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Medical Properties details Wash. facility sale-leaseback deal, other operational activities

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Six trends shaping the industries and sectors we cover in 2021

Six trends shaping the industries and sectors we cover in 2021

Capital Markets View – January 2021


Medical Properties details Wash. facility sale-leaseback deal, other operational activities

Medical PropertiesTrust Inc. outlined a sale-leaseback transaction and several other operationalactivities.

The company plans to convert a $93 million loan secured by theOlympia, Wash., facility into a sale-leaseback arrangement under which the leasewill be similar to its existing leases with Capella Healthcare Inc. The loan wasobtained as part of the company's divestmentof its investment in the Capella operations. The sale-leaseback transaction, whichgained regulatory approval June 1, is expected to be completed during the thirdquarter.

Similarly, the REIT sold the $50 million unsecured notes it acquiredfrom RegionalCare Hospital Partners Inc. as part of the recently completed Capelladeal. The notes were sold at par during the second quarter to a "large institution."

Also during the second quarter, the company purchased an acute-carehospital in Newark, N.J., for $63 million. The hospital is leased to a Prime HealthcareServices Inc. affiliate under a 15-year master lease with three five-year extensionoptions, plus CPI increases with a 2% floor.

Through June 30, it finalized the $37 million development ofseven acute-care facilities, which are leased to Adeptus Health Inc. It also completedthe roughly $20 million construction of an inpatient rehabilitation facility, whichis leased to Ernest Health Inc.

On June 22, it completed its purchase of the final German propertythat was part of its two-stepdeal with Median Klinikengroup S.à r.l. The company's total investment in the transaction was €688.4 million.

In June and July, the REIT sold 5.8 million common shares underits at-the-market program, raising roughly $85.7 million in net proceeds.

Also in June, Medical Properties sold the Atrium Medical Center real estate in a Dallassuburb for $28 million, which it used to trim debt.

In May, it wrapped up the sale of four long-term acute-care facilitiesand an inpatient rehabilitation hospital operated by Post Acute Medical for roughly$61.7 million, generating a net gain of about $15 million. It received $9.3 millionin cash as prepayment for four working capital notes and the sale of the equityinterests it held in the operations of three of the facilities.

Also in May, it agreed to sell three inpatient rehabilitationhospitals operated by HealthSouth in Texas for $111.5 million before expenses, resultingin a net gain of roughly $45 million. The deal is anticipated to close during thethird quarter.