Under terms of the deal closed earlier this month, MPT assumes ownership while leasing back the six facilities to Pipeline for 20 years, with multiple extensions.
Pipeline Health, its Chief Executive Officer Andrei Soran and his executive team operate the six facilities in collaboration with the hospitals’ four local chief executive officers.
“This is exciting news for Pipeline Health, and we are looking forward to working with an experienced hospital real estate investor in MPT, which is one of the largest owners of hospitals in the world,” Soran said.
According to Edward K. Aldag, Jr., chairman, president, and chief executive officer of MPT, “Our financing model facilitates acquisitions and recapitalizations allowing operators of hospitals to leverage the value of their real estate assets to fund facility improvements, technology upgrades and other investments in operations. We are pleased to work with Pipeline Health and support their commitment to ongoing investments in the hospitals they operate.”
Soran, who became Pipeline Health CEO in January, said the new capital will be used to retire debt for the system, thereby lowering interest rates and boosting the system’s balance sheet, as well as capital support for the organization.
“We are committed to investing in new equipment and facility improvements at all seven Pipeline hospitals in three markets, and this transaction supports that commitment as we work to enhance service to all the communities surrounding our hospitals,” Soran said.
“We are proud of all the employees and physicians across our seven hospitals, who care for patients every day.”
Pipeline’s four Los Angeles hospitals include: Coast Plaza Hospital, Community Hospital of Huntington Park, East Los Angeles Doctors Hospital and Memorial Hospital of Gardena.
Pipeline also operates City Hospital at White Rock in Dallas, as well as Weiss Memorial Hospital and West Suburban Medical Center, both in Chicago. The seven Pipeline hospitals total nearly 1,200 beds.
Medical Properties Trust, Inc. is a self-advised real estate investment trust formed in 2003 to acquire and develop net-leased hospital facilities. From its inception in Birmingham, Alabama, the Company has grown to become one of the world’s largest owners of hospitals with 444 facilities and roughly 47,000 licensed beds in nine countries and across four continents on a pro forma basis. MPT’s financing model facilitates acquisitions and recapitalizations and allows operators of hospitals to unlock the value of their real estate assets to fund facility improvements, technology upgrades and other investments in operations.