Medical Properties Trust announces sale of Utah Hospital interests for $886m
Medical Properties Trust, Inc. (MPT) has successfully negotiated the sale of its interests in five Utah hospitals for $886 million to a newly established joint venture with an investment fund associated with a leading institutional asset manager specializing in real estate. This significant transaction underpins MPT’s strategic financial planning, evidencing the robust valuation of its hospital real estate portfolio.
In a strategic move to bolster its liquidity and reduce debt, Medical Properties Trust, Inc. has divested approximately 75% of its stakes in these properties, retaining a 25% interest. This sale forms part of a broader strategy to optimize capital allocation and accelerate debt reduction efforts. The total cash proceeds from this transaction are anticipated to be around $1.1 billion, which will be directed towards the repayment of existing debts, including a $300 million Australian term loan and other obligations under MPT’s revolving credit facilities.
Edward K. Aldag, Jr., Chairman, President, and CEO of Medical Properties Trust, expressed confidence in the company’s underwriting process and its recognition by sophisticated third-party investors. “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,” said Aldag. This reflects a positive outlook on future transactions and the overall health of the hospital real estate market.
Additionally, the joint venture has secured $190 million in non-recourse secured financing, further affirming the value of MPT’s assets. The strategic financial advisory for this transaction was provided by Eastdil Secured, L.L.C., with legal counsel from Goodwin Procter LLP and Baker Donelson PC.
MPT, a self-advised real estate investment trust (REIT) founded in 2003, has grown significantly, owning approximately 439 hospital facilities with around 43,000 licensed beds across nine countries and three continents as of the end of 2023. This expansive portfolio highlights MPT’s position as one of the leading global owners of hospital real estate, specializing in the acquisition and development of net-leased healthcare facilities.
This transaction not only reinforces Medical Properties Trust, Inc.’s commitment to its financial strategy but also demonstrates the growing private market interest in real hospital assets, setting a promising precedent for similar deals in the future.