Medical Properties Trust announced that the assumption of its master lease of four Los Angeles area hospitals and two medical office buildings by Pipeline Health has been approved as part of Pipeline’s successful confirmation of its plan of reorganization, which provides for Pipeline’s exit from bankruptcy proceedings. The pre-bankruptcy lease rate, annual escalator, remaining term of approximately 18 years and other material lease provisions remain unchanged. The court-approved plan reconfirms the characterization of the master lease as a true operating lease rather than a financing arrangement.
Following the December sale of its Illinois hospitals, Pipeline is primarily focusing its post-bankruptcy business plan on opportunities within its Los Angeles footprint. On the effective date of the Plan, MPT will be paid all rent that accrued through the first half of January 2023, and it has agreed to defer approximately $5.6 million, or approximately 30%, of 2023 cash rent into 2024 when it will be collected with interest. MPT and Pipeline also agreed to complete Pipeline’s pre-bankruptcy plans to add a behavioral facility within Coast Plaza Hospital. MPT will fund the capital addition, which will be joined to the master lease and earn rent at the lease rate upon completion. Read more.
