Medical Properties Trust, Inc. has acquired the real estate assets of three hospital facilities that are operated by Hospital Partners of America, Inc. for $100 million.
Medical Properties Trust, Inc. (MPT) also expects to fund a $17 million loan secured by additional hospital property. With these transactions, MPT has completed approximately $258 million of investments in 2007 and Hospital Partners of America, Inc. (HPA) immediately becomes MPT’s third largest tenant.
Hospital Partners of America is a privately-held health care services company based in Charlotte, N.C. that was founded in 2002. It currently operates four acute care facilities in the U.S. and is expected to assume the operation of two additional facilities in the near future. HPA’s largest shareholders are New Enterprise Associates and Tailwind Capital Partners, two highly respected venture capital investors.
“We are very pleased to begin our relationship with Hospital Partners of America with the acquisition of these hospitals that are located in very attractive markets,” says Edward K. Aldag, Jr., MPT’s chairman, president and CEO.
The properties acquired are Twelve Oaks Medical Center in Houston, Texas and Shasta Regional Medical Center in Redding, California. Twelve Oaks, which is licensed for 524 beds, is comprised of two campuses in Houston: River Oaks and Sharpstown. River Oaks is an eight-story 199,000 square foot structure and Sharpstown is a four-story 156,000 square foot facility. Shasta Regional Medical Center is a 232,000 square foot hospital that is licensed for 246 beds. In addition, MPT expects to fund a $17 million mortgage loan secured by additional hospital property during the third quarter ending September 30.
The Company funded the transactions with proceeds of a bridge loan provided by JP Morgan Chase Bank, N.A. and Keybank National Association to fund the acquisitions. MPT has entered into a term sheet with the same lenders for a new credit facility that is expected to close during the next 90 days, proceeds of which will repay the bridge loan.
The initial term for the leases is 15 years, with options to extend for three terms of five years each; the loan has a term of five years. The leases and loan agreements provide for early termination in certain circumstances. Performance of the leases and mortgage loan is unconditionally guaranteed by HPA. MPT expects that the lease and interest rates will result in average returns exceeding 10.5%.