2024-01-29 00:42:12 ET
Summary
- The collapse of Medical Properties Trust following headwinds faced by Steward Health Care System has worsened a losing investment position and made me sour on the prospects of the REIT.
- Don't chase the yield here as MPW could choose to further cut its quarterly distribution to address debt with the market having already lost confidence in its assets.
- A tripartite of headwinds will complicate shareholder value creation for the foreseeable future, and MPW should consider a sale of its entire REIT.
I'm now a Medical Properties Trust ( MPW ) bagholder, an unfortunate position in a new year that promised optimism. The owner of acute care hospitals kicked off 2024 with a barrage of setbacks stemming from Steward Health Care System ("SHCS"), its largest tenant. SHCS drove $70.7 million in revenue for MPW's last reported fiscal 2023 third quarter, around 23% of total revenue of $306.6 million realized during the period. SHCS recently hired a restructuring adviser and is only partially paying rent owed to MPW. There is also going to be a material non-cash write-off in the upcoming fourth-quarter earnings of consolidated straight-line rent receivables and unpaid rent receivables. Overall, it's a mess and more impairments relating to SHCS are on the horizon beyond the fourth quarter....
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Confessions Of A Medical Properties Trust Bagholder