Allentown, Pa.-based Lehigh Valley Health Network is planning to sell and then lease back several outpatient facilities primarily to fund two hospital projects, The Morning Call reported June 20.
The plan involves selling eight properties to Atlanta-based nonprofit real estate company the Centurion Foundation for an undisclosed amount, according to the report. The health system would continue to control and operate the facilities and lease them back from Centurion for 15 years. At the end of the 15-year period, LVHN would have the opportunity to renew the lease, buy back the properties or pay any remaining debt and arrange for the properties to be sold to another provider.
The projects to be funded by the proceeds are a neighborhood hospital in Hellertown, Pa., and Hanover Hill Behavioral Health in Hanover Township, Pa. LVHN is partnering with King of Prussia, Pa.-based Universal Health Services for the latter project. The 144-bed facility is expected to open in fall 2025.
Centurion aids other nonprofits through development, arranging finances and leasing facilities. It has completed over 100 taxable and tax-exempt financial transactions that total more than $850 million, according to its website. It is currently attempting to acquire two Rhode Island hospitals from Los Angeles-based Prospect Medical Holdings. That deal has received conditional approval from the state's attorney general.
LVHN and Philadelphia-based Jefferson signed a definitive agreement to merge in May. The deal is pending regulatory approval. LVHN declined to comment on whether the proposed merger influenced the plans to sell the properties, according to the report.