Medical Properties Trust (MPT) has completed the previously announced transaction with Macquarie Infrastructure Partners V, a private fund managed by Macquarie Asset Management(MAM) to form a partnership pursuant to which a MAM controlled subsidiary has acquired a 50% interest in a portfolio of eight Massachusetts-based general acute care hospitals owned by MPT and operated by Steward Health Care System.
MPT’s investment basis of roughly $1.2 billion, the approximate $600 million gain on real estate, and collected cash rent and interest of more than $475 million over the course of five-plus years combine to calculate an approximate unlevered internal rate of return of roughly 14%.
“At MPT, we have long understood the embedded value in our entire portfolio as well as the proficiency of operators such as Steward. The closing of this transaction provides independent confirmation of the value that sophisticated investors and lenders also attribute to well-underwritten hospital investments,” said Edward K. Aldag, Jr., MPT’s Chairman, President, and Chief Executive Officer.
”Including non-recourse secured debt, total cash proceeds to MPT were approximately $1.3 billion, virtually all of which was used to repay debt,” said Medical Properties Trust in a statement.
Aldag continued, “The in-place partnership agreements we now have with Macquarie offer both parties opportunities for efficient follow-on co-investments. In addition, this repeatable model provides an attractive addition to the array of efficient equity capital options available to fund our robust and accretive investment pipeline.”
“We are excited to have reached financial close on these eight, high-quality acute care facilities in Massachusetts, and about our broader partnership with MPT. Hospitals are essential, long-lived assets that are critical to any functioning community, and these attributes drive a resilient operating environment and investment profile characteristic of other infrastructure assets. We look forward to furthering our partnership with MPT in the future,” said Karl Kuchel, CEO of Macquarie Infrastructure Partners.