Medical Properties Trust

Medical Properties Trust, Inc.

Company type	Public company
Traded as	NYSE: MPW S&P 600 component
Industry	Real estate investment trust Health care
Predecessor	Medical Properties Trust, LLC
Founded	August 27, 2003 (2003-08-27)
Founder	Edward K. Aldag, Jr.
Headquarters	1000 Urban Center Drive, Birmingham, Alabama , United States
Key people	Edward K. Aldag, Jr., Chairman & CEO R. Steven Hamner, CFO
Revenue	$995.5 million (2024)
Net income	$2.408 billion (2024)
Total assets	$14.294 billion (2024)
Total equity	$4.833 billion (2024)
Number of employees	118 (2025)
Website	www.medicalpropertiestrust.com
Footnotes / references [1]

Medical Properties Trust, Inc. (MPT) is an international real estate investment trust (REIT) based in Birmingham, Alabama that purchases and invests in healthcare facilities and for-profit healthcare holding companies, primarily in the United States and Europe. Their property acquisitions often come in the form of sale-leaseback agreements, in which the original property owner sells the property to MPT and becomes their tenant. MPT's tenants are generally subject to long-term triple net leases, in which tenants pay rent as well as the maintenance costs and property taxes usually handled by lessors. These lease types, common among REITs, are often seen by prospective tenants as a source of cash infusion which can allow them to avert bankruptcy, pay debts, or improve their properties.

As of December 2024, the company owned 173 properties in the United States and 223 internationally, for a total of 396 properties worth over $14 billion.^[1] In addition to real estate, the company also owns equity interest in several healthcare systems. Its three largest tenants by value of assets were Circle Health Group, Priory Group, and Healthcare Systems of America. Past investments have included Steward Health Care and Capella Healthcare.

MPT bills itself as the first REIT focused exclusively on healthcare facilities.^[2] By nature, trusts like MPT are legally intended to generate profit for investors, some of which according to MPT include retirement funds for firefighters and teachers. However, MPT has come under the spotlight at times in criticism of REITs, particularly in healthcare. MPT has argued that their sale-leaseback strategy has allowed providers to avert bankruptcies and reinvest into operations, and thereby ensure continued care for their communities, which are often low-income or otherwise disadvantaged with more sparse access to healthcare. Critics, largely part of the American health care reform movement, allege that many holding companies utilize REITs to purchase struggling health facilities, extract remaining liquidity for executive bonuses, investor dividends, and company expansion, and then close the facilities–after which MPT resells the properties for further profit. The onus of rent, maintenance, and taxes are often placed on the facility itself rather than the parent company, which can lead to significant negative impact to long-term solvency. Studies of MPT's transactions with healthcare companies and those of other healthcare REITs have correlated the model with higher healthcare costs, lower operating capital, and poor patient outcomes.^[3][4][5][6]

The company was founded by Edward K. Aldag, Jr. and a group of other industry experts on August 27, 2003, as successor to a previous venture, Medical Properties Trust, LLC, which had formed in Maryland in December 2002.^[7]

MPT claimed to be the first REIT to focus exclusively on healthcare facilities.^[2] However, at least one other healthcare-exclusive REIT, the similarly-named but distinct Windrose Medical Properties Trust, was formed prior to MPT in March 2002.^[8]

In 2004 filings with the U.S. Securities and Exchange Commission (SEC), in which MPT sought classification as a REIT, they disclosed that they held twelve properties, nine of which were operating at the time and three of which were in development. It stated these properties were under lease terms of 11 to 16 years with annual escalation clauses allowing for consistent rent increases. Its largest tenant was Vibra Healthcare, which operated four rehabilitation hospitals and two long-term acute care hospitals owned by MPT across the country.^[7]

In these filings, MPT cautioned potential investors of the risks of investing in portfolio as concentrated as theirs, but also sought to ease those concerns. MPT's business strategy held less risk, it claimed, given Bureau of Economic Analysis projections that the healthcare industry in the U.S. would grow significantly for the near future and healthcare spending with it (expected to almost double by 2012), especially given advances in medical technology and life expectancy, and Census Bureau estimates that the percentage of the population aged 60 and over would rise from 12.4% in 2000 to 19.6% in 2030. MPT further expressed belief that the industry was moving from a preference of ownership of real estate by operators toward one of long-term leases.^[7]

MPT went public on the New York Stock Exchange (NYSE) via an initial public offering on July 7, 2005.^[9]

MPT's ability to develop new hospitals was tested early with their three facilities in development. In late 2005, the first of the three was completed: Town & Country Hospital in Houston, Texas.^[10][11] To purchase the land and develop the 99-bed hospital, MPT spent $65 million.^[11] Within a year however, the hospital's operator, a new physician-run venture named Stealth, defaulted on its lease.^[11][12] MPT arranged for Vibra to take over operations at the hospital on an interim basis while they sought a new tenant.^[13] Ultimately, MPT sold the property in early 2007 to Memorial Hermann Health System for $70 million, marking a net profit for MPT's investors. MPT blamed Stealth's lease default on the hospital's failure to obtain necessary managed health contracts, complicated by a lack of capital to cover losses.^[12] Memorial Hermann intended to close the hospital and reopen it the next year as a long-term acute care facility.^[12]

The resolution of MPT's issues with Town & Country Hospital was lauded by Aldag:^[14]

In 2006, not only did we continue to grow at very fast rates, increasing our investments by more than $213 million, but we also overcame our first real potential negative event. [. . .] We were able to turn that negative into a positive in about two months by selling the property in January 2007 for a gain exceeding $5.0 million.

2006, MPT's first full year on the NYSE, ended successfully with a total share return to investors of 69%.^[14]

In 2005, the company acquired the Northern California Rehabilitation Hospital for $20.75 million^[15] and the Chino Valley Medical Center for $21 million.^[16]

In 2012, the company acquired Ernest Health in a $400 million transaction.^[17]

In March 2016, the company merged its investment in the operations of Capella Healthcare with RegionalCare.^[18]

In October 2016, the company invested $1.25 billion in Steward Health Care System.^[19]

In May 2017, the company announced plans to invest $1.4 billion in 10 acute care hospitals and a behavioral health facility.^[20]

In August 2019 Medical Properties Trust bought eight U.K. hospitals operated by Ramsay Health Care and 16 hospitals operated by Prospect Medical Holdings. ^[21]

In December 2019, MPT announced that it was purchasing 30 acute care hospitals in the U.K. for nearly £1.5 billion and leasing them to Circle Health.^[22]

In 2020, MPT invested in Steward, still under the control of Cerberus Capital Management, $400 million, structured as around $200M in a joint venture with Steward executives to buy hospitals in the UK, and around $200M to acquire hospitals in Utah from Steward, which also involved forgiving a mortgage; by this time MPT had invested $4B in Steward and MPT would invest another $600M in Steward by 2024. Steward was MPT's biggest tenant and accounted for around 30% of MPT's rental income.^[23][3]

From 2017 to 2021, CEO Edward Aldag’s salary, bonuses and stock awards have totaled around $70 million.^[24]

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.^[3][25]

As Steward continued failing in 2023, MPT cut its quarterly dividend in half, and as Steward headed toward bankruptcy in 2024, MPT's shares fell to around 80% of their highest price in February 2020.^[23][26]

A 2022 Wall Street Journal report 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. MPT responded 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.^[27]

In March 2024, Bethany McLean of Business Insider criticized the company, writing that "MPT's hospital investments represent a breathtaking scheme that has decimated healthcare in communities across America."^[4] 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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