Medical Properties Belief Inks $1.5B Gross sales Leaseback

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BIRMINGHAM, AL – The on-site Medical Properties Trust is investing $ 1.55 billion in a Los Angeles-based healthcare services company in a sale-leaseback. Prospect Medical Holdings is leasing its real estate assets back in California, Connecticut, and Pennsylvania, but is omitting its properties in Rhode Island, New Jersey, and Texas. The portfolio includes 14 acute hospitals and 2 behavioral hospital facilities.

Prospect will continue to own and operate all hospitals and ancillary businesses in California, Connecticut, Pennsylvania, Texas and New Jersey, as well as the Rhode Island joint venture. The transaction is expected to close in the second half of 2019, subject to customary closing conditions. The prospect will use the funds to withdraw the company's existing term loans.

According to CEO Samuel S. Lee, the company expects to leverage MPTs for long-term growth and notes that it is “a significant and experienced potential source of funding for improvements to our existing facilities, as well as future acquisitions and other growth opportunities. We will intensify our focus and resources in our existing markets – where we can expand and drive more growth – to provide high quality, affordable and coordinated care through our extensive network of hospitals, medical groups and ancillary facilities. "

MPT also expects the relationship to grow, according to prepared remarks from MPT CEO Edward K Aldag.

Separately, the REIT announced that it has entered into final agreements with two new operators overall and has completed a transaction with a third new operator with 24 hospital facilities for a total investment of approximately $ 1.75 billion. With these transactions, MPT has exceeded its 2019 acquisition forecast of $ 2.5 billion on a total investment of $ 3 billion.

In addition to the sales leaseback with Prospect, the REIT has invested $ 145 million in seven community hospitals operated by Saint Luke & # 39; s Health System and one acute care hospital operated by Halsen Healthcare for $ 55 million becomes.

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