Edgar Filing: HEALTH CARE PROPERTY INVESTORS INC

Filed Pursuant to Rule 424(b)(3)
Registration Number: 333-86654
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED JUNE 10, 2002)

$250,000,000

HEALTH CARE PROPERTY INVESTORS, INC.

6.45% SENIOR NOTES DUE 2012

----------------

We will pay interest on the notes on June 25 and December 25 of each
year, beginning December 25, 2002. The notes will mature on June 25, 2012. We
may not redeem the notes before maturity.

The notes will be unsecured obligations and rank equally with our
unsecured senior indebtedness. The notes will only be issued in registered form
in denominations of $1,000.

INVESTING IN THE NOTES INVOLVES RISKS THAT ARE DESCRIBED IN THE "RISK
FACTORS" SECTION BEGINNING ON PAGE S-3 OF THIS PROSPECTUS SUPPLEMENT AND PAGE 5
OF THE ACCOMPANYING PROSPECTUS.

----------------

PER NOTE TOTAL
-------- -----

Public offering price(1).................................... 99.702% $249,255,000
Underwriting discount....................................... .650% $1,625,000
Proceeds, before expenses, to HCPI.......................... 99.052% $247,630,000

(1) Plus accrued interest from June 25, 2002, if settlement occurs after
that date

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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus supplement or the accompanying prospectus is truthful or
complete. Any representation to the contrary is a criminal offense.

The notes will be ready for delivery in book-entry form only through The
Depository Trust Company on or about June 25, 2002.

----------------

JOINT BOOK-RUNNING MANAGERS

MERRILL LYNCH & CO. CREDIT SUISSE FIRST BOSTON

----------------

DEUTSCHE BANK SECURITIES

BANC OF AMERICA SECURITIES LLC

BNY CAPITAL MARKETS, INC.

GOLDMAN, SACHS & CO.

WACHOVIA SECURITIES
----------------

The date of this prospectus supplement is June 19, 2002.

TABLE OF CONTENTS

PROSPECTUS SUPPLEMENT

PAGE
----

SUMMARY............................................................ S-1
RISK FACTORS....................................................... S-3
CAUTIONARY LANGUAGE REGARDING FORWARD LOOKING STATEMENTS........... S-5
BUSINESS........................................................... S-6
PROPERTIES......................................................... S-10
RATIO OF EARNINGS TO FIXED CHARGES................................. S-13
USE OF PROCEEDS.................................................... S-13
CAPITALIZATION..................................................... S-14
SELECTED CONSOLIDATED FINANCIAL DATA............................... S-15
DESCRIPTION OF NOTES............................................... S-17
SUPPLEMENTAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS....... S-20
UNDERWRITING....................................................... S-23
LEGAL MATTERS...................................................... S-24
EXPERTS............................................................ S-24

PROSPECTUS
PAGE
----
ABOUT THIS PROSPECTUS.............................................. 1
WHERE YOU CAN FIND MORE INFORMATION................................ 1
CAUTIONARY LANGUAGE REGARDING FORWARD LOOKING STATEMENTS........... 2
NOTICE REGARDING ARTHUR ANDERSEN LLP............................... 3
THE COMPANY........................................................ 4
RISK FACTORS....................................................... 5
RATIO OF EARNINGS TO FIXED CHARGES................................. 7
USE OF PROCEEDS.................................................... 7
DESCRIPTION OF THE DEBT SECURITIES................................. 8
DESCRIPTION OF PREFERRED STOCK..................................... 14
DESCRIPTION OF COMMON STOCK........................................ 18
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS RELATED TO OUR REIT
ELECTION......................................................... 24
PLAN OF DISTRIBUTION............................................... 34
LEGAL MATTERS...................................................... 35
EXPERTS............................................................ 35

----------------

You should rely only on the information contained, or incorporated by
reference, in this prospectus supplement and the accompanying prospectus. We
have not, and the underwriters have not, authorized anyone to provide you with
different information. If anyone provides you with different or inconsistent
information, you should not rely on it. We are not, and the underwriters are
not, making an offer to sell or a solicitation of an offer to buy these
securities in any jurisdiction where the offer, sale or solicitation is not
permitted. You should assume that the information appearing in this prospectus
supplement, the accompanying prospectus and the documents incorporated by
reference is accurate only as of their respective dates. Our business,
financial condition, results of operations and prospects may have changed since
those dates.

SUMMARY

THE FOLLOWING SUMMARY MAY NOT CONTAIN ALL THE INFORMATION THAT MAY BE
IMPORTANT TO YOU. YOU SHOULD READ THE ENTIRE PROSPECTUS SUPPLEMENT, THE
ACCOMPANYING PROSPECTUS AND THE DOCUMENTS INCORPORATED BY REFERENCE IN THE
PROSPECTUS BEFORE MAKING A DECISION TO INVEST IN THE NOTES.

ALL REFERENCES TO "HCPI," "OUR" AND "WE" IN THIS PROSPECTUS SUPPLEMENT
AND THE ACCOMPANYING PROSPECTUS MEAN HEALTH CARE PROPERTY INVESTORS, INC. AND
ITS MAJORITY-OWNED SUBSIDIARIES AND OTHER ENTITIES CONTROLLED BY HEALTH CARE
PROPERTY INVESTORS, INC., EXCEPT WHERE IT IS CLEAR FROM THE CONTEXT THAT THE
TERM MEANS ONLY THE ISSUER, HEALTH CARE PROPERTY INVESTORS, INC.

OUR COMPANY

We were organized in 1985 to qualify as a real estate investment trust,
or a REIT. We invest in health care related real estate located throughout the
United States. We commenced business 17 years ago, making us the second oldest
REIT specializing in health care real estate. Since 1986, the debt rating
agencies have rated our debt investment grade. Currently, Moody's Investors
Service, Standard & Poor's and Fitch rate our senior debt at Baa2, BBB+ and
BBB+, respectively. The market value of our common stock was approximately $2.5
billion as of June 18, 2002.

As of March 31, 2002, our gross investment in our properties, including
partnership interests and mortgage loans, was approximately $2.8 billion. As of
March 31, 2002, our portfolio of 425 properties in 42 states consisted of:

. 172 long-term care facilities;

. 90 assisted living facilities;

. 85 medical office buildings;

. 37 physician group practice clinics;

. 21 acute care hospitals;

. Nine rehabilitation hospitals;

. Six health care laboratory and biotech research facilities; and

. Five retirement living communities.

Our principal offices are located at 4675 MacArthur Court, Suite 900,
Newport Beach, California 92660, and our telephone number is (949) 221-0600.

S-1

THE OFFERING

Issuer........................ Health Care Property Investors, Inc.

Securities offered............ $250 million in aggregate principal amount of 6.45%
senior notes.

Maturity...................... June 25, 2012.

Interest payment dates........ June 25 and December 25 of each year, beginning
December 25, 2002.

Ranking....................... The notes will be unsecured and rank senior to our
subordinated indebtedness and equally with our other
senior indebtedness. The notes will effectively rank
junior to all liabilities of our subsidiaries. The notes
will also be subordinated to our secured indebtedness
as to the assets securing such indebtedness.

Covenant...................... Under specified circumstances, the indenture
governing the notes restricts our ability to incur
additional indebtedness.

Use of proceeds............... We estimate that the net proceeds from this offering,
after deducting estimated fees and expenses, will be
approximately $247,030,000 million. We intend to
use these proceeds for the repayment of outstanding
indebtedness.

Risk factors.................. See "Risk Factors" and the other information in this
prospectus supplement and the accompanying
prospectus for a discussion of factors you should
carefully consider before deciding to invest in the
notes.

S-2

RISK FACTORS

SET FORTH BELOW AND IN THE SECTION ENTITLED "RISK FACTORS" OF THE
ACCOMPANYING PROSPECTUS ARE THE RISKS THAT WE BELIEVE ARE MATERIAL TO INVESTORS
WHO PURCHASE THE NOTES. IN ADDITION TO OTHER INFORMATION CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS, YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING FACTORS BEFORE
INVESTING IN THE NOTES.

OUR INDEBTEDNESS COULD ADVERSELY AFFECT OUR FINANCIAL RESULTS AND PREVENT US
FROM FULFILLING OUR OBLIGATIONS UNDER THE NOTES.

At March 31, 2002, our total consolidated indebtedness was approximately
$1.1 billion with gross real estate assets of $2.8 billion. We may be able to
borrow substantial additional unsecured indebtedness in the future. If new
indebtedness is added to our current debt levels, the related risks that we now
face could increase.

Our indebtedness could have important consequences for the holders of the
notes, including:

. limiting our ability to satisfy our obligations with respect to the
notes;

. increasing our vulnerability to general adverse economic and industry
conditions;

. limiting our ability to obtain additional financing to fund future
working capital, capital expenditures and other general corporate
requirements;

. requiring a substantial portion of our cash flow from operations for
the payment of principal of, and interest on, our indebtedness and
reducing our ability to use our cash flow to fund working capital,
capital expenditures and general corporate requirements;

. limiting our flexibility in planning for, or reacting to, changes in
our business and the industry; and

. putting us at a disadvantage compared to competitors with less
indebtedness.

OUR BUSINESS OPERATIONS MAY NOT GENERATE THE CASH NEEDED TO SERVICE OUR
INDEBTEDNESS.

Our ability to make payments on our indebtedness, including these notes,
and to fund planned capital expenditures will depend on our ability to generate
cash in the future. We cannot assure you that our business will generate
sufficient cash flow from operations or that future borrowings will be
available to us in an amount sufficient to enable us to pay our indebtedness,
including these notes, or to fund our other liquidity needs.

ALTHOUGH THESE NOTES ARE REFERRED TO AS "SENIOR NOTES," THEY WILL BE
EFFECTIVELY SUBORDINATED TO OUR SECURED INDEBTEDNESS AND ALL LIABILITIES OF OUR
SUBSIDIARIES.

The notes are unsecured and therefore will be effectively subordinated to
any secured indebtedness we may incur to the extent of the value of the assets
securing such indebtedness. In the event of a bankruptcy or similar proceeding
involving us, our assets which serve as collateral will be available to satisfy
the obligations under any secured indebtedness before any payments are made on
the notes. In addition, our subsidiaries and general and limited partnerships
will not guarantee the notes. In the event of a bankruptcy, liquidation or
reorganization of any of our subsidiaries or partnerships, creditors of our
subsidiaries and partnerships will generally be entitled to payment of their
claims from the assets of those subsidiaries and partnerships before any assets
are made available for distribution to us, except to the extent we may also
have a claim as a creditor. At March 31, 2002, these notes were effectively
junior to approximately $181.7 million of indebtedness.

AN ACTIVE TRADING MARKET MAY NOT DEVELOP FOR THE NOTES.

Prior to the offering, there was no existing trading market for the
notes. Although the underwriters have informed us that they currently intend to
make a market in the notes after we complete the offering, they have no
obligation to do so and may discontinue making a market at any time without
notice.

S-3

We do not intend to apply for listing of the notes on any securities
exchange or for quotation on the Nasdaq National Market.

The liquidity of any market for the notes will depend on a number of
factors, including:

. the number of holders of the notes;

. our performance;

. the market for similar securities;

. the interest of securities dealers in making a market in the notes;
and

. prevailing interest rates.

We cannot assure you that an active market for the notes will develop or,
if developed, that it will continue.

OUR PRIOR ENGAGEMENT OF ARTHUR ANDERSEN AS OUR INDEPENDENT AUDITORS DURING
FISCAL YEARS 1999, 2000, AND 2001 MAY ADVERSELY AFFECT OUR ABILITY TO ACCESS
THE CAPITAL MARKETS AND MAKE TIMELY FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION IN THE FUTURE.

On March 14, 2002, Arthur Andersen LLP, our former independent public
auditors, was indicted on federal obstruction of justice charges arising from
the federal government's investigation of Enron Corp. On June 15, 2002, Arthur
Andersen was found guilty of these charges. Although we dismissed Arthur
Andersen as our independent public auditors during May 2002 and engaged Ernst &
Young LLP, our consolidated financial statements for the fiscal years ended
December 31, 1999, 2000, and 2001 were audited by Arthur Andersen and are
incorporated by reference into the prospectus supplement and the accompanying
prospectus. The Securities and Exchange Commission has said that it will
continue accepting financial statements audited by Arthur Andersen as long as a
reasonable effort is made to have Arthur Andersen reissue its reports and to
obtain a manually signed accountant's report from Arthur Andersen. Arthur
Andersen notified us that, as of June 6, 2002, it is no longer able to reissue
its reports because both of the partners who were assigned to our account have
resigned from the firm. Our access to the capital markets and our ability to
make timely filings with the SEC could be impaired if the SEC ceases accepting
financial statements from a prior period audited by Arthur Andersen for which
Arthur Andersen will not reissue an audit report. In that case, we would not be
able to access the public capital markets unless another independent accounting
firm is able to audit the financial statements originally audited by Arthur
Andersen. Any delay or inability to access the public capital markets caused by
these circumstances could have a material adverse effect on us.

S-4

CAUTIONARY LANGUAGE REGARDING FORWARD LOOKING STATEMENTS

Statements in this prospectus supplement, the accompanying prospectus and
the information incorporated by reference that are not historical factual
statements are "forward looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. We intend such forward looking
statements to be covered by the safe harbor provisions for forward looking
statements contained in the Private Securities Litigation Reform Act of 1995
and are including this section for purposes of complying with these safe harbor
provisions. The statements include, among other things, statements regarding
the intent, belief or expectations of HCPI 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, we, through our senior management, from time
to time make forward looking oral and written public statements concerning our
expected future operations and other developments. Readers are cautioned that,
while forward looking statements reflect our 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 the
factors set forth under the caption "Risk Factors" in this prospectus
supplement and the accompanying prospectus, you should consider the following:

. 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 our lessees or mortgagors;

. Changes in the reimbursement available to our lessees 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;

. Competition for lessees and mortgagors, including with respect to new
leases and mortgages and the renewal or rollover of existing leases;

. 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;

. The ability of our lessees and mortgagors to operate our properties
in a manner sufficient to maintain or increase revenues and to
generate sufficient income to make rent and loan payments;

. The financial weakness of operators in the long-term care and
assisted living sectors, including the bankruptcies of certain of our
operators, which results in uncertainties in our ability to continue
to realize the full benefit of such operators' leases;

. Changes in national or regional economic conditions, including
changes in interest rates and the availability and cost of capital
for HCPI; and

. The risk that we will not be able to sell or lease facilities that
are currently vacant.

We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise. In light of these risks and uncertainties, the forward
looking events discussed in this prospectus supplement or discussed in or
incorporated by reference in the accompanying prospectus may not occur.

S-5

BUSINESS

PORTFOLIO OF PROPERTIES

As of March 31, 2002, our gross investment in our properties, including
partnership interests and mortgage loans, was approximately $2.8 billion. Our
portfolio of 425 properties in 42 states consisted of:

. 172 long-term care facilities;

. 90 assisted living facilities;

. 85 medical office buildings;

. 37 physician group practice clinics;

. 21 acute care hospitals;

. Nine rehabilitation hospitals;

. Six health care laboratory and biotech research facilities; and

. Five retirement living communities.

The average age of our properties is 18 years. As of March 31, 2002,
approximately 55% of our annualized revenue was derived from properties
operated by publicly traded health care providers.

LESSEES AND OPERATORS

As of March 31, 2002, we had an ownership interest in 399 properties
located in 40 states and mortgage loans on 26 properties.

We leased 299 of our owned properties pursuant to long-term triple net
leases to 84 health care providers. Under a triple net lease, in addition to
the rent obligation, the lessee is responsible for all operating expenses of
the property such as utilities, property taxes, insurance and repairs and
maintenance. The most significant lessees under triple net leases include the
following companies or their affiliates:

. Tenet Healthcare Corporation;

. HealthSouth Corporation;

. Kindred Healthcare, Inc.;

. Emeritus Corporation;

. HCA Inc.;

. Beverly Enterprises, Inc.; and

. Centennial Healthcare Corp.

The remaining 100 owned properties are medical office buildings,
physician clinics and health care laboratory and biotech research facilities
with triple net, gross or modified gross leases with multiple tenants. These
properties are managed by independent property management companies on our
behalf. Under gross or

S-6

modified gross leases, we may be responsible for property taxes, repairs and
maintenance and/or insurance on those properties.

We also hold mortgage loans on 26 properties that are owned and operated
by 14 health care providers including Beverly, Emeritus and Centennial. We have
provided mortgage loans in the amount of $157,095,000 on those 26 properties,
including 15 long-term care facilities, seven assisted living facilities, three
acute care hospitals and one medical office building. At March 31, 2002, the
remaining balance on these loans totaled $146,605,000.

With the exception of Tenet, which accounted for 17.8% of our annualized
revenue during the quarter ended March 31, 2002, no single lessee or operator
accounted for more than 5.3% of our annualized revenue for the quarter ended
March 31, 2002.

LEASES AND LOANS

The initial base rental rates of the triple net leases of properties we
acquired during the period from January 1, 1999 to March 31, 2002 have
generally ranged from 9% to 12% per annum of the acquisition price of the
related property. Initial interest rates on the loans we entered into during
this period have generally ranged from 8% to 11% per annum. Rental rates vary
by lease, taking into consideration many factors, such as:

. Creditworthiness of the lessee;

. Operating performance of the facility;

. Interest rates at the beginning of the lease; and

. Location, type and physical condition of the facility.

Certain leases provide for additional rents that are based upon a
percentage of increased revenue over specific base period revenue of the leased
properties. Others have rent increases based on inflation indices or other
factors and some leases and loans have annual fixed rent or interest rate
increases.

In addition to the minimum and additional rents, each lessee under a
triple net lease is responsible for all additional charges, including charges
related to non-payment or late payment of rent, taxes and assessments,
governmental charges, and utility and other charges. Each triple net lessee is
required, at its expense, to maintain its leased property in good order and
repair. We are not required to repair, rebuild or maintain the properties
leased under triple net leases.

Each lessee with a gross or modified gross lease is also responsible for
minimum and additional rents, but may not be responsible for all operating
expenses. Under gross or modified gross leases, we may be responsible for
property taxes, repairs and maintenance and/or insurance on those properties.

The primary or fixed terms of the triple net and modified gross leases
generally range from 10 to 15 years, and generally have one or more five-year
(or longer) renewal options. The average remaining base lease term on the
triple net and modified gross leases is approximately seven years. The primary
term of the gross leases to multiple tenants in the medical office buildings
range from 1 to 20 years, with an average of six years remaining on those
leases. Obligations under the triple-net leases, in most cases, have corporate
parent or shareholder guarantees. Irrevocable letters of credit from various
financial institutions and lease deposits back 139 leases and loans on 15
facilities and cover from 1 to 18 months of lease or loan payments. We require
the lessees and mortgagors to renew such letters of credit during the lease or
loan term in amounts that may change based upon the passage of time, improved
operating cash flows or improved credit ratings.

We believe that the credit enhancements discussed above provide us with
significant protection for our investment portfolio. As of June 10, 2002, other
than approximately $11 million in delinquent rents and interest,

S-7

of which approximately $4 million is covered by credit enhancements, we are
currently receiving rents and interest in a timely manner from substantially
all lessees and mortgagors as provided under the terms of the leases or loans;
we have provided reserves of $4.5 million against the remaining amounts.

Based upon information provided to us by lessees or mortgagors, certain
facilities are presently underperforming financially. Individual facilities may
underperform as a result of inadequate Medicaid reimbursement, low occupancy,
less than optimal patient mix, excessive operating costs, other operational
issues or capital needs. We believe that, even if these facilities remain at
current levels of performance, the lease and loan provisions contain sufficient
security to assure that material rental and mortgage obligations will continue
to be met for the remainder of the lease or loan terms. In the future it is
expected that some lessees may choose not to renew their leases on certain
properties at existing rental rates.

FACILITY OPERATORS

At March 31, 2002, we had approximately 93 operators in 42 states. In
addition, approximately 650 leases are in force in the multi-tenant buildings.
Listed below are our major operators, the number of facilities operated by our
operators, and the annualized revenue and the approximate percentage of
annualized revenue derived from those operators as of March 31, 2002.

PERCENTAGE OF
TOTAL ANNUALIZED
OPERATORS FACILITIES ANNUALIZED REVENUE REVENUE
--------- ---------- ----------------------------- ----------------
(DOLLAR AMOUNTS IN THOUSANDS)

Tenet 9 $56,564 18%
HealthSouth 9 16,931 5
Kindred 23 16,290 5
Emeritus 23 15,642 5
HCA 9 14,470 5
Beverly 26 11,971 4
Centennial 18 8,896 3

Certain of the listed facilities have been subleased to other operators
with the original lessee remaining liable on the leases. The revenue applicable
to these sublessees is included in the annualized revenue percentages above.
The percentage of annualized revenue on these subleased facilities approximated
1% as of March 31, 2002.

Tenet, HealthSouth, Kindred, Emeritus, HCA and Beverly are subject to the
informational filing requirements of the Securities Exchange Act of 1934, as
amended, and accordingly file periodic financial statements on Form 10-K and
Form 10-Q with the Securities and Exchange Commission. We obtained all of the
financial and other information relating to these operators listed below from
their public reports.

S-8

The following table summarizes our major public operators' assets,
stockholders' equity, annualized revenue and net income (or net loss) from
continuing operations as of or for the year ended December 31, 2001 and the
three months ended March 31, 2002.

NET INCOME/(LOSS)
STOCKHOLDERS' FROM CONTINUING
ASSETS AS OF EQUITY (DEFICIT) AT REVENUE OPERATIONS
---------------- ------------------ ---------------- ---------------
OPERATORS 12/31/01 3/31/02 12/31/01 3/31/02 12/31/01 3/31/02 12/31/01 3/31/02
--------- -------- ------- -------- ------- -------- ------- -------- -------

Tenet(1)....... $12,995 $13,640 $5,079 $5,465 $12,053 $10,175 $643 $524
HealthSouth.... 7,579 7,730 3,797 3,910 4,380 1,130 202 108
Kindred(2)..... 1,509 1,533 590 611 2,329 811 52 18
Emeritus(3).... 168 149 (74) (77) 141 36 (4) (1)
HCA............ 17,730 17,955 4,762 5,226 17,953 4,873 886 385
Beverly........ 1,681 1,540 296 318 2,713 623 (301) 21

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(1) For Tenet, the December 31, 2001 information described above is for the
fiscal year ended May 31, 2001 or as of May 31, 2001, as applicable, and
the March 31, 2002 information described above is for the nine months ended
February 28, 2002 or as of February 28, 2002, as applicable.
(2) For Kindred, the information described above is for the nine months ended
or as of December 31, 2001, as applicable.
(3) For Emeritus, Net Income/(Loss) from Continuing Operations figures do not
reflect preferred stock dividend payments.

DEVELOPMENT OF FACILITIES

Since 1987, we have committed to the development of 62 facilities. As of
March 31, 2002, we have funded costs of approximately $422 million and have
completed 58 facilities of our total development commitment. The completed
facilities comprise:

. 35 assisted living facilities;

. Seven long-term care facilities;

. Seven medical office buildings;

. Five rehabilitation hospitals; and

. Four acute care hospitals.

Simultaneously with the commencement of each of these development
programs and prior to funding, we enter into a lease agreement with the
developer/operator. The base rent under the lease is generally established at a
rate equivalent to a specified margin over our cost of money at the
commencement of the lease.

S-9

PROPERTIES

Of the 425 health care facilities in which we had an investment as of
March 31, 2002, we directly owned 327 facilities and 25 mortgages. Of the
remaining facilities, we had varying percentage interests in several limited
liability companies and partnerships that together owned 72 facilities and one
mortgage. The following is a summary of our properties grouped by type of
facility and ownership status:

100% OWNED 100% INTEREST
FACILITIES MORTGAGES(1) OTHER(1) TOTAL
---------- ------------- -------- -----

Long-Term Care Facilities................................... 133 14 25 172
Acute Care Hospitals........................................ 16 3 2 21
Medical Office Buildings.................................... 54 1 30 85
Assisted Living Facilities.................................. 79 7 4 90
Rehabilitation Hospitals.................................... 3 -- 6 9
Physician Group Practice Clinics............................ 37 -- -- 37
Health Care Laboratory and Biotech Research Facilities...... -- -- 6 6
Retirement Living Communities............................... 5 -- -- 5
--- -- -- ---
Totals................................................... 327 25 73 425
=== == == ===

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(1) We have provided 26 mortgage loans in the amount of $157,095,000. At March
31, 2002, the remaining balance on these loans totaled $146,605,000.

The following paragraphs describe each type of property.

LONG-TERM CARE FACILITIES. We have invested in 172 long-term care
facilities. Various health care providers operate these facilities. Long-term
care facilities offer restorative, rehabilitative and custodial nursing care
for people not requiring the more extensive and sophisticated treatment
available at acute care hospitals. Revenue from ancillary and subacute care
services are derived from providing services to residents beyond room and board
and include occupational, physical, speech, respiratory and IV therapy, wound
care, oncology treatment, brain injury care and orthopedic therapy as well as
sales of pharmaceutical products and other services. Certain long-term care
facilities provide some of the foregoing services on an out-patient basis.
Long-term care facilities are designed to supplement hospital care and many
have transfer agreements with one or more acute care hospitals. These
facilities depend to some degree upon referrals from practicing physicians and
hospitals. Long-term care services are paid for either by private sources, or
through the federal Medicare and state Medicaid programs.

Long-term care facilities generally provide patients with accommodation,
complete medical and nursing care, and rehabilitation services including
speech, physical and occupational therapy. As a part of the Omnibus Budget
Reconciliation Act of 1981, or OBRA, Congress established a waiver program
under Medicaid to offer an alternative to institutional long-term care
services. The provisions of OBRA and the subsequent OBRA Acts of 1987 and 1990
allow states, with federal approval, greater flexibility in program design as a
means of developing cost-effective alternatives to delivering services
traditionally provided in the long-term care setting. This is a contributing
factor to the recent increase in the number of assisted living facilities,
which may adversely affect some long-term care facilities as some individuals
choose the residential environment and lower cost delivery system provided in
the assisted living setting.

ACUTE CARE HOSPITALS. We have an interest in 21 general acute care
hospitals and three long-term acute care hospitals. Acute care hospitals offer
a wide range of services such as fully-equipped operating and recovery rooms,
obstetrics, radiology, intensive care, open heart surgery and coronary care,
neurosurgery, neonatal intensive care, magnetic resonance imaging, nursing
units, oncology, clinical laboratories, respiratory therapy, physical therapy,
nuclear medicine, rehabilitation services and outpatient services.

S-10

Long-term acute care hospitals provide care for patients with complex
medical conditions that require more intensive care, monitoring or emergency
back-up than that available in most skilled nursing-based subacute programs.
Most long-term acute care hospital patients have severe chronic health problems
and are medically unstable or at risk of medical instability. The most common
cases treated in this setting include high acuity ventilator-dependent patients
and patients with multiple system failures relating to cancer, spinal cord
injuries or head injuries.

Services are paid for by private sources, third party payors (e.g.,
insurance and HMOs) or through the federal Medicare and state Medicaid
programs. Medicare provides reimbursement incentives to traditional general
acute care hospitals to minimize inpatient length of stay.

MEDICAL OFFICE BUILDINGS. We have investments in 85 medical office
buildings. These buildings are generally located adjacent to, or on the campus
of, acute care hospitals. Medical office buildings contain physicians' offices
and examination rooms, and may also include pharmacies, hospital ancillary
service space and day-surgery operating rooms. Medical office buildings require
more extensive plumbing, electrical, heating and cooling capabilities than
commercial office buildings for sinks, brighter lights and special equipment
that physicians typically use. Of our owned medical office buildings, 18 are
master leased on a triple net basis to lessees that then sublease office space
to physicians or other medical practitioners, 67 are managed by third party
property management companies and are leased under triple net leases, or gross
or modified gross leases under which we are responsible for certain operating
expenses and two are mortgages.

ASSISTED LIVING FACILITIES. We have investments in 90 assisted living
facilities. Assisted living facilities serve elderly persons who require more
assistance with daily living activities than congregate care residents, but who
do not require the constant supervision nursing homes provide. Services include
personal supervision and assistance with eating, bathing, grooming and
administering medication. Assisted living facilities typically contain larger
common areas for dining, group activities and relaxation to encourage social
interaction. Residents typically rent studio and one and two bedroom units on a
month-to-month basis. Charges for room and board and other services in the
assisted living facilities are generally paid from private sources.

REHABILITATION HOSPITALS. We have investments in nine rehabilitation
hospitals. These hospitals provide inpatient and outpatient care for patients
who have sustained traumatic injuries or illnesses, such as spinal cord
injuries, strokes, head injuries, orthopedic problems, work-related
disabilities and neurological diseases, as well as treatment for amputees and
patients with severe arthritis. Rehabilitation programs encompass physical,
occupational, speech and inhalation therapies, rehabilitative nursing and other
specialties. Services are paid for by the patient or the patient's family,
third party payors (e.g., insurance and HMOs) or through the federal Medicare
program.

PHYSICIAN GROUP PRACTICE CLINICS. We have investments in 37 physician
group practice clinic facilities that are leased to 15 different tenants. These
clinics generally provide a broad range of medical services through organized
physician groups representing various medical specialties. Each clinic facility
is generally leased to a single lessee under a triple net or modified gross
lease.

HEALTH CARE LABORATORY AND BIOTECH RESEARCH FACILITIES. We have
investments in six health care laboratory and biotech research facilities.
These facilities are located on a research campus of a major university. The
facilities are designed for and accommodate research and development in the
biopharmaceutical industry, drug discovery and development and predictive and
personalized medicine. The facilities are leased to two tenants on a long-term
basis.

RETIREMENT LIVING COMMUNITIES. We have investments in five retirement
living communities. Retirement living communities offer seniors lifelong
shelter and access to specified health care services. In return, residents may
pay a lump-sum entrance fee and/or regular monthly payments. Depending on the
contract, the entrance fee may be nonrefundable, refundable on a declining
basis over time, partially refundable or fully

S-11

refundable. Retirement living community residents enjoy an independent
lifestyle with the knowledge that if their health deteriorates, their needs
will continue to be met. Most retirement living communities establish minimum
requirements for incoming residents based on age, financial assets, income
level and physical health and mobility. In general, residents are expected to
move into the community while they are independent and self reliant.

COMPETITION

We compete for real estate acquisitions and financings with health care
providers, other health care related real estate investment trusts, real estate
partnerships, real estate lenders and other investors.

Our properties are subject to competition from the properties of other
health care providers. Certain of these other operators have capital resources
substantially in excess of some of the operators of our facilities. In
addition, the extent to which the properties are utilized depends upon several
factors, including the number of physicians using the health care facilities or
referring patients there, competitive systems of health care delivery and the
size and composition of the population in the surrounding area. Private,
federal and state payment programs and the effect of other laws and regulations
may also have a significant influence on the utilization of the properties.
Virtually all of the properties operate in a competitive environment and
patients and referral sources, including physicians, may change their
preferences for a health care facility from time to time.

LOCATION OF PROPERTIES

The following table summarizes facility counts and annualized revenue
breakdown by state as of March 31, 2002 (dollar amounts in thousands):

FACILITIES REVENUE
---------- --------

California.............................. 41 $ 56,289
Texas................................... 51 36,810
Indiana................................. 49 27,272
Utah.................................... 27 24,297
Florida................................. 37 25,091
Others (37 states)...................... 220 147,791
--- --------
425 $317,550
=== ========

LEASE EXPIRATION AND MORTGAGE MATURITIES

The following table recaps the percentage of revenue per year as a
percentage of total annualized revenue reflecting mortgage maturities, and the
earlier of lease expirations or the earliest possible purchase option date,
where applicable as of March 31, 2002.

YEAR FACILITIES REVENUE
---- ---------- -------

2002..................................... 10 0.4%
2003..................................... 16 2.6%
2004..................................... 25 21.0%
2005..................................... 26 8.5%
2006..................................... 21 4.9%
2007..................................... 42 4.7%
2008..................................... 40 6.5%
2009..................................... 23 5.1%
2010..................................... 43 6.1%
2011-20.................................. 179 40.2%
--- -----
425 100.0%
=== =====

S-12

RATIO OF EARNINGS TO FIXED CHARGES

The following table sets forth our ratios of earnings to fixed charges
for the periods indicated. In computing the ratios of earnings to fixed
charges, earnings have been based on consolidated income from operations before
fixed charges (exclusive of capitalized interest). Fixed charges consist of
interest on debt, including amounts capitalized, and the pro rata share of the
fixed charges of the partnerships and limited liability companies in which we
hold an interest. In computing the ratios of earnings to combined fixed charges
and preferred stock dividends, preferred stock dividends consist of dividends
on our 7 7/8% Series A cumulative redeemable preferred stock, 8.70% Series B
cumulative redeemable preferred stock and 8.60% Series C cumulative redeemable
preferred stock.

FOR THE THREE
YEAR ENDED DECEMBER 31, MONTHS ENDED
------------------------ MARCH 31,
1997 1998 1999 2000 2001 2002
---- ---- ---- ---- ---- -------------

Ratio of Earnings to Fixed Charges............. 3.00 2.87 2.45 2.41 2.64 2.86
---- ---- ---- ---- ---- ----
Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends.................... 2.88 2.37 1.89 1.88 2.01 2.12
---- ---- ---- ---- ---- ----

USE OF PROCEEDS

We estimate that the net proceeds from this offering, after deducting
estimated fees and expenses, will be approximately $247,030,000 million. We
intend to use the net proceeds from this offering to repay a portion of our
outstanding indebtedness under our revolving lines of credit. Borrowings under
our revolving lines of credit were $296,700,000 as of June 17, 2002 at an
average interest rate of 2.77%.

S-13

CAPITALIZATION

The following table sets forth the capitalization of HCPI at March 31,
2002 on an actual basis and on an as adjusted basis to reflect the issuance and
sale of the notes.

MARCH 31, 2002
------------------------
ACTUAL AS ADJUSTED
------ -----------
(IN THOUSANDS)

Debt Obligations:
Bank Notes Payable(1)........................................... $ 309,800 $ 62,770
Senior Notes Payable(2)......................................... 653,411 903,411
Mortgage Notes Payable.......................................... 181,682 181,682
----------- -----------
Total Debt Obligations...................................... 1,144,893 1,147,863
Minority Interests in Partnerships/Convertible Operating
Partnership Units................................................ 69,767 69,767

Stockholders' Equity:
Preferred Stock, $1.00 par value: 50,000,000 shares authorized;
11,721,600 shares outstanding................................. 274,487 274,487
Common Stock, $1.00 par value: 200,000,000 shares authorized;
57,049,963 shares outstanding................................. 57,050 57,050
Additional Paid-In Capital...................................... 1,124,032 1,124,032
Other Equity.................................................... (10,676) (10,676)
Cumulative Net Income........................................... 913,493 913,493
Cumulative Dividends............................................ (1,111,560) (1,111,560)
----------- -----------
Total Stockholders' Equity.................................. 1,246,826 1,246,826
----------- -----------
Total Capitalization............................................... $ 2,461,486 $ 2,464,456
=========== ===========

--------
(1) Outstanding bank notes payable were approximately $296,700 as of June 17,
2002 at an average interest rate of 2.77%.
(2) Our senior debt is net of any original issue discounts and currently is
rated Baa2 by Moody's and BBB+ by both Standard & Poor's and Fitch.

S-14

SELECTED CONSOLIDATED FINANCIAL DATA

We are providing the following financial information to aid you in your
analysis of whether to make an investment in the notes offered by this
prospectus supplement. This information is only a summary and you should read
it in conjunction with the historical financial statements and related notes
contained in the annual and quarterly reports and other information that we
have filed with the Securities and Exchange Commission. See "Where You Can Find
More Information" on page 1 of the accompanying prospectus.

THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
---------------------------------- ----------------------
2001(1) 2000(1) 1999(1) 2002 2001(1)
---------- ---------- ---------- ---------- ----------
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

INCOME STATEMENT DATA:
Rental Income, Triple Net Leases......... $ 223,578 $ 224,253 $ 141,261 $ 52,811 $ 51,475
Rental Income, Managed Properties........ 83,906 79,054 55,149 22,447 19,796
Interest and Other Income................ 21,850 22,875 25,062 5,511 5,319
---------- ---------- ---------- ---------- ----------
Total Revenue......................... 329,334 326,182 221,472 80,769 76,590
Interest Expense......................... 78,489 86,747 58,458 17,536 20,996
Real Estate Depreciation................. 69,799 69,074 44,181 17,934 16,961
Managed Properties Operating Expenses.... 29,809 27,681 18,240 7,475 7,201
General and Administrative Expenses...... 13,182 13,266 11,908 4,199 3,256
Impairment Losses Related to Depreciable
Property............................... 7,360 2,751 -- -- 1,600
Impairment of Equity Investment.......... -- 2,000 -- -- --
---------- ---------- ---------- ---------- ----------
Total Expenses........................ 198,639 201,519 132,787 47,144 50,014
---------- ---------- ---------- ---------- ----------
Income from Operations................... 130,695 124,663 88,685 33,625 26,576
Minority Interests....................... (6,595) (5,729) (5,476) (1,999) (1,337)
---------- ---------- ---------- ---------- ----------
Income Before Discontinued Operations.... 124,100 118,934 83,209 31,626 25,239
Operating Income from Discontinued
Operations............................. 2,114 2,803 2,713 102 1,559
Gain/(Loss) on Sale of Real Estate
Properties, Net........................ (5,048) 11,756 10,303 (1,319) (774)
---------- ---------- ---------- ---------- ----------
Net Income Before Extraordinary Items.... 121,166 133,493 96,225 30,409 26,024
Extraordinary Item-Gain on Extinguishment
of Debt................................ -- 274 -- -- --
---------- ---------- ---------- ---------- ----------
Net Income............................... 121,166 133,767 96,225 30,409 26,024
Dividends to Preferred Stockholders...... 24,900 24,900 17,775 (6,225) (6,225)
---------- ---------- ---------- ---------- ----------
Net Income Applicable to Common Shares... $ 96,266 $ 108,867 $ 78,450 $ 24,184 $ 19,799
========== ========== ========== ========== ==========
Basic Earnings Per Common Share.......... $ 1.79 $ 2.13 $ 2.25 $ 0.43 $ 0.39
========== ========== ========== ========== ==========
Diluted Earnings Per Common Share........ $ 1.78 $ 2.13 $ 2.25 $ 0.42 $ 0.39
========== ========== ========== ========== ==========
Weighted Average Shares Outstanding
(Basic)................................ 53,879 51,057 34,792 56,737 50,963
========== ========== ========== ========== ==========
BALANCE SHEET DATA:
Total Assets............................. $2,431,153 $2,394,852 $2,464,795 $2,519,069 $2,431,843
Debt Obligations......................... 1,057,752 1,158,928 1,179,507 1,144,893 1,111,830
Stockholders' Equity..................... 1,246,724 1,139,283 1,195,662 1,246,826 1,246,724

S-15

THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
------------------------------- -------------------
2001(1) 2000(1) 1999(1) 2002 2001(1)
--------- --------- --------- --------- --------
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

OTHER DATA:
Funds From Operations(2).................. $ 179,375 $ 171,344 $ 114,520 $ 43,911 $ 39,418
Cash Flows From Operating Activities...... 200,848 205,511 124,117 51,753 50,198
Cash Flows Provided By (Used In) Investing
Activities.............................. (118,163) 63,714 (230,460) (109,087) (11,566)
Cash Flows Provided By (Used In) Financing
Activities.............................. (132,900) (218,298) 109,535 55,543 (91,042)
Dividends Paid............................ 190,123 175,079 106,177 51,531 44,966
Dividends Paid Per Common Share........... 3.10 2.94 2.78 0.80 0.76

--------
(1) Our consolidated statements of income and our presentation of FFO have been
revised from those originally reported to reflect the impact of the
implementation of the Statement of Financial Accounting Standard No. 144
"Accounting for the Impairment or Disposal of Long-Live Assets" (FAS 144).
In accordance with FAS 144, in 2002, the year of implementation, results
from discontinued operations related to properties held for sale have been
reclassified to "Operating Income from Discontinued Operations." The
reclassification has no impact on net revenues, net income, net income per
share of common stock or FFO for the years ended December 31, 2001, 2000
and 1999.

(2) We believe that Funds From Operations, or FFO, is an important supplemental
measure of operating performance. HCPI adopted the new definition of FFO
prescribed by the National Association of Real Estate Investment Trusts.
FFO is defined as net income applicable to common shares (computed in
accordance with generally accepted accounting principles), excluding gains
(or losses) from debt restructuring and sales of property, plus real estate
depreciation, and after adjustments for unconsolidated partnerships and
joint ventures. FFO does not, and is not intended to, represent cash
generated from operating activities in accordance with generally accepted
accounting principles, is not necessarily indicative of cash available to
fund cash needs and should not be considered as an alternative to net
income. FFO, as defined by us, may not be comparable to similarly entitled
items reported by other REITs that do not define it in accordance with the
definition prescribed by National Association of Real Estate Income Trusts.
The following table represents items and amounts being aggregated to
compute FFO.

THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
--------------------------- ------------------
2001(1) 2000(1) 1999(1) 2002 2001(1)
-------- -------- -------- ------- -------
(AMOUNTS IN THOUSANDS)

Net Income Applicable to Common Shares....... $ 96,266 $108,867 $ 78,450 $24,184 $19,799
Real Estate Depreciation..................... 69,799 69,074 44,181 17,934 16,961
Impairment Losses Related to Depreciable
Property................................... 7,360 2,751 -- -- 1,600
Joint Venture Adjustments.................... 243 1,917 1,584 283 106
(Gain)/Loss and Depreciation on Real Estate
Dispositions............................... 5,707 (10,991) (9,695) 1,510 952
Gain on Extinguishment of Debt............... -- (274) -- -- --
-------- -------- -------- ------- -------
Funds From Operations..................... $179,375 $171,344 $114,520 $43,911 $39,418
======== ======== ======== ======= =======

S-16

DESCRIPTION OF NOTES

THE FOLLOWING INFORMATION CONCERNING THE NOTES SUPPLEMENTS, AND SHOULD BE
READ IN CONJUNCTION WITH, THE STATEMENTS UNDER THE HEADING "DESCRIPTION OF THE
DEBT SECURITIES" IN THE ACCOMPANYING PROSPECTUS. CAPITALIZED TERMS NOT DEFINED
BELOW ARE USED AS DEFINED IN THE INDENTURE.

GENERAL

The notes will be issued under an indenture, dated as of September 1,
1993, between HCPI and The Bank of New York, as trustee, which has been
incorporated by reference as an exhibit to the registration statement of which
the accompanying prospectus is a part. The following summary of certain
provisions of the notes and of the indenture is not complete and you should
read the indenture to fully understand all the provisions of the notes.

The notes will constitute a separate series of senior debt securities
under the indenture, initially limited to $250,000,000 aggregate principal
amount. We may, from time to time, without giving notice to or seeking the
consent of the holders of the notes, issue additional notes having the same
ranking, interest rate, maturity and other terms as the notes issued in this
offering. Any additional notes having such similar terms together with the
previously issued notes will constitute a single series of debt securities
under the indenture.

The notes will be senior unsecured obligations of HCPI and will rank
equally with all other senior unsecured indebtedness of HCPI. The indenture
does not limit the aggregate principal amount of debt securities that HCPI may
issue under the indenture and the notes will rank equally and ratably with all
other debt securities issued under the indenture. The notes will not be listed
on any national securities exchange.

The notes will mature on June 25, 2012 and will not be redeemable prior
to maturity. The notes will bear interest from their date of issuance at the
rate shown on the cover of this prospectus supplement, payable semi-annually on
June 25 and December 25 in each year, commencing on December 25, 2002, to
holders of record on the preceding June 10 and December 10. Interest will be
calculated on the basis of a 360-day year of twelve 30-day months. Beneficial
interests in the notes may be acquired, or subsequently transferred, only in
denominations of $1,000 and integral multiples of $1,000.

If any interest payment date or the maturity date falls on a day that is
not a Business Day, the required payment of principal and/or interest will be
made on the next succeeding Business Day as if made on the date such payment
was due, and no interest will accrue on such payment for the period from and
after such interest payment date or maturity date, as the case may be, to the
date of such payment on the next succeeding Business Day. As used in this
prospectus supplement, "Business Day" means any day, other than a Saturday or
Sunday, which is not a day on which banking institutions or trust companies in
the City of New York are authorized or obligated by law to close.

Except as described under "Description of the Debt Securities--Certain
Covenants of the Company--Limitation on Borrowing Money" in the accompanying
prospectus, the indenture does not contain any other provisions that would
allow holders of the notes protection in the event of a highly leveraged
transaction, reorganization, restructuring, change in control, merger or
similar transaction involving HCPI that may adversely affect holders of the
notes.

GLOBAL NOTES, DELIVERY AND FORM

The notes will be represented by one fully registered global security
which will be deposited with, or on behalf of, the depositary. Except as set
forth below, the global security may not be transferred except as a whole by
the depositary to a nominee of the depositary or by a nominee of the depositary
to the depositary or another nominee of the depositary or by the depositary or
any nominee to a successor of the depositary or a nominee of such successor.

So long as the depositary or its nominee is the registered owner of the
global security, the depositary or its nominee, as the case may be, will be the
sole holder of the notes represented thereby, and the trustee and HCPI are only
required to treat the depositary or its nominee as the legal owner of the
notes, for all purposes under the indenture. Except as otherwise provided in
this section, the beneficial owners of the global security

S-17

representing the notes will not be entitled to receive physical delivery of
certificated notes and will not be considered the holders of the notes for any
purpose under the indenture, and no global security representing the notes
shall be exchangeable or transferable. Accordingly, each person owning a
beneficial interest in the global security must rely on the procedures of the
depositary and, if such person is not a participant in the depositary's system,
on the procedures of the participant through which such person owns its
interest to exercise any rights of a holder under the indenture. The laws of
some jurisdictions require that certain purchasers of securities take physical
delivery of the securities in certificated form. These limits and these laws
may impair the ability to transfer beneficial interests in the global security
representing the notes.

The following is based on information furnished by the depositary:

The depositary will act as securities depository for the notes. The notes
will be issued as fully registered securities registered in the name of Cede &
Co. (the depositary's partnership nominee). One fully registered global
security will be issued for the notes, in the aggregate principal amount of the
notes, and will be deposited with the depositary.

The depositary is a limited-purpose trust company organized under the New
York Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the United States Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code, and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934. The depositary holds securities that its
participants deposit with the depositary. The depositary also facilitates the
settlement among its participants of securities transactions, such as transfers
and pledges, in deposited securities through electronic computerized book-entry
changes in participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct participants include securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations. The depositary is owned by a number of its direct
participants and by the New York Stock Exchange LLC, the American Stock
Exchange, Inc., and the National Association of Securities Dealers, Inc. Access
to the depositary's system is also available to indirect participants such as
securities brokers and dealers, banks and trust companies that clear through or
maintain a custodial relationship with a direct participant, either directly or
indirectly. The rules applicable to the depositary and its participants are on
file with the Securities and Exchange Commission.

Purchases of notes under the depositary's system must be made by or
through direct participants, which will receive a credit for the notes on the
depositary's records. The beneficial ownership interest of each actual
purchaser of each note is in turn to be recorded on the direct and indirect
participants' records. Beneficial owners will not receive written confirmation
from the depositary of their purchase, but beneficial owners are expected to
receive written confirmations providing details of the transaction, as well as
periodic statements of their holdings, from the direct or indirect participants
through which the beneficial owner entered into the transaction. Transfers of
ownership interests in the notes are to be accomplished by entries made on the
books of participants acting on behalf of beneficial owners. Beneficial owners
of the notes will not receive certificated notes representing their ownership
interests in the notes, except in the event that use of the book-entry system
for the notes is discontinued.

To facilitate subsequent transfers, the global security representing the
notes which is deposited with the depositary is registered in the name of the
depositary's partnership nominee, Cede & Co. The deposit of the global security
with the depositary and its registration in the name of Cede & Co. effect no
change in beneficial ownership. The depositary has no knowledge of the actual
beneficial owners of the global security representing the notes; the
depositary's records reflect only the identity of the direct participants to
whose accounts such notes are credited, which may or may not be the beneficial
owners. The participants will remain responsible for keeping account of their
holdings on behalf of their customers.

Conveyance of notices and other communications by the depositary to
direct participants, by direct participants to indirect participants, and by
direct participants and indirect participants to beneficial owners will by
governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.

S-18

Neither the depositary nor Cede & Co. will consent or vote with respect
to the global security representing the notes. Under its usual procedures, the
depositary mails an omnibus proxy to HCPI as soon as possible after the
applicable record date. The omnibus proxy assigns Cede & Co.'s consenting or
voting rights to those direct participants to whose accounts the notes are
credited on the applicable record date (identified in a listing attached to the
omnibus proxy).

Principal and interest payments on the global security representing the
notes will be made to the depositary. The depositary's practice is to credit
direct participants' accounts on the applicable payment date in accordance with
their respective holdings shown on the depositary's records unless the
depositary has reason to believe that it will not receive payment on such date.
Payments by participants to beneficial owners will be governed by standing
instructions and customary practices, as is the case with securities held for
the accounts of customers in bearer form or registered in "street name," and
will be the responsibility of such participant and not of the depositary, the
trustee or HCPI, subject to any statutory or regulatory requirements as may be
in effect from time to time. Payment of principal, premium, if any, and
interest to the depositary is the responsibility of HCPI or the trustee,
disbursement of such payments to direct participants shall be the
responsibility of the depositary, and disbursement of such payments to the
beneficial owners shall be the responsibility of direct and indirect
participants.

If the depositary is at any time unwilling or unable to continue as
depositary and a successor depositary is not appointed within 90 days, HCPI
will issue certificated notes in exchange for the notes represented by the
global security. In addition, HCPI may at any time and in its sole discretion
determine to discontinue use of the global security and, in such event, will
issue definitive notes in exchange for the notes represented by the global
security. Notes so issued will be issued in denominations of $1,000 and
integral multiples thereof and will be issued in registered form only, without
coupons.

S-19

SUPPLEMENTAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

The following summary describes the United States federal income tax
considerations anticipated to be material to purchasers of the notes. The
information in this section is based on:

. the Internal Revenue Code of 1986, as amended,

. current, temporary and proposed Treasury Regulations promulgated
under the Internal Revenue Code,

. the legislative history of the Internal Revenue Code,

. current administrative interpretations and practices of the Internal
Revenue Service, and

. court decisions,

in each case, as of the date of this prospectus supplement. The administrative
interpretations and practices of the Internal Revenue Service include its
practices and policies as expressed in private letter rulings which are not
binding on the Internal Revenue Service, except with respect to the particular
taxpayers who requested and received these rulings. Future legislation,
Treasury Regulations, administrative interpretations and practices or court
decisions may adversely affect the tax considerations contained in this
discussion. Any change could apply retroactively to transactions preceding the
date of the change. We have not requested, and do not plan to request, any
rulings from the Internal Revenue Service concerning the statements made and
the conclusions reached in the following summary, and such statements and
conclusions are not binding on the Internal Revenue Service or any court. Thus,
the tax considerations contained in this discussion could be challenged by the
Internal Revenue Service and, if challenged, may not be sustained by a court.

This summary deals only with notes held as "capital assets" (within the
meaning of Section 1221 of the Internal Revenue Code) by holders who purchase
the notes upon their initial issuance at the price set forth on the cover of
this prospectus supplement. It does not address all the tax consequences that
may be relevant to you in light of your particular circumstances. In addition,
it does not address the tax consequences relevant to persons who receive
special treatment under the federal income tax law, except to the extent
discussed under the heading "Non-United States holders" or where specifically
noted. Holders receiving special treatment include, without limitation:

. financial institutions, banks and thrifts,

. insurance companies,

. tax-exempt organizations,

. "S" corporations,

. regulated investment companies and real estate investment trusts,

. foreign corporations or partnerships, and persons who are not
residents or citizens of the United States,

. dealers in securities or currencies,

. persons holding notes as a hedge against currency risks or as a
position in a straddle, and

. persons whose functional currency is not the United States dollar.

In addition, if a partnership holds notes, the tax treatment of a partner in
the partnership will generally depend upon the status of the partner and the
activities of the partnership. If you are a partner of a partnership holding
our notes, you should consult your tax advisor regarding the tax consequences
of the ownership and disposition of the notes.

S-20

THIS DISCUSSION DOES NOT ADDRESS ANY ASPECTS OF FEDERAL INCOME TAXATION
RELATING TO THE COMPANY OR ITS ELECTION TO BE TAXED AS A REIT. A SUMMARY OF
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS TO THE COMPANY IS PROVIDED IN THE
ACCOMPANYING PROSPECTUS, WHICH YOU SHOULD READ IN CONNECTION WITH THIS
DISCUSSION. YOU ARE URGED TO CONSULT YOUR TAX ADVISOR REGARDING THE TAX
CONSEQUENCES TO YOU OF:

. THE ACQUISITION, OWNERSHIP AND SALE OR OTHER DISPOSITION OF THE NOTES
OFFERED UNDER THIS PROSPECTUS SUPPLEMENT, INCLUDING THE FEDERAL,
STATE, LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES,

. OUR ELECTION TO BE TAXED AS A REIT FOR FEDERAL INCOME TAX PURPOSES,
AND

. POTENTIAL CHANGES IN THE TAX LAWS.

CONSEQUENCES TO UNITED STATES HOLDERS

As used in this section, the term "United States holder" means a
beneficial owner of a note that is for United States Federal income tax
purposes either:

. a citizen or resident of the United States,

. a corporation, or a partnership, including an entity treated as a
corporation or partnership for United States Federal income tax
purposes, created or organized in or under the laws of the
United States or any State thereof or the District of Columbia,
unless, in the case of a partnership, Treasury regulations are
adopted that provide otherwise,

. an estate the income of which is subject to United States Federal
income taxation regardless of its source,

. a trust whose administration is subject to the primary supervision of
a court within the United States and with respect to which one or
more United States persons have the authority to control all
substantial decisions, or

. any other person whose income or gain in respect of a note is
effectively connected with the conduct of a United States trade or
business and that files a valid W-8ECI.

Notwithstanding the preceding sentence, to the extent provided in Treasury
regulations, certain trusts in existence on August 20, 1996, and treated as
United States persons prior to such date that elect to be treated as
United States persons, shall also be considered United States holders.

UNITED STATES HOLDERS

STATED INTEREST

Stated interest on the notes will generally be taxable to you as ordinary
income from domestic sources at the time it is paid or accrues in accordance
with your method of accounting for tax purposes.

SALE OR EXCHANGE OF NOTES

You will generally recognize gain or loss upon the sale, exchange,
retirement or other taxable disposition of a note equal to the difference
between the amount realized upon the sale, exchange or other disposition (less
an amount attributable to any accrued stated interest not previously included
in income, which will be taxable as interest income) and your adjusted tax
basis in the note. Your adjusted tax basis in a note will generally equal the
amount you paid for the note. Any gain or loss recognized on a disposition of
the note will be capital gain or loss. If you are an individual and have held
the note for more than one year, such capital gain will generally be subject to
tax at a maximum rate of 20%. Your ability to deduct capital losses may be
limited.

S-21

BACKUP WITHHOLDING AND INFORMATION REPORTING

Payments of interest and principal on the notes and the proceeds received
upon the sale or other disposition of such notes may be subject to information
reporting and backup withholding. Payments to certain exempt holders
(including, among others, corporations and certain tax-exempt organizations)
are generally not subject to information reporting or backup withholding.
Payments to a non-exempt United States holder will be subject to information
reporting and backup withholding if such holder:

. fails to furnish its taxpayer identification number ("TIN"), which,
for an individual, is ordinarily his or her social security number,

. furnishes an incorrect TIN,

. is notified by the Internal Revenue Service that it has failed to
properly report payments of interest or dividends, or

. fails to certify, under penalties of perjury, that it has furnished a
correct TIN and that the Internal Revenue Service has not notified
the United States holder that it is subject to backup withholding.

The amount of any reportable payments, including interest, made to a
United States holder (other than to holders which are exempt recipients) and
the amount of tax withheld, if any, with respect to such payments will be
reported to such United States holders and to the Internal Revenue Service for
each calendar year.

A United States holder should consult its tax advisor regarding its
qualification for an exemption from backup withholding and information
reporting and the procedures for obtaining such an exemption, if applicable.
The backup withholding tax is not an additional tax, and taxpayers may use
amounts withheld as a credit against their United States federal income tax
liability or may claim a refund as long as they timely provide certain
information to the Internal Revenue Service.

NON-UNITED STATES HOLDERS

The preceding discussion does not address the rules governing United
States federal income taxation of the ownership and disposition of notes by
persons that are non-United States holders. The term "non-United States holder"
means a beneficial owner of a note that is not a United States holder. In
general, non-United States holders may be subject to special tax withholding
requirements on payments from us and with respect to their sale or other
disposition of notes, except to the extent reduced or eliminated by an income
tax treaty between the United States and the non-United States holder's country
or if certain other conditions are met. A non-United States holder who is
eligible for reduction or elimination of withholding must file an appropriate
form with us in order to claim this treatment. Non-United States holders should
consult their own tax advisors concerning the federal income tax consequences
to them of the acquisition, ownership and disposition of notes.

OTHER TAX CONSEQUENCES

State, local and foreign income tax laws may differ substantially from
the corresponding federal income tax laws, and this discussion does not purport
to describe any aspect of the tax laws of any state, local or foreign
jurisdiction. Persons considering the purchase of notes should consult their
tax advisors concerning the application of United States federal income tax
laws to their particular situations as well as any consequences of the
purchase, ownership and disposition of the notes arising under the laws of any
state, local or foreign taxing jurisdiction.

S-22

UNDERWRITING

We intend to offer the notes through the underwriters. Merrill Lynch,
Pierce, Fenner & Smith Incorporated and Credit Suisse First Boston Corporation
are acting as representatives of the underwriters named below. Subject to the
terms and conditions contained in a purchase agreement between us and the
underwriters, we have agreed to sell to the underwriters, and the underwriters
severally have agreed to purchase from us, the principal amount of the notes
listed opposite their names below.

PRINCIPAL
UNDERWRITER AMOUNT
----------- ---------

Merrill Lynch, Pierce, Fenner & Smith
Incorporated................................ $87,500,000
Credit Suisse First Boston Corporation............... 87,500,000
Deutsche Bank Securities Inc......................... 20,000,000
Banc of America Securities LLC....................... 13,750,000
BNY Capital Markets, Inc............................. 13,750,000
Goldman, Sachs & Co.................................. 13,750,000
Wachovia Securities, Inc............................. 13,750,000
------------
Total....................................... $250,000,000
============

The underwriters have agreed to purchase all of the notes sold pursuant
to the purchase agreement if any of these notes are purchased. If an
underwriter defaults, the purchase agreement provides that the purchase
commitments of the nondefaulting underwriters may be increased or the purchase
agreement may be terminated.

We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act of 1933, as amended, or to
contribute to payments the underwriters may be required to make in respect of
those liabilities.

The underwriters are offering the notes, subject to prior sale, when, as
and if issued to and accepted by them, subject to approval of legal matters by
their counsel, including the validity of the notes, and other conditions
contained in the purchase agreement, such as the receipt by the underwriters of
officers' certificates and legal opinions. The underwriters reserve the right
to withdraw, cancel or modify offers to the public and to reject orders in
whole or in part.

COMMISSIONS AND DISCOUNTS

The underwriters have advised us that they propose initially to offer the
notes to the public at the public offering price specified on the cover page of
this prospectus supplement, and to dealers at that price less a concession not
in excess of .40% of the principal amount of the notes. The underwriters may
allow, and the dealers may reallow, a discount not in excess of .25% of the
principal amount of the notes to other dealers. After the initial public
offering, the public offering price, concession and discount may be changed.

The expenses of the offering, not including the underwriting discount,
are estimated to be $600,000 and are payable by us.

NEW ISSUE OF NOTES

The notes are a new issue of securities with no established trading
market. We do not intend to apply for listing of the notes on any national
securities exchange or for quotation of the notes on any automated dealer
quotation system. We have been advised by the underwriters that they presently
intend to make a market in the

S-23

notes after completion of the offering. However, they are under no obligation
to do so and may discontinue any market-making activities at any time without
notice. We cannot assure that an active public market for the notes will
develop or that any trading market that does develop for the notes will be
liquid. If an active public trading market for the notes does not develop, the
market price and liquidity of the notes may be adversely affected.

PRICE STABILIZATION AND SHORT POSITIONS

In connection with the offering, the underwriters are permitted to engage
in transactions that stabilize the market price of the notes. Such transactions
consist of bids or purchases to peg, fix or maintain the price of the notes. If
the underwriters create a short position in connection with the offering, i.e.,
if they sell more notes than are specified on the cover page of this prospectus
supplement, the underwriters may reduce that short position by purchasing notes
in the open market. Purchases of a security to stabilize the price or to reduce
a short position could cause the price of the security to be higher than it
might be in the absence of such purchases.

Neither we nor any of the underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the notes. In addition, neither we nor
any of the underwriters makes any representation that the underwriters will
engage in these transactions or that these transactions, once commenced, will
not be discontinued without notice.

OTHER RELATIONSHIPS

Some of the underwriters and their affiliates have engaged in, and may in
the future engage in, investment banking and other commercial dealings in the
ordinary course of business with us. They have received customary fees and
commissions for these transactions.

LEGAL MATTERS

Certain legal matters with respect to the securities offered hereby will
be passed upon for us by Latham & Watkins, Costa Mesa, California. Sidley
Austin Brown & Wood LLP, Los Angeles, California, will act as counsel for the
underwriters. Certain legal matters relating to Maryland law will be passed
upon for us by Ballard Spahr Andrews & Ingersoll, LLP, Baltimore, Maryland.
Paul C. Pringle, a partner of Sidley Austin Brown & Wood LLP, owns 16,271
shares of our common stock.

EXPERTS

The financial statements incorporated by reference into the accompanying
prospectus and elsewhere in the registration statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are incorporated by reference therein in
reliance upon the authority of said firm as experts in accounting and auditing
in giving said reports.

Arthur Andersen provided its written consent to the incorporation by
reference of its report with respect to the financial statements incorporated
by reference in the initial filing of the registration statement and in the
first amendment thereto. However, we were not able to obtain, after reasonable
efforts, the written consent of Arthur Andersen to our inclusion of its report
with respect to the financial statements included in the subsequent amendments
to the registration statement or in this prospectus supplement or the
accompanying prospectus, as required by Section 7 of the Securities Act.
Accordingly, Arthur Andersen may not have any liability under Section 11 of the
Securities Act of 1933 for false and misleading statements and omissions
contained in this prospectus supplement or the accompanying prospectus,
including the financial statements, and any claims against Arthur Andersen
related to any such false and misleading statements and omissions may be
limited.

S-24

PROSPECTUS

$975,000,000
HEALTH CARE PROPERTY INVESTORS, INC.

DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK

----------------

WE MAY FROM TIME TO TIME OFFER AND SELL IN ONE OR MORE SERIES OR CLASSES:

. debt securities;
. shares of our preferred stock;
. shares of our common stock; and
. rights to acquire Junior Participating Preferred Stock that are
attached to, and trade with, our common stock.

The securities offered by this prospectus will have an aggregate public
offering price of $975,000,000. We will provide the specific terms of these
securities in prospectus supplements to this prospectus prepared in connection
with each offering. The debt securities may be convertible into preferred
stock, common stock or debt securities of another series. The preferred stock
may be convertible into common stock or preferred stock of another series. No
securities may be sold under this prospectus without delivery of the applicable
prospectus supplement. You should read this prospectus and the prospectus
supplements carefully before you invest in the securities.

Securities may be sold directly, through agents from time to time or
through underwriters or dealers, which may include Merrill Lynch, Pierce,
Fenner & Smith Incorporated. If any of our agents or any underwriter is
involved in the sale of the securities, the name of the agent or underwriter
and any applicable commission or discount will be set forth in the accompanying
prospectus supplement. The net proceeds to us from the sale also will be set
forth in the applicable prospectus supplement.

INVESTING IN THE SECURITIES INVOLVES RISKS THAT ARE DESCRIBED IN THE
"RISK FACTORS" SECTION BEGINNING ON PAGE 5 OF THIS PROSPECTUS AND, IF
APPLICABLE, IN THE "RISK FACTORS" SECTION OF THE APPLICABLE PROSPECTUS
SUPPLEMENT.

Our common stock is traded on the New York Stock Exchange under the
symbol "HCP". On June 7, 2002, the closing price of our common stock was $42.65

----------------

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is
a criminal offense.

----------------

The date of this prospectus is June 10, 2002.

ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement that we filed with
the SEC utilizing a "shelf" registration process. Under this shelf registration
process, we may sell any combination of the securities described in this
prospectus in one or more offerings up to a total dollar amount of
$975,000,000. This prospectus provides you with a general description of the
securities we may offer. Each time we sell securities, we will provide a
prospectus supplement that will contain specific information about the terms of
that offering. The prospectus supplement may also add or update information
contained in this prospectus. You should read both this prospectus and any
prospectus supplement together with additional information described under the
heading "Where You Can Find More Information."

As allowed by SEC rules, this prospectus does not contain all the
information you can find in the registration statement or the exhibits to the
registration statement. For further information, we refer you to the
registration statement, including its exhibits and schedules. Statements
contained in this prospectus about the provisions or contents of any contract,
agreement or any other document referred to are not necessarily complete. For
each of these contracts, agreements or documents filed as an exhibit to the
registration statement, we refer you to the actual exhibit for a more complete
description of the matters involved. You should not assume that the information
in this prospectus or any applicable prospectus supplement is accurate as of
any date other than the date on the front of those documents. For further
information about us or the securities offered under this prospectus, you
should refer to that registration statement, which you can obtain from the SEC
as described below under the heading "Where You Can Find More Information."

All references to "HCPI," "our" and "we" in this prospectus mean
Healthcare Property Investors, Inc. and its majority-owned subsidiaries and
other entities controlled by Health Care Property Investors, Inc., except where
it is clear from the context that the term means only the issuer, Health Care
Property Investors, Inc.

WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and current reports, proxy statements and other
information with the SEC. You may read and copy any reports, statements or
other information that we have filed at the SEC's public reference rooms. You
may read and copy any document we file with the SEC at its public reference
facilities at 450 Fifth Street, N.W., Washington, D.C. 20549. You may also
obtain copies of this information by mail from the public reference section of
the SEC, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, at
prescribed rates. Please call the SEC at 1-800-SEC-0330 for further information
on the operation of the public reference facilities. Our SEC filings are also
available to the public from commercial document retrieval services and at the
web site maintained by the SEC at http://www.sec.gov. You may inspect
information that we file with The New York Stock Exchange at the offices of The
New York Stock Exchange at 20 Broad Street, New York, New York 10005.

The SEC allows us to "incorporate by reference" the information we file
with the SEC, which means that we can disclose important information to you by
referring to the other information we have filed with the SEC. The information
that we incorporate by reference is considered a part of this prospectus and
information that we file later with the SEC will automatically update and
supersede the information contained in this prospectus. We incorporate by
reference the following documents we filed with the SEC pursuant to Section 13
of the Securities Exchange Act of 1934, as amended:

. our Current Report on Form 8-K dated May 14, 2002;

. our Quarterly Report on Form 10-Q/A for the fiscal quarter ended
March 31, 2002;

. our Annual Report on Form 10-K/A for the fiscal year ended December
31, 2001;

. our Proxy Statement dated March 27, 2002;

. the description of our common stock contained in our registration
statement on Form 10 dated May 7, 1985 (File No. 1-8895), including
the amendments dated May 20, 1985 and May 23, 1985, and any other
amendment or report filed for the purpose of updating such
description, including the description of amendments to our charter
contained in our Quarterly Report on Form 10-Q for the quarter ended
June 30, 2001; and

. the description of our preferred share purchase rights (which were
issued pursuant to our Stockholder Rights Plan dated June 20, 2000)
contained in our Form 8-A dated July 28, 2000 (File No. 1-08895).

We are also incorporating by reference additional documents that we may
file with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934 after the date of this prospectus and before we stop
offering the securities described in this prospectus. These documents include
periodic reports, such as annual reports on Form 10-K, quarterly reports on
Form 10-Q and current reports on Form 8-K, as well as proxy statements. Any
statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this prospectus.

If you are a stockholder, we may have sent you some of the documents
incorporated by reference, but you can obtain any of them through us or the
SEC. Documents incorporated by reference are available from us without charge,
excluding all exhibits unless we have specifically incorporated by reference
the exhibit in this prospectus. Stockholders may obtain documents incorporated
by reference in this prospectus by requesting them in writing or by telephone
from the appropriate party at the following address:

James G. Reynolds
Executive Vice President and Chief Financial Officer
Health Care Property Investors, Inc.
4675 MacArthur Court, 9th Floor
Newport Beach, California 92660
(949) 221-0600

CAUTIONARY LANGUAGE REGARDING FORWARD LOOKING STATEMENTS

Statements in this prospectus and the information incorporated by
reference in this prospectus or any prospectus supplement that are not
historical factual statements are "forward looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. We intend such
forward looking statements to be covered by the safe harbor provisions for
forward looking statements contained in the Private Securities Litigation
Reform Act of 1995 and are including this section for purposes of complying
with these safe harbor provisions. The statements include, among other things,
statements regarding the intent, belief or expectations of HCPI 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, we, through our senior
management, from time to time make forward looking oral and written public
statements concerning our expected future operations and other developments.
You are cautioned that, while forward looking statements reflect our 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 the factors set forth in our annual report on Form 10-K for the
fiscal year ended December 31, 2001, you should consider the following:

. Competition for lessees and mortgagors, including with respect to new
leases and mortgages and the renewal or rollover of existing leases;

. 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;

. The ability of our lessees and mortgagors to operate our properties
in a manner sufficient to maintain or increase revenues and to
generate sufficient income to make rent and loan payments;

. The financial weakness of operators in the long-term care and
assisted living sectors, which results in uncertainties in our
ability to continue to realize the full benefit of such operators'
leases;

. Changes in national or regional economic conditions, including
changes in interest rates and the availability and cost of capital
for HCPI; and

. The risk that we will not be able to sell or lease facilities that
are currently vacant.

We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise. In light of these risks and uncertainties, the forward
looking events discussed in this prospectus or discussed in or incorporated by
reference in this prospectus or any prospectus supplement may not occur.

NOTICE REGARDING ARTHUR ANDERSEN LLP

Section 11(a) of the Securities Act provides that if any part of a
registration statement at the time it becomes effective contains an untrue
statement of a material fact or an omission to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading, any person acquiring a security pursuant to such registration
statement (unless it is proved that at the time of such acquisition such person
knew of such untruth or omission) may sue, among others, every accountant who
has consented to be named as having prepared or certified any part of the
registration statement or as having prepared or certified any report or
valuation which is used in connection with the registration statement with
respect to the statement in such registration statement, report or valuation
which purports to have been prepared or certified by the accountant. On May 14,
2002, we announced that we appointed Ernst & Young LLP to replace Arthur
Andersen LLP as our independent accountants. Prior to the date of this
prospectus, the Arthur Andersen partners who reviewed our most recent audited
financial statements have resigned from Arthur Andersen. As a result, after
reasonable efforts, we have been unable to obtain Arthur Andersen's written
consent to the incorporation by reference into this registration statement of
its audit reports with respect to our financial statements. Under these
circumstances, Rule 437a under the Securities Act permits us to file this
registration statement without a written consent from Arthur Andersen.
Accordingly, Arthur Andersen will not be liable to you under Section 11(a) of
the Securities Act because it has not consented to being named as an expert in
the registration statement.

THE COMPANY

We were organized in 1985 to qualify as a real estate investment trust,
or a REIT. We invest in health care related real estate located throughout the
United States. We commenced business nearly 17 years ago, making us the second
oldest REIT specializing in health care real estate. Since 1986, the debt
rating agencies have rated our debt investment grade. As of April 1, 2002,
Moody's Investors Service, Standard & Poor's and Fitch rate our senior debt at
Baa2, BBB+ and BBB+, respectively. The market value of our common stock was
approximately $2.3 billion as of May 15, 2002.

. 172 long-term care facilities;

. 90 assisted living facilities;

. 85 medical office buildings;

. 37 physician group practice clinics;

. 21 acute care hospitals;

. Nine rehabilitation hospitals;

. Six health care laboratory and biotech research facilities; and

. Five retirement living communities.

Our principal offices are located at 4675 MacArthur Court, Suite 900,
Newport Beach, California 92660, and our telephone number is (949) 221-0600.

RISK FACTORS

SET FORTH BELOW ARE THE RISKS THAT WE BELIEVE ARE MATERIAL TO INVESTORS
WHO PURCHASE THE SECURITIES. IN ADDITION TO OTHER INFORMATION CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND THE APPLICABLE PROSPECTUS
SUPPLEMENT, YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING FACTORS BEFORE
INVESTING IN THE SECURITIES.

DECLINE IN THE ASSISTED LIVING SECTOR AND THE LONG-TERM CARE INDUSTRY MAY HAVE
SIGNIFICANT ADVERSE CONSEQUENCES TO US.

ASSISTED LIVING INDUSTRY. The assisted living industry, from which we
currently derive 13% of our revenue, has been challenged by overbuilding in
certain areas, slower than projected fill-up rates, margin pressure from lower
than projected rents and shortage of capital. Various assisted living companies
continue their efforts to restructure their capital, debt and lease structures.

LONG-TERM CARE INDUSTRY. We currently derive 26% of our revenue from the
long-term care industry. Certain long-term care operators and facilities
continue to experience operating problems in part due to low levels of Medicaid
reimbursements in certain states. In addition, if the most recent Medicare
reimbursement increase is not extended beyond October 1, 2002 and various
states institute Medicaid rate cuts to reduce budget shortfalls, additional
operators may begin feeling the strain of inadequate reimbursement.

We cannot assure you that the trouble experienced by assisted living
operators and long-term care operators will not have a material adverse effect
on our net income, funds from operations or the value of the securities.

THE HEALTH CARE INDUSTRY IS HEAVILY REGULATED BY THE GOVERNMENT, WHICH MAY
ADVERSELY AFFECT OUR RENTAL AND DEBT PAYMENT REVENUES.

The health care industry is heavily regulated by federal, state and local
laws. This government regulation of the health care industry affects us because:

. the financial ability of lessees to make rent and debt payments to us
may be affected by governmental regulations such as licensure,
certification for participation in government programs, and
government reimbursement; and

. our additional rents are based on our lessees' gross revenue from
operations in many instances, which in turn are affected by the
amount of reimbursement such lessees receive from the government.

The failure of any borrower of funds from us or lessee of any of our
properties to comply with such laws and regulations could affect its ability to
operate its facility or facilities and could adversely affect such borrower's
or lessee's ability to make debt or lease payments to us.

FRAUD AND ABUSE. Various federal and state governments have considered
or passed laws that attempt to eliminate fraud and abuse by prohibiting payment
arrangements that include compensation for patient referrals. We cannot assure
you that the operators are in compliance or will remain in compliance in the
future with these laws.

LICENSURE RISKS. Most health care facilities must obtain a license to
operate. Failure to obtain licensure or loss of licensure would prevent a
facility from operating which could adversely affect the facility operator's
ability to make rent and debt payments.

ENVIRONMENTAL MATTERS. A wide variety of federal, state and local
environmental and occupational health and safety laws and regulations affect
health care facility operations. Under various federal, state and local
environmental laws, ordinances and regulations, an owner of real property or a
secured lender (such as us) may be liable for the costs of removal or
remediation of hazardous or toxic substances at, under or disposed of in
connection with such property, as well as other potential costs relating to
hazardous or toxic substances (including government fines and damages for
injuries to persons and adjacent property). The presence of such

substances, or the failure to properly dispose of or remediate such substances,
may adversely affect the owner's ability to sell or rent such property or to
borrow using such property as collateral which, in turn, would reduce our
revenue.

MEDICARE AND MEDICAID PROGRAMS. Sources of revenue for lessees and
mortgagors may include the federal Medicare program, state Medicaid programs,
private insurance carriers, health care service plans and health maintenance
organizations, among others. Efforts to reduce costs by these payors will
likely continue, which may result in reduced or slower growth in reimbursement
for certain services provided by some of our operators. In addition, the
failure of any of our operators to comply with various laws and regulations
could jeopardize their ability to continue participating in the Medicare and
Medicaid programs.

COST CONTROL. The healthcare industry has continually faced various
challenges, including increased government and private payor pressure on health
care providers to control costs, the migration of patients from acute care
facilities into extended care and home care settings and the vertical and
horizontal consolidation of health care providers. Changes in the law, new
interpretations of existing laws, and changes in payment methodology may have a
dramatic effect on the definition of permissible or impermissible activities,
the relative costs associated with doing business and the amount of
reimbursement furnished by both government and other third-party payors. These
changes may be applied retroactively. The ultimate timing or effect of
legislative efforts cannot be predicted and may impact us in different ways.

LOSS OF OUR TAX STATUS AS A REAL ESTATE INVESTMENT TRUST WOULD HAVE SIGNIFICANT
ADVERSE CONSEQUENCES TO US AND THE VALUE OF OUR SECURITIES.

We currently operate and have operated commencing with our taxable year
ended December 31, 1985 in a manner that is intended to allow us to qualify as
a real estate investment trust for federal income tax purposes under the
Internal Revenue Code of 1986, as amended.

Qualification as a real estate investment trust involves the application
of highly technical and complex Internal Revenue Code provisions for which
there are only limited judicial and administrative interpretations. The
determination of various factual matters and circumstances not entirely within
our control may affect our ability to qualify as a real estate investment
trust. For example, in order to qualify as a real estate investment trust, at
least 95% of our gross income in any year must be derived from qualifying
sources, and we must satisfy a number of requirements regarding the composition
of our assets. Also, we must make distributions to stockholders aggregating
annually at least 90% of our net taxable income, excluding capital gains. In
addition, new legislation, regulations, administrative interpretations or court
decisions may adversely affect our investors or our ability to qualify as a
REIT for tax purposes. Although we believe that we are organized and have
operated in such manner, we can give no assurance that we have qualified or
will continue to qualify as a REIT for tax purposes.

If we lose our real estate investment trust status, we will face serious
tax consequences that will substantially reduce the funds available to make
payments of principal and interest on the debt securities we issue and to make
distributions to our stockholders. If we fail to qualify as a real estate
investment trust:

. we would not be allowed a deduction for distributions to stockholders
in computing our taxable income and would be subject to federal
income tax at regular corporate rates;

. we also could be subject to the federal alternative minimum tax and
possibly increased state and local taxes; and

. unless we are entitled to relief under statutory provisions, we could
not elect to be subject to tax as a real estate investment trust for
four taxable years following the year during which we were
disqualified.

In addition, if we fail to qualify as a real estate investment trust, all
distributions to stockholders would be subject to tax as ordinary income to the
extent of our current and accumulated earnings and profits, we will not be
required to make distributions to stockholders.

As a result of all these factors, our failure to qualify as a real estate
investment trust also could impair our ability to expand our business and raise
capital, and would adversely affect the value of our securities.

RATIO OF EARNINGS TO FIXED CHARGES

FOR THE THREE
MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
------------------------ -------------
1997 1998 1999 2000 2001 2002
---- ---- ---- ---- ---- -------------

Ratio of Earnings to Fixed Charges............. 3.03 2.91 2.50 2.45 2.59 2.86
---- ---- ---- ---- ---- ----
Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends..................... 2.92 2.40 1.93 1.91 1.97 2.12
---- ---- ---- ---- ---- ----

USE OF PROCEEDS

Unless we indicate otherwise in the applicable prospectus supplement, we
intend to use a portion of the net proceeds from the sale of the securities
offered from time to time hereby to repay all or a portion of our outstanding
indebtedness under our revolving lines of credit. Borrowings under our
revolving lines of credit averaged $184,000,000 for the quarter ended March 31,
2002 at a rate of 2.74%. The remaining proceeds will be used for general
corporate purposes, including strategic acquisitions, the acquisition of health
care related properties and the construction of health care related properties.
Based upon our historical investment trends, including investments totaling
approximately $125 million during the quarter ended March 31, 2002 and
approximately $240 million during 2001, as of the date of this prospectus, we
expect our investments for 2002 to total approximately $400 million.
Achievement of our 2002 investment goal is predicated on the availability of
suitable health care facilities to acquire at reasonable prices, and our
ability to obtain favorable financing terms. If we do not meet our 2002
investment goal, we may experience slower than expected growth in net income
and cash flows from operating activities. As of the date of this prospectus, we
have commitments to invest approximately $165 million of health care
facilities. However, we cannot assure you that we will complete any investment
on a timely basis, or at all.

DESCRIPTION OF THE DEBT SECURITIES

This prospectus describes certain general terms and provisions of our
debt securities. When we offer to sell a particular series of debt securities,
we will describe the specific terms of the series in a prospectus supplement or
a pricing supplement.

The debt securities are to be issued under an existing indenture dated as
of September 1, 1993 between us and The Bank of New York, as trustee, which has
been filed with the SEC and incorporated by reference in the registration
statement of which this prospectus is a part. We have summarized the material
provisions of the indenture and general provisions of the debt securities below.

GENERAL

The indenture does not limit the aggregate principal amount of debt
securities that may be issued under the indenture and provides that the debt
securities may be issued from time to time in one or more series. All
securities issued under the indenture will rank equally and ratably with all
other securities issued under the indenture.

The debt securities will be unsecured and will rank on a parity with all
of our other unsecured and unsubordinated indebtedness. The debt securities are
not, by their terms, subordinate in right of payment to any of our other
indebtedness.

The prospectus supplement and any related pricing supplement will
describe certain terms of the debt securities offered by that prospectus
supplement, including:

. the title of the debt securities;

. any limit on the aggregate principal amount of the debt securities
and their purchase price;

. the date or dates on which the debt securities will mature;

. the rate or rates per annum (or manner in which interest is to be
determined) at which the debt securities will bear interest, if any,
and the date from which the interest, if any, will accrue;

. the dates on which interest, if any, on the debt securities will be
payable and the regular record dates for these interest payment dates;

. any mandatory or optional sinking fund or analogous provisions;

. additional provisions, if any, for the defeasance of the debt
securities;

. the date, if any, after which and the price or prices at which the
debt securities may, pursuant to any optional or mandatory redemption
or repayment provisions, be redeemed and the other detailed terms and
provisions of any optional or mandatory redemption or repayment
provisions;

. whether the debt securities are to be issued in whole or in part in
registered form represented by one or more registered global
securities and, if so, the identity of the depositary for the
registered global securities;

. any applicable material United States federal income tax
consequences; and

. any other specific terms of the debt securities, including any
additional events of default or covenants provided for with respect
to the debt securities, and any terms that may be required by or
advisable under applicable laws or regulations.

Principal of, premium, if any, and interest, if any, on the debt
securities will be payable at the place or places designated by us and set
forth in the applicable prospectus supplement. Interest, if any, on the debt
securities will be paid, unless otherwise provided in the applicable prospectus
supplement, by check mailed to the person in whose name the debt securities are
registered at the close of business on the record dates designated in the
applicable prospectus supplement at the address of the related holder appearing
on the register of debt securities. The trustee will maintain at an office in
the Borough of Manhattan, The City of New York, a register for the registration
of transfers of debt securities, subject to any restrictions set forth in the
applicable prospectus supplement relating to the debt securities.

Unless otherwise provided in the applicable prospectus supplement or
pricing supplement, the debt securities will be issued only in fully registered
form without coupons and in denominations of $1,000 or any larger amount that
is an integral multiple of $1,000. Debt securities may be presented for
exchange and transfer in the manner, at the places and subject to the
restrictions set forth in the indenture, the debt securities and the prospectus
supplement. These services will be provided without charge, other than any tax
or other governmental charge payable in connection with the exchange or
transfer, but subject to the limitations provided in the indenture.

Debt securities will bear interest at a fixed rate or a floating rate.
The debt securities may be issued at a price less than their stated redemption
price at maturity, resulting in the debt securities being treated as issued
with original issue discount for federal income tax purposes. Any original
issue discount debt securities may currently pay no interest or interest at a
rate which at the time of issuance is below market rates. Special federal
income tax and other considerations applicable to any of these discounted notes
will be described in the prospectus supplement or pricing supplement.

The indenture provides that all debt securities of any one series need
not be issued at the same time and we may, from time to time, issue additional
debt securities of a previously issued series. In addition, the indenture
provides that we may issue debt securities with terms different from those of
any other series of debt securities and, within a series of debt securities,
certain terms (such as interest rate or manner in which interest is calculated
and maturity date) may differ.

CONVERSION RIGHTS

The terms, if any, on which debt securities of a series may be exchanged
for or converted into shares of our common stock, preferred stock or debt
securities of another series will be set forth in the prospectus supplement
relating to the series. To protect our status as a REIT, a holder may not
convert any debt security, and the debt security is not convertible by any
holder, if as a result of the conversion any person would then be deemed to
beneficially own, directly or indirectly, 9.9% or more of our common stock.

GLOBAL DEBT SECURITIES

The registered debt securities of a series may be issued in the form of
one or more fully registered global securities that will be deposited with a
depositary or with a nominee for a depositary identified in the prospectus
supplement relating to the series and registered in the name of the depositary
or a nominee of the depository. In these cases, one or more registered global
securities will be issued in a denomination or aggregate denominations equal to
the portion of the aggregate principal amount of outstanding registered debt
securities of the series to be represented by the registered global security or
securities. Unless and until it is exchanged in whole for debt securities in
definitive registered form, a registered global security may not be transferred
except as a whole by the depositary for such registered security to a nominee
of the depositary or by a nominee of the depositary to the depositary or
another nominee of the depositary or by the depositary or any nominee to a
successor of the depositary or a nominee of the successor.

The specific terms of the depositary arrangement with respect to any
portion of a series of debt securities to be represented by a registered global
security will be described in the prospectus supplement relating to the series.
We anticipate that the following provisions will apply to all depositary
arrangements.

Ownership of beneficial interests in a registered global security will be
limited to persons, or participants, that have accounts with the depositary for
the registered global security or persons that may hold interests through
participants. Upon the issuance of a registered global security, the depositary
for the registered global security will credit, on its book-entry registration
and transfer system, the participants' accounts with the respective principal
amounts of the debt securities represented by the registered global security
beneficially owned by the participants. The accounts to be credited will be
designated by any dealers, underwriters or agents participating in the
distribution of the debt securities. Ownership of beneficial interests in the
registered global security will be shown on, and the transfer of the ownership
interests will be effected only through, records maintained by the depositary
for the registered global security (with respect to interests of participants)
and on the records of participants (with respect to interests of persons
holding through participants). The laws of some states may require that certain
purchasers of securities take physical delivery of the securities in definitive
form. These limits and laws may impair the ability to own, transfer or pledge
beneficial interests in registered global securities.

So long as the depositary for a registered global security, or its
nominee, is the registered owner of the registered global security, the
depositary or its nominee will be considered the sole owner or holder of the
debt securities represented by the registered global security for all purposes
under the indenture. Except as set forth below, owners of beneficial interests
in a registered global security will not be entitled to have the debt
securities represented by the registered global security registered in their
names, will not receive or be entitled to receive physical delivery of the debt
securities in definitive form and will not be considered the owners or holders
of the debt securities under the indenture. Accordingly, each person owning a
beneficial interest in a registered global security must rely on the procedures
of the depositary for the registered global security and, if a person is not a
participant, on the procedures of the participant through which the person owns
its interest, to exercise any rights of a holder under the indenture. We
understand that under existing industry practices, if we request any action of
holders or if an owner of a beneficial interest in a registered global security
desires to give or take any action which a holder is entitled to give or take
under the indenture, the depositary for the registered global security would
authorize the participants holding the relevant beneficial interests to give or
take the action, and the participants would authorize beneficial owners owning
through the participants to give or take the action or would otherwise act upon
the instructions of beneficial owners holding through them.

Principal, premium, if any, and interest payments on debt securities
represented by a registered global security registered in the name of a
depositary or its nominee will be made to the depositary or its nominee as the
registered owner of the registered global security. Neither we, the trustee nor
any other agent of us or the trustee will have any responsibility or liability
for any aspect of the records relating to or payments made on account of
beneficial ownership interests in a registered global security or for
maintaining, supervising or reviewing any records relating to beneficial
ownership interests.

We expect that the depositary for any debt securities represented by a
registered global security, upon receipt of any payment of principal, premium
or interest in respect of the registered global security, will immediately
credit participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the registered global security as shown on
the records of the depositary. We also expect that payments by participants to
owners of beneficial interests in a registered global security held through the
participants will be governed by standing customer instructions and customary
practices, as is now the case with the securities held for the accounts of
customers in bearer form or registered in "street name," and will be the
responsibility of the participants.

If the depositary for any debt securities represented by a registered
global security is at any time unwilling or unable to continue as depositary or
ceases to be a clearing agency registered under the Securities Exchange Act of
1934, and a successor depositary registered as a clearing agency under the
Securities Exchange Act of 1934 is not appointed by us within 90 days, we will
issue the debt securities in definitive form in exchange for the registered
global security. In addition, we may at any time and in our sole discretion
determine not to have any of the debt securities of a series represented by one
or more registered global securities and, in such event,

will issue debt securities of the series in definitive form in exchange for the
registered global security or securities representing such debt securities. Any
debt securities issued in definitive form in exchange for a registered global
security will be registered in such name or names as the depositary shall
instruct the trustee. It is expected that these instructions will be based upon
directions received by the depositary from participants with respect to
ownership of beneficial interests in the registered global security.

COVENANTS

LIMITATION ON BORROWING MONEY

In the indenture, we have agreed not to create, assume, incur or
otherwise become liable in respect of any:

(a) Senior Debt, unless the aggregate principal amount of our Senior Debt
outstanding will not, at the time of such creation, assumption or incurrence
and after giving effect thereto and to any concurrent transactions, exceed the
greater of (i) 300% of Capital Base and (ii) 500% of Tangible Net Worth; and

(b) Non-Recourse Debt, unless the aggregate principal amount of our
Senior Debt and Non-Recourse Debt outstanding will not, at the time of such
creation, assumption or incurrence and after giving effect thereto and to any
concurrent transactions, exceed 500% of Capital Base.

For the purpose of this limitation as to borrowing money, the following
terms have the following meanings:

. "Senior Debt" means all Debt other than Non-Recourse Debt and
Subordinated Debt;

. "Debt," with respect to any Person, means:

(a) its indebtedness, secured or unsecured, for borrowed money;

(b) Liabilities secured by any existing lien on property owned by the
Person;

(c) Capital Lease Obligations and the present value of all payments
due under any arrangement for retention of title (discounted at
the implicit rate if known and at 9% otherwise) if the arrangement
is in substance an installment purchase or an arrangement for the
retention of title for security purposes; and

(d) guarantees of obligations of the character specified in clauses
(a), (b) and (c) above to the full extent of the liability of the
guarantor (discounted to present value, as provided in clause (c)
above, in the case of guarantees of title retention arrangements).

. "Capital Lease" means at any time any lease of Property which, in
accordance with generally accepted accounting principles, would at
that time be required to be capitalized on a balance sheet of the
lessee;

. "Capital Lease Obligation" means at any time the amount of the
liability in respect of a Capital Lease which, in accordance with
generally accepted accounting principles, would at that time be so
required to be capitalized on a balance sheet of the lessee;

. "Property" means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible;

. "Person" means an individual, partnership, joint venture, joint-stock
company, association, corporation, trust or unincorporated
organization, or a government or agency or political subdivision
thereof;

. "Non-Recourse Debt," with respect to any Person, means any Debt
secured by, and only by, property on or with respect to which the
Debt is incurred where the rights and remedies of the holder of the
Debt in the event of default do not extend to assets other than the
property constituting security for the Debt;

. "Subordinated Debt" means any of our unsecured Debt which is issued
or assumed pursuant to, or evidenced by, an indenture or other
instrument which contains provisions for the subordination of such
Debt (to which appropriate reference shall be made in the instruments
evidencing such Debt if not

contained therein) to the debt securities (and, at our option, if so
provided, to our Debt, either generally or as specifically designated);

. "Capital Base" means, at any date, the sum of Tangible Net Worth and
Subordinated Debt;

. "Tangible Net Worth" means, at any date, the net book value (after
deducting related depreciation, obsolescence, amortization,
valuation, and other proper reserves) of our Tangible Assets at that
date, minus the amount of our Liabilities at that date;

. "Tangible Assets" means all of our assets (including assets held
subject to Capital Leases and other arrangements pursuant to which
title to the Property has been retained by or vested in some other
Person for security purposes), except: (a) deferred assets other than
prepaid insurance, prepaid taxes and deposits; (b) patents,
copyrights, trademarks, trade names, franchises, goodwill,
experimental expense and other similar intangibles; and (c)
unamortized debt discount and expense; and

. "Liabilities" means at any date the items shown as liabilities on our
balance sheet, except any items of deferred income, including capital
gains.

CONSOLIDATION, MERGER AND SALE OF ASSETS

We may not consolidate or merge with or into or transfer or lease our
assets substantially as an entirety to any person unless we are the continuing
corporation or the successor corporation or person to which the assets are
transferred or leased is organized under the laws of the United States or any
state of the United States or the District of Columbia and expressly assumes
our obligations on the debt securities and under the indenture, and after
giving effect to the transaction no event of default under the indenture has
occurred and is continuing, and certain other conditions are met.

ADDITIONAL COVENANTS

Any additional covenants that we agree to with respect to a series of the
debt securities will be set forth in the prospectus supplement or related
pricing supplement.

EVENTS OF DEFAULT

The following will be events of default under the indenture with respect
to the debt securities of any series:

. failure to pay principal of or any premium on any debt security of
the series when due;

. failure to pay any interest on any debt security of the series when
due, continued for 30 days;

. failure to deposit any sinking fund payment when due in respect of
any debt security of the series;

. failure to perform any other of our covenants or warranties in the
indenture (other than a covenant or warranty included in the
indenture solely for the benefit of one or more series of debt
securities other than that series), continued for 60 days after
written notice by the trustee to us or by the holders of at least 25%
in aggregate principal amount of the outstanding debt securities of
the series to us and the trustee as provided in the indenture;

. certain events in bankruptcy, insolvency, conservatorship,
receivership or reorganization of us;

. an acceleration of any of our other indebtedness, in an aggregate
principal amount exceeding $20,000,000, not rescinded or annulled
within 10 days after written notice is given as provided in the
indenture; and

. the occurrence of any other event of default provided with respect to
the debt securities of that series.

If an event of default with respect to the outstanding debt securities of
any series occurs and is continuing, either the trustee or the holders of at
least 25% in aggregate principal amount of the outstanding debt

securities of that series may declare the principal amount of all the
outstanding debt securities of that series to be due and payable immediately.
At any time after the declaration of acceleration with respect to the debt
securities of any series has been made, but before a judgment or decree based
on acceleration has been obtained, the holders of a majority in aggregate
principal amount of the outstanding debt securities of that series may, under
certain circumstances, rescind and annul the acceleration.

The indenture provides that the trustee will, within 90 days after the
occurrence of a default with respect to a series of debt securities, give to
the holders of the outstanding debt securities of the series notice of all
uncured defaults known to it. Except in the case of default in the payment of
principal, premium, if any, or interest, if any, on any debt securities of a
series, the trustee shall be protected in withholding the notice if the trustee
in good faith determines that the withholding of the notice is in the interest
of the holders of outstanding debt securities of the series.

The indenture provides that, subject to the duty of the trustee during
the continuance of an event of default to act with the required standard of
care, the trustee will be under no obligation to exercise any of its rights or
powers under the indenture at the request or direction of any of the holders,
unless the holders shall have offered to the trustee reasonable indemnity.
Subject to such provisions for the indemnification of the trustee and subject
to certain other limitations, the holders of a majority in aggregate principal
amount of the outstanding debt securities of any series will have the right to
direct the time, method and place of conducting any proceedings for any remedy
available to the trustee, or exercising any trust or power conferred on the
trustee, with respect to the debt securities of that series.

We are required to furnish to the trustee annually a statement as to our
performance of certain obligations under the indenture and as to any default in
our performance.

MODIFICATION, WAIVER AND AMENDMENT

The indenture provides that modifications and amendments may be made by
us and the trustee to the indenture with the consent of the holders of not less
than 66 2/3% in aggregate principal amount of the outstanding debt securities
of each series affected by the modification or amendment. However, no such
modification or amendment may, without the consent of the holder of each
outstanding debt security affected thereby:

. change the stated maturity of the principal of, or any installment of
principal of, premium, if any, or interest, if any, on any debt
security;

. reduce the principal amount of, premium, if any, or interest, if any,
on any debt security;

. reduce the amount of principal of an original issue discount debt
security payable upon acceleration of the stated maturity of the debt
security;

. change the place or currency of payment of the principal of, premium,
if any, or interest, if any, on any debt security;

. impair the right to institute suit for the enforcement of any payment
on or with respect to any debt security;

. reduce the percentage in aggregate principal amount of the
outstanding debt securities of any series, the consent of whose
holders is required for modification or amendment of the indenture or
for waiver of compliance with certain provisions of the indenture or
for waiver of certain defaults; or

. modify the provisions of the indenture providing for the
modification, waiver or amendment of provisions of the indenture
regarding waivers of events of default or the provisions providing
that we maintain certain insurance.

The holders of a majority in aggregate principal amount of the
outstanding debt securities of each series will be able, on behalf of all
holders of the debt securities of that series, to waive compliance by us with
certain restrictive provisions of the indenture, or any past default under the
indenture with respect to the debt securities of that series, except a default
in the payment of principal, premium, if any, or interest, if any, or in
respect of a provision of the indenture which cannot be amended or modified
without the consent of the holder of each outstanding debt security of the
series affected.

SATISFACTION AND DISCHARGE OF INDENTURE

The indenture, with respect to any and all series of debt securities
(except for certain specified surviving obligations including, among other
things, our obligation to pay the principal of, premium, if any, or interest,
if any, on any debt securities), will be discharged and cancelled upon the
satisfaction of certain conditions, including the payment in full of the
principal of, premium, if any, and interest, if any, on all of the debt
securities of that series or the deposit with the trustee of an amount of cash
sufficient for the payment or redemption, in accordance with the indenture.

DEFEASANCE

We will be able to terminate certain of our obligations under the
indenture with respect to the debt securities of any series on the terms and
subject to the conditions contained in the indenture by depositing in trust
with the trustee cash or U.S. government obligations (or combination thereof)
sufficient to pay the principal of, premium, if any, and interest, if any, on
the debt securities of the series to their maturity or redemption date in
accordance with the terms of the indenture and the debt securities of the
series.

GOVERNING LAW AND CONSENT TO JURISDICTION

The debt securities and the indenture will be governed by and construed
in accordance with the laws of the State of California.

CONCERNING THE TRUSTEE

The indenture contains certain limitations on the rights of the trustee
should it become a creditor of us, to obtain payment of claims in certain
cases, or to realize on certain property received in respect of any such claim
as security or otherwise. The trustee will be permitted to engage in other
transactions with us. However, if the trustee acquires any conflicting interest
it must eliminate such conflict or resign or otherwise comply with the Trust
Indenture Act of 1939, as amended.

The indenture provides that, in case an event of default should occur and
be continuing, the trustee will be required to use the degree of care and skill
of a prudent person in the conduct of his or her own affairs in the exercise of
its powers.

DESCRIPTION OF PREFERRED STOCK

The following description of the terms of the preferred stock sets forth
certain general terms and provisions of the preferred stock to which any
prospectus supplement may relate.

GENERAL

Our authorized capital stock consists of 200,000,000 shares of common
stock, $1.00 par value per share, and 50,000,000 shares of preferred stock,
$1.00 par value per share. As of the date of this prospectus, we had 2,400,000
shares of 7 7/8% Series A cumulative redeemable preferred stock, 5,345,000
shares of 8.70% Series B cumulative redeemable preferred stock and 3,976,000
shares of 8.60% Series C cumulative redeemable preferred stock outstanding. We
will not sell any of our outstanding series of preferred stock under this
prospectus.

Under our charter, our board of directors is authorized without further
stockholder action to establish and issue, from time to time, up to 50,000,000
shares of preferred stock, in one or more series, with such designations,
preferences, powers and relative participating, optional or other special
rights, and the qualifications, limitations or restrictions thereon, including,
but not limited to, dividend rights, dividend rate or rates, conversion rights,
voting rights, rights and terms of redemption (including sinking fund
provisions), the redemption price or prices, and the liquidation preferences as
shall be stated in the resolution providing for the issue of a series of such
stock, adopted, at any time or from time to time, by our board of directors.

The preferred stock shall have the dividend, liquidation, redemption and
voting rights set forth below unless otherwise provided in a prospectus
supplement relating to a particular series of the preferred stock. The terms of
any particular series of preferred stock will be described in the prospectus
supplement relating to that particular series of preferred stock, including:

. the number of shares constituting the series and the distinctive
designation thereof;

. the voting rights, if any, of the series;

. the rate of dividends payable on the series, the time or times when
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;

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

. the rights of the holders of shares of the series upon our
liquidation, dissolution or winding up;

. the rights, if any, of holders of shares of the series to convert
their shares into or to exchange the 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 the 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 or upon the happening of a
specified event and any other terms or conditions of such conversion
or exchange; and

. any other preferences, powers and relative participating, optional or
other special rights and qualifications, limitations or restrictions
of shares of the series.

The preferred stock will, when issued, be fully paid and nonassessable
and will have no preemptive rights. Unless otherwise stated in a prospectus
supplement relating to a particular series of preferred stock, each series of
preferred stock will rank on a parity as to dividends and distributions of
assets with each other series of preferred stock. The rights of the holders of
each series of preferred stock will be subordinate to those of our general
creditors.

CERTAIN PROVISIONS OF OUR CHARTER

See "Description of Common Stock--Transfer Restrictions, Redemption and
Business Combination Provisions" for a description of certain provisions of our
charter, including provisions relating to redemption rights and provisions
which may have certain anti-takeover effects.

DIVIDEND RIGHTS

Holders of shares of preferred stock of each series will be entitled to
receive, when, as and if declared by our board of directors, out of funds
legally available therefor, cash dividends on the dates and at rates as will be
set forth in, or as are determined by the method described in, the prospectus
supplement relating to the series of preferred stock. The rate may be fixed or
variable or both. Each dividend will be payable to the holders of record as
they appear on our stock books on the record dates fixed by our board of
directors, as specified in the prospectus supplement relating to the series of
preferred stock.

Dividends may be cumulative or noncumulative, as provided in the prospectus
supplement relating to the series of preferred stock. If our board of directors
fails to declare a dividend payable on a dividend payment date on any series of
preferred stock for which dividends are noncumulative, then the holders of the
series of preferred stock will have no right to receive a dividend in respect
of the dividend period ending on the dividend payment date, and we will have no
obligation to pay the dividend accrued for such period, whether or not
dividends on the series are declared payable on any future dividend payment
dates. Dividends on the shares of each series of preferred stock for which
dividends are cumulative will accrue from the date on which we initially issue
shares of the series.

So long as the shares of any series of preferred stock are outstanding,
we may not declare any dividends on our common stock or any other stock ranking
as to dividends or distributions of assets junior to the series of preferred
stock or make any payment on account of, or set apart money for, the purchase,
redemption or other retirement of, or for a sinking or other analogous fund
for, any shares of junior stock or make any distribution in respect thereof,
whether in cash or property or in obligations or stock, other than junior stock
which is neither convertible into, nor exchangeable or exercisable for, any
securities other than junior stock, unless:

. full dividends (including, if the preferred stock is cumulative,
dividends for prior dividend periods) shall have been paid or
declared and set apart for payment on all outstanding shares of
preferred stock of the series and all other series of our preferred
stock (other than junior stock); and

. we are not in default or in arrears with respect to the mandatory or
optional redemption or mandatory repurchase or other mandatory
retirement of, or with respect to any sinking or other analogous fund
for, any shares of preferred stock of the series or any shares of any
other series of our preferred stock (other than junior stock).

LIQUIDATION PREFERENCE

In the event of any liquidation, dissolution or winding up of us, voluntary
or involuntary, the holders of each series of the preferred stock will be
entitled to receive out of our assets available for distribution to
stockholders, before any distribution of assets or payment is made to the
holders of common stock or any other shares of our stock ranking junior as to
such distribution or payment to such series of preferred stock, the amount set
forth in the prospectus supplement relating to such series of preferred stock.
If, upon any voluntary or involuntary liquidation, dissolution or winding up of
us, the amounts payable with respect to the preferred stock of any series and
any other shares of preferred stock (including any other series of the
preferred stock) ranking as to any such distribution on a parity with such
series of preferred stock are not paid in full, the holders of the preferred
stock of such series and of such other shares of preferred stock will share
ratably in any such distribution of our assets in proportion to the full
respective preferential amounts to which they are entitled. After payment to
the holders of the preferred stock of each series of the full preferential
amounts of the liquidating distribution to which they are entitled, the holders
of each such series of preferred stock will be entitled to no further
participation in any distribution of our assets.

If such payment shall have been made in full to all holders of shares of
preferred stock, our remaining assets will be distributed among the holders of
any other classes of stock ranking junior to the 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. For such purposes, our consolidation or merger with or into any other
corporation, or the sale, lease or conveyance of all or substantially all of
our property or business, shall not be deemed to constitute a liquidation,
dissolution or winding up of us.

REDEMPTION

A series of preferred stock may be redeemable, in whole or from time to
time in part, at our option, and may be subject to mandatory redemption
pursuant to a sinking fund or otherwise, in each case upon terms, at the times
and at the redemption prices set forth in the prospectus supplement relating to
such series. Shares of the preferred stock redeemed by us will be restored to
the status of authorized but unissued shares of preferred stock.

In the event that fewer than all of the outstanding shares of a series of
the preferred stock are to be redeemed, whether by mandatory or optional
redemption, the number of shares to be redeemed will be determined by lot or
pro rata (subject to rounding to avoid fractional shares) as may be determined
by us or by any other method as may be determined by us in our sole discretion
to be equitable. From and after the redemption date (unless default shall be
made by us 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 the 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.

So long as any dividends on shares of any series of preferred stock or
any other series of preferred stock ranking on a parity as to dividends and
distributions of assets with such series of preferred stock are in arrears, no
shares of any such series of the preferred stock or such other series of
preferred stock will be redeemed (whether by mandatory or optional redemption)
unless all such shares are simultaneously redeemed, and we will not purchase or
otherwise acquire any such shares. However, the foregoing will not prevent the
purchase or acquisition of such shares of preferred stock of such series or of
shares of such other series of preferred stock pursuant to a purchase or
exchange offer made on the same terms to holders of all outstanding shares of
preferred stock of such series and, unless the full cumulative dividends on all
outstanding shares of any cumulative preferred stock of such series and any
other stock ranking on a parity with such series as to dividends and upon
liquidation shall have been paid or contemporaneously are declared and paid for
all past dividend periods, we will not purchase or otherwise acquire directly
or indirectly any shares of preferred stock of such series (except by
conversion into or exchange for our stock) ranking junior to the preferred
stock of such series as to dividends and upon liquidation.

Notice of redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each holder of record of shares of preferred
stock to be redeemed at the address shown on our stock transfer books. After
the redemption date, dividends will cease to accrue on the shares of preferred
stock called for redemption and all rights of the holders of such shares will
terminate, except the right to receive the redemption price without interest.

CONVERSION RIGHTS

The terms, if any, on which shares of preferred stock of any series may
be exchanged for or converted (mandatorily or otherwise) into shares of common
stock or another series of preferred stock will be set forth in the prospectus
supplement relating thereto.

VOTING RIGHTS

Except as indicated below or in a prospectus supplement relating to a
particular series of preferred stock, or except as required by applicable law,
the holders of the preferred stock will not be entitled to vote for any purpose.

So long as any shares of preferred stock remain outstanding, we will not,
without the consent or the affirmative vote of the holders of two-thirds of the
shares of each series of preferred stock outstanding at the time given in
person or by proxy, either in writing or at a meeting (such series voting
separately as a class):

. authorize, create or issue, or increase the authorized or issued
amount of, any series of stock ranking prior to such series of
preferred stock with respect to payment of dividends, or the

distribution of assets on liquidation, dissolution or winding up or
reclassifying any of our authorized stock into any such shares, or
create, authorize or issue any obligation or security convertible
into or evidencing the right to purchase any such shares; and

. repeal, amend or otherwise change any of the provisions applicable to
the preferred stock of such series in any manner which materially and
adversely affects the powers, preferences, voting power or other
rights or privileges of such series of 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 other
series of preferred stock, or any increase in the amount of
authorized shares of such series or of any other series of preferred
stock, in each case ranking on a parity with or junior to the
preferred stock of such series, shall not be deemed to materially and
adversely affect such rights, preferences, privileges or voting
powers.

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
shall be effected, all outstanding shares of the preferred stock shall have
been redeemed or called for redemption and sufficient funds shall have been
deposited in trust to effect such redemption.

RESTRICTIONS ON OWNERSHIP

In order for us to qualify as a real estate investment trust under the
Internal Revenue Code of 1986, as amended, not more than 50% in value of our
outstanding capital stock may be owned, directly or indirectly, by five or
fewer individuals (as defined in the Internal Revenue Code to include certain
entities) during the last half of a taxable year. To assist us in meeting this
requirement, we may take certain actions to limit the beneficial ownership,
directly or indirectly, by a single person of our outstanding equity
securities, including any preferred stock. The applicable prospectus supplement
will specify any additional ownership limitation relating to a series of
preferred stock.

TRANSFER AGENT AND REGISTRAR

The transfer agent, dividend and redemption price disbursement agent and
registrar for shares of each series of the preferred stock will be set forth in
the prospectus supplement relating thereto.

DESCRIPTION OF COMMON STOCK

Our authorized capital stock consists of 200,000,000 shares of common
stock, par value $1.00 per share, and 50,000,000 shares of preferred stock, par
value $1.00 per share. The following description is qualified in all respects
by reference to our charter, a copy of which was filed as an exhibit to our
Quarterly Report on Form 10-Q for the quarter ended June 30, 2001, our Second
Amended and Restated Bylaws, a copy of which was filed as an exhibit to our
Quarterly Report on Form 10-Q for the quarter ended March 31, 1999, and
Amendment No. 1 to our Second Amended and Restated Bylaws, filed as an exhibit
to our Annual Report on Form 10-K for the fiscal year ended December 31, 2001
and the rights agreement between us and The Bank of New York, as rights agent.

COMMON STOCK

All shares of common stock participate equally in dividends payable to
holders of common stock when and as declared by our board of directors and in
net assets available for distribution to holders of common stock upon our
liquidation, dissolution, or winding up, have one vote per share on all matters
submitted to a vote of the stockholders and do not have cumulative voting
rights in the election of directors. All issued and outstanding shares of
common stock are, and the common stock offered hereby will be upon issuance,
validly issued, fully paid and nonassessable. Holders of the common stock do
not have preference, conversion, exchange or preemptive rights. Our common
stock is listed on the New York Stock Exchange under the symbol "HCP."

STOCKHOLDER RIGHTS AGREEMENT

On June 20, 2000, we adopted a Stockholder Rights Plan and declared a
dividend of one preferred share purchase right for each outstanding share of
our common stock. The rights will become exercisable if a person or group of
affiliated or associated persons has acquired, or obtained the right to
acquire, beneficial ownership of 15% of more of our common stock or following
the commencement or announcement of an intention to make a tender offer or
exchange offer the consummation of which would result in the beneficial
ownership by a person or group of 15% or more of our common stock. After the
rights become exercisable, each right will entitle the holder to purchase from
us one one-hundredth (1/100th) of a share of Series D Junior Participating
Preferred Stock at a price of $95 per one one-hundredth (1/100th) of a share of
Series D Preferred Stock, subject to certain anti-dilution adjustments. The
rights will at no time have any voting rights.

Each share of Series D Preferred Stock purchasable upon exercise of the
rights will be entitled, when, as and if declared, to a minimum preferential
quarterly dividend payment of $1.00 per share but will be entitled to an
aggregate dividend of 100 times the dividend, if any, declared on our common
stock. In the event of our liquidation, dissolution or winding up, the holders
of the shares of the Series D Preferred Stock will be entitled to a
preferential liquidation payment of $100 per share plus any accrued but unpaid
dividends and distributions thereon, whether or not declared, provided that the
holders of shares of the Series D Preferred Stock shall be entitled to receive
an aggregate amount per share, subject to adjustment, equal to 100 times the
aggregate amount to be distributed per share to holders of shares of our common
stock. Each share of Series D Preferred Stock will have 100 votes and will vote
together with our common stock. Finally, in the event of any merger,
consolidation or other transaction in which shares of our common stock are
exchanged, each share of Series D Preferred Stock will be entitled to receive
100 times the amount received per share of common stock. Shares of Series D
Preferred Stock will not be redeemable. The rights are protected by customary
anti-dilution provisions. Because of the nature of the Series D Preferred
Stock's dividend, liquidation and voting rights, the value of one one-hundredth
of a share of Series D Preferred Stock purchasable upon exercise of each Right
should approximate the value of one common share.

Under certain circumstances, each holder of a right, other than rights
that are or were acquired or beneficially owned by a person or group acquiring
15% or more (which rights will thereafter be void), will have the right to
receive upon exercise that number of shares of our common stock having a market
value of two times the then current purchase price of one right. In the event
that, after a person acquired 15% or more of our common stock, we were acquired
in a merger or other business combination transaction or more than 50% of our
assets or earning power were sold, each holder of a right shall have the right
to receive, upon the exercise thereof at the then current purchase price of the
right, that number of shares of common stock of the acquiring company which at
the time of such transaction would have a market value of two times the then
current purchase price of one right.

The rights may be redeemed by our board of directors at any time prior to
the time a person or group acquires 15% or more of our common stock.

The rights will expire on July 27, 2010 (unless earlier redeemed,
exchanged or terminated). The Bank of New York is the Rights Agent.

The rights are designed to assure that all of our stockholders receive
fair and equal treatment in the event of any proposed takeover of us and to
guard against partial tender offers, open market accumulations and other
abusive tactics to gain control of us without paying all stockholders a control
premium. The rights will cause substantial dilution to a person or group that
acquires 15% or more of our stock on terms not approved by our board of
directors. The rights should not interfere with any merger or other business
combination approved by our board of directors at any time prior to the first
date that a person or group acquires 15% or more of our common stock.

TRANSFER RESTRICTIONS, REDEMPTION AND BUSINESS COMBINATION PROVISIONS

Among other requirements, in order for us to qualify as a REIT under the
Internal Revenue Code, no more than 50% in value of our outstanding shares of
stock may be owned, actually or constructively, by five or fewer individuals
(as defined in the Internal Revenue Code to include certain entities) during
the last half of a taxable year. In addition, if we, or an owner of 10% or more
of our capital stock, actually or constructively owns 10% or more of one of our
tenants (or a tenant of any partnership or limited liability company in which
we are a partner or member), the rent received by us (either directly or
through the partnership or limited liability company) from the tenant will not
be qualifying income for purposes of the gross income tests for REITs contained
in the Internal Revenue Code. A REIT's stock must also be beneficially owned by
100 or more persons during at least 335 days of a taxable year of twelve months
or during a proportionate part of a shorter taxable year.

Our charter contains restrictions on the ownership and transfer of our
common stock which are intended to assist us in complying with these
requirements and continuing to qualify as a REIT. The relevant sections of our
charter provide that, subject to the exceptions described below, no person or
entity may own, or be deemed to own by virtue of the applicable constructive
ownership provisions of the Internal Revenue Code, more than 9.8% (by number of
shares or value, whichever is more restrictive) of the outstanding shares of
common stock. We refer to the limits described in this paragraph as the
"ownership limits."

The constructive ownership rules under the Internal Revenue Code are
complex and may cause stock owned actually or constructively by a group of
related individuals and/or entities to be owned constructively by one
individual or entity. As a result, the acquisition of less than 9.8% of our
common stock (or the acquisition of an interest in an entity that owns,
actually or constructively, our common stock) by an individual or entity,
could, nevertheless cause that individual or entity, or another individual or
entity, to own constructively in excess of 9.8% of our outstanding common stock
and thereby subject the common stock to the applicable ownership limit.

Our board of directors may, but in no event will be required to, waive
the ownership limit with respect to a particular stockholder if it:

. determines that such ownership will not jeopardize our status as a
REIT; and

. our board of directors otherwise decides such action would be in our
best interest.

As a condition of such waiver, the board of directors may require an
opinion of counsel satisfactory to it and/or undertakings or representations
from the applicant with respect to preserving our REIT status.

These charter provisions further prohibit:

. any person from beneficially or constructively owning shares of our
stock that would result in us being "closely held" under Section
856(h) of the Internal Revenue Code or otherwise cause us to fail to
qualify as a REIT; and

. any person from transferring shares of our common stock if such
transfer would result in shares of our stock being beneficially owned
by fewer than 100 persons (determined without reference to any rules
of attribution).

Any person who acquires or attempts or intends to acquire beneficial or
constructive ownership of shares of common stock that will or may violate any
of the foregoing restrictions on transferability and ownership will be required
to give notice immediately to us and provide us with such other information as
we may request in order to determine the effect of such transfer on our status
as a REIT.

Pursuant to our charter, if any purported transfer of common stock or any
other event would otherwise result in any person violating the ownership limits
or such other limit as permitted by our board of directors, then any such
purported transfer will be void and of no force or effect as to that number of
shares in excess of the

applicable ownership limit. The shares proposed to be transferred will be
deemed to have been transferred to, and held by, a trustee of a trust for the
exclusive benefit of a charitable organization selected by us. The automatic
transfer will be effective as of the close of business on the business day
prior to the date of the violative transfer or other event that results in a
transfer to the trust.

The trustee shall sell the shares to us or to another person designated
by the trustee whose ownership of the shares will not violate the ownership
limit.

The trustee must, within 20 days of receiving notice from us of the
transfer of shares to the trust:

. sell the excess shares to a person or entity who could own the shares
without violating the ownership limits or as otherwise permitted by
our board of directors, and

. distribute to the prohibited transferee or owner, as applicable, an
amount equal to the lesser of (1) the price paid by the prohibited
transferee or owner for the excess shares (or, if the event which
resulted in the transfer to the trust did not involve a purchase of
such shares at market price, the last reported sales price reported
on the New York Stock Exchange on the trading day immediately
preceding the relevant date) and (2) the sales proceeds received by
the trust for the excess shares.

The trustee shall be designated by us and shall be unaffiliated with us
and any prohibited transferee or owner. Prior to the sale of any excess shares
by the trust, the trustee will receive, in trust for the beneficiary, all
dividends and other distributions paid by us with respect to the excess shares,
and may also exercise all voting rights with respect to the excess shares.

Subject to Maryland law, effective as of the date that the shares have
been transferred to the trust, the trustee shall have the authority, at the
trustee's sole discretion,

. to rescind as void any vote cast by a prohibited transferee or owner,
as applicable, prior to our discovery that the shares have been
transferred to the trust; and

. to recast the vote in accordance with the desires of the trustee
acting for the benefit of the beneficiary of the trust.

However, if we have already taken irreversible corporate action, then the
trustee may not rescind and recast the vote. Any dividend or other distribution
paid to the prohibited transferee or owner, prior to our discovery that the
shares had been automatically transferred to a trust as described above, must
be repaid to the trustee upon demand for distribution to the beneficiary of the
trust. If the transfer to the trust as described above is not automatically
effective, for any reason, to prevent violation of the applicable ownership
limit or as otherwise permitted by the board of directors, then our charter
provides that the transfer of the excess shares will be void.

All certificates representing shares of our common stock bear a legend
referring to the restrictions described above.

In addition, if our 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% of
the voting shares of capital stock has or may become concentrated in the hands
of one beneficial owner, it shall have the power:

. by lot or other means deemed equitable by it to call for the purchase
from any stockholder of a number of voting shares sufficient, in the
opinion of our board of directors, to maintain or bring the direct or
indirect ownership of voting shares of capital stock of the
beneficial owner to a level of no more than 9.9% of our outstanding
voting shares; and

. to refuse to transfer or issue voting shares of capital stock 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
by that person of more than 9.9% of the outstanding voting shares of
our capital stock.

If our board of directors fails to grant an exemption from this 9.9%
ownership limitation, then the 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 voting shares shall be deemed void ab
initio and the intended transferee shall be deemed never to have had an
interest in the transferred securities. The purchase price for any voting
shares of capital stock so redeemed 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 we send notices of such
acquisitions, 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. 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, except the right to payment of the purchase price for the shares.

Our charter requires that, except in certain circumstances, business
combinations between us and a beneficial holder of 10% or more of our
outstanding voting stock, or a related person, be approved by the affirmative
vote of at least 90% of our outstanding voting shares.

A business combination is defined in our charter as:

. our merger or consolidation with or into a related person;

. 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 defined below) of our assets (including
without limitation any voting securities of a subsidiary) to a
related person;

. any merger or consolidation of a related person with or into us;

. any sale, lease, exchange, transfer or other disposition of all or
any substantial part of the assets of a related person to us;

. the issuance of any of our securities (other than by way of pro rata
distribution to all stockholders) to a related person; and

. any agreement, contract or other arrangement providing for any of the
transactions described in the definition of business combination.

The term "substantial part" means more than 10% of the book value of our
total assets as of the end of its most recent fiscal year ending prior to the
time the determination is being made.

The foregoing provisions of our charter and certain other matters may not
be amended without the affirmative vote of at least two-thirds of our
outstanding voting shares.

The rights and the foregoing provisions may have the effect of
discouraging unilateral tender offers or other takeover proposals which certain
stockholders might deem to be in their interests or in which they might receive
a substantial premium. Our board of directors' authority to issue and establish
the terms of currently authorized preferred stock, without stockholder
approval, may also have the effect of discouraging takeover attempts. See
"Description of Preferred Stock." The rights and the foregoing provisions could
also have the effect of insulating current management against the possibility
of removal and could, by possibly reducing temporary fluctuations in market
price caused by accumulations of shares of common stock, deprive stockholders
of opportunities to sell at a temporarily higher market price. However, our
board of directors believes that inclusion of the business combination
provisions in our charter and the rights may help assure fair treatment of
stockholders and preserve our assets.

The above summary of certain provisions of the rights and our charter
does not purport to be complete or to give effect to provisions of statutory or
common law. The summary is subject to, and qualified in its entirety by
reference to, the provisions of applicable law and, our charter and the rights
agreement, copies of which are incorporated by reference as exhibits to the
registration statement of which this prospectus is a part.

TRANSFER AGENT AND REGISTRAR

Bank of New York acts as transfer agent and registrar of the common stock.

UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
RELATED TO OUR REIT ELECTION

The following is a summary of the federal income tax considerations
related to our REIT election which are anticipated to be material to purchasers
of the securities offered by this prospectus. Your tax treatment will vary
depending upon the terms of the specific securities that you acquire, as well
as your particular situation. This discussion does not attempt to address any
aspects of federal income taxation relevant to your ownership of the securities
offered by this prospectus. Instead, the material federal income tax
considerations relevant to your ownership of the securities offered by this
prospectus may be provided in the applicable prospectus supplement that relates
to those securities.

The information in this section is based on:

. the Internal Revenue Code;

. current, temporary and proposed Treasury regulations promulgated
under the Internal Revenue Code;

. the legislative history of the Internal Revenue Code;

. current administrative interpretations and practices of the Internal
Revenue Service; and

. court decisions

in each case, as of the date of this prospectus. In addition, the
administrative interpretations and practices of the Internal Revenue Service
include its practices and policies as expressed in private letter rulings which
are not binding on the Internal Revenue Service, except with respect to the
particular taxpayers who requested and received these rulings. Future
legislation, Treasury regulations, administrative interpretations and practices
and/or court decisions may adversely affect the tax considerations contained in
this discussion. Any change could apply retroactively to transactions preceding
the date of the change. We have not requested, and do not plan to request, any
rulings from the Internal Revenue Service concerning our tax treatment, and the
statements in this prospectus are not binding on the Internal Revenue Service
or any court. Thus, we can provide no assurance that the tax considerations
contained in this discussion will not be challenged by the Internal Revenue
Service or if challenged, will be sustained by a court.

You are advised to consult the applicable prospectus supplement, as well
as your own tax advisors, regarding the tax consequences to you of:

. the acquisition, ownership and sale or other disposition of the
securities offered under this prospectus, including the federal,
state, local, foreign and other tax consequences;

. our election to be taxed as a REIT for federal income tax purposes;
and

. potential changes in the tax laws.

TAXATION OF THE COMPANY

GENERAL. We elected to be taxed as a REIT under Sections 856 through 860
of the Internal Revenue Code, commencing with our taxable year ending December
31, 1985. We believe we have been organized and have operated in a manner which
allows us to qualify for taxation as a REIT under the Internal Revenue Code
commencing with our taxable year ending December 31, 1985. We intend to
continue to operate in this manner, but there is no assurance that we have
operated or will continue to operate in a manner so as to qualify or remain
qualified as a REIT. See "--Failure to Qualify."

The sections of the Internal Revenue Code and the corresponding Treasury
regulations that relate to the qualification and operation of a REIT are highly
technical and complex. This summary is qualified in its entirety by the
applicable Internal Revenue Code provisions, rules and regulations promulgated
thereunder, and administrative and judicial interpretations thereof.

Latham & Watkins has rendered an opinion to us, dated as of June 7, 2002,
to the effect that, commencing with our taxable year ending December 31, 1985,
we have been organized and have operated in conformity with the requirements
for qualification and taxation as a REIT, and our proposed method of operation
will enable us to continue to meet the requirements for qualification and
taxation as a REIT under the Internal Revenue Code. It must be emphasized that
this opinion was based on various assumptions and representations as to factual
matters, including representations made by us in a certificate provided by one
of our officers. Our tax counsel has no obligation to update its opinion
subsequent to its date. In addition, this opinion was based upon our factual
representations set forth in this prospectus. Moreover, our qualification and
taxation as a REIT depends upon our ability to meet, through actual annual
operating results, asset diversification, distribution levels and diversity of
stock ownership, the various qualification tests imposed under the Internal
Revenue Code discussed below, the results of which have not been and will not
be reviewed by our tax counsel. Accordingly, no assurance can be given that our
actual results of operation for any particular taxable year will satisfy those
requirements. Further, the anticipated income tax treatment described in this
prospectus may be changed, perhaps retroactively, by legislative,
administrative or judicial action at any time.

If we qualify for taxation as a REIT, we generally will not be required
to pay federal corporate income taxes on our net income that is currently
distributed to our stockholders. This treatment substantially eliminates the
"double taxation" that ordinarily results from investment in a corporation.
Double taxation means taxation once at the corporate level when income is
earned and once again at the stockholder level when this income is distributed.
We will be required to pay federal income tax, however, as follows:

. We will be required to pay tax at regular corporate rates on any
undistributed REIT taxable income, including undistributed net
capital gains.

. We may be required to pay the "alternative minimum tax" on our items
of tax preference.

. If we have: (a) net income from the sale or other disposition of
"foreclosure property" which is held primarily for sale to customers
in the ordinary course of business; or (b) other nonqualifying income
from foreclosure property, we will be required to pay tax at the
highest corporate rate on this income. Foreclosure property is
generally defined as property acquired through foreclosure or after a
default on a loan secured by the property or a lease of the property.

. We will be required to pay a 100% tax on any net income from
prohibited transactions. Prohibited transactions are, in general,
sales or other taxable dispositions of property, other than
foreclosure property, held primarily for sale to customers in the
ordinary course of business.

. If we fail to satisfy the 75% gross income test or the 95% gross
income test discussed below, but nonetheless maintain our
qualification as a REIT because certain other requirements are met,
we will be required to pay a tax equal to (a) the greater of (i) the
amount by which 75% of our gross income exceeds the amount qualifying
under the 75% gross income test described below and (ii) the amount
by which 90% of our gross income exceeds the amount qualifying under
the 95% gross income test described below, multiplied by (b) a
fraction intended to reflect our profitability.

. We will be required to pay a 4% excise tax to the extent we fail to
distribute during each calendar year at least the sum of (a) 85% of
our REIT ordinary income for the year, (b) 95% of our REIT capital
gain net income for the year, and (c) any undistributed taxable
income from prior periods.

. If we acquire any asset from a corporation which is or has been a C
corporation in a transaction in which the basis of the asset in our
hands is determined by reference to the basis of the asset in the
hands of the C corporation, and we subsequently recognize gain on the
disposition of the asset during the ten-year period beginning on the
date on which we acquired the asset, then we will be required to pay
tax at the highest regular corporate tax rate on this gain to the
extent of the excess of (a) the fair market value of the asset over
(b) our adjusted basis in the asset, in each case determined as of
the date on which we acquired the asset. A C corporation is generally
defined as a corporation required to pay full corporate-level tax.
The results described in this paragraph with

respect to the recognition of gain assume that we will make or
refrain from making an election under the Treasury regulations under
Section 337 of the Internal Revenue Code, depending upon the time of
the acquisition.

. We will be subject to a 100% tax on any "redetermined rents,"
"redetermined deductions" or "excess interest." In general,
redetermined rents are rents from real property that are overstated
as a result of services furnished by a "taxable REIT subsidiary" of
ours to any of our tenants. See "--Ownership of Interests in Taxable
REIT Subsidiaries." Redetermined deductions and excess interest
generally represent amounts that are deducted by a taxable REIT
subsidiary of ours for amounts paid to us that are in excess of the
amounts that would have been deducted based on arm's length
negotiations.

REQUIREMENTS FOR QUALIFICATION AS A REIT. The Internal Revenue Code
defines a REIT as a corporation, trust or association:

(1) that is managed by one or more trustees or directors;

(2) that issues transferable shares or transferable certificates to
evidence beneficial ownership;

(3) that would be taxable as a domestic corporation but for Sections 856
through 860 of the Internal Revenue Code;

(4) that is not a financial institution or an insurance company within
the meaning of the Internal Revenue Code;

(5) that is beneficially owned by 100 or more persons;

(6) not more than 50% in value of the outstanding stock of which is
owned, actually or constructively, by five or fewer individuals,
including specified entities, during the last half of each taxable
year; and

(7) that meets other tests, described below, regarding the nature of its
income and assets and the amount of its distributions.

The Internal Revenue Code provides that all of conditions (1) to (4),
must be met during the entire taxable year and that condition (5) must be met
during at least 335 days of a taxable year of twelve months, or during a
proportionate part of a taxable year of less than twelve months. Conditions (5)
and (6) do not apply until after the first taxable year for which an election
is made to be taxed as a REIT. For purposes of condition (6), pension funds and
other specified tax-exempt entities generally are treated as individuals,
except that a "look-through" exception applies with respect to pension funds.

We believe that we have satisfied conditions (1) through (7) during the
relevant time periods. In addition, our charter provides for restrictions
regarding ownership and transfer of shares. These restrictions are intended to
assist us in continuing to satisfy the share ownership requirements described
in (5) and (6) above. These ownership and transfer restrictions are described
in "Description of Common Stock--Transfer Restrictions, Redemptions and
Business Combination Provisions" in this Prospectus. These restrictions,
however, may not ensure that we will, in all cases, be able to satisfy the
share ownership requirements described in (5) and (6) above. If we fail to
satisfy these share ownership requirements, except as provided in the next
sentence, our status as a REIT will terminate. If, however, we comply with the
rules contained in the Treasury regulations that require us to ascertain the
actual ownership of our shares, and we do not know, or would not have known
through the exercise of reasonable diligence, that we failed to meet the
requirement described in condition (6) above, we will be treated as having met
this requirement. See "--Failure to Qualify."

In addition, we may not maintain our status as a REIT unless our taxable
year is the calendar year. We have and will continue to have a calendar taxable
year.

OWNERSHIP OF A PARTNERSHIP INTEREST. We own and operate one or more
properties through partnerships and limited liability companies. Treasury
regulations provide that if we are a partner in a partnership, we will be
deemed to own our proportionate share of the assets of the partnership. Also,
we will be deemed to be entitled to our proportionate share of the income of
the partnership. The character of the assets and gross income of the
partnership retains the same character in our hands for purposes of Section 856
of the Internal Revenue Code, including satisfying the gross income tests and
the asset tests. In addition, for these purposes, the assets and items of
income of any partnership in which we own a direct or indirect interest include
such partnership's share of assets and items of income of any partnership in
which it owns an interest. We have included a brief summary of the rules
governing the federal income taxation of partnerships and their partners below
in "--Tax Aspects of the Partnerships." The treatment described above also
applies with respect to the ownership of interests in limited liability
companies or other entities that are treated as partnerships for tax purposes.

We have direct or indirect control of certain partnerships and limited
liability companies and intend to continue to operate them in a manner
consistent with the requirements for qualification as a REIT. We are a limited
partner or non-managing member in certain partnerships and limited liability
companies. If a partnership or limited liability company in which we own an
interest takes or expects to take actions which could jeopardize our status as
a REIT or require us to pay tax, we may be forced to dispose of our interest in
that entity. In addition, it is possible that a partnership or limited
liability company could take an action which could cause us to fail a REIT
income or asset test, and that we would not become aware of such action in a
time frame which would allow us to dispose of our interest in the applicable
entity or take other corrective action on a timely basis. In such a case, we
could fail to qualify as a REIT.

OWNERSHIP OF INTERESTS IN QUALIFIED REIT SUBSIDIARIES. We own and
operate a number of properties through our wholly-owned subsidiaries that we
believe will be treated as "qualified REIT subsidiaries" under the Internal
Revenue Code. A corporation will qualify as a qualified REIT subsidiary if we
own 100% of its outstanding stock and if we do not elect with the subsidiary to
treat it as a "taxable REIT subsidiary," described below. A corporation that is
a qualified REIT subsidiary is not treated as a separate corporation, and all
assets, liabilities and items of income, deduction and credit of a qualified
REIT subsidiary are treated as assets, liabilities and items of income,
deduction and credit (as the case may be) of the parent REIT for all purposes
under the Internal Revenue Code (including all REIT qualification tests). Thus,
in applying the requirements described in this prospectus, the subsidiaries in
which we own a 100% interest (other than any taxable REIT subsidiaries) will be
ignored, and all assets, liabilities and items of income, deduction and credit
of such subsidiaries will be treated as our assets, liabilities and items of
income, deduction and credit. A qualified REIT subsidiary is not subject to
federal income tax and our ownership of the stock of such a subsidiary will not
violate the REIT asset tests, described below under "--Asset tests."

OWNERSHIP OF INTERESTS IN TAXABLE REIT SUBSIDIARIES. A taxable REIT
subsidiary is a corporation other than a REIT in which a REIT directly or
indirectly holds stock and that has made a joint election with the REIT to be
treated as a taxable REIT subsidiary. A taxable REIT subsidiary also includes
any corporation other than a REIT with respect to which a taxable REIT
subsidiary owns, directly or indirectly, securities possessing more than 35% of
the total voting power or value of the outstanding securities of such
corporation. A taxable REIT subsidiary may generally engage in any business,
including the provision of customary or noncustomary services to tenants of its
parent REIT, except that a taxable REIT subsidiary may not directly or
indirectly operate or manage a lodging or health care facility or directly or
indirectly provide to any other person (under a franchise, license or
otherwise) rights to any brand name under which any lodging or health care
facility is operated. A taxable REIT subsidiary is subject to federal income
tax, and state and local income tax where applicable, as a regular C
corporation. In addition, a taxable REIT subsidiary may be prevented from
deducting interest on debt that is directly or indirectly funded by its parent
REIT if certain tests regarding the taxable REIT subsidiary's debt-to-equity
ratio and interest expense are satisfied. We own interests in HCPI Investments,
Inc. and Indiana HCP GP, Inc. We have jointly elected with each of HCPI
Investments and Indiana HCP GP, Inc. to have these corporations be treated as
taxable REIT subsidiaries. As a result, our ownership of securities of HCPI
Investments and Indiana HCP GP, Inc. will not be subject to the 10% asset test
described below, and their operations will be subject to the provisions
described above which are applicable to a taxable REIT subsidiary. See "--Asset
tests."

INCOME TESTS. We must satisfy two gross income requirements annually to
maintain our qualification as a REIT:

. First, each taxable year we must derive directly or indirectly at
least 75% of our gross income, excluding gross income from prohibited
transactions, from (a) certain investments relating to real property
or mortgages on real property, including "rents from real property"
and, in some circumstances, interest, or (b) some types of temporary
investments; and

. Second, each taxable year we must derive at least 95% of our gross
income, excluding gross income from prohibited transactions, from (a)
the real property investments described above, and (b) dividends,
interest and gain from the sale or disposition of stock or securities.

For these purposes, the term "interest" generally does not include any
amount received or accrued, directly or indirectly, if the determination of all
or some of the amount depends in any way on the income or profits of any
person. An amount received or accrued generally will not be excluded from the
term "interest," however, solely by reason of being based on a fixed percentage
or percentages of receipts or sales.

Rents we receive from a tenant will qualify as "rents from real property"
for the purpose of satisfying the gross income requirements for a REIT
described above only if the following conditions are met:

. The amount of rent must not be based in whole or in part on the
income or profits of any person. However, an amount we receive or
accrue generally will not be excluded from the term "rents from real
property" solely by reason of being based on a fixed percentage or
percentages of receipts or sales;

. We, or an actual or constructive owner of 10% or more of our stock,
must not actually or constructively own 10% or more of the interests
in the assets or net profits of the tenant, or, if the tenant is a
corporation, 10% or more of the total combined voting power of all
classes of stock entitled to vote or 10% or more of the total value
of all classes of stock of the tenant. Rents received from such
tenant that is a taxable REIT subsidiary, however, will not be
excluded from the definition of "rents from real property" if at
least 90% of the space at the property to which the rents relate is
leased to third parties, and the rents paid by the taxable REIT
subsidiary are comparable to rents paid by our other tenants for
comparable space;

. Rent attributable to personal property, leased in connection with a
lease of real property, is not greater than 15% of the total rent
received under the lease. If this requirement is not met, then the
portion of rent attributable to personal property will not qualify as
"rents from real property;" and

. We generally must not operate or manage the property or furnish or
render services to the tenants of the property, subject to a 1% DE
MINIMIS exception, other than through an independent contractor from
whom we derive no revenue. We may, however, directly perform certain
services that are "usually or customarily rendered" in connection
with the rental of space for occupancy only and are not otherwise
considered "rendered to the occupant" of the property. Examples of
such services include the provision of light, heat, or other
utilities, trash removal and general maintenance of common areas. In
addition, we may employ a taxable REIT subsidiary, which may be
wholly or partially owned by us, to provide both customary and
non-customary services to our tenants without causing the rent we
receive from those tenants to fail to qualify as "rents from real
property." Any amounts we receive from a taxable REIT subsidiary with
respect to the taxable REIT subsidiary's provision of non-customary
services will, however, be nonqualified income under the 75% gross
income test and, except to the extent received through the payment of
dividends, the 95% gross income test.

We generally do not intend to receive rent which fails to satisfy any of
the above conditions. Notwithstanding the foregoing, we may have taken and may
continue to take actions which fail to satisfy one or more of the above
conditions to the extent that we determine, based on the advice of our tax
counsel, that those actions will not jeopardize our status as a REIT.

We believe that the aggregate amount of our nonqualifying income, from
all sources, in any taxable year will not exceed the limit on nonqualifying
income under the gross income tests. If we fail to satisfy one or both of the
75% or 95% gross income tests for any taxable year, we may nevertheless qualify
as a REIT for the year if we are entitled to relief under the Internal Revenue
Code. Generally, we may avail ourselves of the relief provisions if:

. our failure to meet these tests was due to reasonable cause and not
due to willful neglect;

. we attach a schedule of the sources of our income to our federal
income tax return; and

. any incorrect information on the schedule was not due to fraud with
intent to evade tax.

It is not possible, however, to state whether in all circumstances we
would be entitled to the benefit of these relief provisions. For example, if we
fail to satisfy the gross income tests because nonqualifying income that we
intentionally accrue or receive exceeds the limits on nonqualifying income, the
Internal Revenue Service could conclude that our failure to satisfy the tests
was not due to reasonable cause. If these relief provisions do not apply to a
particular set of circumstances, we will not qualify as a REIT. As discussed
above in "--Taxation of the Company--General," even if these relief provisions
apply, and we retain our status as a REIT, a tax would be imposed with respect
to our nonqualifying income. We may not always be able to maintain compliance
with the gross income tests for REIT qualification despite our periodic
monitoring of our income.

PROHIBITED TRANSACTION INCOME. Any gain that we realize on the sale of
any property held as inventory or other property held primarily for sale to
customers in the ordinary course of business will be treated as income from a
prohibited transaction that is subject to a 100% penalty tax. Our gain would
include our share of any gain realized by any of the partnerships, limited
liability companies or qualified REIT subsidiaries in which we own an interest.
This prohibited transaction income may also adversely affect our ability to
satisfy the income tests for qualification as a REIT. Under existing law,
whether property is held as inventory or primarily for sale to customers in the
ordinary course of a trade or business depends on all the facts and
circumstances surrounding the particular transaction. We intend to hold our
properties for investment with a view to long-term appreciation and to engage
in the business of acquiring, developing and owning our properties. We have and
may in the future make occasional sales of the properties as are consistent
with our investment objectives. We do not intend to enter into any sales that
are prohibited transactions. The Internal Revenue Service may contend, however,
that one or more of these sales is subject to the 100% penalty tax.

REDETERMINED RENTS. Any redetermined rents, redetermined deductions or
excess interest we generate will be subject to a 100% penalty tax. In general,
redetermined rents are rents from real property that are overstated as a result
of services furnished by one of our taxable REIT subsidiaries to any of our
tenants, and redetermined deductions and excess interest represent amounts that
are deducted by a taxable REIT subsidiary for amounts paid to us that are in
excess of the amounts that would have been deducted based on arm's length
negotiations. Rents we receive will not constitute redetermined rents if they
qualify for the safe harbor provisions contained in the Internal Revenue Code.
Safe harbor provisions are provided where generally:

. Amounts are received by a REIT for services customarily furnished or
rendered in connection with the rental of real property;

. Amounts are excluded from the definition of impermissible tenant
service income as a result of satisfying the 1% DE MINIMIS exception;

. The taxable REIT subsidiary renders a significant amount of similar
services to unrelated parties and the charges for such services are
substantially comparable;

. Rents paid to the REIT by tenants who are not receiving services from
the taxable REIT subsidiary are substantially comparable to the rents
paid by the REIT's tenants leasing comparable space who are receiving
such services from the taxable REIT subsidiary and the charge for the
services is separately stated; and

. The taxable REIT subsidiary's gross income from the service is not
less than 150% of the subsidiary's direct cost in furnishing or
rendering the service.

ASSET TESTS. At the close of each quarter of our taxable year, we also
must satisfy four tests relating to the nature and diversification of our
assets:

. First, at least 75% of the value of our total assets, including
assets held by our qualified REIT subsidiaries and our allocable
share of the assets held by the partnerships and limited liability
companies in which we own an interest, must be represented by real
estate assets, cash, cash items and government securities. For
purposes of this test, the term "real estate assets" generally means
real property (including interests in real property and interests in
mortgages on real property) and shares (or transferable certificates
of beneficial interest) in other REITs, as well as any stock or debt
instrument attributable to the investment of the proceeds of a stock
offering or a public debt offering with a term of at least five
years, but only for the one-year period beginning on the date the
REIT receives such proceeds;

. Second, not more than 25% of the value of our total assets may be
represented by securities, other than those securities included in
the 75% asset test;

. Third, of the securities included in the 25% asset test, the value of
any one issuer's securities may not exceed 5% of the value of our
total assets, and we may not own more than 10% by vote or value of
any one issuer's outstanding securities. For years prior to 2001, the
10% limit applies only with respect to voting securities of any
issuer and not to the value of the securities of any issuer; and

. Fourth, not more than 20% of the value of our total assets may be
represented by the securities of one or more taxable REIT
subsidiaries. The 10% value limitation and the 20% asset test are
part of recently enacted legislation and are effective for taxable
years ending after December 31, 2000.

We own 100% of the outstanding stock of HCPI Investments, Inc. and
Indiana HCP GP, Inc. Each of HCPI Investments and Indiana HCP GP, Inc. elected,
together with us, to have these corporations be treated as taxable REIT
subsidiaries. So long as HCPI Investments and Indiana HCP GP, Inc. qualify as
taxable REIT subsidiaries, we will not be subject to the 5% asset test, 10%
voting securities limitation or 10% value limitation with respect to our
ownership of securities in HCPI Investments or Indiana HCP GP, Inc. We or HCPI
Investments or Indiana HCP GP, Inc. may acquire securities in other taxable
REIT subsidiaries in the future. We believe that the aggregate value of our
taxable REIT subsidiaries will not exceed 20% of the aggregate value of our
gross assets. With respect to each issuer in which we currently own an interest
that does not qualify as a REIT, a qualified REIT subsidiary or a taxable REIT
subsidiary, we believe that (1) the value of the securities of any such issuer
has not exceeded 5% of the total value of our assets and (2) our ownership of
the securities of any such issuer has complied with the 10% voting securities
limitation and 10% value limitation. No independent appraisals have been
obtained to support these conclusions. In addition, there can be no assurance
that the Internal Revenue Service will not disagree with our determinations of
value. We also own, and may continue to make, loans which must qualify under
the "straight debt safe-harbor" in order to satisfy the 10% value limitation
described above. We believe, based on the advice of our tax counsel, that all
such existing loans qualify under this safe-harbor. However, there is very
little authority interpreting this safe-harbor and, as a result, there can be
no assurance that the Internal Revenue Service would not take a contrary
position.

The asset tests must be satisfied not only on the date that we (directly
or through our partnerships or limited liability companies) acquire securities
in the applicable issuer, but also each time we increase our ownership of
securities of such issuer, including as a result of increasing our interest in
a partnership or limited liability company which owns such securities. For
example, our indirect ownership of securities of an issuer may increase as a
result of our capital contributions to a partnership or limited liability
company. After initially meeting the asset tests at the close of any quarter,
we will not lose our status as a REIT for failure to satisfy the asset tests at
the end of a later quarter solely by reason of changes in asset values. If we
fail to satisfy an asset test because we acquire securities or other property
during a quarter (including as a result of an increase in our interests in a
partnership or limited liability company), we can cure this failure by
disposing of sufficient nonqualifying assets within 30 days after the close of
that quarter. Although we expect to satisfy the asset tests and plan to take
steps to ensure that we satisfy such tests for any quarter with respect to
which retesting is to occur, there can be no assurance that such steps will
always be successful or will not require a reduction in our overall interest in
an issuer (including in a taxable REIT subsidiary). If we fail to timely cure
any noncompliance with the asset tests, we would cease to qualify as a REIT.

ANNUAL DISTRIBUTION REQUIREMENTS. To maintain our qualification as a
REIT, we are required to distribute dividends, other than capital gain
dividends, to our stockholders in an amount at least equal to the sum of:

. 90% (95% for taxable years beginning before January 1, 2001) of our
"REIT taxable income"; and

. 90% (95% for taxable years beginning before January 1, 2001) of our
after tax net income, if any, from foreclosure property; minus

. the excess of the sum of specified items of our noncash income items
over 5% of "REIT taxable income" as described below.

Our "REIT taxable income" is computed without regard to the dividends
paid deduction and our net capital gain. In addition, for purposes of this
test, non-cash income means income attributable to leveled stepped rents,
original issue discount on purchase money debt, or a like-kind exchange that is
later determined to be taxable.

In addition, if we dispose of any asset we acquired from a corporation
which is or has been a C corporation in a transaction in which our basis in the
asset is determined by reference to the basis of the asset in the hands of that
C corporation, within the ten-year period following our acquisition of such
asset, we would be required to distribute at least 90% (95% for taxable years
beginning before January 1, 2001) of the after-tax gain, if any, we recognized
on the disposition of the asset, to the extent that gain does not exceed the
excess of (a) the fair market value of the asset on the date we acquired the
asset over (b) our adjusted basis in the asset on the date we acquired the
asset.

We must pay these distributions in the taxable year to which they relate,
or in the following taxable year if they are declared before we timely file our
tax return for that year and paid on or before the first regular dividend
payment following their declarations. Except as provided below, these
distributions are taxable to our stockholders, other than tax-exempt entities
in the year in which paid. This is so even though these distributions relate to
the prior year for purposes of our 90% distribution requirement. The amount
distributed must not be preferential. To avoid being preferential, every
stockholder of the class of stock to which a distribution is made must be
treated the same as every other stockholder of that class, and no class of
stock may be treated other than according to its dividend rights as a class. To
the extent that we do not distribute all of our net capital gain or distribute
at least 90% (95% for taxable years beginning before January 1, 2001), but less
than 100%, of our "REIT taxable income," as adjusted, we will be required to
pay tax on the undistributed amount at regular ordinary and capital gain
corporate tax rates. We believe we have made, and intend to continue to make,
timely distributions sufficient to satisfy these annual distribution
requirements.

We anticipate that we will generally have sufficient cash or liquid
assets to enable us to satisfy our distribution requirements. However, we may
not have sufficient cash or other liquid assets to meet these distribution
requirements because of timing differences between the actual receipt of income
and actual payment of deductible expenses, and the inclusion of income and
deduction of expenses in determining our taxable income. If these timing
differences occur, we may need to arrange for short-term, or possibly
long-term, borrowings or need to pay dividends in the form of taxable stock
dividends in order to meet the distribution requirements.

We may be able to rectify an inadvertent failure to meet the 90%
distribution requirement for a year by paying "deficiency dividends" to
stockholders in a later year, which we may include in our deduction for
dividends paid for the earlier year. Thus, we may be able to avoid being taxed
on amounts distributed as deficiency dividends. However, we will be required to
pay interest based upon the amount of any deduction taken for deficiency
dividends.

In addition, we will be required to pay a 4% excise tax on the excess of
our required distribution for a calendar year over the amounts we actually
distribute for such year. The amount of our required distribution during each
calendar year (or in the case of distributions with declaration and record
dates falling in the last three months of the calendar year, by the end of
January immediately following such year) equals the sum of 85% of our REIT
ordinary income for such year, 95% of our REIT capital gain net income for the
year and any

undistributed taxable income from prior periods. Any REIT taxable income and
net capital gain on which this excise tax is imposed for any year will be
treated as an amount distributed during that year for purposes of calculating
such tax.

Distributions with declaration and record dates falling in the last three
months of the calendar year, which are paid to our stockholders by the end of
January immediately following that year, will be treated for federal income tax
purposes as having been paid on December 31 of the prior year.

FAILURE TO QUALIFY

If we fail to qualify for taxation as a REIT in any taxable year, and the
relief provisions of the Internal Revenue Code do not apply, we will be
required to pay tax, including any alternative minimum tax, on our taxable
income at regular corporate rates. Distributions to stockholders in any year in
which we fail to qualify as a REIT will not be deductible by us and we will not
be required to distribute any amounts to our stockholders. As a result, we
anticipate that our failure to qualify as a REIT would reduce the cash
available for distribution by us to our stockholders. In addition, if we fail
to qualify as a REIT, all distributions to stockholders will be taxable at
ordinary income rates to the extent of our current and accumulated earnings and
profits. In this event, corporate distributees may be eligible for the
dividends-received deduction. Unless entitled to relief under specific
statutory provisions, we will also be disqualified from taxation as a REIT for
the four taxable years following the year in which we lose our qualification.
It is not possible to state whether in all circumstances we would be entitled
to this statutory relief.

TAX ASPECTS OF THE PARTNERSHIPS

GENERAL. We own, directly or indirectly, interests in various
partnerships and limited liability companies and may own interests in
additional partnerships and limited liability companies in the future. Our
ownership of an interest in such partnerships and limited liability companies
involves special tax considerations. These special tax considerations include,
for example, the possibility that the Internal Revenue Service might challenge
the status of one or more of the partnerships or limited liability companies in
which we own an interest as partnerships, as opposed to associations taxable as
corporations, for federal income tax purposes. If a partnership or limited
liability company in which we own an interest, or one or more of its subsidiary
partnerships or limited liability companies, were treated as an association, it
would be taxable as a corporation and therefore be subject to an entity-level
tax on its income. In this situation, the character of our assets and items of
gross income would change, and could prevent us from satisfying the REIT asset
tests and/or the REIT income tests. This, in turn, would prevent us from
qualifying as a REIT. In addition, a change in the tax status of one or more of
the partnerships or limited liability companies in which we own an interest
might be treated as a taxable event. If so, we might incur a tax liability
without any related cash distributions.

Treasury regulations that apply for tax periods beginning on or after
January 1, 1997, provide that a domestic business entity not otherwise
organized as a corporation and which has at least two members may elect to be
treated as a partnership for federal income tax purposes. Unless it elects
otherwise, an eligible entity in existence prior to January 1, 1997, will have
the same classification for federal income tax purposes that it claimed under
the entity classification Treasury regulations in effect prior to this date. In
addition, an eligible entity which did not exist or did not claim a
classification prior to January 1, 1997, will be classified as a partnership
for federal income tax purposes unless it elects otherwise. All of the
partnerships in which we own an interest intend to claim classification as
partnerships under these Treasury regulations. As a result, we believe that
these partnerships will be classified as partnerships for federal income tax
purposes. The treatment described above also applies with respect to our
ownership of interests in limited liability companies that are treated as
partnerships for tax purposes.

ALLOCATIONS OF INCOME, GAIN, LOSS AND DEDUCTION. A partnership or
limited liability company agreement will generally determine the allocation of
income and losses among partners or members. These allocations, however, will
be disregarded for tax purposes if they do not comply with the provisions of

Section 704(b) of the Internal Revenue Code and the Treasury regulations.
Generally, Section 704(b) of the Internal Revenue Code and the related Treasury
regulations require that partnership and limited liability company allocations
respect the economic arrangement of the partners and members. If an allocation
is not recognized for federal income tax purposes, the relevant item will be
reallocated according to the partners' or members' interests in the partnership
or limited liability company. This reallocation will be determined by taking
into account all of the facts and circumstances relating to the economic
arrangement of the partners or members with respect to such item. The
allocations of taxable income and loss in each of the partnerships and limited
liability companies in which we own an interest are intended to comply with the
requirements of Section 704(b) of the Internal Revenue Code and the Treasury
regulations thereunder.

TAX ALLOCATIONS WITH RESPECT TO THE PROPERTIES. Under Section 704(c) of
the Internal Revenue Code, income, gain, loss and deduction attributable to
appreciated or depreciated property that is contributed to a partnership or
limited liability company in exchange for an interest in the partnership or
limited liability company must be allocated in a manner so that the
contributing partner or member is charged with the unrealized gain or benefits
from the unrealized loss associated with the property at the time of the
contribution. The amount of the unrealized gain or unrealized loss is generally
equal to the difference between the fair market value or book value and the
adjusted tax basis of the contributed property at the time of contribution.
These allocations are solely for federal income tax purposes. These allocations
do not affect the book capital accounts or other economic or legal arrangements
among the partners or members. Some of the partnerships and/or limited
liability companies in which we own an interest were formed by way of
contributions of appreciated property. The relevant partnership and/or limited
liability company agreements require that allocations be made in a manner
consistent with Section 704(c) of the Internal Revenue Code.

TAX LIABILITIES AND ATTRIBUTES INHERITED FROM AHP

On November 4, 1999, we acquired American Health Properties, Inc., or
AHP, in a merger. AHP had also made an election to be taxed as a REIT. If AHP
failed to qualify as a REIT for any of its taxable years, it would be required
to pay federal income tax (including any applicable alternative minimum tax) on
its taxable income at regular corporate rates. Unless statutory relief
provisions apply, AHP would be disqualified from treatment as a REIT for the
four taxable years following the year during which it lost qualification. We,
as successor-in-interest to AHP, would be required to pay this tax. The
built-in gain rules described under "--Taxation of the Company--General" above
would apply with respect to any assets acquired by us from AHP in connection
with the merger if the merger qualified as a tax-free reorganization under the
Internal Revenue Code and if AHP failed to qualify as a REIT at any time during
its existence. In that case, if we had not made an election under Treasury
regulation Section 1.337(d)-5T, AHP would recognize taxable gain as a result of
the merger under the built-in gain rules, notwithstanding that the merger
otherwise qualified as a tax-free reorganization under Internal Revenue Code.
The liability for any tax due with respect to the gain described above would
have been assumed by us in the merger. We have made a protective election under
Treasury regulation Section 1.337(d)-5T with respect to the merger to prevent
the recognition of this gain. Even with this election, under these
circumstances, if we disposed of any of the assets acquired from AHP during a
specified ten-year period, we would be required to pay tax on all or a portion
of the gain on this disposition at the highest corporate tax rate under the
built-in gain rules. In addition, in connection with the merger, we succeeded
to various tax attributes of AHP assuming the merger is treated as a tax-free
reorganization under the Internal Revenue Code, including any undistributed C
corporation earnings and profits of AHP. If AHP qualified as a REIT for all
years prior to the merger and the merger is treated as a tax-free
reorganization under the Internal Revenue Code, then AHP would not have any
undistributed C corporation earnings and profits. If, however, AHP failed to
qualify as a REIT for any year, then it is possible that we acquired
undistributed C corporation earnings and profits from AHP. If we did not
distribute these C corporation earnings and profits prior to the end of 1999,
we would be required to distribute these earnings and profits through
deficiency dividends or would fail to qualify as a REIT. Furthermore, after the
merger, the asset and income tests described in "--Requirements for
qualification as a REIT--Income tests" and "--Asset tests" apply to all of our
assets, including the assets acquired from AHP, and to all of our income,
including the income derived from the assets we acquired from

AHP. As a result, the nature of the assets that we acquired from AHP and the
income derived from those assets may have an effect on our tax status as a REIT.

Qualification as a REIT required AHP to satisfy numerous requirements,
some on an annual and others on a quarterly basis, established under highly
technical and complex Internal Revenue Code provisions. These include
requirements relating to AHP's:

. actual annual operating results;

. asset diversification;

. distribution levels, including the effect, if any, of the
characterization of AHP's psychiatric group preferred stock on
distribution levels; and

. diversity of stock ownership.

There are only limited judicial and administrative interpretations of
these requirements and qualification as a REIT involves the determination of
various factual matters and circumstances which were not entirely within AHP's
control.

AHP's REIT counsel rendered an opinion to the effect that, based on the
facts, representations and assumptions stated therein, commencing with its
taxable year ended December 31, 1987, AHP was organized in conformity with the
requirements for qualification and taxation as a REIT under the Internal
Revenue Code, and its method of operation enabled it to meet, through the
effective time of the merger, the requirements for qualification and taxation
as a REIT under the Internal Revenue Code. This opinion assumed, among other
things, the accuracy of an opinion rendered by AHP's corporate counsel with
respect to the characterization of AHP's psychiatric group preferred stock and
dividends thereon, which corporate counsel's opinion was based on the facts,
representations and assumptions stated therein.

Because many of the properties formerly owned by AHP, and now owned by
us, have fair market values in excess of their tax bases, assuming the merger
was treated as a tax-free reorganization under Section 368(a) of the Internal
Revenue Code, AHP's tax basis in the assets transferred in the merger carried
over to us. This lower tax basis causes us to have lower depreciation
deductions and results in higher gain on sale with respect to these properties
than would be the case if these properties had been acquired by us in a taxable
transaction.

OTHER TAX CONSEQUENCES

We may be required to pay tax in various state or local jurisdictions,
including those in which we transact business. Our state and local tax
treatment may not conform to the federal income tax consequences discussed
above. Consequently, you should consult your tax advisors regarding the effect
of state and local tax laws on an investment in us.

PLAN OF DISTRIBUTION

We may sell the securities to one or more underwriters for public
offering and sale by them and may also sell the securities to investors
directly or through agents. We will name any underwriter or agent involved in
the offer and sale of securities in the applicable prospectus supplement. We
have reserved the right to sell or exchange securities directly to investors on
our own behalf in those jurisdictions where we are authorized to do so.

We may distribute the securities from time to time in one or more
transactions:

. at a fixed price or prices, which may be changed;

. at market prices prevailing at the time of sale;

. at prices related to such prevailing market prices; or

. at negotiated prices.

We may also, from time to time, authorize dealers, acting as our agents,
to offer and sell securities upon the terms and conditions set forth in the
applicable prospectus supplement. In connection with the sale of securities,
we, or the purchasers of securities for whom the underwriters may act as
agents, may compensate underwriters in the form of underwriting discounts or
commissions. Underwriters may sell the securities to or through dealers, and
those dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions from the purchasers for
whom they may act as agent. Unless otherwise indicated in a prospectus
supplement, an agent will be acting on a best efforts basis and a dealer will
purchase securities as a principal, and may then resell the securities at
varying prices to be determined by the dealer.

When securities are to be sold to underwriters, unless otherwise set
forth in the applicable prospectus supplement, the underwriters' obligations to
purchase those securities will be subject to certain conditions precedent. If
the underwriters purchase any of the securities, they will be obligated to
purchase all of the securities.

We will describe in the applicable prospectus supplement any compensation
we pay to underwriters or agents in connection with the offering of securities,
and any discounts, concessions or commissions allowed by underwriters to
participating dealers. Dealers and agents participating in the distribution of
securities may be deemed to be underwriters, and any discounts and commissions
received by them and any profit realized by them on resale of the securities
may be deemed to be underwriting discounts and commissions. We may enter into
agreements to indemnify underwriters, dealers and agents against certain civil
liabilities, including liabilities under the Securities Act of 1933, and to
reimburse these persons for certain expenses.

To facilitate the offering of securities, certain persons participating
in the offering may engage in transactions that stabilize, maintain, or
otherwise affect the price of the securities. This may include over-allotments
or short sales of the securities, which involve the sale by persons
participating in the offering of more securities than we sold to them. In these
circumstances, these persons would cover such over-allotments or short
positions by making purchases in the open market or by exercising their
over-allotment option, if any. In addition, these persons may stabilize or
maintain the price of the securities by bidding for or purchasing securities in
the open market or by imposing penalty bids, whereby selling concessions
allowed to dealers participating in the offering may be reclaimed if securities
sold by them are repurchased in connection with stabilization transactions. The
effect of these transactions may be to stabilize or maintain the market price
of the securities at a level above that which might otherwise prevail in the
open market. These transactions may be discontinued at any time.

Certain of the underwriters, dealers or agents and their associates may
engage in transactions with and perform services for us in the ordinary course
of our business.

LEGAL MATTERS

Certain legal matters with respect to the securities offered hereby will
be passed upon for us by Latham & Watkins, Costa Mesa, California. Certain
legal matters relating to Maryland law will be passed upon for us by Ballard
Spahr Andrews & Ingersoll, LLP, Baltimore, Maryland. Sidley, Austin, Brown &
Wood LLP will act as counsel for any agents or underwriters. Paul C. Pringle, a
partner of Sidley Austin Brown & Wood LLP, owns 15,952 shares of our common
stock.

EXPERTS

We have not been able to obtain, after reasonable efforts, the written
consent of Arthur Andersen LLP to our naming it in this prospectus as having
certified our consolidated financial statements for the three years ended
December 31, 2001, as required by Section 7 of the Securities Act. Accordingly,
Arthur Andersen will not have any liability under Section 11 of the Securities
Act of 1933 for false and misleading statements and omissions contained in this
prospectus, including the financial statements, and any claims against Arthur
Andersen related to any such false and misleading statements and omissions may
be limited.

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$250,000,000

HEALTH CARE PROPERTY INVESTORS, INC.

6.45% SENIOR NOTES DUE 2012
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PROSPECTUS SUPPLEMENT

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MERRILL LYNCH & CO.

CREDIT SUISSE FIRST BOSTON

DEUTSCHE BANK SECURITIES

BANC OF AMERICA SECURITIES LLC

BNY CAPITAL MARKETS, INC.

GOLDMAN, SACHS & CO.

WACHOVIA SECURITIES

JUNE 19, 2002

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