Macquarie Asset Management has invested roughly $1.7 billion in hospital infrastructure owned by Medical Properties Trust.

Under the terms of the partnership, MAM will gain a 50% interest in eight general acute care hospitals under MPT and operated by Steward Health Care System in Massachusetts. Both companies expect the deal to be an example of how hospitals are an attractive infrastructure asset class to invest in and to bring awareness to their true value in the market. Apollo provided a roughly $920 million loan in the deal, according to the Commercial Observer.

The hospitals are located in Brighton, Methuen, Haverhill, Brockton, Fall River, Taunton, Ayer and Dorchester, reported The Boston Real Estate Times.

“We are excited to have reached financial close on these eight, high-quality acute care facilities in Massachusetts and about our broader partnership with MPT. Hospitals are essential, long-lived assets that are critical to any functioning community, and these attributes drive a resilient operating environment and investment profile characteristic of other infrastructure assets,” said Karl Kuchel, CEO of Macquarie Infrastructure Partners, in a statement.

A self-advised real estate investment trust based in Alabama, MPT is one of the largest hospital owners in the world, with roughly 440 facilities and 46,000 licensed beds (on a pro forma basis) in nine countries and across four continents.

MAM offers specialist investment solutions for infrastructure and renewables, real estate, private credit, equities and multi-asset solutions among other areas. With $545.7 billion in assets, the company employs over 2,000 staff in 22 markets in the Americas, Europe, Asia and Australia.

The two originally partnered back in September, with the agreement comprising a 48% increase over the original investment in the hospitals in 2016. Both companies say that the deal recognizes the efficiency of MPT’s underwriting process for identifying operators and strategies that provide long-term and sustained improvements to operations. This aligns with the company’s financing model, which allows outside parties like MAM to acquire and recapitalize hospitals to fund facility improvements, technology upgrades and other operational investments.

“The in-place partnership agreements we now have with Macquarie offer both parties opportunities for efficient follow-on co-investments,” said Edward Aldag Jr., MPT’s chairman, president and chief executive officer, in a statement. In addition, this repeatable model provides an attractive addition to the array of efficient equity capital options available to fund our robust and accretive investment pipeline.”

MPT collected approximately $1.3 billion in total cash proceeds from the deal, including non-recourse secured debt, with virtually all of it used to repay debt. Its investment basis consists of roughly $1.2 billion, approximately $600 million gained on real estate, and collected cash rent and interest of more than $475 million over more than five years together. It has an unlevered internal rate of return of roughly 14%.

American commercial real estate services and investment firm CBRE Group advised MPT to first source a new equity partner to recapitalize the assets. CBRE then sourced the debt financing for the newly formed joint venture ownership entity, reported the Boston Real Estate Times.

“This was a rare opportunity for an investor to partner with MPT to recapitalize the largest acute care hospital portfolio to come to market,” said CBRE vice chairman Lee Asher. “These are unique inpatient assets in critical healthcare markets in Massachusetts, and we believe the newly formed joint venture will successfully support Steward’s hospital operations and mission to deliver the highest quality care to its patients.”