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September 2, 2021updated 20 Dec 2021 3:33pm

MPT and MIP V to form partnership for Massachusetts hospitals

The sale will enable MPT to continue to apply substantial equity funding to its US investments.

Medical Properties Trust (MPT) and Macquarie Infrastructure Partners V (MIP V) have signed an agreement to form a partnership for eight hospitals in Massachusetts, the US.

Pursuant to the agreement, MPT will sell a 50% stake in a portfolio of eight general acute care hospitals in Massachusetts to a MIP V controlled subsidiary for $1.78bn.

The hospitals are currently owned by MPT and operated by Steward Health Care System.

MPT will use the cash proceeds expected to be generated through this transaction to repay debt and fund its $950m Springstone inpatient behavioral health facility transactions that were announced earlier.

These transactions are slated for completion in the second half of this year.

With the sale of its hospitals, MPT will be able to continue to apply substantial equity funding to its US investments.

MPT chairman, president, and CEO Edward Aldag said: “This transaction’s portfolio valuation is a 48% increase over our original investment in these hospitals made in 2016, and the compelling value creation reflects the strength of MPT’s underwriting process, which allows our team to identify operators and strategies that are likely to result in long-term and sustained improvement in operating results.”

The transaction also advances diversification of operator portfolio, which is a core priority of MPT and demonstrates repeatable opportunity in US hospital sector.

The completion is subject to customary closing conditions, and the ability to source nonrecourse secured debt financing for the transaction.

Macquarie Infrastructure Partners CEO Karl Kuchel said: “The eight hospitals that we are investing in are essential to their local communities and Steward, as operator, has clearly demonstrated the ability to transform the performance of these acute care hospitals over the last five years, so that they are now world class, well-operated healthcare infrastructure facilities.

“MPT is a leading global hospital owner, and our 50/50 partnership with MPT, combined with the 20-year triple net master lease with Steward, ensures that there is strong alignment across all parties with respect to the long-term performance of this portfolio.”

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