Medical Properties Trust Reports $2.41 Billion Net Loss for 2024 Amid Impairment Charges

Medical Properties Trust, Inc. (MPT) reported a net loss of $2.41 billion ($4.02 per diluted share) for the year ended December 31, 2024, compared to a net loss of $556.5 million ($0.93 per diluted share) in 2023. The increased loss stemmed primarily from $2.2 billion in impairment charges and negative fair value adjustments related to investments in Steward Health Care System and Prospect Medical Holdings, Inc., exceeding the $700 million in similar charges recorded in 2023. Total revenues increased by $123.7 million (14%) to $995.5 million, driven by a $207.7 million increase in operating lease revenue, partially offset by decreases in income from financing leases and interest and other income. The increase in operating lease revenue was attributed to incremental revenue from 2023 acquisitions and completed projects, CPI increases, and favorable foreign currency fluctuations, partially offset by revenue losses from property sales.

Significant developments in 2024 included surpassing a $2 billion liquidity target through asset sales and a new secured loan facility, resulting in approximately $500 million in gains on sales. The company also successfully addressed near-term debt maturities through these actions and a reduction in its dividend. A global settlement was reached with Steward, ending their relationship and allowing MPT to re-lease 18 of 23 properties. Subsequent to year-end, Prospect filed for Chapter 11 bankruptcy, impacting MPT's investments, and a private notes offering raised $2.5 billion in net proceeds to redeem existing debt and further enhance liquidity. The company also amended its credit facility multiple times throughout the year, modifying covenants and interest rates.

MPT's portfolio consisted of 396 properties (including those under construction or in the form of mortgage loans) at December 31, 2024, located across 31 U.S. states, seven European countries, and Colombia. The portfolio comprised 173 general acute care hospitals, 69 behavioral health facilities, 130 post-acute care facilities, and 21 freestanding ER/urgent care facilities. As of February 28, 2025, the portfolio included 373 facilities leased to 52 tenants, with less than 1% of total assets unleased. The company's top five tenants by total assets were Circle, Priory, Healthcare Systems of America, Lifepoint Behavioral Health, and Swiss Medical Network.

MPT's strategy focuses on leasing facilities to experienced healthcare operators under long-term net leases, with selective investments in long-term, interest-only mortgage loans and non-controlling investments in tenants. The company monitors key performance indicators from tenants to assess risk, including utilization trends, medical staff composition, facility operating performance, and payor mix. MPT highlighted the importance of healthcare real estate due to compelling demographics, specialized nature of the investment, and consolidation within the sector, providing details on the healthcare industry in each of its operating countries. The company also detailed its lease and loan arrangements, including rent escalators and tenant responsibilities.

MPT's outlook and strategy emphasize continued portfolio diversification, monitoring concentration across various metrics. The company highlighted its corporate responsibility initiatives, including sustainability efforts and employee engagement programs, resulting in various awards and recognitions. The company employs 118 people as of February 28, 2025, and detailed its commitment to equal opportunity and diversity. The filing concluded with a discussion of competition, insurance, healthcare regulatory matters, and risk factors related to its business, financing, real estate investments, the healthcare industry, organizational structure, and tax implications.