Medical Properties Trust

Last updated
Medical Properties Trust, Inc.
Company type Public company
NYSE:  MPW
S&P 600 component
Industry Real estate investment trust
Health care
FoundedAugust 27, 2003;20 years ago (2003-08-27)
FounderEdward K. Aldag, Jr.
Headquarters1000 Urban Center Drive
Birmingham, Alabama
Key people
Edward K. Aldag, Jr., Chairman & CEO
R. Steven Hamner, CFO
Emmett E. McLean, COO
RevenueIncrease2.svg $1.544 billion (2021)
Increase2.svg $656.9 million (2021)
Total assets Increase2.svg $20.519 billion (2021)
Total equity Increase2.svg $8.445 billion (2021)
Number of employees
86 (2019)
Website www.medicalpropertiestrust.com
Footnotes /references
[1]

Medical Properties Trust, Inc., based in Birmingham, Alabama, is a real estate investment trust that invests in healthcare facilities subject to NNN leases. The company owns 438 properties in the United States, Australia, Colombia, Germany, Italy, Portugal, Spain, Switzerland, Finland, and the United Kingdom. [1]

Contents

The company owns equity interest in several healthcare providers. Current and past investments have included Steward Health Care, Capella Healthcare, Priory Group, and Ernest Health.

History

The company was founded on August 27, 2003. [1] It went public on the New York Stock Exchange via an IPO on July 7, 2005.

In 2005, the company acquired the Northern California Rehabilitation Hospital for $20.75 million [2] and the Chino Valley Medical Center for $21 million. [3]

In 2012, the company acquired Ernest Health in a $400 million transaction. [4]

In March 2016, the company merged its investment in the operations of Capella Healthcare with RegionalCare. [5]

In October 2016, the company invested $1.25 billion in Steward Health Care System. [6] [7]

In May 2017, the company announced plans to invest $1.4 billion in 10 acute care hospitals and a behavioral health facility. [8]

In August 2019 Medical Properties Trust bought eight U.K. hospitals operated by Ramsay Health Care and 16 hospitals operated by Prospect Medical Holdings. [9] On January 8, 2020, MPT purchased 30 acute care hospitals in the U.K. for nearly £1.5 billion and leased them to Circle Health. [10] Later in 2021, the company completed a sale-and-leaseback transaction with Priory Group to acquire 35 U.K. mental health facilities for £800 million. [10]

From 2017 to 2021, CEO Edward Aldag’s salary, bonuses and stock awards have totaled around $70 million. [11]

In March 2022, Medical Properties Trust sold a 50% stake in the eight Massachusetts hospitals it had bought from Steward Healthcare System to Macquarie Infrastructure Partners V for $1.7 billion. [12] [13] Also in March 2022, the company purchased four hospitals in Finland for 178 million Euros, representing its first acquisition in Northern Europe. [14]

Criticism

Wall Street Journal

In 2022, The Wall Street Journal reported that Medical Properties Trust had made multiple loans to its largest tenant Steward Health Care and paid above market value to Steward for property that Steward then leased from Medical Properties. The article alleged that this was done to help Steward pay off debts to Cerberus Capital Management, while Medical Properties claimed that the amounts paid for the properties were fair based on its underwriting and internal appraisals for the properties. MPT referenced Steward’s dependability in paying approximately $1.2 billion in rent and interest since 2016 as further evidence of prudent underwriting. MPT also cited its 2022 sale of a 50% stake in the Massachusetts real estate it bought from Steward as validation of its strategy. [15] In March 2022, Macquarie Infrastructure Partners V entered into a $1.7 billion partnership with MPT to own eight hospitals leased to Steward, resulting in a 47% gain on sale of real estate for MPT. [12] [13]

Another Wall Street Journal report also claimed that the company engaged in risky acquisitions with tenants who were likely to default on rent payments later while the compensation of executives of the company was partially linked to the volume of acquisitions they could make. The company clarified that it does not directly compensate executives for acquisition volume, and that its compensation plan provides for reducing executive compensation if acquisitions do not increase the company's per-share value. [16]

Business Insider

In March 2024, Bethany McLean of Business Insider critcized the company, writing that "MPT's hospital investments represent a breathtaking scheme that has decimated healthcare in communities across America." [17] This article mentioned Edward Aldag who founded MPT and is the current President and CEO. Referring to him, the article states "Top executives, including Aldag, received hefty bonuses based in part on the dollar volume of transactions they did — meaning the more hospitals they drove into debt, the better."

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References

  1. 1 2 3 "Medical Properties Trust, Inc. Form 8-K Current Report". U.S. Securities and Exchange Commission.
  2. ↑ "Medical Properties Trust acquires California hospital". American City Business Journals . July 18, 2005.
  3. ↑ "Medical Properties Trust acquires another California hospital". American City Business Journals . December 1, 2005.
  4. ↑ "CORRECTING and REPLACING Medical Properties Trust in $400 Million Transaction with Ernest Health, Inc. to Add 16 Hospitals to Portfolio" (Press release). Business Wire. January 31, 2012.
  5. ↑ "Medical Properties Trust Agrees to Merge Capella Health Holdings with RegionalCare, an Affiliate of Certain Funds Managed by Affiliates of Apollo Global Management, LLC" (Press release). Business Wire. March 22, 2016.
  6. ↑ "Steward Receives $1.25 Billion Investment from Medical Properties Trust, Setting Stage for National Growth" (Press release). PR Newswire. September 26, 2016.
  7. ↑ Poe, Kelly (September 26, 2016). "Medical Properties Trust buying nine properties for $1.2 billion". The Birmingham News .
  8. ↑ "Medical Properties Trust, Inc. to Invest $1.4 Billion in Ten Acute Care Hospitals and One Behavioral Health Facility" (Press release). Business Wire. May 19, 2017.
  9. ↑ "Medical Properties wraps up ~$2.0B investment". Seeking Alpha. 26 August 2019. Retrieved 26 August 2019.
  10. 1 2 "Medical Properties Trust 10-Q". Securities and Exchange Commission. Retrieved April 13, 2022.
  11. ↑ ""Less about people and more about profits": Investors' role in next week's closure of San Antonio hospital under scrutiny". CBS News . Retrieved May 8, 2023.
  12. 1 2 "CORRECTING and REPLACING Medical Properties Trust Completes Hospital Partnership With Macquarie Asset Management". The Globe and Mail. March 16, 2022. Retrieved May 9, 2023.
  13. 1 2 Mugford, John B. (March 22, 2022). "Transactions: A $1.7 billion hospital portfolio recap". Healthcare Real Estate Insights. Retrieved May 9, 2023.
  14. ↑ "Medical Properties Trust 10-Q 2022 First Quarter". Securities and Exchange Commission. Retrieved May 12, 2022.
  15. ↑ Spegele, Brian (February 14, 2022). "How a Small Alabama Company Fueled Private Equity's Push Into Hospitals". Wall Street Journal. Retrieved April 30, 2022.
  16. ↑ Spegele, Brian (March 31, 2022). "Hospital Deal Gone Bust Puts Real-Estate Firm in Spotlight". Wall Street Journal. Retrieved April 30, 2022.
  17. ↑ McLean, Bethany. "Why America's hospitals are on life support". Business Insider. Retrieved 2024-03-12.
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