Medical Properties Trust, Inc. (MPT) has recently completed the sale of its assets in Arizona, including a 50-bed hospital and seven freestanding emergency department facilities (FSEDs), to Dignity Health for $160 million. This transaction is expected to result in a capitalization rate of less than 7.5%, based on the sale price and current cash rents.
The proceeds from this sale will be used by MPT to pay off debt and for general corporate purposes. These eight facilities were originally constructed by MPT between 2015 and 2017 at an initial cost of $92 million for their previous operator, Adeptus Health (Adeptus). The locations were carefully chosen during the underwriting process due to their strategic value in providing care for lower-acuity patients closer to home as well as diagnosing injuries or illnesses requiring advanced treatment at other acute care facilities within the system.
Despite Adeptus filing for Chapter 11 bankruptcy protection in 2017, Dignity Health continued leasing these facilities without any interruption or change in rental rates. With this recent transaction completed, Medical Properties Trust has successfully unloaded all eight medical properties located throughout Arizona.
