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Medical Properties Trust finalizes sale of five medical facilities to Prime Healthcare for $350 million

by HealthCare Business News | April 11, 2024
Business Affairs
Medical Properties Trust Inc. (MPT), headquartered in Birmingham, Alabama, has officially concluded the sale of five medical facilities located in California and New Jersey to Prime Healthcare. The deal, finalized for an aggregate sum of $350 million, was part of a strategic realignment between the two entities. This sale includes an upfront cash payment of $250 million and a $100 million interest-bearing mortgage note payable to MPT within nine months.

This transaction marks a pivotal development in the ongoing relationship between MPT and Prime Healthcare. As part of the agreement, both parties have also renegotiated a 20-year master lease for four additional hospitals currently leased to Prime. This lease incorporates a $260 million purchase option, incentivizing Prime with a reduced purchase price of $238 million if exercised before August 26, 2028. Post this date, the purchase price will revert to its original $260 million, with provisions for annual price adjustments.

Prime Healthcare is the fifth largest for-profit health system in the United States, operating 44 hospitals in 14 states, more than 300 outpatient locations, and nearly 45,000 employees and affiliated physicians.

Founded in 2003, Medical Properties Trust is a leading figure in the hospital real estate investment trust (REIT) sector. As of December 31, 2023, the company boasts ownership of 439 healthcare facilities, encompassing roughly 43,000 licensed beds across nine countries and three continents.

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