Birmingham, Ala.-based Medical Properties Trust, one of the world's largest hospital real estate owners posted a net loss of $801 million in the third quarter of 2024 ended Sept. 30, a 786% decrease from a $117 million gain during the same period in 2023, according to a Nov. 7 news release.
Here are six things to know:
1. Medical Properties Trust saw around $130 million in real estate gains in the third quarter of 2024, which was offset by around $608 million in impairment charges, around $131 million in net negative fair-value adjustments and $137 million in accelerated non-cash amortization of lease intangibles related to Dallas-based Steward Health Care real estate. It also has a net debt of $9.2 billion.
2. MPT removed Steward, which sought Chapter 11 protection May 6, from its portfolio after reaching definitive agreements with Healthcare Systems of America, HonorHealth, Quorum Health, Insight Health and College Health to operate and lease 17 Steward hospitals in five states. The company provided around $90 million in working capital loans to the operators and is getting cash interest payments. The loans will help provide liquidity "until their facility-level receivables are sufficient to raise asset-backed loans." MPT expects to start receiving partial cash rental payments from the new hospital tenets in the first quarter of 2025.
3. In September, Steward provided MPT with around $10 million in consolidated cash rent in the third quarter prior to finalizing a global settlement agreement with Steward and its creditors. The global settlement allowed MPT to restore control over its real estate, ended the relationship with Steward, and allowed for the 17 hospitals previously leased to Steward to secure new tenants.
4. MPT received around $45 million from Steward's sale of three hospitals in Florida to Orlando Health for around $440 million. Steward retained around $395 million from the sale. "In turn, Steward and its creditors relinquished all rights to any further allocation of value from transactions related to any other hospital remaining in the portfolio and the parties agreed to mutually dismiss claims against each other and exchange broad general releases," the release said.
5. MPT sold 18 freestanding emergency department facilities and a general acute hospital for around $246 million. The company also received a $100 million mortgage repayment regarding its sale of five hospitals to Prime Healthcare in April.
6. "Across our highly diversified, global portfolio, we are excited by the positive trends we continue to see in utilization, acuity mix, and reimbursements," said Edward Aldag Jr. in the release. "Further, as a result of our recent global settlement and our team’s tireless efforts, we successfully re-tenanted 17 Steward hospitals across five states to ensure continuity of patient care and recover our annual cash flows associated with these properties. With Steward’s removal from our portfolio, we look forward to demonstrating the strength and resilience of our diversified portfolio of hospital real estate and the importance of our business model to an industry in desperate need for more capital solutions."