PORTFOLIO UPDATE AND FUTURE OUTLOOK
In the second quarter of 2012, the Company commenced two previously announced development projects: a 40-bed, $16.6 million inpatient rehabilitation facility with Ernest Health in Lafayette, IN; and a 26-bed, $9.4 million inpatient rehabilitation facility on the campus of an existing long-term acute care hospital leased by Post Acute Medical in Victoria, TX.
“The Lafayette, IN and Victoria, TX projects both demonstrate the current and future value to MPT shareholders of our close relationships with our tenants,” continued Aldag. “Upon completion of the Lafayette hospital, MPT will earn lease revenue pursuant to its master lease agreement with Ernest Health, and in addition will receive approximately 80% of the hospital’s operating earnings with no additional investment. The Victoria, TX project will be the sixth hospital that Post Acute Medical leases from MPT, two of which share operating earnings with MPT.”
At June 30, 2012, the Company had total real estate and related investments of approximately $2 billion comprised of 79 healthcare properties in 23 states leased to 21 hospital operating companies. In July 2012, the Company completed a $100 million mortgage loan investment secured by the Centinela Hospital Medical Center in Inglewood, CA, and restructured its leases to Prime Healthcare as a master lease structure. Among other benefits of the restructure, the lease terms were extended, a minimum annual rent escalator was established and all of MPT’s Prime Healthcare leases and loans were effectively cross-defaulted and cross-collateralized.Based on the Company’s asset portfolio and capitalization as of June 30, 2012, the $100 million Centinela Hospital Medical Center mortgage loan, placement into service of the three Emerus emergency hospitals during the upcoming fourth quarter, and $200 million in anticipated fourth quarter acquisitions, the Company reaffirmed its expectation that calendar year 2012 Normalized FFO will approximate $0.85 per share.