CommonWealth REIT

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CommonWealth REIT Announces Restructuring of Management Agreement with RMR and Significant Governance Enhancements

Further Aligning Interests of RMR with CWH Shareholders While Maintaining Low Cost Structure; Increasing Independence of CWH Board; Recommending Annual Election of All Trustees; Terminating "Poison Pill"

Arbitration Panel Dismisses Corvex/Related Claims for Damages Against CWH Trustees

NEWTON, Mass.--(BUSINESS WIRE)-- CommonWealth REIT (NYSE:CWH) today announced the restructuring of its management agreement with Reit Management & Research LLC (RMR) and several significant governance enhancements.

Restructuring of Management Agreement with RMR.

CWH and RMR have agreed to restructure their business management agreement as follows:

Changing Board of Trustees.

The CWH Board of Trustees intends to increase the size of the CWH Board from its current five members and to increase the ratio of Independent Trustees to total Trustees from the current 60% to at least 75%. The Nominating & Governance Committee of CWH's Board (which is comprised solely of Independent Trustees) has retained the services of the executive search firm Korn / Ferry International to help identify potential Independent Trustee candidates. The CWH Board also anticipates that the Independent Trustees of the expanded Board will designate a Lead Independent Trustee soon after the new Trustees join the Board.

Recommending Annual Election of All Trustees.

The CWH Board of Trustees has determined to recommend to shareholders that CWH's Declaration of Trust be amended to permit the annual election of all Trustees. CWH's Trustees currently serve staggered, three year terms. The proposed amendment to CWH's Declaration of Trust will be presented to CWH's shareholders at CWH's next annual shareholders' meeting following resolution of the pending disputes with Corvex Management LP, Related Fund Management, LLC and certain of their affiliates ("Corvex/Related"). If this amendment is approved by CWH's shareholders, all Trustees will thereafter be elected for one year terms.

Terminating "Poison Pill".

The CWH Board of Trustees has determined to accelerate the expiration of CWH's shareholders' rights plan (the "poison pill"), which currently expires on October 17, 2014, to a date soon after resolution of the pending disputes with Corvex/Related.

Arbitration Panel Dismisses Corvex/Related Claims for Damages Against CWH Trustees.

Among the various claims asserted by Corvex/Related in the pending arbitration proceedings were claims for money damages against CWH's Trustees for breaches of fiduciary duty by employing RMR. After the expert reports were exchanged which evaluated the quality and costs of RMR's historical services to CWH, and at the request of Corvex/Related, the Arbitration Panel ordered that these claims be dismissed with prejudice. An evidentiary hearing before the Arbitration Panel regarding remaining matters currently in the dispute between Corvex/Related and CWH is scheduled to begin on October 7, 2013.

Other Matters.

In order to implement certain changes announced today and to provide shareholders additional time to consider these matters, and considering the current schedule of the Corvex/Related arbitration proceedings, the CWH Board has amended CWH's Bylaws so that the 30 day period during which qualified shareholders may present Trustee nominations and proposals of other business for consideration at CWH's 2014 Annual Meeting will now commence on December 11, 2013 and will end at 5:00 p.m. (Eastern Time) on January 10, 2014 (rather than commencing on September 28, 2013 and ending on October 28, 2013, as previously required).

CWH's Independent Trustees issued the following joint statement regarding today's announcements:

"During the past several weeks, the Board and management of CWH have had numerous conversations with shareholders. Historically, CWH's Board and management have focused on providing high quality management services to CWH at or below average costs. Nonetheless, a persistent theme of our recent conversations with shareholders has been that CWH should further align RMR's financial incentives with the returns realized by shareholders and enhance its governance. The changes announced today are intended to address these concerns, while allowing CWH shareholders to continue receiving high quality management services at or below average costs."

"None of the changes announced today affect the business plan that CWH has been implementing over the last several years, which includes focusing the Company's portfolio towards high quality office buildings in central business district (CBD) locations and divesting non-core suburban properties. The Board and management continue to execute this business plan and believe it will result in enhanced value for all CWH shareholders."

CommonWealth REIT is a real estate investment trust (REIT) that primarily owns office properties located throughout the United States. CWH is headquartered in Newton, MA.

WARNING CONCERNING FORWARD LOOKING STATEMENTS

THIS PRESS RELEASE CONTAINS STATEMENTS THAT CONSTITUTE FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND OTHER SECURITIES LAWS. ALSO, WHENEVER CWH USES WORDS SUCH AS "BELIEVE", "EXPECT", "ANTICIPATE", "INTEND", "PLAN", "ESTIMATE" OR SIMILAR EXPRESSIONS, CWH IS MAKING FORWARD LOOKING STATEMENTS. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON CWH'S PRESENT INTENT, BELIEFS AND EXPECTATIONS, BUT FORWARD LOOKING STATEMENTS ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY THESE FORWARD LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS. FOR EXAMPLE:

FOR THESE REASONS, AMONG OTHERS, INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE UPON ANY FORWARD LOOKING STATEMENTS IN THIS PRESS RELEASE.

EXCEPT AS REQUIRED BY LAW, CWH DOES NOT INTEND TO UNDERTAKE ANY OBLIGATION TO UPDATE ANY FORWARD LOOKING STATEMENT IN THIS PRESS RELEASE AS A RESULT OF FUTURE EVENTS, NEW INFORMATION WHICH MAY COME TO CWH'S ATTENTION OR OTHERWISE.

A Maryland Real Estate Trust with transferable shares of beneficial interest listed on the New York Stock Exchange. No shareholder, Trustee or officer is personally liable for any act or obligation of the Trust.

CommonWealth REIT
Timothy A. Bonang, 617-796-8222
Vice President, Investor Relations
www.cwhreit.com

Source: CommonWealth REIT

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