<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

                                    FORM 10-K

(MARK ONE)

[X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934

         FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002

                                       OR

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934

         FOR THE TRANSITION PERIOD FROM TO

                        Commission File Number 001-31375

                        WINDROSE MEDICAL PROPERTIES TRUST

             (Exact name of registrant as specified in its charter)

                   MARYLAND                                  35-216691
       ---------------------------------
        (STATE OR OTHER JURISDICTION OF                   (I.R.S. EMPLOYER
         INCORPORATION OR ORGANIZATION)                  IDENTIFICATION NO.)

       3502 WOODVIEW TRACE, SUITE 210                     (317) 860-8180
         INDIANAPOLIS, INDIANA 46268              -----------------------------
     ----------------------------------------     (REGISTRANT'S TELEPHONE NUMBER
     (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)             INCLUDING AREA CODE)
                 (ZIP CODE)

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

Securities registered pursuant to Section 12(b) of the Act:

         Common Stock, par value of $.01 per share       New York Stock Exchange

Securities registered pursuant to Section 12(g) or the Act:

         None:

    Indicate by check mark whether the Registrant (i) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such report), and (ii) has been subject to such
filing requirements for the past 90 days. Yes: [X] No [ ]

    Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ] (No delinquent filers)

    Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). Yes: [ ] No [X]

    Aggregate market value of the voting stock held by non-affiliates of the
Registrant: $0 as of June 28, 2002 and $55,494,173 as of March 10, 2003.

    As of March 10, 2003, the latest practicable date, there were 5,691,710
shares of the Registrant's common stock outstanding.

Documents incorporated by reference: Portions of the Registrant's definitive
Proxy Statement to be filed with the Securities and Exchange Commission no later
than 120 days after the Registrant's fiscal year ended December 31, 2002, and to
be delivered to stockholders in connection with the 2003 Annual Meeting of
Stockholders, are incorporated by reference into Part III.

<PAGE>

                        WINDROSE MEDICAL PROPERTIES TRUST
                                    FORM 10-K
                      FOR THE YEAR ENDED DECEMBER 31, 2002
                                      INDEX

<TABLE>
<CAPTION>
                                                                                                                 PAGE
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<S>                                                                                                              <C>
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS......................................................    1
PART I   ......................................................................................................    1
         Item 1.   Business....................................................................................    1
         Item 2.   Properties..................................................................................   17
         Item 3.   Legal Proceedings...........................................................................   17
         Item 4.   Submission of Matters to a Vote of Security Holders.........................................   17
PART II  ......................................................................................................   18
         Item 5.   Market for the Registrant's Common Equity and Related Stockholder Matters...................   18
         Item 6.   Selected Financial Data.....................................................................   18
         Item 7.   Management's Discussion and Analysis of Financial Condition and Results of Operations.......   19
         Item 7A.  Quantitative and Qualitative Disclosures about Market Risk..................................   26
         Item 8.   Financial Statements and Supplementary Data.................................................   27
         Item 9.   Changes in and Disagreements with Accountants on Accounting and Financial Disclosure........   27
PART III ......................................................................................................   27
         Item 10.  Trustees and Executive Officers.............................................................   27
         Item 11.  Executive Compensation......................................................................   27
         Item 12.  Security Ownership of Certain Beneficial Owners and Management..............................   27
         Item 13.  Certain Relationships and Related Transactions..............................................   28
         Item 14.  Disclosure Controls and Procedures..........................................................   28
PART IV  ......................................................................................................   29
         Item 15.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K............................   29
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS.....................................................................  F-1
INDEPENDENT AUDITORS' REPORT...................................................................................  F-2
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.....................................................................  F-7
SIGNATURE
EXHIBIT INDEX
</TABLE>

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This Annual Report on Form 10-K ("Report"), including the "Management's
Discussion and Analysis of Financial Condition and Results of Operation,"
contains certain information and statements that constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. These forward-looking statements can be identified by the use of
forward-looking terminology including, but not limited to, "may," "will,"
"expect," "should," "anticipate," "target," "goal," "continue," "project,"
"intend," "plan," "believe," "seek," "estimate," or similar terminology. These
forward-looking statements are only predictions and are subject to risks,
uncertainties, and assumptions that are difficult to predict. Therefore, actual
results may differ materially and adversely from those expressed in any
forward-looking statements. Factors that might cause or contribute to such
differences include, but are not limited to, those discussed in this Report
under the section entitled "Risk Factors" and elsewhere, and in other reports
Windrose Medical Properties Trust files with the Securities and Exchange
Commission ("SEC"), from time to time. Windrose Medical Properties Trust
undertakes no obligation to revise or update publicly any forward-looking
statement for any reason.

                                     PART I

ITEM 1.  BUSINESS

OVERVIEW

         Windrose Medical Properties Trust (the "Company") is a self-managed
real estate investment trust ("REIT"). The Company was organized in March 2002
as a Maryland REIT with perpetual existence and intends to elect to be taxed as
a real estate investment trust under the federal income tax laws.

         The Company completed its initial public offering ("IPO") and began
operations in August 2002. The Company was formed to acquire, selectively
develop and manage specialty medical properties, such as:

         -        medical office buildings;

         -        outpatient treatment and diagnostic facilities;

         -        physician group practice clinics;

         -        ambulatory surgery centers;

         -        specialty hospitals and treatment centers; and

         -        other related healthcare specialty properties.

         The Company owns its properties and conducts its business through
Windrose Medical Properties, L.P., its operating partnership. The Company is the
sole general partner of, and owns a 94.0% interest in, the operating
partnership. The limited partners of the operating partnership are

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certain of the sellers of the initial properties and assets the Company acquired
in connection with the IPO. As of December 31, 2002, the Company's net
investment in properties was approximately $63.6 million and its portfolio
consisted of four outpatient treatment and diagnostic centers, two multi-tenant
medical office buildings, and one ambulatory surgery center/physician group
practice clinic.

RECENT DEVELOPMENTS

         In the first quarter of 2003, the Company entered into agreements to
acquire 12 multi-tenant medical office buildings (the "MPA" Portfolio") located
in Florida, Georgia, Tennessee and Texas for an aggregate purchase price of
approximately $68 million. This acquisition of the MPA Portfolio will more than
double the Company's present asset base. The MPA Portfolio is consistent with
the Company's acquisition parameters and strategy of acquiring and managing
income-producing specialty medical properties. The Company believes the assets
of MPA should greatly enhance the Company's multi-tenant medical office building
portfolio.

THE MARKET FOR SPECIALTY MEDICAL PROPERTIES

         The types of specialty medical properties that the Company intends to
own represent a large and growing segment of the healthcare-related real estate
market. According to Real Estate Forum, the market value of outpatient
facilities in the United States, which the Company believes include all types of
properties that the Company intends to own, is estimated to exceed $300 billion.
In addition, an estimated $7 billion is spent annually on development and
construction of new outpatient facilities. The Company believes a substantial
number of properties meeting its investment criteria will be available for
acquisition and development due to a number of emerging trends:

         -        De-Centralization: there is a trend toward delivery of medical
                  services through smaller facilities located near patients and
                  designed to treat specific diseases and conditions;

         -        Increasing Regulation: evolving regulatory factors affecting
                  healthcare delivery create an incentive for medical services
                  providers to focus on patient care, leaving real estate
                  ownership, management and operation to third party real estate
                  professionals;

         -        Modernization: hospitals are modernizing their facilities and
                  becoming more efficient in the face of declining Medicare and
                  other reimbursement and changing patient demographics;

         -        Redeployment of Capital: medical services providers are
                  considering sale/leaseback transactions as an alternative to
                  financing their businesses with debt and are seeking to sell
                  real estate assets to finance equipment needed to provide more
                  comprehensive services to patients and improve overall patient
                  care;

         -        Efficient Patient Care: physicians increasingly are seeking to
                  provide a full range of diagnostic and surgical services in a
                  single location for the convenience of both patients and
                  physicians; and

         -        Physician Practice Ownership: many local physician groups have
                  reacquired their practices from national physician management
                  companies or have formed larger

                                        2

<PAGE>

                  group practices and are now seeking third party real estate
                  sale/leaseback transactions to generate capital to finance the
                  growth of their practices. In addition, many groups are
                  expanding their revenue bases through ownership in other
                  healthcare businesses housed in specialty medical properties.

         The Company believes that these trends will continue to lead medical
services providers to seek real estate companies with healthcare knowledge and
expertise, such as the Company, to acquire their existing properties, develop
new facilities and lease these specialty medical properties back to the
providers.

COMPANY'S COMPETITIVE ADVANTAGE

         The Company believes it has a competitive advantage in identifying,
acquiring, developing, owning and leasing attractive specialty medical
properties which will benefit from recent industry trends because of its
management team's:

         -        skill and experience in medical real estate;

         -        knowledge and understanding of regulatory and other trends
                  affecting the medical services industry;

         -        extensive network of industry relationships;

         -        proven capability to acquire existing properties;

         -        proven ability to selectively design, develop and lease new
                  facilities to quality tenants at returns more attractive than
                  can be achieved through acquisitions; and

         -        significant experience in providing planning, development and
                  management services to the medical services industry.

BUSINESS STRATEGY

         The Company's business objective is to increase its Funds From
Operations ("FFO") by (i) maintaining and increasing property occupancy and
rental rates through the aggressive management of its portfolio of existing
properties; (ii) acquire additional properties; (iii) develop new properties;
(iv) provide planning, design, project management and additional services to
third parties; and (v) provide a full range of services to the Company's
tenants. FFO is defined by the National Association of Real Estate Investment
Trusts as net income or loss, excluding gains or losses from sales of
depreciated property, plus operating property depreciation and amortization and
adjustments for minority interest and unconsolidated companies on the same
basis. While management believes that FFO is a relevant measure of the operating
performance of equity REITs, such amount does not represent cash flow from
operations as defined by Generally Accepted Accounting Principles, should not be
considered as an alternative to net income as an indicator of the Company's
operating performance, and is not indicative of cash available to fund all cash
flow needs.

         The Company intends to take advantage of the opportunities created by
the changing healthcare environment to acquire, develop and manage specialty
medical properties. To accomplish its objectives, the Company intends to:

                                        3

<PAGE>

         -        Leverage its broad network of relationships and industry
                  knowledge;

         -        Act as a skilled provider of capital and real estate services
                  that can respond quickly to the changing needs of medical
                  service providers.

         -        Focus its efforts on properties that will benefit from
                  industry trends, particularly medical office buildings,
                  outpatient treatment and diagnostic facilities, physician
                  group practice clinics, ambulatory surgery centers and
                  specialty hospitals and treatment centers;

         -        Partner with experienced developers who have done significant
                  work in bringing new specialty medical properties to market,
                  adding value through its healthcare industry expertise; and

         -        Lease its properties to tenants with proven operating
                  histories and management teams.

         All references to the "Company" in this Report on Form 10-K include the
Company and those entities owned or controlled by the Company, unless the
context indicates otherwise.

         The Company's headquarters and executive offices are located in
Indianapolis, Indiana. In addition, the Company and its taxable REIT subsidiary
Hospital Affiliates Development Corporation ("HADC") have an office in
Nashville, Tennessee. As of December 31, 2002, the Company had 36 employees.

RISK FACTORS

         In addition to the other information contained herein, the risks and
uncertainties and other factors described below could have a material adverse
effect on the Company's business, financial condition, results of operations and
share price and could also cause the Company's future business, financial
condition and results of operations to differ materially from the results
contemplated by any forward-looking statement it may make herein, in any other
document it files with the Securities and Exchange Commission, or in any press
release or other written or oral statement it may make. The Company has
organized the risks into four general groupings below:

         -        risks relating to the healthcare industry;

         -        risks relating to the Company's business, structure and growth
                  strategy;

         -        tax risks; and

         -        risks relating to real estate investments.

RISKS RELATING TO THE HEALTHCARE INDUSTRY

         Reductions in reimbursement from third party payors, including Medicare
and Medicaid, could adversely affect the profitability of the Company's lessees
and hinder their ability to make rent payments to the Company.

         Sources of revenue for the Company's lessees and operators may include
the federal Medicare program, state Medicaid programs, private insurance
carriers and health maintenance organizations, among others. Efforts by such
payors to reduce healthcare costs will likely continue, which may result in
reductions or slower growth in reimbursement for certain services provided by
some of the Company's

                                        4

<PAGE>

tenants. In addition, the failure of any of the Company's tenants to comply with
various laws and regulations could jeopardize their ability to continue
participating in Medicare, Medicaid and other government sponsored payment
programs.

         The healthcare industry continues to face various challenges, including
increased government and private payor pressure on healthcare providers to
control or reduce costs. The Company believes that its lessees will continue to
experience a shift in payor mix away from fee-for-service payors resulting in an
increase in the percentage of revenues attributable to managed care payors and
general industry trends that include pressures to control healthcare costs.
Pressures to control healthcare costs and a shift away from traditional health
insurance reimbursement to managed care plans have resulted in an increase in
the number of patients whose healthcare coverage is provided under managed care
plans, such as health maintenance organizations and preferred provider
organizations. These changes could have a material adverse effect on the
financial condition of some or all of the Company's lessees, which could
negatively affect its ability to make distributions to its shareholders.

         The healthcare industry is heavily regulated, and new laws or
regulations, changes to existing laws or regulations, loss of licensure or
failure to obtain licensure could result in the inability of the Company's
lessees to make lease payments to it.

         The healthcare industry is heavily regulated by federal, state and
local governmental bodies. The Company's lessees generally will be subject to
laws and regulations covering, among other things, licensure, certification for
participation in government programs, and relationships with physicians and
other referral sources. Changes in these laws and regulations could negatively
affect the ability of the Company's lessees to make lease payments to it and the
Company's ability to make distributions to its shareholders.

         Many of the Company's medical properties and their lessees may require
a license or certificate of need, or CON, to operate. Failure to obtain a
license or CON, or loss of a required license would prevent a facility from
operating in the manner intended by the lessee. These events could materially
adversely affect the facility operator's ability to make rent payments to the
Company. State and local laws also may regulate expansion, including the
addition of new beds or services or acquisition of medical equipment, and the
construction of healthcare facilities, by requiring a CON or other similar
approval.

         The Company's real estate investments are concentrated in specialty
medical properties, making it more vulnerable economically than if its
investments were diversified.

         As a REIT the Company will invest primarily in real estate. Within the
real estate industry, the Company intends primarily to acquire or selectively
develop and own specialty medical properties. The Company is subject to risks
inherent in concentrating investments in real estate. These risks resulting from
a lack of diversification become even greater as a result of its business
strategy to invest primarily in specialty medical properties. A downturn in the
real estate industry could significantly adversely affect the value of the
Company's properties. A downturn in the healthcare industry could negatively
affect the Company's lessees' ability to make lease payments to it and the
Company's ability to make distributions to its shareholders. These adverse
effects could be more pronounced than if the Company diversified its investments
outside of real estate or outside of specialty medical properties.

         Adverse trends in healthcare provider operations may negatively affect
the Company's lease revenues and its ability to make distributions to its
shareholders.

                                        5

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         The healthcare industry is currently experiencing:

         -        changes in the demand for and methods of delivering healthcare
                  services;

         -        changes in third party reimbursement policies;

         -        significant unused capacity in certain areas, which has
                  created substantial competition for patients among healthcare
                  providers in those areas;

         -        continuing pressure by private and governmental payors to
                  reduce payments to providers of services; and

         -        increased scrutiny of billing, referral and other practices by
                  federal and state authorities.

         These factors may adversely affect the economic performance of some or
all of the Company's lessees and, in turn, the Company's lease revenues and the
Company's ability to make distributions to its shareholders.

         The Company's lessees are subject to fraud and abuse laws, the
violation of which by a lessee may jeopardize the lessee's ability to make rent
payments to the Company.

         The federal government and numerous state governments have passed laws
and regulations that attempt to eliminate healthcare fraud and abuse by
prohibiting business arrangements that induce patient referrals or the ordering
of specific ancillary services. In addition, the Balanced Budget Act of 1997
strengthened the federal anti-fraud and abuse laws to provide for stiffer
penalties for violations. Violations of these laws may result in the imposition
of criminal and civil penalties, including possible exclusion from federal and
state healthcare programs. Imposition of any of these penalties upon one of the
Company's lessees could jeopardize the lessee's ability to operate a facility or
to make rent payments, thereby potentially adversely affecting the Company. The
Company's lease arrangements with certain lessees may also be subject to these
fraud and abuse laws.

RISKS RELATING TO THE COMPANY'S BUSINESS, GROWTH STRATEGY AND ORGANIZATIONAL
STRUCTURE

         The Company's dependence on its lessees for rent may adversely impact
its ability to make distributions to its shareholders.

         As a REIT operating in the healthcare industry, the Company is not
permitted by current tax law to operate or manage the businesses conducted in
its facilities. Accordingly, the Company exclusively relies on rent payments
from its lessees for cash with which to make distributions to shareholders. The
Company has no control over the success or failure of its lessees' businesses.
Reductions in the net operating income of the Company's lessees may adversely
affect the ability of its lessees to make rent payments to it and thus its
ability to make distributions to its shareholders. Failure on the part of a
lessee to comply materially with the terms of a lease would give the Company the
right to terminate the lease with that lessee, repossess the applicable property
and enforce the payment obligations under the lease. However, the Company then
would be required to find another lessee. There can be no assurance that the
Company would be able to find another lessee or that, if another lessee were
found, the Company would be able to enter into a lease on favorable terms.

                                        6

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         Significant adverse changes in the operations of any property, or the
financial condition of any lessee, could have a material adverse effect on the
Company's ability to collect rent payments and, accordingly, on its ability to
make distributions to its shareholders.

         The Company cannot predict whether existing leases of its properties
will be renewed at the end of their lease terms which expire at various times
through 2022. If these leases are not renewed, the Company would be required to
find other lessees for those properties. There can be no assurance that the
Company would be able to enter into leases with new lessees on terms as
favorable to it as the current leases or that the Company would be able to lease
those properties at all.

         Certain of the Company's properties may not have efficient alternative
uses.

         Some of the Company's properties, such as its ambulatory surgery
centers, are specialized medical facilities. If the Company or its lessees
terminate the leases for these properties or the Company's lessees lose their
regulatory authority to operate such properties, the Company may not be able to
locate suitable replacement tenants to lease the properties for their
specialized uses. Alternatively, the Company may be required to spend
substantial amounts to adapt the properties to other uses. Any loss of revenues
and/or additional capital expenditures occurring as a result could hinder the
Company's ability to make distributions to its shareholders.

         The Company's business is highly competitive and it may be unable to
compete successfully.

         The Company competes for development opportunities and opportunities to
purchase medical properties with, among others:

         -        private investors;

         -        healthcare providers, including physicians;

         -        healthcare-related REITs;

         -        real estate partnerships;

         -        financial institutions; and

         -        local developers.

         Many of these competitors have substantially greater financial and
other resources than the Company has and may have better relationships with
lenders and sellers. The Company intends to adhere to its acquisition strategy
and criteria. However, increased competition for medical properties from
competitors, including other REITs, may adversely affect the Company's ability
to acquire specialty medical properties and the price it pays for properties. If
the Company is unable to acquire properties or if it pays too much for
properties, the Company's revenue and earnings growth and/or financial return
could be adversely affected. The Company's properties face competition from
other nearby facilities that provide services comparable to those offered at its
facilities. Some of those facilities are owned by governmental agencies and
supported by tax revenues, and others are owned by nonprofit corporations and
may be supported to a large extent by endowments and charitable contributions.
Those types of support are not available to the Company's facilities. In
addition, competing healthcare facilities located in the areas served by

                                       7

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the Company's facilities may provide health services that are not available at
its facilities. From time to time, referral sources, including physicians and
managed care organizations, may change their lists of healthcare facilities to
which they refer patents, which could adversely affect the Company's rental
revenues.

         The Company's use of debt financing subjects it to significant risks,
including refinancing risk and the risk of insufficient cash available for
distribution.

         The Company's Declaration of Trust and other organizational documents
do not limit the amount of debt it may incur, and the Company's Board of
Trustees may modify its target debt level at any time without shareholder
approval. Debt, whether with recourse to the Company generally or only with
respect to a particular property, creates an opportunity for increased net
income, but at the same time creates risks. For example, variable rate debt can
reduce the cash available for distribution to shareholders in periods of rising
interest rates. The Company intends to incur debt only when it believes it will
enhance its risk-adjusted returns. However, the Company cannot make assurances
that its use of financial leverage will prove to be beneficial. The Company has
assumed and will continue to assume and incur mortgage debt in connection with
acquisitions of properties, and has entered into a secured credit facility. The
Company may borrow under the credit facility or from other lenders in the
future, or the Company may issue corporate debt securities in public or private
offerings. Some of these additional borrowings may be secured by its properties.
In addition, in connection with debt-financing, the Company may be subject to
covenants that restrict its operations. There can be no assurance that the
Company will be able to meet its debt service obligations or restrictive
covenants and, to the extent that it cannot, it risks the loss of some or all of
its properties to foreclosure.

         The Company anticipates that much of its debt will be non-amortizing
and payable in balloon payments. Therefore, the Company will likely need to
refinance at least a portion of its outstanding debt as it matures. There is a
risk that the Company may not be able to refinance existing debt or that the
terms of any refinancing will not be as favorable as the terms of the existing
debt. If principal payments due at maturity cannot be refinanced, extended or
repaid with proceeds from other sources, such as new equity capital or sales of
properties, the Company's cash flow may not be sufficient to repay all maturing
debt in years when significant "balloon" payments come due. Additionally, under
the terms of much of the debt that the Company has assumed, it may incur
significant yield maintenance penalties if it chooses to prepay the debt.

         Conflicts of interest could result in an executive officer or a trustee
acting other than in the Company's best interest.

         As described further below, the Company's executive officers and
trustees have conflicts of interest in connection with:

         -        their duties to the Company and the limited partners of the
                  operating partnership; and

         -        allocation of their time between the Company's business and
                  affairs and their other business interests.

         The Company's trustees may have conflicting duties. The Company's
trustees may have conflicting duties because, in their capacities as the
Company's trustees, they have a duty to shareholders, and in the Company's
capacity as general partner of the operating partnership, they have a fiduciary
duty to the limited partners of the operating partnership. Conflicts may arise

                                        8

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when interests of the Company's shareholders and the limited partners of the
operating partnership diverge, particularly in circumstances in which there may
be an adverse tax consequence to the limited partners, such as upon the sale of
assets or the repayment of indebtedness. The partnership agreement of the
operating partnership contains a provision requiring the general partner to
resolve, to the extent possible, in favor of the Company's shareholders, any
matters in which there is a conflict between the rights of the limited partners
of the operating partnership and the rights of the shareholders. It may not
always be possible, however, for a resolution to be reached which favors the
Company's shareholders.

         Some of the Company's trustees and executive officers have other
business interests that may hinder their ability to spend adequate time on the
Company's business. Mr. Klipsch, Chairman of the Company's Board of Trustees and
the Company's Chief Executive Officer, also serves as the Chairman of the Board
of Directors of Klipsch Audio, Inc. Mr. Farrar, the Company's President and
Chief Operating Officer, also serves as Executive Vice President of Klipsch
Audio, Inc. Although Messrs. Klipsch and Farrar intend to devote substantially
all of their time to managing the Company, as a result of their management
obligations with this other company, Messrs. Klipsch and Farrar may find it
difficult to allocate their time between this other company and the Company. If
Messrs. Klipsch and Farrar do not allocate sufficient time to the management of
the Company's operations, it could jeopardize the Company's ability to execute
its business plan.

         Provisions of Maryland law, the Company's Declaration of Trust and the
Company's Bylaws may deter changes in management and third party acquisition
proposals or cause dilution.

         The Company's ownership limitations may restrict business combination
opportunities. To qualify as a REIT under the Internal Revenue Code, no more
than 50% of the Company's outstanding shares of beneficial interest may be
owned, directly or indirectly, by five or fewer persons during the last half of
each taxable year (other than the Company's first REIT taxable year). To
preserve the Company's REIT qualification, its Declaration of Trust generally
prohibits direct or indirect ownership by any person of more than 9.9% of the
number of outstanding shares of any class of the Company's securities, including
its common shares. Generally, common shares owned by affiliated owners will be
aggregated for purposes of the ownership limitation. Any transfer of the
Company's common shares that would violate the ownership limitation will be null
and void, and the intended transferee will acquire no rights in such shares.
Instead, such common shares will be designated as "shares-in-trust" and
transferred automatically to a trust effective on the day before the purported
transfer of such shares. The beneficiary of a trust will be one or more
charitable organizations named by the Company. The ownership limitation could
have the effect of delaying, deterring or preventing a change in control or
other transaction in which holders of common shares might receive a premium for
their common shares over the then-current market price or which such holders
otherwise might believe to be in their best interests. The ownership limitation
provisions also may make the Company's common shares an unsuitable investment
vehicle for any person seeking to obtain, either alone or with others as a
group, ownership of more than 9.9% in value of the Company's shares.

         The Declaration of Trust contains a provision that creates staggered
terms for the Company's Board of Trustees. The Company's Board of Trustees is
divided into three classes. The initial terms of the Company's Class I, Class II
and Class III trustees will expire at the annual meeting of shareholders in each
of 2003, 2004, and 2005, respectively. Trustees of each class are elected for
three-year terms upon the expiration of their current terms and each year one
class of trustees will be elected by the shareholders at the annual meeting of
shareholders. Moreover,

                                        9

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such trustees generally may not be removed as trustees until the end of their
terms except for cause. The staggered terms of trustees may delay, defer or
prevent a tender offer, a change in control or other transaction in which
holders of common shares might receive a premium for their common shares over
the then-current market price or which such holders otherwise might believe to
be in their best interests.

         The Maryland Business Combination Act may discourage a third party from
acquiring the Company. Under the Maryland General Corporation Law, as amended
(MGCL), as applicable to REITs, certain "business combinations" (including
certain issuances of equity securities) between a Maryland REIT and any person
who beneficially owns ten percent or more of the voting power of the trust's
shares or an affiliate thereof are prohibited for five years after the most
recent date on which the person or affiliate acquired at least ten percent of
the voting power of the trust's shares. Thereafter, any business combination
must be approved by two super-majority shareholder votes unless, among other
conditions, the trust's common shareholders receive a minimum price (as defined
in the MGCL) for their shares and the consideration is received in cash or in
the same form as previously paid by the interested shareholder for its common
shares. These provisions could delay, deter or prevent a change of control or
other transaction in which holders of the Company's common shares might receive
a premium for their common shares above the then-current market price or which
such shareholders otherwise might believe to be in their best interests.

         The Company's Board of Trustees may issue additional shares that may
cause dilution. The Company's Declaration of Trust authorizes the Board of
Trustees, without shareholder approval, to:

         -        amend the Declaration of Trust to increase or decrease the
                  aggregate number of shares of beneficial interest or the
                  number of shares of beneficial interest of any class or series
                  that the Company has the authority to issue;

         -        cause the Company to issue additional authorized but unissued
                  common shares or preferred shares; and

         -        classify or reclassify any unissued common or preferred shares
                  and to set the preferences, rights and other terms of such
                  classified or reclassified shares, including the issuance of
                  additional common shares or preferred shares that have
                  preference rights over the common shares with respect to
                  dividends, liquidation, voting and other matters.

         Future issuances of equity securities may cause the Company's
shareholders to experience further dilution.

         The Company's Board of Trustees may issue preferred shares with terms
that may discourage a third party from acquiring it. Although the Company's
Board of Trustees has no present intention to do so, it could establish one or
more series of preferred shares that could, depending on the terms of such
series, delay, deter or prevent a change in control or other transaction in
which holders of its common shares might receive a premium for their common
shares over the then-current market price or which such holders otherwise might
believe to be in their best interests.

         The Company's Declaration of Trust and Bylaws also contain other
provisions that may delay or prevent a change of control or other transaction in
which holders of its common shares

                                       10

<PAGE>

might receive a premium for their common shares over the then-current market
price or which such holders otherwise might believe to be in their best
interests.

         Two of the Company's executive officers have agreements that provide
them with benefits in the event their employment is terminated following a
change in control of the Company.

         The Company has entered into agreements with Messrs. Klipsch and Farrar
that provide them with severance benefits if their employment ends under certain
circumstances following a change in control of the Company. These benefits and
related tax indemnity could prevent or deter a change in control of the Company
that might involve a premium price for its common shares or otherwise be in the
best interests of its shareholders.

         The Company has limited operating history as a REIT and may not be able
to successfully and profitably operate its limited business.

         The Company is a recently formed company. Although its executive
officers and some of its trustees have experience in developing, financing and
purchasing medical properties, they have no experience operating a REIT and,
other than the Company's Chairman, have limited experience in managing a
publicly owned company. Therefore, you should be especially cautious in drawing
conclusions about the ability of the Company's management team to execute its
business plan.

         The Company's Board of Trustees may change the Company's investment and
operational policies without a vote of its common shareholders.

         The Company's major policies, including its policies with respect to
acquisitions, financing, growth, operations, debt limitation and distributions,
are determined by the Board of Trustees. The Board of Trustees may amend or
revise these and other policies from time to time without a vote of the holders
of the common shares. Investment and operational policy changes could adversely
affect the market price of the Company's common shares and its ability to make
distributions to its shareholders.

         Five of the Company's seven properties are located in Las Vegas,
Nevada, making it vulnerable to changes in economic conditions in that
particular market.

         Five of the Company's seven initial properties are located in Las
Vegas, Nevada. As a result, localized adverse events or conditions, such as an
economic recession or overbuilding in the local real estate market, could have a
significant adverse effect on the operations of the Company's properties, and
ultimately on the amounts available for distribution to shareholders.

         The Company depends on key personnel, the loss of which may threaten
the Company's ability to operate its business successfully.

         The Company depends on the services of its existing senior management
to carry out its business and investment strategies. The Company's eight senior
executive officers average over 20 years of experience in developing, acquiring,
operating, managing and financing medical properties and have extensive contacts
throughout the industry. If the Company were to lose any of its senior executive
officers, particularly Messrs. Klipsch, Farrar or McCoin, it may be more
difficult to locate attractive acquisition targets or manage the properties that
it acquires. Additionally, as the Company expands, it will continue to need to
attract and retain qualified additional senior management. The loss of the
services of any of its senior management

                                       11

<PAGE>

personnel, or its inability to recruit and retain qualified personnel in the
future, could have an adverse effect on the Company's business and financial
results.

         The Company's Board of Trustees and management make decisions on its
behalf, and shareholders have limited management rights.

         Common shareholders have no right or power to take part in the
Company's management except through the exercise of voting rights on certain
specified matters. The Board of Trustees is responsible for the Company's
management and strategic business direction, and management is responsible for
its day-to-day operations. Certain policies of the Company's Board of Trustees
may not be consistent with the immediate best interests of shareholders.

         Shares available for future sale may have an adverse effect on the
price of the Company's common shares.

         Sales of a substantial number of the Company's common shares, or the
perception that such sales could occur, could adversely affect prevailing market
prices of its common shares. As of March 27, 2003, there were 362,333
outstanding operating partnership units held by limited partners. These units
will be redeemable, at the election of the holder, for cash, or, at the
Company's election, common shares beginning on August 16, 2003. Upon the
redemption of operating partnership units, any common shares received therefor
may be sold in the public market pursuant to shelf registration statements that
the Company is obligated to file on behalf of the limited partners of the
operating partnership, or pursuant to any available exemption from registration.

         The Company is the general partner of the operating partnership and may
become liable for the debts and other obligations of this partnership beyond the
amount of its investment.

         The Company is the general partner of the operating partnership,
Windrose Medical Properties, L.P., and as of March 27, 2003, owns an approximate
94.0% interest in the Operating Partnership. As general partner, the Company is
liable for the partnership's debts and other obligations. If the partnership is
unable to pay its debts and other obligations, as general partner the Company
would be liable for such debts and other obligations beyond the amount of its
investment in the Operating Partnership. These obligations could include
unforeseen contingent liabilities.

         The market value of the Company's common shares could decrease based on
the Company's performance and market perception and conditions.

         The market value of the Company's common shares may be based primarily
upon the market's perception of the Company's growth potential and current and
future cash dividends, and may be secondarily based upon the real estate market
value of its underlying assets. The market price of the Company's common shares
is influenced by the dividend on its common shares relative to market interest
rates. Rising interest rates may lead potential buyers of the Company's common
shares to expect a higher dividend rate, which would adversely affect the market
price of its common shares. In addition, rising interest rates would result in
increased interest expense on variable rate debt, thereby adversely affecting
cash flow and the Company's ability to service its indebtedness and pay
dividends.

                                       12

<PAGE>

TAX RISKS

         Loss of the Company's tax status as a REIT would have significant
adverse consequences to the Company and the value of its common shares.

         The Company currently intends to operate in a manner that will allow it
to qualify as a REIT for federal income tax purposes under the Internal Revenue
Code. The Company's qualification as a REIT depends on its ability to meet
various requirements concerning, among other things, the ownership of its
outstanding capital stock, the nature of its assets, the sources of its income
and the amount of its distributions to its shareholders. The REIT qualification
requirements are extremely complex, and interpretations of the federal income
tax laws governing qualification as a REIT are limited. Accordingly, the Company
cannot be certain that it will be successful in operating so as to qualify as a
REIT. At any time, new laws, interpretations, or court decisions may change the
federal tax laws relating to, or the federal income tax consequences of,
qualification as a REIT. It is possible that future economic, market, legal, tax
or other considerations may cause the Board of Trustees to revoke the REIT
election, which it may do without shareholder approval.

         If the Company loses or revokes its REIT status, it will face serious
tax consequences that will substantially reduce the funds available for
distribution to shareholders because:

         -        it would not be allowed a deduction for distributions to
                  shareholders in computing its taxable income, it would be
                  subject to federal income tax at regular corporate rates and
                  it might need to borrow money or sell assets in order to pay
                  any such tax;

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

         -        unless it is entitled to relief under statutory provisions,
                  the Company also would be disqualified from taxation as a REIT
                  for the four taxable years following the year during which it
                  ceased to qualify.

         In addition, if the Company fails to qualify as a REIT, all
distributions to shareholders would be subject to tax as ordinary income to the
extent of its current and accumulated earnings and profits, it would not be
required to make distributions to shareholders and corporate distributees might
be eligible for the dividends received deduction.

         As a result of all these factors, the Company's failure to qualify as a
REIT also could impair the Company's ability to expand its business and raise
capital, and would adversely affect the value of the Company's common shares.

         Failure to make required distributions would subject the Company to
tax.

         In order to qualify as a REIT, each year the Company must distribute to
its shareholders at least 90% of its taxable income, other than any net capital
gain. To the extent that the Company satisfies the distribution requirement, but
distributes less than 100% of its taxable income, it will be subject to federal
corporate income tax on its undistributed income. In addition, the Company will
incur a 4% nondeductible excise tax on the amount, if any, by which its
distributions in any year are less than the sum of:

         -        85% of its ordinary income for that year;

                                       13

<PAGE>

         -        95% of its capital gain net income for that year; and

         -        100% of its undistributed taxable income from prior years.

         The Company intends to pay out its income to shareholders in a manner
intended to satisfy the distribution requirement and to avoid corporate income
tax and the 4% excise tax. Differences in timing between the recognition of
income and the related cash receipts or the effect of required debt amortization
payments could require the Company to borrow money or sell assets to pay out
enough of its taxable income to satisfy the distribution requirement and to
avoid corporate income tax and the 4% excise tax in a particular year. The
Company may borrow to pay distributions to its shareholders and the limited
partners of its operating partnership. Any funds that the Company borrows would
subject it to interest rate and other market risks.

RISKS RELATING TO REAL ESTATE INVESTMENTS

         Illiquidity of real estate investments could significantly impede the
Company's ability to respond to adverse changes in the performance of its
properties and harm its financial condition.

         Real estate investments are relatively illiquid. The Company's ability
to quickly sell or exchange any of its medical properties in response to changes
in economic and other conditions will be limited. No assurances can be given
that the Company will recognize full value for any property that it is required
to sell for liquidity reasons. The Company's inability to respond rapidly to
changes in the performance of its investments could adversely affect its
financial condition and results of operations.

         The Company's acquisitions and development properties may underperform
forecasted results or the Company may be limited in its ability to finance
future acquisitions, which may harm its financial condition and operating
results, and the Company may not be able to make the distributions required to
maintain its REIT status.

         The Company intends to pursue acquisitions of additional properties and
to selectively develop new properties. Acquisitions and development entail risks
that investments will fail to perform in accordance with expectations and that
estimates of the cost of improvements necessary to develop and acquire
properties will prove inaccurate, as well as general investment risks associated
with any new real estate investment. The Company anticipates that acquisitions
and development will largely be financed through externally generated funds such
as borrowings under credit facilities and other secured and unsecured debt
financing and from issuances of equity securities. Because the Company must
distribute at least 90% of its taxable income each year to maintain its tax
qualification as a REIT, its ability to rely upon income from operations or cash
flow from operations to finance its growth and acquisition activities will be
limited. Accordingly, if the Company is unable to obtain funds from borrowings
or the capital markets to finance its acquisition and development activities,
its ability to grow could be curtailed, amounts available for distribution to
shareholders could be adversely affected and it could be required to reduce
distributions to shareholders.

         Properties with limited operating history may not achieve forecasted
results which could hinder the Company's ability to make distributions to its
shareholders.

         Newly-developed or newly-renovated properties do not have the operating
history that would allow the Company's management to make objective pricing
decisions in acquiring these properties (including properties which may be
acquired from certain of its executive officers,

                                       14

<PAGE>

trustees and their affiliates). The purchase prices of these properties are
based upon projections by management as to the expected operating results of
such properties, subjecting the Company to risks that such properties may not
achieve anticipated operating results or may not achieve these results within
anticipated time frames.

         If the Company suffers losses that are not covered by insurance or that
are in excess of its insurance coverage limits, it could lose investment capital
and anticipated profits.

         The Company will maintain or require its lessees to maintain
comprehensive insurance on each of its properties. Insurance coverages on a
property will include liability and fire insurance and extended coverage
insurance in amounts sufficient to permit the replacement of the property in the
event of a total loss, subject to applicable deductibles. However, there are
certain types of losses, generally of a catastrophic nature, such as
earthquakes, floods, hurricanes and acts of terrorism, that may be uninsurable
or not insurable at a price the Company can afford. Inflation, changes in
building codes and ordinances, environmental considerations and other factors
also might make it impracticable to use insurance proceeds to replace a property
after it has been damaged or destroyed. Under such circumstances, the insurance
proceeds the Company receives might not be adequate to restore the economic
position with respect to the affected property. If any of these or similar
events occur, the Company's returns from the property and the value of its
investment may be reduced.

         Capital expenditures for property renovation may be greater than
forecasted and may adversely impact rent payments by the Company's lessees' and
the Company's ability to make distributions to shareholders.

         Properties, particularly those that consist of older structures, have
an ongoing need for renovations and other capital improvements, including
periodic replacement of furniture, fixtures and equipment. Under the terms of
the Company's multi-tenant property leases, the Company generally is obligated
to pay the cost of expenditures for items that are necessary for the continued
operation of its properties and that are classified under generally accepted
accounting principles as capital items. If these capital expenditures exceed the
Company's estimates, the additional costs could have an adverse effect on
amounts available for distribution to shareholders. In addition, the Company may
acquire properties in the future that require significant renovation. Renovation
of properties involves certain risks, including the possibility of environmental
problems, construction cost overruns and delays, uncertainties as to market
demand or deterioration in market demand after commencement of renovation and
the emergence of unanticipated competition from other properties.

         All of the Company's properties are subject to property taxes that may
increase in the future and adversely affect its business.

         The Company's properties are subject to real and personal property
taxes that may increase as property tax rates change and as the properties are
assessed or reassessed by taxing authorities. The Company's leases generally
provide that the property taxes are charged to the lessees as an expense related
to the properties that they occupy. As the owner of the properties, however, the
Company is ultimately responsible for payment of the taxes to the government. If
property taxes increase, the Company's lessees may be unable to make the
required tax payments, ultimately requiring the Company to pay the taxes. If the
Company incurs these tax liabilities, its ability to make distributions to its
shareholders could be adversely affected.

                                       15

<PAGE>

         The Company's performance and the price of its common shares will be
affected by risks associated with the real estate industry.

         Factors that may adversely affect the economic performance and value of
the Company's operations include:

         -        changes in the national, regional and local economic climate;

         -        local conditions such as an oversupply of, or a reduction in
                  demand for, medical office space, outpatient treatment and
                  diagnostic facilities, physician practice group clinics,
                  ambulatory surgery centers and specialty hospitals and
                  treatment centers;

         -        attractiveness of the Company's properties to physicians and
                  other types of lessees; and

         -        competition from other medical office buildings, outpatient
                  treatment facilities, physician practice group clinics,
                  ambulatory surgery centers and specialty hospitals and
                  treatment centers.

         As the owner and lessor of real estate, the Company is subject to risks
under environmental laws, the compliance with which and any violation of which,
could materially adversely affect it.

         The Company's operating expenses could be higher than anticipated due
to the cost of complying with existing and future environmental and occupational
health and safety laws and regulations. Various environmental laws may impose
liability on a current or prior owner or operator of real property for removal
or remediation of hazardous or toxic substances. Current or prior owners or
operators may also be liable for government fines and damages for injuries to
persons, natural resources and adjacent property. These environmental laws often
impose liability whether or not the owner or operator knew of, or was
responsible for, the presence or disposal of the hazardous or toxic substances.
The cost of complying with environmental laws could materially adversely affect
amounts available for distribution to the Company's shareholders and could
exceed the value of all of its properties. In addition, the presence of
hazardous or toxic substances, or the failure of the Company's tenants to
properly dispose of or remediate such substances, including medical waste
generated by physicians and the Company's other healthcare tenants, may
adversely affect the Company's tenants or the Company's ability to use, sell or
rent such property or to borrow using such property as collateral which, in
turn, could reduce the Company's revenue and its financing ability. The Company
intends to obtain Phase I environmental assessments on any properties it
acquires. However, even if the Phase I environmental assessment reports do not
reveal any material environmental contamination, it is nonetheless possible that
material environmental liabilities may exist of which the Company is unaware.

         Although the leases covering the Company's properties generally require
the lessees to comply with laws and regulations governing their operations,
including the disposal of medical waste, and to indemnify the Company for
certain environmental liabilities, the scope of their obligations may be
limited. The Company cannot make any assurances that its lessees would be able
to fulfill their indemnification obligations. In addition, environmental and
occupational health and safety laws constantly are evolving, and changes in
laws, regulations or policies, or changes in interpretations of the foregoing,
could create liabilities where none exist today.

                                       16

<PAGE>

         Cost associated with complying with the Americans with Disabilities Act
may adversely affect the Company's financial condition and operating results.

         Under the Americans with Disabilities Act of 1993, all public
accommodations are required to meet certain federal requirements related to
access and use by disabled persons. While the Company believes that its
properties are substantially in compliance with these requirements, a
determination that it is not in compliance with the Americans with Disabilities
Act could result in imposition of fines or an award of damages to private
litigants. In addition, changes in governmental rules and regulations or
enforcement policies affecting the use and operation of the properties,
including changes to building codes and fire and life-safety codes, may occur.
If the Company were required to make substantial modifications at the properties
to comply with the Americans with Disabilities Act or other changes in
governmental rules and regulations, its ability to make distributions to its
shareholders could be adversely affected.

ITEM 2.  PROPERTIES

         At December 31, 2002, the Company owned the following seven properties:

<TABLE>
<CAPTION>
                        TYPE OF                                    SQUARE FOOTAGE        OCCUPANCY AT
PROPERTY                PROPERTY           PROPERTY LOCATION       GROSS/RENTABLE        DECEMBER 31, 2002
----------------------------------------------------------------------------------------------------------
<S>                     <C>                <C>                     <C>                   <C>
Park Medical            Medical office     Charlotte, NC           34,000/32,947                 91%
Center                  building

Urology Center          Ambulatory         Germantown, TN          35,361/33,777                100%
Of the South            surgery
                        center/physician
                        group practice
                        clinic

Partell Medical         Medical office     Las Vegas, NV           32,118/27,736                 87%
Center                  building

Sierra Health           Outpatient         Las Vegas, NV           25,988/25,988                100%
Services (2300          treatment
W. Charleston           and diagnostic
Boulevard)              facilities

Sierra Health           Outpatient         Las Vegas, NV           27,447/27,447                100%
Services (2316          treatment
W.Charleston            and diagnostic
Boulevard)              facilities

Sierra Health           Outpatient         Las Vegas, NV           49,014/49,014                100%
Services (888           treatment
S. Rancho Drive)        and diagnostic
                        facilities
Sierra Health           Outpatient         Las Vegas, NV           58,396/58,396                100%
Services (4475          treatment
S. Eastern Avenue)      and diagnostic
                        facilities
</TABLE>

ITEM 3.  LEGAL PROCEEDINGS

         The Company is not involved in any material litigation.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         No matters were submitted to a vote of security holders during the
fourth quarter of the year ended December 31, 2002.

                                       17

<PAGE>

                                     PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
         MATTERS

         On August 16, 2002, the Company's common shares became listed and
initiated trading on the New York Stock Exchange, symbol WRS. As of March 10,
2003, there were 2,097 shareholders of Record. The following table sets forth
the high and low sales prices of our common shares for the periods indicated and
the dividend declared per share during each such period:

<TABLE>
<CAPTION>
 QUARTER ENDED                       HIGH                    LOW                   DIVIDEND
 -------------                       ----                    ---                   --------
<S>                                 <C>                     <C>                     <C>
 December 31, 2002                  $11.69                  $ 9.85                  $0.13
 September 30, 2002                 $12.10                  $10.11                      -
</TABLE>

         To maintain its status as a REIT for federal income tax purposes, the
Company is required to distribute substantially all of its taxable income, which
may differ materially from its income calculated in accordance with generally
accepted accounting principles, to its shareholders each year. In order to
satisfy this requirement, the Company intends to declare regular quarterly
dividends.

         Distributions will be authorized by the Board of Trustees and declared
by the Company based upon a number of factors, including the amount of funds
from operations, the Company's financial condition, debt service requirements,
capital expenditure requirements, capital expenditure requirements for the
Company's properties, the Company's taxable income, the annual distribution
requirements under the REIT provisions of the Internal Revenue Code and other
factors the Company's trustees deem relevant.

         On December 19, 2002, the Company declared a quarterly cash dividend of
$0.13 per share payable on January 10, 2003, to common shareholders of record on
December 31, 2002. Following is a summary of the taxable nature of the Company's
dividends for the year ended December 31, 2002:

<TABLE>
<S>                                                                   <C>
Percent taxable as ordinary income                                     52.82%
Percent non-taxable as return of capital                               47.18%
                                                                      -------
                                                                      100.00%
</TABLE>

         The level of quarterly dividends is based on a number of factors and
should not be deemed indicative of taxable income for the quarter in which
declared or future quarters or of income calculated in accordance with generally
accepted accounting principles. In addition, the Company cannot provide any
assurance as to the amount of timing of future distributions.

ITEM 6.  SELECTED FINANCIAL DATA

         The Company is engaged in two operating segments; the ownership and
rental of specialty medical facilities (Rental Operations), and the providing of
various real estate services such as third party facility planning, project
management, medical equipment planning and implementation services and related
activities ("Service Operations"). The Company's Service Operations are
conducted through its taxable REIT subsidiary, HADC. The Company's reportable
segments offer different products or services and are managed separately because
each requires different operating strategies and management expertise.

                                       18

<PAGE>

         The following sets forth selected consolidated financial and operating
information on a historical basis for the Company from August 16, 2002 through
December 31, 2002 and its predecessor for the period prior to August 16, 2002.
The following information should be read in conjunction with Item 7,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and Item 8, "Financial Statements and Supplementary Data" included
in this Form 10-K (in thousands, except per share amounts):

<TABLE>
<CAPTION>
                                                                                      YEAR ENDED DECEMBER 31,
                                                           -------------------------------------------------------------------------
                                 1/1/2002
                                  THROUGH      8/16/2002
                                 8/15/2002      THROUGH       2002          2001           2000           1999           1998
                               (PREDECESSOR)  12/31/2002   (COMBINED)   (PREDECESSOR)  (PREDECESSOR)  (PREDECESSOR)  (PREDECESSOR)
                               -----------------------------------------------------------------------------------------------------
<S>                            <C>            <C>          <C>          <C>            <C>            <C>            <C>
RESULTS OF OPERATIONS:
Revenues:
Rental Operations              $        -     $     2,274  $    2,274    $         -    $          -    $      -       $        -
Service Operations (HADC)      $    4,145     $     7,559  $   11,704    $     4,568    $      4,458    $  2,979       $    3,259
TOTAL REVENUES                 $    4,145     $     9,833  $   13,978    $     4,568    $      4,458    $  2,979       $    3,259
NET INCOME (LOSS)              $   (1,015)    $        43  $     (972)   $       (51)   $         47    $   (582)      $      234

PER SHARE DATA(1):
Net Income per Common Share:
   Basic and Diluted                          $       .01
Weighted Average Common
   Shares Outstanding                               5,692
Weighted Average Common and                         6,054
   Dilutive Potential Common
   Shares

BALANCE SHEET DATA (AT
   DECEMBER 31):
Total Assets                                               $   75,265    $     1,535    $      1,438    $  1,703       $    1,681
Total Debt                                                 $    9,664            687    $        362    $    323       $      692
Total Liabilities (Including                               $   17,888    $     1,915    $      1,432    $  1,471       $    1,201
   Minority Interest)
Total Shareholders'/ Owners                                $   57,377    $      (379)   $          6    $    232       $      480
   Equity (Deficit)
Total Common Shares                                             5,692              -               -           -                -
   Outstanding
</TABLE>

(1) Per share data is presented for the period from August 16, 2002 through
December 31, 2002.

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

GENERAL BACKGROUND

         The Company is a self-managed real estate investment trust, or REIT.
The Company was recently formed to acquire, selectively develop and manage
specialty medical properties, such as medical office buildings, outpatient
treatment and diagnostic facilities, physician group practice clinics,
ambulatory surgery centers, and specialty hospitals and treatment centers. The
properties acquired or developed will generally be leased to healthcare
providers and physicians on long-term leases with annual lease rate escalations.
Some of the criteria that will be used to determine

                                       19

<PAGE>

property selections are; location; tenant quality; tenant mix; market appeal;
purchase price; property condition; market trend and length of leases in place.

         Through the Company's predecessor company, its management team has
assisted healthcare providers for over 25 years in planning or developing over
600 medical facilities projects in the United States and 14 foreign countries
having an aggregate value in excess of $1.7 billion. Historically, many medical
providers have had financial incentives, such as cost based reimbursement plans,
to own their own properties. However, as the system of delivering medical
services has evolved, the Company believes providers have increasingly sought
third party ownership of these types of medical properties. This trend creates
an attractive opportunity for the Company to meet the evolving real estate needs
of medical care providers by acquiring, selectively developing and leasing a
portfolio of specialty medical properties.

         On August 15, 2002, the Company's Registration Statement on Form S-11
was declared effective, and on August 22, 2002, the Company completed an initial
public offering of 5,691,710 common shares (the Initial Offering). The public
offering price of all shares sold was $12 per common share, resulting in net
proceeds to the Company (after underwriters discount and offering expenses) of
approximately $61.1 million. The Company contributed all of the net proceeds of
the Initial Offering to the Operating Partnership in exchange for an approximate
94.0% general partnership interest. The Operating Partnership used approximately
$47.4 million of the proceeds from the Initial Offering and the issuance of
limited partnership interests to complete the purchases of four outpatient
treatment centers in Las Vegas, Nevada operated by Sierra Health Services on
August 23, 2002, and the Urology Center of the South near Memphis, Tennessee on
August 22, 2002. On November 8, 2002, the Company purchased Partell Medical
Center in Las Vegas, Nevada for $7.2 million, including $5 million of assumed
debt. The Company acquired Park Medical Center in Charlotte, North Carolina on
December 1, 2002, for $5.65 million, including $3.89 million of assumed debt.
The Company had no property ownership and leasing operations prior to August 16,
2002.

         The Company also conducts service operations through Hospital
Affiliates Development Corporation (HADC), a wholly-owned taxable REIT
subsidiary of the Operating Partnership. The net assets and operations of the
service operations acquired in connection with the Initial Offering were
designated as the predecessor (the Predecessor) for accounting purposes. The
Company maintained carry-over basis for the accounting of the purchase of these
net assets. Accordingly, the results of operations for the year ended December
31, 2002 comprise those of the combined entities of the Company and the
Predecessor from August 16, 2002 through December 31, 2002. All periods prior to
August 16, 2002 include only the operations of the Predecessor.

RESULTS OF OPERATIONS

COMPARISON OF THE YEAR ENDED DECEMBER 31, 2002 TO THE YEAR ENDED DECEMBER 31,
2001

RENTAL OPERATIONS

         No activity related to rental operations was reflected on the
Consolidated Statements of Operations for the years ended December 31, 2001 and
2000 as the Company had no rental operations prior to August 16, 2002.

         Rental Operations revenue for the period August 16, 2002 through
December 31, 2002 was $2.3 million. Rental Operations revenue is driven by
income generated from properties held

                                       20

<PAGE>

for rental purposes. The amount of rental revenue and operating expenses
recognized during 2002 is entirely related to the acquisition of the seven
properties discussed above following completion of the Initial Offering. The
Urology Center of the South near Memphis, Tennessee and the four outpatient
treatment centers in Las Vegas, Nevada operated by Sierra Health Services were
acquired by the Company on August 22, 2002. The Company purchased Partell
Medical Center in Las Vegas, Nevada and Park Medical Center in Charlotte, North
Carolina on November 8, 2002 and December 1, 2002, respectively.

<TABLE>
<CAPTION>
                                                       2002 RENTAL OPERATIONS REVENUE
                                                               (In Thousands)
         Property Name             August     September     October     November     December      Total
<S>                                <C>        <C>           <C>         <C>          <C>           <C>
Sierra Health Services (4           $ 95        $ 342        $ 342         $342         $342       $1,463
     properties)
Urology Center of the South           39          150          150          150          150          639
Partell Medical Center                 0            0            0           46           68          114
Park Medical Center                    0            0            0            0           58           58
                                   ----------------------------------------------------------------------
                        Total       $134        $ 492        $ 492         $538         $618       $2,274
                                   ----------------------------------------------------------------------
</TABLE>

         The leases pertaining to the four outpatient treatment centers in Las
Vegas, Nevada and the Urology Center of the South near Memphis, Tennessee are
all net leases and therefore all operating expenses are paid by the tenants in
accordance with the terms of the lease. Rental revenue is recognized on a
straight-line basis, and the buildings are depreciated using the straight-line
method over their estimated life not to exceed 40 years.

SERVICE OPERATIONS

         Development and project management fees increased by $7.1 million for
the year ended December 31, 2002 as compared to the year ended December 31,
2001. The significant increase is due to a 2002 signing of a design - build
contract by HADC on a development project in Chattanooga, Tennessee. This
contract differs from the previously used fee-for-service contracts in that all
payments are made from the client to HADC and then from HADC to the contractors.
Therefore, the increase in revenue is substantially offset by a corresponding
increase in cost of sales and project costs.

         The decrease in total income from service operations for the year ended
December 31, 2002 as compared to the year ended December 31, 2001 is primarily
attributable to a decline in construction activities and consulting revenue
earned by HADC. During 2002, HADC's resources devoted considerable time to
efforts connected with the Company's Initial Offering as well as potential
acquisition and development projects for the Operating Partnership. Management
of HADC is committed to rebuilding its third party consulting services practice
to ensure that HADC operations achieve acceptable levels of profitability.

GENERAL AND ADMINISTRATIVE

         General and administrative expenses, including expenses at HADC, were
$3.1 million for the year ended December 31, 2002, as compared to $2.5 million
for the year ended December 31, 2001. The increase is the result of the
additional costs associated with the increases in staff and other operational
changes in contemplation of and subsequent to the Initial Offering. In order to
increase shareholder return, management is focused on managing general and
administrative expenses. Management believes the Company currently has
sufficient resources at the corporate level to manage a substantial increase in
the size of its portfolio. Therefore, as rental properties

                                       21

<PAGE>

are added to the portfolio, general and administrative expenses should not grow
proportionately. The following chart shows the general and administrative
expense for each of the business segments:

<TABLE>
<CAPTION>
                                                                QUARTER
                                               AUGUST 16 -        ENDED          YEAR ENDED      YEAR ENDED
                                              SEPTEMBER 30,    DECEMBER 31,      DECEMBER 31,    DECEMBER 31,
                                                  2002            2002              2002            2001
<S>                                           <C>              <C>               <C>             <C>
General and administrative expenses:
     Corporate & Rental Operations              $ 304,520        $546,770         $  851,290              N/A
     Service Operations (HADC)                  $ 363,746        $208,062         $2,264,478     $  2,475,510
                                                ---------        --------         ----------     ------------
Total:                                          $ 668,266        $754,832         $3,115,768     $  2,475,510
                                                =========        ========         ==========     ============
</TABLE>

OTHER INCOME AND EXPENSES

The increase in other expenses was primarily due to the loss recognized on the
interest rate swap instrument during the year ended December 31, 2002. The
Company currently has one interest rate swap contract that does not meet the
criteria of Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities" ("SFAS 133") to qualify for hedge
accounting. SFAS 133 requires that unrealized gains and losses on derivatives
not qualifying as hedge accounting be recognized currently in earnings. The
interest rate swap was acquired in connection with the acquisition of the
Urology Center of the South ("Brierbrook, L.L.C.") and the debt related to the
swap was retired at the time of the acquisition. Financial results for the
period August 16, 2002 through December 31, 2002 were impacted by the loss on
the fair value of the interest rate swap and the monthly amount paid or received
on the interest rate swap that resulted from changes in the LIBOR interest rate.
Fluctuations in the interest rate market indicated an increase of ($231,818) in
the fair value or the amount the Company would be required to pay to retire the
swap instrument. At this time the Company does not intend to retire this swap
during its life, and if not retired, then it will expire, and the Company will
not realize this loss related to changes in the fair value of the swap. The swap
expiration date is June 29, 2006.

COMPARISON OF THE YEAR ENDED DECEMBER 31, 2001 TO THE YEAR ENDED DECEMBER 31,
2000

RENTAL OPERATIONS

         No activity related to rental operations was reflected on the
Consolidated Statements of Operations for the years ended December 31, 2001 and
2000, as the Company had no rental operations prior to August 16, 2002.

SERVICE OPERATIONS

         Development and project management fees increased by $0.1 million or
2.5% to $4.6 million for the year ended December 31, 2001, as compared to $4.5
million for the year ended December 31, 2000. Although the number of projects in
process throughout 2001 decreased from 2000, there was a larger percentage of
project management contracts in 2001, with higher margins, than the planning and
interior design contracts in process during 2000. Cost of sales and project
costs decreased by $0.1 million or 4.1% to $1.8 million for the year ended
December 31, 2001, as compared to $1.9 million for the year ended December 31,
2000. The decrease is consistent with the decrease in the number of projects in
process in 2001 compared to 2000.

                                       22

<PAGE>

GENERAL AND ADMINISTRATIVE

         General and administrative expenses remained constant at $2.5 million
for 2001 and 2000 due to the same level of staff throughout each year and
similar expenses.

CRITICAL ACCOUNTING POLICIES

REAL ESTATE INVESTMENTS

         The Company utilizes the guidelines established under SFAS 144
"Accounting for the Impairment or Disposal of Long-Lived Assets" to determine if
impairment conditions exist. Under SFAS 144, the Company compares the expected
undiscounted cash flows of each property in its portfolio to the net carrying
value to determine if there are any indications of impairment of a property. The
review of anticipated cash flows involves subjective assumptions of estimated
occupancy and rental rates and ultimate residual value. In addition to reviewing
anticipated cash flows, the Company assesses other factors such as changes in
business climate and legal factors that may affect the ultimate value of the
property. These assumptions are subjective and may not ultimately be achieved.

REVENUE AND COST RECOGNITION

         Contract revenues are recognized using the percentage of completion
method based on the efforts expended, whereby the percentage complete is based
on hours incurred in relation to total estimated hours to be incurred. Costs
associated with obtaining contracts are expensed as incurred. Any change in the
estimated total hours to be incurred on a contract could have a material impact
on the Company's estimated contract percentage completion and as a result could
have a material impact on the Company's net income or loss since such estimates
are based upon the estimate of work to be performed on individual contracts.

DEFERRED INCOME TAXES

         In assessing the realizability of deferred tax assets, management
considers whether it is more likely than not that some portion or all of the
deferred tax assets will not be realized. The ultimate realization of deferred
tax assets is dependent upon the generation of future taxable income during the
periods in which those temporary differences become deductible. Management
believes that it is more likely than not that the deferred tax assets will be
realized.

LIQUIDITY AND CAPITAL RESOURCES

         The Company's principal source of cash to meet its cash requirements,
including distributions to shareholders, is its cash flow from operations.

         On September 30, 2002, the Company entered into a $25 million secured
credit facility with Huntington National Bank based in Columbus, Ohio which will
be available for working capital and acquisition purposes. This two-year
facility is secured by first mortgages on the Company's four outpatient
treatment centers in Las Vegas, Nevada, as well as the Urology Center of the
South in Memphis, Tennessee. The credit facility has rates of LIBOR plus
1.75-2.00% depending on the leverage ratio. As of December 31, 2002, there was
no outstanding balance on this line of credit.

                                       23

<PAGE>

         The Company assumed $8.9 million of mortgage debt at face value in
connection with the acquisition of Park Medical Center and Partell Medical
Center. This debt is secured by first mortgages on these properties. At December
31, 2002, the Company had total debt of $8.9 million, all of which was fixed
rate.

         On December 31, 2002, the Company had $8.2 million of cash and cash
equivalents. Net cash used in operating activities was $322,000 for the year
ended December 31, 2002, primarily due to a decline in construction activities
and consulting revenue earned by HADC and also due to the fact that the Company
generated operating cash flows from Rental Operations for approximately only one
quarter.

         Net cash used in investing activities was $51.6 million for the year
ended December 31, 2002, primarily due to the acquisition of the seven medical
properties discussed above.

         Net cash provided by financing activities was $60.0 million for the
year December 31, 2002, primarily attributable to the net proceeds received from
the IPO.

         In the first quarter of 2003, the Company entered into an agreement to
acquire a portfolio of 12 multi-tenant medical office buildings for an aggregate
purchase price of approximately $68 million. The Company will assume mortgage
debt of approximately $38 million and will pay the $30 million balance of the
purchase price with a combination of available cash and borrowings under the $25
million secured credit facility. The Company expects the acquisition to close in
the second quarter of 2003.

         The Company has considered its short-term (one year or less) liquidity
needs and currently expects that its estimated cash flow from operations and
other expected liquidity sources will be adequate to meet these needs. The
Company believes that its principal short-term liquidity needs are to fund
normal recurring expenses, debt service requirements and the minimum
distribution required to maintain the Company's REIT qualification under the
Code. The Company anticipates that these needs will be met with cash flows
provided by operating activities. The Company has also considered capital
improvements and property acquisitions under contract as short-term needs that
will be funded either from other indebtedness, or the issuance of additional
equity securities.

         The Company expects to meet long-term (greater than one year) liquidity
requirements such as property acquisitions, scheduled debt maturities, major
renovations, expansions and other nonrecurring capital improvements through
long-term secured and unsecured indebtedness and the issuance of additional
equity securities. The Company will acquire or develop additional properties
only as suitable opportunities arise, and the Company will not undertake
acquisition or development of properties unless its acquisition criteria are
met.

FUNDS FROM OPERATIONS (FFO)

         The Company believes that FFO is helpful to investors as a measure of
the performance of an equity REIT because, along with cash flow from operating
activities, financing activities and investing activities, it provides investors
with an indication of the ability of the Company to incur and service debt, to
make capital expenditures and to fund other cash needs. FFO is defined by the
National Association of Real Estate Investment Trusts ("NAREIT") as net income
(loss) (computed in accordance with GAAP), excluding gains (or losses) from
sales of properties, plus real estate related depreciation and amortization and
after comparable adjustments for the Company's portion of these items related to
minority interest unconsolidated entities and joint

                                       24

<PAGE>

ventures. The Company computes FFO in accordance with standards established by
NAREIT which may not be comparable to FFO reported by other REITs that do not
define the term in accordance with the current NAREIT definition or that
interpret the current NAREIT definition differently than the Company. FFO does
not represent cash generated from operating activities determined by GAAP and
should not be considered as an alternative to net income (determined in
accordance with GAAP) as an indication of the Company's financial performance or
to cash flow from operating activities (determined in accordance with GAAP) as a
measure of the Company's liquidity, nor is it indicative of funds available to
fund the Company's cash needs, including its ability to make cash distributions.
FFO may include funds that may not be available for management's discretionary
use due to functional requirements to conserve funds for capital expenditures
and property acquisitions, and other commitments and uncertainties. The
following is a reconciliation between net income and FFO for the period from
August 16, 2002 (date of Initial Offering) through December 31, 2002:

<TABLE>
<CAPTION>
                                                                           For the Period August 16, 2002
                                                                              Through December 31, 2002
                                                                           ------------------------------
<S>                                                                        <C>
Net Income                                                                          $    43,260
Add back (deduct):
     Depreciation and amortization                                                  $   481,256
     Minority interest share of depreciation and amortization                           (29,000)
                                                                                    -----------
FUNDS FROM OPERATIONS                                                               $   495,516
                                                                                    ===========
</TABLE>

RELATED PARTIES AND OTHER TRANSACTIONS

         In addition to the transactions relating to formation of the Company
and the Initial Offering, in the normal course of business and, in management's
opinion, at terms comparable to those available from unrelated third parties,
the Company has engaged in transactions with certain affiliates from time to
time.

         The Company pays an overhead sharing fee to a company in which certain
executive officers of the Company have an ownership interest. This fee of
$17,500 per month is to cover fixed overhead costs such as rent, certain office
support staff services, and other fixed expenses. The Company reimburses other
direct expenses as incurred.

         In December 2002, Alliance Design Group, LLC, ("ADG") an affiliate of
Windrose International, LLC, which prior to the Initial Offering was the owner
of the Predecessor, repaid in full a demand note held with the Company, which
bore interest at a rate of 9.5% per annum. Certain executive officers of the
Company are owners of Windrose International LLC.

INFLATION

         All of the Company's net leases require the tenant to pay, as
additional rent, any increases in real estate taxes and operating expenses. Many
of the Company's multi-tenant leases require a tenant to pay as additional rent,
a portion of any increases in real estate taxes and operating expenses over a
base amount. In addition, most of the leases provide for fixed increases in base
rent or indexed escalations (based on increases in the Consumer Price Index or
other fixed percentages). The Company believes that a significant portion of
inflationary increases in expenses will be offset by these expense
reimbursements and contractual rent increases. However, such lease provisions
may not fully protect the Company from the effects of inflation.

                                       25

<PAGE>

RECENT ACCOUNTING PRONOUNCEMENTS

         In April 2002, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 145, which rescinded SFAS No. 4, SFAS No. 44, and SFAS No. 64, as well
as amending SFAS No. 13. The adoption of this statement is not expected to have
a material impact on the financial position or results of operations of the
Company.

         In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities," which addresses financial
accounting and reporting costs associated with exit or disposal activities. The
provisions of this statement are effective for exit and disposal activities that
are initiated after December 31, 2002. The adoption of this statement is not
expected to have a material impact on the financial position or results of
operations of the Company.

         In December 2002, the FASB issued SFAS No. 148, "Accounting for
Stock-Based Compensation--Transition and Disclosure, and amendment of FASB
Statement No. 123 ("SFAS No. 148"). SFAS No. 148 amended SFAS No. 123,
"Accounting for Stock-Based Compensation", to provide alternative methods of
transition for voluntary change to the fair value based method of accounting for
employee stock-based compensation. In addition, SFAS No. 148 amends the
disclosure requirements of SFAS No. 123 to require prominent disclosure in
annual and interim financial statements about the method of accounting for
stock-based compensation and its effect on reported results. The disclosure
provisions of SFAS No. 148 are included in the accompanying Notes to
Consolidated Financial Statements.

         In November 2002, FASB issued Interpretation No. 45, Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others ("Interpretation 45") which addresses the
disclosure to be made by a guarantor in its interim and annual financial
statements about its obligations under guarantees. Interpretation 45 requires
the guarantor to recognize a liability for the non-contingent component of the
guarantee, which is the obligation to stand ready to perform in the event that
specified triggering events or conditions occur. The initial measurement of this
liability is the fair value of the guarantee at inception. The recognition of
the liability is required even if it is not probable that payments will be
required under the guarantee or if the guarantee was issued with a premium
payment or as part of a transaction with multiple elements. The adoption of this
statement is not expected to have a material impact on the financial position or
results of operations of the Company.

         In January 2003, the FASB issued Interpretation No. 46, Consolidation
of Variable Interest Entities ("Interpretation 46"), which addresses
consolidation of certain variable interest entities and is effective January 31,
2003. The Company does not anticipate that the adoption of Interpretation 46
will have a material impact on its financial statements or results of
operations.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         Market risk is the exposure to loss resulting from adverse changes in
market prices, interest rates, foreign currency exchange rates, commodity prices
and equity prices. The primary market risk to which the Company is exposed is
interest rate risk. Interest rates are sensitive to many factors, including
governmental monetary and tax policies, domestic and international economic and
political considerations and other factors that are beyond our control. The
Company's future income, cash flows and fair values relevant to financial
instruments are dependent upon prevalent market interest rates. The Company's
interest rate risk management

                                       26

<PAGE>

objective is to limit the impact of interest rate changes on earnings and cash
flows and to lower its overall borrowing costs.

         As of December 31, 2002, total outstanding debt of the Company was
$9,664,112. The current outstanding debt balances relate to fixed rate mortgages
assumed through the Partell Medical Center and Park Medical Center acquisitions.
The fair value of this debt approximates its carrying value. On September 30,
2002, the Company entered into a $25 million secured credit facility with
Huntington National Bank based in Columbus, Ohio. This two-year facility is
secured by first mortgages on the Company's four outpatient treatment centers in
Las Vegas, Nevada, as well as the Urology Center of the South in Memphis,
Tennessee. The credit facility has rates of LIBOR plus 1.75-2.00% depending on
the leverage ratio. There were no amounts outstanding on this line of credit
facility as of December 31, 2002.

         The Company has one interest rate swap contract that does not meet the
criteria of Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities" ("SFAS 133") to qualify for hedge
accounting. SFAS 133 requires that unrealized gains and losses on derivatives
not qualifying as hedge accounting be recognized currently in earnings. The
interest rate swap was acquired in connection with the acquisition of the
Urology Center of the South from Brierbrook Partners and the debt related to the
swap was retired at the time of the acquisition. During the period from August
16, 2002 through December 31, 2002, the Company recognized a loss of $231,818
from this interest rate swap contract. The fair value of the interest rate swap
at December 31, 2002 was a $680,125 liability.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The financial statements and supplementary data are included under Item
15 of this Report.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

         None.

                                    PART III

ITEM 10. TRUSTEES AND EXECUTIVE OFFICERS

         Incorporated herein by reference from the Company's definitive proxy
statement to be filed with the Securities and Exchange Commission with respect
to its Annual Meeting of Shareholders to be held on May 8, 2003.

ITEM 11. EXECUTIVE COMPENSATION

         Incorporated herein by reference from the Company's definitive proxy
statement to be filed with the Securities and Exchange Commission with respect
to its Annual Meeting of Shareholders to be held on May 8, 2003.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

                                       27

<PAGE>

         Incorporated herein by reference from the Company's definitive proxy
statement to be filed with the Securities and Exchange Commission with respect
to its Annual Meeting of Shareholders to be held on May 8, 2003.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Incorporated herein by reference from the Company's definitive proxy
statement to be filed with the Securities and Exchange Commission with respect
to its Annual Meeting of Shareholders to be held on May 8, 2003.

ITEM 14. DISCLOSURE CONTROLS AND PROCEDURES

         The Company maintains disclosure controls and procedures that are
designed to ensure that information required to be disclosed in its annual and
periodic reports filed with the SEC is recorded, processed, summarized and
reported within the time periods specified in the SEC's rules and forms. These
disclosure controls and procedures are further designed to ensure that such
information is accumulated and communicated to management, including the chief
executive officer and chief financial officer, to allow timely decisions
regarding required disclosure.

         Based on the most recent evaluation, which was completed within 90 days
of the filing of this report, the chief executive officer and chief financial
officer believe that the Company's disclosure controls and procedures are
effective. There have been no significant changes in the internal controls or in
other factors that could significantly affect the internal controls subsequent
to the date management completed its evaluation.

                                       28

<PAGE>

                                     PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)      THE FOLLOWING DOCUMENTS ARE FILED AS PART OF THIS FORM 10-K:

1.       CONSOLIDATED FINANCIAL STATEMENTS

         The following Consolidated Financial Statements of the Company,
         together with the Independent Auditors' Report, are included in the
         Company's Annual Report to shareholders for the year ended December 31,
         2002, filed as Exhibit 13.01 to this Form 10-K, are incorporated by
         reference into this Item 15:

<TABLE>
<CAPTION>
                                                                                       Page
                                                                                       ----
<S>                                                                                    <C>
Independent Auditors' Report                                                           F-2
Consolidated Balance Sheets, December 31, 2002 and 2001                                F-3
Consolidated Statements of Operations, Years Ended December 31, 2002, 2001             F-4
and 2000
Consolidated Statements of Cash Flows, Years Ended December 31, 2002, 2001             F-5
and 2000
Consolidated Statements of Shareholders' Equity (Deficit), Years                       F-6
Ended December 31, 2002, 2001 and 2000
Notes to Consolidated Financial Statements                                             F-7
</TABLE>

2.       CONSOLIDATED FINANCIAL STATEMENT SCHEDULES

         Schedule III -- Real Estate and Accumulated Depreciation

3.       EXHIBITS

         The following exhibits are filed with this Form 10-K or incorporated
herein by reference to the listed document previously filed with the SEC.

<TABLE>
<CAPTION>
 EXHIBIT
 NUMBER                                           DESCRIPTION
 ------                                           -----------
<S>            <C>
 3.01          Registrant's Articles of Incorporation.*
 3.02          Registrant's Bylaws.*
 4.01          Form of Common Share Certificate.*
10.01          Amended and Restated Agreement of Limited Partnership of Windrose Medical Properties,
                    L.P.*
10.02          Windrose Medical Properties Trust 2002 Stock Incentive Plan.*
10.03          Overhead Sharing Agreement between Windrose Medical Properties, L.P. and Klipsch Audio,
                    Inc.*
10.04          Contract of Acquisition between Windrose Medical Properties Trust and Park Medical
                    Associates, LLC, dated May 7, 2002.*
10.04.1        Amended and Restated Contract of Acquisition, dated July 8, 2002, by and between Windrose
                    Medical Properties, L.P. and Park Medical Associates, LLC.*
</TABLE>

                                       29

<PAGE>

<TABLE>
<S>            <C>
10.05          Form of Purchase and Sale Agreement for Class A limited liability interests in Brierbrook
                    Partners, LLC.*
10.05.1        Form of Purchase and Sale Agreement for Class A limited
                    liability interests in Brierbrook Partners, LLC.*
10.06          Contribution Agreement dated May 23, 2002 among Windrose International, LLC, Med
                    Properties Management Group, LLC, Hospital Affiliates Development Corporation, Med
                    Properties Asset Group LLC, Fred S. Klipsch, O.B. McCoin, Robin Barksdale, Charles
                    Lanham, Frederick L. Farrar, Mike Klipsch, Steve Klipsch, Windrose Medical
                    Properties, L.P. and Windrose Medical Properties Trust.*
10.07          Purchase and Sale Agreement dated May 10, 2002 among Windrose Medical Properties Trust,
                    CPSIEM, LLC and CPSIEE, LLC.*
10.07.1        Purchase and Sale Agreement dated May 10, 2002 among
                    Windrose Medical Properties Trust, CPSIEM, LLC and
                    CPSIEE, LLC.*
10.08          First Amendment to Purchase and Sale Agreement dated May 23, 2002 among Windrose Medical
                    Properties Trust, CPSIEM, LLC and CPSIEE, LLC.*
10.09          Urology Center of the South Ambulatory Surgery Center Amended and Restated Lease
                    Agreement dated June 26, 2001 between Brierbrook Partners, LLC and Urology
                    Ambulatory Surgery Center, L.L.C.*
10.10          Urology Center of the South Office Lease Agreement dated June 26, 2001 between Brierbrook
                    Partners, LLC and Urology Center of the South, P.C.*
10.11          Urology Center of the South Clinic Lease Agreement dated June 26, 2001 between Brierbrook
                    Partners, LLC and Urology Center of the South, P.C.*
10.12          Lease Agreement dated December 28, 2000 between CPSIEM, LLC and Southwest Medical
                    Associates, Inc. (2300 W. Charleston).*
10.13          Lease Agreement dated December 28, 2000 between CPSIEM, LLC and Southwest Medical
                    Associates, Inc. (2316 W. Charleston Blvd).*
10.14          Lease Agreement dated December 28, 2000 between CPSIEE, LLC and Southwest Medical
                    Associates (4475 S. Eastern Avenue).*
10.15          Lease Agreement dated December 28, 2000 between CPSIEM, LLC and Southwest Medical
                    Associates, Inc. (8880 S. Rancho Drive).*
10.16          Office Lease and Guaranty Agreement dated May 16, 1988 by and between Park 51 Associates
                    and Meclenberg Medical Group, P.A., as amended.*
10.17          Lease Guaranty dated December 28, 2000 by Sierra Health Services, Inc. in favor of
                    CPSIEM, LLC (2300 W. Charleston).*
10.18          Lease Guaranty dated December 28, 2000 by Sierra Health Services, Inc. in favor of
                    CPSIEM, LLC (2316 W. Charleston).*
10.19          Lease Guaranty dated December 28, 2000 by Sierra Health Services, Inc. in favor of
                    CPSIEE, LLC (4425 S. Eastern Avenue).*
10.20          Lease Guaranty dated December 28, 2000 by Sierra Health Services, Inc. in favor of
                    CPSIEM, LLC.*
10.21          Promissory Note dated August 2, 1999 from Park Medical Associates General Partnership to
                    General Electric Capital Corporation.*
10.22          Loan Agreement dated August 2, 1999 between General Electric Capital Corporation and Park
                    Medical Associates General Partnership.*
10.23          Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing from
                    Park Medical Associates General Partnership to Charles T. Marshall (Trustee) for the
                    benefit of General Electric Capital Corporation.*
10.24          Urology Ambulatory Surgery Center Subordination, Limited Guaranty and Indemnification
                    Agreement, dated June 26, 2001, by and among Urology Center of the South, P.C.
                    (UCS), Urology Ambulatory Surgery Center, LLC (UASC), and Brierbrook.*
</TABLE>

                                       30

<PAGE>

<TABLE>
<S>            <C>
10.25          Form of Urology Ambulatory Surgery Center Subordination, Non-Compete, Limited Guaranty
                    and Indemnification Agreements, dated June 26, 2001, by and among each of the UCS
                    physicians, UASC, UCS and Brierbrook.*
10.26          Urology Ambulatory Surgery Center Subordination Agreement, dated June 26, 2001 by and
                    among Ambulatory Operations, Inc., UASC and Brierbrook.*
10.27          Urology Ambulatory Surgery Center Subordination Agreement, dated June 26, 2001, by and
                    among LeBonheur Ambulatory Services, Inc., UASC and Brierbrook.*
10.28          Hazardous Materials Indemnity Agreement dated August 2, 1999 by Park Medical Associates
                    General Partnership and Diane B. Ruers for the Benefit of General Electric Capital
                    Corporation.*
10.29          Assignment of Leases and Rents dated August 2, 1999 by Park Medical Associates General
                    Partnership to General Electric Capital Corporation.*
10.30          Form of Change in Control Severance Agreement between Windrose Medical Properties, L.P.
                    and Fred S. Klipsch.*
10.31          Form of Change in Control Severance Agreement between Windrose Medical Properties, L.P.
                    and Frederick L. Farrar.*
10.32          Contract of Acquisition by and between Windrose Medical Properties, L.P. and J&M Quail
                    Meadows, L.L.C. dated as of July 15, 2002.*
10.33          Subordinated Promissory Note dated September 28, 2001 from Windrose International L.L.C.
                    to Fred Klipsch.*
10.34          Subordinated Promissory Note dated May 11, 2002 from Windrose International, L.L.C. to
                    Klipsch Audio, Inc.*
10.35          Promissory Note dated May 1, 1999 from Hospital Affiliates Development Corporation to
                    Robin P. Barksdale.*
10.36          Promissory Note dated May 1, 1999 from Hospital Affiliates Development Corporation to
                    Frederick L. Farrar.*
10.37          Promissory Note dated May 1, 1999 from Hospital Affiliates Development Corporation to
                    Fred S. Klipsch.*
10.38          Promissory Note dated May 1, 1999 from Hospital Affiliates Development Corporation to
                    Athena Development.*
10.39          Subordinated Promissory Note dated May 11, 2002 from Windrose International L.L.C. to
                    Charles Lanham.*
10.40          Promissory Note payable by Alliance Design Group to Hospital Affiliates Development
                    Corporation.*
10.41          Commitment Letter, dated July 18, 2002, from the Huntington National Bank to Windrose
                    Medical Properties, L.P.*
10.42          Master Agreement dated as of October 1, 2001 between Brierbrook Partners, LLC and
                    SouthTrust Bank.*
10.43          Confirmation, dated October 10, 2001, from SouthTrust Bank to Brierbrook Partners, LLC.*
10.44          Secured Revolving Credit Agreement, dated September 27, 2002, by and between Windrose
                    Medical Properties, L.P. and The Huntington National Bank.
10.45          Credit Note, dated September 27, 2002, from Windrose Medical Properties, L.P. to The
                    Huntington National Bank.
13.01          Annual Report to Shareholders for the Year ended December 31, 2002.
21.01          List of Subsidiaries of the Registrant.*
99.01          Certification of Chief Executive Officer.
99.02          Certification of Chief Financial Officer.
</TABLE>

                                       31

<PAGE>

*Previously filed as an exhibit to the Company's Registration Statement on Form
  S-11, as amended, Registration No. 333-89186, and incorporated by reference
  herein.

(b)      REPORTS ON FORM 8-K

         Form 8-K filed on November 15, 2002, regarding the filing of
         certifications by the Company's Chief Executive Officer and Chief
         Financial Officer.

(c)      EXHIBITS

         The exhibits required to be filed with this Form 10-K pursuant to Item
         601 of regulation S-K are listed under "Exhibits" in Part IV, Item
         15(a)(3) of this Form 10-K, and are incorporated herein by reference.

(d)      FINANCIAL STATEMENT SCHEDULE

         The Financial Statement Schedule required to be filed with this Form
         10-K is listed under "Consolidated Financial Statement Schedules" in
         Part IV, Item 15(a)(1) of this Form 10-K, and is incorporated herein by
         reference.

                                       32

<PAGE>

FINANCIAL STATEMENTS

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                                                                     PAGE
<S>                                                                                                                  <C>
Independent Auditors' Report......................................................................................   F-2

Consolidated Balance Sheets as of December 31, 2002 and 2001......................................................   F-3

Consolidated Statements of Operations for the Years Ended December 31, 2002, 2001 and 2000........................   F-4

Consolidated Statements of Cash Flows for the Years Ended December 31, 2002, 2001 and 2000........................   F-5

Consolidated Statements of Changes in Shareholders' Equity (Deficit) for the Years Ended December 31, 2002, 2001
and 2000 .........................................................................................................   F-6

Notes to Consolidated Financial Statements........................................................................   F-7
</TABLE>

                                      F-1

<PAGE>

                          Independent Auditors' Report

The Board of Trustees and Shareholders
Windrose Medical Properties Trust:

We have audited the accompanying consolidated balance sheets of Windrose Medical
Properties Trust and Subsidiaries (see Note 1) as of December 31, 2002 and 2001,
the related consolidated statements of operations for the period January 1, 2002
through August 15, 2002, the period August 16, 2002 through December 31, 2002
and for each of the years in the three-year period ended December 31, 2002, and
the consolidated statements of cash flows and shareholders' equity (deficit) for
each of the years in the three-year period ended December 31, 2002. In
connection with our audits of the consolidated financial statements we have also
audited the financial statement schedule III. These consolidated financial
statements and the financial statement schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on the
consolidated financial statements and the financial statement schedule based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Windrose Medical
Properties Trust and Subsidiaries as of December 31, 2002 and 2001, the results
of their operations for the period January 1, 2002 through August 15, 2002, the
period August 16, 2002 through December 31, 2002 and for each of the years in
the three-year period ended December 31, 2002, and their cash flows for each of
the years in the three-year period ended December 31, 2002, in conformity with
accounting principles generally accepted in the United States of America. Also,
in our opinion, the related financial statement schedule III, when considered in
relation to the basic consolidated financial statements taken as a whole,
presents fairly, in all material respects, the information set forth therein.

KPMG LLP
Indianapolis, Indiana
February 18, 2003

                                      F-2

<PAGE>

               WINDROSE MEDICAL PROPERTIES TRUST AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                AS OF DECEMBER 31

<TABLE>
<CAPTION>
                                                                                               2002               2001
                                                                                          -------------      ------------
                                                                                                             (PREDECESSOR)
                                     ASSETS

<S>                                                                                       <C>                <C>
Real Estate Investments:
   Land                                                                                   $   8,455,937      $          -
   Buildings                                                                                 52,630,420                 -
                                                                                          -------------      ------------
                                                                                             61,086,357                 -
   Accumulated Depreciation                                                                    (407,018)                -
                                                                                                             ------------
                                                                                          -------------

NET REAL ESTATE INVESTMENTS                                                                  60,679,339                 -

Cash and Cash Equivalents                                                                     8,237,588           115,290
Receivables on Construction and Consulting Contracts                                            730,900           837,304
Straight-line Rent Receivable                                                                   294,026                 -
Due from Affiliate                                                                                   -            219,000
Revenue Earned in Excess of Billings                                                          1,268,785           209,017
Deferred Leasing Commissions, Net of Accumulated Amortization of $74,238                      2,885,385                 -
Deferred Financing Fees, Net of Accumulated Amortization of $27,783                             282,060                 -
Other Assets                                                                                    886,804           154,658
                                                                                          -------------      ------------
     TOTAL ASSETS                                                                         $  75,264,887      $  1,535,269
                                                                                          =============      ============

                 LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

Secured Debt                                                                                  9,664,113                 -
Lines of Credit                                                                                       -           498,133
Notes Payable to Owners                                                                               -           188,660
Billings in Excess of Revenues Earned                                                           404,268           444,423
Accounts Payable and Accrued Expenses                                                         1,039,314           472,803
Consulting and Construction Payables                                                          1,357,243            83,548
Dividends Payable to Shareholders                                                               739,923                 -
Tenant Security Deposits and prepaid rent                                                       175,281                 -
Deferred Tax Liability                                                                                -           227,000
Accumulated Loss on Interest Rate Swap                                                          680,125                 -
                                                                                          -------------      ------------
     TOTAL LIABILITIES                                                                       14,060,267         1,914,567

Minority Interest                                                                             3,827,456                 -

SHAREHOLDERS' EQUITY (DEFICIT):
   Common Stock ($.01 par value); 100,000,000 Shares Authorized, 5,691,710 Issued and
        Outstanding at December 31, 2002 and No Shares Issued and Outstanding at
        December 31, 2001                                                                        56,917                 -
   Additional Paid In Capital                                                                58,016,910                 -
   Distributions in Excess of Net Income                                                       (696,663)
   Members' Deficit                                                                                   -          (379,298)
                                                                                          -------------      ------------
     TOTAL SHAREHOLDERS' EQUITY (DEFICIT)                                                    57,377,164          (379,298)
                                                                                          -------------      ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)                                      $  75,264,887      $  1,535,269
                                                                                          =============      ============
</TABLE>

           See accompanying Notes to Consolidated Financial Statements

                                      F-3

<PAGE>

               WINDROSE MEDICAL PROPERTIES TRUST AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                                  JANUARY 1, 2002      AUGUST 16, 2002                   YEARS ENDED
                                                      THROUGH             THROUGH                        DECEMBER 31,
                                                   AUGUST 15, 2002   DECEMBER 31, 2002    ------------------------------------------
                                                                                          2002           2001               2000
                                                  (Predecessor)      (Company)         (Combined)   (Predecessor)      (Predecessor)
<S>                                               <C>               <C>                <C>          <C>                <C>
RENTAL OPERATIONS:
  Revenues:
    Rental income                                 $           -     $    2,274,130     $ 2,274,130     $       -         $         -
                                                  -------------     --------------     -----------     ---------         -----------

  Operating expenses:
    Rental expenses                                           -            163,351         163,351             -                   -
    Interest expense                                          -            124,363         124,363             -                   -
    Depreciation and amortization                             -            481,256         481,256             -                   -
                                                  -------------     --------------     -----------     ---------         -----------
      Total operating expenses                                -            768,970         768,970             -                   -
                                                  -------------     --------------     -----------     ---------         -----------
    Income from rental operations                             -          1,505,160       1,505,160             -                   -
                                                  -------------     --------------     -----------     ---------         -----------
SERVICE OPERATIONS (HADC)
  Revenues:
    Development and project management fees           4,145,468          7,559,007      11,704,475     4,568,284           4,458,305
    Cost of sales and project costs                   3,541,826          7,535,403      11,077,229     1,782,881           1,858,399
                                                  -------------     --------------     -----------      --------         -----------
      Total income from service operations              603,642             23,604         627,246     2,785,403           2,599,906
                                                  -------------     --------------     -----------     ---------         -----------

General and administrative expenses                   1,692,670          1,423,098       3,115,768     2,475,510           2,451,795
                                                  -------------     --------------     -----------     ---------         -----------

      Operating income (loss)                        (1,089,028)           105,666        (983,362)      309,893             148,111

OTHER INCOME (EXPENSE)
    Interest income (expense)                           (22,169)           (27,091)        (49,260)      (22,115)           (29,660)
    Loss on interest rate swap                                -           (231,818)       (231,818)            -                   -
    Other expense                                       (30,404)           (49,635)        (80,039)      (18,148)           (30,514)
                                                  -------------     --------------     -----------      --------         -----------

 Net income (loss) before taxes and minority
interest                                             (1,141,601)          (202,878)     (1,344,479)      269,630              87,937
                                                  -------------     --------------     -----------      --------         -----------

    Income tax (expense) benefit                        126,000            255,141         381,141      (321,000)           (41,000)
                                                  -------------     --------------     -----------      --------         -----------

Net income (loss) before minority interest           (1,015,601)            52,263        (963,338)      (51,370)             46,937
                                                  -------------     --------------     -----------     ---------         -----------

    Minority interest in income of common unit
    holders and other subsidiaries                            -             (9,003)         (9,003)            -                   -
                                                  -------------     --------------     -----------      --------         -----------

Net income (loss) available for common            $  (1,015,601)    $       43,260     $  (972,341)    $ (51,370)        $    46,937
                                                  =============     ==============     ===========     =========         ===========

Net income (loss) per common share:
    Basic and diluted                                               $         0.01
                                                                    ==============

    Weighted average number of common shares
    outstanding                                                          5,691,710
                                                                    ==============
    Weighted average number of common and dilutive
    potential common shares                                              6,054,043
                                                                    ==============
</TABLE>

           See accompanying Notes to Consolidated Financial Statements

                                      F-4

<PAGE>

               WINDROSE MEDICAL PROPERTIES TRUST AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                         FOR THE YEARS ENDED DECEMBER 31

<TABLE>
<CAPTION>
                                                                      2002               2001             2000
<S>                                                               <C>                 <C>              <C>
Cash flows from operating activities:

     Net income (loss)                                            $   (972,341)       $  (51,370)      $  46,937
                                                                  ------------        ----------       ---------

     Adjustments to reconcile net income (loss) to net
     cash provided by (used
     in) operating activities:

     Depreciation and amortization                                     481,256            46,082          44,354
     Amortization of deferred financing fees                            27,783                 -               -
     Loss on interest rate swap                                        231,818                 -               -
     Minority interest                                                   9,003                 -               -
     Deferred income taxes                                            (380,389)          327,000          34,000
     Changes in operating assets and liabilities:
        Construction payables, net                                   1,380,099          (287,697)        359,847
        Revenues earned in excess of billings                       (1,059,768)         (141,881)        (60,571)
        Straight-line rent receivable                                 (294,026)                -               -
        Due from affiliate                                             219,000           (19,000)        (24,125)
        Billings in excess of revenues earned                          (40,155)         (307,420)          5,684
        Other accrued revenues and expenses, net                        75,618           353,861           6,650
                                                                  ------------        ----------       ---------
     NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES              (322,102)          (80,425)        412,776

Cash flows from investing activities:

     Acquisition of real estate investments                        (51,460,997)                -               -
     Purchase of furnitures and fixtures                              (140,840)          (14,236)        (31,040)
                                                                  ------------        ----------       ---------
     NET CASH USED IN INVESTING ACTIVITIES                         (51,601,837)          (14,236)        (31,040)

Cash flows from financing activities:

     Proceeds from issuance of debt                                          -           125,000               -
     Payments on Indebtedness                                           (4,018)                -               -
     Net payments on notes payable to owners                          (188,660)                -          (1,250)
     Net proceeds (payments) on line of credit                        (498,133)          199,899          39,893
     Debt issuance costs                                              (309,843)                -               -
     Contributions from (distributions to) owners                      (86,503)         (333,600)       (273,023)
     Proceeds from issuance of common shares, net                   61,133,394                 -               -
                                                                  ------------        ----------       ---------
     NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES            60,046,237            (8,701)       (234,380)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                 8,122,298          (103,362)        147,356

     Cash and cash equivalents at beginning of the year                115,290           218,652          71,296
                                                                  ------------        ----------       ---------

     Cash and cash equivalents at end of the year                    8,237,588        $  115,290       $ 218,652
                                                                  ============        ==========       =========

SUPPLEMENTAL DISCLOSURES:

     Interest paid                                                $    226,884        $   35,565       $  33,549
                                                                  ============        ==========       =========
     Income taxes paid                                            $          -        $    9,810       $       -
                                                                  ============        ==========       =========
     Issuance of partnership units for real estate investments    $  1,723,000        $        -       $       -
                                                                  ============        ==========       =========
     Net liabilities (including secured debt) assumed in
     acquisition of real estate investments                       $ 10,861,000        $        -       $       -
                                                                  ============        ==========       =========
</TABLE>

           See accompanying Notes to Consolidated Financial Statements

                                      F-5

<PAGE>

               WINDROSE MEDICAL PROPERTIES TRUST AND SUBSIDIARIES
      CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>
                                                                                            DISTRIBUTIONS
                                                 COMMON STOCK         ADDITIONAL PAID-IN   IN EXCESS OF
                                             SHARES         AMOUNT         CAPITAL           NET INCOME
                                             ------         ------         -------           ----------
<S>                                         <C>           <C>         <C>                  <C>
--------------------------------------------------------------------------------------------------------
BALANCES AT DECEMBER 31, 1999                       -     $       -   $                -   $           -
--------------------------------------------------------------------------------------------------------

Net Income                                          -             -                    -               -

Distributions to owners                             -             -                    -               -

--------------------------------------------------------------------------------------------------------
BALANCES AT DECEMBER 31, 2000                       -     $       -   $                -   $           -
--------------------------------------------------------------------------------------------------------

Net Loss                                            -             -                    -               -

Distributions to owners                             -             -                    -               -

--------------------------------------------------------------------------------------------------------
BALANCES AT DECEMBER 31, 2001                       -     $       -   $                -   $           -
--------------------------------------------------------------------------------------------------------

Net Loss                                            -             -                    -               -

Distributions to owners                             -             -                    -               -

--------------------------------------------------------------------------------------------------------
BALANCES AT AUGUST 15, 2002                         -     $       -   $                -   $           -
--------------------------------------------------------------------------------------------------------

Issuance of Common Stock, Net of            5,691,710     $  56,917   $       62,779,429               -
Underwriting Discount

Offering Costs                                      -             -           (1,702,952)              -

Adjustment Required to Reflect Predecessor          -             -           (3,059,567)              -
Basis

Net Income                                          -             -                    -          43,260

Dividends Declared                                  -             -                    -        (739,923)

--------------------------------------------------------------------------------------------------------
BALANCES AT DECEMBER 31, 2002               5,691,710     $  56,917   $       58,016,910   $    (696,663)
--------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>

                                               MEMBERS' EQUITY    TOTAL SHAREHOLDERS'
                                                  (DEFICIT)         EQUITY (DEFICIT)
                                                  ---------         ----------------
<S>                                            <C>                <C>
-----------------------------------------------------------------------------------
BALANCES AT DECEMBER 31, 1999                  $       231,758      $       231,758
-----------------------------------------------------------------------------------

Net Income                                              46,937               46,937

Distributions to owners                               (273,023)            (273,023)

-----------------------------------------------------------------------------------
BALANCES AT DECEMBER 31, 2000                  $         5,672      $         5,672
-----------------------------------------------------------------------------------

Net Loss                                       $       (51,370)             (51,370)

Distributions to owners                               (333,600)            (333,600)

-----------------------------------------------------------------------------------
BALANCES AT DECEMBER 31, 2001                  $      (379,298)     $      (379,298)
-----------------------------------------------------------------------------------

Net Loss                                            (1,015,601)          (1,015,601)

Distributions to owners                                (86,503)             (86,503)

-----------------------------------------------------------------------------------
BALANCES AT AUGUST 15, 2002                    $    (1,481,402)     $    (1,481,402)
-----------------------------------------------------------------------------------

Issuance of Common Stock, Net of                             -           62,836,346
  Underwriting Discount

Offering Costs                                               -           (1,702,952)

Adjustment Required to Reflect Predecessor           1,481,402           (1,578,165)
  Basis

Net Income                                                   -               43,260

Dividends Declared                                           -             (739,923)

-----------------------------------------------------------------------------------
BALANCES AT DECEMBER 31, 2002                                -      $    57,377,164
-----------------------------------------------------------------------------------
</TABLE>

           See accompanying Notes to Consolidated Financial Statements

                                      F-6

<PAGE>

                        WINDROSE MEDICAL PROPERTIES TRUST

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND INITIAL PUBLIC OFFERING

         Windrose Medical Properties Trust (the "Company") was organized in the
state of Maryland in March, 2002 as a real estate investment trust. The Company
intends to be taxed as a real estate investment trust ("REIT") under the
Internal Revenue Code. The Company was formed to invest in specialty medical
properties and to capitalize on the experience and expertise of its management
team in selectively acquiring, planning, developing and managing medical
facilities. On August 15, 2002, the Company's Registration Statement on Form
S-11 was declared effective. The Company had no operations prior to August 16,
2002.

         The Company received net proceeds of $61.1 million after underwriters'
discounts and expenses from its August 22, 2002 initial public offering of
5,691,710 common shares at a price of $12 per share (the "Initial Offering").
The Company contributed all of the net proceeds of the Initial Offering to
Windrose Medical Properties, L.P. (the "Operating Partnership") for the sole
general partnership interest of approximately 94.0%. The Operating Partnership
utilized approximately $47.4 million of the proceeds from the Initial Offering
and the issuance of limited partnership interests to complete the purchases of
four outpatient treatment centers in Las Vegas, Nevada operated by Sierra Health
Services on August 23, 2002, and the Urology Center of the South near Memphis,
Tennessee on August 22, 2002. On November 8, 2002, the Company purchased Partell
Medical Center ("Partell") in Las Vegas, Nevada for $7.2 million, including $5
million of assumed debt. The Company acquired Park Medical Center ("Park") in
Charlotte, North Carolina on December 1, 2002, for $5.65 million, including
$3.89 million of assumed debt.

         The Company also conducts service operations through Hospital
Affiliates Development Corporation (HADC), a wholly-owned taxable REIT
subsidiary of the Operating Partnership. The net assets and operations of the
service operations acquired in connection with the Initial Offering were
designated as the predecessor (the Predecessor) for accounting purposes. The
Company maintained carry-over basis for the accounting of the purchase of these
net assets. Accordingly, the results of operations for the year ended December
31, 2002 comprise those of the combined entities of the Company from August 16,
2002 through December 31, 2002 and the Predecessor from January 1, 2002 to
August 15, 2002. All periods prior to August 16, 2002 include only the
operations of the Predecessor.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

         The consolidated financial statements include the accounts of the
Company and its majority-owned or controlled subsidiaries. The equity interests
in these majority-owned or controlled subsidiaries not owned by the Company are
reflected as minority interests in the consolidated financial statements. All
significant intercompany balances and transactions have been eliminated in the
consolidated financial statements.

REAL ESTATE INVESTMENTS

         Real estate investments to be held and used are stated at the lower of
cost less accumulated depreciation or fair value if impairment is identified.
Real estate investments to be

                                      F-7

<PAGE>

disposed of are reported at the lower of their carrying amount or fair value
less cost of sale. Buildings are depreciated using the straight-line method over
their estimated life not to exceed 40 years.

         All direct and indirect costs, including interest and real estate taxes
clearly associated with the development, construction or expansion of real
estate investments are capitalized as a cost of the property. All external costs
associated with the acquisition of real estate investments are capitalized as a
cost of the property.

         Upon the acquisition of rental property, the Company evaluates all
in-place tenant lease agreements to determine if the leases are at, below or
above market rates. If a lease is determined to be above or below market, a
corresponding asset or liability is recorded and amortized into income over the
life of the lease. At the time of acquisition, a deferred lease commission asset
is also recorded and amortized over the lease's remaining life.

         The Company evaluates its real estate investments to be held and used
upon occurrence of significant changes in the operations, but not less than
annually, to assess whether any impairment indications are present that affect
the recovery of the recorded value. If any real estate investment is considered
impaired, a loss is provided to reduce the carrying value of the property to its
estimated fair value.

CASH EQUIVALENTS

         Highly liquid investments with maturity of three months or less when
purchased are classified as cash equivalents.

ALLOWANCE FOR DOUBTFUL ACCOUNTS

         The Company reviews each account receivable for collectibility and
provides an allowance for doubtful accounts as specific accounts receivable are
deemed uncollectible.

DEFERRED COSTS

         Costs incurred in connection with obtaining financing are amortized to
interest expense on the straight-line method over the term of the related loan.
Costs associated with the leasing of real estate investments are amortized over
the term of the related lease. Unamortized costs are charged to expense upon the
early termination of the lease or upon early payment of the financing.

REVENUES

RENTAL OPERATIONS

         Rental income from leases with scheduled rental increases during their
terms is recognized on a straight-line basis.

SERVICE OPERATIONS

         Contract revenues are recognized using the percentage of completion
method based on the efforts expended, whereby the percentage complete is based
on hours incurred in relation to total estimated hours to be incurred. Costs
associated with obtaining contracts are expensed as

                                      F-8

<PAGE>

incurred. The Company does not combine contracts for purposes of recognizing
revenue and, generally, does not segment contracts.

         Customers are billed based on the terms included in the contracts,
which are generally upon delivery of certain products or information, or
achievement of certain milestones defined in the contracts. When billed, such
amounts are recorded as accounts receivable. Revenue earned in excess of
billings represents revenue related to services completed but not billed, and
billings in excess of revenue earned represent billings in advance of services
performed.

         Contract costs include labor costs and those indirect costs related to
contract performance, such as indirect labor and supplies. Losses on contracts
are recognized in the period such losses are determined. Changes in job
performance, job conditions, and estimated profitability, including those
arising from contract penalty provisions, and final contract settlements may
result in revisions to costs and income and are recognized in the period in
which the revisions are determined.

         Leasing commissions are recorded as income at the time the services are
provided unless future contingencies exist, in which case the income is recorded
when the contingency is resolved.

NET INCOME PER COMMON SHARE

         Basic net income per common share is computed by dividing net income
available for common shares by the weighted average number of common shares
outstanding for the period. Diluted net income per share is computed by dividing
the sum of net income available for common shares and minority interest in
earnings of unitholders, by the sum of the weighted average number of common
shares and units outstanding and dilutive potential common shares for the
period.

         There was no adjustment to either the weighted average shares
outstanding or the reported amounts of income for the effects of outstanding
stock options in computing diluted earnings per share because the unexercised
stock options were anti-dilutive.

         The 362,333 outstanding limited partners' units in the Operating
Partnership included in the diluted earnings per share calculation have no
effect on the earnings per share amounts since the minority interests' share of
income would also be added back to the net income.

FEDERAL INCOME TAXES

         The Company intends to elect to be taxed as a real estate investment
trust ("REIT") under the Internal Revenue Code. To qualify as a REIT, the
Company must meet a number of organizational and operational requirements,
including a requirement that it currently distribute at least 90% of its taxable
income to its shareholders. Management intends to continue to adhere to these
requirements and to maintain the Company's REIT status. As a REIT, the Company
is entitled to a tax deduction for some or all of the dividends it pays to
shareholders. Accordingly, the Company generally will not be subject to federal
income taxes as long as it distributes an amount equal to or in excess of its
taxable income currently distributed to its shareholders. If the Company fails
to qualify as a REIT in any taxable year, it will be subject to federal income
taxes and may not be able to qualify as a REIT for four subsequent taxable
years.

                                      F-9

<PAGE>

         REIT qualification reduces, but does not eliminate, the amount of state
and local taxes paid by the Company. In addition, the Company's financial
statements include the operations of a taxable REIT subsidiary that is not
entitled to a dividends paid deduction and is subject to corporate federal,
state, and local income taxes. As a REIT, the Company may also be subject to
certain federal excise taxes if it engages in certain types of transactions.

         The following table reconciles the Company's net income to its taxable
income before the dividends paid deduction for the period August 16, 2002
through December 31, 2002:

<TABLE>
<CAPTION>
                                                                             FOR THE PERIOD
                                                                             AUGUST 16, 2002
                                                                                 THROUGH
                                                                            DECEMBER 31, 2002
                                                                         ------------------------
<S>                                                                      <C>
Net income                                                                      $  43,260
Book/tax differences                                                              347,587
                                                                                ---------
Adjusted taxable income subject to 90% dividend requirement                       390,847
                                                                                =========
</TABLE>

           The Company's dividends paid deduction is summarized below:

<TABLE>
<CAPTION>
                                                                          FOR THE PERIOD
                                                                          AUGUST 16, 2002
                                                                              THROUGH
                                                                         DECEMBER 31, 2002
<S>                                                                      <C>
Dividends declared                                                           $ 739,923
Less: Return of capital                                                       (349,076)
                                                                             ---------
Total dividends paid deduction attributable to adjusted
taxable income                                                               $ 390,847
                                                                             =========
</TABLE>

         A summary of the tax characterization of the dividends paid per common
share for the period August 16, 2002 through December 31, 2002 follows:

<TABLE>
<CAPTION>
                                                                           2002
                                                                     ------------------
<S>                                                                  <C>
Total dividends declared per share                                        $  .13
                                                                          ======
Ordinary income                                                            52.82%
Return of capital                                                          47.18%
                                                                          ------
                                                                          100.00%
                                                                          ======
</TABLE>

         Income taxes for the taxable REIT subsidiary are accounted for using
the asset and liability method. Deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred tax assets and liabilities are measured
using enacted tax rates in effect in the years in which the temporary
differences are expected to reverse. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period that
includes the enactment date.

         The Company assesses the realizability of deferred tax assets and
considers whether it is more likely than not that some portion or all of the
deferred tax assets will not be realized. The

                                      F-10

<PAGE>

ultimate realization of deferred tax assets is dependent upon the generation of
future taxable income during the periods in which those temporary differences
become deductible.

STOCK BASED COMPENSATION

         The Company applies the recognition and measurement provisions of APB
Opinion No. 25, Accounting for Stock Issued to Employees, and related
Interpretations in accounting for its stock option plan. Accordingly, no
compensation expense is reflected in net income as all options granted had an
exercise price equal to or greater than the market value of the underlying
common stock on the date of grant. If compensation cost for the Company's fixed
stock option plan had been determined consistent with SFAS Statement No. 123,
the Company's net income and net income per share for the period from August 16,
2002 through December 31, 2002 would have been reduced to the pro forma amounts
indicated below:

<TABLE>
<CAPTION>
                                                                        For the period August 16, 2002
                                                                           through December 31, 2002
<S>                                                                     <C>
Net income as reported                                                        $           43,260
Deduct: Total stock based compensation expense
        determined under fair value method for all
        awards                                                                          (164,032)
                                                                              ------------------
Pro forma net loss                                                                      (120,772)
                                                                              ==================
Basic and diluted net income (loss) per share         As reported             $              .01
                                                      Pro forma               $             (.02)
                                                                              ------------------
</TABLE>

         The fair values of the options were determined using the Black-Scholes
option-pricing model with the following assumptions:

<TABLE>
<CAPTION>

                                            FOR THE PERIOD AUGUST 16, 2002
                                               THROUGH DECEMBER 31, 2002
                                         --------------------------------------
<S>                                      <C>
Dividend yield                                                8.00%
Volatility                                                   42.47%
Risk-free interest rate of options                            3.25%
   granted on 8/16/2002 with expected
   life of five years
Risk-free interest rate of options                            3.82%
   granted on 8/16/2002 with expected
   life of seven years
Risk-free interest rate of options      .                     3.65%
   granted on 12/19/2002
Expected life of options with one year                     5 years
   vesting period
Expected life of options with four year                    7 years
   vesting period
Weighted-average fair value per                            $  2.33
   share of options granted
</TABLE>

DERIVATIVE FINANCIAL INSTRUMENTS

         The Company complies with SFAS No. 133 "Accounting for Derivative
Instruments and Hedging Activities" as amended by SFAS No. 137 and No. 138. SFAS
133 requires that all derivative instruments be recorded on the balance sheet at
their fair market value. Gains or losses resulting from changes in the value of
those derivatives would be accounted for depending on the

                                      F-11

<PAGE>

use of the derivative and whether it qualifies for hedge accounting. The Company
will use derivative financial instruments such as interest rate swaps to
mitigate its interest rate risk. SFAS 133 requires that the changes in fair
value of derivatives that qualify as cash flow hedges be recognized in other
comprehensive income while the ineffective portion of the derivative's change in
fair market value be recognized immediately in earnings.

FAIR VALUE OF FINANCIAL INSTRUMENTS

         The fair values of the Company's financial instruments are generally
calculated as the present value of estimated future cash flows using a discount
rate commensurate with the risks involved. The fair value approximates the
carrying value for all financial instruments including indebtedness, which is
discussed in Footnote 7 to the Consolidated Financial Statements.

USE OF ESTIMATES

         The preparation of the consolidated financial statements requires
management of the Company to make a number of estimates and assumptions relating
to the reported amount of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the consolidated financial
statements and the reported amounts of revenues and expenses during the period.
Actual results could differ from those estimates.

3. DERIVATIVE INSTRUMENTS

         The Company has one interest rate swap contract that does not meet the
criteria of Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities" ("SFAS 133") to qualify for hedge
accounting. SFAS 133 requires that unrealized gains and losses on derivatives
not qualifying as hedge accounting be recognized currently in earnings. The
interest rate swap was acquired in connection with the acquisition of the
Urology Center of the South and the debt related to the swap was retired at the
time of the acquisition. The assumed accumulated loss on the interest rate swap
on the acquisition date was $448,307 and during the period from August 16, 2002
through December 31, 2002, the Company recognized a loss of $231,818 from this
interest rate swap contract.

4. RELATED PARTIES AND OTHER TRANSACTIONS

         In the normal course of business and, in management's opinion, at terms
comparable to those available from unrelated third parties, the Company has
engaged in transactions with certain affiliates from time to time.

         The Company pays an overhead sharing fee to a company in which certain
executive officers of the Company have an ownership interest. This fee of
$17,500 per month is to cover fixed overhead costs such as rent, certain office
support staff services, and other fixed expenses. The Company reimburses other
direct expenses as incurred.

         In December 2002, Alliance Design Group, LLC, ("ADG") an affiliate of
Windrose International LLC, which prior to the Initial Offering was the owner of
the Predecessor, repaid in full a demand note held with the Company, which bore
interest at a rate of 9.5% per annum. Certain executive officers of the Company
are owners of Windrose International LLC.

                                      F-12

<PAGE>

5. ACCOUNTS RECEIVABLE, REVENUE EARNED IN EXCESS OF BILLINGS AND BILLINGS IN
   EXCESS OF REVENUES EARNED

         At December 31, 2002, the estimated period to complete contracts in
process ranges from one month to three years, and the Company expects to collect
substantially all related accounts receivable and revenue earned in excess of
billings within this time period. The following summarizes contracts in process
at:

<TABLE>
<CAPTION>
                                                                          DECEMBER 31,
                                                         -----------------------------------------------
                                                                   2002                      2001
                                                                -----------               ----------
<S>                                                             <C>                      <C>
Costs incurred on uncompleted contracts...........               $9,540,530              $ 2,859,126
Estimated earnings................................                1,606,525                2,763,032
                                                                 ----------              -----------
                                                                 11,147,055                5,622,158
Less billings to date.............................               10,282,538                5,857,564
                                                                 ----------              -----------
                                                                 $  864,517              $  (235,406)
                                                                 ==========              ===========
</TABLE>

         Contracts in progress at December 31, 2002 and 2001 are included in the
balance sheets under the following captions:

<TABLE>
<CAPTION>
                                                                              DECEMBER 31,
                                                             -----------------------------------------------
                                                                        2002                   2001
                                                                     ----------            -------------
<S>                                                                  <C>                   <C>
    Revenue earned in excess of billings..............               $1,268,785            $     209,017
    Billings in excess of revenue earned..............                 (404,268)                (444,423)
                                                                     ----------            -------------
                                                                     $  864,517            $    (235,406)
                                                                     ==========            =============
</TABLE>

6. CONCENTRATION OF CREDIT RISK

         Five of the Company's seven properties are located in Las Vegas,
Nevada. As a result, localized adverse events or conditions, such as economic
recession or overbuilding in the local real estate market, could have a
significant adverse effect on the operations of these properties, and ultimately
on the amounts available for distribution to shareholders.

         Sierra Health Services, Inc. is the lease guarantor for four of the
Company's seven properties. These four properties have a cost basis of
approximately $39.3 million at December 31, 2002 and the leases generate
approximately $4.1 million of yearly revenue. Established in 1984, Sierra is a
publicly held, diversified, managed care holding company based in Las Vegas,
Nevada, with operations primarily in managed care, health insurance, and
workers' compensation insurance.

         Financial information as of December 31, 2002 and 2001 and for the
years ended December 31, 2002, 2001 and 2000 of Sierra Health Services, Inc. and
subsidiaries as filed with the Securities and Exchange Commission on Form 10-K
may be found at the SEC's website www.sec.gov.

7. LONG TERM DEBT

         On September 30, 2002, the Company entered into a $25 million secured
credit facility which will be available for working capital and acquisition
purposes. This two-year facility is secured by first mortgages on the Company's
four outpatient treatment centers in Las Vegas, Nevada, as well as the Urology
Center of the South in Memphis, Tennessee. The credit facility has rates of
LIBOR plus 1.75-2.00% depending on the leverage ratio. The line of credit
contains

                                      F-13

<PAGE>

covenants that require, among other things, the maintenance of certain financial
ratios. At December 31, 2002, there were no amounts outstanding on the line of
credit.

         At December 31, 2001, there were short-term borrowings of $498,133
under an available line of credit of $500,000. Interest accrued at a rate of
prime plus 1% (5.75% at December 31, 2001) and was payable monthly. The line of
credit was paid off with proceeds from the Initial Offering in August, 2002.

         Notes payable to owners of $63,660 at December 31, 2001 was evidenced
by individual promissory notes with interest accruing at a rate of 9% per annum
with interest due quarterly. An additional note payable to owner issued in 2001
of $125,000, bore interest at the bank's prime rate (4.75% at December 31,
2001). All notes payable to owners were paid off with proceeds from the Initial
Offering in August, 2002.

         In connection with the acquisitions of Partell and Park, the following
debt was assumed by the Company:

<TABLE>
<CAPTION>
                                                                              Outstanding at 12/31/2002
                                                                              -------------------------
<S>                                                                           <C>
Fixed rate secured debt, including unamortized balance of debt
    premium, monthly payments of $35,726, including interest at                      $5,467,642
    7.62%, maturity date of September 30, 2011
Fixed rate secured debt, including unamortized balance of debt
    premium, monthly payments of $26,666, including interest at
    7.97%, maturity date of February 28, 2010                                        $4,196,471
                                                                                     ----------
                  Total                                                              $9,664,113
                                                                                     ==========
</TABLE>

         The fair value assigned to the fixed-rate debt at the acquisition date
of Partell based on an estimated market interest rate of 6.1% was $5,476,302,
and the resultant debt premium of $482,832 is being amortized to interest
expense over the remaining term of the debt. At December 31, 2002 the
unamortized balance of the debt premium was $478,189.

         The fair value assigned to the fixed-rate debt at the acquisition date
of Park based on an estimated market interest rate of 6.5% was $4,200,166, and
the resultant debt premium of $302,987 is being amortized to interest expense
over the remaining term of the debt. At December 31, 2002 the unamortized
balance of the debt premium was $299,292.

         At December 31, 2002, scheduled amortization and maturities of
indebtedness for the next five years and thereafter follows:

<TABLE>
<S>                               <C>
2003                              $     92,364
2004                                    99,811
2005                                   107,860
2006                                   116,558
2007                                   125,957
Thereafter                           8,344,082
                                  ------------
Total                             $  8,886,632
                                  ============
</TABLE>

                                      F-14

<PAGE>

8. INCOME TAXES

         Income taxes are provided for the tax effects of transactions reported
by the Operating Partnership's wholly-owned taxable REIT subsidiary, HADC.

         The components of the provision for income taxes are as follows for the
years ended December 31, 2002, 2001 and 2000:

<TABLE>
<CAPTION>
                                                               DECEMBER 31,
                                              ----------------------------------------------
                                                  2002              2001           2000
                                              -------------      -----------    ------------
<S>                                           <C>                <C>            <C>
Current:
   Federal...........................                  --           (5,250)     $      6,125
   State.............................                  --             (750)              875
                                              -----------        ---------      ------------
                                                       --           (6,000)            7,000
                                              -----------        ---------      ------------

Deferred:
   Federal...........................            (333,498)         286,125            29,750
   State.............................             (47,643)          40,875             4,250
                                              -----------        ---------      ------------
                                                 (381,141)         327,000            34,000
                                              -----------        ---------      ------------

         Net tax expense
           (benefit).................         $  (381,141)       $ 321,000      $     41,000
                                              ===========        =========      ============
</TABLE>

         Differences in income taxes at the statutory rate and the Company's
actual provision for 2002 result from the Company's dividends paid deductions as
a REIT. Differences in income taxes at the statutory rate and actual provision
for 2001 and 2000 relate primarily to a wholly-owned limited liability
subsidiary of the Predecessor, which was not subject to tax.

         The net deferred tax asset (liability) at December 31, 2002 and 2001
consists of the following components:

<TABLE>
<CAPTION>
                                                         DECEMBER 31,
                                              -----------------------------------
                                                  2002               2001
<S>                                           <C>                <C>
Deferred tax asset...................         $    326,167       $            --
Deferred tax liability...............             (172,778)             (227,000)

                                              ------------       ---------------
Net deferred tax asset (liability)...         $    153,389       $      (227,000)
                                              ============       ===============
</TABLE>

         The deferred tax asset primarily consists of a net operating loss carry
forward. The deferred tax liability at December 31, 2002 is the result of the
cash to accrual adjustment, which is being phased in over four years, as HADC
was a cash basis tax payor until January 1, 2002. The deferred tax liability for
2001 consists of cash to accrual adjustments.

         In assessing the realizability of deferred tax assets, management
considers whether it is more likely than not that some portion or all of the
deferred tax assets will not be realized. The ultimate realization of deferred
tax assets is dependent upon the generation of future taxable income during the
periods in which those temporary differences become deductible. Management
believes that it is more likely than not that these deferred tax assets will be
realized.

                                      F-15

<PAGE>

         At December 31, 2002, the Company has net operating loss carryforwards
for federal and state income tax purposes of approximately $778,000 which are
available to offset future federal and state taxable income, if any, through
2022.

9. STOCK BASED COMPENSATION

         The Company has established a stock plan for the purpose of attracting
and retaining executive officers, employees, trustees and other persons and
entities that provide services to us. The stock plan authorizes the issuance of
options to purchase common shares and the grant of stock awards, performance
shares, stock appreciation rights and incentive awards. The Company's officers
and employees and those of its operating partnership and other subsidiaries are
eligible to participate in the stock plan. The Company's trustees and other
persons and entities that provide services to us are also eligible to
participate in the stock plan.

         Up to 800,000 common shares are available for issuance under the stock
plan. On August 15, 2002, options for an aggregate of 128,000 common shares were
granted to the Company's executive officers and non-employee trustees. On
December 19, 2002, an additional 11,500 options were granted to senior
management of the Company.

         All options vest at the rate of 20% per year commencing on the date of
grant except for options to purchase 42,000 and 20,000 common shares issued to
Messrs. Klipsch and Farrar, respectively, which vest at the rate of 50%
commencing on August 16, 2002 and 50% on August 16, 2003. There are a total of
139,500 options outstanding at December 31, 2002 with a weighted average
exercise price of $12.

10. RETIREMENT PLAN

         The Company has a 40l(k) retirement plan. New employees must be
employed for six consecutive months before becoming eligible for semiannual
enrollment. The Company contributes a matching contribution equal to 50% of
employee contributions. The maximum amount of matching contributions paid by the
Company is 3% of the employee's salary which vests 20% per year. Total
contributions for the period August 16, 2002 through December 31, 2002 amounted
to $10,881.

11. LEASING

         The following table displays the Company's portfolio of in-service
leases, which contain escalation provisions and provisions requiring tenants to
pay pro rata share of operating expenses. The leases typically include renewal
options and all are classified and accounted for as operating leases.

                                      F-16

<PAGE>

         At December 31, 2002, future minimum rentals to be received during the
next five years under existing non-cancelable leases, excluding tenants current
pro rata share of operating expenses, are as follows ($ in thousands):

<TABLE>
<S>                                                   <C>
2003                                                  $ 6,277
2004                                                    6,218
2005                                                    6,017
2006                                                    5,633
2007                                                    5,616
Thereafter                                             58,116
                                                      -------
Total                                                 $87,877
                                                      =======
</TABLE>

12. SEGMENT REPORTING

         The Company is engaged in two operating segments; the ownership and
rental of specialty medical facilities (Rental Operations), and the providing of
various real estate services such as third party facility planning, project
management, medical equipment planning and implementation services and related
activities ("Service Operations"). The Company's Service Operations are
conducted through its taxable REIT subsidiary, HADC. The Company's reportable
segments offer different products or services and are managed separately because
each requires different operating strategies and management expertise.

         Non segment assets to reconcile to total assets consist of corporate
assets including cash, deferred financing costs and other assets.

         The Company assesses and measures segment operating results based on
industry performance measures referred to as Funds From Operations ("FFO"). The
National Association of Real Estate Investment Trusts defines FFO as net income
or loss, excluding gains or losses from sales of depreciated operating property,
plus operating property depreciation and amortization and adjustments for
minority interest and unconsolidated companies on the same basis. FFO is not a
measure of operating results or cash flows from operating activities as measured
by generally accepted accounting principles, is not necessarily indicative of
cash available to fund cash needs and should not be considered an alternative to
cash flows as a measure of liquidity. Interest expense and other non-property
specific revenues and expenses are not allocated to individual segments in
determining the Company's performance measure.

         The revenues and FFO for each of the reportable segments for the
three-years ended December 31, 2002 and the assets for each of the reportable
segments as of December 31, 2002 and December 31, 2001, are summarized as
follows:

<TABLE>
<CAPTION>
                                                                    YEARS ENDED DECEMBER 31

                                                2002                          2001                       2000
                                             (Combined)                  (Predecessor)              (Predecessor)
<S>                                      <C>                             <C>                        <C>
REVENUES
Rental Operations                        $         2,274,130                       --                         --
Service Operations                       $        11,704,475                4,568,284                  4,458,305
                                         -------------------              -----------                -----------
Consolidated Revenue                     $        13,978,605                4,568,284                  4,458,305
                                         ===================              ===========                ===========
</TABLE>

                                      F-17

<PAGE>

<TABLE>
<CAPTION>
                                                  JANUARY 1, 2002     AUGUST 16, 2002                  YEARS ENDED
                                                      THROUGH             THROUGH                      DECEMBER 31,
                                                  AUGUST 15, 2002    DECEMBER 31, 2002      2002          2001           2000
                                                   (Predecessor)         (Company)       (Combined)   (Predecessor)  (Predecessor)
<S>                                               <C>                <C>                  <C>         <C>            <C>
FUNDS FROM OPERATIONS
  Rental Operations
                                                  $             --   $       1,986,416    1,986,416   $        --    $          --
    Service Operations (HADC)                              603,642              23,604      627,246     2,785,403        2,599,906
                                                  ----------------   -----------------   ----------   -----------    -------------
Total Segment FFO                                          603,642           2,010,020    2,613,662     2,785,403        2,599,906
  Non Segment FFO:
    Interest                                               (22,169)            (27,091)     (49,260)      (22,115)         (29,660)
    General and administrative expense                  (1,692,670)         (1,423,098)  (3,115,768)   (2,475,510)      (2,451,795)
    Other expenses                                         (30,404)            (49,635)     (80,039)       18,148)         (30,514)
    Interest Rate Swap                                          --            (231,818)    (231,818)           --               --
    Income Tax (Expense) Benefit                           126,000             255,141      381,141      (321,000)         (41,000)
    Minority interest in Net Income                             --              (9,003)      (9,003)           --               --
                                                  ----------------   -----------------   ----------   -----------    -------------
Consolidated FFO                                        (1,015,601)            524,516     (491,085)      (51,370)          46,937
Depreciation and amortization:                                  --            (481,256)    (481,256)           --               --
                                                  ----------------   -----------------   ----------   -----------    -------------
Net Income (Loss) Available for Common
   Shareholders                                   $     (1,015,601)  $          43,260     (972,341)      (51,370)          46,937
                                                  ================   =================   ==========   ===========    =============
</TABLE>

<TABLE>
<CAPTION>
                                                            DECEMBER 31,           DECEMBER 31,
                                                                2002                   2001
                                                         --------------------   --------------------
                                                                                   (PREDECESSOR)

<S>                                                      <C>                    <C>
ASSETS

         Rental Operations                                  $ 64,486,193           $         --

         Service Operations                                    2,229,152              1,397,521
                                                            ------------           ------------
            Total Segment Assets                              66,715,345              1,397,521

         Non-Segment Assets                                    8,549,542                137,748
                                                            ------------           ------------
            Consolidated Assets                             $ 75,264,887           $  1,535,269
                                                            ============           ============
</TABLE>

13. COMMITMENTS AND CONTINGENCIES

         The Company is subject to various legal proceedings and claims that
arise in the ordinary course of business. In the opinion of management, the
amount of any ultimate liability with respect to these actions will not
materially affect the Company's consolidated financial statements or results of
operations.

14. SUBSEQUENT EVENTS

Medical Properties of America Acquisition

         The Company entered into an agreement to acquire the real estate assets
of Medical Properties of America and its affiliates ("MPA") pursuant to an
Agreement and Plan of Purchase dated as of January 31, 2003 and amended February
17, 2003, by and among the Company and MPA. MPA is a privately held real estate
investment company headquartered in Nashville, TN that acquires, owns, and
manages strategically located healthcare real estate. Included in the portfolio
of properties to be acquired are twelve multi-tenant medical office buildings
located in

                                      F-18

<PAGE>

Florida, Georgia, Tennessee and Texas. Subject to change upon closing, the
amended purchase price of this asset acquisition is $67,630,000. The portfolio
will be purchased by a combination of assumed debt of approximately $38 million
and cash of $30 million, allowing the Company to complete the transaction
without changes to its capital structure.

                                      F-19

<PAGE>

                    SELECTED QUARTERLY FINANCIAL INFORMATION
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                          PERIOD AUGUST 16,
                                                                  QUARTER ENDED                THROUGH
2002                                                               DECEMBER 31,             SEPTEMBER 30,
-----------------------------------------------------------------------------------------------------------
<S>                                                               <C>                     <C>
CORPORATE AND RENTAL OPERATIONS
Revenues                                                            $  1,648,638           $      625,492
General and administrative expense                                  $    546,770           $      304,520
Income from Corporate and Rental Operations                         $    423,533           $      (73,421)

SERVICE OPERATIONS (HADC)
Revenues                                                            $  5,237,664           $    2,321,343
General and administrative expense                                  $    208,062           $      363,746
Income from Service Operations (HADC)                               $   (258,109)          $      (34,954)
Consolidated net income (loss) available for common                 $    136,044           $      (92,784)
     shares
Basic and diluted income (loss) per common share                    $       0.02           $        (0.02)
Weighted average common shares                                      $  5,691,710           $    5,691,710
</TABLE>

                                      F-20

<PAGE>

                                       SCHEDULE III

WINDROSE MEDICAL PROPERTIES TRUST
REAL ESTATE AND ACCUMULATED
DEPRECIATION
DECEMBER 31, 2002
(IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                                                         COST
                                                                                            INITIAL COST            CAPITALIZED
                              GEOGRAPHICAL                                              ----------------------      SUBSEQUENT TO
DEVELOPMENT                     LOCATION          BUILDING TYPE      ENCUMBRANCE         LAND        BUILDINGS      ACQUISITION(1)
-----------                     --------          -------------      -----------         ----        ---------      --------------
<S>                           <C>                 <C>                <C>                 <C>         <C>            <C>
Urology Center of             Germantown, TN      Medical                  (1)           2,640          7,625            --
the South (1325                                   Office/
Wolf Park Drive)                                  Ambulatory
                                                  Surgery Center

2300-2316                     Las Vegas, NV       Medical Office           (1)           1,834         11,110            --
Charleston Sierra

4475 S. Eastern               Las Vegas, NV       Medical Office           (1)           1,747         12,147            --
Sierra

888 S. Rancho                 Las Vegas, NV       Medical Office           (1)             343         10,207            --
Sierra

Partell Medical               Las Vegas, NV       Medical Office       4,989             1,332          6,318            --
Center (2870 S.
Maryland Pkwy)

Park Medical                  Charlotte, NC       Medical Office       3,897               559          5,223            --
Center (10512 Park
Road)

                                                                     -------            ------        -------
TOTALS                                                               $ 8,886            $8,456        $52,630
                                                                     =======            ======        =======
</TABLE>

<TABLE>
<CAPTION>
                         GROSS BOOK VALUE 12/31/02
                     --------------------------------------
                       LAND/
                       LAND                                       ACCUMULATED          YEAR               YEAR      DEPRECIABLE
DEVELOPMENT             IMP         BLDGS/TI         TOTAL        DEPRECIATION      CONSTRUCTED         ACQUIRED       LIFE
-----------             ---         --------         -----        ------------      -----------         --------    -----------
<S>                  <C>            <C>             <C>           <C>               <C>                 <C>         <C>
Urology Center of      2,640           7,625          10,265           66              2002               2002          40
the South (1325
Wolf Park Drive)

2300-2316              1,834          11,110          12,944          102              1985/              2002          40
Charleston Sierra                                                                      1982

4475 S. Eastern        1,747          12,147          13,894          112              1998               2002          40
Sierra

888 S. Rancho            343          10,207          10,550           94              1982               2002          40
Sierra

Partell Medical        1,333           6,318           7,651           22              1991               2002          40
Center (2870 S.
Maryland Pkwy)

Park Medical             559           5,223           5,782           11              1988               2002          40
Center (10512 Park
Road)
                     -------        --------        --------      -------
         TOTAL       $ 8,456        $ 52,630        $ 61,086      $   407
                     =======        ========        ========      =======
</TABLE>

(1)  On September 30, 2002, the Company entered into a $25 million secured
     credit facility with Huntington National Bank based in Columbus, Ohio which
     will be available for working capital and acquisition purposes. This
     two-year facility is secured by first mortgages on the Company's four
     outpatient treatment centers in Las Vegas, Nevada, as well as the Urology
     Center of the South in Memphis, Tennessee.

                                      F-21

<PAGE>

                                    SIGNATURE

         PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934,
THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.

                              WINDROSE MEDICAL PROPERTIES
                              TRUST (Registrant)

Date: March 31, 2003
                              By:         /S/  FRED S. KLIPSCH
                                  ---------------------------------------------
                                               FRED S. KLIPSCH
                                  CHAIRMAN, CHIEF EXECUTIVE OFFICER, AND TRUSTEE
                                             (PRINCIPAL EXECUTIVE OFFICER)

                              By:         /S/  DOUG HANSON
                                  ---------------------------------------------
                                               DOUG HANSON
                                  VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
                                 (PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER)

         PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934,
THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.

<TABLE>
<CAPTION>
         SIGNATURE                                     TITLE                             DATE
         ---------                                     -----                             ----
<S>                                        <C>                                       <C>
/s/ FRED S. KLIPSCH                        Chairman, Chief Executive                 March 31, 2003
-----------------------------------        Officer, and Trustee
     FRED S. KLIPSCH                       (Principal Executive Officer)

/s/ FREDERICK L. FARRAR                    President, Chief Operating                March 31, 2003
-----------------------------------        Officer and Treasurer
    FREDERICK L. FARRAR

/s/ BAIN J. FARRIS                         Trustee                                   March 31, 2003
-----------------------------------
      BAIN J. FARRIS

/s/ BRUCE M. JACOBSON                      Trustee                                   March 31, 2003
-----------------------------------
    BRUCE M. JACOBSON

/s/ CHARLES E. LANHAM                      Trustee                                   March 31, 2003
-----------------------------------
    CHARLES E. LANHAM
</TABLE>

<PAGE>

<TABLE>
<S>                                        <C>                                       <C>
/s/ DAVID L. MARAMAN                       Trustee                                   March 31, 2003
-----------------------------------
      DAVID L. MARAMAN

/s/ RANDALL TOBIAS                         Trustee                                   March 31, 2003
-----------------------------------
       RANDALL TOBIAS

/s/ NORMAN ZAHLER                          Trustee                                   March 31, 2003
-----------------------------------
       NORMAN ZAHLER
</TABLE>

<PAGE>

                                  CERTIFICATION

I, Fred S. Klipsch, certify that:

1.       I have reviewed this annual report on Form 10-K of Windrose Medical
Properties Trust;

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

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

4.       The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have;

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

         b)       Evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this annual report (the "Evaluation Date");
                  and

         c)       Presented in this annual report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions);

         a)       All significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

         b)       Any fraud, whether or not material, that involves
                  management or other employees who have a significant role in
                  the registrant's internal controls; and

6.       The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: March 31, 2003

                                   /s/ Fred S. Klipsch
                                   ---------------------------------------------
                                   Chairman, Chief Executive Officer and Trustee

<PAGE>

                                  CERTIFICATION

I, Doug Hanson, certify that:

1.       I have reviewed this annual report on Form 10-K of Windrose Medical
Properties Trust;

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

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

4.       The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have;

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

         b)       Evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this annual report (the "Evaluation Date");
                  and

         c)       Presented in this annual report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions);

         a)       All significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

         b)       Any fraud, whether or not material, that involves
                  management or other employees who have a significant role in
                  the registrant's internal controls; and

6.       The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: March 31, 2003

                                      /s/ Doug Hanson
                                      ------------------------------------------
                                      Vice President and Chief Financial Officer

<PAGE>

                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                                                   EXHIBIT TITLE
-------                                                  -------------
<S>               <C>
 3.01             Registrant's Articles of Incorporation.*
 3.02             Registrant's Bylaws.*
 4.01             Form of Common Share Certificate.*
10.01             Amended and Restated Agreement of Limited Partnership of Windrose Medical Properties, L.P.*
10.02             Windrose Medical Properties Trust 2002 Stock Incentive Plan.*
10.03             Overhead Sharing Agreement between Windrose Medical Properties, L.P. and Klipsch Audio,
                       Inc.*
10.04             Contract of Acquisition between Windrose Medical Properties Trust and Park Medical
                       Associates, LLC, dated May 7, 2002.*
10.04.1           Amended and Restated Contract of Acquisition, dated July 8, 2002, by and between Windrose
                       Medical Properties, L.P. and Park Medical Associates, LLC.*
10.05             Form of Purchase and Sale Agreement for Class A limited liability interests in Brierbrook
                       Partners, LLC.*
10.05.1           Form of Purchase and Sale Agreement for Class A limited liability interests in Brierbrook Partners, LLC.*
10.06             Contribution Agreement dated May 23, 2002 among Windrose International, LLC, Med Properties
                       Management Group, LLC, Hospital Affiliates Development Corporation, Med Properties
                       Asset Group LLC, Fred S. Klipsch, O.B. McCoin, Robin Barksdale, Charles Lanham,
                       Frederick L. Farrar, Mike Klipsch, Steve Klipsch, Windrose Medical Properties, L.P.
                       and Windrose Medical Properties Trust.*
10.07             Purchase and Sale Agreement dated May 10, 2002 among Windrose Medical Properties Trust,
                       CPSIEM, LLC and CPSIEE, LLC.*
10.07.1           Purchase and Sale Agreement dated May 10, 2002 among Windrose Medical Properties Trust,
                       CPSIEM, LLC and CPSIEE, LLC.*
10.08             First Amendment to Purchase and Sale Agreement dated May 23, 2002 among Windrose Medical
                       Properties Trust, CPSIEM, LLC and CPSIEE, LLC.*
10.09             Urology Center of the South Ambulatory Surgery Center Amended and Restated Lease Agreement
                       dated June 26, 2001 between Brierbrook Partners, LLC and Urology Ambulatory Surgery
                       Center, L.L.C.*
10.10             Urology Center of the South Office Lease Agreement dated June 26, 2001 between Brierbrook
                       Partners, LLC and Urology Center of the South, P.C.*
10.11             Urology Center of the South Clinic Lease Agreement dated June 26, 2001 between Brierbrook
                       Partners, LLC and Urology Center of the South, P.C.*
10.12             Lease Agreement dated December 28, 2000 between CPSIEM, LLC and Southwest Medical
                       Associates, Inc. (2300 W. Charleston).*
10.13             Lease Agreement dated December 28, 2000 between CPSIEM, LLC and Southwest Medical
                       Associates, Inc. (2316 W. Charleston Blvd).*
10.14             Lease Agreement dated December 28, 2000 between CPSIEE, LLC and Southwest Medical
                       Associates (4475 S. Eastern Avenue).*
10.15             Lease Agreement dated December 28, 2000 between CPSIEM, LLC and Southwest Medical
                       Associates, Inc. (8880 S. Rancho Drive).*
10.16             Office Lease and Guaranty Agreement dated May 16, 1988 by and between Park 51 Associates
                       and Meclenberg Medical Group, P.A., as amended.*
</TABLE>

<PAGE>

<TABLE>
<S>               <C>
10.17             Lease Guaranty dated December 28, 2000 by Sierra Health Services, Inc. in favor of CPSIEM,
                       LLC (2300 W. Charleston).*
10.18             Lease Guaranty dated December 28, 2000 by Sierra Health Services, Inc. in favor of CPSIEM,
                       LLC (2316 W. Charleston).*
10.19             Lease Guaranty dated December 28, 2000 by Sierra Health Services, Inc. in favor of CPSIEE,
                       LLC (4425 S. Eastern Avenue).*
10.20             Lease Guaranty dated December 28, 2000 by Sierra Health Services, Inc. in favor of CPSIEM,
                       LLC.*
10.21             Promissory Note dated August 2, 1999 from Park Medical Associates General Partnership to
                       General Electric Capital Corporation.*
10.22             Loan Agreement dated August 2, 1999 between General Electric Capital Corporation and Park
                       Medical Associates General Partnership.*
10.23             Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing from
                       Park Medical Associates General Partnership to Charles T. Marshall (Trustee) for the
                       benefit of General Electric Capital Corporation.*
10.24             Urology Ambulatory Surgery Center Subordination, Limited Guaranty and Indemnification
                       Agreement, dated June 26, 2001, by and among Urology Center of the South, P.C. (UCS),
                       Urology Ambulatory Surgery Center, LLC (UASC), and Brierbrook.*
10.25             Form of Urology Ambulatory Surgery Center Subordination, Non-Compete, Limited Guaranty and
                       Indemnification Agreements, dated June 26, 2001, by and among each of the UCS
                       physicians, UASC, UCS and Brierbrook.*
10.26             Urology Ambulatory Surgery Center Subordination Agreement, dated June 26, 2001 by and among
                       Ambulatory Operations, Inc., UASC and Brierbrook.*
10.27             Urology Ambulatory Surgery Center Subordination Agreement, dated June 26, 2001, by and
                       among LeBonheur Ambulatory Services, Inc., UASC and Brierbrook.*
10.28             Hazardous Materials Indemnity Agreement dated August 2, 1999 by Park Medical Associates
                       General Partnership and Diane B. Ruers for the Benefit of General Electric Capital
                       Corporation.*
10.29             Assignment of Leases and Rents dated August 2, 1999 by Park Medical Associates General
                       Partnership to General Electric Capital Corporation.*
10.30             Form of Change in Control Severance Agreement between Windrose Medical Properties, L.P. and
                       Fred S. Klipsch.*
10.31             Form of Change in Control Severance Agreement between Windrose Medical Properties, L.P. and
                       Frederick L. Farrar.*
10.32             Contract of Acquisition by and between Windrose Medical Properties, L.P. and J&M Quail
                       Meadows, L.L.C. dated as of July 15, 2002.*
10.33             Subordinated Promissory Note dated September 28, 2001 from Windrose International L.L.C. to
                       Fred Klipsch.*
10.34             Subordinated Promissory Note dated May 11, 2002 from Windrose International, L.L.C. to
                       Klipsch Audio, Inc.*
10.35             Promissory Note dated May 1, 1999 from Hospital Affiliates Development Corporation to Robin
                       P. Barksdale.*
10.36             Promissory Note dated May 1, 1999 from Hospital Affiliates Development Corporation to
                       Frederick L. Farrar.*
10.37             Promissory Note dated May 1, 1999 from Hospital Affiliates Development Corporation to Fred
                       S. Klipsch.*
10.38             Promissory Note dated May 1, 1999 from Hospital Affiliates Development Corporation to
                       Athena Development.*
10.39             Subordinated Promissory Note dated May 11, 2002 from Windrose International L.L.C. to
                       Charles Lanham.*
</TABLE>

<PAGE>

<TABLE>
<S>               <C>
10.40             Promissory Note payable by Alliance Design Group to Hospital Affiliates Development
                       Corporation.*
10.41             Commitment Letter, dated July 18, 2002, from the Huntington National Bank to Windrose
                       Medical Properties, L.P.*
10.42             Master Agreement dated as of October 1, 2001 between Brierbrook Partners, LLC and
                       SouthTrust Bank.*
10.43             Confirmation, dated October 10, 2001, from SouthTrust Bank to Brierbrook Partners, LLC.*
10.44             Secured Revolving Credit Agreement, dated September 27, 2002, by and between Windrose
                       Medical Properties, L.P. and The Huntington National Bank.
10.45             Credit Note, dated September 27, 2002, from Windrose Medical Properties, L.P. to The
                       Huntington National Bank.
13.01             Annual Report to Shareholders for the Year ended December 31, 2002.
21.01             List of Subsidiaries of the Registrant.*
99.01             Certification of Chief Executive Officer.
99.02             Certification of Chief Financial Officer.
</TABLE>

*  Previously filed as an exhibit to the Company's Registration Statement
   on Form S-11, as amended, Registration No. 333-89186, and incorporated
   by reference herein.