Generates Approximately $1.1 Billion of
Total Cash Proceeds to MPT
Brings Total Liquidity Transactions
Year-to-Date to $1.6 Billion, or 80% of MPT’s Initial FY 2024
Target
Medical Properties Trust, Inc. (the “Company” or “MPT”) (NYSE:
MPW) today announced that it has sold its interests in five Utah
hospitals to a newly formed joint venture (the “Venture”) with an
investment fund (the “Fund”) affiliated with a leading
multi-strategy, multi-billion dollar institutional asset manager
with a proven track record in real estate investments. MPT has
retained an approximate 25% interest in the Venture and the Fund
purchased an approximate 75% interest for $886 million, fully
validating MPT’s underwritten lease base of approximately $1.2
billion. Simultaneous with the closing of this sale transaction,
the Venture placed new non-recourse secured financing, providing
$190 million of additional cash to MPT based on its share of the
proceeds and further confirming underwritten asset values.
Together, the two transactions delivered approximately $1.1
billion of immediate cash proceeds to MPT, before costs and
reserves. The proceeds are expected to be used to reduce
outstanding debt – including payment in full of the approximate
$300 million Australian term loan due 2024 and repayment of
borrowings under its revolving credit facility – and for general
corporate purposes.
Edward K. Aldag, Jr., Chairman, President and Chief Executive
Officer said, “MPT’s approach to underwriting hospital real estate
has once again been validated by highly sophisticated third-party
participants in a broadening private market for real hospital
assets. Our primary focus remains on accelerating our capital
allocation strategy, and we are now confident that we will exceed
our initial target of $2.0 billion in liquidity transactions in
2024 based on the valuations achieved on recent transactions and
the terms we are actively negotiating for additional
transactions.”
As previously reported, the Utah lessee (an affiliate of
CommonSpirit Health) may acquire the leased real estate at a price
equal to the greater of fair market value and the approximate $1.2
billion lease base at the fifth or tenth anniversary of the 2023
master lease commencement. MPT granted certain limited and
conditional preferences to the Fund based on the possible exercise
price of the lessee’s purchase option.
Eastdil Secured, L.L.C. acted as exclusive financial adviser,
and Goodwin Procter LLP and Baker Donelson PC acted as legal
advisers for MPT.
About Medical Properties Trust, Inc.
Medical Properties Trust, Inc. is a self-advised real estate
investment trust formed in 2003 to acquire and develop net-leased
hospital facilities. From its inception in Birmingham, Alabama, the
Company has grown to become one of the world’s largest owners of
hospital real estate with 439 facilities and approximately 43,000
licensed beds in nine countries and across three continents as of
December 31, 2023. MPT’s financing model facilitates acquisitions
and recapitalizations and allows operators of hospitals to unlock
the value of their real estate assets to fund facility
improvements, technology upgrades and other investments in
operations. For more information, please visit the Company’s
website at www.medicalpropertiestrust.com.
This press release includes forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements can generally be identified by
the use of forward-looking words such as “may”, “will”, “would”,
“could”, “expect”, “intend”, “plan”, “estimate”, “target”,
“anticipate”, “believe”, “objectives”, “outlook”, “guidance” or
other similar words, and include statements regarding our
strategies, objectives, future expansion and development
activities, asset sales and other liquidity transactions, expected
returns on investments and expected financial performance.
Forward-looking statements involve known and unknown risks and
uncertainties that may cause our actual results or future events to
differ materially from those expressed in or underlying such
forward-looking statements, including, but not limited to: (i)
macroeconomic conditions, including due to geopolitical conditions
and instability, which may lead to a disruption of or lack of
access to the capital markets, disruptions and instability in the
banking and financial services industries, rising inflation and
movements in currency exchange rates; (ii) the risk that MPT is not
able to recover deferred rent or its other investments in Steward
at full value, within a reasonable time period or at all; (iii) the
risk that previously announced or contemplated property sales, loan
repayments, and other capital recycling transactions do not occur
as anticipated or at all; (iv) the risk that MPT is not able to
attain its leverage, liquidity and cost of capital objectives
within a reasonable time period or at all; (v) MPT’s ability to
obtain debt financing on attractive terms or at all, as a result of
changes in interest rates and other factors, which may adversely
impact its ability to pay down, refinance, restructure or extend
its indebtedness as it becomes due, or pursue acquisition and
development opportunities; (vi) the ability of our tenants,
operators and borrowers to satisfy their obligations under their
respective contractual arrangements with us; (vii) the economic,
political and social impact of, and uncertainty relating to, the
potential impact from health crises (like COVID-19), which may
adversely affect MPT’s and its tenants’ business, financial
condition, results of operations and liquidity; (viii) our success
in implementing our business strategy and our ability to identify,
underwrite, finance, consummate and integrate acquisitions and
investments; (ix) the nature and extent of our current and future
competition; (x) international, national and local economic, real
estate and other market conditions, which may negatively impact,
among other things, the financial condition of our tenants, lenders
and institutions that hold our cash balances, and may expose us to
increased risks of default by these parties; (xi) factors affecting
the real estate industry generally or the healthcare real estate
industry in particular; (xii) our ability to maintain our status as
a REIT for income tax purposes in the U.S. and U.K.; (xiii) federal
and state healthcare and other regulatory requirements, as well as
those in the foreign jurisdictions where we own properties; (xiv)
the value of our real estate assets, which may limit our ability to
dispose of assets at attractive prices or obtain or maintain equity
or debt financing secured by our properties or on an unsecured
basis; (xv) the ability of our tenants and operators to operate
profitably and generate positive cash flow, remain solvent, comply
with applicable laws, rules and regulations in the operation of our
properties, to deliver high-quality services, to attract and retain
qualified personnel and to attract patients; (xvi) potential
environmental contingencies and other liabilities; (xvii) the risk
that the expected sale of three Connecticut hospitals currently
leased to Prospect does not occur; (xviii) the risk that MPT is
unable to monetize its investment in Prospect Medical Holdings,
Inc. at full value within a reasonable time period or at all; and
(xix) the cooperation of our joint venture partners, including
adverse developments affecting the financial health of such joint
venture partners or the joint venture itself; and (xx) the risks
and uncertainties of litigation or other regulatory
proceedings.
The risks described above are not exhaustive and additional
factors could adversely affect our business and financial
performance, including the risk factors discussed under the section
captioned “Risk Factors” in our most recent Annual Report on Form
10-K, as may be updated in our other filings with the SEC.
Forward-looking statements are inherently uncertain and actual
performance or outcomes may vary materially from any
forward-looking statements and the assumptions on which those
statements are based. Readers are cautioned to not place undue
reliance on forward-looking statements as predictions of future
events. We disclaim any responsibility to update such
forward-looking statements, which speak only as of the date on
which they were made.
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version on businesswire.com: https://www.businesswire.com/news/home/20240412552958/en/
Drew Babin, CFA, CMA Senior Managing Director of Corporate
Communications Medical Properties Trust, Inc. (646) 884-9809
dbabin@medicalpropertiestrust.com
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