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INDEX TO FINANCIAL STATEMENTS

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Filed pursuant to Rule 424(b)(4)
Registration Statement No. 333-178720

PROSPECTUS

8,000,000 Shares

Select Income REIT

Common Shares of Beneficial Interest

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We are a newly organized real estate company formed to primarily own and invest in net leased, single tenant properties. Approximately 68.1% of our total revenues for the year ended December 31, 2011 were from our properties in Oahu, Hawaii, most of which are long term leased to tenants, many of whom own buildings and operate their businesses on our land. The remainder of our total revenues for this period were from office (approximately 20.5%) and industrial (approximately 11.4%) properties located throughout the mainland United States.

We are selling 8,000,000 of our common shares of beneficial interest, $0.01 par value per share, or Shares. This is our initial public offering and, prior to this offering, there has been no public market for our Shares. The initial public offering price of our Shares is $21.50 per Share, and we currently expect that our initial distribution rate will be $0.40 per Share per quarter ($1.60 per Share per year).

Our Shares have been approved for listing on the New York Stock Exchange, or NYSE, under the symbol "SIR."

We are organized under Maryland law and intend to qualify for taxation as a real estate investment trust, or REIT, for U.S. federal income tax purposes beginning with the year ending December 31, 2012. Subject to certain exceptions described herein, our organizational documents provide that no person may own more than 9.8% of the number or value of our Shares.

Investing in our Shares involves risks. See "Risk Factors" beginning on page 10.

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PRICE $21.50 PER SHARE

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We have granted the underwriters an option to purchase up to 1,200,000 additional Shares from us at the initial public offering price, less the underwriting discounts and commissions, within 30 days from the date of this prospectus to cover over allotments, if any.

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

The underwriters expect to deliver our Shares to purchasers on March 12, 2012.

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March 6, 2012

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        Through and including March 31, 2012 (the 25th day after the date of this prospectus), all dealers that buy, sell or trade our Shares may be required to deliver a prospectus, regardless of whether they are participating in this offering. This is in addition to a dealer's obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

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

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        In this prospectus, unless the context otherwise requires:

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"we," "us," or "our" means Select Income REIT and its consolidated subsidiaries, and includes the accounts of 251 properties owned by our parent CommonWealth REIT (and certain related assets and liabilities) as if they were owned by us as an entity separate and apart from CommonWealth REIT prior to the contribution of these 251 properties to us on February 16, 2012; the financial information included in this prospectus does not necessarily reflect what our results of operations, financial position and cash flows would have been if we had operated as a stand alone company;



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"CWH" means CommonWealth REIT and, as the context may require, its consolidated subsidiaries other than us;



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our "declaration of trust" and our "bylaws" refer to our Amended and Restated Declaration of Trust and Amended and Restated Bylaws, respectively, that will be in effect upon completion of this offering;



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a "single tenant property" or a property being leased to a "single tenant" means that at least 90% of the rentable square feet of the property is leased to a single tenant;



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a "net leased property" or a property being "net leased" means that the property's lease requires the tenant to pay rent and also pay or reimburse us for all, or substantially all, property level operating expenses and capital expenditures, such as real estate taxes, insurance, utilities, maintenance and repairs, other than, in certain circumstances, roof and structural element-related expenditures;



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"annualized rents" as of a date means annualized rental income as of such date pursuant to signed leases, plus estimated annual expense reimbursements; and



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our 251 properties include four easements, under which we have granted third parties the right to use, in exchange for regular payments, a portion of certain of our properties.

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RISK FACTORS

        Investing in our Shares involves risks. The risks described below are all of the material risks that we have identified at this time. The occurrence of any of the following risks could materially and adversely affect our business, prospects, financial condition, liquidity, results of operations and ability to meet our obligations and make or sustain distributions on our Shares, which could cause the market price of our Shares to decrease and result in a partial or complete loss of your investment in our Shares. Additional risks that we do not know of, or that we currently think are immaterial, may also become important factors that adversely affect us.

Risks Related to Our Business

The U.S. economy has recently experienced a severe recession and the recovery to date has been slow and incomplete. As a result, some of our tenants may become unable to pay our rents, our CAD could decrease and the values of our properties may decline.

        The U.S. economy has recently experienced a severe recession and the recovery to date has been slow and incomplete. If these general economic conditions persist or worsen, our business, prospects, financial condition, liquidity, results of operations and ability to meet our obligations and make or sustain distributions on our Shares may be materially and adversely affected, including as follows:

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our tenants may become unable or unwilling to pay our rents;



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the demand for leased land in Hawaii or for leased office and industrial space across the country may decline, and the rents we can charge when our tenants' rents are reset, leases are renewed or new leases are signed may be lower than the rents we now charge;



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we may be unable to lease our properties which become vacant as our leases expire or if our tenants default;



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the market values of our properties may decline; and



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access to capital markets may become difficult, expensive or impossible, and our ability to obtain debt or equity capital to fund our operations, meet our obligations, purchase additional properties or otherwise conduct our business may be materially and adversely affected or eliminated.

When we reset rents, renew leases or lease to new tenants, our rents may decline and our expenses may increase.

        When we reset rents, renew leases or lease to new tenants we may receive less rent than we currently receive. A majority of our Hawaii land leases require the rent to periodically be reset based on fair market values, which could result in rental increases or decreases. Our ability to increase rents when rent resets occur will depend upon then prevailing market conditions that are beyond our control. Accordingly, we can provide no assurance that the historical increases which CWH achieved in rent resets will be repeated in the future. While rent resets involving our Hawaii land leases have, in the aggregate, resulted in rent increases during the period of CWH's ownership, in some instances rent resets have resulted in rent decreases. Additionally, a downturn in economic conditions in Hawaii may cause reduced market rents for our properties when rents are reset, which could lead to a reduction in our revenues.

        When we lease to new tenants or renew leases we may have to spend substantial amounts for leasing commissions, tenant fit out or other tenant inducements. Many of our leases are for properties that are specially suited to the particular business of our tenants. Because these properties have been designed or physically modified for a particular tenant, if the current lease is terminated or not

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renewed, we may be required to renovate the property at substantial costs, decrease the rent we charge or provide other concessions in order to lease the property to another tenant.

If interest rates increase, our interest expense will increase and our earnings and CAD will decrease. When interest rates increase, the market prices of shares which make distributions, like we expect to make on our Shares, often decrease.

        Interest rates are currently at historically low levels and may well increase. Rising interest rates may adversely affect us and the value of your investment in our Shares, including in the following ways:

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Funds we borrow under our bank facility will bear interest at variable rates. If interest rates increase, so will our interest costs, which may adversely affect our cash flow, our ability to pay principal and interest on our debt, our cost of refinancing our debt when it becomes due and our ability to make or sustain distributions on our Shares. Additionally, if we choose to hedge our interest rate risk, no assurance can be given that the hedge will be effective or that our hedging counterparty will meet its obligations to us.



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An increase in interest rates could decrease the amount buyers are willing to pay for our properties, thereby reducing the market value of our properties and limiting our ability to sell properties or to obtain financing secured by our properties.



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We expect to make regular distributions on our Shares. When interest rates increase, the market prices of distribution paying securities often decrease. Accordingly, if interest rates increase, the market price of your Shares may decrease.

We currently have a concentration of properties in Oahu, Hawaii, which contributed approximately 68.1% of our total revenues for the year ended December 31, 2011, and are exposed to risks as a result of this concentration.

        Approximately 68.1% of our total revenues for the year ended December 31, 2011 were received from properties located in Oahu, Hawaii. Consequently, we are significantly affected by Hawaii's economy. Hawaii's economy is heavily influenced by tourism. A decline in tourism to Hawaii may affect our Hawaii tenants' ability to pay rent to us and could adversely affect us.

        Oahu's remote location on a volcanic island makes our properties there vulnerable to certain risks from natural disasters, such as tsunamis, hurricanes, flooding, volcanic eruptions and earthquakes, which could cause damage to our properties, affect our Hawaii tenants' ability to pay rent to us and cause the value of our properties to decline.

Our ability to increase rents in Hawaii may be curtailed in the future by government action.

        In July 2009, the Hawaii state legislature enacted legislation which would have limited rent increases at certain of our leased industrial and commercial properties in Hawaii. In May 2010, the U.S. District Court in Hawaii ruled that this legislation violated the U.S. Constitution and was unenforceable. In October 2010, CWH entered a settlement agreement with the State of Hawaii pursuant to which the State's appeal of this decision was dismissed with prejudice in return for CWH's agreement not to pursue its attorneys' fees from the State. The Hawaii state legislature may in the future adopt laws to limit rent increases at our properties in Hawaii, and, even if we are successful in challenging such laws, the cost of doing so is likely to be more material to us than it was to CWH because of our smaller size.

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Substantially all of our properties are leased to single tenants and the large majority are leased to tenants that are not rated.

        Substantially all of our total revenues for the year ended December 31, 2011 were from properties leased to single tenants. We expect that we will continue to derive substantially all of our revenues from single tenant properties and, therefore, the success of single tenant properties will be materially dependent on the performance of those tenants under their respective leases. Tenant defaults or failure to renew leases upon termination will adversely impact our revenues. In addition to not realizing rental income, many property level operating expenses and capital expenditures, such as real estate taxes, insurance, utilities, maintenance and repairs, other than, in certain circumstances, roof and structural element-related expenditures, are paid or reimbursed by our tenants pursuant to our leases, and a tenant default could leave us responsible for paying these expenses. Because our properties are leased to single tenants, the adverse impact of tenant defaults or non-renewals is likely to be greater than would be the case if our properties were leased to multiple tenants.

        The occurrence of a tenant bankruptcy or insolvency could diminish the income we receive from that tenant's lease. If a tenant becomes bankrupt or insolvent, federal law may prohibit us from evicting such a tenant based solely upon such bankruptcy or insolvency. In addition, a bankrupt or insolvent tenant may be authorized to reject and terminate its lease with us. Any claims against a bankrupt tenant for unpaid future rent would be subject to statutory limitations that would likely result in our receipt of rental income that is substantially less than the contractually specified rent we are owed under the lease. In addition, any claim we have for unpaid past rent may not be paid in full.

        The large majority of our properties are leased to tenants who are not rated by any nationally recognized statistical rating organization. It is more difficult to assess the ability of a tenant that is not rated to meet its obligations to us than that of a rated tenant.

Our failure to meet certain terms of our credit agreement would adversely affect our business and may prevent us from making distributions on our Shares.

        Upon completion of this offering, we expect to enter into a credit agreement for a $500 million bank facility. The credit agreement will include various conditions to our borrowing, various covenants and events of default. The credit agreement will contain important financial covenants, including covenants requiring us to maintain certain minimum debt service coverage and leverage ratios. For a description of our expected bank facility, see "Business—Our Financing Policies—Our New Bank Facility." Lenders under the credit agreement will take a security interest in the equity of certain of our subsidiaries as collateral. If the occupancy of our properties or the rents we can charge decline, the amount we can borrow under our bank facility may be reduced or eliminated and we may be in default under the credit agreement. If we are unable to borrow under our bank facility we may be unable to meet our obligations or acquire additional properties, and we may be required to sell some of our properties. In addition, the credit agreement will provide that a change in control of us (as defined in the credit agreement), including RMR ceasing to act as our sole business and property manager, may cause the amounts outstanding under our bank facility to become immediately due and payable.

        If we default under the credit agreement at a time when amounts are outstanding under our bank facility, our lenders may demand immediate payment or assume control of our assets that have been pledged as collateral. Additionally, during the continuance of any event of default under the credit agreement, we will be limited or in some cases prohibited from making distributions on our Shares. Any default under the credit agreement or under any other agreement relating to debt that we may incur may materially and adversely affect us.

        In the future, we may obtain additional debt financing, and the covenants and conditions which apply to any such additional indebtedness may be more restrictive than the covenants and conditions that will be in the credit agreement.

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We may be unable to access the capital necessary to repay our debts, invest in our properties or fund acquisitions.

        We intend to qualify for taxation as a REIT for U.S. federal income tax purposes for our taxable year ending December 31, 2012. To qualify for taxation as a REIT, we will be required to distribute at least 90% of our annual REIT taxable income (excluding capital gains) and satisfy a number of organizational and operational requirements to which REITs are subject. Accordingly, we generally will not be able to retain sufficient cash from operations to repay debts, invest in our properties or fund acquisitions. Our business and growth strategies depend, in part, upon our ability to raise additional capital at reasonable costs to repay our debts, invest in our properties and fund new acquisitions. The net proceeds of this offering will be used to repay amounts due to CWH and will not be available for investment in our business. Our ability to raise reasonably priced capital is not guaranteed. Since 2008, there has been a significant reduction in the amount of capital available for commercial enterprises on a global basis and increased volatility in most debt and equity markets. We may be unable to raise reasonably priced capital because of reasons related to our business or for reasons beyond our control, such as market conditions. Additionally, since we are a newly formed company with no previous operating history, it may be more difficult for us to raise reasonably priced capital than other companies, many of which have established financing programs and, in some cases, investment grade credit ratings. Though we intend to manage our leverage in a way that may eventually permit us to achieve an investment grade rating, we can provide no assurance that we will be able to achieve an investment grade rating or when we might do so. If we are unable to achieve an investment grade rating, we believe our ability to issue reasonably priced unsecured debt may be limited. If we are unable to raise reasonably priced capital, our business and growth strategies may fail.

We may be unable to acquire additional properties and grow our business.

        An element of our business plan involves the acquisition of additional properties. We cannot assure you that we will be able to consummate attractive acquisition opportunities or that any acquisitions we make will be successful. Notwithstanding pre-acquisition due diligence, we do not believe that it is possible to fully understand a property before it is owned and operated for an extended period of time; therefore, we could acquire a property with undisclosed defects, and we might encounter unanticipated difficulties and expenditures relating to any acquired property. Newly acquired properties might require significant management attention that would otherwise be devoted to our ongoing business. We might never realize the anticipated benefits of any acquisition. After our acquisition of a property, the market in which the property is located may experience unexpected changes that adversely affect the property's value. Also, any acquisitions may not yield the returns we expect and, if any such acquisitions are financed with debt or new equity issuances, may result in shareholder dilution. In addition, our credit agreement will limit our future investments in certain areas relative to our total asset value, and this may limit our ability to acquire properties that we would like to acquire. For these reasons, among others, our business plan to acquire additional properties may not succeed or may cause us losses.

We face significant competition.

        We face significant competition for acquisition opportunities from other investors, including publicly traded and private REITs, numerous financial institutions, individuals and public and private companies. Because of competition, we may be unable to, or may pay a significantly increased purchase price to, acquire a desired property. Some of our competitors may have greater financial and management resources than we have.

        In addition, substantially all of our properties face competition for tenants. Some competing properties may be newer, better located or more attractive to tenants. Competing properties may have lower rates of occupancy than our properties, which may result in competing owners offering available

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space at lower rents than we offer at our properties. This competition may affect our ability to attract and retain tenants and may reduce the rents we are able to charge.

Ownership of real estate is subject to environmental and climate change risks.

        Ownership of real estate is subject to risks associated with environmental hazards. We may be liable for environmental hazards at, or migrating from, our properties, including those created by prior owners or occupants, existing tenants, abutters or other persons. Various federal and state laws impose liabilities upon property owners, such as us, for any environmental damages arising from properties they own. We may be held liable for environmental investigation and clean up at, or near, our properties, including at sites we own and lease to our tenants. As an owner or previous owner of properties which contain environmental hazards, we also may be liable for damages to governmental agencies or third parties for costs and damages they incur arising from environmental hazards at such properties. Moreover, the costs and damages which may arise from environmental hazards are often difficult to project and may be substantial.

        Although our leases generally require our tenants to operate in compliance with all applicable laws and to indemnify us against any environmental liabilities arising from a tenant's activities on the property, we could be subject to strict liability by virtue of our ownership interest. We cannot be sure that our tenants will satisfy their indemnification obligations, if any, under our leases. Furthermore, the discovery of contamination or violations of environmental laws on any of our properties could lead to significant remediation costs or fines, penalties, or other liabilities or obligations attributable to the tenant of that property. Such liabilities or obligations may affect a tenant's ability to make payments to us, including rental payments and, where applicable, indemnification payments. When we acquired our properties from CWH, we agreed to indemnify CWH against all environmental liabilities with respect to the properties.

        Certain of our Hawaii lands are used or have been used for industrial purposes. Though we have reviewed these and our other properties for potential environmental liabilities and have established a reserve for potential costs that may be incurred as a result of environmental contamination, no assurance can be given that we have identified all potential environmental liabilities or that our reserve will be sufficient to cover any costs we may incur relating to environmental matters. Some of these properties contain, or may have contained, or are adjacent to or near other properties that have contained or currently contain, underground storage tanks for the storage of petroleum products and other hazardous or toxic substances. Our exposure to these tanks creates the potential for the release of petroleum products or other hazardous or toxic substances onto our properties. In addition, certain of our properties are on or are adjacent to or near other properties upon which others, including former owners or tenants of our properties, have engaged, or may in the future engage, in activities that may release petroleum products or other hazardous or toxic substances.

        We do not have any insurance designated to limit any losses that we may incur as a result of known or unknown environmental conditions which are not caused by an insured event, such as, for example, fire or flood. As of December 31, 2011, we have reserved approximately $12.2 million for potential environmental liabilities. The environmental reserve CWH has applied to our properties historically has not varied significantly from year to year and the actual historical costs to remediate certain environmental issues have not deviated significantly from the corresponding reserve amount. Nevertheless, environmental exposures are difficult to assess and estimate for numerous reasons, including uncertainty about the extent of contamination, alternative treatment methods that may be applied, location of the property which subjects it to differing local laws and regulations and their interpretations, as well as the time it takes to remediate contamination. In developing reserves for potential environmental liability on a property by property basis, we consider among other things, enacted laws and regulations, assessments of contamination and surrounding geology, quality of information available, currently available technologies for treatment, alternative methods of remediation

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and prior experience. Environmental reserves are based on estimates which are subject to significant change and are adjusted as the remediation treatment progresses, as circumstances change and as environmental contingencies become more clearly defined and reasonably estimable. We do not believe that there are environmental conditions at any of our properties that will materially and adversely affect us. However, no assurance can be given that environmental conditions present at our properties or costs we may be required to incur in the future to address environmental contamination will not materially and adversely affect us.

        We believe any asbestos in our buildings is contained in accordance with current regulations, and we have no current plans to remove it. If we removed the asbestos or demolished these properties, certain environmental regulations govern the manner in which the asbestos must be handled and removed.

        The current political debate about climate change has resulted in various treaties, laws and regulations which are intended to limit carbon emissions. We believe these laws being enacted or proposed may cause energy costs at our properties to increase. Laws enacted to mitigate climate change may make some of our buildings obsolete or cause us to make material investments in our properties which could materially and adversely affect our financial condition.

Real estate ownership creates risks and liabilities.

        In addition to the risks related to environmental hazards and climate change, our business is subject to other risks associated with real estate ownership, including:

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the illiquid nature of real estate markets which limits our ability to sell our assets rapidly to respond to changing market conditions;



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the subjectivity of real estate valuations and changes in such valuations over time;



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legislative and regulatory developments that may occur at the federal, state and local levels that have direct or indirect impact on the ownership, leasing and operation of our properties;



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property and casualty losses; and



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litigation incidental to our business.

Insurance on our properties may not adequately cover all losses and uninsured losses could materially and adversely affect us.

        Generally, our tenants are responsible for the costs of insurance coverage for the properties we lease to them, including for casualty, liability, fire, extended coverage and rental or business interruption loss. Either we purchase the insurance ourselves and our tenants are required to reimburse us, or the tenants buy the insurance directly and are required to list us as an insured party. Depending upon the location of the property, including our properties located in Hawaii, losses of a catastrophic nature, such as those caused by tsunamis, hurricanes, flooding, volcanic eruptions and earthquakes, may be covered by insurance policies with limitations such as large deductibles or co-payments that a tenant may not be able to meet. Under certain circumstances insurance proceeds may not be adequate to restore our economic position with respect to an affected property and we could be materially and adversely affected. Furthermore, we do not have any insurance designated to limit any losses that we may incur as a result of known or unknown environmental conditions which are not caused by an insured event, such as, for example, fire or flood.

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We intend to rely on information technology in our operations, and any material failure, inadequacy, interruption or security failure of that technology could harm our business.

        We intend to rely on information technology networks and systems, including the Internet, to process, transmit and store electronic information and to manage or support a variety of our business processes, including financial transactions and keeping of records, which may include personal identifying information of tenants and lease data. We intend to rely on commercially available systems, software, tools and monitoring to provide security for processing, transmitting and storing confidential tenant information, such as individually identifiable information relating to financial accounts. Although we will take steps to protect the security of the data maintained in our information systems, it is possible that our security measures will not be able to prevent the systems' improper functioning, or the improper disclosure of personally identifiable information such as in the event of cyber attacks. Security breaches, including physical or electronic break-ins, computer viruses, attacks by hackers and similar breaches, can create system disruptions, shutdowns or unauthorized disclosure of confidential information. Any failure to maintain proper function, security and availability of our information systems could interrupt our operations, damage our reputation, subject us to liability claims or regulatory penalties and could materially and adversely affect us.

Changes in lease accounting standards may materially and adversely affect us.

        The Financial Accounting Standards Board has proposed accounting rules that would require companies to capitalize all leases on their balance sheets by recognizing a lessee's rights and obligations. If the proposal is adopted in its current form, many companies that account for certain leases on an "off balance sheet" basis would be required to account for such leases "on balance sheet." This change would remove many of the differences in the way companies account for owned property and leased property, and could have a material affect on various aspects of our tenants' businesses, including their credit quality and the factors they consider in deciding whether to own or lease properties. If the proposal is adopted in its current form, it could cause companies that lease properties to prefer shorter lease terms, in an effort to reduce the leasing liability required to be recorded on their balance sheets. The proposal could also make lease renewal options less attractive, as, under certain circumstances, the rule would require a tenant to assume that a renewal right will be exercised and accrue a liability relating to the longer lease term.

Risks Related to Our Relationships with CWH and RMR and to Our Organization and Structure

CWH will own more than 70% of our Shares after this offering. As a result, you will have less influence over our business than shareholders of most other publicly owned companies.

        After this offering, CWH will own approximately 73.3% of our outstanding Shares (approximately 70.5% if the underwriters exercise their over allotment option in full). For so long as CWH continues to retain a significant ownership stake in us, CWH may be able to elect all of the members of our board of trustees, including our Independent Trustees, and may effectively control the outcome of shareholder actions. As a result, CWH may have the ability to control all matters affecting us, including:

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the composition of our board of trustees and, through our board of trustees, determinations with respect to our management, business plans and policies, including the appointment and removal of our officers;



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determinations with respect to mergers and other business combinations;



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amendments to our transaction agreement with CWH;



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amendments to our management agreements with RMR;



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the making of distributions on our Shares; and



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the number of Shares available for issuance under our 2012 Equity Compensation Plan, or the Equity Compensation Plan.

        CWH's significant ownership in us and resulting ability to effectively control us may discourage transactions involving a change of control, including transactions in which you as a holder of our Shares might otherwise receive a premium for your Shares over the then current market price.

CWH's ability to sell its ownership stake in us and speculation about such possible sales may adversely affect the market price of our Shares.

        CWH is not prohibited from selling some or all of its Shares, except that it has agreed (subject to certain exceptions) not to sell or transfer any Shares for 180 days after the date of this prospectus without first obtaining the written consent of Morgan Stanley & Co. LLC, and CWH may do so without your approval. CWH has advised us that it does not have any current plans to sell or otherwise dispose of its Shares. However, CWH has a history of successfully divesting certain of its properties into new REITs and then selling or distributing to its shareholders its stake in such REITs over time. In addition, speculation by the press, stock analysts, our shareholders or others regarding CWH's intention to dispose of its Shares could adversely affect the market price of our Shares. So long as CWH continues to retain significant ownership in us, the market price of our Shares may be adversely impacted. Accordingly, your Shares may be worth less than they would be if CWH did not have significant ownership in us.

This offering will directly benefit CWH.

        All of the net proceeds of this offering will be used by us to repay part of the $400 million CWH Note which we issued to CWH in connection with its transfer of properties to us. In addition, upon completion of this offering, we expect to repay the balance of the $400 million CWH Note not repaid with the net proceeds of this offering by borrowing the necessary amount under our bank facility.

We are dependent upon RMR to manage our business and implement our growth strategy.

        We have no employees. Personnel and services that we require will be provided to us under contracts with RMR. Our ability to achieve our business objectives depends on RMR and its ability to manage our properties, identify and complete new acquisitions for us and to execute our financing strategy. Accordingly, our business is dependent upon RMR's business contacts, its ability to successfully hire, train, supervise and manage its personnel and its ability to maintain its operating systems. If we lose the services provided by RMR or its key personnel, our business and growth prospects may decline. We may be unable to duplicate the quality and depth of management available to us by becoming a self managed company or by hiring another manager. Also, in the event RMR is unwilling or unable to continue to provide management services to us, our cost of obtaining substitute services may be greater than the fees we will pay RMR under our management agreements, and as a result our expenses may increase.

Our management structure and agreements and relationships with CWH and RMR may restrict our investment activities and may create conflicts of interest or the perception of such conflicts.

        RMR will be authorized to follow broad operating and investment guidelines and, therefore, will have discretion in determining the types of properties that will be appropriate investments for us, as well as our individual operating and investment decisions. Our board of trustees will periodically review

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our operating and investment guidelines and our operating activities and investments but it will not review or approve each decision made by RMR on our behalf. In addition, in conducting periodic reviews, our board of trustees will rely primarily on information provided to it by RMR. RMR is beneficially owned by our Managing Trustees, Barry M. Portnoy and Adam D. Portnoy.

        In our management agreements with RMR, we will acknowledge that RMR manages other businesses, including four other NYSE-listed REITs (CWH, GOV, HPT and SNH), and will not be required to present us with investment opportunities that RMR determines are within the investment focus of another business managed by RMR. RMR will have discretion to determine which investment or leasing opportunities to present to us or to other businesses it manages. Accordingly, we may lose investment opportunities to, and may compete for tenants with, CWH and other businesses managed by RMR. We will also agree with RMR to first offer any property that we determine to sell and that is within the principal investment focus of another REIT managed by RMR to such REIT prior to entering into any sale or other disposition arrangement with respect to such property.

        RMR also acts as the manager for CWH and three other NYSE-listed REITs: GOV, HPT and SNH. RMR also provides management services to other publicly and privately owned companies, including Five Star Quality Care, Inc., or Five Star, which operates senior living communities; TravelCenters of America LLC, or TravelCenters, which operates and franchises travel centers; and Sonesta International Hotels Corporation, or Sonesta, which owns, operates and franchises hotels, resorts and cruise ships. These multiple responsibilities to public companies and other businesses could create competition for the time and efforts of RMR and Barry M. Portnoy and Adam D. Portnoy. In addition, we expect to participate with RMR, CWH, GOV, HPT, SNH, Five Star and TravelCenters in a combined insurance program through Affiliates Insurance Company, an Indiana insurance company, or AIC. RMR, CWH, GOV, HPT, SNH, Five Star and TravelCenters have each invested in AIC and all of our trustees are directors of AIC. We also expect to invest in AIC.

        Barry M. Portnoy is Chairman of the Board and Adam D. Portnoy is President, Chief Executive Officer and a director of RMR. One of our Independent Trustees, William A. Lamkin, is an Independent Trustee of CWH. All of our other Independent Trustees are members of one or more boards of trustees or directors of other companies managed by RMR. Our executive officers are also executive officers of RMR, CWH and other companies managed by RMR. In addition, Adam D. Portnoy is President of CWH. The foregoing individuals may hold equity in or positions with other companies managed by RMR. Such equity ownership and positions by our trustees and officers after this offering could create, or appear to create, conflicts of interest with respect to matters involving us, RMR and its affiliates.

The management agreements that we will enter into with RMR were negotiated between affiliated parties and may not be as favorable to us as they would have been if negotiated between unaffiliated parties.

        We will pay RMR fees based in part upon the historical cost of our investments to CWH which at any time may be more or less than the fair market value thereof, the gross revenue we collect from tenants and the cost of construction we incur at our properties which is supervised by RMR, plus an incentive fee for years beginning after December 31, 2012 based upon certain increases in our Normalized FFO Per Share (as defined in the management agreements). See "Manager." Our fee arrangements with RMR could encourage RMR to advocate acquisitions of properties, to undertake construction activities or to overpay for acquisitions or construction. These arrangements may also encourage RMR to discourage our sales of properties. Our management agreements were negotiated between affiliated parties and the terms, including the fees payable to RMR, may not be as favorable to us as they would have been were they negotiated on an arm's length basis between unaffiliated parties.

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The management agreements that we will enter into with RMR may discourage our change of control.

        RMR will be able to terminate its management agreements with us if we experience a change of control. We may be unable to duplicate, without considerable cost increases, the quality and depth of management available to us by contracting with RMR if we become a self managed company or if we contract with unrelated third parties. For these reasons, the management agreements that we will enter into with RMR may discourage a change of control of us, including a change of control which might result in payment of a premium for your Shares.

The potential for conflicts of interest as a result of our management structure may provoke dissident shareholder activities that result in significant costs.

        In the past, in particular following periods of volatility in the overall market or declines in the market price of a company's securities, shareholder litigation, dissident trustee nominations and dissident proposals have often been instituted against companies alleging conflicts of interest in business dealings with affiliated persons and entities. Our relationship with CWH, with RMR, with the other businesses and entities to which RMR provides management services, with Barry M. Portnoy and Adam D. Portnoy and with RMR affiliates may precipitate such activities. These activities, if instituted against us, could result in substantial costs and a diversion of our management's attention.

Ownership limitations and anti-takeover provisions in our declaration of trust and bylaws, as well as certain provisions of Maryland law, may prevent your receiving a takeover premium or prevent our shareholders from implementing beneficial changes.

        Our declaration of trust will prohibit any shareholder other than CWH, RMR and their affiliates from owning (directly and by attribution) more than 9.8% of the number or value of shares of any class or series of our outstanding shares of beneficial interest, including our Shares. This provision of our declaration of trust is intended to assist with our REIT compliance under the Internal Revenue Code of 1986, as amended, or the Code, and otherwise to promote our orderly governance. However, this provision will also inhibit acquisitions of a significant stake in us and may prevent a change in our control. Additionally, many provisions that will be contained in our governing documents upon completion of this offering (described below under the caption "Material Provisions of Maryland Law and of Our Declaration of Trust and Bylaws") may further deter persons from attempting to acquire control of us and implement changes that may be beneficial to our shareholders, including, for example, provisions relating to:

•

the division of our trustees into three classes, with the term of one class expiring each year, which could delay a change in our control;



•

shareholder voting rights and standards for the election of trustees and other provisions which require larger majorities for approval of actions which are not approved by our trustees than for actions which are approved by our trustees;



•

required qualifications for an individual to serve as a trustee and a requirement that certain of our trustees be "Managing Trustees" and other trustees be "Independent Trustees";



•

limitations on the ability of our shareholders to propose nominees for election as trustees and propose other business to be considered at a meeting of our shareholders;



•

limitations on the ability of our shareholders to remove our trustees;



•

the authority of our board of trustees, and not our shareholders, to adopt, amend or repeal our bylaws; and



•

the authority of our board of trustees to adopt certain amendments to our declaration of trust without shareholder approval, including the authority to increase or decrease the number of

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authorized Shares, to create new classes or series of shares (including a class or series of shares that could delay or prevent a transaction or a change in our control that might involve a premium for our Shares or otherwise be in the best interests of our shareholders), to increase or decrease the number of shares of any class, and to classify or reclassify any unissued shares from time to time by setting or changing the preferences, conversion or other rights, voting powers, restrictions, limitations as to distributions, qualifications or terms or conditions of redemption of our Shares or any new class of shares created by our board of trustees.

Our rights and the rights of our shareholders to take action against our trustees and officers are limited.

        Upon completion of this offering, our declaration of trust will limit the liability of our trustees and officers to us and our shareholders for money damages to the maximum extent permitted under Maryland law. Under current Maryland law, our trustees and officers will not have any liability to us and our shareholders for money damages other than liability resulting from:

•

actual receipt of an improper benefit or profit in money, property or services; or



•

active and deliberate dishonesty by the trustee or officer that was established by a final judgment as being material to the cause of action adjudicated.

        Our bylaws will require us to indemnify any present or former trustee or officer, to the maximum extent permitted by Maryland law, who is made or threatened to be made a party to a proceeding by reason of his or her service in that capacity. However, except with respect to proceedings to enforce rights to indemnification, we will indemnify any person referenced in the previous sentence in connection with a proceeding initiated by such person against us only if such proceeding is authorized by our board of trustees. In addition, we may be obligated to pay or reimburse the expenses incurred by our present and former trustees and officers without requiring a preliminary determination of their ultimate entitlement to indemnification.

Disputes with CWH and RMR may be referred to binding arbitration.

        Our contracts with CWH and RMR will provide that any dispute arising under those contracts may be referred to binding arbitration. As a result, we may not be able to pursue claims in court against CWH or RMR for any dispute that is referred to arbitration.

We may change our operational, financing and investment policies without shareholder approval and we may become more highly leveraged, which may increase our risk of default under our debt obligations.

        Our board of trustees determines our operational, financing and investment policies and may amend or revise our policies, including our policies with respect to our intention to qualify for taxation as a REIT, acquisitions, dispositions, growth, operations, indebtedness, capitalization and distributions, or approve transactions that deviate from these policies, without a vote of, or notice to, our shareholders. Policy changes could adversely affect the market value of our Shares and our ability to make distributions to you. Further, our organizational documents do not limit the amount or percentage of indebtedness, funded or otherwise, that we may incur. Our board of trustees may alter or eliminate our current policy on borrowing at any time without shareholder approval. If this policy changed, we could become more highly leveraged, which could result in an increase in our debt service costs. Higher leverage also increases the risk of default on our obligations. In addition, a change in our investment policies, including the manner in which we allocate our resources across our portfolio or the types of assets in which we seek to invest, may increase our exposure to interest rate risk, real estate market fluctuations and liquidity risk.

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Risks Related to this Offering

The future amounts of any distributions to our shareholders are not assured or guaranteed.

        We intend to make regular quarterly distributions on our Shares. However:

•

our ability to make distributions will be adversely affected if any of the risks described herein occur; and



•

any distributions will be made at the discretion of our board of trustees and will depend upon various factors that our board of trustees deems relevant, including our results of operations, our financial condition, debt and equity capital available to us, our expectation of our future capital requirements, our CAD, our Normalized FFO, restrictive covenants in our financial or other contractual arrangements (including those that will be in our credit agreement), tax law requirements to qualify for taxation as a REIT and restrictions under Maryland law.

For these reasons, among others, our distribution rate may not meet our expectations, may decline or we may cease making distributions. Also, our distributions may include a return of capital.

The market prices of publicly traded shares have recently been very volatile. There has been no historical public market for our Shares. The market price for Shares you purchase may decline substantially and quickly.

        The stock market in general, and REITs in particular, have recently experienced extreme share price and volume fluctuations. These broad market and industry factors may decrease the market price of our Shares, regardless of our actual operating performance. Prior to this offering, there has been no public market for our Shares. We cannot predict the extent to which a trading market will develop or how liquid or volatile that market might become. The initial public offering price for our Shares was determined by negotiations between us and the representatives of the underwriters and may not be indicative of prices that will prevail in the trading market. The market value of our Shares could be substantially affected by general market conditions, including the extent to which a secondary market develops for our Shares following completion of this offering, the extent of institutional investor interest in us, the general reputation of REITs and the attractiveness of their equity securities in comparison to other equity securities (including securities issued by other real estate-based companies), our financial performance and general stock and bond market conditions. For these reasons, among others, the market price of the Shares you purchase in this offering may decline substantially and quickly.

Purchasers in this offering will experience immediate dilution in net tangible book value, and there may be future dilution to earnings related to our Shares.

        The initial public offering price of our Shares is higher than the net tangible book value per outstanding Share. Purchasers of our Shares in this offering will incur immediate dilution of $0.44 per Share in the net tangible book value of our Shares from the initial public offering price of $21.50 per Share. If the underwriters exercise their over allotment option in full, there will be immediate dilution of $0.48 per Share in the net tangible book value of our Shares. The market price of our Shares could decline as a result of issuances or sales of a large number of our Shares in the market after this offering or the perception that such issuances or sales could occur. Additionally, future issuances or sales of a substantial number of our Shares may be at prices below the initial public offering price of our Shares offered by this prospectus and may result in further dilution in the net tangible book value of our Shares and/or materially and adversely impact the market price of our Shares.

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Future sales of our securities may depress the market price of your Shares.

        Subject to applicable law, our board of trustees has the authority, without further shareholder approval, to cause us to issue additional Shares and other equity and debt securities on the terms and for the consideration it deems appropriate. We cannot predict the effect, if any, of future issuances of our Shares or other securities, or of the prospect of such issuances on the market price of our Shares. We also may issue from time to time additional securities in connection with property or business acquisitions and may grant registration rights in connection with such issuances. After completion of this offering, we will have 30,000,000 Shares outstanding, including an aggregate of 22,000,000 Shares owned by CWH (assuming no exercise of the underwriters' over allotment option). Additionally, up to 3,000,000 Shares may be issued under the Equity Compensation Plan to our trustees, executive officers and RMR employees. From and after January 1, 2013, RMR will be eligible to receive incentive compensation payable in our Shares. We, our trustees, certain of our executive officers and CWH have agreed, subject to various exceptions, not to sell or issue any Shares or any securities convertible into or exchangeable or exercisable for Shares, or file any registration statement relating to our equity securities with the Securities and Exchange Commission, or the SEC, for 180 days after the date of this prospectus without the prior written consent of Morgan Stanley & Co. LLC on behalf of the underwriters. Morgan Stanley & Co. LLC, at any time and without notice, may release all or any portion of our Shares subject to the foregoing agreements. Future sales or issuances of a substantial number of our Shares or of senior securities, or the perception that such sales or issuances might occur, could depress the market price of our Shares.

The Combined Financial Statements of Selected Properties of CommonWealth REIT and our unaudited pro forma financial statements may not be representative of our results as an independent public company.

        The Combined Financial Statements of Selected Properties of CommonWealth REIT and our unaudited pro forma financial statements that are included in this prospectus do not necessarily reflect what our financial position, results of operations or cash flows would have been had we been an independent entity during the periods presented. This financial information is not necessarily indicative of what our results of operations, financial position, cash flows or expenses will be in the future. It is impossible for us to accurately estimate all adjustments which may reflect all the significant changes that will occur in our cost structure, funding and operations as a result of our creation, including potential increased costs associated with reduced economies of scale and increased costs associated with being a separate publicly traded company. For additional information, see "Selected Financial and Pro Forma Financial Information" and the Combined Financial Statements of Selected Properties of CommonWealth REIT and our unaudited pro forma financial statements appearing elsewhere in this prospectus.

If we fail to establish and maintain an effective system of integrated internal controls, we may not be able to accurately report our financial results.

        In connection with operating as a public company, we will be required to provide reliable financial statements and reports to our shareholders. To monitor the accuracy and reliability of our financial reporting, we will utilize an internal audit function provided by RMR that will oversee our internal controls. RMR has documented and developed for CWH and will document and develop for us an initial accounting policy framework and accounting procedures manual for our use, but we can provide no assurances that such procedures will be adequate to provide reasonable assurance to our shareholders regarding the reliability of our financial reporting and the preparation of our financial statements. In addition, RMR will develop and document policies and procedures for us with respect to company-wide business processes and cycles in order to implement effective internal control over financial reporting. While we intend to undertake substantial work to comply with Section 404 of the

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Sarbanes-Oxley Act of 2002, and RMR has substantial experience in complying with these sections of the Sarbanes-Oxley Act of 2002, we cannot be certain that we will be successful in implementing or maintaining effective internal control over our financial reporting and may determine in the future that our existing internal controls need improvement. If we fail to implement and comply with proper overall controls, we could be materially harmed or we could fail to meet our reporting obligations. In addition, the existence of a material weakness or significant deficiency could result in errors in our financial statements that could require a restatement, cause us to fail to meet our reporting obligations, result in increased costs to remediate any deficiencies, attract regulatory scrutiny or lawsuits and cause investors to lose confidence in our reported financial information, leading to a substantial decline in the market price of our Shares.

In addition to the underwriting discounts and commissions to be received by the underwriters, they may receive other benefits from this offering.

        In addition to the underwriting discounts and commissions to be received by the underwriters, affiliates of each of the underwriters will act as lenders under our bank facility and are lenders to CWH. We will use the net proceeds of this offering to repay a portion of the $400 million CWH Note. If CWH uses such repayment to repay any of its indebtedness, affiliates of certain of our underwriters may receive a portion of such repayment. These transactions create a potential conflict of interest because each of these entities may have an interest in the successful completion of this offering beyond the underwriting discounts and commissions they will receive.

        The underwriters and/or their affiliates may engage in commercial and investment banking transactions with us or our affiliates in the ordinary course of their business. They expect to receive customary compensation and expense reimbursement for these commercial and investment banking transactions.

Risks Related to Our Taxation

Our failure to qualify or remain qualified for taxation as a REIT for U.S. federal income tax purposes could have significant adverse consequences.

        We intend to qualify for taxation as a REIT for U.S. federal income tax purposes commencing with our taxable year ending December 31, 2012, and to maintain such qualification thereafter. Our qualifying for taxation as a REIT depends on our satisfying complex, statutory requirements, for which there are only limited judicial and administrative interpretations. Even if we initially qualify for taxation as a REIT, maintaining our status as a REIT will require us to continue to satisfy certain tests concerning, among other things, the nature of our assets, the sources of our income and the amounts we distribute to our shareholders. In order to meet these requirements, it may be necessary for us to liquidate or forego attractive investments. If we fail to qualify or remain qualified for taxation as a REIT, then our ability to raise capital might be adversely affected, we will be in breach under our credit agreement, we may be subject to material amounts of federal and state income taxes. In addition, if we lose or revoke our tax status as a REIT for a taxable year, we will be prevented from requalifying for taxation as a REIT for the next four taxable years.

Distributions to our shareholders generally will not qualify for reduced tax rates.

        The maximum tax rate for dividends payable by U.S. corporations to non-corporate stockholders, trusts and estates is 15% through the end of 2012. Distributions paid by REITs, however, are generally not eligible for this reduced rate. The more favorable rates for corporate dividends could cause non-corporate investors, trusts and estates to perceive that investment in REITs are less attractive than investment in non-REIT corporations that pay dividends, thereby reducing the demand and market price of our Shares.

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CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS

        This prospectus contains certain forward looking statements that are subject to various risks and uncertainties. Forward looking statements are generally identifiable by use of forward looking terminology such as "may," "will," "should," "potential," "intend," "expect," "outlook," "seek," "anticipate," "estimate," "approximately," "believe," "could," "project," "predict," or other similar words or expressions. Forward looking statements are based on certain assumptions, discuss future expectations, describe future plans and strategies, contain financial and operating projections or state other forward looking information. Our ability to predict results or the actual effect of future events, actions, plans or strategies is inherently uncertain. Although we believe that the expectations reflected in our forward looking statements are based on reasonable assumptions, our actual results and performance could differ materially from those set forth in our forward looking statements. Factors that could have a material adverse effect on our forward looking statements and upon our business, results of operations, financial condition, FFO, Normalized FFO, CAD, cash flows, liquidity and prospects include, but are not limited to:

•

the factors referenced in this prospectus, including those set forth under the section captioned "Risk Factors";



•

changes in the debt or equity markets, the general economy or the real estate industry, whether the result of market events or otherwise;



•

our ability to retain our existing tenants and maintain current rental rates;



•

unanticipated increases in financing and other costs, including a rise in interest rates;



•

our ability to raise additional capital at reasonable costs to repay debts, invest in our properties and fund acquisitions;



•

our ability to acquire additional single tenant properties;



•

the degree and nature of our competition;



•

actual and potential conflicts of interest with CWH, our Managing Trustees and RMR and its affiliates and clients;



•

changes in personnel or the lack of availability of qualified personnel;



•

changes in governmental regulations, accounting rules, tax rates and similar matters;



•

legislative and regulatory changes, including changes to the Code and related rules, regulations and interpretations governing the taxation of REITs; and



•

limitations imposed on our business and our ability to satisfy complex rules in order for us to qualify as a REIT for U.S. federal income tax purposes.

        When considering forward looking statements, you should keep in mind the risk factors and other cautionary statements in this prospectus. The matters summarized under "Risk Factors" and elsewhere in this prospectus could cause our actual results and performance to differ significantly from those contained in our forward looking statements. Accordingly, we cannot guarantee future results or performance. Readers are cautioned not to place undue reliance on any of these forward looking statements, which reflect our views as of the date of this prospectus. Furthermore, we do not intend to update any of our forward looking statements after the date of this prospectus to conform these statements to actual results and performance, except as may be required by applicable law.

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USE OF PROCEEDS

        We estimate that the net proceeds of this offering will be approximately $155.8 million (or approximately $179.9 million if the underwriters exercise their over allotment option in full), after deducting the underwriting discounts and commissions and other estimated offering expenses payable by us of approximately $16.2 million (or approximately $17.9 million if the underwriters exercise their over allotment option in full).

        We will use the net proceeds of this offering to repay part of the $400 million CWH Note. The $400 million CWH Note is non-interest bearing, provided that, if demand is made on the CWH Note at a time when we are no longer wholly owned by CWH, the principal amount of the CWH Note after such demand will bear interest at an annual rate equal to the "Prime Rate" published in The Wall Street Journal from time to time. We expect to repay all of the remaining outstanding balance of the $400 million CWH Note and to reimburse CWH for costs it incurred to organize us and prepare for this offering with borrowings under our $500 million bank facility. Affiliates of the underwriters will act as lenders under our bank facility.

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DISTRIBUTION POLICY

        We intend to pay regular quarterly distributions to holders of our Shares. Our expected initial quarterly distribution is $0.40 per Share. On an annualized basis, we expect to distribute $1.60 per Share, which equals an annual yield of approximately 7.4% of the initial public offering price of $21.50 per Share. We estimate that our expected initial annual distribution will represent approximately 75.4% of CAD for the year ending December 31, 2012. We do not intend to reduce the annualized distribution per Share if the underwriters exercise their over allotment option. If the underwriters exercise their over allotment option in full, and we maintain our expected distribution, our total distributions on an annualized basis would increase by approximately $1.9 million and our initial annual distribution would represent 78.0% of CAD for the year ending December 31, 2012. We intend to maintain this distribution rate for at least twelve months following completion of this offering. However, the timing and amount of any distributions will be at the discretion of our board of trustees and will depend on various factors that our board of trustees deems relevant, including our results of operations, our financial condition, debt and equity capital available to us, our expectation of our future capital requirements, our CAD, our Normalized FFO, restrictive covenants in our financial or other contractual arrangements (including those that will be in our credit agreement), tax law requirements to qualify for taxation as a REIT and restrictions under Maryland law. The distribution that we expect to pay for the period beginning on the closing date of this offering and ending on the last day of the first full calendar quarter after the closing date will include a full quarterly distribution plus a prorated amount for the number of days between the closing date of this offering and the end of the calendar quarter in which the closing occurs.

        We have estimated our CAD for the year ending December 31, 2012 based on adjustments to our pro forma net income available to our shareholders for the year ended December 31, 2011 (giving effect to this offering, the repayment of the $400 million CWH Note and the borrowing of approximately $251.5 million under our $500 million bank facility as described in "Use of Proceeds"). In estimating our CAD, we have made certain assumptions as reflected in the table and notes below. For example, this estimate does not include the effect of any changes in our working capital. This estimate was based upon the historical operating results of our properties and does not take into account any capital investments or their associated cash flows as they cannot be estimated at this time. Similarly, this estimate does not take into account any financing activities, or their associated cash flows, other than the repayment of the $400 million CWH Note and the borrowing of approximately $251.5 million under our bank facility, as they cannot be estimated at this time. This estimate also does not take into account other currently unanticipated expenditures we may have to make.

        Following completion of this offering, we may undertake other investing or financing activities that may have a material effect on our estimate of CAD. Because we have made the assumptions described herein in making this estimate, we do not intend this estimate to be a projection or forecast of our actual results of operations or our liquidity, and have estimated this amount for the sole purpose of illustrating the expected amount of our initial distribution. This estimate should not be considered as an alternative to cash flow from operating activities or net income computed in accordance with GAAP or as an indicator of our liquidity or our ability to make distributions. In addition, the calculations set forth below may not be the basis upon which our board of trustees may determine future distributions. No assurance can be given that our estimate will prove accurate, and actual distributions may therefore be significantly different from the estimated distributions.

        Distributions in excess of our current and accumulated earnings and profits, if any, will not be taxable to a taxable U.S. shareholder under current U.S. federal income tax law to the extent those distributions do not exceed the shareholder's adjusted tax basis in his or her Shares, but rather will reduce the adjusted basis of the Shares. In that case, the gain (or loss) recognized on the sale, exchange or other disposition of those Shares or upon our liquidation will be increased (or decreased) accordingly. To the extent those distributions exceed a taxable U.S. shareholder's adjusted tax basis in

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his or her Shares, they generally will be treated as a gain realized from the taxable disposition of those Shares. The percentage of distributions to our shareholders that exceeds our current and accumulated earnings and profits may vary substantially from year-to-year. For a more complete discussion of the tax treatment of distributions to U.S. holders of our Shares, see "Federal Income Tax Considerations—Taxation of U.S. Shareholders."

        U.S. federal income tax law requires that a REIT distribute annually at least 90% of its REIT taxable income, excluding net capital gains, and that it pay tax at regular corporate rates to the extent that it annually distributes less than 100% of its net taxable income including net capital gains. For more information, please see "Federal Income Tax Considerations." We anticipate that our distributions will exceed the annual distribution requirements applicable to REITs. However, under some circumstances, we may be required to pay additional distributions in order to meet these distribution requirements, and we may need to borrow funds to make those distributions.

        We cannot assure you that our estimated distributions will be paid or sustained. Any distributions we pay in the future, as well as their timing and frequency, will depend upon our actual results of operations, economic conditions and other factors that could differ materially from our current expectations. Our actual results of operations will be affected by a number of factors, including the rental income we receive, our operating expenses, interest expense, the ability of our tenants to meet their obligations and our unanticipated expenditures. For more information regarding risk factors that could materially and adversely affect our actual results of operations, see "Risk Factors." If our properties do not generate sufficient revenues to allow cash to be distributed by us, we may be required to fund distributions from working capital or borrowings under our bank facility, reduce our distributions or make taxable distributions of our Shares. Our payment of distributions is subject to compliance with restrictions that will be contained in our credit agreement. In addition, our declaration of trust allows us to issue preferred shares that could have a preference on distributions. We currently have no intention to issue any preferred shares, but if we do, the distribution preference on the preferred shares could limit our ability to make distributions to holders of our Shares.

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        The following table sets forth calculations relating to our intended initial distribution based on the pro forma net income from our properties for the year ended December 31, 2011 and the adjustments we have made in order to estimate our CAD for the year ending December 31, 2012. Amounts are in thousands, except Share, per Share and per square foot data.

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CAPITALIZATION

        The following table sets forth our cash, debt and shareholders' equity on (1) a historical basis, (2) as adjusted for the transfer of 251 properties from CWH to us and total issuances to CWH of 22,000,000 Shares and the $400 million CWH Note and (3) a pro forma basis reflecting this offering and the application of the net proceeds as set forth under "Use of Proceeds". This table contains unaudited information and should be read in conjunction with "Use of Proceeds," "Selected Financial and Pro Forma Financial Information," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the historical and pro forma financial statements and the related notes that appear elsewhere in this prospectus. Amounts are in thousands, except Share data.

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DILUTION

        If you invest in our Shares, your interest will be diluted to the extent of the difference between the initial public offering price per Share and the net tangible book value per Share immediately after the completion of this offering.

        Net tangible book value per Share represents the amount of total tangible assets less total liabilities, divided by the number of Shares then outstanding. Our pro forma net tangible book value as of December 31, 2011, adjusted for CWH's contribution of our properties and our issuance of the $400 million CWH Note, was approximately $476.0 million for a net tangible book value per Share of $21.64. After giving effect to our sale of Shares in this offering at the initial public offering price of $21.50 per Share and deducting the underwriting discounts and commissions and other estimated offering expenses, our pro forma net tangible book value would have been approximately $631.8 million, or $21.06 per Share (assuming no exercise of the underwriters' over allotment option). This represents an immediate decrease in the net tangible book value of $0.58 per Share and an immediate dilution of $0.44 per Share to new investors purchasing Shares in this offering. The following table illustrates this dilution per Share:

        The following table sets forth, as of December 31, 2011, on the pro forma basis as described above, the difference between the number of Shares purchased from us in this offering and the total consideration paid by CWH and by the new investors in this offering at the initial public offering price of $21.50 per Share, and prior to deducting the underwriting discounts and commissions and other estimated offering expenses.

        If the underwriters' over allotment option is exercised in full, the following will occur:

•

the percentage of our Shares held by CWH will decrease to approximately 70.5% of the total number of our Shares outstanding;



•

the number of our Shares held by new investors in this offering will increase to 9,200,000 Shares, or approximately 29.5% of the total number of Shares outstanding; and



•

the immediate dilution experienced by the new investors in this offering will be $0.48 per Share and the net tangible book value per Share will be $21.02 per Share.

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SELECTED FINANCIAL AND PRO FORMA FINANCIAL INFORMATION

        You should read the following selected financial and pro forma financial information in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the historical and pro forma combined financial statements and related notes included elsewhere in this prospectus.

        We present herein selected combined historical financial information for Selected Properties of CommonWealth REIT, which is a combination of the accounts of 251 properties. These properties and certain related assets and liabilities are reflected in the combined financial statements as if they were owned in an entity separate from CWH, however they were not owned in a separate legal entity during the periods presented in such statements.

        We have not presented our historical financial information because we have not had any activity since our formation other than the issuance to CWH of 22,000,000 Shares and the $400 million CWH Note in connection with CWH's contribution of 251 properties to us and activity in connection with this offering. Therefore, we do not believe a discussion of our historical results would be meaningful.

        The selected historical combined financial information for the years ended December 31, 2009, 2010 and 2011 and the selected historical combined balance sheet information as of December 31, 2010 and 2011 have been derived from the audited Combined Financial Statements of Selected Properties of CommonWealth REIT, appearing elsewhere in this prospectus. The selected pro forma financial information for the year ended December 31, 2011 and the selected pro forma balance sheet information as of December 31, 2011 have been derived from the Unaudited Pro Forma Financial Statements of Select Income REIT, appearing elsewhere in this prospectus. The selected historical financial information as of December 31, 2007, 2008 and 2009, and for the years ended December 31, 2007 and 2008, have been derived from the unaudited financial statements of Selected Properties of CommonWealth REIT that are not included in this prospectus. The selected financial and pro forma financial information in this section are not intended to replace these audited and unaudited financial statements. In addition, the pro forma balance sheet and income statement data below have been adjusted to reflect our bank facility, the sale of 8,000,000 Shares offered hereby, the receipt of the estimated net proceeds of this offering, after deducting the underwriting discounts and commissions and other estimated offering expenses payable by us, and the use of the estimated net proceeds of this offering and borrowings under our bank facility as described under "Use of Proceeds." The selected financial and pro forma financial information below and the financial statements included in this prospectus do not necessarily reflect what our results of operations, financial position and cash flows would have been if we had operated as a stand alone company during all periods presented, and, accordingly, this historical and pro forma information should not be relied upon as an indicator of our future performance. All amounts are in thousands, except number of properties data.

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(1)

We consider Property NOI to be appropriate supplemental information to net income and total revenues because it helps both investors and management to understand the operations of our properties. We use Property NOI internally to evaluate individual, regional and company wide property level performance and believe Property NOI provides useful information to investors regarding our results of operations because it reflects only those income and expense items that are incurred at the property level and may facilitate comparisons of our operating performance between periods. The calculation of Property

NOI excludes certain components of total expenses in order to provide results that are more closely related to our properties' results of operations. Property NOI does not represent cash generated by operating activities in accordance with GAAP and should not be considered as an alternative to total revenues, net income or cash flow from operating activities determined in accordance with GAAP, or as an indicator of our financial performance or liquidity, nor is Property NOI necessarily indicative of sufficient cash flow to fund all of our needs. We believe that Property NOI may facilitate an understanding of our consolidated historical operating results. Property NOI should be considered in conjunction with total revenues, net income and cash flow from operating activities as presented in our combined consolidated statements of income and combined consolidated statements of cash flows.

The following table is a reconciliation of our net income and total revenues to Property NOI:

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(1)

Percent leased includes (a) space being fitted out for occupancy pursuant to signed leases and (b) space which is leased but is not occupied or is being offered for sublease by tenants.

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(1)

Average effective rental rates per rentable square foot represents total revenues during the period specified divided by the average rentable square feet occupied during the period specified.

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(1)

Rentable square feet is pursuant to signed leases as of December 31, 2011, and includes (a) space being fitted out for occupancy pursuant to signed leases and (b) space which is leased but is not occupied or is being offered for sublease by tenants.

(2)

Annualized revenue is annualized rental income as of December 31, 2011 pursuant to signed leases, plus estimated annual expense reimbursements.

(3)

Based on rentable square feet.

(4)

Based on annualized revenue.