Finance REITs
April 23, 2008
By: Barbra Murray, Contributin Correspondent
Medical Properties Trust Inc. has just taken another step in its multi-phase acquisition of a 21-property healthcare center portfolio from HCP Inc. with the closing of the purchase of 10 facilities for $168 million.
The group of assets Medical Properties has just claimed as its own consists of Wesley Rehabilitation Hospital in Wichita, Kans.; Fort Lauderdale, Fla.'s Sunrise Rehabilitation Hospital; Pioneer Valley Hospital in West Valley City, Utah; Poplar Bluff Regional Medical Center in Poplar Bluff, Mo.; as well as six wellness centers in Connecticut, Massachusetts and Rhode Island.
Completion of the transaction comes on the heels of the closing of Medical Properties' $138 million purchase of seven of the facilities in the HCP portfolio in early April. Those properties are located in Arizona, Utah and five southern states. The acquisition of the remaining four properties for an aggregate $51.4 million is on target to close during the second quarter, wrapping up the entire portfolio deal at a total acquisition cost of approximately $371 million. When all is said and done, the company will have added seven acute care hospitals, six wellness centers, five inpatient rehabilitation hospitals and three long-term acute care hospitals to its holdings.
Medical Properties is relying on a handful of sources to finance the portfolio purchase. Profits from purchase and sale deals with Vibra Healthcare L.L.C., borrowings under existing company credit facilities, and common stock and debt securities sales will all be used to fund the deal. Additionally, commitments from a group of lenders will provide Medical Properties with access to a senior secured interim loan facility providing as much as $300 million to cover the balance of the portfolio acquisition cost.
The healthcare property market has been one of the strongest real estate sectors over the last few years, and it hasn't yet reached its peak, as real estate services firm Grubb & Ellis Co. notes in a report published last month. The aging baby boomer generation will continue to spur demand, with the youngest members of the group turning 65 in three years, and the economic downturn will also likely increase investor interest in the sector due to its non-cyclical growth profile.
A Birmingham, Ala.-based REIT, Medical Properties acquires and develops net-leased healthcare facilities across the country. Company stock opened today at $12.38. Long Beach, Calif.-headquartered HCP is a REIT that invests primarily in U.S. healthcare-related real estate. As of the close of 2007, the company's portfolio of fully owned assets consisted of 753 skilled nursing, hospital, medical office, senior housing and life science properties. The REIT's stock opened at $36.64 today.
By: Barbra Murray, Contributin Correspondent
Medical Properties Trust Inc. has just taken another step in its multi-phase acquisition of a 21-property healthcare center portfolio from HCP Inc. with the closing of the purchase of 10 facilities for $168 million.
The group of assets Medical Properties has just claimed as its own consists of Wesley Rehabilitation Hospital in Wichita, Kans.; Fort Lauderdale, Fla.'s Sunrise Rehabilitation Hospital; Pioneer Valley Hospital in West Valley City, Utah; Poplar Bluff Regional Medical Center in Poplar Bluff, Mo.; as well as six wellness centers in Connecticut, Massachusetts and Rhode Island.
Completion of the transaction comes on the heels of the closing of Medical Properties' $138 million purchase of seven of the facilities in the HCP portfolio in early April. Those properties are located in Arizona, Utah and five southern states. The acquisition of the remaining four properties for an aggregate $51.4 million is on target to close during the second quarter, wrapping up the entire portfolio deal at a total acquisition cost of approximately $371 million. When all is said and done, the company will have added seven acute care hospitals, six wellness centers, five inpatient rehabilitation hospitals and three long-term acute care hospitals to its holdings.
Medical Properties is relying on a handful of sources to finance the portfolio purchase. Profits from purchase and sale deals with Vibra Healthcare L.L.C., borrowings under existing company credit facilities, and common stock and debt securities sales will all be used to fund the deal. Additionally, commitments from a group of lenders will provide Medical Properties with access to a senior secured interim loan facility providing as much as $300 million to cover the balance of the portfolio acquisition cost.
The healthcare property market has been one of the strongest real estate sectors over the last few years, and it hasn't yet reached its peak, as real estate services firm Grubb & Ellis Co. notes in a report published last month. The aging baby boomer generation will continue to spur demand, with the youngest members of the group turning 65 in three years, and the economic downturn will also likely increase investor interest in the sector due to its non-cyclical growth profile.
A Birmingham, Ala.-based REIT, Medical Properties acquires and develops net-leased healthcare facilities across the country. Company stock opened today at $12.38. Long Beach, Calif.-headquartered HCP is a REIT that invests primarily in U.S. healthcare-related real estate. As of the close of 2007, the company's portfolio of fully owned assets consisted of 753 skilled nursing, hospital, medical office, senior housing and life science properties. The REIT's stock opened at $36.64 today.
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