are to be included in its stockholders’ long-term capital gains, based on the allocation of the Capital Gains Amount which would have resulted if such undistributed long-term capital gains had been distributed as “capital gains dividends” by the Corporation to its stockholders.

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(5) No full dividends will be declared or paid or set apart for payment on any class or series of Preferred Stock ranking, as to dividends, on a parity with or junior to the Series F Preferred Stock (other than a dividend in shares of any class of stock ranking junior to the Series F Preferred Stock as to dividends and upon liquidation) for any period unless full cumulative dividends have been or contemporaneously are declared and paid, or declared and a sum sufficient for the payment thereof is set apart for such payment, on the Series F Preferred Stock for all past dividend periods and the then current dividend period. When dividends are not paid in full (or a sum sufficient for such full payment is not so set apart) upon the Series F Preferred Stock and the shares of any other class or series of Preferred Stock ranking on a parity as to dividends with the Series F Preferred Stock (including the Series E Preferred Stock), all dividends declared upon the Series F Preferred Stock and any other class or series of Preferred Stock ranking on a parity as to dividends with the Series F Preferred Stock shall be declared pro rata so that the amount of dividends declared per share of Series F Preferred Stock and such other class or series of Preferred Stock shall in all cases bear to each other the same ratio that accrued dividends per share on the Series F Preferred Stock and such other class or series of Preferred Stock (which shall not include any accrual in respect of unpaid dividends for prior dividend periods if such Preferred Stock does not have a cumulative dividend) bear to each other.

(6) Except as provided in the immediately preceding paragraph, unless full cumulative dividends on the Series F Preferred Stock have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof is set apart for payment for all past dividend periods and the then current dividend period, no dividends (other than in shares of Common Stock or other shares of capital stock of the Corporation ranking junior to the Series F Preferred Stock as to dividends and upon liquidation) shall be declared or paid or set aside for payment nor shall any other distribution be declared or made upon the Common Stock, or any other capital stock of the Corporation ranking junior to or on a parity with the Series F Preferred Stock as to dividends or upon liquidation, nor shall any shares of Common Stock, or any other shares of capital stock of the Corporation ranking junior to or on a parity with the Series F Preferred Stock as to dividends or upon liquidation be redeemed, purchased or otherwise acquired for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any such shares of any such stock) by the Corporation (except by conversion into or exchange for other capital stock of the Corporation ranking junior to the Series F Preferred Stock as to dividends and upon liquidation, pursuant to Paragraph H of this Article THIRD to ensure the Corporation’s continued status as a REIT (as defined herein), or pursuant to comparable Charter provisions with respect to other classes or series of the Corporation’s stock).

E. Liquidation Preference . Upon any liquidation, dissolution or winding up of the affairs of the Corporation, voluntary or involuntary, the holders of shares of Series F Preferred Stock will be entitled to be paid out of the assets of the Corporation legally available for distribution to its stockholders a liquidation preference of $25 per share (the “Liquidation Preference”), plus an amount equal to any accrued and unpaid dividends to the date of payment, before any distribution of assets is made to holders of Common Stock or any other class or series of capital stock of the Corporation that ranks junior to the Series F Preferred Stock as to liquidation rights. If, upon any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the amounts payable with respect to the Series F Preferred Stock and any other

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shares of Preferred Stock of the Corporation ranking as to any such distribution on a parity with the Series F Preferred Stock (including the Series E Preferred Stock) are not paid in full, the holders of the Series F Preferred Stock and of such other shares of Preferred Stock of the Corporation (including the Series E Preferred Stock) will share ratably in any such distribution of assets of the Corporation in proportion to the full respective preferential amounts to which they are entitled. After payment to the holders of the Series F Preferred Stock of the full preferential amounts of the liquidating distribution to which they are entitled, the holders of the Series F Preferred Stock will be entitled to no further participation in any distribution of assets by the Corporation.

If such payment shall have been made in full to all holders of shares of Series F Preferred Stock (and any equity securities ranking on a parity with the Series F Preferred Stock as to rights upon liquidation, dissolution or winding up of the Corporation (including the Series E Preferred Stock)), the remaining assets of the Corporation shall be distributed among the holders of any other classes or series of stock ranking junior to the Series F Preferred Stock upon liquidation, dissolution or winding up, according to their respective rights and preferences and in each case according to their respective number of shares. The consolidation or merger of the Corporation with or into any other corporation, or the sale, lease or conveyance of all or substantially all of the property or business of the Corporation, shall not be deemed to constitute a liquidation, dissolution or winding up of the Corporation.

F. Redemption .

(1) The Series F Preferred Stock is not redeemable prior to December 3, 2008. To ensure that the Corporation remains a qualified real estate investment trust (“REIT”) for federal and state income tax purposes, however, the Series F Preferred Stock shall be subject to the provisions of Paragraph H of this Article THIRD pursuant to which Series F Preferred Stock owned by a stockholder in violation of the restrictions set forth in Paragraph H of this Article THIRD or certain other limitations shall automatically be transferred to a Trust (as defined in Paragraph H of this Article THIRD) for the benefit of a Charitable Beneficiary (as defined in Paragraph H of this Article THIRD) and the Corporation shall have the right to purchase such shares, as provided in Paragraph H of this Article THIRD. On and after December 3, 2008, the Corporation, at its option, upon not less than 30 nor more than 60 days’ written notice, may redeem shares of the Series F Preferred Stock, in whole or in part, at any time or from time to time, for cash at a redemption price of $25 per share, plus all accrued and unpaid dividends thereon to the date fixed for redemption, without interest, to the extent the Corporation has funds legally available therefor. Holders of Series F Preferred Stock to be redeemed shall surrender such Series F Preferred Stock at the place designated in such notice and shall be entitled to the redemption price and any accrued and unpaid dividends payable upon such redemption following

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such surrender. If notice of redemption of any shares of Series F Preferred Stock has been given and if the funds necessary for such redemption have been set aside by the Corporation in trust for the benefit of the holders of any shares of Series F Preferred Stock so called for redemption, then from and after the redemption date dividends will cease to accrue on such shares of Series F Preferred Stock, such shares of Series F Preferred Stock shall no longer be deemed outstanding and all rights of the holders of such shares will terminate, except the right to receive the redemption price. If less than all of the outstanding Series F Preferred Stock is to be redeemed, the Series F Preferred Stock to be redeemed shall be selected pro rata (as nearly as may be practicable without creating fractional shares) or by any other equitable method determined by the Corporation.

(2) Unless full cumulative dividends on all shares of Series F Preferred Stock shall have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof set apart for payment for all past dividend periods and the then current dividend period, no shares of Series F Preferred Stock shall be redeemed unless all outstanding shares of Series F Preferred Stock are simultaneously redeemed and the Corporation shall not purchase or otherwise acquire directly or indirectly any shares of Series F Preferred Stock (except by exchange for capital stock of the Corporation ranking junior to the Series F Preferred Stock as to dividends and upon liquidation); provided, however, that the foregoing shall not prevent the purchase by the Corporation of shares of Series F Preferred Stock in order to ensure that the Corporation continues to meet the requirements for qualification as a REIT for federal and state income tax purposes, or the purchase or acquisition of shares of Series F Preferred Stock pursuant to a purchase or exchange offer made on the same terms to holders of all outstanding shares of Series F Preferred Stock. So long as no dividends are in arrears, the Corporation shall be entitled at any time and from time to time to repurchase shares of Series F Preferred Stock in open-market transactions duly authorized by the Board of Directors and effected in compliance with applicable laws.

(3) Notice of redemption will be given by publication in a newspaper of general circulation in the City of New York, such publication to be made once a week for two successive weeks commencing not less than 30 nor more than 60 days prior to the redemption date. A similar notice furnished by the Corporation will be mailed, postage prepaid, not less than 30 nor more than 60 days prior to the redemption date, addressed to the respective holders of record of the Series F Preferred Stock to be redeemed at their respective addresses as they appear on the stock transfer records of the transfer agent. No failure to give such notice or any defect therein or in the mailing thereof shall affect the validity of the proceedings for the redemption of any shares of Series F Preferred Stock except as to the holder to whom notice was defective or not given. Each notice shall state: (i) the redemption date; (ii) the redemption price; (iii) the number of shares of Series F Preferred Stock to be redeemed; (iv) the place or places where the Series F Preferred Stock is to be surrendered for payment of the redemption price; and (v) that dividends on the shares to be redeemed will cease to accrue on such redemption date. If less than all of the Series F Preferred Stock held by any holder is to be redeemed, the notice mailed to such holder shall also specify the number of shares of Series F Preferred Stock held by such holder to be redeemed.

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(4) Immediately prior to any redemption of Series F Preferred Stock, the Corporation shall pay, in cash, any accumulated and unpaid dividends through the redemption date, unless a redemption date falls after a Dividend Record Date and on or prior to the corresponding Dividend Payment Date, in which case each holder of Series F Preferred Stock at the close of business on such Dividend Record Date shall be entitled to the dividend payable on such shares on the corresponding Dividend Payment Date notwithstanding the redemption of such shares on or before such Dividend Payment Date.

(5) From and after the redemption date (unless default shall be made by the Corporation in providing for the payment of the redemption price plus accumulated and unpaid dividends, if any), dividends shall cease to accumulate on the shares of Series F Preferred Stock called for redemption and all rights of the holders thereof (except the right to receive the redemption price plus accumulated and unpaid dividends, if any) shall cease.

(6) Any shares of Series F Preferred Stock that shall at any time have been redeemed shall, after such redemption, have the status of authorized but unissued Preferred Stock, without designation as to class or series until such shares are once more designated as part of a particular class or series of Preferred Stock by the Board of Directors.

G. Voting Rights .

(1) Holders of the Series F Preferred Stock will not have any voting rights, except as set forth below.

(2) Whenever dividends on any shares of Series F Preferred Stock shall be in arrears for six or more quarterly periods, whether or not consecutive, the holders of such shares of Series F Preferred Stock (voting separately as a class with all other classes or series of Preferred Stock upon which like voting rights have been conferred, including the Series E Preferred Stock, and are exercisable) will be entitled to vote for the election of a total of two additional directors of the Corporation at a special meeting called by the holders of record of at least 25% of the Series F Preferred Stock or the holders of any other series of Preferred Stock so in arrears, unless such request is received less than 90 days before the date fixed for the next annual or special meeting of stockholders, or at the next annual meeting of stockholders, and at each subsequent annual meeting, until all dividends accumulated on such shares of Series F Preferred Stock for the past dividend periods and the then current dividend period shall have been fully paid or declared and a sum sufficient for the payment thereof set aside for payment. In such case, the entire Board of Directors of the Corporation will be increased by two directors.

(3) So long as any shares of Series F Preferred Stock remain outstanding, the Corporation shall not, without the consent or the affirmative vote of the holders of at least two-thirds of the shares of the Series F Preferred Stock outstanding at the time, given in person or by proxy, either in writing or at a meeting (such Series F Preferred Stock voting separately as a class): (i) authorize, create or issue, or increase the authorized or issued amount of, any class or series of stock ranking prior to such Series F Preferred Stock with respect to the payment of dividends, or the distribution of assets on liquidation, dissolution or winding up, or reclassify any authorized stock of the Corporation into any such shares, or create, authorize or issue any

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obligation or security convertible into or evidencing the right to purchase any such shares or (ii) repeal, amend, or otherwise change any of the provisions applicable to the Series F Preferred Stock in any manner which materially and adversely affects the powers, preferences, voting power or other rights or privileges of the Series F Preferred Stock or the holders thereof; provided, however, that any increase in the amount of the authorized Preferred Stock or the creation or issuance of any other classes or series of Preferred Stock, or any increase in the amount of authorized shares of the Series F Preferred Stock or of any other class or series of Preferred Stock, in each case ranking on a parity, including the Series E Preferred Stock, with or junior to the Series F Preferred Stock, shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers.

(4) The foregoing voting provisions will not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required would occur, all outstanding shares of Series F Preferred Stock shall have been redeemed or called for redemption upon proper notice and sufficient funds shall have been deposited in trust to effect such redemption.

(5) Anything herein to the contrary notwithstanding, the holders of shares of Series F Preferred Stock will not have any voting rights with respect to, and the consent of the holders of Series F Preferred Stock is not required for, the taking of any corporate action, including any merger or consolidation involving the Corporation or a sale of all or substantially all of the assets of the Corporation, irrespective of the effect of such merger, consolidation or sale may have upon the powers, preferences, voting powers or other rights or privileges of the Series F Preferred Stock or the holders thereof.

(6) Except as expressly stated in these Series F Terms, the Series F Preferred Stock will not have any relative, participating, optional or other special voting rights and powers.

H. Restrictions on Ownership and Transfer to Preserve Tax Benefit .

(1) Definitions . For the purposes of Paragraph H of these Series F Terms, the following terms shall have the following meanings:

“Beneficial Ownership” shall mean ownership of Series F Preferred Stock by a Person who is or would be treated as an owner of such Series F Preferred Stock either actually or constructively through the application of Section 544 of the Code, as modified by Section 856(h)(1)(B) of the Code. The terms “Beneficial Owner,” “Beneficially Owns” and “Beneficially Owned” shall have the correlative meanings.

“Charitable Beneficiary” shall mean one or more beneficiaries of a Trust, as determined pursuant to Subparagraph H(3)(f) of these Series F Terms, each of which shall be an organization described in Sections 170(b)(1)(A), 170(c)(2) and 501(c)(3) of the Code.

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“Code” shall mean the Internal Revenue Code of 1986, as amended. All section references to the Code shall include any successor provisions thereof as may be adopted from time to time.

“Constructive Ownership” shall mean ownership of Series F Preferred Stock by a Person who is or would be treated as an owner of such Series F Preferred Stock either actually or constructively through the application of Section 318 of the Code, as modified by Section 856(d)(5) of the Code. The terms “Constructive Owner,” “Constructively Owns” and “Constructively Owned” shall have the correlative meanings.

“IRS” shall mean the United States Internal Revenue Service.

“Market Price” shall mean the last reported sales price reported on the New York Stock Exchange of the Series F Preferred Stock on the trading day immediately preceding the relevant date, or if the Series F Preferred Stock is not then traded on the New York Stock Exchange, the last reported sales price of the Series F Preferred Stock on the trading day immediately preceding the relevant date as reported on any exchange or quotation system over which the Series F Preferred Stock may be traded, or if the Series F Preferred Stock is not then traded over any exchange or quotation system, then the market price of the Series F Preferred Stock on the relevant date as determined in good faith by the Board of Directors of the Corporation.

“Ownership Limit” shall mean 9.8% (by value or by number of shares, whichever is more restrictive) of the outstanding Series F Preferred Stock of the Corporation. The number and value of shares of outstanding Series F Preferred Stock of the Corporation shall be determined by the Board of Directors in good faith, which determination shall be conclusive for all purposes hereof.

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not include an underwriter acting in a capacity as such in a public offering of shares of Series F Preferred Stock provided that the ownership of such shares of Series F Preferred Stock by such underwriter would not result in the Corporation being “closely held” within the meaning of Section 856(h) of the Code, or otherwise result in the Corporation failing to qualify as a REIT.

“Purported Beneficial Transferee” shall mean, with respect to any purported Transfer (or other event) which results in a transfer to a Trust, as provided in Subparagraph H(2)(b) of these Series F Terms, the Purported Record Transferee, unless the Purported Record Transferee would have acquired or owned shares of Series F Preferred Stock for another Person who is the beneficial transferee or beneficial owner of such shares, in which case the Purported Beneficial Transferee shall be such Person.

“Purported Record Transferee” shall mean, with respect to any purported Transfer (or other event) which results in a transfer to a Trust, as provided in Subparagraph H(2)(b) of these Series F Terms, the record holder of the Series F Preferred Stock if such Transfer had been valid under Subparagraph H(2)(a) of these Series F Terms.

“Transfer” shall mean any sale, issuance, transfer, gift, assignment, devise or other disposition of Series F Preferred Stock as well as any other event that causes any Person to Beneficially Own or Constructively Own Series F Preferred Stock, including (i) the granting of any option or entering into any agreement for the sale, transfer or other disposition of Series F Preferred Stock or (ii) the sale, transfer, assignment or other disposition of any securities (or rights convertible into or exchangeable for Series F Preferred Stock), whether voluntary or involuntary, whether such transfer has occurred of record or of beneficial ownership or Beneficial Ownership or Constructive Ownership (including but not limited to transfers of interests in other entities which result in changes in Beneficial or Constructive Ownership of Series F Preferred Stock), and whether such transfer has occurred by operation of law or otherwise.

“Trust” shall mean each of the trusts provided for in Subparagraph H(3) of these Series F Terms.

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(2) Restriction on Ownership and Transfers .

(a) Prior to the Restriction Termination Date:

(i) except as provided in Subparagraph H(9) of these Series F Terms, no Person shall Beneficially Own Series F Preferred Stock in excess of the Ownership Limit;

(ii) except as provided in Subparagraph H(9) of these Series F Terms, no Person shall Constructively Own Series F Preferred Stock in excess of the Ownership Limit;

(iii) no Person shall Beneficially or Constructively Own Series F Preferred Stock which, taking into account any other capital stock of the Corporation Beneficially or Constructively Owned by such Person, would result in the Corporation being “closely held” within the meaning of Section 856(h) of the Code, or otherwise failing to qualify as a REIT (including but not limited to Beneficial or Constructive Ownership that would result in the Corporation owning (actually or Constructively) an interest in a tenant that is described in Section 856(d)(2)(B) of the Code if the income derived by the Corporation (either directly or indirectly through one or more subsidiaries) from such tenant would cause the Corporation to fail to satisfy any of the gross income requirements of Section 856(c) of the Code or comparable provisions of any applicable state law).

(b) If prior to the Restriction Termination Date, any Transfer (whether or not such Transfer is the result of a transaction entered into through the facilities of the New York Stock Exchange (“NYSE”)) or other event occurs that, if effective, would result in any Person Beneficially or Constructively Owning Series F Preferred Stock in violation of Subparagraph H(2)(a) of these Series F Terms, (1) then that number of shares of Series F Preferred Stock that otherwise would cause such Person to violate Subparagraph H(2)(a) of these Series F Terms (rounded up to the nearest whole share) shall be automatically transferred to a Trust for the benefit of a Charitable Beneficiary, as described in Subparagraph H(3), effective as of the close of business on the business day prior to the date of such Transfer or other event, and such Purported Beneficial Transferee shall thereafter have no rights in such shares or (2) if, for any reason, the transfer to the Trust described in clause (1) of this sentence is not automatically effective as provided therein to prevent any Person from Beneficially or Constructively Owning Series F Preferred Stock in violation of Subparagraph H(2)(a) of these Series F Terms, then the Transfer of that number of shares of Series F Preferred Stock that otherwise would cause any Person to violate Subparagraph H(2)(a) shall be void ab initio, and the Purported Beneficial Transferee shall have no rights in such shares.

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(c) Notwithstanding any other provisions contained herein, prior to the Restriction Termination Date, any Transfer of Series F Preferred Stock (whether or not such Transfer is the result of a transaction entered into through the facilities of the NYSE) that, if effective, would result in the capital stock of the Corporation being beneficially owned by less than 100 Persons (determined without reference to any rules of attribution) shall be void ab initio, and the intended transferee shall acquire no rights in such Series F Preferred Stock.

(3) Transfers of Series F Preferred Stock in Trust .

(a) Upon any purported Transfer or other event described in Subparagraph H(2)(b) of these Series F Terms, such Series F Preferred Stock shall be deemed to have been transferred to the Trustee in his capacity as trustee of a Trust for the exclusive benefit of one or more Charitable Beneficiaries. Such transfer to the Trustee shall be deemed to be effective as of the close of business on the business day prior to the purported Transfer or other event that results in a transfer to the Trust pursuant to Subparagraph H(2)(b). The Trustee shall be appointed by the Corporation and shall be a Person unaffiliated with the Corporation, any Purported Beneficial Transferee or any Purported Record Transferee. Each Charitable Beneficiary shall be designated by the Corporation as provided in Subparagraph H(3)(f) of these Series F Terms.

(b) Series F Preferred Stock held by the Trustee shall be issued and outstanding Series F Preferred Stock of the Corporation. The Purported Beneficial Transferee or Purported Record Transferee shall have no rights in the shares of Series F Preferred Stock held by the Trustee. The Purported Beneficial Transferee or Purported Record Transferee shall not benefit economically from ownership of any shares held in trust by the Trustee, shall have no rights to dividends and shall not possess any rights to vote or other rights attributable to the shares of Series F Preferred Stock held in the Trust.

(c) The Trustee shall have all voting rights and rights to dividends with respect to Series F Preferred Stock held in the Trust, which rights shall be exercised for the exclusive benefit of the Charitable Beneficiary. Any dividend or distribution paid to or on behalf of the Purported Record Transferee or Purported Beneficial Transferee prior to the discovery by the Corporation that shares of Series F Preferred Stock have been transferred to the Trustee shall be paid to the Trustee upon demand, and any dividend or distribution declared but unpaid shall be paid when due to the Trustee with respect to such Series F Preferred Stock. Any dividends or distributions so paid over to the Trustee shall be held in trust for the Charitable Beneficiary.

The Purported Record Transferee and Purported Beneficial Transferee shall have no voting rights with respect to the Series F Preferred Stock held in the Trust and, subject to Maryland law, effective as of the date the Series F Preferred Stock has been transferred to the Trustee, the Trustee shall have the authority (at the Trustee’s sole discretion) (i) to rescind as void any vote cast by a Purported Record Transferee with respect to such Series F Preferred Stock prior to the discovery by the Corporation that the Series F Preferred Stock has been transferred to the Trustee and (ii) to recast such vote in accordance with the desires of the Trustee acting for the benefit of the Charitable Beneficiary; provided, however, that if the Corporation has already taken irreversible corporate action, then the Trustee shall not have the

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authority to rescind and recast such vote. Notwithstanding any other provision of these Series F Terms to the contrary, until the Corporation has received notification that the Series F Preferred Stock has been transferred into a Trust, the Corporation shall be entitled to rely on its share transfer and other stockholder records for purposes of preparing lists of stockholders entitled to vote at meetings, determining the validity and authority of proxies and otherwise conducting votes of stockholders.

(d) Within 20 days of receiving notice from the Corporation that shares of Series F Preferred Stock have been transferred to the Trust, the Trustee of the Trust shall sell the shares of Series F Preferred Stock held in the Trust to a Person, designated by the Trustee, whose ownership of the shares of Series F Preferred Stock will not violate the ownership limitations set forth in Subparagraph H(2)(a). Upon such sale, the interest of the Charitable Beneficiary in the shares of Series F Preferred Stock sold shall terminate and the Trustee shall distribute the net proceeds of the sale to the Purported Record Transferee and to the Charitable Beneficiary as provided in this Subparagraph H(3)(d). The Purported Record Transferee shall receive the lesser of (1) the price paid by the Purported Record Transferee for the shares of Series F Preferred Stock in the transaction that resulted in such transfer to the Trust (or, if the event which resulted in the transfer to the Trust did not involve a purchase of such shares of Series F Preferred Stock at Market Price, the Market Price of such shares of Series F Preferred Stock on the day of the event which resulted in the transfer of such shares of Series F Preferred Stock to the Trust) and (2) the price per share received by the Trustee (net of any commissions and other expenses of sale) from the sale or other disposition of the shares of Series F Preferred Stock held in the Trust. Any net sales proceeds in excess of the amount payable to the Purported Record Transferee shall be immediately paid to the Charitable Beneficiary together with any dividends or other distributions thereon. If, prior to the discovery by the Corporation that shares of such Series F Preferred Stock have been transferred to the Trustee, such shares of Series F Preferred Stock are sold by a Purported Record Transferee then (i) such shares of Series F Preferred Stock shall be deemed to have been sold on behalf of the Trust and (ii) to the extent that the Purported Record Transferee received an amount for such shares of Series F Preferred Stock that exceeds the amount that such Purported Record Transferee was entitled to receive pursuant to this Subparagraph H(3)(d), such excess shall be paid to the Trustee upon demand.

(e) Series F Preferred Stock transferred to the Trustee shall be deemed to have been offered for sale to the Corporation, or its designee, at a price per share equal to the lesser of (i) the price paid by the Purported Record Transferee for the shares of Series F Preferred Stock in the transaction that resulted in such transfer to the Trust (or, if the event which resulted in the transfer to the Trust did not involve a purchase of such shares of Series F Preferred Stock at Market Price, the Market Price of such shares of Series F Preferred Stock on the day of the event which resulted in the transfer of such shares of Series F Preferred Stock to the Trust) and (ii) the Market Price on the date the Corporation, or its designee, accepts such offer. The Corporation shall have the right to accept such offer until the Trustee has sold the shares of Series F Preferred Stock held in the Trust pursuant to Subparagraph H(3)(d). Upon such a sale to the Corporation, the interest of the Charitable Beneficiary in the shares of Series F Preferred Stock sold shall terminate and the Trustee shall distribute the net proceeds of the sale to the Purported Record Transferee and any dividends or other distributions held by the Trustee with respect to such Series F Preferred Stock shall thereupon be paid to the Charitable Beneficiary.

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(f) By written notice to the Trustee, the Corporation shall designate one or more nonprofit organizations to be the Charitable Beneficiary of the interest in the Trust such that the Series F Preferred Stock held in the Trust would not violate the restrictions set forth in Subparagraph H(2)(a) in the hands of such Charitable Beneficiary.

(4) Remedies For Breach . If the Board of Directors or a committee thereof or other designees if permitted by the MGCL shall at any time determine in good faith that a Transfer or other event has taken place in violation of Subparagraph H(2) of these Series F Terms or that a Person intends to acquire, has attempted to acquire or may acquire beneficial ownership (determined without reference to any rules of attribution), Beneficial Ownership or Constructive Ownership of any shares of Series F Preferred Stock of the Corporation in violation of Subparagraph H(2) of these Series F Terms, the Board of Directors or a committee thereof or other designees if permitted by the MGCL shall take such action as it deems advisable to refuse to give effect or to prevent such Transfer, including, but not limited to, causing the Corporation to redeem shares of Series F Preferred Stock, refusing to give effect to such Transfer on the books of the Corporation or instituting proceedings to enjoin such Transfer; provided, however, that any Transfers (or, in the case of events other than a Transfer, ownership or Constructive Ownership or Beneficial Ownership) in violation of Subparagraph H(2)(a) of these Series F Terms, shall automatically result in the transfer to a Trust as described in Subparagraph H(2)(b) and any Transfer in violation of Subparagraph H(2)(c) shall automatically be void ab initio irrespective of any action (or non-action) by the Board of Directors.

(5) Notice of Restricted Transfer . Any Person who acquires or attempts to acquire shares of Series F Preferred Stock in violation of Subparagraph H(2) of these Series F Terms, or any Person who is a Purported Beneficial Transferee such that an automatic transfer to a Trust results under Subparagraph H(2)(b) of these Series F Terms, shall immediately give written notice to the Corporation of such event and shall provide to the Corporation such other information as the Corporation may request in order to determine the effect, if any, of such Transfer or attempted Transfer on the Corporation’s status as a REIT.

(6) Owners Required To Provide Information . Prior to the Restriction Termination Date each Person who is a beneficial owner or Beneficial Owner or Constructive Owner of Series F Preferred Stock and each Person (including the stockholder of record) who is holding Series F Preferred Stock for a beneficial owner or Beneficial Owner or Constructive Owner shall provide to the Corporation such information that the Corporation may request, in good faith, in order to determine the Corporation’s status as a REIT.

(7) Remedies Not Limited . Nothing contained in these Series F Terms (but subject to Subparagraph H(13) of these Series F Terms) shall limit the authority of the Board of Directors to take such other action as it deems necessary or advisable to protect the Corporation and the interests of its stockholders by preservation of the Corporation’s status as a REIT.

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(8) Ambiguity . In the case of an ambiguity in the application of any of the provisions of this Paragraph H of these Series F Terms, including any definition contained in Subparagraph H(1), the Board of Directors shall have the power to determine the application of the provisions of this Paragraph H with respect to any situation based on the facts known to it (subject, however, to the provisions of Subparagraph H(13) of these Series F Terms). In the event Paragraph H requires an action by the Board of Directors and these Series F Terms fail to provide specific guidance with respect to such action, the Board of Directors shall have the power to determine the action to be taken so long as such action is not contrary to the provisions of Paragraph H. Absent a decision to the contrary by the Board of Directors (which the Board of Directors may make in its sole and absolute discretion), if a Person would have (but for the remedies set forth in Subparagraph H(2)) acquired Beneficial or Constructive Ownership of Series F Preferred Stock in violation of Subparagraph H(2)(a), such remedies (as applicable) shall apply first to the shares of Series F Preferred Stock which, but for such remedies, would have been actually owned by such Person, and second to shares of Series F Preferred Stock which, but for such remedies, would have been Beneficially Owned or Constructively Owned (but not actually owned) by such Person, pro rata, among the Persons who actually own such shares of Series F Preferred Stock based upon the relative number of the shares of Series F Preferred Stock held by each such Person.

(9) Exceptions .

(a) Subject to Subparagraph H(2)(a)(iii), the Board of Directors, in its sole discretion, may exempt (prospectively or retroactively) a Person from the limitation on a Person Beneficially Owning shares of Series F Preferred Stock in violation of Subparagraph H(2)(a)(i) if the Board of Directors determines that such exemption will not cause any Individual’s Beneficial Ownership of such shares of Series F Preferred Stock to violate Subparagraph H(2)(a)(i) and that any such violation will not cause the Corporation to fail to qualify as a REIT under the Code.

(b) Subject to Subparagraph H(2)(a)(iii), the Board of Directors, in its sole discretion, may exempt (prospectively or retroactively) a Person from the limitation on a Person Constructively Owning Series F Preferred Stock in violation of Subparagraph H(2)(a)(ii), if the Board of Directors determines that such Person does not and will not own, actually or Constructively, an interest in a tenant of the Corporation (or a tenant of any entity owned in whole or in part by the Corporation) that would cause the Corporation to own, actually or Constructively, more than a 9.8% interest (as set forth in Section 856(d)(2)(B) of the Code) in such tenant and that any such ownership would not cause the Corporation to fail to qualify as a REIT under the Code. Notwithstanding the foregoing, but subject to Subparagraph H(2)(a)(iii), a Person’s ownership of such an interest in a tenant shall not prevent the Board of Directors, in its sole discretion, from exempting such Person from the limitation on a Person Constructively Owning Series F Preferred Stock in violation of Subparagraph H(2)(a)(ii) if the Board of Directors determines that the resulting application of Section 856(d)(2)(B) of the Code would affect the characterization of less than 0.5% of the gross income (as such term is used in Section 856(c)(2) of the Code) of the Corporation in any taxable year, after taking into account the effect of this sentence with respect to all other Series F Preferred Stock to which this sentence applies.

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(c) Subject to Subparagraph H(2)(a)(iii) and the remainder of this Subparagraph H(9)(c), the Board of Directors may from time to time increase or decrease the Ownership Limit; provided , however , that the decreased Ownership Limit will not be effective for any Person whose percentage ownership in Series F Preferred Stock is in excess of such decreased Ownership Limit until such time as such Person’s percentage of Series F Preferred Stock equals or falls below the decreased Ownership Limit, but any further acquisition of Series F Preferred Stock in excess of such percentage ownership of Series F Preferred Stock will be in violation of the Ownership Limit, and, provided further, that the new Ownership Limit would not allow five or fewer Persons to Beneficially Own more than 49% in value of the outstanding capital stock of the Company.

(d) In granting a person an exemption under Subparagraph H(9)(a) or (b) above, the Board of Directors may require such Person to make certain representations or undertakings or to agree that any violation or attempted violation of such representations or undertakings (or other action which is contrary to the restrictions contained in Subparagraph H(2)(a) of these Series F Terms) will result in such Series F Preferred Stock being transferred to a Trust in accordance with Subparagraph H(2)(b) of these Series F Terms. In granting any exception pursuant to Subparagraph H(9)(a) or (b) of these Series F Terms, the Board of Directors may require a ruling from the IRS, or an opinion of counsel, in either case in form and substance satisfactory to the Board of Directors in its sole discretion, as it may deem necessary or advisable in order to determine or ensure the Corporation’s status as a REIT.

(10) Preemptive Rights . No holder of shares of Series F Preferred Stock shall have any preemptive or preferential right to subscribe for or to purchase any additional shares of any series, or any bonds or convertible securities of any nature.

(11) Legends . Each certificate for Series F Preferred Stock shall bear the following legends:

CLASSES OF STOCK

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AUTHORITY OF THE BOARD OF DIRECTORS TO SET SUCH RIGHTS AND PREFERENCES OF SUBSEQUENT SERIES. REQUEST FOR SUCH WRITTEN STATEMENT MAY BE DIRECTED TO THE SECRETARY OF THE CORPORATION AT ITS PRINCIPAL OFFICE.”

RESTRICTION ON OWNERSHIP AND TRANSFER

“THE SHARES OF SERIES F PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON BENEFICIAL AND CONSTRUCTIVE OWNERSHIP AND TRANSFER FOR THE PURPOSE OF THE CORPORATION’S MAINTENANCE OF ITS STATUS AS A REAL ESTATE INVESTMENT TRUST UNDER THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”). SUBJECT TO CERTAIN FURTHER RESTRICTIONS AND EXCEPT AS EXPRESSLY PROVIDED IN THE ARTICLES SUPPLEMENTARY FOR THE SERIES F PREFERRED STOCK, (i) NO PERSON MAY BENEFICIALLY OWN SHARES OF THE CORPORATION’S SERIES F PREFERRED STOCK IN EXCESS OF 9.8% (BY VALUE OR BY NUMBER OF SHARES, WHICHEVER IS MORE RESTRICTIVE) OF THE OUTSTANDING SERIES F PREFERRED STOCK OF THE CORPORATION; (ii) NO PERSON MAY CONSTRUCTIVELY OWN SHARES OF THE CORPORATION’S SERIES F PREFERRED STOCK IN EXCESS OF 9.8% (BY VALUE OR BY NUMBER OF SHARES, WHICHEVER IS MORE RESTRICTIVE) OF THE OUTSTANDING SERIES F PREFERRED STOCK OF THE CORPORATION; (iii) NO PERSON MAY BENEFICIALLY OR CONSTRUCTIVELY OWN SERIES F PREFERRED STOCK THAT, TAKING INTO ACCOUNT ANY OTHER CAPITAL STOCK OF THE CORPORATION BENEFICIALLY OR CONSTRUCTIVELY OWNED BY SUCH PERSON, WOULD RESULT IN THE CORPORATION BEING “CLOSELY HELD” UNDER SECTION 856(h) OF THE CODE OR OTHERWISE CAUSE THE CORPORATION TO FAIL TO QUALIFY AS A REIT; AND (iv) NO PERSON MAY TRANSFER SERIES F PREFERRED STOCK IF SUCH TRANSFER WOULD RESULT IN THE CAPITAL STOCK OF THE CORPORATION BEING OWNED BY FEWER THAN 100 PERSONS. ANY PERSON WHO BENEFICIALLY OR CONSTRUCTIVELY OWNS OR ATTEMPTS TO BENEFICIALLY OR CONSTRUCTIVELY OWN SERIES F PREFERRED STOCK WHICH CAUSES OR WILL CAUSE A PERSON TO BENEFICIALLY OR CONSTRUCTIVELY OWN SERIES F PREFERRED STOCK IN EXCESS OF THE ABOVE LIMITATIONS MUST IMMEDIATELY NOTIFY THE CORPORATION. IF ANY OF THE RESTRICTIONS ON TRANSFER OR OWNERSHIP ARE VIOLATED, THE SERIES F PREFERRED STOCK REPRESENTED HEREBY IN EXCESS OF SUCH RESTRICTIONS WILL BE AUTOMATICALLY TRANSFERRED TO THE TRUSTEE OF A TRUST FOR THE BENEFIT OF ONE OR MORE CHARITABLE BENEFICIARIES. IN ADDITION, THE CORPORATION MAY REDEEM SHARES UPON THE TERMS AND CONDITIONS SPECIFIED BY THE BOARD OF DIRECTORS IN ITS SOLE DISCRETION IF THE BOARD OF DIRECTORS DETERMINES THAT OWNERSHIP OR A TRANSFER OR OTHER EVENT MAY VIOLATE THE RESTRICTIONS DESCRIBED ABOVE. FURTHERMORE, UPON THE OCCURRENCE OF CERTAIN EVENTS, ATTEMPTED TRANSFERS IN VIOLATION OF THE RESTRICTIONS DESCRIBED ABOVE MAY BE VOID AB INITIO. ALL TERMS IN THIS LEGEND WHICH ARE DEFINED IN THE ARTICLES SUPPLEMENTARY FOR THE SERIES F PREFERRED

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STOCK SHALL HAVE THE MEANINGS ASCRIBED TO THEM IN SUCH ARTICLES SUPPLEMENTARY, AS THE SAME MAY BE AMENDED FROM TIME TO TIME, A COPY OF WHICH, INCLUDING THE RESTRICTIONS ON TRANSFER AND OWNERSHIP, WILL BE FURNISHED TO EACH HOLDER OF SERIES F PREFERRED STOCK ON REQUEST AND WITHOUT CHARGE. REQUESTS FOR SUCH A COPY MAY BE DIRECTED TO THE SECRETARY OF THE CORPORATION AT ITS PRINCIPAL OFFICE.”

(13) NYSE . Nothing in this Paragraph H shall preclude the settlement of any transaction entered into through the facilities of the NYSE. The shares of Series F Preferred Stock that are the subject of such transaction shall continue to be subject to the provisions of this Paragraph H after such settlement.

(14) Applicability of Paragraph H . The provisions set forth in this Paragraph H shall apply to the Series F Preferred Stock notwithstanding any contrary provisions of the Series F Preferred Stock provided for elsewhere in these Series F Terms.

I. Conversion . The Series F Preferred Stock is not convertible into or exchangeable for any other property or securities of the Corporation.

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EXHIBIT 3.2

As Amended and Restated

July 22, 2004

THIRD AMENDED AND RESTATED BYLAWS

HEALTH CARE PROPERTY INVESTORS, INC.

ARTICLE I

OFFICES

SECTION 1. PRINCIPAL OFFICE — The principal office of the Corporation in the State of Maryland shall be established and maintained at the office of THE CORPORATION TRUST INCORPORATED, 300 East Lombard Street, Baltimore, Maryland 21202, and THE CORPORATION TRUST INCORPORATED shall be the resident agent of this Corporation.

SECTION 2. OTHER OFFICES — The Corporation may establish such other offices, within or without the State of Maryland, at such place or places as the Board of Directors from time to time may designate, or which the business of the Corporation may require.

ARTICLE II

STOCKHOLDERS

SECTION 1. ANNUAL MEETINGS — Annual meetings of stockholders for the election of directors to succeed directors whose terms are expiring and the transaction of any business within the powers of the Corporation, shall be held on a date and at a time between April 15 and May 15, inclusive, as designated by the Board of Directors at such place, within or without the State of Maryland, as the Board of Directors by resolution shall determine, and as set forth in the notice of the meeting.

SECTION 2. SPECIAL MEETINGS — Special meetings of the stockholders, for any purpose or purposes, may be called by the Chief Executive Officer, the President, or a majority of the Board of Directors, and shall be called by the Secretary or any other officer upon written request of stockholders holding in the aggregate not less than 50% of the outstanding shares entitled to vote on the business proposed to be transacted thereat. Any such request of the stockholders shall state the purpose of the meeting and the matters proposed to be acted on at such meeting. The Secretary or other officer of the Corporation shall inform the requesting stockholders of the reasonably estimated cost of preparing and mailing notice of the proposed special meeting and, upon payment to the Corporation of such estimated costs, the Secretary or other officer of the Corporation shall give notice to each stockholder entitled to notice of the special meeting. Unless requested by stockholders entitled to cast a majority of all votes entitled to be cast at a meeting of stockholders, a special meeting need not be called to consider any matter which is substantially the same as a matter voted on at any special meeting of the

stockholders of the Corporation held during the preceding twelve months. Special meetings of stockholders may be held at such time and place, within or without the State of Maryland, as shall be stated in the notice of the meeting. The notice of a special meeting shall state the nature of the business to be transacted and no other business shall be considered at the meeting.

SECTION 3. NOTICE OF MEETINGS — Written or printed notice, stating the place, date and time of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each stockholder entitled to vote thereat at his address as it appears on the records of the Corporation by United States mail, postage prepaid, not less than ten (10) nor more than ninety (90) days before the date of the meeting, unless any provisions of the laws of the State of Maryland shall prescribe a differing elapsed period of time. No business other than that stated in the notice shall be transacted at any special meeting.

SECTION 4. VOTING — At each annual meeting the stockholders entitled to vote shall elect directors to succeed the directors whose terms are expiring, and the stockholders may transact such other corporate business as may be within the powers of the Corporation., subject to Section 7 of this Article II. The vote for directors, and, upon the demand of any stockholder entitled to vote on any such matter, the vote upon any question before the meeting, shall be by ballot. All elections of directors shall be by a plurality of the votes cast, and all questions shall be decided by a majority of the votes cast, except as otherwise provided by the Charter of the Corporation or by the laws of the State of Maryland.

The directors may fix a day not more than ninety (90) days nor less than ten (10) days prior to the holding of any meeting of stockholders as the date as of which stockholders entitled to notice of and to vote at such meeting shall be determined; and only stockholders of record on such day shall be entitled to notice of or to vote at any such meeting.

Each stockholder entitled to vote, in accordance with the terms of the Charter and the provisions of these Bylaws, shall be entitled to one vote, in person or by proxy, for each share of stock entitled to vote held by such stockholder, but no proxy shall be voted after eleven (11) months from its date unless such proxy provides for a longer period. In no case shall any proxy be given for a period in excess of ten (10) years from the date of its execution.

SECTION 5. QUORUM — Except as provided in the next section hereof, any number of stockholders together holding a majority of the stock issued and outstanding and entitled to vote thereat, who shall be present in person or represented by proxy at any meeting duly called, shall constitute a quorum for the transaction of business. If, at any meeting less than a quorum shall be present or represented, the chairman of the meeting or the stockholders entitled to vote at such meeting, either in person or by proxy, shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting to the extent permitted by the laws of the State of Maryland, until the requisite amount of stock shall be present, at which time any business may be transacted which might have been transacted at the meeting as originally noticed.

SECTION 6. ACTION WITHOUT MEETING — Any action to be taken by the stockholders may be taken without a meeting, if, prior to such action, all stockholders entitled to vote thereon shall consent in writing to such action being taken, and such consent shall be treated for all purposes as a vote at a meeting.

SECTION 7. NOMINATIONS AND STOCKHOLDER BUSINESS

(a) Annual Meetings of Stockholders .

(1) Nominations of persons for election to the Board of Directors and the proposal of business to be considered by the stockholders may be made at an annual meeting of stockholders only (i) pursuant to the Corporation’s notice of meeting, (ii) by or at the direction of the Board of Directors or (iii) by any stockholder of the Corporation who was a stockholder of record at the time of giving of notice provided for in this Section 7(a), who is entitled to vote at the meeting and who complied with the notice procedures set forth in this Section 7(a).

(2) For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (iii) of paragraph (a)(1) of this Section 7, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a stockholder’s notice shall be delivered to the Secretary at the principal executive offices of the Corporation not less than sixty (60) days nor more than ninety (90) days prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is advanced by more than thirty (30) days or delayed by more than sixty (60) days from such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the ninetieth (90th) day prior to such annual meeting and not later than the close of business on the later of the sixtieth (60th) day prior to such annual meeting or the tenth (10th) day following the day on which public announcement of the date of such meeting is first made. Such stockholder’s notice shall set forth (i) as to each person whom the stockholder proposes to nominate for election or reelection as a director all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected); (ii) as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and of the beneficial owner, if any, on whose behalf the proposal is made; and (iii) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made, (x) the name and address of such stockholder, as they appear on the Corporation’s books, and of such beneficial owner and (y) the class and number of shares of stock of the Corporation which are owned beneficially and of record by such stockholder and such beneficial owner.

(3) Notwithstanding anything in the second sentence of paragraph (a)(2) of this Section 7 to the contrary, in the event that the number of directors to be elected to the Board of Directors is increased and there is no public announcement naming all of the nominees for director or specifying the size of the increased Board of Directors made by the Corporation at least seventy (70) days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice required by this Section 7(a) shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the

Secretary at the principal executive offices of the Corporation not later than the close of business on the tenth (10th) day following the day on which such public announcement is first made by the Corporation.

(b) Special Meetings of Stockholders . Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected (i) pursuant to the Corporation’s notice of meeting, (ii) by or at the direction of the Board of Directors or (iii) provided that the Board of Directors has determined that directors shall be elected at such special meeting, by any stockholder of the Corporation who is a stockholder of record at the time of giving of notice provided for in this Section 7(b), who is entitled to vote at the meeting and who complied with the notice procedures set forth in this Section 7(b). In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder may nominate a person or persons (as the case may be) for election to such position as specified in the Corporation’s notice of meeting, if the stockholder’s notice required by paragraph (a)(2) of this Section 7 (together with the information and consents required pursuant to clauses (ii) and (iii) of paragraph (a)(2)) shall be delivered to the Secretary at the principal executive offices of the Corporation not earlier than the ninetieth (90th) day prior to such special meeting and not later than the close of business on the later of the sixtieth (60th) day prior to such special meeting or the tenth (10th) day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting.

(1) Only such persons who are nominated in accordance with the procedures set forth in this Section 7 shall be eligible to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 7. The presiding officer of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made in accordance with the procedures set forth in this Section 7 and, if any proposed nomination or business is not in compliance with this Section 7, to declare that such defective nomination or proposal be disregarded.

(2) For purposes of this Section 7, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the Exchange Act.

(3) Notwithstanding the foregoing provisions of this Section 7, a stockholder shall also comply with all applicable requirements of state law and of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 7. Nothing in this Section 7 shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act.

SECTION 8. INSPECTORS — The Board of Directors may, in advance of any meeting of stockholders, appoint one or more inspectors to act at such meeting or any adjournment thereof. If the inspectors shall not be so appointed or if any of them shall fail to appear or act, the chairman of the meeting may, and on the request of any stockholder entitled to vote thereat shall, appoint inspectors. Each inspector, before entering upon the discharge of his duties, shall take and sign an oath to execute faithfully the duties of inspector at such meeting with strict impartiality and according to the best of his ability. The inspectors shall determine the number of shares represented at the meeting, the existence of a quorum, the validity and effect of proxies, and shall receive votes, ballots or consents, hear and determine all challenges and questions arising in connection with the right to vote, count and tabulate all votes, ballots or consents, determine the result, and do such acts as are proper to conduct the election or vote with fairness to all stockholders. On request of the chairman of the meeting or any stockholder entitled to vote thereat, the inspectors shall make a report in writing of any challenge, request or matter determined by them and shall execute a certificate of any fact found by them. No director or candidate for the office of director shall act as inspector of an election of directors. Inspectors need not be stockholders.

ARTICLE III

DIRECTORS

SECTION 1. NUMBER AND TERM — The number of directors shall be ten (10) until changed by amendment to this Section of the Bylaws duly adopted by the Board of Directors or stockholders. In no case shall the number of directors ever be less than three (3). Notwithstanding the foregoing, upon the occurrence of a default in the payment of dividends on any class or series of preferred stock, or any other event, which will entitle the holders of any class or series of preferred stock to elect additional directors of the Corporation, the number of directors of the Corporation will thereupon be increased by the number of additional directors to be elected by the holders of such class or series of preferred stock, and such increase in the number of directors shall remain in effect for so long as the holders of such class or series of preferred stock are entitled to elect such additional directors.

Directors need not be stockholders.

SECTION 2. QUORUM — A majority of the directors shall constitute a quorum for the transaction of business. If, at any meeting of the Board, there shall be less than a quorum present, a majority of those directors present may adjourn the meeting, from time to time, until a quorum is obtained, and no further notice thereof need be given other than by announcement at said meeting which shall be so adjourned.

SECTION 3. FIRST MEETING — The newly elected directors may hold their first meeting for the purpose of organization and the transaction of business, if a quorum is present, immediately after the annual meeting of stockholders or the time and place of such meeting may be fixed by written consent of the entire Board.

SECTION 4. ELECTION OF OFFICERS — At the first meeting, or at any subsequent meeting called for that purpose, the directors shall elect the officers of the

Corporation, as more specifically set forth in ARTICLE V of these Bylaws. Such officers shall hold office until the next annual election of officers, or until their successors are elected and shall have qualified.

SECTION 5. REGULAR MEETINGS — Regular meetings of the Board of Directors shall be held at such places and times as shall be determined, from time to time, by resolution of the Board of Directors without other notice than such resolution.

SECTION 6. SPECIAL MEETINGS — Special meetings of the Board of Directors may be called by the Chairman, the Chief Executive Officer, the President, or by the Secretary on prior notice to each director. In case such notice is mailed, it shall be given at least four (4) days prior to the time of the holding of the meeting. In case such notice is given personally, or by telephone, electronic mail, facsimile correspondence or telegram, it shall be given at least twenty-four (24) hours prior to the time of the holding of the meeting.

SECTION 7. PLACE OF MEETINGS — The directors may hold their meetings, and have one or more offices, and keep the books of the Corporation outside the State of Maryland at any office or offices of the Corporation, or at any other place as they from time to time by resolution may determine.

SECTION 8. DISPENSING WITH NOTICE — The transactions of any meeting of the Board of Directors which is not properly called or noticed, regardless of how called and noticed or wherever held, shall be as valid as though such transactions had occurred at a meeting duly held after regular call and notice if a quorum is present and if, either before or after the meeting, each of the directors not present signs a written waiver of notice, a consent to holding the meeting or an approval of the minutes thereof. The waiver of notice or consent need not specify the purpose of the meeting. All such waivers, consents and approvals shall be filed with the corporate records or made a part of the minutes of the meeting. Notice of a meeting need not be given to any director who attends the meeting without protesting, prior thereto or at its commencement, the lack of notice to such director.

SECTION 9. ACTION WITHOUT MEETING — Any action required or permitted to be taken at any meeting of the Board of Directors, or any committee thereof, may be taken without a meeting if a written consent thereto is signed by all members of the Board or of such committee, as the case may be, and such written consent is filed with the minutes of the proceedings of the Board of Directors or committee.

SECTION 10. TELEPHONIC MEETINGS — Unless otherwise restricted by the Charter or these Bylaws, members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors, or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at such meeting.

SECTION 11. GENERAL POWERS OF DIRECTORS — The Board of Directors shall manage the business and affairs of the Corporation, and, subject to the restrictions imposed by law, exercise all the powers of the Corporation, except as conferred on or reserved to the stockholders by law or by the Charter or these Bylaws.

SECTION 12. SPECIFIC POWERS OF DIRECTORS — Without prejudice to such general powers, it hereby is expressly declared that the directors shall have the following powers, to the extent permitted under the laws of the State of Maryland, subject to the provisions of the Charter and other provisions of these Bylaws:

(1) To make and change regulations, not inconsistent with these Bylaws, for the management of the business and affairs of the Corporation.

(2) To purchase or otherwise acquire for the Corporation any property, rights or privileges which the Corporation is authorized to acquire.

(3) To pay for any property purchased for the Corporation, either wholly or partly in money, stock, bonds, debentures or other securities of the Corporation.

(4) To borrow money and make and issue notes, bonds and other negotiable and transferable instruments, mortgages, deeds of trust and trust agreements, and to do every act and thing necessary to effectuate the same.

(5) To lease and rent real property whether in the capacity of lessor or lessee.

(6) To dispose of or transfer property, both real and personal, in any fashion or by any lawful means, including, without limitation, by lease and as security for borrowings of the Corporation.

(7) To lend money and acquire loans made by others, and to accept, in connection therewith, notes, bonds and other transferable instruments, mortgages, deeds of trust and trust agreements of others, and to do every act and thing otherwise necessary in connection therewith.

(8) To make investments from time to time with funds of the Corporation and to dispose of such investments.

(9) To remove any officer when, in their judgment, the best interests of the Corporation shall be served thereby, and, in their discretion, from time to time to devolve the powers and duties of any officer upon any other officer or person for the time being.

(10) To appoint and remove or suspend subordinate officers, agents, or factors as they may deem necessary, and to determine their duties, and to fix and from time to time to change their salaries or remuneration, and to require security as and when they think fit.

(11) To confer upon any officer of the Corporation the power to appoint, remove and suspend subordinate officers, agents and factors.

(12) To determine who shall be authorized, on behalf of the Corporation, to make and sign bills, notes, acceptances, endorsements, contracts and other instruments.

(13) To determine who shall be entitled, in the name and on behalf of the Corporation, to vote upon or to assign and transfer any shares of stock, bonds or other securities of other corporations held by this Corporation.

(14) To authorize the Corporation to enter into, and to execute and deliver, and to modify, amend or terminate, from time to time, agreements, notes, acceptances, bills of sale, documents of transfer or other documents or instruments of any kind or nature whatsoever, in furtherance of or in connection with lawful activities of the Corporation.

(15) To delegate any of the powers of the Board, in relation to the ordinary business of the Corporation, to any standing or special committee, or to any officer or agent (with power to sub-delegate), upon such terms as they deem fit.

(16) To call special meetings of the stockholders for any purpose or purposes.

SECTION 13. COMPENSATION — Directors shall receive no stated salary for their services as directors but, by resolution of the Board, may receive fixed fees per year and/or per meeting, and expenses of attendance for attendance at each meeting.

Nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity as an officer, agent, or otherwise, and receiving compensation therefor.

ARTICLE IV

COMMITTEES

SECTION 1. APPOINTMENTS AND POWERS — The Board of Directors may, by resolution or resolutions passed by a majority of the entire Board of Directors, designate one or more committees, including, without limitation an Audit Committee, a Nominating and Corporate Governance Committee and a Compensation Committee, each consisting of one (1) or more directors, to serve at the pleasure of the Board of Directors. The Board of Directors may designate one or more directors as alternate members of a committee who may replace any absent or disqualified member at any meeting of the committee. Such alternate members shall not be counted for purposes of determining a quorum unless so appointed, in which case they shall be counted in the place of the absent or disqualified member. The committee, to the extent provided in said resolution or resolutions or in these Bylaws and permitted under the laws of the State of Maryland, shall have and may exercise the powers of the Board of Directors in the management of the business and affairs of the Corporation and may have power to authorize the seal of the Corporation to be affixed to all papers which may require it. Such committee or committees shall have such name or names as may be stated in these Bylaws or as may be determined from time to time by resolution adopted by the Board of Directors.

SECTION 2. MINUTES — Committees shall keep regular minutes of their proceedings, and report the same to the Board of Directors when required.

ARTICLE V

OFFICERS

SECTION 1. OFFICERS — The officers shall be elected at the first meeting of the Board of Directors after each annual meeting of stockholders. The Board of Directors shall elect a Chief Executive Officer, a President, a Secretary and a Treasurer, and may elect one or more Vice Presidents as they may deem proper. Any person may hold two or more offices, except that no one person shall concurrently hold the offices of President and Vice-President.

The Board of Directors may elect such other officers and agents as it may deem advisable, who shall hold office for such terms and shall exercise such powers and perform such duties as shall from time to time be determined by the Board of Directors.

SECTION 2. CHIEF EXECUTIVE OFFICER — The Chief Executive Officer shall have the general powers and duties of supervision and management usually vested in the office of Chief Executive Officer of a corporation. He shall have general supervision, direction and control of the business of the Corporation. He shall also exercise such further powers and perform such other duties as may be conferred upon him by the Bylaws or the Board of Directors from time to time. Except as the Board of Directors shall authorize the execution thereof in some other manner, he shall have the power to execute bonds, mortgages and other contracts on behalf of the Corporation, and he may cause the corporate seal to be affixed to any instrument or document executed on behalf of the Corporation. In the event that no other individual shall at that time have been appointed by the Board of Directors to, and hold, the office of President of the Corporation, the individual appointed by the Board to the position of Chief Executive Officer shall also, by virtue of holding such office, be deemed to hold the office of President, and any action taken by such individual in his capacity as Chief Executive Officer will also be deemed action of the President.

SECTION 3. PRESIDENT — The President shall have the general powers and duties of supervision and management usually vested in the office of President of a corporation. He shall have general supervision, direction and control of the business of the Corporation. He shall also exercise such further powers and perform such other duties as may be conferred upon him by the Bylaws or the Board of Directors from time to time. Except as the Board of Directors shall authorize the execution thereof in some other manner, he shall have the power to execute bonds, mortgages and other contracts on behalf of the Corporation, and he may cause the corporate seal to be affixed to any instrument or document executed on behalf of the Corporation. In the event that no other individual shall at that time have been appointed by the Board of Directors to, and hold, the office of President of the Corporation, the individual appointed by the Board of Directors to the office of Chief Executive Officer shall also, by virtue of holding such office, be deemed to hold the office of President, and any action taken by such individual in his capacity as Chief Executive Officer will also be deemed action of the President.

SECTION 4. VICE PRESIDENTS — Each Vice President shall have such powers and shall perform such duties as are usually vested in the office of Vice President of a corporation. Except as the Board of Directors shall authorize the execution thereof in some other manner, he shall have the power to execute bonds, mortgages and other contracts on behalf of the Corporation, and he may cause the corporate seal to be affixed to any instrument or document executed on behalf of the Corporation.

SECTION 5. SECRETARY — The Secretary shall give, or cause to be given, notice of all meetings of stockholders and the Board of Directors, and all other notices required by law or by these Bylaws, and, in case of his absence or refusal or neglect so to do, any such notice may be given by any person thereunto directed by the Chief Executive Officer, the President, the Board of Directors, or the stockholders upon whose request the meeting is called as provided in these Bylaws. He shall record all proceedings of meetings of the stockholders and of the Board of Directors in a book to be kept for that purpose, and shall perform such other duties as may be assigned to him by the Directors or the Chief Executive Officer or President. He shall have custody of the corporate seal, and shall have the power to affix said seal to all instruments or documents executed on behalf of the Corporation.

SECTION 6. TREASURER — The Treasurer shall have the custody of the corporate funds and securities, and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation. He shall deposit all monies and other valuables in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors.

The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors or the President or Chief Executive Officer, taking proper vouchers for such disbursements. He shall render to the President or Chief Executive Officer and the Board of Directors, at the regular meetings of the Board, or whenever they may request it, an accounting of all his transactions as Treasurer, and of the financial condition of the Corporation.

If required by the Board of Directors, he shall give the Corporation a bond for the faithful discharge of his duties, in such amount and with such surety as the Board shall prescribe.

SECTION 7. CHAIRMAN — The Chairman, if one is elected, shall preside at all meetings of the Board of Directors and stockholders, and shall have and perform such other duties as from time to time may be assigned to him by the Board of Directors.

SECTION 8. ASSISTANT SECRETARIES AND ASSISTANT TREASURERS — Assistant Secretaries and Assistant Treasurers, if any, may be appointed by the Chief Executive Officer, the President or Vice President and shall have such powers and shall perform such duties as shall be assigned to them, respectively, by the Secretary and by the Treasurer.

ARTICLE VI

RESIGNATIONS; FILLING OF VACANCIES; REMOVAL FROM OFFICE

SECTION 1. RESIGNATIONS — Any director or officer may resign at any time. Such resignation shall be made in writing, and shall take effect at the time specified therein, and, if no time be specified, at the time of its receipt by the Board of Directors, the Chief Executive Officer, the President or the Secretary. The acceptance of a resignation shall not be necessary to make it effective.

SECTION 2. FILLING OF VACANCIES — If the office of any officer or director becomes vacant, other than vacancies on the Board of Directors created by an increase in the number of directors, the remaining directors in office, although less than a quorum, may appoint, by a majority vote, any qualified person to fill such vacancy, who shall hold office, in the case of an officer, for the unexpired term of his predecessor and until his successor is elected and shall have qualified, or, in the case of a director, until the next annual meeting of stockholders and until his successor is elected and shall have qualified.

Any vacancy on the Board of Directors occurring by reason of an increase in the number of directors may be filled by action of a majority of the entire Board, for a term of office continuing only until the next annual meeting of stockholders and until his successor is elected and shall have qualified, or may be filled by the affirmative vote of the holders of a majority of the shares then entitled to vote at an election of directors.

SECTION 3. REMOVAL FROM OFFICE — A director may be removed from office only by the stockholders or the Board of Directors of the Corporation in the manner and by the vote set forth in the Charter of the Corporation. The stockholders of the Corporation may elect a successor or successors to fill any vacancy or vacancies which result from the removal of a director or directors, and each such successor will serve for the unexpired term of the removed director.

Any officer or agent elected or appointed by the Board of Directors, may be removed by said Board whenever, in its judgment, the best interests of the Corporation shall be served thereby.

ARTICLE VII

CAPITAL STOCK

SECTION 1. CERTIFICATES OF STOCK — Certificates of stock, numbered, and with the seal of the Corporation affixed, signed by the Chairman, Chief Executive Officer (if the Board shall not have then appointed a President in which case the actions of the Chief Executive Officer shall, for purposes of Maryland law, be deemed those of the President), the President or a Vice President, and countersigned by the Secretary or an Assistant Secretary, or the Treasurer or an Assistant Treasurer, shall be issued to each stockholder, certifying to the number of shares owned by him in the Corporation. The signatures on certificates of stock may be either manual or facsimile.

In case any officer who has signed or whose facsimile signature has been placed upon such certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer at the date of its issue. Each certificate representing shares of the capital stock of the Corporation shall bear on its face or back such statements relating to the authority of the Corporation to issue more than one class of stock, the designations and other terms and conditions of each such class of stock and restrictions on transferability of capital stock imposed by the Corporation, or a statement that such information will be provided on request and without charge, all as and to the extent which may be required by the laws of the State of Maryland.

SECTION 2. LOST CERTIFICATES — A new certificate of stock may be issued in place of any certificate theretofore issued by the Corporation and alleged to have been lost or destroyed, and the Board of Directors may, at its discretion, request the owner of the lost or destroyed certificate, or his legal representative, to give the Corporation a bond, in such sum as the Board of Directors may direct, but not exceeding double the value of the stock, to indemnify the Corporation against any claim that may be made against it on account of the alleged loss of any such certificate.

SECTION 3. TRANSFER OF SHARES — Subject to the restrictions that may be contained in the Charter, the shares of stock of the Corporation shall be transferable only upon its books by the holders thereof in person or by their duly authorized representatives.

SECTION 4. DIVIDENDS — Subject to the provisions of the Charter and the laws of the State of Maryland, the Board of Directors may, at any regular or special meeting, declare dividends upon the capital stock of the Corporation, as and when the Board of Directors may deem expedient.

ARTICLE VIII

MISCELLANEOUS PROVISIONS

SECTION 1. CORPORATE SEAL — The Board of Directors shall adopt and may alter a common seal of the Corporation. Said seal shall be circular in form and shall contain the name of the Corporation, the year of its creation, and the words: “CORPORATE SEAL, MARYLAND.” It may be used by causing it or a facsimile thereof to be impressed, affixed, or otherwise reproduced.

SECTION 2. FISCAL YEAR — The fiscal year of the Corporation shall end on the 31st day of December of each calendar year.

SECTION 3. CHECKS, DRAFTS, NOTES — All checks, drafts, or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Corporation, shall be signed by such officer or officers, agent or agents of the Corporation, and in such manner, as from time to time shall be determined by resolution of the Board of Directors or, in the absence of any specific resolution of the Board of Directors, or if not otherwise provided by the Board of Directors, may be signed by the Chief Executive Officer, the President or any Vice President.

SECTION 4. CORPORATE RECORDS — The Corporation shall keep correct and complete books of account and minutes of the proceedings of its stockholders and Board of Directors.

The Corporation shall keep and maintain at its principal office a certified copy of its Charter and all amendments thereto, a certified copy of its Bylaws and all amendments thereto, a stock ledger or duplicate stock ledger, revised annually, containing the names, alphabetically arranged, of all stockholders, their residence addresses, and the number of shares held by them, respectively. In lieu of the stock ledger or duplicate stock ledger, a statement may be filed in the principal office stating the name of the custodian of the stock ledger or duplicate stock ledger, and the present and complete post office address (including street and number, if any) where such stock ledger or duplicate stock ledger is kept.

The Board of Directors shall take all reasonable steps to assure that a full and correct annual statement of the affairs of the Corporation is prepared annually, including a balance sheet and a financial statement of operations for the preceding fiscal year which shall be certified by independent certified public accountants, and distributed to stockholders within one hundred and twenty (120) days after the close of the Corporation’s fiscal year and a reasonable period of time prior to the annual meeting of stockholders. Such annual statement shall also be submitted at the annual meeting and shall be filed within twenty (20) days thereafter at the principal office of the Corporation in the State of Maryland. The Board of Directors shall also be responsible for scheduling the annual meeting of stockholders.

SECTION 5. NOTICE AND WAIVER OF NOTICE — Whenever, pursuant to the laws of the State of Maryland or these Bylaws, any notice is required to be given, personal notice is not meant unless expressly so stated, and any notice so required shall be deemed to be sufficient if given by depositing the same in the United States mail, postage prepaid, addressed to the person entitled thereto at his address as it appears on the records of the Corporation, and such notice shall be deemed to have been given on the day of such mailing. Stockholders not entitled to vote shall not be entitled to receive notice of any meetings except as otherwise provided by statute.

Any notice required to be given may be waived, in writing, by the person or persons entitled thereto, whether before or after the time stated therein.

ARTICLE IX

AMENDMENTS

SECTION 1. AMENDMENTS OF BYLAWS — The stockholders by the affirmative vote of the holders of two-thirds (2/3) of the stock issued and outstanding and entitled to vote, or the directors, by the affirmative vote of a majority of the entire Board of Directors, may amend or alter any of these Bylaws. Notwithstanding the foregoing, any amendment to Section 1 of Article III of the Bylaws which increases the number of directors by more than one (1) in any twelve (12) month period or increases the total number of directors to more than ten (10), and any amendment to this Section 1 of Article IX of the Bylaws, shall require approval by the Board of Directors by unanimous vote or approval by the stockholders of the Corporation by the affirmative vote of 90% of all votes entitled to be cast.

ARTICLE X

INDEMNIFICATION OF OFFICERS AND DIRECTORS

SECTION 1. INDEMNIFICATION — The Corporation shall indemnify and hold harmless, in the manner and to the fullest extent permitted by law, any person (or the estate of any person) who is or was a party to, or is threatened to be made a party to, any threatened, pending or completed action, suit or proceeding, whether or not by or in the right of the Corporation, and whether civil, criminal, administrative, investigative or otherwise, by reason of the fact that such person is or was a director or officer of the Corporation, or, as a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, trustee, partner, member, agent or employee of another corporation, partnership, limited liability company, association, joint venture, trust, benefit plan or other enterprise (including without limitation service in the administration and management of any separate, segregated fund established for purposes of collecting and distributing voluntary employee political contributions to federal election campaigns pursuant to the Federal Election Campaign Act of 1971, as amended from time to time). To the fullest extent permitted by law, the indemnification provided herein shall include expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement and any such expenses may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding and without requiring a preliminary determination as to the ultimate entitlement to indemnification. The Corporation may, with the approval of the Board of Directors, provide such indemnification and advancement of expenses as set forth in the preceding sentences of this Section 1 of this Article X of the Bylaws to agents and employees of the Corporation, other than officers and directors. The Corporation may, to the fullest extent permitted by law, purchase and maintain insurance on behalf of any officer or director or employee against any liability which may be asserted against such person.

SECTION 2. PROVISIONS NOT EXCLUSIVE — This Article X shall not be construed as a limitation upon the power of the Corporation to indemnify any other person for any such expenses to the fullest extent permitted by law, or upon the power of the Corporation to enter into contracts or undertakings of indemnity with a director, officer, employee or agent of the Corporation, nor shall it be construed as a limitation upon any other rights to which a person seeking indemnification from the Corporation may be entitled under any agreement, the Charter of the Corporation, or vote of stockholders or disinterested directors, or otherwise, both as to any action in such person’s official capacity and as to any action in another capacity while holding any office of the Corporation.

SECTION 3. RESTRICTION ON REPEAL OR MODIFICATION — Any repeal or modification of any section of this Article X of the Bylaws by the stockholders or directors of the Corporation shall be prospective only, and shall not adversely affect any right to indemnification or advancement of expenses hereunder existing at the time of such repeal or modification.

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, James F. Flaherty III, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Health Care Property Investors, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 3, 2004

/s/ James F. Flaherty III

James F. Flaherty III

President and Chief Executive Officer

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Mark A. Wallace, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Health Care Property Investors, Inc.;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 3, 2004

/s/ Mark A. Wallace

Mark A. Wallace

Senior Vice President and Chief Financial Officer (Principal Financial Officer)

EXHIBIT 32.1

Certification of Chief Executive Officer

Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Health Care Property Investors, Inc., a Maryland corporation (the “Company”), hereby certifies, to his knowledge, that:

(i) the accompanying quarterly report on Form 10-Q of the Company for the period ended June 30, 2004 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(ii) the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: August 3, 2004

/s/ James F. Flaherty III

James F. Flaherty III

President and Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to Health Care Property Investors, Inc. and will be retained by Health Care Property Investors, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EXHIBIT 32.2

Certification of Principal Financial Officer

(ii) the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: August 3, 2004

/s/ Mark A. Wallace

Mark A. Wallace

Senior Vice President and Chief Financial Officer

(Principal Financial Officer)

HEALTH CARE PROPERTY INVESTORS, INC.

/s/ Edward J. Henning

/s/ James F. Flaherty III

Edward J. Henning

James F. Flaherty III