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Medical Properties Trust Investing $1.4 Billion in 11 Health Care Facilities

MPT Real Estate Purchase and Investment Key to IASIS Healthcare Merger with Steward Health Care System
May 21, 2017
Medical Properties Trust Inc. (NYSE: MPW) agreed to acquire the real estate interests of 10 acute care hospitals and one behavioral health facility currently operated by IASIS Healthcare. Operation of the healthcare facilities will be transferred to Steward Health Care System LLC when the transaction is completed.

Steward and IASIS simultaneously announced a merger transaction, contingent on the property sale to MPT, which will also make a $100 million preferred equity investment in Steward. The merger of Steward and IASIS will create the largest private for-profit U.S. hospital operator, with projected revenues of almost $8 billion in 2018, the first full year of consolidated operations.

MPT will buy nine hospitals for $700 million and lease them back to Steward under a master lease that runs through October 2031, and includes three five-year extension terms. Birmingham, AL-based MPT will also acquire two new mortgage loans, also aggregating $700 million. The mortgages have the same contractual terms as the leases.

With the new investment, MPT’s total investment in Steward real estate will total $3.3 billion, which includes MPT’s existing investment in hospital real estate leased to IASIS.

MPT said it expects to finance the acquisitions through a combination of a fully committed $1 billion term loan with a term up to two years, another $1 billion available from its revolving credit facility, and the possible issuance of long-term unsecured notes.

The transaction will increase MPT’s total real estate portfolio by approximately 20% to a total value of almost $9 billion, adding 11 hospitals and over 2,400 beds, boosting the total number to 269 hospitals and 31,266 beds.

Its percentage of acute care hospitals increases to 72.5% of MPT’s total portfolio and 84% of the U.S. portfolio, an increase from 66.9% and 79.9%, respectively.

The property investments to be made include the following.

Hospital, Location, Form of Investment, Licensed Beds


  • Davis Hospital and Medical Center, Layton, UT, Mortgage, 220
  • Jordan Valley Medical Center, West Jordan, UT, Mortgage, 171
  • Odessa Regional Medical Center, Odessa, TX, Lease, 225
  • Salt Lake Regional Medical Center, Salt Lake City, UT, Lease, 158
  • St. Luke’s Medical Center, Phoenix, AZ, Lease, 219
  • St. Luke’s Behavioral Health Center, Phoenix, AZ, Lease, 124
  • Southwest General Hospital, San Antonio, TX, Lease, 327
  • Wadley Regional Medical Center at Hope, Hope, AR, Lease, 79
  • Tempe St. Luke’s Hospital, Tempe, AZ, Lease, 87
  • St. Joseph Medical Center, Houston, TX, Lease, 790
  • Mountain Point Medical Center, Lehi, UT, Lease, 40

    The transaction is expected to close by Sept. 30, 2017, subject to customary approvals.


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