FORWARD FOCUSED
FUTURE READY
2025 ANNUAL REPORT
2 | Medical Properties Trust
Dear Shareholders,
2025 marked our 20th anniversary as a publicly traded company.
As I reflect on the past 20 years, a great deal has certainly changed across
the macroeconomic landscape and the healthcare industry, but I am struck
most by what has remained the same, particularly that hospitals remain the
centerpiece of our healthcare systems.
MPT has spent the past two decades committed to addressing the capital
needs of hospitals. Our capital solutions enable hospital operators to unlock
the full value of their real estate, which is invariably the most expensive
component of an operator’s capital stack. Since our IPO, we have worked
tirelessly on behalf of you, our valued shareholders, to acquire hospital real
estate that delivers attractive returns on investment.
Over the past 20 years, these core principles have never wavered, and they
continue to shape the strength of our business today.
A YEAR OF TRANSITION
In this letter last year, I wrote that 2024 was the most challenging year in
our history. I am pleased to share that 2025 was the year we started putting
those challenges in the rearview.
Across our diverse global portfolio, operators are reporting encouraging
performance trends and demonstrating the highest degree of stability in
years. On a trailing-twelve-month basis, total portfolio EBITDARM coverage
increased to 2.6x, led by general acute operators and post-acute care
operators. Several long-time operators reported significant year-over-year
EBITDARM increases, including a 15% improvement at Ernest Health, a 28%
increase at Vibra, and 8% growth at MEDIAN.
As you will recall, we recovered control over our properties in the Steward
restructuring process in September 2024. Within a few weeks, we re-leased
those facilities to several new operators, including HSA, Honor Health,
and Quorum Health with Honor and Quorum already fully ramped. These
new operators have continued to ramp up monthly rent payments on the
schedule agreed upon at that time. With limited exceptions, we collected all
rent due from these operators in 2025.
We continue to keep a close eye on these new providers given the
difficulties inherent in transitioning operations during ongoing bankruptcy
proceedings. As is the case with all of our properties, several of our team
members have had boots on the ground at these facilities throughout the
year, and in addition to various ongoing facility improvement projects,
reported a high-level of patient activity and a renewed sense of energy in
the buildings. We believe that these operators are taking the right steps
22
Years in Business
MPT
NYSE:LISTED
$15.0B
Total Assets
(1)
Footnotes:
(1) As of December 31, 2025.
(2) Inclusive of all MPT properties.
(3) As of March 31, 2026.
On the cover: IMED Alicante Hospital
Leased by IMED Hospitales
At the Very Heart of Healthcare.® | 3
45m
Square Foot
Hospital Portfolio
(1,2)
50+
Industry-Leading
Operator
Relationships
(1)
to enhance revenue cycle management, bring doctors back to facilities,
improve EMS turnaround times, and drive cost savings where possible.
CONTINUING TO STRENGTHEN
OUR FINANCIAL FOUNDATION
We also took significant actions to further enhance the strength of our
balance sheet in 2025.
In February, we issued more than $2.5 billion of 7-year secured bonds at a
blended coupon rate of approximately 7.8%, strengthening our balance sheet
and providing sufficient liquidity to cover all debt maturities through 2026.
In June, our joint venture with Praemia REIM in Germany announced a
successful €702.5 million 10-year refinancing transaction at a 5.1% fixed rate
– an important demonstration of continued investor appetite for high-quality
health care infrastructure in Europe.
We retain numerous options for refinancing maturing debt over the next two
years, including additional asset sales, refinancing with secured debt, and
other transactions to capitalize on the continued evolution of capital markets.
Our carefully crafted covenants provide significant flexibility to be thoughtful
in evaluating each of these potential options.
Given this stronger foundation, in October, our Board of Directors authorized
a new $150 million share repurchase program. Based on our strong belief
that our share price remains significantly undervalued, we have deployed
this program opportunistically and will continue to do so prudently. In
November, our Board of Directors also declared a quarterly dividend of $0.09
From left to right: J. Kevin Hanna - Senior Vice President, Controller and Chief Accounting Officer; R. Lucas Savage - Vice President, Head of Global Acquisitions;
Edward K. Aldag, Jr. - Chairman, President and Chief Executive Officer; Rosa H. Williams - Senior Vice President of Operations and Secretary; R. Steven Hamner - Executive
Vice President and Chief Financial Officer; Charles R. Lambert - Senior Vice President of Finance and Treasurer; and Larry H. Portal - Senior Vice President, Senior Advisor to the CEO.
Vibra Hospital of Northern California
operated by Vibra Health
Approximately
4 | Medical Properties Trust
per common share, an increase of 12%
from the prior quarterly dividend.
LOOKING AHEAD
We are entering our third decade as a
public company with strong conviction
in our business model and a clear focus
on strengthening our platform for the
long term.
General
Acute Care
58.5%
Behavioral Health
16.3%
Other
13.4%
Post Acute Care
11.1%
Freestanding
ER and
Urgent Care
0.7%
GLOBAL PORTFOLIO MIX (1)
384
Hospital Properties (1)
INVESTMENTS BY COUNTRY (1)
Spain
2.0%
All Other Countries and
International Assets
9.6%
Germany
5.0%
Switzerland
5.8%
United Kingdom
27.9%
United States
49.7%
$15.0B
Invested (1)
“We remain confident in
our ability to reach total
annualized cash rent
of more than $1 billion
as our new tenants
continue ramping up
rental payments. ”
To that end, we recently unveiled a
refresh to our brand identity, including
an updated logo and change in our NYSE
ticker symbol to "MPT".
The hospital real estate market continues
to offer attractive growth opportunities
around the world. We recently acquired
a high-performing post-acute facility in
California for approximately $32 million
with a strong cap rate as well as a new
post-acute care facility in Europe for
€23 million. As we continue to improve
our balance sheet position and cost of
capital, we look forward to shifting our
At the Very Heart of Healthcare.® | 5
NOVEMBER 2025
MPT increases regular
quarterly dividend by
12% to $0.09 per share
JUNE 2025
MPT and Praemia REIM
joint venture completes
€702.5 million 10-year
refinancing transaction
secured by 71 rehabilitation
hospitals in Germany
DECEMBER 2025
MPT acquires post-acute facility in
Redding, California for $32 million
DECEMBER 2025
MPT enters into a new lease for
six properties in the Los Angeles,
California area
RECENT TRANSACTIONS (3)
focus towards more of an acquisition mindset in the short
to medium term.
We remain confident in our ability to reach total
annualized cash rent of more than $1 billion as our new
tenants continue ramping up rental payments.
We look forward to demonstrating our commitment to
supporting the communities we serve, driving profitable
FEBRUARY 2025 MPT completes a private
offering of $1.5 billion in aggregate principal
amount of senior secured notes due 2032 and
€1.0 billion aggregate principal amount
of senior secured notes due 2032
growth, and increasing shareholder returns. Thank you
for your support as we continue to do just that.
Edward K. Aldag, Jr.
Chairman, President and Chief Executive Officer
6 | Medical Properties Trust
Rehabilitating Lives in a
South Carolina Community
Opened in 2020, Midlands Regional Rehabilitation
Hospital complements Ernest Health's 1,468-bed
hospital network. The role of rehabilitation and specialty
care hospitals in the U.S. continues to grow to meet the
needs of an aging population.
FORWARD LOOKING STATEMENTS
This report includes forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. Forward-looking statements can generally
be identified by the use of forward-looking words such as “may”, “will”, “would”,
“could”, “expect”, “intend”, “plan”, “estimate”, “target”, “anticipate”, “believe”,
“objectives”, “outlook”, “guidance” or other similar words, and include statements
regarding our strategies, objectives, prospects, industry, asset sales, tenant
conditions and anticipated rent. Forward-looking statements involve known
and unknown risks and uncertainties that may cause our actual results or future
events to differ materially from those expressed in or underlying such forward-
looking statements, including, but not limited to: (i) the risk that projected rents
may be lower than anticipated or realized later than expected; (ii) the risk that
the timing, outcome and terms of the bankruptcy restructuring of Prospect
will not be consistent with those anticipated by the Company; (iii) our success
in implementing our business strategy and our ability to identify, underwrite,
finance, consummate and integrate acquisitions and investments; (iv) the risk
that previously announced or contemplated property sales, loan repayments,
and other capital recycling transactions do not occur as anticipated or at all; (v)
the risk that MPT is not able to attain its leverage, liquidity and cost of capital
objectives within a reasonable time period or at all; (vi) MPT’s ability to obtain
or modify the terms of debt financing on attractive terms or at all, as a result
of changes in interest rates and other factors, which may adversely impact our
ability to pay down, refinance, restructure or extend our indebtedness, including
extending our 2026 credit facility, as it becomes due, or pursue acquisition and
development opportunities; (vii) the ability of our tenants, operators and borrowers
to satisfy their obligations under their respective contractual arrangements with
us; (viii) the ability of our tenants and operators to operate profitably and generate
positive cash flow, remain solvent, comply with applicable laws, rules and regulations
in the operation of our properties, to deliver high-quality services, to attract and
retain qualified personnel and to attract patients; (ix) the risk that we are unable to
monetize our investments in certain tenants at full value within a reasonable time
period or at all; (x) the risk that the operations of our tenants will be negatively
impacted by changes to Medicaid funding introduced by the OBBBA; and (xi) the
risks and uncertainties of litigation or other regulatory proceedings.
The risks described above are not exhaustive and additional factors could adversely
affect our business and financial performance, including the risk factors discussed
under the section captioned “Risk Factors” in our most recent Annual Report on Form
10-K and our Quarterly Reports on Form 10-Q, and as may be updated in our other
filings with the SEC. Forward-looking statements are inherently uncertain and actual
performance or outcomes may vary materially from any forward-looking statements
and the assumptions on which those statements are based. Readers are cautioned
not to place undue reliance on forward-looking statements as predictions of future
events. We disclaim any responsibility to update such forward-looking statements,
which speak only as of the date on which they were made.
Midlands Regional Rehabilitation Hospital
Operated by Ernest Health
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2025
or
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
to
Commission file number 001-32559
Commission file number 333-177186
Medical Properties Trust, Inc.
MPT Operating Partnership, L.P.
(Exact Name of Registrant as Specified in Its Charter)
Maryland
Delaware
20-0191742
20-0242069
(State or Other Jurisdiction of
Incorporation or Organization)
(IRS Employer
Identification No.)
10500 Liberty Parkway
Birmingham, AL
35242
(Address of Principal Executive Offices)
(Zip Code)
(205) 969-3755
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Common stock, par value $0.001 per share, of
Medical Properties Trust, Inc.
MPT
The New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Medical Properties Trust, Inc.
Yes ☒
No ☐
MPT Operating Partnership, L.P.
Yes ☒
No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Medical Properties Trust, Inc.
Yes ☐
No ☒
MPT Operating Partnership, L.P.
Yes ☐
No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Medical Properties Trust, Inc.
Yes ☒
No ☐
MPT Operating Partnership, L.P.
Yes ☒
No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Medical Properties Trust, Inc.
Yes ☒
No ☐
MPT Operating Partnership, L.P.
Yes ☒
No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions
of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Medical Properties Trust, Inc.
Large accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
MPT Operating Partnership, L.P.
Large accelerated filer
☐
Accelerated filer
☐
Non-accelerated filer
☒
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section
404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to
previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers
during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in 12b-2 of the Act).
Medical Properties Trust, Inc.
Yes ☐
No ☒
MPT Operating Partnership, L.P.
Yes ☐
No ☒
As of June 30, 2025, the aggregate market value of the 594.0 million shares of common stock, par value $0.001 per share (“Common Stock”), held by non-affiliates of Medical Properties Trust, Inc.
was $2.6 billion based upon the last reported sale price of $4.31 on the New York Stock Exchange on that date. For purposes of the foregoing calculation only, all directors and executive officers of Medical
Properties Trust, Inc. have been deemed affiliates.
As of February 23, 2026, 597.7 million shares of Common Stock were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the definitive Proxy Statement of Medical Properties Trust, Inc. for the Annual Meeting of Stockholders to be held on May 28, 2026 are incorporated by reference into Items 10 through 14
of Part III, of this Annual Report on Form 10-K.
2
EXPLANATORY NOTE
This report combines the Annual Reports on Form 10-K for the year ended December 31, 2025, of Medical Properties Trust,
Inc., a Maryland corporation, and MPT Operating Partnership, L.P., a Delaware limited partnership, through which Medical Properties
Trust, Inc. conducts substantially all of its operations. Unless otherwise indicated or unless the context requires otherwise, all
references in this report to “we,” “us,” “our,” “Medical Properties,” “MPT,” or “company” refer to Medical Properties Trust, Inc.
together with its consolidated subsidiaries, including MPT Operating Partnership, L.P. Unless otherwise indicated or unless the
context requires otherwise, all references to “operating partnership” refer to MPT Operating Partnership, L.P. together with its
consolidated subsidiaries.
3
TABLE OF CONTENTS
A WARNING ABOUT FORWARD LOOKING STATEMENTS
4
PART I
ITEM 1.
Business
8
ITEM 1A.
Risk Factors
23
ITEM 1B.
Unresolved Staff Comments
39
ITEM 1C.
Cybersecurity
40
ITEM 2.
Properties
42
ITEM 3.
Legal Proceedings
44
ITEM 4.
Mine Safety Disclosures
44
PART II
ITEM 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
44
ITEM 6.
[Reserved]
46
ITEM 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
47
ITEM 7A.
Quantitative and Qualitative Disclosures About Market Risk
63
ITEM 8.
Financial Statements and Supplementary Data
65
ITEM 9.
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
117
ITEM 9A.
Controls and Procedures
117
ITEM 9B.
Other Information
118
ITEM 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
118
PART III
ITEM 10.
Directors, Executive Officers and Corporate Governance
119
ITEM 11.
Executive Compensation
119
ITEM 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
119
ITEM 13.
Certain Relationships and Related Transactions, and Director Independence
119
ITEM 14.
Principal Accountant Fees and Services
119
PART IV
ITEM 15.
Exhibits and Financial Statement Schedules
120
ITEM 16.
Form 10-K Summary
124
SIGNATURES
125
4
A WARNING ABOUT FORWARD LOOKING STATEMENTS
This Annual Report on Form 10-K (the "Annual Report") includes forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). Forward-looking statements can generally be identified by the use of forward-looking words such as "may", "will", "would",
"could", "expect", "intend", "plan", "estimate", "target", "anticipate", "believe", "objectives", "outlook", "guidance", or other similar
words. These forward-looking statements include information about possible or assumed future results of our business, financial
condition, liquidity, results of operations, plans, and objectives. Statements regarding the following subjects, among others, are
forward-looking by their nature:
•
our business strategy;
•
our projected operating results;
•
our ability to raise funds through disposals of properties and other liquidity transactions, including our ability to dispose of
properties on favorable terms or at all;
•
our ability to raise funds through offerings of debt and equity securities and joint venture arrangements;
•
our ability to obtain future financing arrangements (including refinancing of existing financing arrangements);
•
our ability to close on any pending transactions or complete current development projects on the time schedule or terms
described or at all;
•
our ability to acquire, develop, and/or manage additional facilities in the United States (“U.S.”), Europe, South America,
or other foreign locations;
•
availability of suitable facilities to acquire or develop;
•
our ability to enter into, and the terms of, our prospective leases and loans;
•
our ability to re-lease facilities at similar rates as vacancies occur;
•
estimates relating to, and our ability to pay, future distributions;
•
our ability to service our debt and comply with all of our debt covenants;
•
our ability to compete in the marketplace;
•
lease rates and interest rates;
•
market trends;
•
projected capital expenditures; and
•
the impact of technology on our facilities, operations, and business.
Forward-looking statements are based on our beliefs, assumptions, and expectations of our future performance, taking into
account information currently available to us. These beliefs, assumptions, and expectations can change as a result of many possible
events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity, and results of
operations may vary materially from those expressed in our forward-looking statements. You should carefully consider these risks
before you make an investment decision with respect to our common stock and other securities, along with, among others, the
following factors that could cause actual results to vary from our forward-looking statements:
•
macroeconomic conditions, including due to geopolitical conditions and instability, which may lead to a disruption of or
lack of access to the capital markets, disruptions and instability in the banking and financial services industries, rising
inflation and movements in currency exchange rates, and may negatively impact the financial condition of our tenants;
•
the risk that property sales, loan repayments, other capital recycling transactions, or committed acquisitions do not occur
as anticipated or at all;
•
the risk that the final outcome and terms of the bankruptcy restructurings of affiliates of Prospect Medical Holdings, Inc.
(collectively, "Prospect") will not be consistent with those we anticipate and the risk that we are unable to recover the
remaining value of our real estate and other investments in the Prospect portfolio as a result of the bankruptcy
restructuring, within a reasonable timeframe or at all;
•
the risk that we are unable to successfully re-tenant or sell any currently vacant properties on the terms we expect or at all;
5
•
the risk that governments may exercise powers adverse to our ownership and other rights in our properties;
•
the risk that we are not able to attain our leverage, liquidity, and cost of capital objectives within a reasonable time period
or at all;
•
our ability to obtain debt financing on attractive terms or at all, as a result of changes in interest rates and other factors,
which may adversely impact our ability to pay down, refinance, restructure, or extend our indebtedness as it becomes due,
or pursue acquisition and development opportunities;
•
our ability to remain in compliance with our financial covenants under our debt facilities;
•
our ability to effectuate the extension of the revolving portion of our credit facility ("Credit Facility") to June 30, 2027;
•
any downgrades in our credit ratings;
•
the ability of our tenants, operators, and borrowers (including those of our joint ventures) to satisfy their obligations under
their respective contractual arrangements with us, including tenants (like Healthcare Systems of America ("HSA") and
NOR Healthcare Systems ("NOR")) that have rents that will ramp up in 2026;
•
the ability of our tenants and operators to operate profitably and generate positive cash flow, remain solvent, comply with
applicable laws, rules and regulations in the operation of our properties, to deliver high-quality services, to attract and
retain qualified personnel, and to attract patients;
•
the cooperation of our joint venture partners, including adverse developments affecting the financial health of such joint
venture partners or the joint venture itself;
•
the economic, political and social impact of, and uncertainty relating to, the potential impact from epidemics, pandemics
or other public health crises (like COVID-19), which may adversely affect our and our tenants’ business, financial
condition, results of operations, and liquidity;
•
our success in implementing our business strategy and our ability to identify, underwrite, finance, consummate, and
integrate acquisitions and investments;
•
the nature and extent of our current and future competition;
•
factors affecting the real estate industry generally or the healthcare real estate industry in particular;
•
our ability to maintain our status as a real estate investment trust ("REIT") for income tax purposes in the U.S. and United
Kingdom ("U.K.");
•
tax audit results and changes in federal, state, or local tax laws in the U.S., Europe, South America, or other jurisdictions
in which we may own healthcare facilities or transact business;
•
the risk that the operations of our tenants will be negatively impacted by changes in Medicaid funding introduced by the
One Big Beautiful Bill Act;
•
federal and state healthcare and other regulatory requirements, as well as those in the foreign jurisdictions where we own
properties;
•
the value of our real estate assets, which may limit our ability to dispose of assets at attractive prices or obtain or maintain
debt financing secured by our properties or on an unsecured basis;
•
loss of property owned through ground leases upon breach or termination of the ground leases;
•
potential environmental contingencies and other liabilities;
•
our ability to attract and retain qualified personnel;
•
the risks and uncertainties of litigation or other regulatory proceedings and investigations;
•
the accuracy of our methodologies and estimates regarding corporate responsibility metrics and targets, tenant willingness
and ability to collaborate towards reporting such metrics and meeting such goals and targets, and the impact of
governmental regulation on our and our tenants’ corporate responsibility efforts; and
•
other factors referenced in this Annual Report on Form 10-K, including those set forth under the sections captioned “Risk
Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Business.”
Any forward-looking statements speak only as of the date hereof. You should not place undue reliance on these forward-looking
statements. Except as required by law, we disclaim any obligation to update such statements or to publicly announce the result of any
revisions to any of the forward-looking statements contained in this Annual Report on Form 10-K.
6
SUMMARY RISK FACTORS
Set forth below is a summary of the risks described under Item 1A. Risk Factors of this Annual Report.
RISKS RELATED TO OUR BUSINESS, TENANTS, AND STRATEGY
•
Adverse U.S. and global market, economic and political conditions, health crises and other events beyond our control could
have a material adverse effect on our business, results of operations, and financial condition.
•
Our revenues are dependent upon our relationships with and success of our tenants, particularly our largest tenants, like Circle,
Priory, HSA, Swiss Medical, and Lifepoint Behavioral.
•
We have made investments in certain operators of our healthcare facilities and the cash flows (and related returns) from these
investments are subject to more volatility than our properties with traditional net leasing structures.
•
The bankruptcy or insolvency of our tenants or investees could harm our results of operations, financial condition, and liquidity.
•
Declines in the fair value of our assets may force us to recognize impairment charges, which could adversely impact our results
of operations, financial condition, liquidity, and the market price of our common stock.
•
It may be costly to replace defaulting tenants or find new tenants when lease terms end, and we may not be able to find
replacements on comparable or otherwise suitable terms.
•
Our employees are responsible for all aspects of managing our portfolio of over 380 properties across nine countries, and our
failure to effectively manage our properties along with any growth may adversely impact our financial condition and cash flows,
which could negatively affect our ability to service our debt and make distributions.
•
We have less experience with healthcare facilities located outside the U.S.
•
We and our tenants have exposure to contingent rent escalators, which could impact profitability.
•
Our business is highly competitive, and we may be unable to compete successfully.
•
Many of our tenants have an option to purchase the facilities we lease to them, which could disrupt our operations.
•
Merger and acquisition activity or consolidation in the healthcare industry may result in a change of control of, or a competitor’s
investment in, one or more of our tenants or operators, which could have a material adverse effect on us.
•
Our investments in joint ventures could be adversely affected by our lack of control, our partners’ failure to meet their
obligations, and disputes with our partners.
•
Increased scrutiny, politicization, and changing expectations from investors, employees, tenants, and other stakeholders
regarding corporate responsibility and sustainability matters could adversely impact our reputation, tenant and employee
acquisition and retention, and access to capital.
FINANCING RISKS
•
Our indebtedness could adversely affect our financial condition and may otherwise adversely impact our business operations
and our ability to make distributions to stockholders.
•
Covenants in our debt instruments limit our operational flexibility, and a breach of these covenants could materially affect our
financial condition and results of operations.
•
Failure to hedge effectively against interest rate changes may adversely affect our results of operations and our ability to make
distributions to our stockholders.
•
The market price and trading volume of our common stock may be volatile and may decline regardless of our operating
performance, and you may lose all or part of your investment.
•
Future sales of common stock may adversely affect our stock price.
•
Downgrades in our credit ratings could have a material adverse effect on our cost and availability of capital.
•
Elevated interest rates may adversely affect the market price of our securities.
•
Limited access to capital may restrict our growth.
RISKS RELATING TO REAL ESTATE INVESTMENTS
•
Our investments are, and are expected to continue to be, concentrated in a single industry, making us more vulnerable
economically than if our investments were more diversified.
•
The illiquidity of real estate investments could significantly impede our ability to respond to adverse changes in the performance
of our facilities and harm our financial condition.
•
Development and construction risks could adversely affect our ability to service our debt and make distributions to our
stockholders.
•
We may be subject to risks arising from future acquisitions of real estate.
•
Our facilities may not achieve expected results, which may harm our results of operations and financial condition, as well as our
ability to service our debt and make the distributions to our stockholders required to maintain our REIT status.
•
We may suffer losses that are not covered by insurance or that are in excess of our insurance coverage limits.
7
•
Capital expenditures for facility renovation may be greater than anticipated and may adversely impact rent payments by our
tenants and our ability to service our debt and make distributions to our stockholders.
•
Certain of our healthcare facilities are subject to property taxes that may increase in the future and adversely affect our business.
•
As an owner and lessor of real estate, we are subject to risks under applicable environmental laws, the cost of compliance with
which and any violation of which could materially adversely affect us.
•
Our interests in facilities through ground leases expose us to the risk of loss of the facility upon breach or termination of the
underlying ground lease, may limit our use of the facility, and may result in additional expenses to us if our tenants vacate the
facility.
RISKS RELATING TO THE HEALTHCARE INDUSTRY
•
The continued pressure on healthcare reimbursement in the U.S. and other countries in which we do business, including shifts
from fee-for-service reimbursement towards alternative payment models, other healthcare policy reforms, and government cost
cutting measures, could adversely affect the profitability of our tenants and their ability to make payments to us.
•
Significant regulation and loss of licensure or certification or failure to obtain licensure or certification could negatively impact
our tenants' financial condition and results of operations and affect their ability to make payments to us.
•
Our tenants are subject to fraud and abuse laws, the violation of which may jeopardize their ability to make payments to us and
adversely affect their profitability.
•
Certain of our lease arrangements may be subject to laws related to fraud and abuse or physician self-referrals.
•
We may incur substantial capital expenditures to make our healthcare facilities suitable for tenants or compliant with applicable
regulatory requirements.
•
State certificate of need laws may adversely affect our development of facilities and the operations of our tenants.
•
Regulatory restrictions on healthcare transactions involving REITs could adversely affect our business, results of operations,
and financial condition.
RISKS RELATING TO OUR ORGANIZATION AND STRUCTURE
•
We depend on key personnel, the loss of any one of whom may threaten our ability to operate our business successfully.
•
Pursuant to Maryland law, our charter and bylaws contain provisions that may have the effect of deterring changes in
management and third-party acquisition proposals, which in turn could depress the price of our common stock or cause dilution.
•
We rely on information technology in our operations, and any material failure, inadequacy, interruption, or security failure of
such technology (or that of our third-party vendors) could harm our business.
•
Unfavorable resolution of pending and future litigation, regulatory proceedings, or governmental inquiries could have a material
adverse effect on our and our tenants' business, results of operations, financial condition, and reputation.
•
Changes in accounting pronouncements could adversely affect us and the reported financial performance of our tenants.
TAX RISKS
•
Loss of our tax status as a REIT would have significant adverse consequences to us and the value of our common stock.
•
Failure to make required distributions as a REIT would increase our tax burden.
•
Complying with REIT requirements may cause us to forego otherwise attractive opportunities.
•
If certain sale-leaseback transactions are not characterized by the Internal Revenue Service (“IRS”) or similar tax authorities
internationally as “true leases,” we may be subject to adverse tax consequences.
•
Transactions with TRSs may be subject to excise tax.
•
Loans to our tenants could be characterized as equity, in which case our income from that tenant might not be qualifying income
under the REIT rules and we could lose our REIT status.
•
Certain transfers may generate prohibited transaction income, resulting in a penalty tax on gain attributable to the transaction.
•
Changes in U.S. or foreign tax laws, regulations, including changes to tax rates, may adversely affect our results of operations.
8
PART I
ITEM 1. Business
Overview
We are a self-advised REIT formed in 2003 to acquire and develop net-leased healthcare facilities. At December 31, 2025, we
had investments in 384 facilities and approximately 39,000 licensed beds in 31 states in the U.S., seven countries in Europe, and
Colombia in South America. We have operated as a REIT since April 6, 2004, and accordingly, elected REIT status upon the filing of
our calendar year 2004 federal income tax return. Medical Properties Trust, Inc. was incorporated under Maryland law on August 27,
2003, and MPT Operating Partnership, L.P. was formed under Delaware law on September 10, 2003. We conduct substantially all of
our business through MPT Operating Partnership, L.P.
Our primary business strategy is to acquire and develop healthcare facilities and lease the facilities to healthcare operating
companies under long-term net leases, which require the tenant to bear most of the costs associated with the property. The majority of
our leased assets are owned 100%; however, we do own some leased assets through joint ventures with other partners that share our
view that healthcare facilities are part of the infrastructure of any community, which we refer to as investments in unconsolidated real
estate joint ventures. We also make mortgage loans to healthcare operators collateralized by their real estate assets. In addition, we
may make loans to certain of our operators through our taxable REIT subsidiaries (“TRS”), the proceeds of which are typically used
for working capital and other purposes. From time-to-time, we may make noncontrolling investments in our tenants, which we refer to
as investments in unconsolidated operating entities. These investments are typically made in conjunction with larger real estate
transactions with the tenant that give us a right to a share in such tenant’s profits and losses, and provide for certain minority rights
and protections. Our business model facilitates acquisitions and recapitalizations, and allows operators of healthcare facilities to serve
their communities by unlocking the value of their real estate assets to fund facility improvements, technology upgrades, and other
investments in operations.
Our investments in healthcare real estate, other loans, and any investments in our tenants are considered a single reportable
segment as further discussed in Note 2 of Item 8 of this Annual Report on Form 10-K.
Assets
At December 31, 2025 and 2024, our total assets were made up of the following (dollars in thousands):
2025
2024
..........................................................
Real estate assets - at cost
$ 12,751,022
85.0%
$ 12,471,543
87.2%
.............
Accumulated real estate depreciation and amortization
(1,663,056)
(11.1)%
(1,422,948)
(10.0)%
..........................................................
Cash and cash equivalents
540,859
3.6%
332,335
2.3%
...........
Investments in unconsolidated real estate joint ventures
1,399,777
9.3%
1,156,397
8.1%
......................
Investments in unconsolidated operating entities
322,179
2.2%
439,578
3.1%
...........................................................................................
Other
1,650,994
11.0%
1,317,689
9.3%
...............................................................................
Total assets
$ 15,001,775
100.0%
$ 14,294,594
100.0%
Revenues
The following is a breakdown of our revenues for the years ended December 31, 2025 and 2024 (dollars in thousands):
2025
2024
....................................................................................
Rent billed
$
736,543
75.8%
$
719,749
72.3%
..........................................................................
Straight-line rent
152,163
15.6%
163,414
16.4%
......................................................
Income from financing leases
39,735
4.1%
63,651
6.4%
............................................................
Interest and other income
43,581
4.5%
48,733
4.9%
..............................................................................
Total revenues
$
972,022
100.0%
$
995,547
100.0%
See “Overview” in Item 7 of this Annual Report on Form 10-K for details of transaction and other activity for 2025 and 2024.
9
Portfolio of Properties
As of February 23, 2026, our portfolio consisted of 381 properties: 365 facilities are leased to 50 tenants, along with others in
the form of developments and mortgage loans, and less than 1% of total assets that are not currently leased to a tenant, as discussed in
Note 3 to Item 8 of this Annual Report on Form 10-K. Of our portfolio of properties, 105 facilities are owned by way of our five
unconsolidated real estate joint venture arrangements in which we share control with our joint venture partners. Our facilities consist
of 165 general acute care hospitals, 68 behavioral health facilities, 128 post acute care facilities, and 20 freestanding ER/urgent care
facilities (“FSERs”).
See Item 2 of this Annual Report on Form 10-K for further information about our properties.
Outlook and Strategy
Our strategy is to lease the facilities that we acquire or develop to experienced healthcare operators pursuant to long-term net
leases. In addition, we may selectively structure certain of our investments as long-term, interest-only mortgage loans to healthcare
operators. Our mortgage loans are typically structured such that we obtain annual cash returns similar to our net leases. In addition, we
have obtained and may continue to obtain profits or other interests in certain of our tenants’ operations. These noncontrolling
investments in our tenants are typically made in conjunction with larger real estate transactions, provide for certain minority rights and
protections, and sometimes give us a right to participate in future real estate transactions and enhance our overall return.
The market for healthcare real estate is extensive and includes real estate owned by a variety of healthcare operators. For
example, according to the 2024 American Hospital Association statistics report, there were approximately 5,100 community hospitals
throughout the U.S. We typically acquire and develop net-leased facilities that focus on the most critical components of healthcare.
We typically invest in facilities that have the highest intensity of care including:
•
General acute care hospitals — provide inpatient and outpatient care for the treatment of acute conditions and
manifestations of chronic conditions, illnesses, or injuries including both surgical and non-surgical
treatments/interventions. This type of facility also provides ambulatory care through onsite emergency rooms.
•
Behavioral health facilities — specialty facilities focused on the treatment of mental, social, and even physical illnesses,
while promoting the health and well-being of the body, mind, and spirit. Behavioral health services range in acuity of care
from outpatient therapy and drug and alcohol rehabilitation services to secured, inpatient mental health hospital care.
•
Post acute care facilities — includes a) inpatient rehabilitation facilities ("IRFs") that provide rehabilitation to patients
with various neurological, musculoskeletal orthopedic, and other medical conditions following stabilization of their acute
medical issues and b) long-term acute care hospitals ("LTACHs") that are specialty-care hospitals designed for patients
with serious medical problems that require intense, specialized treatment for an extended period of time, sometimes
requiring a hospital stay averaging in excess of three weeks.
•
FSERs — provide emergency medical services comparable to most hospital emergency rooms, while not physically
attached to a hospital campus. Urgent care centers operate similarly, but generally provide care for non-emergent injuries
and illnesses.
10
On a property type basis, our total assets at December 31, 2025 were as follows:
Diversification
A fundamental component of our business plan is the continued diversification of our portfolio. We monitor diversification in
several ways, including concentration in any one facility. We believe facility level diversification is important because if an individual
facility is needed in the community and has support from local physicians and others in the community, its operations will generally
be successful regardless of who the operator is (see "Underwriting/Asset Management" section below for performance indicators we
look for at the facility level). Other ways we monitor diversification include our tenant relationships, the types of hospitals we own,
and the geographic areas in which we invest.
At December 31, 2025, our largest investment in any single property was less than 2% of our total assets. From a tenant
relationship perspective, see section titled “Significant Tenants” below for detail. See sections titled “Portfolio of Properties” and
“Outlook and Strategy” above for information on the diversification of our hospital types. From a geographical perspective, we have
investments across the U.S. and in Europe and South America. See Note 3 to Item 8 of this Annual Report on Form 10-K for more
detail on our geographic concentration information.
Underwriting/Asset Management
Revenues from rents we earn pursuant to lease agreements with our tenants make up approximately 95% of our total revenues
with the remainder of our income coming from interest income from loans to our tenants and other facility owners and from profits or
equity interests in certain of our tenants’ operations. Our tenants operate in the healthcare industry, generally providing medical,
surgical, rehabilitative, and behavioral health care to patients. The capacity of our tenants to pay our rents and interest is dependent
upon their ability to conduct their operations at profitable levels. We believe that the business environment of the industry segments in
which our tenants operate is generally positive for efficient operators. However, our tenants’ operations are impacted by economic,
regulatory, healthcare, and market conditions (along with the possibility of natural disasters, epidemics, pandemics, or other public
health crises, like COVID-19) that may affect their profitability, which could impact our results. Accordingly, we monitor certain key
performance indicators (based on available data provided by our tenants/borrowers) that we believe provides us with early indications
of conditions that could affect the level of risk in our portfolio.
Key factors that we may consider in underwriting prospective deals and in our ongoing monitoring of our tenants’ (and
guarantors’) performance, as well as the condition of our properties, include, but are not limited to, the following:
•
the scope and breadth of clinical services and programs, including utilization trends (both inpatient and outpatient) by
service type;
•
the size and composition of medical staff and physician leadership at the facilities, including specialty, tenure, and number
of procedures performed and/or referrals;
•
an evaluation of the operators’ management team, as applicable, including background and tenure within the healthcare
industry;
59%
16%
11%
General Acute CareHospitals
Behavioral Health Facilities
PostAcuteCare Facilities
Freestanding ER/UrgentCare Facilities
Other
TOTAL ASSETS BY ASSET TYPE
11%
59%
16%
1%
13%
11
•
staffing trends, including ratios, turnover metrics, recruitment and retention strategies at corporate and individual facility
levels;
•
facility operating performance measured by current, historical, and prospective operating margins (measured by a tenant's
earnings before interest, taxes, depreciation, amortization, management fees, and facility rent) of each tenant and at each
facility;
•
the ratio of our tenants' operating earnings to facility rent and to other fixed costs, including debt costs;
•
changes in revenue sources of our tenants, including the relative mix of public payors (including Medicare,
Medicaid/MediCal, and managed care in the U.S., as well as equivalent payors in Europe and South America) and private
payors (including commercial insurance and private pay patients);
•
historical support (financial or otherwise) from governments and/or other public payor systems, including during major
economic downturns/depressions;
•
trends in tenants' cash collections, including comparison to recorded net patient service revenues, knowing and assessing
current revenue cycle management systems and potential future planned upgrades or replacements;
•
tenants' free cash flow;
•
the potential impact of healthcare pandemics/epidemics, legislation, and other regulations (including changes in
reimbursement) on our tenants', borrowers', and guarantors' profitability and liquidity;
•
the potential impact of any legal, regulatory, or compliance proceedings with our tenants (including at the facility level);
•
the potential impact of supply chain and inflation-related challenges as they relate to new developments or capital addition
projects;
•
an ongoing assessment of the operating environment of our tenants, including demographics, competition, market
position, status of compliance, accreditation, quality performance, and health outcomes as measured by The Centers for
Medicare and Medicaid Services ("CMS"), The Joint Commission, and other governmental bodies in which our tenants
operate;
•
the level of investment in the hospital infrastructure and health IT systems; and
•
physical real estate due diligence, typically including property condition and Phase 1 environmental assessments, along
with routine property inspections thereafter.
In addition to the key factors above, we may analyze the physician relationships with the hospital and study admissions to
understand how broad such referrals are to the hospital. Finally, we typically address two primary questions when underwriting an
investment – 1) is this hospital truly needed in the market? and 2) would the community suffer were the hospital not there? We believe
answers to these two questions can usually provide significant insight on whether or not to move forward with a particular investment.
Healthcare Industry
The delivery of the majority of healthcare services, whether in the U.S. or elsewhere, requires real estate. The global outbreak of
COVID-19 further validated this, as hospitals during the pandemic were proven invaluable. As a consequence, healthcare providers
depend on real estate to maintain and grow their businesses. We believe that the healthcare real estate market provides investment
opportunities due to the:
•
compelling demographics driving the demand for health services;
•
specialized nature of healthcare real estate investing; and
•
consolidation of the fragmented healthcare real estate sector.
As noted previously, we have investments in nine different countries across three continents. Although there are regulatory,
cultural, and other differences between these countries, the importance of healthcare and its impact on the economy is a consistent
theme. See below for details of the healthcare industry in each of the countries in which we currently do business (according to
government sources and healthcare industry reports):
12
United States (population - approximately 350 million)
•
U.S. citizens receive healthcare primarily through private (via insurance carried by the individual or its employer) or
public (Medicare/Medicaid) payors.
•
U.S. currently ranks highest in overall health expenditures in the world with $5.3 trillion in 2024, or $15,474 per person.
U.S. health expenditures as a percentage of Gross Domestic Product (“GDP”) were 18% in 2024.
•
In 2024, the largest share of total health spending was paid by the federal government at 31%, with individual pay at 28%,
private business funding 18%, state and local governments making up 16%, and other private sources accounting for 7%.
•
Medicare spending grew 7.8% to $1.12 trillion in 2024, or 21% of total National Health Expenditures (“NHE”).
•
Medicaid spending grew 6.6% to $931.7 billion in 2024, or 18% of total NHE.
•
Hospital expenditures grew 8.9% to $1.6 trillion in 2024.
•
Out-of-pocket spending grew 5.9% to $556.6 billion in 2024, or 11% of total NHE.
United Kingdom (population - approximately 70 million)
•
All British residents are entitled to public healthcare through the National Health Service, including hospital, physician,
and mental health care.
•
Overall health expenditures grew to £317 billion in 2024, up from £298 billion in 2023.
•
Health expenditures accounted for 11.1% of GDP in 2024.
•
Government-financed healthcare expenditures made up £258 billion in 2024, representing 81.3% of overall healthcare
spending.
•
Private household out-of-pocket and voluntary health insurance spending totaled £54.3 billion in 2024, representing
17.2% of overall healthcare spending, up from £47 billion in 2023 and 16.3% of overall healthcare spending.
Switzerland (population - approximately 10 million)
•
Switzerland operates a universal healthcare system which is highly decentralized, with the cantons playing a key role in its
operation.
•
Health expenditures accounted for 11.8% of GDP in 2024, consistent with 2023.
•
Overall health expenditures were CHF 94 billion in 2023, which was a 2.4% increase from 2022.
•
In 2023, hospital care represented 36.3% of total health expenditures, compared to 35.7% in 2022.
Germany (population - approximately 85 million)
•
Health insurance in Germany is compulsory and consequently offers universal coverage for its citizens.
•
Health expenditures were approximately 12.3% of GDP in 2024.
•
Health expenditures were €529.6 billion in 2024, which was a 7% increase from 2023.
•
In 2023, private health insurance accounted for 8.0% of total health expenditures, similar to 2022.
Spain (population - approximately 50 million)
•
Spain has a public healthcare system, mainly financed by taxes, which allows residents to have access to free or very low-
cost healthcare.
•
In 2024, total health expenditures were €146.4 billion, or 9.2% of GDP.
•
In 2023, hospital care represented approximately 61% of the overall public healthcare expenditure.
•
Public spending accounted for 72.8% of all health spending in 2024.
13
•
Out-of-pocket payments were 18.6% in 2022, down from 20.6% in 2021.
Italy (population - approximately 60 million)
•
Italy’s healthcare system provides universal coverage for all citizens and legal foreign residents and is funded by
corporate and value-added tax revenues collected by the central government.
•
In 2024, total health expenditures were 8.4% of GDP.
•
In 2023, private funding of healthcare was €44.3 billion, compared to €41.5 billion in 2022.
Finland (population - approximately 6 million)
•
Finland's healthcare system provides public healthcare services that all residents are entitled to, which is funded by taxes
and social security payments.
•
In 2024, total health expenditures were €31.7 billion, or 10.6% of GDP.
•
In 2024, public spending on healthcare accounted for 81.4% of overall healthcare expenditures.
•
In 2023, just over 16% of total health spending was paid out-of-pocket.
Portugal (population - approximately 10 million)
•
Portugal provides universal health coverage to its citizens through its National Health Service, which is financed through
taxation.
•
Health spending in Portugal accounted for 10.2% of GDP in 2024, up from 10% in 2023.
•
Public spending accounted for 62.2% of all health spending in 2024, consistent with recent years.
Colombia (population - approximately 55 million)
•
Colombia provides universal public and private coverage available for purchase through private companies where all
citizens are entitled to a comprehensive health benefit package.
•
In 2024, health expenditures were 8.1% of GDP, up from 7.7% in 2023.
•
Public spending accounted for 76% of all health spending in 2024.
Our Leases and Loans
The leases of our facilities are generally “absolute-net” leases with terms requiring the tenant to pay all ongoing operating
expenses of the facility, including property, casualty, general liability, and other insurance coverages; utilities and other charges
incurred in the operation of the facilities; real estate and certain other taxes; ground lease rent (if any); and the costs of repairs and
maintenance (including any repairs mandated by regulatory requirements). Our tenants are also responsible for any desired capital
expenditures (costs that either improve the value of the facility or extend the facility's life), subject to our approval; however, if we
agree to fund such capital expenditures instead, our lease revenue will typically increase accordingly. Borrowers under our mortgage
loan arrangements retain the responsibilities of ownership, including physical maintenance and improvements and all costs and
expenses. Our leases and loans typically require our tenants to indemnify us for any past or future environmental liabilities, as well.
Our current leases and loans have a weighted-average remaining initial term of 16.7 years (see Item 2 for more information on
remaining lease and loan terms) and most include renewal options at the election of our tenants. Based on current monthly revenue,
99% of our leases provide annual rent escalations based on increases in the Consumer Price Index (“CPI”), or similar indexes for
properties outside the U.S. and/or fixed minimum annual rent escalations.
14
Significant Tenants
Our top five tenants, on a total asset basis as of December 31, 2025 along with a comparison to December 31, 2024, is as
follows (dollars in thousands):
As of December 31, 2025
As of December 31, 2024
Operators
Total Assets (1)
Percentage of
Total Assets
Total Assets (1)
Percentage of
Total Assets
........................................................................
Circle
$
2,121,848
14.1%
$
2,026,778
14.2%
.......................................................................
Priory
1,301,888
8.7%
1,233,462
8.6%
...............................
Healthcare Systems of America
1,200,996
8.0%
1,187,006
8.3%
...........................................
Swiss Medical Network
873,703
5.8%
719,632
5.1%
................................................
Lifepoint Behavioral
809,492
5.4%
813,584
5.7%
........................................................
Other operators
6,688,287
44.6%
6,624,256
46.3%
..............................................................
Other assets
2,005,561
13.4%
1,689,876
11.8%
.....................................................................
Total
$
15,001,775
100.0%
$
14,294,594
100.0%
(1)
Total assets by operator are generally comprised of real estate assets, mortgage loans, investments in unconsolidated real
estate joint ventures, investments in unconsolidated operating entities, and other loans.
Circle
Affiliates of Circle Health Ltd. ("Circle") lease 36 facilities in the U.K. pursuant to separate lease agreements. Of these leases,
34 are cross-defaulted individual leases guaranteed by Circle and have initial fixed terms ending in 2050, with two five-year extension
options plus annual inflation-based escalators. The remaining two facilities are leased with a weighted-average remaining initial fixed
term of 9.6 years along with annual inflation-based escalators and extension options.
Priory
Affiliates of Priory Group ("Priory"), a subsidiary of Median B.V., lease 37 facilities in the U.K. pursuant to separate lease
agreements. Of these properties, 31 are cross-defaulted individual leases guaranteed by Priory and have initial fixed terms ending in
2046, with two ten-year extension options plus annual inflation-based escalators. The remaining six facilities are cross-defaulted
individual leases guaranteed by Priory and have initial fixed terms ending in 2044, with annual inflation-based escalators.
At December 31, 2025, we hold a minority interest in Priory approximating $44 million, which we acquired in connection with
the property acquisitions discussed above. In 2024, we sold our interest in a British pound syndicated term loan with Median Kliniken
S.á.r.l. ("MEDIAN") as the borrower ("Priory syndicated term loan") for aggregate proceeds of £90 million.
Healthcare Systems of America
We lease eight facilities in the U.S. (covering three states) to HSA pursuant to one master lease agreement. The master lease had
an initial fixed term of 20 years (ending in September 2044) and contains three extension options of five years plus annual inflation-
based escalators.
These facilities were leased to and operated by Steward Healthcare, Inc. (“Steward”) prior to their bankruptcy, as discussed
below, and we re-leased them to HSA in September 2024 when HSA took over operating these facilities. As part of this transition,
HSA (like other tenants of former Steward-operated facilities) assumed responsibility for the costs of operating the facilities
(including payroll and related benefits) on a go forward basis. In addition, HSA entered into an interim transition services agreement
with Steward to, among other things, assist with billing and collection. To assist HSA during this transition and minimize disruptions
to patient care, we did the following:
a)
agreed to a ramp up of cash rents starting at lease commencement. HSA is currently paying 50% of full contractual rents,
and cash rents are scheduled to increase to 100% in the 2026 fourth quarter, and
b)
advanced a loan to HSA (similar to other new operators), secured by accounts receivable.
We have elected to account for rent and interest revenue related to HSA on a cash basis. During 2025, we received $33.8 million
reflecting the revenue recognized from HSA for the year.
15
Swiss Medical Network
Affiliates of Swiss Medical Network (“Swiss Medical”) lease 18 facilities in Switzerland under individual leases through our
Infracore SA real estate joint venture (“Infracore”), in which we hold a 70% non-controlling interest and have one facility under
development. The weighted-average remaining term of these leases at December 31, 2025 was 25 years. These leases are subject to
annual inflation-based escalators.
In addition, we hold an 8.9% passive equity ownership interest in Swiss Medical and a loan as part of a syndicated loan facility
for a combined total of approximately $197 million at December 31, 2025. Swiss Medical’s parent is Aevis Victoria SA (“Aevis”), a
public healthcare, lifestyle, and infrastructure investment company that also holds an interest in Infracore. We hold a passive 4.6%
equity interest in Aevis at December 31, 2025.
Lifepoint Behavioral
Lifepoint Behavioral Health ("Lifepoint Behavioral") leases 19 facilities pursuant to one master lease agreement. The master
lease's original initial fixed term was 20 years (ending in October 2041) and contains two extension options of five years plus
inflation-based escalators.
No other tenant accounted for more than 5% of our total assets at December 31, 2025 or 2024.
Other Tenant Matters
In 2025 and 2024, we had two tenants that filed for bankruptcy.
Steward
As discussed in previous filings, Steward filed for Chapter 11 bankruptcy on May 6, 2024 with the United States Bankruptcy
Court for the Southern District of Texas. On September 18, 2024, the bankruptcy court approved a global settlement between Steward,
its lenders, the unsecured creditors committee, and us. The order provided for the following: a) termination of our master lease with
Steward; b) the release of claims against 23 of our properties, allowing us to begin the process of re-tenanting these facilities, which
we did as discussed further in Note 3 to Item 8 of this Annual Report on Form 10-K, and c) a full release of claims against us from all
parties. In return, we consented to the sale of the operations and our real estate in three facilities in the Space Coast region of Florida
with a substantial portion of the proceeds being transferred to Steward, along with a full release of our claims in Steward including
claims to past due rent and interest, outstanding loans, and our equity investment. In regard to our real estate partnership with
Macquarie Asset Management (“Macquarie”), the bankruptcy court approved the termination of the partnership’s master lease with
Steward during the 2024 third quarter. In addition, we and Macquarie entered into an agreement with the mortgage lender of the
partnership to transition the eight Massachusetts properties to them along with cash proceeds of approximately $40 million
(representing our share), in return for full payment of the underlying mortgage debt and a release of claims against each party. With
this global settlement, our relationship with Steward effectively ended.
Prospect
As discussed in past filings, Prospect previously leased six of our facilities in California and three facilities in Connecticut. In
addition, we held a mortgage loan secured by a first mortgage on four facilities in Pennsylvania among other investments. Prospect
filed for Chapter 11 bankruptcy on January 11, 2025 with the United States Bankruptcy Court for the Northern District of Texas. On
March 20, 2025, the bankruptcy court approved a global settlement (including a recovery waterfall) between us, Prospect, and other
stakeholders. As part of the global settlement, we re-leased the six California properties to NOR as a result of their successful bid to
acquire the operations of the Prospect-operated California facilities. In regard to the remaining seven properties, five of these facilities
have been sold to-date with the remaining two expected to be sold later in 2026.
Prospect's bankruptcy proceedings are continuing, and the ultimate outcome of such proceedings is uncertain. At this time, we
cannot assure you that we will be able to recover in full the remaining $61 million of our investment in Prospect as of December 31,
2025. In addition, the bankruptcy court approved an order for up to $70 million in additional advances from us including up to $30
million in the form of a backstop facility to cover administrative and priority claims. These possible advances are conditioned on other
events occurring including the sale of the final Connecticut property and the bankruptcy plan becoming effective. Any funds advanced
are secured by recoveries, if any, from causes of action owned by the debtor.
See Note 3 to Item 8 of this Annual Report on Form 10-K for more information on the impact of these bankruptcies on our
results of operations.
16
Tax Structure
U.S.
We have operated as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, (the “Code”)
since 2004. Accordingly, we are generally not subject to U.S. federal corporate income tax on our REIT taxable income, provided that
we continue to qualify as a REIT and our distributions to our stockholders equal or exceed such taxable income. This treatment
substantially eliminates the “double taxation” that ordinarily results from an investment in a "C" corporation.
The Code defines a REIT as a corporation that: (a) is managed by one or more directors; (b) would be taxable as a domestic
corporation if not for Sections 856 through 860 of the Code; (c) is beneficially owned by 100 or more persons; (d) does not have five
or fewer individuals owning more than 50% in value of the outstanding stock; and (e) meets certain asset, income, and distributions
tests.
We believe that we are organized and have operated in a manner that is in line with the Code’s definition of a REIT since 2004,
and we intend to operate in this manner for the foreseeable future. However, see our “Tax Risks” section in Item 1A of this Annual
Report on Form 10-K for further information including the potential impact to us if we were to lose our REIT status.
Certain non-real estate activities (such as working capital loans or investments in unconsolidated operating entities) are
conducted by entities which we elected to be treated as a TRS. Our TRS entities are subject to both U.S. federal and state income
taxes. In the case of domestic investments in unconsolidated operating entities, these investments typically fall under a structure
permitted by the REIT Investment Diversification and Empowerment Act of 2007 (“RIDEA”). Under the provisions of RIDEA, a
REIT may lease “qualified health care properties” on an arm’s length basis to a TRS that owns healthcare operations so long as the
property is operated by an entity that qualifies as an “eligible independent contractor.”
International
For our properties located outside the U.S., we are subject to the local taxes of the jurisdictions where our properties reside
and/or legal entities are domiciled; however, we do not expect to incur additional taxes, of a significant nature, in the U.S. from
foreign-based income as the majority of such income flows through our U.S. REIT.
Effective July 1, 2023, we moved a majority of our U.K. assets into a U.K. REIT regime. The REIT requirements in the U.K.
are generally similar to those in the U.S. We believe we have met all requirements as of December 31, 2025.
Environmental Matters
Under various U.S. federal, state, and local environmental laws and regulations and similar international laws, a current or
previous owner, operator, or tenant of real estate may be required to remediate hazardous or toxic substance releases or threats of
releases. There may also be certain obligations and liabilities on property owners with respect to asbestos containing materials.
Investigation, remediation, and monitoring costs may be substantial. The confirmed presence of contamination or the failure to
properly remediate contamination on a property may adversely affect our ability to sell or rent that property or to borrow funds using
such property as collateral and may adversely impact our investment in that property. Generally, prior to completing an acquisition or
closing a mortgage loan, we obtain Phase I environmental assessments (or similar studies outside the U.S.) in order to attempt to
identify potential environmental concerns at the facilities. These assessments are carried out in accordance with an appropriate level of
due diligence and generally include a physical site inspection, a review of relevant environmental and health agency database records,
one or more interviews with appropriate site-related personnel, review of the property’s chain of title, and review of historic aerial
photographs and other information on past uses of the property. We may also conduct limited subsurface investigations and test for
substances of concern where the results of the Phase I environmental assessments or other information indicates possible
contamination or where our consultants recommend such procedures. Upon closing and for the remainder of the lease or loan term,
our transaction documents typically require our tenants to repair and remediate environmental issues at the applicable facility, and to
comply in full with all environmental laws and regulations.
Seismic Standards
California Seismic Standards
The Alfred E. Alquist Hospital Facilities Seismic Safety Act of 1983 (“Alquist Act”), establishes, under the jurisdiction of the
Department of Health Care Access and Information ("HCAI"), formerly the Office of Statewide Health Planning and Development
("OSHPD"), a program of seismic safety building standards for certain hospitals constructed on and after March 7, 1973. The law
requires the California Building Standards Commission to adopt earthquake performance categories, seismic evaluation procedures,
standards and timeframes for upgrading certain facilities, and seismic retrofit building standards. This legislation was adopted to avoid
the loss of life and the disruption of operations and the provision of emergency medical services that may result from structural
damage sustained to hospitals resulting from an earthquake. A violation of any provision of the act is a misdemeanor.
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Under the Alquist Act and related rules and regulations, all general acute care hospital buildings in California are assigned a
structural performance category (“SPC”). SPC ratings range from 1 to 5 with SPC-1 assigned to buildings that may be at risk of
collapse during a strong earthquake and SPC-5 assigned to buildings reasonably capable of providing services to the public following
a strong earthquake. Pursuant to the Alquist Act, state law initially required all SPC-1 buildings to be removed from providing general
acute care services by 2020 and all SPC-2 buildings to be removed from providing general acute care services by 2030. However, in
2017, HCAI adopted a new performance category that allowed hospitals to explore the possibilities of upgrading nonconforming
buildings to a new performance level that is not as rigorous. Under SPC-4D, buildings undergoing a retrofit to this level can continue
functioning indefinitely beyond 2030. In addition, California AB 2190 bill required HCAI to grant an additional extension of time to
an owner who was subject to the January 1, 2020, deadline if specified conditions were met. The bill authorized the additional
extension to be until July 1, 2022, if the compliance plan was based upon replacement or retrofit, or until January 1, 2025, if the
compliance plan was for a rebuild. As AB 2190 extensions for SPC-1 buildings concluded in 2025, AB 869 established new
regulatory framework for other buildings beyond 2030 that remained noncompliant. Under extraordinary circumstances a 5-year
deadline may be met for a maximum possible deadline of 2035.
As of December 31, 2025, we have 17 licensed hospitals in California totaling investments of approximately $1.0 billion.
Exclusive of one hospital (representing less than 0.8% of our total assets), all of our California hospitals are seismically compliant
through 2030 as determined by HCAI. For the one remaining hospital, we have requested an extension to complete a project which
will result in the property being compliant. We expect this project to be completed by the third quarter of 2027.
Colombia Seismic Standards
Similar to California, the design, construction, and technical supervision of buildings in Colombia must meet certain minimum
seismic standards. Such standards divide the country into seismic hazard zones: low threat, intermediate threat, and high threat. Two
of our facilities are located in Bogotá, an intermediate threat zone, while the other two facilities (representing less than 1% of our total
assets) are located in a high threat zone.
In addition, all buildings are classified into use groups. Clinical hospitals and health centers fall into Group IV, which are
deemed indispensable buildings and are held to a higher standard of earthquake resistant construction. Buildings in Group IV are
considered essential for the recovery of the community after the occurrence of an emergency, including an earthquake, and the
additional structural requirements are in place to ensure that they can remain operational.
As of December 31, 2025, our two facilities in the high threat zone are seismic compliant. We estimate that our two facilities in
Bogotá, an intermediate threat zone, need approximately $15 million of seismic upgrades to become compliant under Colombian law.
Under our current lease and loan agreements, our tenants (or borrowers) are responsible for capital expenditures in connection
with seismic laws. However, if we elect to fund capital expenditures for seismic purposes, we would expect a corresponding increase
in the lease base that would result in additional rent (such as with our commitment of up to $60 million made to NOR for seismic
compliance). Other than as discussed above, we do not currently expect California or Colombia seismic standards to have an impact
on our cash flows. We also do not currently expect compliance with seismic standards to materially impact the financial condition of
our tenants.
Competition
We compete in acquiring and developing facilities with financial institutions, other lenders, real estate developers, healthcare
operators, other REITs, other public and private real estate companies, infrastructure and other funds, and private real estate investors.
Among the factors that may adversely affect our ability to compete are the following:
•
we may have less knowledge than our competitors of certain markets in which we seek to invest in or develop facilities;
•
some of our competitors may have greater financial and operational resources than we have;
•
some of our competitors may have lower costs of capital than we do;
•
some of our competitors may pursue a transaction more quickly than we do;
•
our competitors or other entities may pursue a strategy similar to ours; and
•
some of our competitors may have existing relationships with our potential tenants/operators.
To the extent that we experience vacancies in our facilities, we will also face competition in leasing those facilities to
prospective tenants. The actual competition for tenants varies depending on the characteristics of each local market. Virtually all of
our facilities operate in highly competitive environments, and patients and referral sources, including physicians, may change their
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preferences for healthcare facilities from time-to-time. The operators of our properties compete on a local and regional basis with
operators of properties that provide comparable services. Operators compete for patients based on a number of factors, including
quality of care, reputation, physical appearance of a facility, location, services offered, physicians, staff, and price. We also face
competition for tenants, such as physicians and other healthcare providers, from owners of comparable healthcare facilities.
For additional information, see “Risk Factors” in Item 1A of this Annual Report on Form 10-K.
Insurance
We obtain various types of insurance to mitigate the impact of property, business interruption, liability, flood, earthquake, fire,
wind, and other environmental losses. We attempt to obtain the appropriate policy terms, conditions, limits, and deductibles
considering the relative risk of loss and cost of coverage. However, there are certain types of extraordinary losses that may be either
uninsurable or not economically insurable.
We maintain or require in our leases and mortgage loans that our tenants maintain applicable types of insurance on our facilities
and their operations. In addition, we have a comprehensive insurance program to further protect our interests. At December 31, 2025,
we believe that the policy specifications and insured limits of our tenant’s policies and our own policies are appropriate given the
relative risk of loss, the cost of the coverage, and standard industry practice. However, no assurances can be given that we will not
incur losses that are uninsured or that exceed our insurance coverage.
Healthcare Regulatory Matters
In this Section, we discuss certain material federal healthcare laws and regulations that may affect our operations and those of
our tenants and borrowers. We do not address all applicable federal healthcare laws, and do not address state healthcare laws and
regulations, except as otherwise indicated. Certain state laws and regulations, like the federal healthcare laws and regulations, could
affect the operations of our tenants and, accordingly, our results. In some instances, we own a minority interest in our tenants’
operations and, in addition to the effect on our tenant’s ability to meet its financial obligations to us, our ownership and investment
returns may also be negatively impacted by such laws and regulations. Moreover, the discussion relating to reimbursement for
healthcare services addresses matters that are subject to frequent review and revision by Congress and the agencies responsible for
administering federal payment programs including state agencies. Consequently, predicting future reimbursement trends or changes,
along with the potential impact to us, is inherently difficult and imprecise. Finally, though we have not included a comprehensive
discussion of applicable foreign laws or regulations, our tenants in Europe and South America may be subject to similar laws and
regulations governing the ownership or operation of healthcare facilities including, without limitation, laws governing patient care and
safety, reimbursement, licensure, and data protection.
Ownership and operation of hospitals and other healthcare facilities are subject, directly and indirectly, to substantial U.S.
federal, state, and local government healthcare laws, rules, and regulations. Our tenants’ failure to comply with these laws and
regulations could adversely affect their ability to meet their obligations to us. Physician investment in our facilities or in real estate
joint ventures is also subject to such laws and regulations. We are not a healthcare provider or in a position to influence the referral of
patients or ordering of items and services reimbursable by the federal government or any state agency. Nonetheless, to the extent that a
healthcare provider engages in transactions with our tenants, such as subleases or other financial arrangements, the Anti-Kickback
Statute and the Stark Law (both discussed in this section), and any state counterparts thereto, could be implicated.
As in the U.S. under the Health Insurance Portability and Accountability Act of 1996 ("HIPAA") and similar state data
protection laws, our tenants in foreign jurisdictions may be subject to strict laws and regulations governing data protection (such as the
European Union's General Data Protection Regulation ("GDPR")), generally, and the protection of a patient’s personal health
information, specifically. Tenants may also be subject to laws and regulations addressing billing and reimbursement for healthcare
items and services. Furthermore, in certain cases, as with certificate of need laws in the U.S., government approval in foreign
jurisdictions may also be required prior to the transfer of a healthcare facility or prior to the establishment of new or replacement
facilities, the addition of beds, the addition or expansion of services, and certain capital expenditures.
Our leases and loan documents typically require our tenants, both domestic and foreign, to comply with all applicable laws,
including healthcare laws. We intend for all of our business activities and operations (including that of our tenants and borrowers) in
such jurisdictions to conform in all material respects with all applicable healthcare laws, rules, and regulations.
Applicable Laws (not intended to be a complete list)
Anti-Kickback Statute. The federal Anti-Kickback Statute (codified at 42 U.S.C. § 1320a-7b(b)) prohibits, among other things,
the offer, payment, solicitation, or acceptance of remuneration, directly or indirectly, in return for referring an individual to a provider
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of items or services for which payment may be made in whole, or in part, under a federal healthcare program, including the Medicare
or Medicaid programs. Violation of the Anti-Kickback Statute is a crime, punishable by fines of up to $100,000 per violation, ten
years imprisonment, or both. Violations may also result in civil sanctions, including civil monetary penalties of up to $50,000 per
violation, exclusion from participation in federal healthcare programs, including Medicare and Medicaid, and additional monetary
penalties in amounts treble to the underlying remuneration. The Anti-Kickback Statute is an intent-based statute, and has been broadly
interpreted. As an example, courts have held that there is a violation of the Anti-Kickback Statute if just one purpose of an
arrangement is to generate prohibited referrals even though there may be one or more other lawful purposes to the arrangement at
issue.
The Office of Inspector General of the Department of Health and Human Services has issued “Safe Harbor Regulations” that
describe practices that will not be considered violations of the Anti-Kickback Statute. Nonetheless, the fact that a particular
arrangement does not meet safe harbor requirements does not also mean that the arrangement violates the Anti-Kickback Statute.
Rather, the safe harbor regulations only provide a guaranty that qualifying arrangements will not be prosecuted under the Anti-
Kickback Statute. We intend to use commercially reasonable efforts to structure our arrangements with tenants to satisfy, or meet as
closely as possible, all safe harbor conditions. We also require our tenants, under our lease or loan agreements, to comply with
applicable laws which would include structuring their arrangements with third parties in a manner that complies with the Anti-
Kickback Statute. We cannot assure you, however, that we or our tenants will meet all the conditions for an applicable safe harbor.
Physician Self-Referral Statute (“Stark Law”). Unless subject to an exception, the Ethics in Patient Referrals Act of 1989, or the
Stark Law (codified at 42 U.S.C. § 1395nn) prohibits a physician from making a direct or indirect referral to an “entity” furnishing
“designated health services” (which would include, without limitation, certain inpatient and outpatient hospital services) paid by
Medicare or Medicaid if the physician or a member of the physician's immediate family has a “financial relationship” with that entity.
The prohibition further bars the entity from billing Medicare or Medicaid for any services furnished pursuant to a prohibited referral.
Sanctions for violating the Stark Law include denial of payment, required refunding of amounts received for services provided
pursuant to prohibited referrals, imposition of civil monetary penalties of up to $15,000 per prohibited service provided, and exclusion
from the participation in federal healthcare programs. The statute also provides for a penalty of up to $100,000 for a circumvention
scheme. The Stark Law is a strict liability statute, and therefore, no intent is required to be shown in order to prove a violation of the
statute.
There are exceptions to the self-referral prohibition for many of the customary financial arrangements between physicians and
providers, including, without limitation, employment contracts, rental of office space or equipment, personal services agreements and
recruitment agreements. Unlike safe harbors under the Anti-Kickback Statute, the Stark Law imposes strict liability on the parties to
an arrangement, and an arrangement must comply with every requirement of a Stark Law exception or the arrangement is in violation
of the Stark Law.
CMS has issued multiple phases of final regulations implementing the Stark Law and continues to make changes to these
regulations. Although our lease and loan agreements require tenants and borrowers to comply with the Stark Law (and we intend for
them to comply with the Stark Law), we cannot offer assurance that the arrangements entered into by us, our facilities, or our tenants
and borrowers will be found to be in compliance with the Stark Law, as it ultimately may be implemented or interpreted. In addition,
changes to the Stark Law could require our tenants to restructure certain arrangements with physicians, which could impact the
business of our tenants.
False Claims Act. The federal False Claims Act prohibits the making or presenting of any false claim for payment to the federal
government. It is the civil equivalent to federal criminal provisions prohibiting the submission of false claims to federally funded
programs. Additionally, qui tam, or whistleblower, provisions of the federal False Claims Act allow private individuals to bring
actions on behalf of the federal government alleging that the defendant has defrauded the federal government. Whistleblowers may
collect a portion of the federal government’s recovery — an incentive for private parties to bring such actions. A successful federal
False Claims Act case may result in a penalty of three times the actual damages, plus additional civil penalties payable to the
government, plus reimbursement of the fees of counsel for the whistleblower. Many states have enacted similar statutes preventing the
presentation of a false claim to a state government.
The Civil Monetary Penalties Law. The Civil Monetary Penalties Law (“CMPL”) is a comprehensive statute that covers an
array of fraudulent and abusive activities and is very similar to the False Claims Act. Among other things, the CMPL prohibits the
knowing presentation of a claim for certain healthcare services that is false or fraudulent, the presentation of false or misleading
information in connection with claims for payment, and other acts involving fraudulent conduct. Violation of the CMPL may result in
penalties ranging from $20,000 to in excess of $100,000 (penalties are periodically adjusted). Notably, such penalties apply to each
instance of prohibited conduct, including each item or service not provided as claimed and each provision of false information or each
false record. In addition, violators of the CMPL may be penalized up to three times the amount unlawfully claimed and may be
excluded from participation in federal healthcare programs.
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Licensure. Our tenants are subject to extensive federal, state, and local licensure, certification, and inspection laws and
regulations, including, in some cases, certificate of need laws. Further, various licenses and permits are required to dispense narcotics,
operate pharmacies, handle radioactive materials, and operate equipment. Failure to comply with any of these laws could result in loss
of licensure, certification or accreditation, denial of reimbursement, imposition of fines, and suspension or decertification from federal
and state healthcare programs.
Data Privacy and Security. There are numerous laws and regulations at the U.S. federal and state levels, and globally,
addressing data privacy and cybersecurity. As one example, HIPAA restricts the use and disclosure of individually identifiable health
information (“PHI”), provides for safeguards of PHI, and requires healthcare providers to notify patients of breaches of unsecured
PHI. In general, our tenants based in the U.S. are subject to HIPAA, and they may also be subject to similar state laws addressing the
privacy and security of protected health information. As discussed previously, our tenants in jurisdictions outside the U.S. may be
subject to GDPR and to other various laws and regulations addressing the privacy and security of protected health information.
Moreover, at the U.S. federal and state levels, and globally, legislative and regulatory bodies continue to enact various comprehensive
data privacy and cybersecurity legislation to which our tenants may be subject. In general, we rely on our tenants to comply with their
obligations with respect to HIPAA and other similar privacy and security laws and regulations, and our leases and loan agreements
require that our tenants conduct their business in substantial compliance with applicable privacy and security laws.
EMTALA. Our tenants that provide emergency care in the U.S. are subject to the Emergency Medical Treatment and Active
Labor Act (“EMTALA”). Regardless of an individual’s ability to pay, this federal law requires such healthcare facilities to conduct an
appropriate medical screening examination of every individual who presents to the hospital’s emergency room for treatment and, if the
individual is suffering from an emergency medical condition, to either stabilize the condition or make an appropriate transfer of the
individual to a facility able to handle the condition. Liability for violations of EMTALA are severe and include, among other things,
civil monetary penalties and exclusion from participation in federal healthcare programs. Our lease and loan agreements require our
tenants to comply with EMTALA, and we believe our tenants conduct business in substantial compliance with EMTALA.
Antitrust Laws. The federal government and most states have enacted antitrust laws that prohibit certain types of conduct
deemed to be anti-competitive, which include, among other things, price fixing, market allocation, market monopolization, price
discrimination, or acquisitions of competitors. Antitrust enforcement in the healthcare industry has been a priority of the Federal Trade
Commission and the Department of Justice, including with respect to hospitals, managed care plans, and physician practice
acquisitions. As a REIT, our transactions involving solely the purchase and sale of real estate are generally exempt from federal
antitrust laws. Some states, however, have enacted antitrust laws or similar statutes that have broad application and could apply to
transactions involving the purchase and sale of healthcare real estate. Moreover, our tenants who operate hospitals, managed care
plans, and physician practices may be subject to these laws governing anti-competitive behavior, and we cannot predict how the
enforcement of these antitrust laws may affect the operations, the growth, or divestiture plans of our tenants and borrowers.
Reimbursement Pressures. Since the passage of the Patient Protection and Affordable Care Act, as amended by the Health Care
and Education Reconciliation Act of 2010, reimbursement models and healthcare delivery systems continue to evolve. Healthcare
facility operating margins have faced significant pressure due to the deterioration in pricing flexibility and payor mix, a continued shift
toward alternative payment models, increases in operating expenses (particularly labor costs), reductions in levels of Medicaid funding
due to state budget shortfalls, delays in Medicaid supplemental payments, and other healthcare industry-specific cost pressures on our
tenants. Private payors may also rely, to a certain extent, on government reimbursement programs to set reimbursement rates which
could further negatively impact the results and operations of our tenants. It remains difficult to predict how future changes to
reimbursement models and healthcare delivery systems could impact the business of our tenants.
Corporate Responsibility
Corporate responsibility is an important part of our overall business. Our approach to sustainability is overseen by our Board of
Directors, executive management team, and our Environmental and Social Committee, a committee of the Board of Directors that was
formed to continuously improve programs, policies, and practices relating to environmental, social, and governance initiatives across
all aspects of our business. In addition, our Ethics, Nominating and Governance Committee of the Board of Directors is responsible
for developing and recommending corporate governance guidelines and policies. We also have an employee-led working group with
responsibility for driving further environmental performance improvements across all aspects of our business.
We annually publish our Corporate Responsibility Report, which describes how our approach to key corporate responsibility
issues enables us to support our employees, to build strong tenant relationships, and position us for sustainable success. Our
environmental sustainability initiatives focus on improvements to our corporate operations and hospital facilities. As such, in 2025, we
measured and reported greenhouse gas emissions from our controlled and part of our noncontrolled operations and increased the
number of green provisions in our lease agreements.
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To more effectively track and communicate our performance, we are guided by various frameworks and methodologies,
including participation in GRESB's Real Estate Assessment and reporting disclosures better aligned with the Sustainability
Accounting Standards Board and the Task Force on Climate-Related Disclosure.
Our corporate responsibility achievements over the past year include the following:
•
honored among Modern Healthcare's Best Places to Work for the fifth consecutive year;
•
named to Newsweek's America's Most Responsible Companies list for the third consecutive year;
•
increased coverage of green lease provisions in new and existing leases;
•
expanded tenant emissions data coverage by engaging new tenants and collecting additional prior year data;
•
strengthened our GRESB Real Estate Assessment score; and
•
completed construction of a new environmentally-friendly corporate headquarters.
For additional information regarding our initiatives and to view our Corporate Responsibility Report, please visit our website at
www.mpt.com.
Human Capital
Our employees are our most valuable asset. Led by our founding executives, we have a total of 121 employees as of February
23, 2026, located in the U.S., Luxembourg, and the U.K. None of our employees are subject to a collective bargaining agreement.
We believe that our relations with our employees are good, and we are committed to providing a dynamic and supportive
workplace for our employees that encourages both personal and professional growth through significant training and continuing
education opportunities. We offer employees the opportunity to attend continuing education courses in order to maintain their
professional certifications, participate in seminars and workshops on topics related to their job responsibilities, and build upon their
leadership abilities through management development programs. In addition, we provide regular training for all employees on topics
such as personal safety, cybersecurity, and data security awareness, and we have established company-wide human rights, and health
and safety policies.
We offer a competitive benefits package that includes annual discretionary performance-based bonuses and stock compensation,
a 401(k) plan, leading healthcare and insurance benefits, paid time off, and health and wellness reimbursement programs, designed to
help recruit and retain high-quality, motivated employees, and to contribute to their health and security. We routinely evaluate and
benchmark the competitiveness of our compensation and benefit programs to ensure that we are rewarding our employees and
supporting their needs.
In 2025, a third party firm conducted an employee satisfaction survey to measure the level of satisfaction of each employee and
gain insight into the health of our company. The responses and comments we received were overwhelmingly positive. As a result,
MPT was selected as one of Modern Healthcare’s Best Places to Work in healthcare for 2025.
We believe it is important to be a good corporate citizen around the world, particularly in the communities where our employees
live and work. We do this by providing financial support to non-profit programs aimed at improving community public health and
supporting the diverse interests of our employees. In addition, we encourage each of our employees to get involved in their
communities to make a positive difference, and we provide paid time off to do so.
We are firmly committed to providing equal opportunity in all aspects of employment. We forbid discrimination against any
person or harassment, intimidation, or hostility of any kind, retaliation or any other characteristic or conduct that may be protected by
applicable local, state, or federal law. Our hiring process includes a robust search for the best available candidate and each candidate is
properly vetted through interviews with numerous MPT employees. The company also retains the services of an experienced
independent industrial psychologist to ensure a strong fit exists between the company and the candidate and that the candidate meets
the standards for the specific job and the needs of the company. We provide regular training on anti-harassment policies.
Available Information
Our website address is www.mpt.com and provides access in the “Investor Relations” section, free of charge, to our annual
reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, including exhibits, and all amendments to these
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reports as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange
Commission ("SEC"). We use, and intend to continue to use, the “Investor Relations” section of our website as a means of disclosing
material nonpublic information and of complying with our disclosure obligations under Regulation FD, including, without limitation,
through the posting of investor presentations that may include material nonpublic information. Accordingly, investors should monitor
the “Investor Relations” section, in addition to following our press releases, SEC filings, public conference calls, presentations, and
webcasts. Also available on our website, free of charge, are our Corporate Governance Guidelines, the charters of our Ethics,
Nominating, and Corporate Governance, Audit and Compensation Committees and our Code of Ethics and Business Conduct. If you
are not able to access our website, the information is available in print free of charge to any stockholder who should request the
information directly from us at (205) 969-3755. Information on or connected to our website is neither part of nor incorporated by
reference into this Annual Report on Form 10-K or any other SEC filings.
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ITEM 1A. Risk Factors
The risks and uncertainties described herein are not the only ones facing us. There may be additional risk factors that we do not
presently know of or that we currently consider not likely to have a significant impact on us, and it is not possible for us to assess the
impact of all such risk factors on our business or the extent to which any factor, or combination of factors, may affect our business.
Investors should also refer to our quarterly reports on Form 10-Q for future periods and current reports on Form 8-K for material
updates to these risk factors. All of these risk factors could adversely affect our business, results of operations, financial condition,
and our ability to service our debt and make distributions to our stockholders. Some statements in this Annual Report, including
statements in the following risk factors, constitute forward-looking statements. See “A Warning About Forward Looking Statements”
at the beginning of this Annual Report.
Risk factors pertaining to our Company generally fall within the following broad areas:
•
risks related to our business, tenants, and strategy;
•
financing risks;
•
risks relating to real estate investments;
•
risks relating to the healthcare industry;
•
risks relating to our organization and structure; and
•
tax risks.
RISKS RELATED TO OUR BUSINESS, TENANTS, AND STRATEGY
Adverse U.S. and global market, economic and political conditions, health crises and other events beyond our control could
have a material adverse effect on our business, results of operations, and financial condition.
Economic crises, significant concerns over energy costs, inflation or the impact of tariff or similar policies, elevated interest
rates, the availability and cost of credit, geopolitical issues (including as a result of existing and potential armed conflicts), or a
declining real estate market in the U.S. or abroad have in the past, and may in the future, contribute to increased volatility, diminished
expectations for the economy and the markets, reduced capital availability, shortage of available healthcare workers and related
increased labor costs, and high levels of unemployment by historical standards. Some or all of these factors, combined with fluctuating
business and consumer confidence, can precipitate an economic decline.
Adverse U.S. and global market, economic and political conditions, including dislocations and volatility in the credit markets,
elevated levels of inflation and interest rates, and general global economic uncertainty, could have a material adverse effect on our
business, results of operations, and financial condition as a result of the following potential consequences, among others:
•
reduced values of our properties may limit our ability to dispose of assets at attractive prices, or at all, or to obtain debt
financing secured by our properties and may reduce the availability of unsecured loans;
•
our ability to obtain financing on terms and conditions that we find acceptable, or at all, may be limited, which could
reduce our ability to pursue acquisition and redevelopment opportunities, refinance existing debt, reduce our returns from
acquisition and redevelopment activities, reduce our ability to sell properties or re-tenant properties on favorable terms,
and increase our future interest expense; and
•
adverse economic or operating conditions affecting our tenants could result in late payments, rent deferrals, restructurings
or nonpayment, and could increase our costs for and the time required to re-tenant or sell affected properties, which could
adversely affect our cash flows and results of operations.
Public health crises, pandemics and epidemics, such as those caused by viruses such as H5N1 (avian flu), severe acute
respiratory syndrome (SARS), and COVID-19, could adversely impact our and our tenants’ business by disrupting supply chains and
transactional activities, creating labor shortages and increasing operating expenses, and negatively impacting local, national, or global
economies, including the availability of capital.
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Our revenues are dependent upon our relationships with and success of our tenants, particularly our largest tenants, like Circle,
Priory, HSA, Swiss Medical, and Lifepoint Behavioral.
Our tenants’ financial performance and resulting ability to satisfy their lease and loan obligations to us are material to our
financial results and our ability to service our debt and make distributions to our stockholders. We have no operational control over the
business of our tenants and associated health systems. Our tenants experience operational challenges from time-to-time, and this can
be even more of a risk for those tenants that grow (or have grown) via acquisitions in a short time frame, like Circle, and others. Such
operational challenges can result in our tenants and operators having to write-off uncollectible accounts receivable, incurring higher
expenses, or even undergoing insolvency in certain cases.
We recorded real estate and other impairment charges along with negative fair value adjustments in 2024 and 2025 related to
Steward and Prospect. For more information on these charges, see Note 3 to Item 8 of this Annual Report. We are dependent upon the
ability of our tenants to make rent and loan payments to us, and any failure to meet these obligations could have a material adverse
effect on our financial condition and results of operations. As of December 31, 2025, our largest tenants – Circle, Priory, HSA, Swiss
Medical, and Lifepoint Behavioral – represented 14.1%, 8.7%, 8.0%, 5.8%, and 5.4%, respectively, of our total assets.
We rely on our tenants to provide us with accurate financial and other information under the terms of our leases or in the
ordinary course of our business relationship, which we, in turn, use for making business decisions, assessing risk, and calculating and
reporting tenant coverage and other data. Because most of our tenants are private companies, the financial information they provide us
with might not be audited. If the financial or other information provided to us by our tenants is not accurate or timely, our reported
tenant coverage and other data, which is based on such tenant-provided information, might prevent us from making a timely or
accurate business decision or adequately assessing risk in connection with a tenant, which could adversely impact our financial
condition, results of operations, stock price, and reputation.
In addition, our tenants operate in the healthcare industry, which is highly regulated by U.S. federal, state, and local laws along
with laws in Europe and South America and changes in applicable laws and regulations may temporarily impact our tenants’
operations until they are able to make the appropriate adjustments to their business. Any adverse result to our tenants (particularly
Circle, Priory, HSA, Swiss Medical, and Lifepoint Behavioral) in regulatory proceedings or financial or operational setbacks
(including cybersecurity incidents affecting electronic health records, billing functions, telehealth platforms, or other systems
containing patient data that may result in reputational harm, regulatory investigations or enforcement actions, litigation and
remediation costs, among others) may have a material adverse effect on the relevant tenant’s operations and on its ability to make
required lease and loan payments to us.
We have made investments in certain operators of our healthcare facilities and the cash flows (and related returns) from these
investments are subject to more volatility than our properties with traditional net leasing structures.
At December 31, 2025, we had approximately $0.3 billion of investments in unconsolidated operating entities, or 2% of our
total assets. These investments include loans but also equity investments that generate returns dependent upon the operator’s
performance. As a result, the cash flows and returns from these investments may be more volatile than that of our traditional net
leasing structures.
As disclosed elsewhere in this Annual Report, operational challenges for certain operators have in the past, and may in the
future, impact our ability to recover our investments, in part or at all, and therefore could have a material adverse impact on our
financial condition, results of operations, stock price, and ability to service our debt and make distributions to our stockholders. See
the risk factor titled “Our revenues are dependent upon our relationships with and success of our tenants, particularly our largest
tenants, like Circle, Priory, HSA, Swiss Medical, and Lifepoint Behavioral” and Item 7 of this Annual Report.
The bankruptcy or insolvency of our tenants or investees could harm our results of operations, financial condition, and
liquidity.
Any bankruptcy filing by one of our tenants (such as Steward in 2024 and Prospect in 2025) could harm our operating results
and financial condition. A tenant bankruptcy is likely to delay our efforts to collect past due balances under our leases and loans, and
could ultimately preclude collection of such balances. If a lease is assumed by a tenant in bankruptcy (as was the case with Pipeline
Health System, LLC ("Pipeline") in 2022), we expect that all pre-bankruptcy balances due under the lease would be paid to us in full.
However, if we are required to seek one or more replacement operators for our facilities, this may result in delays and increase costs as
transferring operations of healthcare facilities is highly regulated. If a lease is rejected by a tenant in bankruptcy, we could have only a
secured claim for damages. Any secured claims we have against our tenants may only be paid to the extent of the value of the
collateral, which may not cover any or all of our losses. Any unsecured claim (such as our equity interests in our tenants) we hold
against a bankrupt entity may be paid only to the extent that funds are available and only in the same percentage as is paid to all other
holders of unsecured claims. We may recover none or substantially less than the full value of any unsecured claims, which would
harm our financial condition. In addition, any bankruptcy filing by one of our tenants may require a disproportionate amount of our
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management’s attention, cause us to incur increased professional fees that may not be recovered, and negatively impact our reputation
and the market price of our common stock.
Declines in the fair value of our assets may force us to recognize impairment charges, which could adversely impact our results
of operations, financial condition, liquidity, and the market price of our common stock.
We periodically evaluate our investments for impairment under generally accepted accounting principles (“GAAP”) in the U.S.
based on factors such as market conditions, tenant performance, and investment structure. If we determine that an impairment has
occurred, we are required to make a downward adjustment to the net carrying value of the property. For example, the early termination
of, or default under, a lease by a tenant or operator may lead to an impairment charge with respect to the relevant asset. During the
year ended December 31, 2024, we incurred impairment charges and negative fair value adjustments relating to our investments in
Steward and Prospect and additional charges relating to our investments in Prospect in 2025. For more information on these
impairment charges and negative fair value adjustments, see Note 3 to Item 8 of this Annual Report.
Impairment charges also indicate a potential permanent adverse change in the fundamental operating characteristics of the
impaired asset. There is no assurance that adverse impairment charges will be reversed in the future and the decline in the impaired
asset’s value could be permanent. There can be no assurance that we will not take additional impairment charges in the future. Any
future impairment could have a material adverse effect on our results of operations, financial condition, liquidity, and the market price
of our common stock.
It may be costly to replace defaulting tenants or find new tenants when lease terms end, and we may not be able to find
replacements on comparable or otherwise suitable terms.
Failure on the part of a tenant to comply materially with the terms of a lease could give us the right to terminate the lease,
repossess the facility, cross default certain other leases and loans with that tenant, and enforce the payment obligations under the lease.
The process of terminating a lease with a defaulting tenant and repossessing the applicable facility may be costly and require a
disproportionate amount of management’s attention. In addition, defaulting tenants may initiate litigation in connection with a lease
termination or repossession against us. Defaults by our significant tenants under master or cross-defaulted leases (like Circle, Priory,
HSA, Swiss Medical and Lifepoint Behavioral) would have an even more pronounced negative impact.
Additionally, failure on the part of a tenant to renew or extend the lease at the end of its fixed term could result in us having to
search for, negotiate with, and execute new lease agreements. This risk is even greater for those properties under master or cross-
defaulted leases (like Circle) because several properties have the same lease ending dates. See Item 2 for our lease and loan maturity
schedule.
If a tenant-operator defaults and we choose to terminate the lease, or if a tenant fails to renew or extend the lease at the end of its
fixed term, we would be required to find another tenant-operator or to sell the facility. The process of finding and negotiating with a
new tenant, along with costs (such as maintenance, property taxes, utilities, ground lease expenses, etc.) that we will incur while the
facility is potentially untenanted, may be costly and require a disproportionate amount of our management’s attention. Additionally,
the transfer of healthcare facilities is highly regulated, which may result in delays and increased costs in locating a suitable
replacement tenant. There can be no assurance that we would be able to find another tenant in a timely fashion, or at all, or that, if
another tenant were found, we would be able to enter into a new lease on favorable terms. If we are unable to re-let the properties to
healthcare operators, we may be forced to sell the properties at a loss due to the repositioning expenses likely to be incurred by non-
healthcare purchasers. Alternatively, we may be required to spend substantial amounts to adapt the facility to other uses. Thus,
defaults under or the non-renewal or non-extension of leases may adversely affect our results of operations, financial condition, and
our ability to service our debt and make distributions to our stockholders.
Our employees are responsible for all aspects of managing our portfolio of over 380 properties across nine countries, and our
failure to effectively manage our properties along with any growth may adversely impact our financial condition and cash
flows, which could negatively affect our ability to service our debt and make distributions.
We currently employ 121 employees that are responsible for identifying, underwriting and closing new investments; managing
existing properties and those under development; and handling all finance and accounting duties; among other things for a portfolio of
over 380 properties across nine countries. There is no assurance that we will be able to adapt our management, administrative,
accounting, and operational systems, or hire and retain sufficient operational staff, to manage our existing portfolio or facilities that we
may acquire or develop in the future. Additionally, investing in real estate located in foreign countries creates risks associated with the
uncertainty of foreign laws, economies, and markets, and exposes us to local economic downturns and adverse market developments.
Our failure to manage our portfolio effectively may adversely impact our financial condition and cash flows, which could negatively
affect our ability to service our debt and make distributions to our stockholders.
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We have less experience with healthcare facilities located outside the U.S.
At December 31, 2025, we had approximately 50.3% of our total assets located in eight different countries outside the U.S. We
have less experience investing in healthcare properties or other real estate-related assets located outside the U.S. Investing in real
estate located in foreign countries creates risks associated with the uncertainty of foreign laws and markets including, without
limitation, laws respecting foreign ownership, the enforceability of loan and lease documents, and foreclosure laws. Foreign real estate
and tax laws are complex and subject to change, and we cannot assure you we will always be in compliance with those laws or that
compliance will not expose us to additional expense. The properties we have acquired internationally will face risks in connection
with, among others, unexpected changes in regulatory requirements, political and economic instability, potential imposition of adverse
or confiscatory taxes, possible challenges to the anticipated tax treatment of the structures that allow us to acquire and hold
investments, possible currency transfer restrictions, the difficulty in enforcing obligations in foreign jurisdictions, and the burden of
complying with a wide variety of foreign laws. In addition, to qualify as a REIT, we generally will be required to operate any non-U.S.
investments in accordance with the rules applicable to U.S. REITs, which may be inconsistent with local practices. We may also be
subject to fluctuations in local real estate values or markets or the economy as a whole, which may adversely affect our investments.
In addition, the revenues and expenses incurred internationally are denominated in either euros, British pounds, Swiss francs, or
Colombian pesos, which could expose us to losses resulting from fluctuations in exchange rates to the extent we have not hedged our
position, which in turn could adversely affect our revenues, operating margins, and dividends, and may also affect the book value of
our assets and stockholders’ equity. While we may hedge some of our foreign currency risk, we may not be able to do so successfully
and may incur losses on our investments as a result of exchange rate fluctuations. Furthermore, we are subject to laws and regulations,
such as the Foreign Corrupt Practices Act and similar local anti-bribery laws, which generally prohibit companies and their
employees, agents, and contractors from making improper payments to governmental officials for the purpose of obtaining or
retaining business. Failure to comply with these laws could subject us to civil and criminal penalties that could materially and
adversely affect our results of operations, the value of our international investments, and our ability to service our debt and make
distributions to our stockholders.
We and our tenants have exposure to contingent rent escalators, which could impact profitability.
We receive a significant portion of our revenues by leasing assets under long-term net leases that generally provide for fixed
rental rates subject to annual escalations. These annual escalations may be contingent on changes in CPI (or a similar index
internationally), typically with specified caps and floors. If, as a result of weak economic conditions or other factors, the CPI does not
increase, our growth and profitability may be hindered by these leases. In addition, if strong economic conditions or higher than
normal inflation results in significant increases in CPI (as was the case in 2023), but the escalations under our leases are capped, our
growth and profitability may be limited.
Conversely, higher than normal increases in CPI could negatively impact our tenants' profitability, particularly if reimbursement
revenues from governmental programs, like Medicare, do not keep pace. Even if these governmental programs eventually increase
reimbursement rates in line with CPI, there could be interim shortfalls for our tenants, which may adversely impact our ability to
collect rent/interest on a timely basis.
Our business is highly competitive, and we may be unable to compete successfully.
We compete for acquisition and development opportunities with, among others, private investors, including large private equity
funds; healthcare providers, including physicians; other REITs; real estate developers; government-sponsored and/or not-for-profit
agencies; financial institutions; and other lenders. Some of these competitors may have substantially greater financial resources than
we have and may have better relationships with lenders and sellers. Competition for healthcare facilities may adversely affect our
ability to acquire or develop healthcare facilities and the prices we pay for those facilities. If we are unable to acquire or develop
facilities or if we pay too much for facilities, our revenue, earnings growth, and financial return could be materially adversely affected.
Certain of our facilities, or facilities we may acquire or develop in the future, will face competition from other nearby facilities that
provide services comparable to those offered at our facilities. Some of those facilities are owned by governmental agencies and
supported by tax revenues, and others are owned by tax-exempt corporations and may be supported to a large extent by endowments
and charitable contributions. Those types of support are not generally available to our facilities. In addition, competing healthcare
facilities located in the areas served by our facilities may provide healthcare services that are not available at our facilities. From time-
to-time, referral sources, including physicians and managed care organizations, may change the healthcare facilities to which they
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refer patients. Each of these circumstances could adversely affect our tenants and indirectly our results of operations, financial
condition, and ability to service our debt and make distributions.
Many of our tenants have an option to purchase the facilities we lease to them, which could disrupt our operations.
Many of our tenants have the option to purchase the facilities we lease to them. In the event our tenants decide to purchase the
facilities at the end of the lease term, we may not be able to re-invest the capital on as favorable terms, or at all. Our inability to
effectively manage the turnover of our facilities could materially adversely affect the execution of our business plan and our results of
operations.
We have 90 leased properties that are subject to purchase options as of December 31, 2025. For 84 of these properties, the
purchase option generally allows the lessee to purchase the real estate at the end of the lease term, assuming not in default at that time,
at a price equivalent to the greater of (i) fair market value or (ii) our original purchase price (increased, in some cases, by a certain
annual rate of return from the lease commencement date). The lease agreements generally provide for an appraisal process to
determine fair market value. For two of these properties, the purchase option generally allows the lessee to purchase the real estate at
the end of the lease term, assuming not in default at that time, at our purchase price (increased, in some cases, by a certain annual rate
of return from lease commencement date). For the remaining four properties, the purchase options approximate fair value.
In certain circumstances, a prospective purchaser of our hospital real estate may be deemed to be subject to Anti-Kickback and
Stark statutes, which are described in the “Healthcare Regulatory Matters” section in Item 1 of this Annual Report. In such event, it
may not be practicable for us to sell a property to such prospective purchaser at a price other than fair market value.
Merger and acquisition activity or consolidation in the healthcare industry may result in a change of control of, or a
competitor’s investment in, one or more of our tenants or operators, which could have a material adverse effect on us.
The healthcare industry continues to experience consolidation, including among owners of real estate and healthcare providers.
We compete with other healthcare REITs, healthcare providers, healthcare lenders, real estate partnerships, banks, insurance
companies, private equity firms, and other investors that pursue a variety of investments, which may include investments in our
tenants. A competitor’s investment in one of our tenants, any change of control of a tenant, or a change in the tenant’s management
team could enable our competitor to influence or control that tenant’s business and strategy. This influence could have a material
adverse effect on us by impairing our relationship with the tenant, negatively affecting our interest, or impacting the tenant’s financial
and operational performance, including their ability to pay us rent or interest. Depending on our contractual agreements and the
specific facts and circumstances, we may have consent rights, termination rights, remedies upon default, or other rights and remedies
related to a competitor’s investment in, a change of control of, or other transactions impacting a tenant. In deciding whether to
exercise our rights and remedies, including termination rights or remedies upon default, we assess numerous factors, including legal,
contractual, regulatory, business, and other relevant considerations.
Our investments in joint ventures could be adversely affected by our lack of control, our partners’ failure to meet their
obligations, and disputes with our partners.
We have investments in five unconsolidated real estate joint ventures with independent parties that total approximately $1.4
billion at December 31, 2025. Joint venture arrangements involve risks including the possibility that the other party may refuse or not
be able to make capital contributions if needed, that our partner might have economic or other interests that are inconsistent with the
joint venture’s interests, or that we may become engaged in a dispute with our partner. If any of these events occur, we may need to
provide additional funding to the joint ventures to meet our obligations, incur additional expenses to resolve disputes, or be forced to
buy out the partner’s interest or to sell our interest at a time that is not advantageous to us. Any loss of income, cash flows, or
disruption of management’s time could have a negative impact on the rest of our business.
Increased scrutiny, politicization, and changing expectations from investors, employees, tenants, and other stakeholders
regarding corporate responsibility and sustainability matters could adversely impact our reputation, tenant and employee
acquisition and retention, and access to capital.
Companies across all industries have faced scrutiny related to their corporate responsibility practices and reporting. Certain
investors, employees, and other stakeholders have focused on corporate responsibility practices and placed importance on the
implications and broader societal impacts of their investments and business decisions. For example, some investment funds and
certain institutional investors have previously incorporated aspects of corporate responsibility and sustainability (including third-party
scores) into stewardship, engagement, and, in some cases, investment or voting decisions, although these approaches vary and have
shifted recently in response to market, regulatory, and political developments. Our failure, or perceived failure, to meet the goals and
objectives we set in our sustainability disclosure, or to maintain accurate, consistent, and appropriately supported disclosures, could
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negatively impact our reputation, tenant and employee retention, and access to capital. At the same time, in the U.S., corporate
responsibility initiatives and disclosures have become increasingly politicized, including through anti-environmental, social and
governance (“ESG”) policy statements at the federal and state level, and legislative, regulatory, and enforcement initiatives in certain
states. As a result, stakeholder expectations may be divergent, rapidly changing, and, in some cases, conflicting. Certain investors,
lenders, counterparties, tenants, employees, and other stakeholders may seek greater corporate responsibility commitments and
disclosure, while others may oppose or seek to limit corporate responsibility initiatives or the use of ESG-related criteria in
investment, lending, or contracting decisions as incompatible with fiduciary duties to maximize financial returns.
This evolving and polarized environment could adversely affect us in a number of ways, including by (i) increasing the cost and
complexity of compliance and reporting as legal requirements, regulatory guidance, and market standards change, including as rules
are proposed, modified, delayed, rescinded, or subject to litigation; (ii) exposing us to litigation, regulatory inquiries, or enforcement
actions (including allegations of “greenwashing” or, conversely, claims that certain initiatives are impermissible or inconsistent with
applicable law or fiduciary duties); and (iii) creating reputational risk, including the risk of negative publicity, activism, boycotts, or
divestment from stakeholders on either side of these issues.
FINANCING RISKS
Our indebtedness could adversely affect our financial condition, and may otherwise adversely impact our business operations
and our ability to make distributions to stockholders.
As of February 23, 2026, we had approximately $9.6 billion of debt outstanding - see "Contractual Commitments" in Item 7 of
this Annual Report for a schedule of our debt coming due over the next five years. Our indebtedness could have significant adverse
effects on our business, including by:
•
requiring us to use a substantial portion (or all) of our cash flows from operations to service our indebtedness, which
would reduce available cash flows to fund working capital, development projects, and other general corporate purposes, as
well as cash distributions;
•
forcing us to dispose of one or more of our properties, possibly on disadvantageous terms, to make payments on our debt;
•
reducing our ability to extend existing bank debt or refinance debt on favorable terms;
•
increasing our vulnerability to general adverse economic and industry conditions;
•
limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
•
restricting us from making strategic acquisitions or exploiting other business opportunities; and
•
placing us at a competitive disadvantage compared to our competitors that have less debt.
Future borrowings under our loan facilities may bear interest at variable rates in addition to the $0.6 billion in variable interest
rate debt that we had outstanding as of February 23, 2026. If interest rates increase significantly, our operating results would decline
along with the cash available for distributions to our stockholders.
In addition, most of our current debt is, and we anticipate that much of our future debt will be, non-amortizing and payable in
balloon payments. Therefore, we will likely need to refinance at least a portion of that debt as it matures. There is a risk that we may
not be able to extend, refinance, or pay off debt maturing in 2026 and future years or that the terms of any refinancing will not be as
favorable as the terms of the then-existing debt. If principal payments due at maturity cannot be refinanced, extended, or repaid with
proceeds from other sources, such as new equity capital, joint venture proceeds, or sales of facilities, our cash flows may not be
sufficient to repay all maturing debt in years when significant balloon payments come due. Any failure to make required payments
when due could result in an event of default, which could lead to, among other things, the acceleration of some or all of our
indebtedness, the imposition of default interest and other charges, the termination of commitments under our Credit Facility, and,
where applicable, the exercise of remedies against collateral, any of which could materially adversely affect our financial condition,
business operations, and ability to make distributions to our stockholders. See Item 7 of this Annual Report for further information on
our debt maturities.
Covenants in our debt instruments limit our operational flexibility, and a breach of these covenants could materially affect our
financial condition and results of operations.
The terms of our Credit Facility and the indentures governing our outstanding senior notes and other debt instruments that we
may enter into in the future are subject to customary financial, operational, and reporting covenants. For example, our Credit Facility
imposes certain restrictions on us, including restrictions on our ability to: incur debts; create or incur liens; provide guarantees in
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respect of obligations of any other entity; make redemptions and repurchases of our capital stock; prepay, redeem, or repurchase debt;
engage in mergers or consolidations; enter into affiliated transactions; dispose of real estate; and change our business. In addition, our
Credit Facility and senior notes limit the amount of dividends we can pay. Furthermore, our senior notes require us to maintain total
unencumbered assets (as defined in the related indenture) of not less than 150% of our unsecured indebtedness, and the terms of our
senior secured notes issued in February 2025 limit the amount of first lien debt that can be secured on the collateral of such notes.
Finally, our Credit Facility requires compliance with certain borrowing base conditions, as well as maintenance of maximum total
leverage and secured leverage ratios and a minimum fixed charge coverage ratio. From time-to-time, the lenders of our Credit Facility
may adjust certain covenants to give us more flexibility (as was done in 2024); however, such modified covenants could be temporary,
and we must be in a position to meet the lowered reset covenants in the future. Our continued ability to incur debt and operate our
business is subject to compliance with the covenants in our debt instruments. Breaches of these covenants could result in defaults
under applicable debt instruments and other debt instruments due to cross-default provisions, even if payment obligations are satisfied.
Financial and other covenants, among others, that limit our operational flexibility, as well as defaults resulting from a breach of any of
these covenants in our debt instruments, could have a material adverse effect on our financial condition and results of operations.
Failure to hedge effectively against interest rate changes may adversely affect our results of operations and our ability to make
distributions to our stockholders.
As of February 23, 2026, we had approximately $0.6 billion in variable interest rate debt. This variable rate debt subjects us to
interest rate volatility. To manage interest rate volatility, from time-to-time, we have entered into interest rate swaps to fix the interest
rate. However, these hedging arrangements involve risk, including the risk that counterparties may fail to honor their obligations, and
that the arrangements may not be effective in reducing our exposure to interest rate changes, and may result in higher interest rates
than we would otherwise have. Moreover, no hedging activity can completely insulate us from the risks associated with changes in
interest rates. Failure to hedge effectively against interest rate changes may materially adversely affect our results of operations and
our ability to service our debt and make distributions to our stockholders.
The market price and trading volume of our common stock may be volatile and may decline regardless of our operating
performance, and you may lose all or part of your investment.
As observed in recent years, the market price of our common stock may be highly volatile and subject to wide fluctuations. In
addition, the trading volume in our common stock may fluctuate and cause significant price variations to occur. A variety of factors
may cause significant price variations, including, we believe, the amount and status of short interest in our securities and any
coordinated trading activities or large derivative positions in our common stock. For example, the potential for a "short squeeze"
whereby a number of investors take a short position in a stock and have to buy the borrowed securities to close out the position at a
time that other short sellers of the same security also want to close out their positions, may result in volatility in our stock price. If the
market price of our common stock declines significantly, you may be unable to sell your shares at or above your purchase price.
We cannot assure you that the market price of our common stock will not fluctuate or decline significantly in the future.
Although not a comprehensive list, some possible factors that could negatively affect our share price or result in fluctuations in the
price or trading volume of our common stock include:
•
actual or anticipated variations in our quarterly operating results or distributions;
•
changes in our earnings estimates, or publications of research, news, or other reports about us or the real estate or
healthcare industries;
•
changes in market valuations of similar companies;
•
changes in the market value of our facilities;
•
adverse market reaction to any increased indebtedness we incur in the future;
•
additions or departures of key management personnel;
•
actions by institutional stockholders;
•
an oversupply of, or a reduction in demand for, general acute care hospitals, behavioral health facilities, post acute care
facilities, or freestanding ER/urgent care facilities;
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•
speculation in the press or investment community;
•
short-selling activity;
•
the financial performance and health of our tenants; and
•
general market and economic conditions, including inflation and rising interest rates.
Future sales of common stock may adversely affect our stock price.
We cannot predict the effect, if any, of future sales of common stock on the market price of our common stock. Sales of
substantial amounts of common stock, or the perception that these sales could occur, may adversely affect prevailing market prices for
our common stock. If the market price of our common stock declines significantly, you may be unable to sell your shares at or above
your purchase price. In addition, such a share price decline could impair our ability to raise future capital through a sale of additional
equity securities.
Downgrades in our credit ratings could have a material adverse effect on our cost and availability of capital.
As of February 23, 2026, S&P Global rates Medical Properties Trust and our unsecured notes at CCC+. Our corporate family
rating for Moody's was upgraded in February 2025 to B3 and Moody's assigned a B2 rating to the new secured debt that was issued in
February 2025 (see Note 4 to Item 8 of this Annual Report for more information on this offering). However, S&P currently has a
negative outlook on our ratings, and there can be no assurance that we will be able to maintain or improve our current credit ratings.
Any downgrades in terms of ratings or outlook by any or all of the rating agencies could have a material adverse effect on our cost and
availability of capital, which could in turn have a material adverse effect on our financial condition and results of operations.
Elevated interest rates may adversely affect the market price of our securities.
One of the factors that investors may consider in deciding whether to buy or sell our securities is our dividend rate as a
percentage of our price per share of common stock, relative to market interest rates. In recent years, elevated inflation has prompted
central banks to tighten monetary policies and raise interest rates, which can create headwinds to economic growth. Previous rate
hikes enacted by the Federal Reserve in 2022 and 2023 have had a significant impact on interest rate indexes, such as SOFR and the
Prime Rate. In 2024, and amid cooling inflation, the Federal Reserve cut interest rates. However, if market interest rates were to begin
rising again, prospective investors may desire a higher distribution on our securities or seek securities paying higher distributions. The
market price of our common stock likely will be based primarily on the earnings that we derive from rental and interest income with
respect to our facilities and our related distributions to stockholders, and not from the underlying appraised value of the facilities
themselves. As a result, interest rate fluctuations and capital market conditions can affect the market price of our common stock. In
addition, elevated interest rates would result in increased interest expense on our variable-rate debt and any refinancing of existing
debt, thereby adversely affecting cash flows and our ability to service our indebtedness and make distributions.
Limited access to capital may restrict our growth.
Our business plan contemplates growth through acquisitions and development of facilities. As a REIT, we are required to make
distributions, which (if paid in cash) reduce our ability to fund acquisitions and developments with retained earnings. Thus, access to
the capital markets, bank borrowings, and other financing vehicles is important to fund new opportunistic investments. Due to market
or other conditions, we may not be able to obtain additional equity or debt capital or dispose of assets on favorable terms, or at all, at
the time we need additional capital to acquire healthcare properties, which could have a material adverse effect on our results of
operations and our ability to service our debt and make distributions to our stockholders. Our continued ability to incur and refinance
debt is subject to maintaining sufficient unencumbered assets, in the case of unsecured indebtedness, or additional collateral, in the
case of secured indebtedness, to incur such debt and, if sufficient unencumbered assets or additional collateral cannot be provided, we
may be unable to incur or refinance debt.
RISKS RELATING TO REAL ESTATE INVESTMENTS
Our investments are, and are expected to continue to be, concentrated in a single industry, making us more vulnerable
economically than if our investments were more diversified.
We acquire, develop, and make investments in healthcare real estate. In addition, we selectively make investments in healthcare
operators. We are subject to risks inherent in concentrating investments in real estate. The risks resulting from a lack of diversification
become even greater as a result of our business strategy to invest solely in healthcare facilities. A downturn in the real estate industry
could materially adversely affect the value of our facilities. A downturn in the healthcare industry could negatively affect our tenants’
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ability to make lease or loan payments to us as well as our return on equity investments. Consequently, our ability to meet debt service
obligations or make distributions to our stockholders is dependent on the real estate and healthcare industries.
The illiquidity of real estate investments could significantly impede our ability to respond to adverse changes in the performance
of our facilities and harm our financial condition.
Real estate investments are relatively illiquid. Additionally, the real estate market is affected by many factors beyond our
control, including adverse changes in global, national, and local economic and market conditions and the availability, costs, and terms
of financing. Our ability to quickly sell or exchange any of our facilities in response to changes in economic and other conditions will
be limited. No assurances can be given that we will recognize full value for any facility that we are required to sell for liquidity
reasons. Our inability to respond rapidly to changes in the performance of our investments could adversely affect our financial
condition and results of operations.
Development and construction risks could adversely affect our ability to service our debt and make distributions to our
stockholders.
We have developed and constructed facilities in the past and are currently developing several facilities. Our development and
related construction activities may subject us to a number of risks, including:
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we may have to compete for suitable development sites;
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our ability to complete construction is dependent on there being no title, environmental, or other legal proceedings in
connection with the project;
•
we may be subject to delays due to weather conditions, strikes, supply chain disruptions, available labor, and other
contingencies beyond our control;
•
we may be unable to obtain, or suffer delays in obtaining necessary zoning, land-use, building, occupancy, and other
required governmental permits, which could result in increased costs, delays, or our abandonment of these projects; and
•
we may incur construction costs for a facility which exceed our original estimates due to increased costs for materials or
labor or other costs that we did not anticipate.
We expect to fund our development projects over time. The time frame required for development and construction of these
facilities means that we may have to wait for some time to earn significant cash returns. In addition, our tenants may not be able to
obtain managed care provider contracts for new developments in a timely manner or at all. Risks associated with our development
projects may reduce anticipated rental revenue, which could affect our ability to service our debt and make distributions.
We may be subject to risks arising from future acquisitions of real estate.
We may be subject to risks in connection with our acquisition of healthcare real estate, including:
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we may have no previous business experience with the tenants at the facilities acquired, and we may face difficulties in
working with them;
•
underperformance of the acquired facilities due to various factors, including unfavorable terms and conditions of any
acquired lease agreements, disruptions caused by the management of our tenants, or changes in economic conditions;
•
diversion of our management’s attention away from other business concerns;
•
exposure to any undisclosed or unknown potential liabilities (including environmental liabilities) relating to the acquired
facilities (or entities acquired in a share deal); and
•
potential underinsured losses on the acquired facilities.
We cannot assure you that we will be able to manage the new properties without encountering difficulties or that any such
difficulties will not have a material adverse effect on us.
Our facilities may not achieve expected results, which may harm our results of operations and financial condition, as well as
our ability to service our debt and make the distributions to our stockholders required to maintain our REIT status.
Acquisitions and developments entail risks that investments will fail to perform in accordance with expectations and that cost
estimates may prove inaccurate, as well as general investment risks associated with any new real estate investment. Newly-developed
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or newly-renovated facilities may not have operating histories that are helpful in making objective pricing decisions. The purchase
prices for such facilities will be based, in part, upon projections by management as to the expected operating results of the facilities,
subjecting us to risks that they may not achieve anticipated operating results within anticipated time frames or at all. If our facilities do
not achieve expected results and fail to generate anticipated cash flows from operations, amounts available to service our debt or to
make distributions to our stockholders required to maintain our REIT status could be adversely affected.
We may suffer losses that are not covered by insurance or that are in excess of our insurance coverage limits.
Our leases and mortgage loans generally require our tenants/borrowers to carry property, general liability, professional liability,
loss of earnings, all risk, and extended coverage insurance in amounts sufficient to permit the replacement of the facility in the event
of a total loss, subject to applicable deductibles. We carry general liability insurance and loss of earnings coverage on all of our
properties as a contingent measure in case our tenant’s coverage is not sufficient. However, there are certain types of losses, generally
of a catastrophic nature, such as earthquakes, fires, floods, hurricanes, and acts of terrorism, which may be uninsurable or not
insurable at a price we or our tenants/borrowers can afford. Inflation, changes in building codes and ordinances, environmental
considerations, and other factors also might make it impracticable to use insurance proceeds to replace a facility after it has been
damaged or destroyed. Under such circumstances, the insurance proceeds we receive might not be adequate to restore our economic
position with respect to the affected facility. If any of these or similar events occur, it may reduce our return from the facility and the
value of our investment. We continually review the insurance maintained by our tenants/borrowers and believe the coverage provided
to be adequate and customary for similarly situated companies in our industry. However, we cannot provide any assurances that such
insurance will be available at a reasonable cost in the future. Also, we cannot assure you that material uninsured losses, or losses in
excess of insurance proceeds, will not occur in the future.
Capital expenditures for facility renovation may be greater than anticipated and may adversely impact rent payments by our
tenants and our ability to service our debt and make distributions to our stockholders.
Facilities, particularly those that consist of older structures, have an ongoing need for capital improvements, including periodic
replacement of fixtures and fixed equipment. Although our leases generally require our tenants to be primarily responsible for the cost
of such expenditures, renovation of facilities involves certain risks, including the possibility of environmental problems, regulatory
requirements, construction cost overruns and delays, uncertainties as to market demand or deterioration in market demand after
commencement of renovation, and the emergence of unanticipated competition from other facilities. All of these factors could
adversely impact rent and loan payments by our tenants and returns on our equity investments, which in turn could have a material
adverse effect on our financial condition, results of operations, and our ability to service debt and make distributions.
Certain of our healthcare facilities are subject to property taxes that may increase in the future and adversely affect our
business.
Our facilities are subject to real and personal property taxes that may increase as property tax rates change and as the facilities
are assessed or reassessed by taxing authorities. Our leases generally provide that the property taxes are charged to our tenants as an
expense related to the facilities that they occupy. As the owner of the facilities, however, we are ultimately responsible for payment of
the taxes to the government. If property taxes increase, our tenants may be unable to make the required tax payments, ultimately
requiring us to pay the taxes. If we incur these tax liabilities, our ability to service our debt and make expected distributions to our
stockholders could be adversely affected. In addition, if such taxes increase on properties in which we have an equity investment in
the tenant, our return on investment may be negatively affected.
As an owner and lessor of real estate, we are subject to risks under applicable environmental laws, the cost of compliance with
which and any violation of which could materially adversely affect us.
Various environmental laws may impose liability on the current or prior owner or operator of real property for removal or
remediation of hazardous or toxic substances. Current or prior owners or operators may also be liable for government fines and
damages for injuries to persons, natural resources, and adjacent property. These environmental laws often impose liability whether or
not the owner or operator knew of, or was responsible for, the presence or disposal of the hazardous or toxic substances. The cost of
complying with environmental laws could materially adversely affect our ability to service our debt or make distributions to our
stockholders. In addition, the presence of hazardous or toxic substances, or the failure of our tenants to properly manage, dispose of, or
remediate such substances, including medical waste, may adversely affect our tenants or our ability to use, sell, or rent such property
or to borrow using such property as collateral which, in turn, could reduce our revenue and our financing ability. We typically obtain
Phase I environmental assessments (or similar studies) on facilities we acquire or develop or on which we make mortgage loans.
However, even if the Phase I environmental assessment reports do not reveal any material environmental contamination, it is possible
that material environmental contamination and liabilities may exist, of which we are unaware.
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Although our leases and mortgage loans require our operators to comply with laws and regulations governing their operations,
including the disposal of medical waste, and to indemnify us for environmental liabilities, the scope of their obligations may be
limited. We cannot assure you that our tenants would be able to fulfill their indemnification obligations and, therefore, any material
violation of environmental laws could have a material adverse effect on us. In addition, environmental laws are constantly evolving,
and changes in laws or regulations, or changes in interpretations of the foregoing, could create liabilities where none exist today.
Our interests in facilities through ground leases expose us to the risk of loss of the facility upon breach or termination of the
underlying ground lease, may limit our use of the facility, and may result in additional expenses to us if our tenants vacate the
facility.
We have acquired interests in 20 facilities, at least in part, by acquiring leasehold interests in the land on which the facility is
located rather than an ownership interest in the land. As lessee under ground leases, we are exposed to the possibility of losing the
property upon termination, or an earlier breach by us, which could adversely impact our financial condition. Ground leases may also
restrict our use of the related facility, which may limit our flexibility in renting the facility and may impede our ability to sell the
property. Finally, if our facility lease expires or is terminated for whatever reason resulting in the tenant vacating the facility, we
would be responsible for the ground lease payments until we find a replacement tenant, which would negatively impact our cash flows
and results of operations.
RISKS RELATING TO THE HEALTHCARE INDUSTRY
The continued pressure on healthcare reimbursement in the U.S. and other countries in which we do business, including shifts
from fee-for-service reimbursement towards alternative payment models, other healthcare policy reforms, and government cost
cutting measures, could adversely affect the profitability of our tenants and their ability to make payments to us.
Sources of revenue for our tenants may include the U.S. Medicare and Medicaid programs, other government-sponsored
payment programs, private insurance carriers, and health maintenance organizations, among others. In addition to ongoing efforts to
reduce healthcare costs, the failure of any of our tenants to comply with various laws and regulations could jeopardize their ability to
continue participating in Medicare, Medicaid, and other government-sponsored payment programs. Recently, the One Big Beautiful
Bill Act of 2025 included Medicaid reforms (including work requirements and other eligibility-related changes) as well as other
program integrity measures that could reduce coverage or lead to more frequent changes in coverage status, increase uncompensated
care, and further pressure provider reimbursement and liquidity, which could adversely affect our tenants’ revenues and cash flows.
The shift in our tenant payor mix away from fee-for-service payors results in an increase in the percentage of revenues
attributable to alternative payment models implemented by private and government payors, which can lead to reductions in
reimbursement for services provided by our tenants. In the U.S., there is continued focus on transitioning Medicare from its traditional
fee-for-service model to models that employ one or more capitated, value-based, or bundled payment approaches, and private payors
have implemented similar types of alternative payment models. Other countries where we do business have implemented various
strategies to reduce overall healthcare cost or may do so in the future. Such efforts from private and government payors, in addition to
general industry trends, continue to place pressures on our tenants to control healthcare costs. Furthermore, pressures to control
healthcare costs and a shift away from traditional health insurance reimbursement have resulted in an increase in the number of
patients whose healthcare coverage is provided under managed care plans, such as health maintenance organizations and preferred
provider organizations. These shifts place further cost pressures on our tenants. We also continue to believe that, due to the aging of
the population and the expansion of governmental payor programs, there will be a marked increase in the number of patients relying
on healthcare coverage provided by governmental payors. In instances where we have an equity investment in our tenants’ operations,
in addition to the effect on these tenants’ ability to meet their financial obligations to us, our ownership and investment interests may
also be negatively impacted.
Additionally, government and commercial payors in the U.S., and in other countries (like Colombia) in which we do business,
have the ability to withhold or delay payments to our tenants. Delayed or withheld payments may be due to a variety of reasons
including, but not limited to, initial denials based on incomplete or inaccurate documentation, payors strategically slowing payments, a
lack of funds available, or a combination of these and other factors. Delayed or withheld payments to our tenants may impact our
tenants’ cash flows and working capital. We cannot predict when and to what extent these delays may occur, nor whether our business
will be adversely impacted.
The CMS regulatory restrictions on reimbursement for LTACHs and IRFs can lead to reduced reimbursement for our tenants
that operate such facilities and departments. CMS continues to explore restrictions on LTACH and IRF reimbursement focused on
more targeted facility and patient level criteria.
The Reform Law enacted in 2010 represented a major shift in the U.S. healthcare industry by, among other things, allowing
millions of formerly uninsured individuals to obtain health insurance coverage and by significantly expanding Medicaid.
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In addition to the items above, governments may look for cost cutting measures and strategies to balance budgets and/or control
government deficits. Such cost cutting measures may add pressure on healthcare reimbursement to our tenants, some of which rely
heavily on such reimbursements.
We cannot predict with absolute precision how these changes will affect the long-term financial condition of our tenants.
However, any significant negative impact to our tenants could have a material adverse effect on our financial condition and results of
operations and could negatively affect our ability to service our debt and make distributions to our stockholders.
Significant regulation and loss of licensure or certification or failure to obtain licensure or certification could negatively impact
our tenants' financial condition and results of operations and affect their ability to make payments to us.
The U.S. healthcare industry is highly regulated by federal, state, and local laws and is directly affected by federal conditions of
participation, state licensing requirements, facility inspections, state and federal reimbursement policies, regulations concerning
capital and other expenditures, certification requirements and other such laws, regulations, and rules. As with the U.S. healthcare
industry, our tenants in the U.K., other parts of Europe, and South America are also subject in some instances to comparable types of
laws, regulations, and rules that affect their ownership and operation of healthcare facilities. Although our lease and mortgage loan
agreements require our tenants/borrowers to comply with applicable laws, and we intend for these facilities to comply with such laws,
we do not actively monitor compliance. Therefore, we cannot offer any assurance that our tenants/borrowers will be found to be in
compliance with such, as the same may ultimately be implemented or interpreted.
From time-to-time, our tenants are subject to various federal and state inquiries, investigations, and other proceedings and would
expect such governmental compliance and enforcement activities to be ongoing at any given time with respect to one or more of our
tenants, either on a confidential or public basis. An adverse result to our tenant/borrower in one or more such governmental
proceedings may have a material adverse effect on their operations and financial condition and on its ability to make required lease
and/or loan payments to us. In instances where we have an equity investment in the operator, in addition to the effect on these
tenants’/borrowers’ ability to meet their financial obligation to us, our ownership and investment interests may be negatively
impacted.
In the U.S., licensed health care facilities must comply with minimum health and safety standards and are subject to survey and
inspection by state and federal agencies and their agents or affiliates, including CMS, The Joint Commission, and state departments of
health. CMS develops Conditions of Participation and Conditions for Coverage that health care organizations must meet in order to
begin and continue participating in the Medicare and Medicaid programs and receive payment under such programs. These minimum
health and safety standards are aimed at improving quality and protecting the health and safety of beneficiaries, and there are several
common criteria that exist across health entities. The failure to comply with any of these standards could jeopardize a healthcare
organization’s Medicare certification and, in turn, its right to receive payment under the Medicare and Medicaid programs.
Further, many hospitals and other institutional providers in the U.S. are accredited by accrediting organizations, such as The
Joint Commission. The Joint Commission was created to accredit healthcare providers, including our tenants that meet its minimum
health and safety standards. Once hospitals achieve a minimum number of patients and approximately every three years thereafter,
surveyors for The Joint Commission conduct on site surveys of facilities for compliance with a multitude of patient safety, treatment,
and administrative requirements. Facilities may lose accreditation for failure to meet such requirements, which in turn may result in
the loss of license or certification including under the Medicare and Medicaid programs, as well as inability to participate in certain
managed care plans, which require the healthcare provider to be accredited.
Finally, healthcare facility reimbursement practices and quality of care issues may result in loss of license or certification, such
as engaging in the practice of “upcoding,” whereby services are billed for higher procedure codes, or an event involving poor quality
of care, which leads to the serious injury or death of a patient. The failure of any tenant/borrower to comply with such laws,
requirements, and regulations resulting in a loss of its license would affect its ability to continue its operation of the facility and would
adversely affect its ability to make lease and/or loan payments to us. This, in turn, could have a material adverse effect on our financial
condition and results of operations and could negatively affect our ability to service our debt and make distributions to our
stockholders.
In addition, establishment of healthcare facilities and transfers of operations of healthcare facilities in the U.S. are typically
subject to federal and state regulatory approvals, such as federal antitrust laws and state certificate of need laws in the U.S.
Restrictions and delays in transferring the operations of healthcare facilities, in obtaining new third-party payor contracts, including
Medicare and Medicaid provider agreements, and in receiving licensure and certification approval from appropriate state and federal
agencies by new tenants, may affect our ability to terminate lease agreements, remove tenants that violate lease terms, and replace
existing tenants with new tenants. Furthermore, these matters may affect a new tenant’s/borrower’s ability to obtain reimbursement for
services rendered, which could adversely affect its ability to make lease and/or loan payments to us. In instances where we have an
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equity investment in the operator, in addition to the effect on these tenants’/borrowers’ ability to meet their financial obligations to us,
our ownership and investment interests may also be negatively impacted.
Our tenants are subject to fraud and abuse laws, the violation of which may jeopardize their ability to make payments to us and
adversely affect their profitability.
As noted earlier, in the U.S., the federal government and numerous state governments have passed laws and regulations that
attempt to eliminate healthcare fraud and abuse by prohibiting business arrangements that induce patient referrals, the ordering of
specific ancillary services, or the submission of false claims for payment. The trend towards increased investigation and enforcement
activity in the areas of fraud and abuse and patient self-referrals to detect and eliminate fraud and abuse in the Medicare and Medicaid
programs is likely to continue in future years. As described above, the penalties for violations of these laws can be substantial and may
result in the imposition of criminal and civil penalties and possible exclusion from federal and state healthcare programs. Imposition
of any of these penalties upon any of our tenants could jeopardize a tenant’s ability to operate a facility or to make lease and/or loan
payments, thereby potentially adversely affecting us.
In the case of an acquisition of a provider’s operations, some of our tenants have accepted an assignment of the previous
operator’s Medicare provider agreement. Such operators that take assignment of Medicare provider agreements might be subject to
liability for federal or state regulatory, civil, and criminal investigations of the previous owner’s operations and claims submissions.
These types of issues may not be discovered prior to purchase or after our tenants commence operations in these facilities. Adverse
decisions, fines, or recoupments might negatively impact our tenants’ financial condition, and in turn their ability to make lease and/or
loan payments to us.
Certain of our lease arrangements may be subject to laws related to fraud and abuse or physician self-referrals.
Physician investment in, or other financial arrangements with, subsidiaries that lease our facilities could subject our leases to
scrutiny under fraud and abuse and physician self-referral laws. Under the Stark Law, and its implementing regulations, if our leases
do not satisfy the requirements of an applicable exception, the ability of our tenants to bill for services provided to Medicare
beneficiaries pursuant to referrals from physician investors could be adversely impacted and subject our tenants to fines, which could
impact our tenants’ ability to make lease and/or loan payments to us. In instances where we have an equity investment in our tenants’
operations, in addition to the effect on the tenants’ ability to meet their financial obligations to us, our ownership and investment
interests may also be negatively impacted. Therefore, in all cases, we intend to use our good faith efforts to structure our lease
arrangements to comply with these laws.
We may incur substantial capital expenditures to make our healthcare facilities suitable for tenants or compliant with
applicable regulatory requirements.
Healthcare facilities are typically highly customized and subject to healthcare-specific building code requirements. The
improvements generally required to conform a property to healthcare use can be costly and at times tenant-specific. A new or
replacement operator may require different features in a property, depending on that operator’s particular business. If a current
operator is unable to pay rent and/or vacates a property, we may incur substantial capital expenditures to modify a property before we
are able to secure another tenant. Also, if the property needs to be renovated to accommodate multiple tenants, or be compliant with
additional regulatory requirements, we may similarly incur substantial capital expenditures before we are able to re-lease the space.
These capital expenditures may have a material adverse effect on our results of operations, financial condition, and liquidity.
State certificate of need laws may adversely affect our development of facilities and the operations of our tenants.
Certain U.S. healthcare facilities in which we invest may be subject to state laws that require regulatory approval in the form of
a certificate of need prior to the transfer of a healthcare facility or prior to initiation of certain projects, including the establishment of
new or replacement facilities, the addition of beds, the addition of new or expansion of existing services, and certain capital
expenditures. State certificate of need laws are not uniform throughout the U.S., are subject to change, and may delay developments of
facilities or acquisitions or certain other transfers of ownership of facilities. We cannot predict with certainty the impact of state
certificate of need laws on our activities or on the operations of our tenants. Certificate of need laws often materially impact the ability
of competitors to enter into the marketplace of our facilities. As a result, a portion of the value of the facility may be related to the
limitation on new competitors. In the event of a change in the certificate of need laws, this attributed value may markedly change.
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Regulatory restrictions on healthcare transactions involving REITs could adversely affect our business, results of operations,
and financial condition.
Certain states have enacted, and other states are considering, laws and regulatory regimes that seek to increase oversight of
transactions involving REIT ownership or leasing of healthcare facilities. These measures include, among other things, prohibitions on
certain sale-leaseback transactions involving acute-care hospitals; restrictions on the issuance of new hospital licenses for facilities
leased from REITs; requirements that REIT investments be subject to enhanced transaction review and ongoing financial reporting
obligations; and pre-transaction notice and review regimes applicable to certain healthcare transactions, including the sale, transfer, or
lease of a material portion of a health care entity’s assets. Covered transactions may be subject to extended regulatory review periods,
which could delay, condition, and/or increase the cost and complexity of completing such transactions. If these or similar regulatory
restrictions are adopted more broadly, they could limit our ability to acquire and lease hospital properties, delay transactions, increase
compliance costs, expose us to greater regulatory and legal risk, and adversely affect our business, results of operations, and financial
condition.
RISKS RELATING TO OUR ORGANIZATION AND STRUCTURE
We depend on key personnel, the loss of any one of whom may threaten our ability to operate our business successfully.
We depend on the services of our executives and other officers to carry out our business and investment strategy. If we were to
lose any of these, it may be more difficult for us to locate attractive acquisition targets, complete our acquisitions, and manage the
facilities that we have acquired or developed. Additionally, we will continue to need to attract and retain additional qualified officers
and employees. The loss of the services of any of our officers, or our inability to recruit and retain qualified personnel in the future,
could have a material adverse effect on our business and financial results.
Pursuant to Maryland law, our charter and bylaws contain provisions that may have the effect of deterring changes in
management and third-party acquisition proposals, which in turn could depress the price of our common stock or cause
dilution.
Our charter contains ownership limitations that may restrict business combination opportunities, inhibit change of control
transactions, and reduce the value of our common stock. To qualify as a REIT under the Code, no more than 50% in value of our
outstanding stock, after taking into account options to acquire stock, may be owned, directly or indirectly, by five or fewer persons
during the last half of each taxable year. Our charter generally prohibits direct or indirect ownership by any person of more than 9.8%
in value or in number, whichever is more restrictive, of outstanding shares of any class or series of our securities, including our
common stock. Generally, our common stock owned by affiliated owners will be aggregated for purposes of the ownership limitation.
The ownership limitation could have the effect of delaying, deterring, or preventing a change in control or other transaction in which
holders of common stock might receive a premium for their common stock over the then-current market price or which such holders
otherwise might believe to be in their best interests. The ownership limitation provisions also may make our common stock an
unsuitable investment vehicle for any person seeking to obtain, either alone or with others as a group, ownership of more than 9.8% of
either the value or number of the outstanding shares of our common stock.
Our charter and bylaws contain provisions that may impede third-party acquisition proposals. Our charter and bylaws also
provide restrictions on replacing or removing directors. Directors may be removed by the affirmative vote of the holders of two-thirds
of our common stock. Additionally, stockholders are required to give us advance notice of director nominations. Special meetings of
stockholders can only be called by our president, our Board of Directors, or the holders of at least 25% of stock entitled to vote at the
meetings. These and other charter and bylaw provisions may delay or prevent a change of control or other transactions in which
holders of our common stock might receive a premium for their common stock over the then-current market price or which such
holders otherwise might believe to be in their best interests.
We rely on information technology in our operations, and any material failure, inadequacy, interruption, or security failure of
our technology (or that of our third-party vendors) could harm our business.
We rely on information technology networks and systems, including the Internet, to process, transmit, and store electronic
information, and to manage or support a variety of business processes, including financial transactions and records, and maintaining
personal identifying information (in accordance with GDPR law in Europe and similar laws elsewhere) along with tenant and lease
data. We purchase or license some of our information technology from vendors. We rely on commercially available systems, software,
tools, and monitoring to provide security for the processing, transmission, and storage of confidential data. Although we have taken
steps to protect the security of our information systems and the data maintained in those systems, it is possible that our safety and
security measures will not prevent the systems’ improper functioning or the improper access or disclosure of our or our tenant’s
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information, such as in the event of cyber attacks. Further, our failure to protect the security of our information systems and data
maintained in those systems could subject us to liability under various U.S. federal and state, and foreign privacy laws and regulations.
Even well-protected information systems remain potentially vulnerable because the techniques used in security breaches evolve
and generally are not recognized until launched against a target, and in some cases are designed not to be detected and, in fact, may
not be detected. Accordingly, we may be unable to anticipate these techniques or to implement adequate security barriers or other
preventative measures, and thus it is impossible for us to entirely mitigate this risk.
A security breach, including physical or electronic break-ins, computer viruses, attacks by hackers and similar breaches, or other
significant disruption involving our IT networks and related systems (or that of our third-party vendors) could:
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disrupt the proper functioning of our networks and systems and therefore our operations, possibly for an extended
period of time;
•
result in misstated financial reports, violations of loan covenants, and/or missed reporting deadlines;
•
result in our inability to properly monitor our compliance with regulations regarding our qualification as a REIT;
•
result in the unauthorized access to, and destruction, loss, theft, misappropriation, or release of proprietary,
confidential, sensitive, or otherwise valuable information of ours or others, which others could use to compete against
us or for disruptive, destructive, or otherwise harmful purposes;
•
require management attention and resources to remedy any resulting damages;
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subject us to liability claims or regulatory penalties; or
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damage our reputation among our tenants and investors generally.
Any of the foregoing could have a materially adverse effect on our business, financial condition, and results of operations.
Unfavorable resolution of pending and future litigation, regulatory proceedings, or governmental inquiries could have a
material adverse effect on our and our tenants' business, results of operations, financial condition, and reputation.
We are, and from time-to-time may be, involved in litigation, regulatory proceedings and other governmental inquiries. In
particular, recent media and political focus on private investments in healthcare has led to heightened regulatory focus in this area,
including Congressional efforts to increase federal oversight over healthcare facilities, state-level legislative and regulatory initiatives
(including in Massachusetts and California) to expand notice, review, transparency, and oversight requirements for healthcare
facilities and healthcare-related transactions, and federal and state-level government investigations relating to certain of our assets and
tenants. An unfavorable resolution of pending or future litigation, regulatory proceedings, governmental inquiries, or other claims
could have a material adverse effect on our and our tenants’ business, results of operations and financial condition. Regardless of
outcome, any litigation, regulatory proceeding or governmental inquiry, and related adverse publicity, may result in substantial costs
and expenses, significantly divert the attention of management, and materially damage our reputation. An unfavorable outcome may
result in our having to pay significant fines, judgments, or settlements, which, if not indemnifiable by our tenants, or if uninsured, or if
exceeding insurance coverage, could adversely impact our financial condition, cash flows, results of operations, and the trading price
of our common stock.
Changes in accounting pronouncements could adversely affect us and the reported financial performance of our tenants.
Uncertainties posed by various initiatives of accounting standard-setting by the Financial Accounting Standards Board
(“FASB”) and the SEC, which create and interpret applicable accounting standards for U.S. companies, may change the financial
accounting and reporting standards or their interpretation and application of these standards that govern the preparation of our
financial statements.
These changes could have a material impact on our reported financial condition and results of operations. In some cases, we
could be required to apply a new or revised standard retroactively, resulting in potentially material restatements of prior period
financial statements. Similarly, these changes could have a material impact on our tenants’/borrowers’ reported financial condition or
results of operations or could affect our tenants’ preferences regarding leasing real estate.
TAX RISKS
Loss of our tax status as a REIT would have significant adverse consequences to us and the value of our common stock.
We believe that we qualify as a REIT for U.S. federal income tax purposes as of December 31, 2025. In addition, we own a
direct interest in a subsidiary REIT that has elected to be taxed as a REIT for U.S. federal income tax purposes commencing with the
2022 tax year. The REIT qualification requirements are extremely complex, and interpretations of the U.S. federal income tax laws
governing qualification as a REIT are limited. Accordingly, there is no assurance that we will be successful in operating so as to
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qualify as a REIT. At any time, new laws, regulations, interpretations, or court decisions may change the U.S. federal or state tax laws
relating to, or the U.S. federal or state income tax consequences of, qualification as a REIT. It is possible that future economic,
market, legal, tax, or other considerations may cause our Board of Directors to revoke the REIT election, which it may do without
stockholder approval.
If we lose or revoke our REIT status (currently or with respect to any tax years for which the statute of limitations has not yet
expired), we will face serious tax consequences that will substantially reduce the funds available for distribution because we would not
be allowed a deduction for distributions to stockholders in computing our taxable income; therefore, we would be subject to U.S.
federal income tax at regular corporate rates, and we might need to borrow money or sell assets in order to pay any such tax. We also
could be subject to increased state and local taxes. Unless we are entitled to relief under statutory provisions, we also would be
disqualified from taxation as a REIT for the four taxable years following the year during which we ceased to qualify.
Separately, as of July 1, 2023, the majority of our real estate operations in the U.K. operate as a U.K. REIT (and seven more
property holding entities were added in February 2026) and generally are subject only to a withholding tax on earnings upon
distribution out of the U.K. REIT. If we were to fail the requirements of a U.K. REIT, the related U.K. operations would be subject to
higher tax rates like non-REITs.
As a result of all these factors, a loss or revocation of our REIT status (whether in the U.S. or U.K.) could have a material
adverse effect on our financial condition and results of operations and could adversely affect the value of our common stock.
Failure to make required distributions as a REIT would increase our tax burden.
In order to qualify as a U.S. REIT, each year we must distribute to our stockholders at least 90% of our REIT taxable income,
excluding net capital gains. To the extent that we satisfy the distribution requirement, but distribute less than 100% of our taxable
income, we will be subject to U.S. federal corporate income tax on our undistributed income. In addition, we will incur a 4%
nondeductible excise tax on the amount, if any, by which our distributions in any year are less than the sum of (1) 85% of our ordinary
income for that year; (2) 95% of our capital gain net income for that year; and (3) 100% of our undistributed taxable income from
prior years.
We may be required to make distributions to stockholders at disadvantageous times or when we do not have funds readily
available for distribution. Differences in timing between the recognition of income and the related cash receipts or the effect of
required debt amortization payments could require us to borrow money or sell assets to pay out enough of our taxable income to
satisfy the distribution requirement and to avoid corporate income tax and the 4% excise tax in a particular year. In the future, we may
borrow to pay distributions to our stockholders. Any funds that we borrow would subject us to interest rate and other market risks.
Complying with REIT requirements may cause us to forego otherwise attractive opportunities.
To qualify as a REIT for U.S. federal income tax purposes, we must continually satisfy tests concerning, among other things, the
sources of our income, the nature and diversification of our assets, the amounts we distribute to our stockholders, and the ownership of
our stock. In order to meet these tests, we may be required to forego attractive business or investment opportunities. Currently, no
more than 20% of the value of our assets may consist of securities of one or more TRS and no more than 25% of the value of our
assets may consist of securities that are not qualifying assets under the test requiring that 75% of a REIT’s assets consist of real estate
and other related assets. In addition, at least 95% of our gross income in any year must be derived from qualifying sources and at least
75% of our gross income must be generated from either rents from real estate or interest on loans secured by real estate (i.e. mortgage
loans). Further, a TRS may not directly or indirectly operate or manage a healthcare facility. Compliance with current and future
changes to REIT requirements may limit our flexibility in executing our business plan.
Similar to the U.S. REIT qualification requirements, we must satisfy tests for our U.K. REIT concerning, among other things,
the sources of our U.K. income, the nature and diversification of our U.K. assets, the amounts we distribute to the shareholders of the
U.K. REIT, and the ownership of the U.K. REIT shares. In order to meet these tests, we may be required to forego attractive business
or investment opportunities.
If certain sale-leaseback transactions are not characterized by the Internal Revenue Service (“IRS”) or similar tax authorities
internationally as “true leases,” we may be subject to adverse tax consequences.
We have purchased certain properties and leased them back to the sellers of such properties. For almost all of our leases, we
intend for any such sale-leaseback transactions to be structured in a manner that the lease will be characterized as a “true lease,”
thereby allowing us to be treated as the owner of the property for U.S. federal income tax purposes. However, depending on the terms
of any specific transaction, taxing authorities might take the position that the transaction is not a “true lease”. In the event any sale-
39
leaseback transaction is challenged and successfully re-characterized, we might not be able to deduct depreciation expense on the real
estate, resulting in potential higher income taxes.
Transactions with TRSs may be subject to excise tax.
We have historically entered into leases and other transactions with our TRS and its subsidiaries and expect to continue to do so
in the future. Under applicable rules, transactions such as leases between our TRS and its parent U.S. REIT that are not conducted on a
market terms basis may be subject to a 100% excise tax. While we believe that all of our transactions with our TRS are at arm’s
length, imposition of a 100% excise tax could have a material adverse effect on our financial condition and results of operations.
Loans to our tenants could be characterized as equity, in which case our income from that tenant might not be qualifying
income under the REIT rules and we could lose our REIT status.
Our TRS may make loans to tenants of our facilities to acquire operations or for working capital purposes. The IRS may take the
position that certain loans to tenants should be treated as equity interests rather than debt, and that our interest income from such
tenant should not be treated as qualifying income for purposes of the REIT gross income tests. If the IRS were to successfully treat a
loan to a particular tenant as an equity interest, the tenant would be a “related party tenant” with respect to our company and the rent
that we receive from the tenant would not be qualifying income for purposes of the REIT gross income tests. As a result, we could be
in jeopardy of failing the 75% income test discussed above, which if we did would cause us to lose our REIT status. In addition, if the
IRS were to successfully treat a particular loan as interests held by our operating partnership rather than by our TRS, we could fail the
5% asset test, and if the IRS further successfully treated the loan as other than straight debt, we could fail the 10% asset test with
respect to such interest. As a result of the failure of either test, we could lose our REIT status, which would subject us to corporate
level income tax and adversely affect our ability to service our debt and make distributions to our stockholders.
Certain transfers may generate prohibited transaction income, resulting in a penalty tax on gain attributable to the transaction.
From time-to-time, we may transfer or otherwise dispose of some of our properties, including by contributing properties as part
of joint venture investments. Under the Code, any gain resulting from transfers of properties we hold as inventory or primarily for sale
to customers in the ordinary course of business is treated as income from a prohibited transaction subject to a 100% penalty tax. We
do not believe that our transfers or disposals of property or our contributions of properties into joint venture investments are prohibited
transactions. However, whether property is held for investment purposes is a question of fact that depends on all the facts and
circumstances surrounding the particular transaction. The IRS may contend that these types of transfers or dispositions are prohibited
transactions. While we believe that the IRS would not prevail in any such dispute, if the IRS were to argue successfully that a transfer,
disposition, or contribution of property constituted a prohibited transaction, we would be required to pay a 100% penalty tax on any
gain allocable to us from the prohibited transaction. In addition, income from a prohibited transaction might adversely affect our
ability to satisfy the income tests for qualification as a REIT.
Changes in U.S. or foreign tax laws, regulations, including changes to tax rates, may adversely affect our results of operations.
We are headquartered in the U.S. with subsidiaries and investments globally and are subject to income taxes in these
jurisdictions. Significant judgment is required in determining our provision for income taxes. Although we believe that we have
adequately assessed and accounted for our potential tax liabilities, and that our tax estimates are reasonable, there can be no assurance
that additional taxes will not be due upon audit of our tax returns, which could materially and adversely impact our results of
operations and cash flows. In addition, the U.S. government, as well as the governments of many of the locations in which we operate
(such as Germany, the U.K., Colombia, Portugal, Spain, Finland, and Luxembourg, which is where most of our Europe entities are
domiciled) are actively discussing changes to corporate taxation. Our future tax expense could be adversely affected by these changes
in tax laws or their interpretation, both domestically and internationally. Potential tax reforms being considered by many countries
include changes that could impact, among other things, global tax reporting, intercompany transfer pricing arrangements, the
definition of taxable permanent establishments, and other legal or financial arrangements. The nature and timing of any changes to
each jurisdiction’s tax laws and the impact on our future tax exposure both in the U.S. and abroad cannot be predicted with any
accuracy but could materially and adversely impact our results of operations and cash flows.
ITEM 1B. Unresolved Staff Comments
None.
40
ITEM 1C. Cybersecurity
Cyber Risk Management and Strategy
We have developed, implemented, and continue to maintain processes and procedures to identify and mitigate cybersecurity
risks across our company (including our offices in Europe). Because we rely on various information technology systems and software
programs to operate our business, we have an extensive cybersecurity program designed to protect our properties and confidential
data. Our cybersecurity risk management and strategy program includes the following:
•
implementing the latest software releases and tools (including multi-factor authentication) in a timely manner;
•
seek to minimize the amount of personal information collected and stored about our employees and seek to avoid any
collection and storage of non-financial or contact information from our tenants/borrowers (and given we are a commercial
real estate landlord, we do not maintain credit card or patient information in our systems);
•
seek to restrict information system access to appropriate levels while allowing users to fulfill their business
responsibilities;
•
constant security monitoring of computers, networks, and cloud-based information assets to detect and respond to
cybersecurity risks and threats;
•
third party internal and external vulnerability assessments and penetration testing;
•
annual review and audit of cyber controls and procedures;
•
periodic review of cybersecurity procedures and implementation of new procedures as necessary to adhere to
cybersecurity standards set forth by the National Institute of Standards and Technology;
•
periodic evaluation and review of cybersecurity risks associated with our use of key third-party business partners, vendors,
and service providers. Because we do not control the systems or cybersecurity plans put in place by such third parties, and
we may have limited contractual protections with such parties, we may be negatively impacted as a result of threats or
incidents experienced by such third parties;
•
security awareness training provided during employee onboarding process and successful completion required at least
annually for all employees with passing requirements;
•
employee anti-phishing campaigns performed at least quarterly;
•
a cybersecurity incident response plan, which is reviewed annually, but generally consists of a coordinated approach to
investigating, containing, documenting, and reporting findings and keeping management and others informed and
involved as appropriate; and
•
a cybersecurity risk insurance policy.
We have not identified any known cybersecurity threats or incidents within the prior year that have materially affected or are
reasonably likely to materially affect us, including our overall business strategy, results of operations, or financial condition. Although
we have taken steps to protect the security of our information systems and the data maintained in those systems, there is no guarantee
the measures and security we have implemented will be successful in detecting and preventing a cybersecurity incident. Please refer to
Item 1A of this Annual Report on Form 10-K for more information regarding additional risks related to cybersecurity and information
technology.
Cyber Governance
Cybersecurity holds a pivotal role in our comprehensive risk management processes and is a key focus for both our Board of
Directors and management. Our management has primary responsibility for identifying, assessing, and managing our exposure to
cybersecurity threats and incidents. However, the Board of Directors, led by members of the Risk Committee, oversees the enterprise
risk management process, specifically addressing material risks stemming from cybersecurity threats.
The Board of Directors receives regular updates from the Computer Security Incident Response Team (“CSIRT”) to provide
insight into significant cybersecurity risks, potential impacts on business operations, and management's strategies for identifying,
monitoring, and mitigating these risks. This includes sharing results from assessments or audits of relevant processes.
41
Led by our Head of Technology with years of experience in Information Technology, our CSIRT, comprising cross-functional
professionals, collaborates to execute our cybersecurity risk assessment and management processes by reviewing and assessing
cybersecurity initiatives, including the incident response plan, cybersecurity compliance, training, and overall risk management
efforts. The collaborative efforts of the Board of Directors and our skilled CSIRT team underscore our commitment to effectively
addressing and mitigating cybersecurity risks within the organization.
42
ITEM 2. Properties
At December 31, 2025, our portfolio (including properties in our five real estate joint ventures) consisted of 384 properties
(including properties under construction or in the form of a first lien mortgage loan) operated by 52 different operators. Our vacant
facilities represent less than 1% of total assets at December 31, 2025.
Total
Properties
Total 2025
Revenues
Total
Assets(A)
(Dollars in thousands)
United States:
........................................................................................................
Alabama
2
$
791
$
6,162
.........................................................................................................
Arizona
8
37,519
328,873
........................................................................................................
Arkansas
1
10,582
65,030
......................................................................................................
California
17
69,157
977,890
........................................................................................................
Colorado
3
10,746
102,549
...................................................................................................
Connecticut
3
60
41,414
...........................................................................................................
Florida
6
21,696
834,940 (B)
.............................................................................................................
Idaho
6
42,180
299,826
..........................................................................................................
Indiana
4
7,148
58,522
..............................................................................................................
Iowa
1
5,396
44,374
...........................................................................................................
Kansas
9
15,982
208,893 (B)
.......................................................................................................
Kentucky
1
10,288
53,080
.......................................................................................................
Louisiana
5
6,060
106,713
................................................................................................
Massachusetts
2
436
244,824 (D)
.......................................................................................................
Michigan
1
3,521
13,038
........................................................................................................
Missouri
4
23,986
117,424
........................................................................................................
Montana
1
2,049
19,134
....................................................................................................
New Jersey
2
21,520
142,121
..................................................................................................
New Mexico
2
5,271
50,519
...............................................................................................
North Carolina
1
3,163
30,027
..............................................................................................................
Ohio
9
25,910
330,189 (B)
......................................................................................................
Oklahoma
1
7,082
6,855
..........................................................................................................
Oregon
1
12,588
80,539
.................................................................................................
Pennsylvania
7
31,450
304,372
...............................................................................................
South Carolina
5
17,174
123,512
.............................................................................................................
Texas
44
100,839
1,427,391 (C)
..............................................................................................................
Utah
7
4,288
193,752 (E)
.........................................................................................................
Virginia
2
2,940
15,728
...................................................................................................
Washington
2
4,319
35,334
......................................................................................................
Wisconsin
1
3,703
27,266
.......................................................................................................
Wyoming
3
10,034
89,174
...................................................................................................
Other assets
—
—
1,072,900
........................................................................................
Total United States
161
$
517,878
$
7,452,365
International:
.......................................................................................................
Colombia
4
$
6,216
$
147,620
........................................................................................................
Germany
85
42,686
751,806 (E)
...............................................................................................................
Italy
8
—
86,091 (E)
.........................................................................................................
Portugal
2
3,748
50,205
.............................................................................................................
Spain
9
12,599
302,323 (D)(E)
....................................................................................................
Switzerland
19
2,877
873,703 (E)
............................................................................................
United Kingdom
92
373,279
4,184,188
..........................................................................................................
Finland
4
12,739
220,813
...................................................................................................
Other assets
—
—
932,661
.........................................................................................
Total International
223
$
454,144
$
7,549,410
.............................................................................................................
Total
384
$
972,022
$
15,001,775
(A)
Represents total assets at December 31, 2025.
(B)
Includes a facility that was vacant at December 31, 2025.
(C)
Includes a development project still under construction and facilities that were vacant at December 31, 2025.
43
(D)
Includes development project(s) still under construction at December 31, 2025.
(E)
For Germany, the U.S., Switzerland, Spain, and Italy, we own properties through five real estate joint venture arrangements and
our share of revenues from these joint ventures is reflected in the "Earnings (loss) from equity investments" line of our
consolidated statements of net income. However, the table below shows revenues earned from these joint venture arrangements:
Total
Properties
Total 2025 Revenues
(Dollars in thousands)
..................................................................................................
Germany
71
$
70,614
..........................................................................................................
U.S.
5
24,733
..............................................................................................
Switzerland
19
61,077
........................................................................................................
Spain
2
7,463
..........................................................................................................
Italy
8
7,111
........................................................................................................
Total
105
$
170,998
A breakout of our facilities at December 31, 2025 based on property type is as follows:
Number of
Properties
Total
Square
Footage
Total
Licensed
Beds(A)
.....................................................................................
General acute care hospitals
168
27,501,398
17,184
.......................................................................................
Behavioral health facilities
68
3,067,544
4,238
............................................................................................
Post acute care facilities
128
13,788,289
17,109
.......................................................................................................................
FSERs
20
170,642
—
384
44,527,873
38,531
(A)
Reflects all properties, including those that are part of real estate joint ventures, except for our facilities that are under
development.
The following table shows lease and loan expirations, assuming that none of the tenants/borrowers exercise any of their renewal
options (dollars in thousands):
Total Lease and Loan Portfolio(1)
Total
Leases/
Loans(2)
Annualized
Base
Rent/
Interest(3)
% of Total
Annualized
Base
Rent/
Interest
Total
Square
Footage
Total
Licensed
Beds
..............................................................................
2026
1
$
228
—
7,040
—
..............................................................................
2027
1
3,681
0.3%
107,849
13
..............................................................................
2028
7
17,746
1.5%
1,946,588
559
..............................................................................
2029
4
16,112
1.4%
775,575
527
..............................................................................
2030
10
7,128
0.6%
309,615
84
..............................................................................
2031
4
3,852
0.3%
133,505
123
..............................................................................
2032
21
60,495
5.2%
1,067,663
743
..............................................................................
2033
5
6,201
0.6%
85,477
24
..............................................................................
2034
8
62,889
5.5%
1,968,674
1,345
..............................................................................
2035
7
25,516
2.2%
750,199
983
.....................................................................
Thereafter
301
950,848
82.4%
34,793,831
33,402
.............................................................................
Total
369
$
1,154,696
100.0%
41,946,016
37,803
(1)
Schedule includes leases and mortgage loans and related terms as of December 31, 2025.
(2)
Reflects all properties, including those that are part of real estate joint ventures, except vacant properties (less than 1% of total
assets), facilities that are under development, and transitioning properties.
(3)
Represents base rent/interest income contractually owed per the lease/loan agreements on an annualized basis as of period end
(including foreign currency exchange rates) but does not include tenant recoveries, additional rents and other lease-related
adjustments to revenue (i.e., straight-line rents and deferred revenues), or any reserves or write-offs.
44
ITEM 3. Legal Proceedings
We are party to various lawsuits as further described in Note 8 to the consolidated financial statements in Item 8 of this Annual
Report on Form 10-K. We have not recorded a liability related to these lawsuits because, at this time, we are unable to determine
whether an unfavorable outcome is possible or to estimate reasonably possible losses.
In addition to the foregoing, we are currently and have in the past been subject to various other legal proceedings and regulatory
actions in connection with our business. We believe that the resolution of any current pending legal or regulatory matters will not have
a material adverse effect on our business, financial condition, results of operations, or cash flows. Nonetheless, we cannot predict the
outcome of these proceedings, as legal and regulatory matters are subject to inherent uncertainties, and there exists the possibility that
the ultimate resolution of such matters could have a material adverse effect on our financial condition, cash flows, results of
operations, and the trading price of our common stock.
ITEM 4. Mine Safety Disclosures
None.
PART II
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities
(a) Our common stock is traded on the New York Stock Exchange under the symbol “MPT.” The following table sets forth the
high and low sales prices for the common stock for the periods indicated, as reported by the New York Stock Exchange Composite
Tape, and the dividends per share declared by us with respect to each such period.
High
Low
Dividends
Year Ended December 31, 2025
......................................................................................................................
First Quarter
$
6.34
$
3.51
$
0.08
..................................................................................................................
Second Quarter
6.09
4.25
0.08
....................................................................................................................
Third Quarter
5.17
3.95
0.08
...................................................................................................................
Fourth Quarter
5.82
4.80
0.09
Year Ended December 31, 2024
......................................................................................................................
First Quarter
$
5.16
$
2.92
$
—
..................................................................................................................
Second Quarter
6.54
3.94
0.30
....................................................................................................................
Third Quarter
6.55
3.92
0.08
...................................................................................................................
Fourth Quarter
5.91
3.63
0.08
45
On February 23, 2026, the closing price for our common stock, as reported on the New York Stock Exchange, was $5.78 per
share. As of February 23, 2026, there were 34 holders of record of our common stock. This figure does not reflect the beneficial
ownership of shares held in nominee name.
(b) Not applicable.
(c) Stock repurchases:
The table below summarizes repurchases of our common stock made during the quarter ended December 31, 2025:
Period
Total number of
shares purchased(1)
(in thousands)
Average price
per share
Total number of shares
purchased as part of
publicly announced
plans or programs(2)
(in thousands)
Approximate dollar
value of shares that
may yet be
purchased under the
plans or programs
(in thousands)
...........................................
October 1, 2025-October 31,
2025
199
$
5.01
—
$
150,000
.....................................
November 1, 2025-November
30, 2025
—
$
—
—
$
150,000
.....................................
December 1, 2025-December
31, 2025
4,504
$
5.20
4,504
$
126,560
..........................................
Total
4,703
4,504
$
126,560
(1)
The number of shares purchased consists of shares of common stock purchased as part of a publicly announced program to
purchase common stock of the Company as well as shares of common stock tendered by employees to satisfy the employees' tax
withholding obligations arising as a result of vesting of restricted stock awards under the 2019 Equity Incentive Plan (the
"Equity Incentive Plan"), which shares were purchased based on their fair market value on the vesting date.
(2)
On October 28, 2025, the Board of Directors of the Company authorized a stock repurchase program for up to $150 million of
common stock, par value $0.001 per share. The repurchase authorization expires December 31, 2026, does not obligate us to
acquire any common stock, and is subject to market conditions and our ongoing determination of the best use of available cash.
46
The following graph provides a comparison of cumulative total stockholder returns for the period from December 31, 2020
through December 31, 2025, among us, the S&P 500 Index, MSCI U.S. REIT Index, and Dow Jones U.S. Real Estate Health Care
Index. The stock performance graph assumes an investment of $100 in us and the three indices, and the reinvestment of dividends.
The historical information below is not indicative of future performance.
Period Ending
12/31/2020
12/31/2021
12/31/2022
12/31/2023
12/31/2024
12/31/2025
.....................................
Medical Properties Trust, Inc.
100.00
114.26
58.27
29.00
25.74
34.80
.............................................................
S&P 500 Index
100.00
128.71
105.40
133.10
166.40
196.16
...............................................
MSCI U.S. REIT Index
100.00
143.06
108.00
122.84
133.59
137.53
..........
Dow Jones U.S. Real Estate Health Care Index
100.00
116.24
90.83
103.43
133.58
181.61
The graph and accompanying text shall not be deemed incorporated by reference by any general statement incorporating by
reference this Annual Report on Form 10-K into any filing under the Securities Act of 1933, as amended, or under the Securities
Exchange Act of 1934, as amended.
ITEM 6. [Reserved]
0
50
100
150
200
250
12/31/20
12/31/21
12/31/22
12/31/23
12/31/24
12/31/25
Index Value
Total Return Performance
Medical Properties Trust, Inc.
S&P 500 Index
MSCI U.S. REIT Index
Dow Jones U.S. Real Estate Health Care Index
47
ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Unless otherwise indicated, references to “our,” “we,” and “us” in this management’s discussion and analysis of financial
condition and results of operations refer to Medical Properties Trust, Inc. and its consolidated subsidiaries, including MPT Operating
Partnership, L.P.
Overview
We are a self-advised healthcare REIT that was incorporated in Maryland on August 27, 2003, primarily for the purpose of
investing in and owning healthcare facilities to be leased to healthcare operators under long-term net leases. We may also make
mortgage loans to healthcare operators that are collateralized by the underlying real estate. We conduct our business operations in one
segment. We currently have healthcare investments in the U.S., Europe, and South America. Our existing tenants are, and our
prospective tenants will generally be, healthcare operating companies and other healthcare providers that use substantial real estate
assets in their operations. We offer financing to these operators through 100% lease and mortgage financing and generally seek lease
and loan terms on a long-term basis (typically at least 15 years) with a series of shorter renewal terms, generally in five year
increments, at the option of our tenants and borrowers. We also have included and intend to include in our lease and loan agreements
annual contractual minimum rate increases. Our existing portfolio’s minimum escalators are typically 2.0%. In addition, most of our
leases and loans include rate increases based on the general rate of inflation (based on CPI or similar indices) if greater than the
minimum contractual increases. Beyond rent or mortgage interest, our leases and loans typically require our tenants to pay all
operating costs and expenses associated with the facility. Finally, from time-to-time, we may make noncontrolling investments in our
tenants, typically in conjunction with larger real estate transactions with the tenant, that give us a right to share in such tenant’s profits
and losses and provide for certain minority rights and protections.
We may make other loans to certain of our operators through our TRSs, which the operators use for working capital. Although it
represents approximately 1% of our total assets at December 31, 2025, we consider our lending business an important element of our
overall business strategy for two primary reasons: (1) it provides opportunities to make income-earning investments that could yield
attractive risk-adjusted returns in an industry in which our management has expertise, and (2) by making debt capital available to
certain qualified operators, we believe we create a competitive advantage for our company over other buyers of, and financing sources
for, healthcare facilities.
At December 31, 2025, our portfolio (including real estate assets in joint ventures) consisted of 384 properties, of which 373
properties are leased or loaned to 52 operators, including facilities under development or in the form of mortgage loans.
The information set forth in this Item 7 is intended to provide readers with an understanding of our financial condition, changes
in financial condition, and results of operations. This section generally discusses the results of our operations for the year ended
December 31, 2025 compared to the year ended December 31, 2024. For a discussion of the year ended December 31, 2024 compared
to the year ended December 31, 2023, please refer to Item 7 of our Annual Report on Form 10-K for the year ended December 31,
2024, filed with the SEC on March 3, 2025.
48
Selected Financial Data
The following sets forth selected consolidated financial and operating data. You should read the following selected financial
data in conjunction with the consolidated financial statements and notes thereto of each of Medical Properties Trust, Inc. and MPT
Operating Partnership, L.P. and their respective subsidiaries included in Item 8 of this Annual Report on Form 10-K.
For the Years Ended December 31,
2025
2024
(In thousands except per share data)
OPERATING DATA
...................................................................................................................
Total revenues
$
972,022
$
995,547
Expenses:
...........................................................................................................................
Interest
510,362
417,824
.....................................................................
Real estate depreciation and amortization
265,405
447,657
.............................................................................................................
Property-related
36,415
27,255
............................................................................................
General and administrative
130,427
133,789
...................................................................................................................
Total expenses
942,609
1,026,525
Other (expense) income:
..............................................................................................
Gain on sale of real estate
5,545
478,693
..............................................................
Real estate and other impairment charges, net
(193,947)
(1,825,402)
.............................................................................
Earnings (loss) from equity interests
97,851
(366,642)
...........................................................
Debt refinancing and unutilized financing costs
(3,629)
(4,292)
..................................................
Other (including fair value adjustments on securities)
(172,552)
(615,565)
...........................................................................................................
Income tax expense
(38,618)
(44,101)
..............................................................................................................................
Net loss
(275,937)
(2,408,287)
.........................................................
Net income attributable to non-controlling interests
(1,112)
(1,984)
.........................................................
Net loss attributable to MPT common stockholders
$
(277,049)
$
(2,410,271)
...................................................................................................................
Net loss attributable to MPT common stockholders per
diluted share
$
(0.46)
$
(4.02)
..............................................
Weighted-average shares outstanding — basic and diluted
600,892
600,248
OTHER DATA
.............................................................................
Dividends declared per common share
$
0.33
$
0.46
...............................................................................................................................
FFO(1)
$
183,924
$
(1,400,123)
...........................................................................................................
Normalized FFO(1)
$
346,277
$
482,705
............................................................................................
Normalized FFO per share(1)
$
0.58
$
0.80
.................................................
Cash paid for acquisitions and other related investments
$
142,089
$
105,618
December 31,
2025
2024
(In thousands)
BALANCE SHEET DATA
..........................................................................................................
Real estate assets — at cost
$
12,751,022
$
12,471,543
.....................................................................
Real estate accumulated depreciation/amortization
(1,663,056)
(1,422,948)
............................................................................................................
Cash and cash equivalents
540,859
332,335
..............................................................
Investments in unconsolidated real estate joint ventures
1,399,777
1,156,397
.........................................................................
Investments in unconsolidated operating entities
322,179
439,578
....................................................................................................................................
Other loans
186,292
109,175
.............................................................................................................................................
Other
1,464,702
1,208,514
...................................................................................................................................
Total assets
$
15,001,775
$
14,294,594
.......................................................................................................................................
Debt, net
$
9,697,835
$
8,848,112
.............................................................................................................................
Other liabilities
696,691
612,699
...........................................................
Total Medical Properties Trust, Inc. stockholders’ equity
4,606,195
4,832,729
..............................................................................................................
Non-controlling interests
1,054
1,054
...............................................................................................................................
Total equity
4,607,249
4,833,783
............................................................................................................
Total liabilities and equity
$
15,001,775
$
14,294,594
(1)
See section titled “Non-GAAP Financial Measures” for an explanation of why these non-GAAP financial measures are useful
along with a reconciliation to our GAAP earnings.
49
2025 Highlights
In 2025, our primary objectives were to manage our near-term debt maturities, securing as much value as possible while exiting
our relationship with Prospect, restructuring our investments in Vibra, and continuing the ramp up of rents on the re-tenanted
properties formerly leased to Steward. In regard to our near-term debt maturities, we made significant progress in refinancing our debt
in 2025, clearing all debt maturities through June 30, 2027 (as we expect the revolving portion of our Credit Facility will be extended
to June 2027), other than one issue of unsecured notes of €500 million due in October 2026 which we believe can be paid off with
cash on-hand and/or availability under the revolving portion of our Credit Facility – see “Contractual Commitments” in Item 7 of this
Annual Report on Form 10-K for further details of our debt maturity schedule.
See below for details of our 2025 activities:
•
Financing activities:
(1)
Repaid the remaining outstanding balance of the British pound sterling term loan due 2025 at maturity in January
2025 of £493 million, with a combination of cash on hand and available capacity under the revolving portion of
our Credit Facility;
(2)
Completed a private notes offering of $1.5 billion in aggregate principal amount of senior secured notes due 2032
and €1.0 billion aggregate principal amount of senior secured notes due 2032, proceeds of which were used to
fund the redemption in full of our 3.325% Senior Unsecured Notes due 2025, 2.500% Senior Unsecured Notes
due 2026, and 5.250% Senior Unsecured Notes due 2026, including related accrued interest, fees and expenses.
Remaining proceeds were used to pay down the revolving portion of our Credit Facility;
(3)
Concurrent with the notes offering, we amended our Credit Facility which, among other things, (i) modified
certain financial covenants and eliminated others including the minimum consolidated tangible net worth
covenant; (ii) lowered borrowing spreads from 300 basis points to 225 basis points; (iii) removed the limitation
on the payment of dividends in cash of $0.08 per share in any fiscal quarter; and (iv) provided for the Credit
Facility to be secured and guaranteed ratably with the newly issued secured notes – see Note 4 to Item 8 of this
Annual Report on Form 10-K for more information regarding this amendment;
(4)
Provided notice that we plan to exercise both of our 6-month extension options such that the maturity of the
revolving portion of our Credit Facility would move to June 30, 2027 (subject to the satisfaction of certain
conditions, with the primary condition of not being in default at the time of each extension option date);
(5)
Replaced the €655 million secured debt in our MEDIAN joint venture on June 17, 2025, that was due on June 30,
2025, with a new €702.5 million nonrecourse, 10-year non-amortizing secured debt;
(6)
Entered into an at-the-market equity offering program (the "ATM Program") on August 11, 2025, which provides
for the sale, from time to time, of up to $500 million of our common stock with a commission rate up to 2%;
(7)
Our Board of Directors approved a stock repurchase program in October 2025 for up to $150 million, for which
we acquired 4.5 million shares for $23.4 million in 2025; and
(8)
Increased our quarterly cash dividend by $0.01 to $0.09 per share as declared in November 2025.
•
Tenant and property activity:
(1)
As more fully described in “Significant Tenants” in Item 1 of this Annual Report on Form 10-K, Prospect filed
for Chapter 11 bankruptcy on January 11, 2025. On March 20, 2025, the bankruptcy court approved a global
settlement (including a recovery waterfall) between us, Prospect, and other stakeholders. As part of the global
settlement, we re-leased six California properties to NOR in December 2025. In addition, five of the remaining
seven properties previously operated by Prospect have been sold to-date with the remaining two expected to be
sold later in 2026.
We expect to receive our remaining investment of $61 million in 2026. With that said, Prospect's bankruptcy
proceedings are continuing, and the ultimate outcome of such proceedings is uncertain. At this time, we cannot
assure you that we will be able to recover in full our remaining investment in Prospect as of December 31, 2025.
In addition, the bankruptcy court approved an order for up to $70 million in additional advances which we may
be required to fund. However, any funds advanced are expected to be secured by recoveries, if any, from causes
of action owned by the debtor;
(2)
Completed a restructuring of our relationship with Vibra including entering into a new 20-year master lease
agreement covering several properties, the acquisition of one post-acute property for $32 million, and the cash
receipt of approximately $18 million for past obligations that we recognized as revenue in the 2025 fourth
quarter. We plan to continue accounting for revenue from Vibra on a cash basis at this time;
50
(3)
Continued the ramp up of cash rents on the re-tenanted properties formerly operated by Steward. Through 2025,
these new tenants are fully current on cash rents, except for three facilities in Ohio and Pennsylvania. Excluding
these three facilities, the new tenants are currently paying 59% of contractual rents, which is expected to increase
to 100% by the 2026 fourth quarter; and
(4)
Increased our investment in the Swiss Medical Network joint venture by approximately CHF 52 million,
inclusive of a CHF 25 million short-term loan, in April 2025 to facilitate the acquisition of a Swiss general acute
facility and repayment of debt.
•
Disposal transactions:
Completed the sale of nine facilities (including two former Steward-operated facilities that were being leased to
College Health for nominal rent) along with certain ancillary land and facilities for aggregate cash proceeds of
approximately $121 million, resulting in a gain on real estate of approximately $5.5 million.
Subsequent to December 31, 2025, the following activities took place:
(1)
Closed and funded the acquisition of one property in Germany for approximately €23 million to be leased to MEDIAN;
(2)
Sold one property previously leased to Vibra for $12 million, proceeds of which we received in 2025 in anticipation of
such closing;
(3)
Seven additional entities in the U.K. were added to our U.K. REIT effective February 1, 2026, which we expect to result
in an approximate $40 million one-time tax benefit in the first quarter of 2026;
(4)
Our Board of Directors approved a $0.09 dividend in February 2026 to be paid in April 2026; and
(5)
In conjunction with completing 20 years trading on the New York Stock Exchange, commenced trading under ticker
symbol "MPT."
2024 Highlights
In 2024, our focus was on improving our liquidity position, managing our near-term debt maturities, and securing as much value
as possible while exiting our relationship with Steward. In regard to improving liquidity, we set a target to generate $2 billion of
liquidity in 2024, which we surpassed by approximately $800 million through a combination of real estate asset sales (discussed
below) that resulted in approximately $500 million of gains on sale and closing on a new secured loan facility with a 10-year term for
approximately £631 million (approximately $800 million). In addition, we reduced our dividend from $0.15 per share to $0.08 per
share for the last two quarters of the year, which resulted in cash savings of approximately $40 million per quarter. In regard to
Steward, the bankruptcy court approved a global settlement in September 2024 between Steward, its lenders, the unsecured creditors
committee, and us. The settlement is more fully described in "Significant Tenants"; however, in summary, the settlement effectively
ended our relationship with Steward and allowed us to regain control of 23 of our properties and begin the process of re-tenanting the
properties as discussed below.
See below for more detail on our 2024 activities:
•
Disposal transactions:
(1)
Generated approximately $130 million from the sale of our interest in the Priory syndicated term loan and
remaining minority interest in Lifepoint Behavioral in the 2024 first quarter;
(2)
Sold five properties in April 2024 to Prime Healthcare Services, Inc. ("Prime") for $350 million, including a
$100 million interest-bearing mortgage loan that was subsequently fully paid in August 2024, realizing a gain on
sale of approximately $53 million;
(3)
Sold our controlling interest in five Utah hospitals in April 2024 for an aggregate agreed valuation of
approximately $1.2 billion to a newly formed joint venture with an institutional asset manager. We recognized a
gain on sale of the real estate of approximately $380 million and retained an approximately 25% interest in the
partnership valued initially at approximately $108 million. In conjunction with this transaction closing, the joint
51
venture placed new non-recourse secured debt on the properties, providing $190 million of additional cash to us.
In total, we received approximately $1.1 billion of cash proceeds from this transaction;
(4)
Completed the sale of eight properties to Dignity Health in July 2024 for approximately $160 million, realizing a
gain on sale of $85 million;
(5)
Completed the sale of 11 properties to UCHealth in August 2024 for approximately $86 million, realizing a gain
on sale of $40 million;
(6)
Completed the sale of Watsonville Community Hospital in Watsonville, California in October 2024 for proceeds
of approximately $40 million, and two freestanding emergency department facilities in Texas for approximately
$5 million. In addition, we received approximately $47 million in October 2024 from proceeds generated by the
sale of three Space Coast properties as previously described in “Significant Tenants”; and
(7)
Completed several small transactions that resulted in approximately $9 million in net proceeds.
•
Additional financing transactions:
(1)
Paid off the remaining A$470 million (approximately $306 million) Australian term loan facility in April 2024;
(2)
Funded and early discharged our British pound sterling secured term loan of approximately £105 million that was
due in December 2024; and
(3)
Amended our Credit Facility in April and August 2024 which reduced revolving commitments thereunder from
$1.8 billion to $1.28 billion and modified certain covenants, among other things – see Note 4 to Item 8 of this
Annual Report on Form 10-K for more information regarding these amendments.
•
Tenant and property activity:
(1)
Incurred approximately $2.4 billion of impairment charges and negative fair value adjustments in 2024 primarily
related to Steward and Prospect as more fully described in Note 3 to Item 8 of this Annual Report on Form 10-K;
(2)
Re-leased 18 of the former 23 Steward operated facilities to six operators including Honor Health, Quorum
Health, HSA, Insight Health, College Health, and Tenor Health (effective January 2025);
(3)
Recovered from our casualty insurers cash in excess of our recovery receivable related to the 2020 storm losses
at our Norwood redevelopment;
(4)
Completed a building improvement project on an existing general acute care facility in Idaho Falls, Idaho in
October 2024 for a total amount of approximately $50 million and commenced collection of rent; and
(5)
Entered into a new forbearance and restructuring agreement in December 2024 with Vibra and received $10
million at the signing of this agreement for unpaid rent.
•
Selected as one of Newsweek’s Most Responsible Companies in 2024.
Critical Accounting Estimates
In order to prepare financial statements in conformity with GAAP in the U.S., we must make estimates about certain types of
transactions and account balances. We believe that our estimates of the amount and timing of credit losses, fair value adjustments
(either as part of a purchase price allocation, recurring accounting for those investments that we have elected the fair value option
method, or impairment analyses), and periodic depreciation of our real estate assets, along with our assessment as to whether
investments we make in certain businesses/entities should be consolidated with our results, have significant effects on our financial
statements. Each of these items involves estimates that require us to make subjective judgments. We rely on our experience, collect
historical and current market data, and develop relevant assumptions to arrive at what we believe to be reasonable estimates. Under
different conditions or assumptions, materially different amounts could be reported related to these critical accounting policies as
described below. In addition, application of these critical accounting policies involves the exercise of judgment on the use of
assumptions as to future uncertainties and, as a result, actual results could materially differ from these estimates. See Note 2 to Item 8
of this Annual Report on Form 10-K for more information regarding our accounting policies and recent accounting developments. Our
critical accounting estimates include the following:
Credit Losses:
Losses from Rent Receivables: For our leases, we review tenant provided financial data and monitor the performance of our
tenants in areas generally consisting of: admission levels and surgery/procedure volumes by type; current operating margins; ratio of
our tenant's operating margins both to facility rent and to facility rent plus other fixed costs; trends in revenue, cash collections, patient
52
mix; and the effect of evolving healthcare regulations, adverse economic and political conditions, such as inflation and interest rates,
and other events ongoing on a tenant's profitability and liquidity.
Operating Lease Receivables: We utilize the information above along with the tenant's payment and default history in
evaluating (on a lease-by-lease basis) whether or not lease payments are deemed probable of collection. If not deemed probable
of collection, rent revenue, under lease accounting guidance, is constrained to the lower of 1) the revenue that would have been
recognized if collection were probable and 2) the amount of lease payments received in cash.
Financing Lease Receivables: We apply a forward-looking “expected credit loss” model to all of our financing
receivables, including financing leases. To do this, we group our financial instruments into two primary pools of similar credit
risk: secured and unsecured. The secured instruments include our investments in financing receivables as all are secured by the
underlying real estate, among other collateral. Within the two primary pools, we further group our instruments into sub-pools
based on several tenant/borrower characteristics, including years of experience in the healthcare industry and in a particular
market or region and overall capitalization. We then determine a credit loss percentage per pool based on our history over a
period of time that closely matches the remaining terms of the financial instruments being analyzed and adjust as needed for
current trends or unusual circumstances. We apply these credit loss percentages to the cost basis of the related instruments to
establish a credit loss reserve on our financing lease receivables and such credit loss reserve (including the underlying
assumptions) is reviewed and adjusted quarterly. If a financing receivable is underperforming and is deemed uncollectible based
on the lessee’s overall financial condition, we will adjust the credit loss reserve based on the fair value of the underlying
collateral.
We exclude interest receivables from the credit loss reserve model. Instead, such receivables are impaired and an
allowance recorded when it is deemed probable that we will be unable to collect all amounts due. The need for an allowance is
based upon our assessment of the lessee’s overall financial condition, economic resources and payment record, the prospects for
support from any financially responsible guarantors, and, if appropriate, the realizable value of any collateral. Financing leases
are placed on non-accrual status when we determine that the collectibility of contractual amounts is not reasonably assured. If on
non-accrual status, we generally account for the financing lease on a cash basis, in which income is recognized only upon
receipt of cash.
Loans: Loans consist of mortgage loans, working capital loans, and other loans. Mortgage loans are collateralized by interests in
real property. Working capital and other loans are generally collateralized by interests in receivables and/or personal property and may
include corporate and individual guarantees. We record loans at cost. Like our financing lease receivables, we establish credit loss
reserves on all outstanding loans based on historical credit losses of similar instruments. Such credit loss reserves, including the
underlying assumptions, are reviewed and adjusted quarterly. If a loan’s performance worsens and foreclosure is deemed probable for
our collateral-based loans (after considering the borrower’s overall financial condition as described above for leases), we will adjust
the allowance for expected credit losses based on the current fair value of such collateral at the time the loan is deemed uncollectible.
If the loan is not collateralized, the loan will be reserved for/written-off once it is determined that such loan is no longer collectible.
Interest receivables on loans are excluded from the forward-looking credit loss reserve model; however, an allowance is
recorded when it is deemed probable that we will be unable to collect all amounts due. Loans are placed on non-accrual status when
we determine that the collectibility of contractual amounts is not reasonable assured. If on non-accrual status, we generally account for
the loan on a cash basis, in which income is recognized only upon receipt of cash.
Investments in Real Estate: We maintain our investments in real estate at cost, and we capitalize improvements and
replacements when they extend the useful life or improve the efficiency of the asset. While our tenants are generally responsible for all
operating costs at a facility, in the event we incur costs of repairs and maintenance, we expense those costs as incurred. We compute
depreciation using the straight-line method over the estimated useful lives of the assets, which at December 31, 2025, the weighted-
average life is approximately 38.6 years for buildings and improvements.
When circumstances indicate a possible impairment of the value of our real estate investments, we review the recoverability of
the facility’s carrying value. The review of the recoverability is generally based on our estimate of the future undiscounted cash flows
from the facility’s use and eventual disposition. Our forecast of these cash flows considers factors such as expected future operating
income, market and other applicable trends, and residual value, as well as the effects of leasing demand, competition, and other
factors. If impairment exists due to the inability to recover the carrying value of a facility on an undiscounted basis, an impairment
loss is recorded to the extent that the carrying value exceeds the estimated fair value of the facility. In making estimates of fair value
for purposes of impairment assessments, we will look to a number of sources including independent appraisals, available broker data,
or our internal data from recent transactions involving similar properties in similar markets. Given the highly specialized aspects of
our properties, no assurance can be given that future impairment charges will not be needed.
53
Acquired Real Estate Purchase Price Allocation: For properties acquired for operating leasing purposes, we currently account
for such acquisitions based on asset acquisition accounting rules. Under this accounting method, we allocate the purchase price of
acquired properties to net tangible and identified intangible assets acquired based on their relative fair values. In making estimates of
fair value for purposes of allocating purchase prices of acquired real estate, we may utilize a number of sources, including available
real estate broker data, independent appraisals that may be obtained in connection with the acquisition or financing of the respective
property, internal data from previous acquisitions or developments, and other market data, including market comparables for
significant assumptions such as market rents, capitalization, and discount rates. We also consider information obtained about each
property as a result of our pre-acquisition due diligence, marketing, and leasing activities in estimating the fair value of the tangible
and intangible assets acquired.
We record above-market and below-market in-place lease values, if any, for the facilities we own which are based on the present
value of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate
of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining term of the lease. We
amortize any resulting capitalized above-market lease values as a reduction of rental income over the lease term. We amortize any
resulting capitalized below-market lease values as an increase to rental income over the lease term. Because our strategy to a large
degree involves the origination and acquisition of long-term lease arrangements at market rates with independent parties, we do not
expect the above-market or below-market in-place lease values to be significant for many of our transactions.
We measure the aggregate value of other lease intangible assets to be acquired based on the difference between (i) the property
valued with new or in-place leases adjusted to market rental rates and (ii) the property valued as if vacant when acquired.
Management’s estimates of value are made using methods similar to those used by independent appraisers (e.g., discounted cash flow
analysis). Factors considered by management in our analysis include an estimate of carrying costs during hypothetical expected lease-
up periods, considering current market conditions, and costs to execute similar leases. We also consider information obtained about
each targeted facility as a result of our pre-acquisition due diligence, marketing, and leasing activities in estimating the fair value of
the intangible assets acquired. In estimating carrying costs, management includes real estate taxes, insurance, and other operating
expenses, and estimates of lost rentals at market rates during the expected lease-up periods, which we expect to be about six months
(based on experience) but can be longer depending on specific local market conditions. Management also estimates costs to execute
similar leases including leasing commissions, legal costs, and other related expenses to the extent that such costs are not already
incurred in connection with a new lease origination.
Other intangible assets acquired may include customer relationship intangible values, which are based on management’s
evaluation of the specific characteristics of each prospective tenant’s lease and our overall relationship with that tenant. Characteristics
to be considered by management in allocating these values include the nature and extent of our existing business relationships with the
tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality, and expectations of lease renewals,
including those existing under the terms of the lease agreement, among other factors. At December 31, 2025, we have not assigned
any value to customer relationship intangibles.
We amortize the value of lease intangibles to expense over the term of the respective leases, which have a weighted-average
useful life of 28.2 years at December 31, 2025. If a lease is terminated early, the unamortized portion of the lease intangible is charged
to expense, as was the case in 2023 with the re-leasing of the Utah properties to CommonSpirit as more fully described in Note 3 to
Item 8 of this Annual Report on Form 10-K.
Investments in Unconsolidated Entities: Investments in entities in which we have the ability to significantly influence (but not
control) are accounted for by the equity method. This includes the five investments in unconsolidated real estate joint ventures at
December 31, 2025. Under the equity method of accounting, our share of the investee’s earnings or losses are included in the
“Earnings (loss) from equity interests” line of our consolidated statements of net income. Except for our joint venture with Primotop
Holdings S.à.r.l. (“Primotop”) (for which we handle the accounting of), we have elected to record our share of such investee’s
earnings or losses on a lag basis (not to exceed three months). The initial carrying value of investments in unconsolidated entities is
based on the amount paid to purchase the interest in the investee entity. Subsequently, our investments are increased/decreased by our
share in the investees’ earnings/losses and decreased by cash distributions from our investees. To the extent that our cost basis is
different from the basis reflected at the investee entity level, the basis difference is generally amortized over the lives of the related
assets and liabilities, and such amortization is included in our share of equity in earnings of the investee.
We evaluate our equity method investments for impairment based upon a comparison of the fair value of the equity method
investment to its carrying value, when impairment indicators exist. If we determine a decline in the fair value of an investment in an
unconsolidated investee entity below its carrying value is other-than-temporary, an impairment is recorded.
Investments in entities in which we do not control nor do we have the ability to significantly influence and for which there is no
readily determinable fair value are accounted for at cost, less any impairment, plus or minus changes resulting from observable price
54
changes in orderly transactions involving the investee. Cash distributions on these types of investments are recorded to either income
upon receipt (if a return on investment) or as a reduction of our investment (if the distributions received are in excess of our share of
the investee’s earnings). For similar investments but for which there are readily determinable fair values, such investments are
measured at fair value, with unrealized gains and losses recorded in income.
Fair Value Option Election: We elected to account for certain investments using the fair value option method, which means we
mark these investments to fair market value on a recurring basis. At December 31, 2025, the fair value amount of investments
recorded using the fair value option was less than $150 million made up of loans and equity investments (see Note 10 to Item 8 of this
Annual Report on Form 10-K for additional details). Our loans are recorded at fair value based on Level 2 or Level 3 inputs by
discounting the estimated cash flows using the market rates which similar loans would be made to borrowers with similar credit
ratings and the same remaining maturities.
For our equity investment in the international joint venture at December 31, 2025, fair value was determined based on Level 3
inputs, by using a market approach, which requires significant estimates of our investee such as projected revenue, expenses, and
working capital and appropriate consideration of the underlying risk profile of the forecasted assumptions associated with the investee.
We classify our valuation of this investment as Level 3, as we use certain unobservable inputs to the valuation methodology that are
significant to the fair value measurement, and the valuation requires management judgment due to the absence of quoted market
prices. In regard to the underlying projections used in the discounted cash flow model, such projections are provided by the investees.
However, we may modify such projections as needed based on our review and analysis of historical results, meetings with key
members of management, and our understanding of trends and developments within the healthcare industry. See Note 10 to Item 8 of
this Annual Report on Form 10-K for additional details.
Principles of Consolidation: Property holding entities and other subsidiaries of which we own 100% of the equity or have a
controlling financial interest evidenced by ownership of a majority voting interest are consolidated. All inter-company balances and
transactions are eliminated. For entities in which we own less than 100% of the equity interest, we consolidate the property if we have
the direct or indirect ability to control the entity’s activities based upon the terms of the respective entity's ownership agreements. For
these entities, we record a non-controlling interest representing equity held by non-controlling interests.
We continually evaluate all of our transactions and investments to determine if they represent variable interests in a variable
interest entity. If we determine that we have a variable interest in a variable interest entity, we then evaluate if we are the primary
beneficiary of the variable interest entity. The evaluation is a qualitative assessment as to whether we have the ability to direct the
activities of a variable interest entity that most significantly impact the entity’s economic performance. We consolidate each variable
interest entity in which we, by virtue of or transactions with our investments in the entity, are considered to be the primary beneficiary.
At December 31, 2025 and 2024, we determined that we were not the primary beneficiary of any variable interest entity in which we
hold a variable interest because we do not control the activities (such as the day-to-day operations) that most significantly impact the
economic performance of these entities.
Liquidity and Capital Resources
Our typical sources of cash include our monthly rent and interest receipts, distributions from our real estate joint ventures,
borrowings under our revolving Credit Facility, public and private issuances of debt, public issuances of our equity securities, and
proceeds from bank debt, asset dispositions (either one-off or group asset sales through joint venture transactions), and principal
payments on loans. Our primary uses of cash include dividend distributions, debt service (including principal and interest), new
investments (including acquisitions, developments, or capital improvement projects), loan advances, property expenses, and general
and administrative expenses.
Absent our requirements to make distributions to maintain our REIT qualification (as described earlier and further described in
Note 5 within Item 8 of this Annual Report on Form 10-K) and our current contractual commitments discussed later in this section, we
do not have any material off-balance sheet arrangements that we expect would materially affect our liquidity and capital resources.
See below for highlights of our sources and uses of cash for the past two years:
2025 Cash Flow Activity
We generated cash of approximately $231 million from operating activities during 2025, consisting of rent and interest along
with distributions from our real estate joint ventures. Our 2025 operating cash flows were lower than the prior year primarily due to an
approximately $38 million increase in interest paid in 2025 compared to 2024, partially offset by increases in cash received due to
inflation based escalators in our leases, among other things. We used these operating cash flows, proceeds from the revolving portion
of our Credit Facility, and proceeds from asset sales to fund our dividends and other investing activities.
See below for further details of these transactions along with additional liquidity activity in 2025:
55
a)
Repaid the remaining outstanding balance of the British pound sterling term loan due 2025 of £493 million, with a
combination of cash on hand and proceeds from the revolving portion of our Credit Facility;
b)
Completed a private offering in February 2025 of $1.5 billion in aggregate principal amount of senior secured notes due
2032 and €1.0 billion aggregate principal amount of senior secured notes due 2032. The net proceeds from the offering
were approximately $2.5 billion after deducting discounts, commissions, and other offering related expenses. We used the
net proceeds from the offering to fund the redemption of our 3.325% Senior Unsecured Notes due 2025, 2.500% Senior
Unsecured Notes due 2026, and 5.250% Senior Unsecured Notes due 2026, with the remainder of net proceeds used to
pay down the revolving portion of our Credit Facility by approximately $800 million;
c)
As more fully described in “Significant Tenants” in Item 1 of this Annual Report on Form 10-K, Prospect filed for
Chapter 11 bankruptcy on January 11, 2025. On March 20, 2025, the bankruptcy court approved a global settlement
(including a recovery waterfall) between us, Prospect, and other stakeholders. In line with terms of this global settlement,
we re-leased the six California properties to NOR in December 2025 pursuant to a 15-year lease with annual rents
scheduled to ramp up to $45 million in December 2026. We expect to receive our remaining investment of $61 million in
2026. With that said, Prospect's bankruptcy proceedings are continuing, and the ultimate outcome of such proceedings is
uncertain. At this time, we cannot assure you that we will be able to recover in full our remaining investment in Prospect.
In addition, the bankruptcy court approved an order for up to $70 million in additional advances which we may be
required to fund. However, any funds advanced are expected to be secured by recoveries, if any, from causes of action
owned by the debtor. At this time, we cannot predict with full certainty as to the amount or timing of such recoveries from
these causes of action;
d)
Completed the sale of nine facilities (including two former Steward-operated facilities that were being leased to College
Health for nominal rent) along with certain ancillary land and facilities for aggregate cash proceeds of approximately $121
million;
e)
Continued the ramp up of cash rents on the re-tenanted properties formerly operated by Steward. In 2025, these new
tenants paid a total of approximately $53 million of rent, and through 2025, all were fully current on cash rents, except for
three facilities in Ohio and Pennsylvania with annual rents of less than 1% of total revenues. Excluding these three
facilities, the new tenants are currently paying 59% of contractual rents, and we expect this will increase to 100% by the
2026 fourth quarter;
f)
Increased our investment in the Swiss Medical Network joint venture by approximately CHF 52 million, inclusive of a
CHF 25 million short-term loan, in April 2025 to facilitate the acquisition of a Swiss general acute facility and repayment
of debt;
g)
Received approximately $63 million in dividends from our investments in real estate joint ventures in 2025, which is up
overall from 2024 but dividends from our MEDIAN joint venture were lower than prior year as we replaced the €655
million secured debt with a less than 3% blended interest rate, on June 17, 2025, that was due on June 30, 2025, with a
new €702.5 million nonrecourse, 10-year non-amortizing secured debt with a 5.1% fixed interest rate;
h)
Entered into an at-the-market equity offering program (the "ATM Program") on August 11, 2025, which provides for the
sale, from time to time, of up to $500 million of our common stock with a commission rate up to 2%. There were no sales
in 2025;
i)
Established a stock repurchase program in October 2025 for up to $150 million through December 31, 2026, under which
we acquired 4.5 million shares for $23.4 million in 2025; and
j)
Completed a restructuring of our relationship with Vibra including entering into a new 20-year master lease agreement
covering several properties, the acquisition of one post-acute property for $32 million, and the cash receipt of
approximately $18 million for past obligations that we recognized as revenue in the 2025 fourth quarter.
Subsequent to December 31, 2025, the following events occurred:
a)
Closed and funded the acquisition of one property in Germany for approximately €23 million to be leased to MEDIAN;
b)
Sold one property previously leased to Vibra for $12 million, proceeds of which we received in 2025 in anticipation of
such closing; and
c)
Our Board of Directors approved a $0.09 dividend in February 2026 to be paid in April 2026.
2024 Cash Flow Activity
We generated cash of approximately $245 million from operating activities during 2024, primarily consisting of rent and interest
from mortgage and other loans and distributions from our real estate joint ventures. In addition to operating cash flows, we generated
approximately $1.85 billion from the Utah Transaction and the sale of about 30 properties (as further discussed in Note 3 to Item 8 of
this Annual Report on Form 10-K), along with approximately $130 million from the sale of our interest in the syndicated Priory term
56
loan and remaining minority interest in Lifepoint Behavioral. In May 2024, we closed on a new secured term loan, generating
proceeds of approximately $800 million. We used our operating cash flows, asset sale proceeds, and term loan proceeds to fund our
investment activities and our dividends of $321 million, pay down over $1 billion of our revolving credit facility and £207 million (or
$266 million) on our British pound sterling term loan due 2025, and to pay off both of our Australian term loan facility of A$470
million (or $306 million) and our British pound sterling secured term loan due 2024 of £105 million (or $134 million).
See below for further details of these transactions along with additional liquidity activity in 2024:
a)
we completed the sales of 11 properties to UCHealth for approximately $86 million of proceeds and eight properties to
Dignity Health for approximately $160 million of proceeds;
b)
we completed the sale of five properties to Prime for cash proceeds of $250 million along with a $100 million interest-
bearing mortgage loan that was fully repaid on August 29, 2024;
c)
we completed the Utah Transaction (as discussed in Note 3 to Item 8 of this Annual Report on Form 10-K) that generated
cash proceeds of approximately $1.1 billion. With the proceeds from these asset sales, we paid off and terminated our
$306 million Australian term loan facility that was due in May 2024 and paid down a portion of our revolving credit
facility;
d)
on May 24, 2024, we closed on a secured loan facility with a consortium of institutional investors for an aggregate
principal amount of approximately £631 million (approximately $800 million) secured by a portfolio of 27 properties
located in the U.K. currently leased to affiliates of Circle. See Note 4 to Item 8 of this Annual Report on Form 10-K for
further details. We used the majority of the net proceeds of the facility to pay down portions of our revolving credit
facility and British pound sterling term loan due 2025, and to pay off our British pound sterling secured term loan due
2024;
e)
received cash related to our Norwood property that exceeded our recovery receivables (as discussed in Note 3 to Item 8 of
this Annual Report on Form 10-K);
f)
completed the sale of Watsonville Community Hospital in Watsonville, California in October 2024 for proceeds of
approximately $40 million, and two freestanding emergency department facilities in Texas for approximately $5 million.
In addition, we received approximately $47 million in October 2024 from proceeds generated by the sale of three Space
Coast properties as previously described in “Significant Tenants”; and
g)
reduced revolving commitments under our revolving credit facility from $1.8 billion to $1.28 billion as part of a series of
amendments more fully described below under “Debt Amendments, Restrictions, and Covenant Compliance”.
Debt Amendments, Restrictions, and Covenant Compliance
Our debt facilities impose certain restrictions on us, including, but not limited to, restrictions on our ability to: incur debt; create
or incur liens; provide guarantees in respect of obligations of any other entity; make redemptions and repurchases of our capital stock;
prepay, redeem, or repurchase debt; engage in mergers or consolidations; enter into affiliated transactions; dispose of real estate or
other assets; and change our business. In addition, the credit agreement governing our Credit Facility limits the amount of dividends
we can pay as a percentage of normalized adjusted funds from operations ("NAFFO"), as defined in the agreements, on a rolling four
quarter basis to 95% of NAFFO. The indentures governing our senior notes also limit the amount of dividends we can pay based on
the sum of 95% of NAFFO, proceeds of equity issuances, and certain other net cash proceeds. Finally, our senior notes require us to
maintain total unencumbered assets (as defined in the related indenture) of not less than 150% of our unsecured indebtedness.
In addition to these restrictions, the Credit Facility contains customary financial and operating covenants, along with customary
events of default, including among others, nonpayment of principal or interest, material inaccuracy of representations, and failure to
comply with our covenants. If an event of default occurs and is continuing under the facility, the entire outstanding balance may
become immediately due and payable.
On April 12, 2024, we amended the Credit Facility and certain other agreements to, among other things, (i) reduce revolving
commitments from $1.8 billion to $1.4 billion, (ii) lower the maximum permitted secured leverage ratio from 40% to 25%, and (iii)
waive the 10% cap on unencumbered asset value attributable to tenants subject to a bankruptcy event for purposes of determining
compliance with the unsecured leverage ratio for the trailing four fiscal quarter period ended June 30, 2024.
On August 6, 2024, we entered into an amendment to the Credit Facility and the British pound sterling term loan due 2025 to,
among other things, (i) further reduce our maximum borrowing in the Credit Facility from $1.4 billion to $1.28 billion, (ii) increase
borrowing spreads to 300 basis points during the Modified Covenant Period (defined below) and then to 225 basis points after the
57
Modified Covenant Period, and (iii) require that proceeds of certain future asset sales and debt transactions (during the Modified
Covenant Period) be applied to repay certain outstanding obligations.
The amendments also amended certain covenants from June 30, 2024 to September 30, 2025 (the “Modified Covenant Period”)
at which point the credit agreement provided that covenants would automatically reset to their prior levels. The amendments also
limited the payment of dividends in cash during the Modified Covenant Period to $0.08 per share in any fiscal quarter, but the
amendments did not provide any additional restrictions on the payment of dividends outside of the Modified Covenant Period.
On February 13, 2025 and concurrent with the closing of our private notes offering discussed previously, we further amended
the Credit Facility and (i) removed the Modified Covenant Period and any restrictions related thereto from the existing Credit Facility,
(ii) permanently removed financial covenants regarding minimum consolidated tangible net worth, maximum unsecured indebtedness
to unencumbered asset value and minimum unsecured net operating income to unsecured interest expense, (iii) amended certain
definitions used in the financial covenant regarding maximum total indebtedness to total asset value to conform to corresponding
definitions in our existing unsecured indentures and the secured notes issued concurrently and set the covenant level at 60%, (iv)
provided notice that we plan to exercise both of our 6-month extension options such that the maturity of the revolving portion of our
Credit Facility would move to June 30, 2027 (subject to the satisfaction of certain conditions with the primary condition of not being
in default at the time of each extension option date), (v) reset the interest rate to SOFR plus 225 basis points, (vi) provided for the
loans thereunder to be secured and guaranteed ratably with the secured notes issued in February 2025, (vii) set the maximum secured
leverage ratio at 40%, and (viii) added mandatory prepayments of senior debt or addition of additional collateral in connection with
any failure to (x) maintain a 65% maximum ratio of secured first lien debt to the undepreciated real estate value of the secured pool
properties or (y) maintain a minimum senior secured debt service coverage ratio of 1.15:1.00 (which increases to 1.30:1.00 starting in
March 2026).
As of December 31, 2025, we are in compliance with all financial and operating covenants.
Short-term Liquidity Requirements:
Our short-term liquidity requirements typically consist of general and administrative expenses, dividends in order to comply
with REIT requirements, interest payments on our debt, and planned funding commitments on development and capital improvement
projects for the next twelve months. Our monthly rent and interest receipts and distributions from our joint venture arrangements are
typically enough to cover our short-term liquidity requirements.
Over the next twelve months, we expect our monthly rent and interest receipts to increase with our contractually required annual
escalations, from the ramp up of cash rents from certain of the tenants that last year replaced Steward, and expected ramping up of rent
revenue from the replacement tenant of the six Prospect California facilities. We would expect these rent and interest increases to
outpace the higher interest cost from the 2025 refinancings.
At February 23, 2026, we only have €500 million of our 0.993% Senior Unsecured Notes due 2026 coming due in the next
twelve months, as we have provided notice of our intent (and believe we will meet all conditions to do so) to extend the revolving
portion of our Credit Facility to June 2027. In addition, we have liquidity of $1.0 billion (including cash on hand and availability
under the $1.28 billion revolving portion of our Credit Facility). We believe this liquidity along with the expected cash receipts of rent
and interest pursuant to our contractual agreements with our tenants/borrowers and distributions from our joint venture arrangements
is sufficient to fund our short-term liquidity requirements (including the payoff of the notes coming due in 2026 as discussed above).
However, as noted earlier, we have access to an ATM program for the sale of up to $500 million of our common stock, if
needed.
Long-term Liquidity Requirements:
Our long-term liquidity requirements generally consist of the same requirements described above under “Short-term Liquidity
Requirements” along with new investments in real estate and the funding of debt maturities coming due after the next twelve months.
At this time, we do not expect any material new investments in real estate in the foreseeable future.
As described previously, we believe our monthly rent and interest receipts and distributions from our joint venture arrangements
along with our current liquidity of approximately $1.0 billion at February 23, 2026, is enough to cover our short-term liquidity
requirements. However, to further improve cash flows and to fund future debt maturities, we will need to look to other sources, which
may include one or a combination of the following:
•
property sales and/or the monetization of a portion of our real estate joint ventures;
•
monetizing our investments in operators;
58
•
reducing our dividend (or moving to a stock dividend), while still complying with REIT requirements and Credit Facility
covenants;
•
identifying and implementing cost reduction opportunities;
•
entering into additional secured loans on real estate;
•
extending the maturity or refinancing of our existing Credit Facility and other term loans;
•
entering into new bank term loans or issuing new USD, EUR, or GBP denominated debt securities; and
•
sale of equity securities (including through the use of our ATM program).
However, there is no assurance that conditions will be favorable for such possible transactions or that our plans will be
successful.
Contractual Commitments
The following table summarizes known material contractual commitments including debt service commitments (principal and
interest payments) as of February 23, 2026 (amounts in thousands):
Commitments (1)
2026
2027
2028
2029
2030
Thereafter
Total
..
Senior unsecured notes
$
777,238 (2) $ 1,602,949
$
942,469
$ 1,003,062
$
533,657
$
1,322,750
$
6,182,125
......
Senior secured notes
104,998
209,995
209,995
209,995
209,995
2,993,493
3,938,471
....................
Revolving credit
facility(3)
449,034
—
—
—
—
—
449,034
.......................
Term loan
11,200
206,055
—
—
—
—
217,255
.................
British pound secured
loan facility
58,582
58,582
58,743
58,582
58,582
998,232
1,291,303
..........
Operating lease
commitments(4)
6,004
6,495
6,640
6,637
6,666
164,275
196,717
..
Purchase obligations(5)
179,657
34,037
23,000
24,000
—
—
260,694
.............................
Totals
$ 1,586,713
$ 2,118,113
$ 1,240,847
$ 1,302,276
$
808,900
$
5,478,750
$ 12,535,599
(1)
We used the exchange rates at February 23, 2026 in preparing this table. For any variable rate debt, we have assumed that the
interest rate in effect at February 23, 2026 remains in effect through maturity.
(2)
Includes the debt principal maturity on October 15, 2026 for €500 million.
(3)
As of February 23, 2026, we have a $1.28 billion revolving credit facility. This table assumes the balance outstanding under the
revolver (which was approximately $440 million as of February 23, 2026) is due at initial maturity on June 30, 2026. However,
as noted earlier, we can extend the revolver by up to one year, which we noticed the lenders of our plan to do so as part of our
February 13, 2025 Credit Facility amendment. Such extension is at our election as long as certain conditions are met with the
primary condition of not being in default at the time of each extension option date.
(4)
Much of our contractual obligations to make operating lease payments are related to ground leases for which we are reimbursed
by our tenants along with corporate office and equipment leases.
(5)
Includes approximately $32 million of future expenditures related to development projects, $157 million of future expenditures
on committed capital improvement projects (including the $60 million commitment to NOR for seismic purposes), and
approximately $62 million of remaining amounts due to Prospect, per court order, that is secured by recovery, if any, from
causes of action.
Results of Operations
Our operating results may vary significantly from year-to-year due to a variety of reasons including acquisitions made during
the year, incremental revenues and expenses from acquisitions made in the prior year, revenues and expenses from completed
development properties, property disposals, annual escalation provisions, cash rents received from cash basis tenants (particularly
those that are in a period of ramp up), interest rate changes, foreign currency exchange rate changes, new or amended debt
agreements, issuances of shares through an equity offering, impact from accounting changes, lease terminations/re-tenanting, etc.
Thus, our operating results for the current year are not necessarily indicative of the results that may be expected in future years.
59
Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024
Net loss for the year ended December 31, 2025, was $(0.3) billion ($(0.46) per share) compared to net loss of $(2.4) billion
($(4.02) per share) for the year ended December 31, 2024. This change in net loss was primarily driven by a total of $2.8 billion of
impairment charges and negative fair value adjustments in 2024 primarily related to Steward (including our Massachusetts-based
partnership), Prospect (including our investment in PHP), and the international joint venture, whereas, we incurred approximately
$340 million in 2025, primarily related to Prospect (including our investment in PHP). See below for further details of these charges
and where reflected in the consolidated statements of net income. This change was partially offset by approximately $479 million of
gains on real estate sales in 2024. Normalized FFO, after adjusting for certain items (as more fully described in the section titled
“Non-GAAP Financial Measures” in this Item 7 of this Annual Report on Form 10-K), was $346 million for 2025, or $0.58 per share,
as compared to $483 million, or $0.80 per share, for 2024. This 28% decrease in Normalized FFO is primarily due to lower revenues
as a result of various disposals in 2024 and 2025, along with less cash revenue received from Steward and Prospect, and higher
interest expense from our recent refinancing activities.
A comparison of revenues for the years ended December 31, 2025 and 2024 is as follows (dollar amounts in thousands):
2025
2024
Change
...........................................................
Rent billed
$
736,543
75.8% $
719,749
72.3% $
16,794
.................................................
Straight-line rent
152,163
15.6%
163,414
16.4%
(11,251)
.............................
Income from financing leases
39,735
4.1%
63,651
6.4%
(23,916)
...................................
Interest and other income
43,581
4.5%
48,733
4.9%
(5,152)
.....................................................
Total revenues
$
972,022
100.0% $
995,547
100.0% $
(23,525)
Our total revenues for 2025 decreased by $24 million or 2.4% over the prior year. This change is made up of the following:
•
Operating lease revenue (includes rent billed and straight-line rent) — up $5.5 million from the prior year, primarily due
to $55 million of operating lease revenue earned from the retenanting of the former Steward-operated facilities, an
increase of $13.6 million due to increases in CPI above the contractual minimum escalations in our leases, $13.4 million
of favorable foreign currency fluctuations, approximately $20 million more cash received from other cash-basis tenants
(including approximately $18 million received from Vibra in the 2025 fourth quarter for past obligations), and a $2.4
million increase due to the completion of capital addition and development projects in 2024 and 2025. This increase was
partially offset by approximately $66 million less operating lease revenue due to property sales in 2024 and 2025 and
$33 million from rent collected from Steward in 2024 (none in 2025).
See Note 3 to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K for more details
regarding the transaction activity above.
•
Income from financing leases — down $23.9 million primarily due to not receiving any cash rent from Prospect (cash-
basis tenant) in 2025, whereas we received $25 million of rent for this tenant in 2024. This decrease was partially offset
by approximately $1 million from the increase in CPI above the lease contractual minimum escalations.
•
Interest and other income — down $5.2 million from the prior year due to the following:
ο
Interest from loans — down $3.8 million, primarily due to an approximate $5.1 million decrease from the sale
of our interest in the Priory syndicated term loan in the first quarter of 2024 and other loan payoffs, including
the Prime mortgage loan that was repaid on August 29, 2024 (as further described in Note 3 to the consolidated
financial statements in Item 8 of this Annual Report on Form 10-K) and approximately $5.2 million less interest
received from cash-basis tenants in 2025 compared to 2024, partially offset by approximately $3.8 million of
additional revenue from the funding of new loans and $2.5 million of higher income from annual escalations
due to increases in CPI.
ο
Other income — down $1.4 million from the prior year as we had less direct reimbursements from our cash-
basis tenants for ground leases, property taxes, and insurance.
Interest Expense
Interest expense for 2025 and 2024 totaled $510.4 million and $417.8 million, respectively. This increase is primarily related to
higher interest from our February 2025 debt refinancing activities (see Note 4 to the consolidated financial statements for further
details), partially offset by lower interest expense from the decrease in average borrowings on our Credit Facility in 2025, compared to
2024, along with the payoff of our £493 million British pound sterling term loan in the first quarter of 2025. Overall, our weighted-
average interest rate was 5.2% for 2025, compared to 4.3% for 2024.
60
Real Estate Depreciation and Amortization
Real estate depreciation and amortization during 2025 decreased to $265.4 million from $447.7 million in 2024 primarily due to
$170 million of additional amortization expense recorded in 2024 primarily to fully amortize the intangibles associated with two
master leases, including the Steward master lease that was terminated effective September 11, 2024. The remaining decrease is due to
the sale of various properties in 2024 and 2025.
Property-related
Property-related expenses for 2025 increased to $36.4 million, compared to $27.3 million in 2024. Of the property expenses in
2025 and 2024, approximately $12.3 million and $13.7 million, respectively, represents costs (primarily property taxes and insurance
premiums) that were reimbursed by our tenants and included in the “Interest and other income” line on our consolidated statements of
net income. The remaining non-reimbursed property expenses are higher year-over-year primarily due to ongoing expenses (such as
property taxes, insurance, maintenance, etc.) incurred at our vacant facilities.
General and Administrative
General and administrative expenses was $130.4 million in 2025, compared to $133.8 million in 2024 as share-based
compensation expense declined to $25.7 million in 2025, compared to $32.9 million in 2024. The decrease in share-based
compensation expense is primarily due to the $10.9 million adjustment from changes in estimated payouts of certain performance
awards.
As more fully described in Note 7 to Item 8 of this Annual Report on Form 10-K, we have certain performance awards granted
in 2025 and 2024 that have cash-settlement features. Awards that can be cash settled are required to be adjusted each quarter to fair
value in determining share-based compensation expense; whereas, an award without cash settlement features (which is our typical
award structure) are expensed based on the grant date fair value. Although we did not have significant fluctuations in expense year-
over-year from these awards, we did have significant volatility from quarter to quarter and would expect further volatility in future
years until the service period for these awards ends.
Gain on Sale of Real Estate
During 2025, the gain on sale of real estate of $5.5 million primarily related to the disposal of nine properties. During 2024, the
gain on sale of real estate of $478.7 million primarily related to the disposal of five Prime facilities, the sale of a 75% interest in five
Utah facilities as part of the Utah Transaction, and the sale of eight Dignity Health facilities and 11 UCHealth facilities. See Note 3 to
the consolidated financial statements in Item 8 of this Annual Report on Form 10-K for more details regarding these disposals.
Real Estate and Other Impairment Charges, Net
In 2025, we recognized $193.9 million of real estate and other impairment charges, primarily associated with our investments in
Prospect and three hospitals in Colombia, as well as, ongoing property taxes and other obligations not paid by our cash basis tenants.
In 2024, we recognized $1.8 billion of real estate and other impairment charges and negative fair value adjustments, primarily
associated with our investments in Steward, Prospect, and the international joint venture. See Note 3 to the consolidated financial
statements in Item 8 of this Annual Report on Form 10-K for more information about these charges.
Earnings (loss) from Equity Interests
Earnings from equity interests was $97.9 million for 2025, compared to a loss of ($366.6) million in 2024. This increase is
primarily due to the $410 million charge in the second quarter of 2024 associated with the real estate impairment in our
Massachusetts-based partnership with Macquarie. In addition, our share of income increased year-over-year in the Utah partnership
that was formed in the 2024 second quarter by approximately $48.7 million, as prior year only included three months of activity
versus a full year in 2025 and the year ended December 31, 2025 included approximately $49 million of positive fair value
adjustments (primarily real estate related) compared to $6.9 million in 2024. Finally, our share of income in the MEDIAN joint
venture increased by approximately $7.4 million year-over-year, primarily driven by the $13 million deferred tax benefit from the
reduction in future German tax rates, partially offset by higher interest expense from the refinancing in 2025.
Debt Refinancing and Unutilized Financing Costs
Debt refinancing and unutilized financing costs were $3.6 million for 2025. These costs were incurred primarily as a result of
the early redemption of our 3.325% Senior Unsecured Notes due 2025, 2.500% Senior Unsecured Notes due 2026, and 5.250% Senior
61
Unsecured Notes due 2026. For 2024, we incurred $4.3 million as a result of the reduction in revolving commitments under our Credit
Facility and partial paydown of our British pound sterling term loan due 2025.
Other (Including Fair Value Adjustments on Securities)
Other expense for 2025 was $172.6 million, compared to $615.6 million in the prior year. We recognized approximately $147
million of unfavorable fair value adjustments to our investment in PHP Holdings in 2025, compared to approximately $550 million of
unfavorable fair value adjustments in 2024. In addition, we incurred approximately $13.5 million in 2025 of legal and other
professional expenses associated with the Prospect and Steward bankruptcies and responding to certain defamatory statements
published by certain parties, among other things, compared to $51.3 million in 2024. We also incurred a $7.8 million economic loss in
2024 from the sale of our interest in the Priory syndicated term loan.
Income Tax Expense
Income tax expense includes U.S. federal and state income taxes on our TRS entities, as well as non-U.S. income based or
withholding taxes on certain investments located in jurisdictions outside the U.S. The $38.6 million of income tax expense for 2025 is
primarily based on the income generated by our investments in the U.K. and Germany and is less than the $44.1 million of income tax
expense in 2024 due to $5 million of additional tax expense in the second quarter of 2024 as a result of the gain on the interest rate
swap associated with the internal restructuring of the British pound sterling term loan due 2025.
We utilize the asset and liability method of accounting for income taxes. Deferred tax assets are recorded to the extent we
believe these assets will more likely than not be realized. In making such determination, all available positive and negative evidence is
considered, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies, and
recent financial performance. Based upon our review of all positive and negative evidence, including our three-year cumulative pre-
tax book loss position in certain entities, we concluded that a valuation allowance of approximately $490 million should be reflected
against certain of our international and domestic net deferred tax assets at December 31, 2025. In the future, if we determine that it is
more likely than not that we will realize our net deferred tax assets, we will reverse the applicable portion of the valuation allowance,
recognize an income tax benefit in the period in which such determination is made, and potentially incur higher income tax expense in
future periods as income is earned. For more detailed information, see Note 5 to Item 8 of this Annual Report on Form 10-K.
Subsequent to December 31, 2025, we moved seven additional U.K. property holding legal entities into our U.K. REIT that was
formed on July 1, 2023. With this move, we plan to adjust the deferred tax liabilities associated with these entities, which we expect
will result in an approximate $40 million one-time tax benefit in the first quarter of 2026. Going forward, these U.K. entities (like the
others in the U.K. REIT) will be subject only to a withholding tax on earnings upon distribution out of the U.K. REIT.
Non-GAAP Financial Measures
We consider non-GAAP financial measures to be useful supplemental measures of our operating performance. A non-GAAP
financial measure is a measure of financial performance, financial position, or cash flows that excludes or includes amounts that are
not so excluded from or included in the most directly comparable measure calculated and presented in accordance with GAAP.
Described below are the non-GAAP financial measures used by management to supplement our evaluation of operating performance
and that we consider useful to investors, together with reconciliations of these measures to the most directly comparable GAAP
measures.
Funds From Operations and Normalized Funds From Operations
Investors and analysts following the real estate industry utilize funds from operations, or FFO, as a supplemental performance
measure. FFO, reflecting the assumption that real estate asset values rise or fall with market conditions, principally adjusts for the
effects of GAAP depreciation and amortization of real estate assets, which assumes that the value of real estate diminishes predictably
over time. We compute FFO in accordance with the definition provided by the National Association of Real Estate Investment Trusts,
or Nareit, which represents net income (loss) (computed in accordance with GAAP), excluding gains (losses) on sales of real estate
and impairment charges on real estate assets, plus real estate depreciation and amortization, including amortization related to in-place
lease intangibles, and after adjustments for unconsolidated partnerships and joint ventures.
In addition to presenting FFO in accordance with the Nareit definition, we disclose normalized FFO, which adjusts FFO for
items that relate to unanticipated or non-core events or activities or accounting changes that, if not noted, would make comparison to
prior period results and market expectations less meaningful to investors and analysts.
We believe that the use of FFO, combined with the required GAAP presentations, improves the understanding of our operating
results among investors and the use of normalized FFO makes comparisons of our operating results with prior periods and other
companies more meaningful. While FFO and normalized FFO are relevant and widely used supplemental measures of operating and
62
financial performance of REITs, they should not be viewed as a substitute measure of our operating performance since the measures
do not reflect either depreciation and amortization costs or the level of capital expenditures and leasing costs (if any are not paid by
our tenants) to maintain the operating performance of our properties, which can be significant economic costs that could materially
impact our results of operations. FFO and normalized FFO should not be considered an alternative to net income (loss) (computed in
accordance with GAAP) as indicators of our financial performance or to cash flow from operating activities (computed in accordance
with GAAP) as an indicator of our liquidity.
The following table presents a reconciliation of net loss attributable to MPT common stockholders to FFO and Normalized FFO
for the years ended December 31, 2025 and 2024 (in thousands except per share data):
For the Years Ended December 31,
2025
2024
FFO Information
...........................................
Net loss attributable to MPT common stockholders
$
(277,049)
$
(2,410,271)
..........................................................
Participating securities’ share in earnings
(889)
(946)
.................................
Net loss, less participating securities’ share in earnings
$
(277,938)
$
(2,411,217)
............................................................................
Depreciation and amortization
322,712
509,524
...................................................................................
Gain on sale of real estate
(6,200)
(478,693)
..........................................................................
Real estate impairment charges
145,350
980,263
....................................................................................
Funds from operations
$
183,924
$
(1,400,123)
............................................................................
Other impairment charges, net
59,651
1,258,443
................................................................
Litigation, bankruptcy and other costs
13,477
51,308
.....................................
Share-based compensation (fair value adjustments) (1)
(10,259)
—
.........................................................................
Non-cash fair value adjustments
106,442
563,666
.................................................................................
Tax rate changes and other
(11,231)
5,119
................................................
Debt refinancing and unutilized financing costs
4,273
4,292
.................................................................
Normalized funds from operations
$
346,277
$
482,705
Per diluted share data
.....................................
Net loss, less participating securities’ share in earnings
$
(0.46)
$
(4.02)
............................................................................
Depreciation and amortization
0.54
0.86
...................................................................................
Gain on sale of real estate
(0.01)
(0.80)
..........................................................................
Real estate impairment charges
0.24
1.63
....................................................................................
Funds from operations
$
0.31
$
(2.33)
............................................................................
Other impairment charges, net
0.10
2.08
................................................................
Litigation, bankruptcy and other costs
0.02
0.09
.....................................
Share-based compensation (fair value adjustments) (1)
(0.02)
—
.........................................................................
Non-cash fair value adjustments
0.18
0.94
.................................................................................
Tax rate changes and other
(0.02)
0.01
................................................
Debt refinancing and unutilized financing costs
0.01
0.01
.................................................................
Normalized funds from operations
$
0.58
$
0.80
(1)
Total share-based compensation expense for GAAP purposes was $25.7 million and $33.0 million for the years ended
December 31, 2025 and 2024, respectively, (including the impact from changes in estimated payouts of performance
awards and fair value adjustments on certain awards that are to be settled in cash). Cash-settled awards are recorded in
accordance with GAAP at fair value and measured at each balance sheet date until settlement. The resulting fluctuations,
which are primarily driven by changes in our stock price rather than operational performance, can introduce significant
volatility in our earnings. To enhance comparability and provide a more stable view of performance over time, normalized
FFO reflects $10.3 million of additional expense in 2025 to arrive at total share-based compensation expense of $36.0
million for the year ended December 31, 2025 using grant date fair value for all awards (including cash-settled awards)
and removing the positive impact in the period from the change in estimate of the payout of our 2023 performance award.
Distribution Policy
We have elected to be taxed as a REIT commencing with our taxable year that began on April 6, 2004 and ended on December
31, 2004. To qualify as a REIT, we must meet a number of organizational and operational requirements, including a requirement that
we distribute (in the form of cash or stock) at least 90% of our REIT taxable income, excluding net capital gains, to our stockholders.
It is our current intention to comply with these requirements and maintain such status going forward.
63
The table below is a summary of our distributions declared (and paid in cash) during the three year period ended December 31,
2025:
Declaration Date
Record Date
Date of Distribution
Distribution per Share
November 17, 2025
December 11, 2025
January 8, 2026
$
0.09
August 14, 2025
September 11, 2025
October 9, 2025
$
0.08
May 29, 2025
June 18, 2025
July 17, 2025
$
0.08
February 13, 2025
March 10, 2025
April 10, 2025
$
0.08
November 21, 2024
December 12, 2024
January 9, 2025
$
0.08
August 22, 2024
September 9, 2024
October 10, 2024
$
0.08
May 30, 2024
June 10, 2024
July 9, 2024
$
0.15
April 12, 2024
April 22, 2024
May 1, 2024
$
0.15
November 9, 2023
December 7, 2023
January 11, 2024
$
0.15
August 21, 2023
September 14, 2023
October 12, 2023
$
0.15
April 27, 2023
June 15, 2023
July 13, 2023
$
0.29
February 16, 2023
March 16, 2023
April 13, 2023
$
0.29
On February 12, 2026, we announced that our Board of Directors declared a regular quarterly cash dividend of $0.09 per share
of common stock to be paid on April 9, 2026, to shareholders of record on March 12, 2026.
We intend to pay to our stockholders, within the time periods prescribed by the Code, all or substantially all of our annual
taxable income, including taxable gains from the sale of real estate and recognized gains on the sale of securities. It is our policy to
make sufficient distributions to stockholders in order for us to maintain our status as a REIT under the Code and to efficiently manage
corporate income and excise taxes on undistributed income, although there is no assurance as to further dividends because they depend
on future earnings, capital requirements, and our financial condition. Although we have only made cash distributions historically, we
may consider making stock dividends in the future for liquidity purposes, while still complying with REIT requirements. In addition,
our Credit Facility limits the amount of cash dividends we can make — see Note 4 to our consolidated financial statements in Item 8
of this Annual Report on Form 10-K for further information.
ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk
Market risk includes risks that arise from changes in interest rates, foreign currency exchange rates, commodity prices, equity
prices, and other market changes that affect market sensitive instruments. We seek to mitigate the effects of fluctuations in interest
rates by matching the terms of new investments with new long-term fixed rate borrowings to the extent possible. We may or may not
elect to use financial derivative instruments to hedge interest rate or foreign currency exposure. For interest rate hedging, these
decisions are principally based on our policy to match investments with comparable borrowings, but are also based on the general
trend in interest rates at the applicable dates and our perception of the future volatility of interest rates. For foreign currency hedging,
these decisions are principally based on how our investments are financed, the long-term nature of our investments, the need to
repatriate earnings back to the U.S., and the general trend in foreign currency exchange rates.
In addition, the value of our facilities are subject to fluctuations based on changes in local and regional economic conditions and
changes in the ability of our tenants to generate profits.
Our primary exposure to market risks relates to fluctuations in interest rates and foreign currency. The following analyses
present the sensitivity of the market value, earnings, and cash flows of our significant financial instruments to hypothetical changes in
interest rates and exchange rates as if these changes had occurred. The hypothetical changes chosen for these analyses reflect our view
of changes that are reasonably possible over a one-year period. These forward looking disclosures are selective in nature and only
address the potential impact from these hypothetical changes. They do not include other potential effects which could impact our
business as a result of changes in market conditions. In addition, they do not include measures we may take to minimize our exposure
such as entering into future interest rate swaps to hedge against interest rate increases on our variable rate debt.
Interest Rate Sensitivity
For fixed rate debt, interest rate changes affect the fair market value but do not impact net income to common stockholders or
cash flows. Conversely, for floating rate debt, interest rate changes generally do not affect the fair market value but do impact net
income to common stockholders and cash flows, assuming other factors are held constant. At December 31, 2025, our outstanding
debt totaled $9.8 billion (excluding debt issue costs and discounts), which consisted of fixed-rate debt of approximately $9.0 billion
and variable rate debt of $0.8 billion. If market interest rates increase or decrease by 10%, the fair value of our debt at December 31,
64
2025 would decrease or increase by approximately $220 million. Changes in the fair value of our fixed rate debt will not have any
impact on us unless we decided to repurchase the debt in the open market.
If market rates of interest on our variable rate debt increase by 10%, the increase in annual interest expense on our variable rate
debt would decrease future earnings and cash flows by $5.1 million per year. If market rates of interest on our variable rate debt
decrease by 10%, the decrease in interest expense on our variable rate debt would increase future earnings and cash flows by $5.1
million per year. This assumes that the average amount outstanding under our variable rate debt for a year is $0.8 billion, the balance
of such variable rate debt at December 31, 2025.
Foreign Currency Sensitivity
With our investments in the U.K., Germany, Spain, Italy, Portugal, Switzerland, Finland, and Colombia, we are subject to
fluctuations in the British pound, euro, Swiss franc, and Colombian peso to U.S. dollar currency exchange rates. Although we
generally deem investments in these countries to be of a long-term nature, are typically able to match any non-U.S. dollar borrowings
with investments in such currencies, and historically have not needed to repatriate a material amount of earnings back to the U.S.,
increases or decreases in the value of the respective non-U.S. dollar currencies to U.S. dollar exchange rates may impact our financial
condition and/or our results of operations. Based on our 2025 results, a 10% increase or decrease in exchange rates would decrease or
increase our net loss by $8.1 million.
65
ITEM 8. Financial Statements and Supplementary Data
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of Medical Properties Trust, Inc.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Medical Properties Trust, Inc. and its subsidiaries (the "Company")
as of December 31, 2025 and 2024, and the related consolidated statements of net income, of comprehensive loss, of equity and of
cash flows for each of the three years in the period ended December 31, 2025, including the related notes and financial statement
schedules listed in the index appearing under Item 15(a) (collectively referred to as the "consolidated financial statements"). We also
have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal
Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of
the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the
period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in
our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of
December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over
financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s
Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the
Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We
are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules
and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to
error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the
consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial
statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting
included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included
performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable
basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect
on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.
66
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements
that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are
material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The
communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a
whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or
on the accounts or disclosures to which it relates.
Impairment Assessment of Real Estate Investments
As described in Notes 2 and 3 to the consolidated financial statements, the carrying value of the Company’s real estate investments
was $10.5 billion as of December 31, 2025, including land, buildings and improvements net of accumulated depreciation and
intangible assets net of accumulated amortization. Management reviews real estate investments for impairment when events and
circumstances indicate that the assets may not be recoverable. Management analyzes recoverability by comparing the carrying value
of the real estate assets to a probability-weighted set of estimated undiscounted cash flows to be generated by those assets, including
an estimated liquidation amount, during the expected holding periods. Assumptions used in determining undiscounted cash flows may
include, but are not limited to, market rental rates, capitalization rates, and holding periods. If the recoverability analysis indicates that
the carrying value of the real estate asset is greater than the expected future undiscounted cash flows, impairment losses are measured
as the difference between carrying value and fair value of the assets. Estimated future cash flows used in such analysis are based on
the Company’s plans for the real estate asset and their view of market economic conditions. Assumptions used in determining fair
value may include, but are not limited to, market rental rates, discount rates, and capitalization rates.
The principal considerations for our determination that performing procedures relating to the impairment assessment of real estate
investments is a critical audit matter are (i) the significant judgment by management when developing the undiscounted cash flows to
be generated by the assets, and developing the fair value estimate, and (ii) a high degree of auditor judgment, subjectivity and effort in
performing procedures related to evaluating management’s undiscounted cash flows to be generated by the assets and significant
assumptions related to market rental rates and the holding period used in developing the undiscounted cash flows, and the market
rental rates and capitalization rates, used in the fair value estimate.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion
on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the Company’s
impairment assessment, including controls over the development of the undiscounted cash flows to be generated by the assets and fair
value estimate. These procedures also included, among others, (i) testing management’s process for developing the estimated future
undiscounted cash flows and for developing the fair value used in the impairment assessment of real estate investments, (ii) evaluating
the appropriateness of the undiscounted cash flows and direct capitalization models, (iii) testing the completeness and accuracy of
underlying data used in the models, and (iv) evaluating the reasonableness of the significant assumptions used by management related
to the market rental rates and holding period used in the undiscounted cash flow model and the market rental rates and capitalization
rates used in the direct capitalization model. Evaluating management's assumptions related to market rental rates, capitalization rates
and holding period involved evaluating whether the assumptions used by management were reasonable considering the consistency
with external market data and comparable transactions.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Birmingham, Alabama
February 26, 2026
We have served as the Company’s auditor since 2008.
67
Report of Independent Registered Public Accounting Firm
To the Partners of MPT Operating Partnership, L.P.:
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of MPT Operating Partnership, L.P. and its subsidiaries (the
"Company") as of December 31, 2025 and 2024, and the related consolidated statements of net income, of comprehensive loss, of
capital and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes and financial
statement schedules listed in the index appearing under Item 15(a) (collectively referred to as the "consolidated financial statements").
We also have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in
Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of
the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the
period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in
our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of
December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over
financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s
Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the
Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We
are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules
and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to
error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the
consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial
statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting
included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included
performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable
basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect
on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.
68
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements
that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are
material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The
communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a
whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or
on the accounts or disclosures to which it relates.
Impairment Assessment of Real Estate Investments
As described in Notes 2 and 3 to the consolidated financial statements, the carrying value of the Company’s real estate investments
was $10.5 billion as of December 31, 2025, including land, buildings and improvements net of accumulated depreciation and
intangible assets net of accumulated amortization. Management reviews real estate investments for impairment when events and
circumstances indicate that the assets may not be recoverable. Management analyzes recoverability by comparing the carrying value
of the real estate assets to a probability-weighted set of estimated undiscounted cash flows to be generated by those assets, including
an estimated liquidation amount, during the expected holding periods. Assumptions used in determining undiscounted cash flows may
include, but are not limited to, market rental rates, capitalization rates, and holding periods. If the recoverability analysis indicates that
the carrying value of the real estate asset is greater than the expected future undiscounted cash flows, impairment losses are measured
as the difference between carrying value and fair value of the assets. Estimated future cash flows used in such analysis are based on
the Company’s plans for the real estate asset and their view of market economic conditions. Assumptions used in determining fair
value may include, but are not limited to, market rental rates, discount rates, and capitalization rates.
The principal considerations for our determination that performing procedures relating to the impairment assessment of real estate
investments is a critical audit matter are (i) the significant judgment by management when developing the undiscounted cash flows to
be generated by the assets, and developing the fair value estimate, and (ii) a high degree of auditor judgment, subjectivity and effort in
performing procedures related to evaluating management’s undiscounted cash flows to be generated by the assets and significant
assumptions related to market rental rates and the holding period used in developing the undiscounted cash flows, and the market
rental rates and capitalization rates, used in the fair value estimate.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion
on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the Company’s
impairment assessment, including controls over the development of the undiscounted cash flows to be generated by the assets and fair
value estimate. These procedures also included, among others, (i) testing management’s process for developing the estimated future
undiscounted cash flows and for developing the fair value used in the impairment assessment of real estate investments, (ii) evaluating
the appropriateness of the undiscounted cash flows and direct capitalization models, (iii) testing the completeness and accuracy of
underlying data used in the models, and (iv) evaluating the reasonableness of the significant assumptions used by management related
to the market rental rates and holding period used in the undiscounted cash flow model and the market rental rates and capitalization
rates used in the direct capitalization model. Evaluating management's assumptions related to market rental rates, capitalization rates
and holding period involved evaluating whether the assumptions used by management were reasonable considering the consistency
with external market data and comparable transactions.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Birmingham, Alabama
February 26, 2026
We have served as the Company’s auditor since 2008.
69
MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
December 31,
2025
2024
(Amounts in thousands,
except for per share data)
ASSETS
Real estate assets
............................................................................................................................................
Land
$
1,790,154
$
1,607,869
......................................................................................................
Buildings and improvements
9,543,162
8,847,892
................................................................................................................
Intangible lease assets
872,371
804,081
...................................................................................................
Investment in financing leases
421,684
1,057,770
..............................................................................................................
Real estate held for sale
—
34,019
...........................................................................................................................
Mortgage loans
123,651
119,912
.....................................................................................
Gross investment in real estate assets
12,751,022
12,471,543
..........................................................................................................
Accumulated depreciation
(1,438,594)
(1,221,644)
.........................................................................................................
Accumulated amortization
(224,462)
(201,304)
........................................................................................
Net investment in real estate assets
11,087,966
11,048,595
................................................................................................................
Cash and cash equivalents
540,859
332,335
.............................................................................................................
Interest and rent receivables
19,210
36,327
............................................................................................................
Straight-line rent receivables
881,452
700,783
.................................................................
Investments in unconsolidated real estate joint ventures
1,399,777
1,156,397
.............................................................................
Investments in unconsolidated operating entities
322,179
439,578
.......................................................................................................................................
Other loans
186,292
109,175
.......................................................................................................................................
Other assets
564,040
471,404
.....................................................................................................................................
Total Assets
$
15,001,775
$
14,294,594
LIABILITIES AND EQUITY
Liabilities
.......................................................................................................................................
Debt, net
$
9,697,835
$
8,848,112
......................................................................................
Accounts payable and accrued expenses
549,105
454,209
..........................................................................................................................
Deferred revenue
19,289
29,445
..........................................................................
Obligations to tenants and other lease liabilities
128,297
129,045
......................................................................................................................
Total Liabilities
10,394,526
9,460,811
Commitments and Contingencies
Equity
.................
Preferred stock, $0.001 par value. Authorized 10,000 shares; no shares outstanding
—
—
...................
Common stock, $0.001 par value. Authorized 750,000 shares; issued and outstanding —
597,008 shares at December 31, 2025 and 600,403 shares at December 31, 2024
597
600
.............................................................................................................
Additional paid-in capital
8,573,396
8,584,917
.............................................................................................................................
Retained deficit
(4,136,011)
(3,658,516)
........................................................................
Accumulated other comprehensive income (loss)
168,213
(94,272)
...............................................................
Total Medical Properties Trust, Inc. stockholders’ equity
4,606,195
4,832,729
..................................................................................................................
Non-controlling interests
1,054
1,054
............................................................................................................................
Total Equity
4,607,249
4,833,783
...........................................................................................................
Total Liabilities and Equity
$
15,001,775
$
14,294,594
See accompanying notes to consolidated financial statements.
70
MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES
Consolidated Statements of Net Income
For the Years Ended December 31,
2025
2024
2023
(Amounts in thousands,
except for per share data)
Revenues
................................................................................................................
Rent billed
$
736,543
$
719,749
$
803,375
......................................................................................................
Straight-line rent
152,163
163,414
(127,894)
..................................................................................
Income from financing leases
39,735
63,651
127,141
.........................................................................................
Interest and other income
43,581
48,733
69,177
......................................................................................................
Total revenues
972,022
995,547
871,799
Expenses
......................................................................................................................
Interest
510,362
417,824
411,171
...............................................................
Real estate depreciation and amortization
265,405
447,657
603,360
........................................................................................................
Property-related
36,415
27,255
41,567
......................................................................................
General and administrative
130,427
133,789
145,588
......................................................................................................
Total expenses
942,609
1,026,525
1,201,686
Other (expense) income
..............................................................................
Gain (loss) on sale of real estate
5,545
478,693
(1,815)
.........................................................
Real estate and other impairment charges, net
(193,947)
(1,825,402)
(376,907)
.......................................................................
Earnings (loss) from equity interests
97,851
(366,642)
13,967
.......................................
Debt refinancing and unutilized financing (costs) benefit
(3,629)
(4,292)
285
............................................
Other (including fair value adjustments on securities)
(172,552)
(615,565)
7,586
..............................................................................................
Total other expense
(266,732)
(2,333,208)
(356,884)
..............................................................................................
Loss before income tax
(237,319)
(2,364,186)
(686,771)
...................................................................................
Income tax (expense) benefit
(38,618)
(44,101)
130,679
....................................................................................................................
Net loss
(275,937)
(2,408,287)
(556,092)
................................................
Net income attributable to non-controlling interests
(1,112)
(1,984)
(384)
...............................................
Net loss attributable to MPT common stockholders
$
(277,049)
$ (2,410,271)
$
(556,476)
Earnings per common share — basic and diluted
...........................................
Net loss attributable to MPT common stockholders
$
(0.46)
$
(4.02)
$
(0.93)
...................................................
Weighted average shares outstanding — basic
600,892
600,248
598,518
................................................
Weighted average shares outstanding — diluted
600,892
600,248
598,518
See accompanying notes to consolidated financial statements.
71
MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Loss
For the Years Ended December 31,
(In thousands)
2025
2024
2023
.......................................................................................................................
Net loss
$
(275,937)
$ (2,408,287)
$
(556,092)
Other comprehensive (loss) income:
.................................................
Unrealized loss on interest rate hedges, net of tax
(4,208)
(20,779)
(34,932)
..............................................................................................
Reclassification of interest rate hedges gain from AOCI to
earnings, net of tax
—
(18,926)
(28,553)
.................................................................
Foreign currency translation gain (loss)
266,693
(97,068)
162,680
................................................................................................
Reclassification of foreign currency translation loss from
AOCI to earnings
—
—
2,490
...........................................................................................
Total comprehensive loss
(13,452)
(2,545,060)
(454,407)
..........................
Comprehensive income attributable to non-controlling interests
(1,112)
(1,984)
(384)
...............................
Comprehensive loss attributable to MPT common stockholders
$
(14,564)
$ (2,547,044)
$
(454,791)
See accompanying notes to consolidated financial statements.
MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES
Consolidated Statements of Equity
For the Years Ended December 31, 2025, 2024 and 2023
Preferred
Common
(In thousands, except per share amounts)
Shares
Par
Value
Shares
Par
Value
Additional
Paid-in
Capital
Retained
Earnings
(Deficit)
Accumulated
Other
Comprehensive
(Loss) Income
Non-
Controlling
Interests
Total
Equity
Balance at December 31, 2022
—
$
—
597,476
$
597
$
8,535,140
$
116,285
$
(59,184)
$
1,569
$
8,594,407
Net (loss) income
—
—
—
—
—
(556,476)
—
384
(556,092)
Unrealized loss on interest rate hedges, net of tax
—
—
—
—
—
—
(34,932)
—
(34,932)
Reclassification of interest rate hedge gain to
earnings, net of tax
—
—
—
—
—
—
(28,553)
—
(28,553)
Foreign currency translation gain
—
—
—
—
—
—
162,680
—
162,680
Reclassification of foreign currency translation
loss to earnings
—
—
—
—
—
—
2,490
—
2,490
Stock vesting and amortization of stock-based compensation
—
—
2,457
2
33,248
—
—
—
33,250
Stock vesting - satisfaction of tax withholdings
—
—
(942)
—
(8,079)
—
—
—
(8,079)
Issuance of non-controlling interests
—
—
—
—
—
—
—
1,375
1,375
Distributions to non-controlling interests
—
—
—
—
—
—
—
(1,063)
(1,063)
Dividends declared ($0.88 per common share)
—
—
—
—
—
(531,618)
—
—
(531,618)
Balance at December 31, 2023
—
$
—
598,991
$
599
$
8,560,309
$
(971,809)
$
42,501
$
2,265
$
7,633,865
Net (loss) income
—
—
—
—
—
(2,410,271)
—
1,984
(2,408,287)
Unrealized loss on interest rate hedges, net of tax
—
—
—
—
—
—
(20,779)
—
(20,779)
Reclassification of interest rate hedge gain to
earnings, net of tax
—
—
—
—
—
—
(18,926)
—
(18,926)
Foreign currency translation loss
—
—
—
—
—
—
(97,068)
—
(97,068)
Stock vesting and amortization of stock-based compensation
—
—
2,173
2
28,412
—
—
—
28,414
Stock vesting - satisfaction of tax withholdings
—
—
(761)
(1)
(3,804)
—
—
—
(3,805)
Acquisitions of non-controlling interests
—
—
—
—
—
—
—
(1,500)
(1,500)
Distributions to non-controlling interests
—
—
—
—
—
—
—
(1,695)
(1,695)
Dividends declared ($0.46 per common share)
—
—
—
—
—
(276,436)
—
—
(276,436)
Balance at December 31, 2024
—
$
—
600,403
$
600
$
8,584,917
$
(3,658,516)
$
(94,272)
$
1,054
$
4,833,783
Net (loss) income
—
—
—
—
—
(277,049)
—
1,112
(275,937)
Unrealized loss on interest rate hedges, net of tax
—
—
—
—
—
—
(4,208)
—
(4,208)
Foreign currency translation gain
—
—
—
—
—
—
266,693
—
266,693
Stock vesting and amortization of stock-based compensation
—
—
1,639
2
15,116
—
—
—
15,118
Stock vesting - satisfaction of tax withholdings
—
—
(529)
—
(2,474)
—
—
—
(2,474)
Repurchase of common stock
—
—
(4,505)
(5)
(23,436)
—
—
—
(23,441)
Distributions to non-controlling interests
—
—
—
—
—
—
—
(1,112)
(1,112)
Offering costs
—
—
—
—
(727)
—
—
—
(727)
Dividends declared ($0.33 per common share)
—
—
—
—
—
(200,446)
—
—
(200,446)
Balance at December 31, 2025
—
$
—
597,008
$
597
$
8,573,396
$
(4,136,011)
$
168,213
$
1,054
$
4,607,249
See accompanying notes to consolidated financial statements.
...........................................................
.................................................................................
...............................
............................................................................
.........................................................
..................................................................................
.............
..................................
....................................................
.............................................
....................................
..............................
..........................................................
.................................................................................
............................................................................
.........................................................
...................................
.............................................
.............................................
....................................
..........................................................
.................................................................................
................................
.........................................................
.............
..................................
..............................................................
............................................
......................................................................................
....................................
..........................................................
72
.
........
....
.
...
....
.
73
MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the Years Ended December 31,
2025
2024
2023
(Amounts in thousands)
Operating activities
................................................................................................................................
Net loss
$
(275,937)
$
(2,408,287)
$
(556,092)
Adjustments to reconcile net loss to net cash provided by operating activities:
..........................................................................................
Depreciation and amortization
272,817
453,749
616,127
........................................................
Amortization of deferred financing costs and debt discount
26,283
17,348
15,775
....................................................................................
Straight-line rent revenue and other
(158,172)
(172,765)
(233,703)
..............................................................................................
Stock-based compensation
25,746
32,976
33,250
........................................................................................
(Gain) loss on sale of real estate
(5,545)
(478,693)
1,815
........................................................................
Real estate and other impairment charges, net
193,947
1,825,402
376,907
.................................................................................
Equity interest real estate impairment
—
410,790
—
..................................................................................
Straight-line rent and other write-off
11,054
2,514
649,911
..........................................................
Debt refinancing and unutilized financing costs (benefit)
3,629
4,292
(285)
..............................................................................................
Tax rate changes and other
(11,231)
5,119
(167,332)
........................................................................................
Non-cash fair value adjustments
106,442
563,666
(34,157)
........................................................
Non-cash revenue from debt and equity securities received
—
—
(81,706)
........................................................................................................
Other adjustments
7,580
4,975
10,287
Changes in:
.............................................................................................
Interest and rent receivables
7,111
2,778
(141,729)
................................................................................................................
Other assets
14,971
(36,109)
13,750
..............................................................................
Accounts payable and accrued expenses
21,680
23,481
(4,599)
.........................................................................................................
Deferred revenue
(9,608)
(5,753)
7,567
.....................................................................................
Net cash provided by operating activities
230,767
245,483
505,786
Investing activities
...............................................................
Cash paid for acquisitions and other related investments
(142,089)
(105,618)
(235,187)
......................................................................................
Net proceeds from sale of real estate
120,550
1,854,077
897,500
.......................................................
Principal received from sale and repayment of loans receivable
116,309
214,416
501,630
..............................................................................................
Investment in loans receivable
(205,752)
(420,324)
(250,223)
.........................................................................................
Construction in progress and other
(80,003)
(79,788)
(114,425)
....................................................................
Proceeds from sale and return of equity investments
—
11,656
12,430
..............................................................................
Capital additions and other investments, net
(73,753)
(156,078)
(294,167)
.........................................................................
Net cash (used for) provided by investing activities
(264,738)
1,318,341
517,558
Financing activities
.....................................................................................................
Proceeds from term debt
2,512,970
804,188
—
.......................................................................................................
Payments of term debt
(2,252,731)
(701,809)
(988,162)
..............................................................................................
Revolving credit facilities, net
241,530
(1,131,312)
567,910
................................................................................................................
Dividends paid
(193,259)
(321,080)
(615,390)
..........................................................................
Lease deposits and other obligations to tenants
(3,202)
2,237
10,139
.................................................................................................................
Offering costs
(727)
—
—
...............................................................................................
Repurchase of common stock
(23,441)
—
—
..........................................................................
Stock vesting - satisfaction of tax withholdings
(2,474)
(3,805)
(8,079)
..........................
Payment of debt refinancing and deferred financing costs and other financing activities
(50,585)
(127,798)
13,255
.........................................................................
Net cash provided by (used for) financing activities
228,081
(1,479,379)
(1,020,327)
.......................................................
Increase in cash, cash equivalents, and restricted cash for the year
194,110
84,445
3,017
............................................................................................
Effect of exchange rate changes
14,712
(5,224)
11,397
......................................................
Cash, cash equivalents, and restricted cash at beginning of year
335,173
255,952
241,538
.................................................................
Cash, cash equivalents, and restricted cash at end of year
$
543,995
$
335,173
$
255,952
...............................................................................................................
Interest paid, including capitalized interest of $12,920 in 2025, $7,642 in 2024,
and $14,178 in 2023
$
458,225
$
420,315
$
406,141
Supplemental schedule of non-cash investing activities:
...................................
Debt and equity securities received for certain obligations, real estate, and revenue
$
—
$
—
$
804,520
..........................................................
Certain obligations and receivables satisfied and real estate sold
50,000
—
722,814
........................................................................................................
Lease incentive provided
50,000
—
—
Supplemental schedule of non-cash financing activities:
.....................................................................................................
Dividends declared, unpaid
$
55,351
$
48,164
$
92,808
Cash, cash equivalents, and restricted cash are comprised of the following:
Beginning of period:
.....................................................................................................
Cash and cash equivalents
$
332,335
$
250,016
$
235,668
....................................................................................
Restricted cash, included in Other assets
2,838
5,936
5,870
$
335,173
$
255,952
$
241,538
End of period:
.....................................................................................................
Cash and cash equivalents
$
540,859
$
332,335
$
250,016
....................................................................................
Restricted cash, included in Other assets
3,136
2,838
5,936
$
543,995
$
335,173
$
255,952
See accompanying notes to consolidated financial statements.
74
MPT OPERATING PARTNERSHIP, L.P. AND SUBSIDIARIES
Consolidated Balance Sheets
December 31,
2025
2024
(Amounts in thousands,
except for per unit data)
ASSETS
Real estate assets
.............................................................................................................................
Land
$
1,790,154
$
1,607,869
.......................................................................................
Buildings and improvements
9,543,162
8,847,892
.................................................................................................
Intangible lease assets
872,371
804,081
....................................................................................
Investment in financing leases
421,684
1,057,770
...............................................................................................
Real estate held for sale
—
34,019
............................................................................................................
Mortgage loans
123,651
119,912
......................................................................
Gross investment in real estate assets
12,751,022
12,471,543
...........................................................................................
Accumulated depreciation
(1,438,594)
(1,221,644)
...........................................................................................
Accumulated amortization
(224,462)
(201,304)
.........................................................................
Net investment in real estate assets
11,087,966
11,048,595
.................................................................................................
Cash and cash equivalents
540,859
332,335
..............................................................................................
Interest and rent receivables
19,210
36,327
.............................................................................................
Straight-line rent receivables
881,452
700,783
..................................................
Investments in unconsolidated real estate joint ventures
1,399,777
1,156,397
..............................................................
Investments in unconsolidated operating entities
322,179
439,578
........................................................................................................................
Other loans
186,292
109,175
........................................................................................................................
Other assets
564,040
471,404
......................................................................................................................
Total Assets
$
15,001,775
$
14,294,594
LIABILITIES AND CAPITAL
Liabilities
........................................................................................................................
Debt, net
$
9,697,835
$
8,848,112
.......................................................................
Accounts payable and accrued expenses
493,364
405,655
...........................................................................................................
Deferred revenue
19,289
29,445
...........................................................
Obligations to tenants and other lease liabilities
128,297
129,045
...............................................................
Payable due to Medical Properties Trust, Inc.
55,351
48,164
.......................................................................................................
Total Liabilities
10,394,136
9,460,421
Commitments and Contingencies
Capital
..............................................................................
General Partner — issued and outstanding — 5,972 units at December 31, 2025 and
6,006 units at December 31, 2024
44,457
49,348
..........................................................
Limited Partners — issued and outstanding — 591,036 units at December 31,
2025 and 594,397 units at December 31, 2024
4,393,915
4,878,043
.........................................................
Accumulated other comprehensive income (loss)
168,213
(94,272)
.................................................................
Total MPT Operating Partnership, L.P. capital
4,606,585
4,833,119
...................................................................................................
Non-controlling interests
1,054
1,054
............................................................................................................
Total Capital
4,607,639
4,834,173
...........................................................................................
Total Liabilities and Capital
$
15,001,775
$
14,294,594
See accompanying notes to consolidated financial statements.
75
MPT OPERATING PARTNERSHIP, L.P. AND SUBSIDIARIES
Consolidated Statements of Net Income
For the Years Ended December 31,
2025
2024
2023
(Amounts in thousands,
except for per unit data)
Revenues
.................................................................................................................
Rent billed
$
736,543
$
719,749
$
803,375
.......................................................................................................
Straight-line rent
152,163
163,414
(127,894)
...................................................................................
Income from financing leases
39,735
63,651
127,141
..........................................................................................
Interest and other income
43,581
48,733
69,177
.......................................................................................................
Total revenues
972,022
995,547
871,799
Expenses
.......................................................................................................................
Interest
510,362
417,824
411,171
................................................................
Real estate depreciation and amortization
265,405
447,657
603,360
.........................................................................................................
Property-related
36,415
27,255
41,567
.......................................................................................
General and administrative
130,427
133,789
145,588
.......................................................................................................
Total expenses
942,609
1,026,525
1,201,686
Other (expense) income
...............................................................................
Gain (loss) on sale of real estate
5,545
478,693
(1,815)
..........................................................
Real estate and other impairment charges, net
(193,947)
(1,825,402)
(376,907)
........................................................................
Earnings (loss) from equity interests
97,851
(366,642)
13,967
........................................
Debt refinancing and unutilized financing (costs) benefit
(3,629)
(4,292)
285
.............................................
Other (including fair value adjustments on securities)
(172,552)
(615,565)
7,586
...............................................................................................
Total other expense
(266,732)
(2,333,208)
(356,884)
...............................................................................................
Loss before income tax
(237,319)
(2,364,186)
(686,771)
....................................................................................
Income tax (expense) benefit
(38,618)
(44,101)
130,679
.....................................................................................................................
Net loss
(275,937)
(2,408,287)
(556,092)
.................................................
Net income attributable to non-controlling interests
(1,112)
(1,984)
(384)
..............................
Net loss attributable to MPT Operating Partnership partners
$
(277,049)
$ (2,410,271)
$
(556,476)
Earnings per unit — basic and diluted
..........................
Net loss attributable to MPT Operating Partnership partners
$
(0.46)
$
(4.02)
$
(0.93)
.......................................................
Weighted average units outstanding — basic
600,892
600,248
598,518
...................................................
Weighted average units outstanding — diluted
600,892
600,248
598,518
See accompanying notes to consolidated financial statements.
76
MPT OPERATING PARTNERSHIP, L.P. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Loss
For the Years Ended December 31,
(In thousands)
2025
2024
2023
............................................................................................................................
Net loss
$
(275,937)
$ (2,408,287)
$
(556,092)
Other comprehensive (loss) income:
......................................................
Unrealized loss on interest rate hedges, net of tax
(4,208)
(20,779)
(34,932)
...................................................................................................
Reclassification of interest rate hedges gain from AOCI to
earnings, net of tax
—
(18,926)
(28,553)
......................................................................
Foreign currency translation gain (loss)
266,693
(97,068)
162,680
......................................................................................................
Reclassification of foreign currency translation loss from
AOCI to earnings
—
—
2,490
................................................................................................
Total comprehensive loss
(13,452)
(2,545,060)
(454,407)
................................
Comprehensive income attributable to non-controlling interests
(1,112)
(1,984)
(384)
......................
Comprehensive loss attributable to MPT Operating Partnership partners
$
(14,564)
$ (2,547,044)
$
(454,791)
See accompanying notes to consolidated financial statements.
MPT OPERATING PARTNERSHIP, L.P. AND SUBSIDIARIES
Consolidated Statements of Capital
For the Years Ended December 31, 2025, 2024 and 2023
General
Limited
Accumulated
Partner
Partners
Other
Non-
(In thousands, except per unit amounts)
Units
Unit
Value
Units
Unit
Value
Comprehensive
(Loss) Income
Controlling
Interests
Total
Capital
Balance at December 31, 2022
5,976
$
86,599
591,500
$
8,565,813
$
(59,184)
$
1,569
$
8,594,797
Net (loss) income
—
(5,564)
—
(550,912)
—
384
(556,092)
Unrealized loss on interest rate hedges, net of tax
—
—
—
—
(34,932)
—
(34,932)
Reclassification of interest rate hedge gain to
earnings, net of tax
—
—
—
—
(28,553)
—
(28,553)
Foreign currency translation gain
—
—
—
—
162,680
—
162,680
Reclassification of foreign currency translation
loss to earnings
—
—
—
—
2,490
—
2,490
Unit vesting and amortization of unit-based compensation
25
332
2,432
32,918
—
—
33,250
Unit vesting - satisfaction of tax withholdings
(10)
(81)
(932)
(7,998)
—
—
(8,079)
Issuance of non-controlling interests
—
—
—
—
—
1,375
1,375
Distributions to non-controlling interests
—
—
—
—
—
(1,063)
(1,063)
Distributions declared ($0.88 per unit)
—
(5,317)
—
(526,301)
—
—
(531,618)
Balance at December 31, 2023
5,991
$
75,969
593,000
$
7,513,520
$
42,501
$
2,265
$
7,634,255
Net (loss) income
—
(24,102)
—
(2,386,169)
—
1,984
(2,408,287)
Unrealized loss on interest rate hedges, net of tax
—
—
—
—
(20,779)
—
(20,779)
Reclassification of interest rate hedge gain to
earnings, net of tax
—
—
—
—
(18,926)
—
(18,926)
Foreign currency translation loss
—
—
—
—
(97,068)
—
(97,068)
Unit vesting and amortization of unit-based compensation
23
285
2,150
28,129
—
—
28,414
Unit vesting - satisfaction of tax withholdings
(8)
(39)
(753)
(3,766)
—
—
(3,805)
Acquisitions of non-controlling interests
—
—
—
—
—
(1,500)
(1,500)
Distributions to non-controlling interests
—
—
—
—
—
(1,695)
(1,695)
Distributions declared ($0.46 per unit)
—
(2,765)
—
(273,671)
—
—
(276,436)
Balance at December 31, 2024
6,006
$
49,348
594,397
$
4,878,043
$
(94,272)
$
1,054
$
4,834,173
Net (loss) income
—
(2,771)
—
(274,278)
—
1,112
(275,937)
Unrealized loss on interest rate hedges, net of tax
—
—
—
—
(4,208)
—
(4,208)
Foreign currency translation gain
—
—
—
—
266,693
—
266,693
Unit vesting and amortization of unit-based compensation
17
151
1,622
14,967
—
—
15,118
Unit vesting - satisfaction of tax withholdings
(6)
(25)
(523)
(2,449)
—
—
(2,474)
Repurchase of units
(45)
(234)
(4,460)
(23,207)
—
—
(23,441)
Distributions to non-controlling interests
—
—
—
—
—
(1,112)
(1,112)
Offering costs
—
(7)
—
(720)
—
—
(727)
Distributions declared ($0.33 per unit)
—
(2,005)
—
(198,441)
—
—
(200,446)
Balance at December 31, 2025
5,972
$
44,457
591,036
$
4,393,915
$
168,213
$
1,054
$
4,607,639
See accompanying notes to consolidated financial statements.
........................................................................
..............................................................................................
.............................................
.........................................................................................
......................................................................
...............................................................................................
..............................
.................................................
................................................................
.........................................................
..............................................................
............................................
........................................................................
..............................................................................................
.........................................................................................
.......................................................................
..................................................
..........................................................
..........................................................
.............................................................
........................................................................
...............................................................................................
.............................................
......................................................................
..............................
..................................................
...........................................................................................
..........................................................
....................................................................................................
..............................................................
........................................................................
77
..............................
78
MPT OPERATING PARTNERSHIP, L.P. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the Years Ended December 31,
2025
2024
2023
(Amounts in thousands)
Operating activities
................................................................................................................................
Net loss
$
(275,937)
$
(2,408,287)
$
(556,092)
Adjustments to reconcile net loss to net cash provided by operating activities:
..........................................................................................
Depreciation and amortization
272,817
453,749
616,127
........................................................
Amortization of deferred financing costs and debt discount
26,283
17,348
15,775
....................................................................................
Straight-line rent revenue and other
(158,172)
(172,765)
(233,703)
................................................................................................
Unit-based compensation
25,746
32,976
33,250
........................................................................................
Gain (loss) on sale of real estate
(5,545)
(478,693)
1,815
........................................................................
Real estate and other impairment charges, net
193,947
1,825,402
376,907
.................................................................................
Equity interest real estate impairment
—
410,790
—
..................................................................................
Straight-line rent and other write-off
11,054
2,514
649,911
..........................................................
Debt refinancing and unutilized financing costs (benefit)
3,629
4,292
(285)
..............................................................................................
Tax rate changes and other
(11,231)
5,119
(167,332)
........................................................................................
Non-cash fair value adjustments
106,442
563,666
(34,157)
........................................................
Non-cash revenue from debt and equity securities received
—
—
(81,706)
........................................................................................................
Other adjustments
7,580
4,975
10,287
Changes in:
.............................................................................................
Interest and rent receivables
7,111
2,778
(141,729)
................................................................................................................
Other assets
14,971
(36,109)
13,750
..............................................................................
Accounts payable and accrued expenses
21,680
23,481
(4,599)
.........................................................................................................
Deferred revenue
(9,608)
(5,753)
7,567
.....................................................................................
Net cash provided by operating activities
230,767
245,483
505,786
Investing activities
...............................................................
Cash paid for acquisitions and other related investments
(142,089)
(105,618)
(235,187)
......................................................................................
Net proceeds from sale of real estate
120,550
1,854,077
897,500
.......................................................
Principal received from sale and repayment of loans receivable
116,309
214,416
501,630
..............................................................................................
Investment in loans receivable
(205,752)
(420,324)
(250,223)
.........................................................................................
Construction in progress and other
(80,003)
(79,788)
(114,425)
....................................................................
Proceeds from sale and return of equity investments
—
11,656
12,430
..............................................................................
Capital additions and other investments, net
(73,753)
(156,078)
(294,167)
.........................................................................
Net cash (used for) provided by investing activities
(264,738)
1,318,341
517,558
Financing activities
.....................................................................................................
Proceeds from term debt
2,512,970
804,188
—
.......................................................................................................
Payments of term debt
(2,252,731)
(701,809)
(988,162)
..............................................................................................
Revolving credit facilities, net
241,530
(1,131,312)
567,910
.............................................................................................................
Distributions paid
(193,259)
(321,080)
(615,390)
..........................................................................
Lease deposits and other obligations to tenants
(3,202)
2,237
10,139
.................................................................................................................
Offering costs
(727)
—
—
..........................................................................................................
Repurchase of units
(23,441)
—
—
...........................................................................
Unit vesting - satisfaction of tax withholdings
(2,474)
(3,805)
(8,079)
..........................
Payment of debt refinancing and deferred financing costs and other financing activities
(50,585)
(127,798)
13,255
.........................................................................
Net cash provided by (used for) financing activities
228,081
(1,479,379)
(1,020,327)
.......................................................
Increase in cash, cash equivalents, and restricted cash for the year
194,110
84,445
3,017
............................................................................................
Effect of exchange rate changes
14,712
(5,224)
11,397
......................................................
Cash, cash equivalents, and restricted cash at beginning of year
335,173
255,952
241,538
..................................................................
Cash, cash equivalents and restricted cash at end of year
$
543,995
$
335,173
$
255,952
...............................................................................................................
Interest paid, including capitalized interest of $12,920 in 2025, $7,642 in 2024,
and $14,178 in 2023
$
458,225
$
420,315
$
406,141
Supplemental schedule of non-cash investing activities:
...................................
Debt and equity securities received for certain obligations, real estate, and revenue
$
—
$
—
$
804,520
..........................................................
Certain obligations and receivables satisfied and real estate sold
50,000
—
722,814
........................................................................................................
Lease incentive provided
50,000
—
—
Supplemental schedule of non-cash financing activities:
..................................................................................................
Distributions declared, unpaid
$
55,351
$
48,164
$
92,808
Cash, cash equivalents, and restricted cash are comprised of the following:
Beginning of period:
.....................................................................................................
Cash and cash equivalents
$
332,335
$
250,016
$
235,668
....................................................................................
Restricted cash, included in Other assets
2,838
5,936
5,870
$
335,173
$
255,952
$
241,538
End of period:
.....................................................................................................
Cash and cash equivalents
$
540,859
$
332,335
$
250,016
....................................................................................
Restricted cash, included in Other assets
3,136
2,838
5,936
$
543,995
$
335,173
$
255,952
See accompanying notes to consolidated financial statements.
79
MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES
MPT OPERATING PARTNERSHIP, L.P. AND SUBSIDIARIES
Notes To Consolidated Financial Statements
1. Organization
Medical Properties Trust, Inc., a Maryland corporation, was formed on August 27, 2003, under the Maryland General
Corporation Law for the purpose of engaging in the business of investing in, owning, and leasing healthcare real estate. Our operating
partnership subsidiary, MPT Operating Partnership, L.P. (the “Operating Partnership”), through which we conduct substantially all of
our operations, was formed in September 2003. At present, we own, directly and indirectly, all of the partnership interests in the
Operating Partnership and have elected to report our required disclosures and that of the Operating Partnership on a combined basis,
except where material differences exist.
We operate as a real estate investment trust (“REIT”). Accordingly, we are generally not subject to United States (“U.S.”)
federal income tax on our REIT taxable income, provided that we continue to qualify as a REIT and our distributions to our
stockholders equal or exceed such taxable income. Similarly, the majority of our real estate operations in the United Kingdom
("U.K.") operate as a REIT and generally are subject only to a withholding tax on earnings upon distribution out of the U.K. REIT.
Certain non-real estate activities we undertake in the U.S. are conducted by entities which we elected to be treated as taxable REIT
subsidiaries (“TRS”). Our TRS entities are subject to both U.S. federal and state income taxes. For our properties located outside the
U.S. (excluding those assets that are in the U.K. REIT), we are subject to the local income taxes of the jurisdictions where our
properties reside and/or legal entities are domiciled; however, we do not expect to incur additional taxes, of a significant nature, in the
U.S. from foreign-based income as the majority of such income flows through our REIT.
Our primary business strategy is to acquire and develop healthcare facilities and lease the facilities to healthcare operating
companies under long-term net leases, which require the tenant to bear most of the costs associated with the property. The majority of
our leased assets are owned 100%; however, we do own some leased assets through joint ventures with other partners that share our
view that healthcare facilities are part of the infrastructure of any community, which we refer to as investments in unconsolidated real
estate joint ventures. We also may make mortgage loans to healthcare operators collateralized by their real estate. In addition, we may
make noncontrolling investments in our tenants (which we refer to as investments in unconsolidated operating entities), from time-to-
time, typically in conjunction with larger real estate transactions with the tenant, which may enhance our overall return and provide for
certain minority rights and protections.
Our business model facilitates acquisitions and recapitalizations, and allows operators of healthcare facilities to unlock the value
of their real estate to fund facility improvements, technology upgrades, and other investments in operations. At December 31, 2025,
we have investments in 384 facilities in 31 states in the U.S., in seven countries in Europe, and one country in South America. Our
properties consist of general acute care hospitals, behavioral health facilities, post acute care facilities (including inpatient physical
rehabilitation facilities and long-term acute care hospitals), and freestanding ER/urgent care facilities.
2. Summary of Significant Accounting Policies
Use of Estimates: The preparation of our consolidated financial statements in conformity with accounting principles generally
accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. We believe the estimates and assumptions underlying our consolidated financial statements at
December 31, 2025 are reasonable and supportable based on the information available (particularly as it relates to our assessments of
the recoverability of our real estate and the adequacy of our credit loss reserves on loans and financing receivables). Actual results
could differ from those estimates.
Principles of Consolidation: Property holding entities and other subsidiaries of which we own 100% of the equity or have a
controlling financial interest evidenced by ownership of a majority voting interest are consolidated. All inter-company balances and
transactions are eliminated. For entities in which we own less than 100% of the equity interest, we consolidate the property if we have
the direct or indirect ability to control the entities’ activities based upon the terms of the respective entities’ ownership agreements.
For these entities, we record a non-controlling interest representing equity held by non-controlling interests.
We continually evaluate all of our transactions and investments to determine if they represent variable interests in a variable
interest entity ("VIE"). If we determine that we have a variable interest in a VIE, we then evaluate if we are the primary beneficiary of
the VIE. The evaluation is a qualitative assessment as to whether we have the ability to direct the activities of a VIE that most
significantly impact the entity’s economic performance. We consolidate each VIE in which we, by virtue of or transactions with our
investments in the entity, are considered to be the primary beneficiary.
80
At December 31, 2025, we had loans and/or equity investments in certain VIEs, which may also be tenants of our facilities. We
have determined that we were not the primary beneficiary of these VIEs. The carrying value and classification of the related assets and
maximum exposure to loss as a result of our involvement with these VIEs at December 31, 2025 are presented below (in thousands):
VIE Type
Carrying
Amount(1)
Asset Type
Classification
Maximum Loss
Exposure(2)
.......................
Loans, net and equity investments
$
—
Investments in Unconsolidated
Operating Entities
$
—
.............................................................
Loans, net
120,398
Mortgage and other loans
120,398
(1)
Carrying amount only reflects the net book value (which has been reduced by any impairments or negative fair value
adjustments) of our loan or equity investment in the VIE.
(2)
Our maximum loss exposure related to loans with VIEs represents our current aggregate net book value of the loan plus
accrued interest and any other related assets (such as rent receivables), less any liabilities. Our maximum loss exposure
related to our equity investments in VIEs represents the net book values of such investments plus any other related assets
(such as rent receivables), less any liabilities.
For the VIE types above, we do not consolidate the VIEs because we do not have the ability to control the activities (such as the
day-to-day healthcare operations of our borrowers or investees) that most significantly impact the VIE's economic performance. As of
December 31, 2025, we were not required to provide financial support through a liquidity arrangement or otherwise to our
unconsolidated VIEs, including circumstances in which they could be exposed to further losses (e.g. cash short falls).
Investments in Unconsolidated Entities: Investments in entities in which we have the ability to significantly influence (but not
control) are accounted for by the equity method. This includes the five investments in unconsolidated real estate joint ventures at
December 31, 2025. Under the equity method of accounting, our share of the investee’s earnings or losses are included in the
“Earnings (loss) from equity interests” line of our consolidated statements of net income. Except for our joint venture with Primotop
Holdings S.à.r.l. (“Primotop”) (for which we handle the accounting of), we have elected to record our share of such investee’s
earnings or losses on a lag basis (not to exceed three months). The initial carrying value of investments in unconsolidated entities is
based on the amount paid to purchase the interest in the investee entity. Subsequently, our investments are increased/decreased by our
share in the investees’ earnings/losses and decreased by cash distributions from our investees. To the extent that our cost basis is
different from the basis reflected at the investee entity level, the basis difference is generally amortized over the lives of the related
assets and liabilities, and such amortization is included in our share of equity in earnings of the investee.
We evaluate our equity method investments for impairment based upon a comparison of the fair value of the equity method
investment to its carrying value, when impairment indicators exist. If we determine a decline in the fair value of an investment in an
unconsolidated investee entity below its carrying value is other-than-temporary, an impairment is recorded.
Investments in entities in which we do not control nor do we have the ability to significantly influence and for which there is no
readily determinable fair value are accounted for at cost, less any impairment, plus or minus changes resulting from observable price
changes in orderly transactions involving the investee. Cash distributions on these types of investments are recorded to either income
upon receipt (if a return on investment) or as a reduction of our investment (if the distributions received are in excess of our share of
the investee’s earnings). For similar investments but for which there are readily determinable fair values, such investments are
measured at fair value, with unrealized gains and losses recorded in income.
Cash and Cash Equivalents: Certificates of deposit, short-term investments with original maturities of three months or less, and
money-market mutual funds are considered cash equivalents. The majority of our cash and cash equivalents are held at major
commercial banks, which at times may exceed the Federal Deposit Insurance Corporation limit. We have not experienced any losses
to-date on our invested cash. Cash and cash equivalents which have been restricted as to its use are recorded in other assets.
Revenue Recognition: Our revenues are primarily from leases and loans. For leases, we follow Accounting Standards
Codification (“ASC”) 842, “Leases”, (“ASC 842”). ASC 842 sets out the principles for the recognition, measurement, presentation,
and disclosure of leases for both parties to a contract (i.e. lessees and lessors). For lessors, we apply this standard as follows:
Operating Lease Revenue
We receive income from operating leases based on the fixed required rents (base rents) per the lease agreements. Rent revenue
from base rents is recorded on the straight-line method, when collectibility of the lease payments is deemed probable, over the terms
of the related lease agreements for new leases and the remaining terms of existing leases for those acquired as part of a property
81
acquisition. The straight-line method records the periodic average amount of base rents earned over the term of a lease, taking into
account contractual rent increases over the lease term. The straight-line method typically has the effect of recording more rent revenue
from a lease than a tenant is required to pay early in the term of the lease. During the later parts of a lease term, this effect reverses
with less rent revenue recorded than a tenant is required to pay. Rent revenue, as recorded on the straight-line method, in our
consolidated statements of net income is presented as two amounts: rent billed and straight-line rent. Rent billed revenue is the amount
of base rent actually billed to our tenants each period as required by the lease. Straight-line rent revenue is the difference between rent
revenue earned based on the straight-line method and the amount recorded as rent billed revenue. We record the difference between
rent revenues earned and amounts due per the respective lease agreements, as applicable, as an increase or decrease to straight-line
rent receivables.
In instances where collectibility of the lease payments is not deemed probable, rent revenue is constrained to the lower of 1) the
revenue that would have been recognized if collection were probable (i.e., straight-line method) and 2) the amount of lease payments
received in cash.
Rental payments received prior to their recognition as income are classified as deferred revenue.
Financing Lease Revenue
Under ASC 842, if an acquisition and subsequent lease of a property back to the seller does not meet the definition of a sale, we
must account for the transaction as a financing lease with income recognized using the imputed interest method.
Another type of financing lease is a direct financing lease (“DFL”). For leases accounted for as DFLs, the future minimum lease
payments are recorded as a receivable at lease inception, while, the difference between the future minimum lease payments and the
estimated residual values less the cost of the properties is recorded as unearned income. Unearned income is deferred and amortized to
income over the lease term to provide a constant yield when collectability of the lease payments is reasonably assured. Investments in
DFLs are presented net of unearned income.
Other Leasing Revenue
We begin recording base rent income from our development projects when the lessee takes physical possession of the facility,
which may be different from the stated start date of the lease. Also, during construction of our development projects, we may be
entitled to accrue rent based on the cost paid during the construction period (construction period rent). We accrue construction period
rent as a receivable with a corresponding offset to deferred revenue during the construction period. When the lessee takes physical
possession of the facility, we begin recognizing the deferred construction period revenue on the straight-line method over the term of
the lease.
We also receive additional rent (contingent rent) under some leases based on increases in the consumer price index (“CPI”) (or
similar index outside the U.S.) or when CPI exceeds the annual minimum percentage increase as stipulated in the lease. Contingent
rents are recorded as rent billed revenue in the period earned.
Tenant payments for ground leases along with other operating expenses, such as property taxes and insurance, that are paid
directly by us and reimbursed by our tenants are presented on a gross basis with the related revenues recorded in “Interest and other
income” and the related expenses in “Property-related” in our consolidated statements of net income. All payments of other operating
expenses made directly by the tenant to the applicable government or appropriate third-party vendor are recorded on a net basis.
Interest Revenue
We receive interest income from our tenants/borrowers on mortgage loans, working capital loans, and other loans. Interest
income from these loans is recognized as earned based upon the principal outstanding and terms of the loans.
Other Revenue
Commitment fees received on operating leases for development and leasing services are initially recorded as deferred revenue
and recognized as income over the initial term of a lease on the straight-line method. Commitment and origination fees from lending
services are also recorded as deferred revenue initially and recognized as income over the life of the loan using the interest method.
Acquired Real Estate Purchase Price Allocation: We account for acquisitions of real estate under asset acquisition accounting
rules. Under this accounting standard, we allocate the purchase price (including any third-party transaction costs directly related to the
acquisition) of acquired properties to tangible and identified intangible assets acquired and liabilities assumed (if any) based on their
82
relative fair values. In making estimates of fair values for purposes of allocating purchase prices of acquired real estate, we may utilize
a number of sources, from time-to-time, including available real estate broker data, independent appraisals that may be obtained in
connection with the acquisition, internal data from previous acquisitions or developments, and other market data, including market
comparables for significant assumptions such as market rents, capitalization, and discount rates. We also consider information
obtained about each property as a result of our pre-acquisition due diligence, marketing, and leasing activities in estimating the fair
value of the tangible and intangible assets acquired.
We measure the aggregate value of lease intangible assets acquired based on the difference between (i) the property valued with
new or in-place leases adjusted to market rental rates and (ii) the property valued as if vacant. Management’s estimates of value are
made using methods similar to those used by independent appraisers (e.g., discounted cash flow analysis). Factors considered by
management in our analysis include an estimate of carrying costs during hypothetical expected lease-up periods, considering current
market conditions, and costs to execute similar leases. We also consider information obtained about each targeted facility as a result of
our pre-acquisition due diligence, marketing, and leasing activities in estimating the fair value of the intangible assets acquired. In
estimating carrying costs, management includes real estate taxes, insurance, and other operating expenses and estimates of lost rentals
at market rates during the expected lease-up periods, which we expect to be about six months, but can be longer depending on specific
local market conditions. Management also estimates costs to execute similar leases including leasing commissions, legal costs, and
other related expenses to the extent that such costs are not already incurred in connection with a new lease origination as part of the
transaction.
Other intangible assets acquired may include customer relationship intangible values which are based on management’s
evaluation of the specific characteristics of each prospective tenant’s lease and our overall relationship with that tenant. Characteristics
to be considered by management in allocating these values include the nature and extent of our existing business relationships with the
tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality, and expectations of lease renewals,
including those existing under the terms of the lease agreement, among other factors.
We amortize the value of our lease intangible assets to expense over the term of the respective leases. If a lease is terminated
early, the unamortized portion of the lease intangibles are charged to expense. This amortization expense is included in the "Real
estate depreciation and amortization" line of our consolidated statements of net income.
We record above-market and below-market in-place lease values, if any, for our facilities, which are based on the present value
of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair
market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of the
lease. We amortize any resulting capitalized above-market lease values as a reduction of rental income over the lease term. We
amortize any resulting capitalized below-market lease values as an increase to rental income over the lease term. If a lease is
terminated early, the unamortized portion of the capitalized above/below market lease value is recognized in rental income at that
time.
Real Estate and Depreciation: Real estate, consisting of land, buildings and improvements, is maintained at cost. Although
typically paid by our tenants, any expenditure for ordinary maintenance and repairs that we pay are expensed to operations as incurred.
Significant renovations and improvements, which improve and/or extend the useful life of the asset, are capitalized and depreciated
over their estimated useful lives. We review real estate investments for impairment when events and circumstances indicate that the
assets may not be recoverable. We analyze recoverability by comparing the carrying value of the real estate assets to a probability-
weighted set of estimated undiscounted cash flows to be generated by those assets, including an estimated liquidation amount, during
the expected holding periods. Assumptions used in determining undiscounted cash flows may include, but are not limited to, market
rental rates, capitalization rates, and holding periods. If the recoverability analysis indicates that the carrying value of the real estate
asset is greater than the expected future undiscounted cash flows, impairment losses are measured as the difference between carrying
value and fair value of the assets. Future cash flows are discounted when determining fair value of an asset. Estimated future cash
flows used in such analysis are based on our plans for the real estate asset and our view of market economic conditions. Assumptions
used in determining fair value may include, but are not limited to, market rental rates, discount rates, and capitalization rates.
When a real estate investment is designated as held for sale, we cease recording depreciation expense and adjust the assets’
value to the lower of its carrying value or fair value, less cost of disposal. Fair value is typically based on estimated cash flows
discounted at a risk-adjusted rate of interest. We classify real estate assets as held for sale when we have commenced an active
program to sell the assets, and in the opinion of management, it is probable the asset will be sold within the next 12 months.
Construction in progress includes the cost of land, the cost of construction of buildings, improvements, and fixed equipment,
and costs for design and engineering. Other costs, such as interest, legal, property taxes, and corporate project supervision, which can
be directly associated with the project during construction, are also included in construction in progress. We commence capitalization
of costs associated with a development project when the development of the future asset is probable and activities necessary to get the
83
underlying property ready for its intended use have been initiated. We stop the capitalization of costs when the property is
substantially complete and ready for its intended use.
Depreciation is calculated on the straight-line method over the estimated useful lives of the related real estate and other assets.
Our weighted-average useful lives at December 31, 2025 are as follows:
.............................................................................................................
Buildings and improvements
38.6 years
...............................................................................................................................
Lease intangibles
28.2 years
...................................................................................................................
Leasehold improvements
14.3 years
.........................................................................................................
Furniture, equipment, and other
5.0 years
Credit Losses:
Losses from Rent Receivables: For our leases, we review tenant provided financial data and monitor the performance of our
tenants in areas generally consisting of: admission levels and surgery/procedure volumes by type; current operating margins; ratio of
our tenant's operating margins both to facility rent and to facility rent plus other fixed costs; trends in revenue, cash collections, patient
mix; and the effect of evolving healthcare regulations, adverse economic and political conditions, such as inflation and interest rates,
and other events ongoing on a tenant's profitability and liquidity.
Operating Lease Receivables: We utilize the information above along with the tenant’s payment and default history in
evaluating (on a lease-by-lease basis) whether or not lease payments are deemed probable of collection. As noted earlier, if not
deemed probable of collection, rent revenue, under lease accounting rules, is constrained to the lesser of 1) the revenue that
would have been recognized if collection were probable (i.e., straight-line method) and 2) the amount of lease payments
received in cash.
Financing Lease Receivables: We apply a forward-looking “expected credit loss” model to all of our financing
receivables, including financing leases and loans. To do this, we group our financial instruments into two primary pools of
similar credit risk: secured and unsecured. The secured instruments include our investments in financing receivables as all are
secured by the underlying real estate, among other collateral. Within the two primary pools, we further group our instruments
into sub-pools based on several tenant/borrower characteristics, including years of experience in the healthcare industry and in a
particular market or region and overall capitalization. We then determine a credit loss percentage per pool based on our history
over a period of time that closely matches the remaining terms of the financial instruments being analyzed and adjust as needed
for current trends or unusual circumstances. We apply these credit loss percentages to the book value of the related instruments
to establish a credit loss reserve on our financing lease receivables and such credit loss reserve (including the underlying
assumptions) is reviewed and adjusted quarterly. If a financing receivable is under performing and is deemed uncollectible
based on the lessee’s overall financial condition, we will adjust the credit loss reserve based on the fair value of the underlying
collateral.
We made the accounting policy election to exclude interest receivables from the credit loss reserve model. Instead,
such receivables are impaired and an allowance recorded when it is deemed probable that we will be unable to collect all
amounts due. The need for an allowance is based upon our assessment of the lessee’s overall financial condition, economic
resources and payment record, the prospects for support from any financially responsible guarantors, and, if appropriate, the
realizable value of any collateral. Financing leases are placed on non-accrual status when we determine that the collectability of
contractual amounts is not reasonably assured. If on non-accrual status, we generally account for the financing lease on a cash
basis, in which income is recognized only upon receipt of cash.
Loans: Loans consist of mortgage loans, working capital loans, and other loans. Mortgage loans are collateralized by interests in
real property. Working capital and other loans are typically collateralized by interests in receivables, personal property, and corporate
and individual guarantees. We record loans at cost. Like our financing lease receivables, we establish credit loss reserves on all
outstanding loans based on historical credit losses of similar instruments. Such credit loss reserves, including the underlying
assumptions, are reviewed and adjusted quarterly. If a loan’s performance worsens and foreclosure is deemed probable for our
collateral-based loans (after considering the borrower’s overall financial condition as described above for leases), we will adjust the
allowance for expected credit losses based on the current fair value of such collateral at the time the loan is deemed uncollectible. If
the loan is not collateralized, the loan will be reserved for/written-off once it is determined that such loan is no longer collectible.
Interest receivables on loans are excluded from the forward looking credit loss reserve model; however, an allowance is
recorded when it is deemed probable that we will be unable to collect all amounts due. Loans are placed on non-accrual status when
we determined that the collectibility of contractual amounts is not reasonably assured. If on non-accrual status, we generally account
for the loan on the cash basis, in which income is recognized only upon receipt of cash.
84
The following table summarizes our credit loss reserves (in thousands):
December 31, 2025
December 31, 2024
........................................................
Balance at beginning of the year
$
511,473
$
96,001
............................................................
Provision for credit loss, net
168,186
1,241,020
..........................................
Expected credit loss reserve written off or related to financial
instruments sold, repaid, or satisfied
(126,362)
(825,548)
........................................................................
Balance at end of year
$
553,297
$
511,473
Earnings Per Share/Units: Basic earnings per common share/unit is computed by dividing net income by the weighted-average
number of shares/units outstanding during the period. Diluted earnings per common share/unit is calculated by including the effect of
dilutive securities.
Our unvested restricted stock awards contain non-forfeitable rights to dividends, and accordingly, these awards are deemed to be
participating securities. These participating securities are included in the earnings allocation in computing both basic and diluted
earnings per common share/unit.
Income Taxes: We conduct our business as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as
amended (“the Code”). To qualify as a REIT, we must meet certain organizational and operational requirements, including a
requirement to distribute to stockholders at least 90% of our REIT’s ordinary taxable income. As a REIT, we generally pay little U.S.
federal and state income tax because of the dividends paid deduction that we are allowed to take. If we fail to qualify as a REIT in any
taxable year, we will then be subject to U.S. federal income taxes on our taxable income at regular corporate rates and will not be
permitted to qualify for treatment as a REIT for U.S. federal income tax purposes for four years following the year during which
qualification is lost, unless the Internal Revenue Service grants us relief under certain statutory provisions. Such an event could
materially adversely affect our net income and net cash available for distribution to stockholders. However, we intend to operate in
such a manner so that we will remain qualified as a REIT for U.S. federal income tax purposes.
Our financial statements include the operations of TRS entities. None of our TRS entities are entitled to a dividends paid
deduction and are subject to U.S. federal, state, and local income taxes. Our TRS entities are authorized to provide property
development, leasing, and management services for third-party owned properties, and we will make non-mortgage loans to and/or
investments in our lessees through these entities.
With the property acquisitions and investments in Europe and South America, we are subject to income taxes internationally.
However, we do not expect to incur any additional income taxes, of a significant nature, in the U.S. as the majority of such income
from our international properties flows through our REIT income tax returns. For our TRS entities and international subsidiaries, we
determine deferred tax assets and liabilities based on the differences between the financial reporting and tax bases of assets and
liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Any increase or decrease in our
deferred tax assets/liabilities that results from a change in circumstances and that causes us to change our judgment about expected
future tax consequences of events, is reflected in our tax provision when such changes occur. Deferred income taxes also reflect the
impact of operating loss carryforwards. A valuation allowance is provided if we believe it is more likely than not that all or some
portion of our deferred tax assets will not be realized. Any increase or decrease in the valuation allowance that results from a change
in circumstances, and that causes us to change our judgment about our ability to realize the related deferred tax asset, is reflected in
our tax provision when such changes occur.
The calculation of our income taxes involves dealing with uncertainties in the application of complex tax laws and regulations in
a multitude of jurisdictions across our global operations. An income tax benefit from an uncertain tax position may be recognized
when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or
litigation processes, on the basis of technical merits. However, if a more likely than not position cannot be reached, we record a
liability as an offset to the tax benefit and adjust the liabilities when our judgment changes as a result of the evaluation of new
information not previously available. Because of the complexity of some of these uncertainties, the ultimate resolution may result in a
payment that is materially different from our current estimate of the uncertain tax position liabilities. These differences will be
reflected as increases or decreases to income tax expense in the period in which new information is available.
Stock-Based Compensation: We adopted the 2019 Equity Incentive Plan (the “Equity Incentive Plan”) during the second quarter
of 2019, which was amended during the second quarter of 2022. Equity awards of restricted stock with service conditions are valued
at the average stock price per share on the date of grant and are amortized to compensation expense over the service periods (typically
three years), using the straight-line method. Equity awards that contain market conditions are valued on the grant date using a Monte
Carlo valuation model and are amortized to compensation expense over the derived service periods, which correspond to the periods
over which we estimate the awards will be earned, which generally range from three to five years, using the straight-line method.
85
Equity awards with performance conditions are valued at the average stock price per share on the date of grant and are amortized
using the straight-line method over the service period, adjusted for the probability of achieving the performance conditions. In 2024
and 2025, certain market-based restricted stock units ("RSUs") were issued with cash-settlement features. These liability-type awards
are adjusted to fair value (using a Monte Carlo valuation model) on a quarterly basis and amortized over the derived service period,
which is also adjusted on a quarterly basis. Forfeitures of stock-based awards are recognized as they occur.
Deferred Costs: Costs incurred that directly relate to the offerings of stock are deferred and netted against proceeds received
from the offering. Leasing commissions and other third-party leasing costs that would not have been incurred if the lease was not
obtained are capitalized as deferred leasing costs and amortized on the straight-line method over the terms of the related lease
agreements. Costs identifiable with loans made to borrowers are capitalized and recognized as a reduction in interest income over the
life of the loan.
Deferred Financing Costs: We generally capitalize financing costs incurred in connection with new financings and refinancings
of debt. These costs are amortized over the lives of the related debt as an addition to interest expense. For debt with defined principal
re-payment terms, the deferred costs are amortized to produce a constant effective yield on the debt (interest method) and are included
within “Debt, net” on our consolidated balance sheets. For debt without defined principal repayment terms, such as our revolving
credit facility, the deferred costs are amortized on the straight-line method over the term of the debt and are included as a component
of “Other assets” on our consolidated balance sheets.
Foreign Currency Translation and Transactions: Certain of our international subsidiaries’ functional currencies are the local
currencies of their respective countries. We translate the results of operations of our foreign subsidiaries into U.S. dollars using
average rates of exchange in effect during the period, and we translate balance sheet accounts using exchange rates in effect at the end
of the period. We record resulting currency translation adjustments in accumulated other comprehensive income (loss), a component
of stockholders’ equity/partnership capital on our consolidated balance sheets.
Certain of our U.S. subsidiaries will enter into short-term and long-term transactions denominated in a foreign currency from
time-to-time. Gains or losses resulting from these foreign currency transactions are revalued into U.S. dollars at the rates of exchange
prevailing at the dates of the transactions. The effects of revaluation gains or losses on our short-term transactions are included in
other income (expense) in the consolidated statements of income, while the revaluation effects on our long-term investments are
recorded in accumulated other comprehensive income (loss) on our consolidated balance sheets.
Derivative Financial Investments and Hedging Activities: During our normal course of business, we may use certain types of
derivative instruments for the purpose of managing interest rate and/or foreign currency risk. We record our derivative and hedging
instruments at fair value on the balance sheet. Changes in the estimated fair value of derivative instruments that are not designated as
hedges or that do not meet the criteria for hedge accounting are recognized in earnings. For derivatives designated as cash flow
hedges, the change in the estimated fair value of the effective portion of the derivative is recognized in accumulated other
comprehensive income (loss) on our consolidated balance sheets, whereas the change in the estimated fair value of the ineffective
portion is recognized in earnings. For derivatives designated as fair value hedges, the change in the estimated fair value of the
effective portion of the derivative offsets the change in the estimated fair value of the hedged item, whereas the change in the
estimated fair value of the ineffective portion is recognized in earnings.
To qualify for hedge accounting, we formally document all relationships between hedging instruments and hedged items, as
well as our risk management objective and strategy for undertaking the hedge prior to entering into a derivative transaction. This
process includes specific identification of the hedging instrument and the hedge transaction, the nature of the risk being hedged and
how the hedging instrument’s effectiveness in hedging the exposure to the hedged transaction’s variability in cash flows attributable to
the hedged risk will be assessed. Both at the inception of the hedge and on an ongoing basis, we assess whether the derivatives that are
used in hedging transactions are highly effective in offsetting changes in cash flows or fair values of hedged items. In addition, for
cash flow hedges, we assess whether the underlying forecasted transaction will occur. We discontinue hedge accounting if a derivative
is not determined to be highly effective as a hedge or that it is probable that the underlying forecasted transaction will not occur.
Fair Value Measurement: We measure and disclose the estimated fair value of financial assets and liabilities utilizing a
hierarchy of valuation techniques based on whether the inputs to a fair value measurement are considered to be observable or
unobservable in a marketplace. Observable inputs reflect market data obtained from independent sources, while unobservable inputs
86
reflect our market assumptions. This hierarchy requires the use of observable market data when available. These inputs have created
the following fair value hierarchy:
•
Level 1 — quoted prices for identical instruments in active markets;
•
Level 2 — quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in
markets that are not active; and model-derived valuations in which significant inputs and significant value drivers are
observable in active markets; and
•
Level 3 — fair value measurements derived from valuation techniques in which one or more significant inputs or
significant value drivers are unobservable.
We measure fair value using a set of standardized procedures that are outlined herein for all assets and liabilities which are
required to be measured at their estimated fair value on either a recurring or non-recurring basis. When available, we utilize quoted
market prices from an independent third party source to determine fair value and classify such items in Level 1. In some instances
where a market price is available, but the instrument is in an inactive or over-the-counter market, we apply the dealer (market maker)
pricing estimate and classify the asset or liability in Level 2.
If quoted market prices or inputs are not available, fair value measurements are based upon valuation models that utilize current
market or independently sourced market inputs, such as interest rates, option volatilities, credit spreads, market capitalization rates,
etc. Items valued using such internally-generated valuation techniques are classified according to the lowest level input that is
significant to the fair value measurement. As a result, the asset or liability could be classified in either Level 2 or 3 even though there
may be some significant inputs that are readily observable. Internal fair value models and techniques that have been used by us include
discounted cash flow, market approach valuations, and Monte Carlo valuation models. We also consider counterparty’s and our own
credit risk on derivatives and other liabilities measured at their estimated fair value.
Fair Value Option Election: For our equity investment in the international joint venture and PHP Holdings (which we sold on
July 1, 2025), along with any related investments such as loans (see Note 10 for more details), we elected to account for these
investments at fair value due to the size of the investments and because we believed this method was more reflective of current values.
We have not made a similar election for other investments that exist at December 31, 2025.
Leases (Lessee)
Pursuant to ASC 842, we are required to apply a dual approach, classifying leases (in which we are the lessee) as either
financing or operating leases based on the principle of whether or not the lease is effectively a financed purchase. This classification
determines whether lease expense is recognized based on an effective interest method (for finance leases) or on a straight-line basis
(for operating leases) over the term of the lease. We record a right-of-use asset and a lease liability for all material leases with a term
greater than 12 months regardless of their classification. Leases with a term of 12 months or less are off balance sheet with lease
expense recognized on a straight-line basis over the lease term.
Segment Reporting
In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-07, "Segment Reporting (Topic
280): Improvements to Reportable Segment Disclosures" ("ASU 2023-07") to improve reportable segment disclosure requirements.
We adopted this guidance in the fourth quarter of 2024 and have included the required disclosures within Note 13 - Segment
Disclosures.
Reclassifications: Certain amounts in the consolidated financial statements for prior periods have been reclassified to conform to
the current period presentation.
Recent Accounting Developments
Disaggregation of Income Statement Expenses
In November 2024, the FASB issued ASU 2024-03, "Income Statement - Reporting Comprehensive Income - Expense
Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses" ("ASU 2024-03") to improve the
disclosures about a public company's expenses and address requests from investors for more detailed information about the types of
expenses in commonly presented expense captions. ASU 2024-03 is effective for annual periods beginning after December 15, 2026.
We are currently evaluating the potential impact of the adoption of this standard on our consolidated financial statements.
87
3. Real Estate and Other Activities
New Investments
For the years ended December 31, 2025, 2024, and 2023, we acquired or invested in the following net assets (in thousands):
2025
2024
2023
..........................................................
Land and land improvements
$
25,231
$
—
$
28,916
.........................................................................................
Buildings
48,742
—
114,966
.................................................................................
Intangible lease assets — subject to amortization
(weighted-average useful life of 19.9 years in 2025 and 24.8
years in 2023)
5,101
—
16,305
................
Investments in unconsolidated real estate joint ventures
63,015
107,908
—
...........................
Investments in unconsolidated operating entities
—
—
50,000
......................................................................................
Other loans
—
—
25,000
.........................................................................
Liabilities assumed
—
(2,290)
—
$
142,089
$
105,618
$
235,187
...............................................................................
Loans repaid(1)
—
—
(22,900)
.............................................................
Total net assets acquired
$
142,089
$
105,618
$
212,287
(1)
The 2023 column includes a $23 million mortgage loan that was converted to fee simple ownership of one property as
described under the Lifepoint Transaction below.
2025 Activity
In 2025, our real estate and other investments totaling approximately $142 million included:
a)
the acquisition of one post-acute property for $32 million in November 2025 to be leased to Vibra Healthcare (“Vibra”);
b)
a new investment in April 2025 of CHF 52 million (or approximately $63 million), inclusive of a CHF 25 million (or
approximately $30 million) short-term loan, in the Swiss Medical Network real estate joint venture, proceeds of which,
along with fundings from our joint venture partner, were used to facilitate the acquisition and leasing of one general acute
care facility in Switzerland and repayment of debt; and
c)
the funding of approximately $47 million to the secured lender in the Steward bankruptcy in March 2025 in order to
obtain control over certain real estate assets for use by our new tenants.
2024 Activity
Utah Transaction
On April 12, 2024, we sold our interests in five Utah hospitals for an aggregate agreed valuation of approximately $1.2
billion to a newly formed joint venture (the "Utah partnership") with an institutional asset manager (the "Fund"), which we call the
Utah Transaction, and we recognized a gain on real estate of approximately $380 million, partially offset by a $20 million write-off of
unbilled straight-line rent receivables. We retained an approximately 25% interest in the Utah partnership valued initially at
approximately $108 million, which is being accounted for on the equity method on a quarterly lag basis and included in the
"Investments in unconsolidated real estate joint ventures" line of the consolidated balance sheets. The Fund purchased an approximate
75% interest for $886 million. In conjunction with this transaction closing, the Utah partnership placed new non-recourse secured
financing, providing $190 million of additional cash to us. In total, the Utah Transaction generated $1.1 billion of cash to us. The Utah
lessee (an affiliate of CommonSpirit Health ("CommonSpirit")) may acquire the leased real estate at a price equal to the greater of fair
market value and the approximate $1.2 billion lease base at the fifth or tenth anniversary of the 2023 master lease commencement. We
granted the Fund certain limited and conditional preferences based on the possible execution of the purchase option, which we
accounted for as a derivative liability with an initial value of approximately $2.3 million.
2023 Activity
Lifepoint Transaction
On February 7, 2023, a subsidiary of Lifepoint Health, Inc. ("Lifepoint") acquired a majority interest in Springstone (now
Lifepoint Behavioral Health, "Lifepoint Behavioral") (the "Lifepoint Transaction") based on an enterprise value of $250 million. As
part of the transaction, we received approximately $205 million in full satisfaction of our initial acquisition loan, including accrued
interest, and we retained (at that time) our minority equity investment in the operations of Lifepoint Behavioral. Separately, we
88
converted an approximate $23 million mortgage loan (made as part of our initial acquisition in 2021) into the fee simple ownership of
a property in Washington, which is leased, along with other behavioral health hospitals, to Lifepoint Behavioral, under a master lease
agreement. In connection with the Lifepoint Transaction, Lifepoint extended its lease on eight existing general acute care hospitals by
five years to 2041.
In the first quarter of 2024, we sold our minority equity investment in Lifepoint Behavioral for approximately $12 million.
Other Transactions
In the second quarter of 2023, we acquired three inpatient rehabilitation facilities for a total of approximately €70 million
(approximately $77 million). These hospitals are leased to Median Kliniken S.á.r.l ("MEDIAN") pursuant to a long-term master lease
with annual inflation-based escalators.
On April 14, 2023, we acquired five behavioral health hospitals located in the U.K. for approximately £44 million
(approximately $58 million). These hospitals are leased to Priory pursuant to five separate lease agreements with annual inflation-
based escalators.
In the first quarter of 2023, we originated a $50 million convertible loan to PHP Holdings, the managed care business of
Prospect at that time. See subheading "Leasing Operations (Lessor)" in this Note 3 for further updates on Prospect.
Development and Capital Addition Activities
See table below for a status summary of our current development and capital addition projects (in thousands):
Property
Commitment
Costs
Paid as of
December 31, 2025
Cost Remaining
..............................................
IMED Hospitales ("IMED") (Spain)
$
67,054
$
39,954
$
27,100
......................................
Healthcare Systems of America (Florida)
43,500
2,064
41,436
.................................................................................
IMED (Spain)
43,495
39,797
3,698
......................................................
Lifepoint Behavioral (Arizona)
10,659
8,281
2,378
...............................................................................
Other (Various)
554
210
344
$
165,262
$
90,306
$
74,956
We have two other development projects ongoing in Texas (Texarkana development) and Massachusetts (Norwood
redevelopment). These are not highlighted above; however, we have completed construction to the stage where the building is
"weathered in" and environmentally secure so as to physically protect our investment while we actively market the hospitals for sale
or lease. As of December 31, 2025, we estimate that the cost of additional construction that we believe will be more efficient if
completed in the near-term (such as electing to accelerate completion of a parking structure at one hospital), approximates between
$10 million and $15 million.
Separately, on the Norwood redevelopment, we recovered from our casualty insurers cash in November 2024 that was in excess
of our recovery receivable related to the 2020 storm losses (included in "Other assets" in the consolidated balance sheets), resulting in
a $24 million additional recovery in the 2024 third quarter.
2025 Activity
During 2025, we completed construction, and began recording rental income, on three projects totaling approximately $46.5
million, two of which are leased to Lifepoint Behavioral and the other to Surgery Partners.
2024 Activity
During the fourth quarter of 2024, we completed construction and began recording rental income on an existing general acute
care facility located in Idaho Falls, Idaho for a total amount of approximately $50 million.
During the first quarter of 2024, we completed construction, and began recording rental income, on a $35.4 million behavioral
health facility located in McKinney, Texas, that is leased to Lifepoint Behavioral. We also completed construction and began
recording rental income on a €46 million (approximately $49.0 million) general acute care facility located in Spain that is leased to
IMED.
2023 Activity
89
During 2023, we completed construction and began recording rental income on one inpatient rehabilitation facility located in
Lexington, South Carolina, which commenced rent on July 1, 2023, and another inpatient rehabilitation facility located in Stockton,
California, which commenced rent on May 1, 2023. Both of these facilities are leased to Ernest Health, Inc. ("Ernest") pursuant to an
existing long-term master lease.
Disposals
2025 Activity
During 2025, we completed the sale of nine facilities (including two former Steward-operated facilities that were being leased to
College Health for nominal rent) along with certain ancillary land and facilities for aggregate cash proceeds of approximately $121
million, resulting in a gain on real estate of approximately $5.5 million. For one of the properties sold, we agreed for the tenant to
retain the cash proceeds of approximately $50 million as an incentive to close on a substitute property and keep cash rents the same.
The $50 million lease incentive will be amortized over the remaining 16-year master lease term as a reduction of revenue.
2024 Activity
During 2024, we had the following disposal activities:
•
See Utah Transaction above for a discussion of the five Utah hospitals sold on April 12, 2024.
•
On April 9, 2024, we sold five properties to Prime Healthcare Services, Inc. ("Prime") for total proceeds of approximately
$250 million along with a $100 million interest-bearing mortgage loan (which was fully repaid on August 29, 2024). This
transaction resulted in a gain on real estate of approximately $53 million, partially offset by a non-cash straight-line rent
write-off of approximately $30 million. As part of this sale transaction, we extended the lease maturity of four other
facilities with Prime to 2044. This amended lease has inflation-based escalators, collared between 2% and 4%, and a
purchase option on or prior to August 26, 2028 for a value of $238 million, which is greater than our net book value for
these properties. After August 26, 2028, this option price reverts to $260 million (subject to annual escalations).
•
On July 23, 2024, we sold the 50-bed Arizona General Hospital in Mesa, Arizona and seven freestanding emergency
departments to Dignity Health ("Dignity") for $160 million. This sale resulted in a gain on real estate of approximately
$85 million, partially offset by a non-cash straight-line rent write-off of approximately $20 million.
•
On August 14, 2024, we sold 11 freestanding emergency departments to UCHealth for $86 million. This sale resulted in a
gain on real estate of approximately $40 million, partially offset by a non-cash straight-line rent write-off of
approximately $16 million.
•
As a result of our global settlement with Steward Health Care System ("Steward") as discussed further under "Leasing
Operations (Lessor)" under this same Note 3, we consented to the sale of three facilities located in Florida ("Space Coast"
properties) to Orlando Health, which closed on October 23, 2024. In accordance with the terms of the global settlement,
the Steward bankruptcy estate retained $395 million of the approximately $440 million total proceeds, and we retained the
remaining proceeds and recognized an approximate $2 million gain in the fourth quarter of 2024.
•
In the fourth quarter of 2024, we sold the Watsonville facility resulting in cash proceeds of approximately $40 million and
an approximate $4 million gain.
•
During 2024, we also completed the sale of six other facilities and two ancillary facilities for approximately $14 million.
90
2023 Activity
On March 30, 2023, we entered into a definitive agreement to sell our 11 general acute care facilities located in Australia and
operated by Healthscope Ltd. ("Healthscope") (the "Australia Transaction") to affiliates of HMC Capital for cash proceeds of
approximately A$1.2 billion. As a result, we designated the Australian portfolio as held for sale in the first quarter of 2023 and
recorded approximately $79 million of net impairment charges at that time, which included $37.4 million of straight-line rent
receivable write-offs and approximately $8 million in fees to sell the hospitals, partially offset by approximately $16 million of gains
from our interest rate swap and foreign currency translation amounts in accumulated other comprehensive income that were
reclassified to earnings in 2023 as part of the transaction. This transaction closed in two phases. The first phase closed on May 18,
2023, in which we sold seven of the 11 facilities for A$730 million, and the final phase closed on October 10, 2023, in which we sold
the remaining four facilities for approximately A$470 million.
On March 8, 2023, we received notice that Prime planned to exercise its right to repurchase from us the real estate associated
with one master lease for approximately $100 million. As such, we recorded an approximate $11 million impairment charge in the
first quarter of 2023 related to non-cash rent receivables on the three facilities that were sold on July 11, 2023.
Intangible Assets
At December 31, 2025 and 2024, our intangible lease assets were $0.9 billion ($0.6 billion, net of accumulated amortization)
and $0.8 billion ($0.6 billion, net of accumulated amortization), respectively.
We recorded amortization expense related to intangible lease assets of $30.4 million, $205.6 million (including $170 million for
accelerating the amortization of the in-place lease intangibles associated with two master leases, including the Steward master lease
that was terminated effective September 18, 2024), and $332.5 million (including $286 million for accelerating the amortization of the
in-place lease intangibles related to re-leasing the Utah properties to CommonSpirit as described in this same Note 3), in 2025, 2024,
and 2023, respectively, and expect to recognize amortization expense from existing lease intangible assets as follows (amounts in
thousands):
For the Year Ended December 31:
.....................................................................................................................................................................
2026
$32,165
.....................................................................................................................................................................
2027
31,847
.....................................................................................................................................................................
2028
31,684
.....................................................................................................................................................................
2029
29,840
.....................................................................................................................................................................
2030
29,173
As of December 31, 2025, capitalized lease intangibles have a weighted-average remaining life of 22.7 years.
Leasing Operations (Lessor)
We acquire and develop healthcare facilities and lease the facilities to healthcare operating companies. The initial fixed lease
terms of these infrastructure-type assets are typically at least 15 years, and most include renewal options at the election of our tenants,
generally in five year increments. Over 99% of our leases provide annual rent escalations based on increases in the CPI (or similar
indices outside the U.S.) and/or fixed minimum annual rent escalations. Many of our domestic leases contain purchase options with
pricing set at various terms but in no case less than our total initial investment. Our leases typically require the tenant to handle and
bear most of the costs associated with our properties including repair/maintenance, property taxes, and insurance.
91
The following table summarizes total future contractual minimum lease payments, excluding operating expense
reimbursements, tenant recoveries, and other lease-related adjustments to revenue (i.e., straight-line rents, deferred revenues, or
reserves/write-offs), from tenants under noncancelable leases as of December 31, 2025 (amounts in thousands):
Total Under
Operating Leases
Total Under
Financing Leases
Total
..................................................................................................
2026
$
842,559
$
34,726
$
877,285
..................................................................................................
2027
933,571
35,477
969,048
..................................................................................................
2028
942,705
36,243
978,948
..................................................................................................
2029
946,839
37,025
983,864
..................................................................................................
2030
952,310
37,822
990,132
..........................................................................................
Thereafter
20,829,144
840,542
21,669,686
$
25,447,128
$
1,021,835
$
26,468,963
For all of our properties subject to lease, we are the legal owner of the property and the tenant's right to use and possess such
property is guided by the terms of a lease. At December 31, 2025, we account for all of these leases as operating leases, except where
generally accepted accounting principles (“GAAP”) requires alternative classification, including leases on certain Ernest Health, Inc.
("Ernest") and Prospect facilities that are accounted for as either direct financing or other financing type leases. The components of
our total investment in financing leases consisted of the following (in thousands):
As of December 31, 2025
As of December 31, 2024
...................................................................
Minimum lease payments receivable
$
570,150
$
591,142
...............................................................
Estimated unguaranteed residual values
203,818
203,818
.........................................
Less: Unearned income and allowance for credit loss
(523,746)
(547,770)
.........................................................
Net investment in direct financing leases
250,222
247,190
.....................................
Other financing leases (net of allowance for credit loss)
171,462
810,580
................................................................
Total investment in financing leases
$
421,684
$
1,057,770
The decrease in our investment in financing leases is primarily due to the re-leasing of six California properties formerly
operated by Prospect, with a net book value of approximately $510 million, to NOR Healthcare Systems Corporation ("NOR") as a
result of their successful bid to acquire the hospital operations. These six properties are now accounted for as operating leases as
further discussed in this same Note 3.
Other Leasing Activities
At December 31, 2025, our vacant properties (excluding developments) represent less than 1% of total assets. We are in various
stages of either re-leasing or selling these vacant properties.
Our tenants’ financial performance and resulting ability to satisfy their lease and loan obligations to us are material to our
financial results and our ability to service our debt and make distributions to our stockholders. Our tenants operate in the healthcare
industry, which is highly regulated, and changes in regulation (or delays in enacting regulation) may temporarily impact our tenants’
operations until they are able to make the appropriate adjustments to their business. In addition, our tenants may experience
operational challenges from time-to-time as a result of many factors, including those external to them, such as cybersecurity attacks,
public health crises, economic issues resulting in high inflation and spikes in labor costs, extreme or severe weather and climate-
related events, and adverse market and political conditions. We monitor our tenants' operating results and the potential impact from
these challenges. We may elect to provide support to our tenants from time-to-time in the form of short-term rent deferrals to be paid
back in full, or in the form of temporary loans. See below for an update on some of our tenants.
Steward Health Care System
Steward filed for Chapter 11 bankruptcy on May 6, 2024 with the United States Bankruptcy Court for the Southern District of
Texas. On September 18, 2024, the bankruptcy court approved a global settlement between Steward, its lenders, the unsecured
creditors committee, and the Company. The order provided for the following: a) termination of our master lease with Steward; b) the
release of claims against 23 of our properties allowing us to begin the process of re-tenanting these properties; and c) a full release of
claims against us from all parties. In return, we consented to the sale of the operations and our real estate in three facilities in the
Space Coast region of Florida (as discussed earlier), along with a full release of our claims in Steward including claims to past due
rent and interest, outstanding loans, and our equity investment.
92
In regard to our real estate partnership with Macquarie that owned and leased eight properties in Massachusetts to Steward, the
bankruptcy court approved the termination of the master lease with Steward during the 2024 third quarter. We and Macquarie entered
into an agreement with the mortgage lender of the joint venture to transition the eight properties to them along with cash proceeds of
approximately $40 million (representing our share), in return for full payment of the underlying mortgage debt and a release of claims
against each party.
With this global settlement and termination of the joint venture master lease, our relationship with Steward effectively ended.
Impairment Charges
Due to the events discussed above, we recorded various impairment charges during 2024 and 2023, which included the
following (in millions):
For the Years Ended December 31,
Description
2024
2023
Income Statement
Classification
.........................................................
Reserve for unpaid rent and interest and straight-line
rent receivables
$
—
$
413
Total revenues
.............................
Working capital and other loans(1)
787
—
Real estate and other
impairment charges, net
...............
Investment in Massachusetts partnership(2)
445
30
Earnings (loss) from
equity interests
...............................................................
Real estate(2)
277
100
Real estate and other
impairment charges, net
...................................
Equity investment and other(1)
54
171
Real estate and other
impairment charges, net
...........................................................................
Total
$
1,563
$
714
(1)
For our non-real estate investments in Steward, we compared our carrying value of all such investments to the fair value
of the underlying collateral, which had no value after the global settlement and our release of claims against Steward as
discussed above.
(2)
The three Space Coast properties and certain excess properties previously leased to Steward were deemed held for sale in
the 2024 third quarter. We recognized a real estate impairment charge of approximately $180 million to adjust our net
book value to align with fair value less cost to sell based on expected proceeds, including from a binding agreement for
the Space Coast properties. For the other real estate held for use, we made a comparison of the projected undiscounted
future cash flows with the net book value of each asset. For those properties where the carrying value was deemed not
recoverable, we recorded an impairment charge to reduce the carrying value to its estimated fair value. For the real estate
in the Massachusetts partnership, there was no fair value as we transitioned those properties to the mortgage lender to
satisfy the mortgage debt. For the remaining properties (less than 10 in total in 2024 and 2023), we, along with assistance
from a third-party, independent valuation firm, estimated fair value using a combination of cost, market, and income
approaches using Level 3 inputs. The cost approach used comparable sales to value the land and cost manuals to value the
improvements. The value derived from the market approach was based on sale prices of similar properties. For the income
approach, we divided the expected operating income (rent revenue less expenses, if any) from the property by a market
capitalization rate (range from 8% to 10%).
In addition with the lease termination discussed above, we fully amortized the related in-place lease intangibles resulting in
$149 million of amortization expense in 2024 as reflected in the real estate depreciation and amortization line of our consolidated
statements of net income.
Re-tenanting Activity
Subsequent to the release of claims on the 23 properties as part of the global settlement, we reached definitive agreements with
six operators (Healthcare Systems of America, Honor Health, Insight Health ("Insight"), Quorum, College Health, and Tenor Health
("Tenor")) to lease 18 of these facilities. These leases included a rent ramp up period. In the 2025 first quarter, cash rents received
from these operators were approximately $3.4 million, ramping up to $11 million in the 2025 second quarter, approximately $12
million in the 2025 third quarter, and $26.1 million in the 2025 fourth quarter. Based on these lease contracts (adjusted for the sale of
the two properties to College Health in 2025), rent payments are to increase to approximately 79% of contractual rent by second
quarter 2026, and 100% of contractual rent starting October 2026. As of December 31, 2025, all of these new operators have paid the
rent due under their respective leases, except for cash-basis tenants Insight/Tenor who represent less than 1% of our annual revenues.
As of December 31, 2025, we have provided approximately $140 million in working capital related loans to these operators to
assist in the takeover of these operations and the transition of certain services (such as revenue cycle management). These loans are
93
generally secured by accounts receivables and/or other assets (like personal property). Our maximum loss exposure to these tenants at
December 31, 2025 is the loan carrying value along with up to $30 million, which reflects the remaining amount available under the
loans.
The remaining five former Steward properties (with a net book value of approximately 4% of our total assets), including two
developments (see "Development and Capital Addition Activities" above), are in various stages of being re-tenanted or sold.
Other Activity
During 2024, we received and recorded rent and interest revenue from Steward of $40 million for the year ended December 31,
2024. In addition, we were benefited from rent paid by Steward to the Massachusetts joint venture of $76 million ($38 million
representing our share) for the year ended December 31, 2024.
Prospect
In August 2019, we invested in a portfolio of 14 acute care hospitals in three states (California, Pennsylvania, and Connecticut)
operated by and master leased to or mortgaged by Prospect Medical Holdings, Inc. ("Prospect") for a combined investment of
approximately $1.6 billion.
On May 23, 2023, Prospect completed a recapitalization plan, which included receiving $375 million in new financing from
several lenders. Along with this new capital from third-party lenders, we agreed to the following restructuring of our then $1.7 billion
investment including: a) maintaining the master lease covering six California hospitals without any changes in rental rates or escalator
provisions, b) transitioning the Pennsylvania properties back to Prospect in return for a $150 million first lien mortgage, c) providing
up to $75 million in a loan secured by a first lien on Prospect's accounts receivable and certain other assets, and d) obtaining a non-
controlling ownership interest in PHP Holdings in exchange for unpaid rent and interest, among other things.
Prospect filed for Chapter 11 bankruptcy on January 11, 2025 with the United States Bankruptcy Court for the Northern District
of Texas. On March 20, 2025, the bankruptcy court approved a global settlement (including a recovery waterfall) between us,
Prospect, and other stakeholders. Due to the bankruptcy, we recorded more than $400 million of impairment charges and negative fair
value adjustments associated with our investments in Prospect in the 2024 fourth quarter, resulting in a full reserve of the asset-backed
loan and our Pennsylvania mortgage loan, along with a decrease in the value in our Connecticut properties. No charge was recorded
on our California properties. In determining the impairment charges needed for these investments, we compared the carrying value of
each investment to the fair value of the underlying collateral less costs to sell and factored in the priority of claims associated with the
bankruptcy. In estimating the fair value of real estate, we, along with assistance from a third-party independent valuation firm, used a
combination of cost, market, and income approaches using Level 3 inputs. The cost approach used comparable sales to value the land
and cost manuals to value the improvements. The value derived from the market approach was based on sales prices of similar
properties. For the income approach, we divided the expected operating income from the property by an estimated market
capitalization rate (ranging from 8.25% to 8.5%).
In 2025 and in accordance with the global settlement and the estimated recovery waterfall, we recorded approximately $140
million of additional impairment charges. In determining the 2025 impairment charges, we compared the carrying value of our
investments to our current estimate of expected proceeds (net of any possible future cash outlays) to be received under the bankruptcy
court approved recovery waterfall, factoring in an estimated recovery of Prospect assets (including our real estate assets as applicable)
and applying the priority of claims associated with the bankruptcy. In estimating the fair value of the California, Pennsylvania, and
Connecticut real estate, we applied the same approach as discussed above for the 2024 impairment charges, except we used bids
received for valuing the Pennsylvania and Connecticut properties in the third and fourth quarters of 2025.
At December 31, 2025, our investment in Prospect is approximately $61 million with recoveries limited to collection of
Connecticut accounts receivable and minor proceeds from remaining asset sales. Prospect's bankruptcy proceedings are continuing,
and the ultimate outcome of such proceedings is uncertain. At this time, we cannot assure you that we will be able to recover our
remaining investment in full as of December 31, 2025.
Possible Additional Funding
In 2025, the bankruptcy court approved an order for up to $70 million in additional advances which we may be required to fund.
This possible loan advance is conditioned on other events occurring including the sale of the last Connecticut facility and the
bankruptcy plan becoming effective. Any funds advanced are expected to be secured by recoveries, if any, from causes of action
owned by the debtor. At this time, we cannot predict with full certainty as to the amount or timing of such recoveries from these
causes of action.
Re-tenanting Activity
94
In December 2025, we re-leased the six California properties to NOR as a result of their successful bid to acquire the hospital
operations. Terms of the lease include an initial annualized rent almost identical to the previous rent amount due from Prospect in
2025, annual inflation-based escalators starting in the 2027 first quarter, and an initial fixed term of 15 years. All rent is to be deferred
for six months, and 50% of rent is to be deferred for an additional six months, after which the aggregate deferred rent will be paid over
the remaining lease term. We have committed to fund up to $60 million in seismic improvements that may be required by California
regulators over the next four years, which will increase the lease base and result in additional rent.
PHP Investment
In regard to our investment in PHP Holdings, we accounted for this investment using the fair value option method. Each
quarter, we marked such investment to fair value as more fully described in Note 10 to the consolidated financial statements. In 2025,
we recorded an approximate $147 million negative fair value adjustment, whereas this adjustment was approximately $550 million in
2024. The adjustment in 2025 was made based on changes to the purchase agreement between PHP Holdings and Astrana Health and
updates to PHP Holdings' working capital position. On July 1, 2025, we received $2.3 million from the sale of PHP Holdings to
Astrana Health.
International Joint Venture
We placed our loan to the international joint venture on the cash basis of accounting in 2023, as we determined that it was no
longer probable that the borrower would pay its future interest in full. This loan, accounted for under the fair value option method, was
collateralized by the equity of Steward held by an investor in both Steward and the international joint venture. Consistent with the
discussion above on non-real estate investments in Steward, we recorded a $225 million unfavorable fair value adjustment in the 2024
first quarter to fully reserve for the loan and related equity investment. These investments, which are included in “Investments in
unconsolidated operating entities” on our consolidated balance sheets, were adjusted for after comparing our carrying value to an
updated fair value analysis of the underlying collateral, with assistance from a third-party, independent valuation firm.
CommonSpirit
On May 1, 2023, Catholic Health Initiatives Colorado ("CHIC"), a wholly owned subsidiary of CommonSpirit, acquired the
Utah hospital operations of five general acute care facilities previously operated by Steward. The new lease, at the time, for these Utah
assets had an initial fixed term of 15 years with annual escalation provisions. As part of this transaction, we severed these facilities
from the master lease with Steward, and accordingly accelerated the amortization of the associated in-place lease intangibles
(approximately $286 million) and wrote-off approximately $95 million of straight-line rent receivables related to the former lease. As
described earlier, these five properties make up the Utah Transaction.
Vibra
In the 2023 third quarter, we moved to cash basis of accounting for Vibra due to declines in operating results. As a result, we
recorded a $49 million charge to reserve billed and straight-line rent receivables. During the 2024 third quarter, we terminated the
lease with this tenant, resulting in the acceleration of lease intangible amortization of $22 million. On December 31, 2024, we entered
into a forbearance and restructuring agreement with the former tenant, which was later amended. The substantive terms of the
forbearance and restructuring agreement included, among other things, the repayment of $10 million of unpaid rent in cash, which we
received on December 31, 2024 and recognized as revenue; Vibra's acquisition of certain of our facilities, one of which closed in early
January 2025 for approximately $3 million (and we received payment in full); and entering into a new lease agreement.
In the 2025 fourth quarter, we completed the restructuring of our relationship with Vibra including entering into a new 20-year
master lease agreement with annual inflation escalators covering several properties; the acquisition by us of one post-acute property
for $32 million that was joined to the master lease with Vibra; the transition of one post-acute property with a net book value of
approximately $53 million to a new tenant (joint venture with Select Medical) that is subject to a 20-year master lease agreement with
annual inflation escalators; the cash receipt of approximately $18 million for past rent obligations that we recognized as revenue; and
the sale of one post-acute property to Vibra for $12 million at a small gain in February 2026, proceeds of which we had previously
received in advance of such sale. We are continuing to account for revenue associated from Vibra on a cash basis at this time.
Investments in Unconsolidated Entities
Investments in Unconsolidated Real Estate Joint Ventures
Our primary business strategy is to acquire real estate and lease to providers of healthcare services. Typically, we directly own
100% of such investments. However, from time-to-time, we will co-invest with other investors that share a similar view that hospital
95
real estate is a necessary infrastructure-type asset in communities. In these types of investments, we will own undivided interests of
less than 100% of the real estate through unconsolidated real estate joint ventures. The underlying real estate and leases in these
unconsolidated real estate joint ventures are generally structured similarly and carry a similar risk profile to the rest of our real estate
portfolio.
The following is a summary of our investments in unconsolidated real estate joint ventures by operator (amounts in thousands):
Operator
Ownership Percentage
As of December 31,
2025
As of December 31,
2024
..................................................................
Swiss Medical Network
70%
$
611,347
$
483,770
........................................................................................
MEDIAN
50%
486,695
431,964
..................................................
CommonSpirit (Utah partnership)
25%
162,278
113,202
.......................................................................
Policlinico di Monza
50%
86,091
77,592
................................................................................
HM Hospitales
45%
53,366
49,869
..............................................................................................
Total
$
1,399,777
$
1,156,397
The increase in the Swiss Medical Network real estate joint venture is due to the new investment made in 2025 as described
earlier in this same Note 3 along with the impact from foreign currency changes.
For our unconsolidated real estate joint venture that leases more than 70 healthcare facilities to MEDIAN, we, along with our
joint venture partner, finalized a refinancing of the €655 million secured debt on June 17, 2025, that was due on June 30, 2025. The
new €702.5 million non-recourse, 10-year non-amortizing secured debt has an approximately 5.1% fixed rate, and the majority of the
proceeds were used to fund the repayment of the prior €655 million secured loan that carried a lower rate. In the 2025 third quarter,
Germany enacted legislation that will reduce future income tax rates by 5%, which resulted in a $13 million (our share) deferred
income tax benefit in the period.
The Utah partnership applies specialized accounting and reporting for investment companies under Topic 946, which measures
the underlying investments at fair value. For the year ended December 31, 2025, our share of the Utah partnership's income included a
favorable fair value adjustment of approximately $49 million, primarily related to an unrealized gain on investments in real estate.
For 2025 and 2024, we received $62 million and $45 million, respectively, in dividends from these real estate joint ventures.
The following tables present summary financial information on a combined basis for our investments in unconsolidated real
estate joint ventures (amounts in thousands):
For the Year Ended December 31,
2025
2024
2023
.................
Revenue
$
357,823
$
348,404
$
315,108
..
Net income (loss)
$
313,593
$
(739,393)
$
14,701
As of December 31,
2025
2024
.................................
Assets
$
5,614,938
$
4,872,918
...........................
Liabilities
$
2,831,599
$
2,599,078
The summary above by year reflects the financial information of all five of our current investments, except for the Utah
Partnership that was formed in April 2024 with reporting starting in the 2024 third quarter. In addition, we have included financial
information for the Macquarie partnership in 2023 and through the 2024 second quarter - see discussion under "Leasing Operations
(Lessor)" in this same Note 3 for more details on this investment and its conclusion.
Investments in Unconsolidated Operating Entities
Our investments in unconsolidated operating entities are noncontrolling investments that are typically made in conjunction with
larger real estate transactions in which the operators are vetted as part of our overall underwriting process. In many cases, we would
96
not be able to acquire the larger real estate portfolio without such investments in operators. These investments also offer the
opportunity to enhance our overall return and provide for certain minority rights and protections.
The following is a summary of our investments in unconsolidated operating entities (amounts in thousands):
Operator
As of December 31,
2025
As of December 31,
2024
................................................................................................
Swiss Medical Network
$
197,497
$
172,453
........................................................................................
Aevis Victoria SA ("Aevis")
64,859
63,409
............................................................................................................................
Priory
43,913
38,739
...........................................................................
Aspris Children's Services ("Aspris")
15,910
15,950
...............................................................................................................
PHP Holdings
—
149,027
............................................................................................................................
Total
$
322,179
$
439,578
For our investments marked to fair value (including our investments in PHP Holdings (through the 2025 third quarter), Aevis,
and the international joint venture), we recorded approximately $154 million of unfavorable non-cash fair value adjustments during
2025; whereas, this was an approximately $794 million of unfavorable non-cash fair value adjustments during 2024. The amount
recorded in 2025 and included in "Other (including fair value adjustments on securities)" line of our consolidated statements of net
income was primarily related to our investment in PHP Holdings, which was sold on July 1, 2025. The amount recorded in 2024
includes an approximate $550 million unfavorable fair market value adjustment to our investment in PHP Holdings - see "Prospect"
subheading of this Note 3 for more information. In addition, we recorded a $225 million unfavorable fair value adjustment in the 2024
first quarter related to our international joint venture investments as described in Note 3 and included in the "Real estate and other
impairment charges, net" line of the consolidated statements of net income.
In the first quarter of 2024, we sold our interest in the Priory syndicated term loan for £90 million (approximately $115 million),
resulting in an approximate £6 million ($7.8 million) economic loss.
Other Investment Activities
In the third quarter of 2023, we invested approximately $105 million for a participation in Steward's syndicated asset-backed
credit facility, and we loaned an additional $40 million. On August 17, 2023, we sold the $105 million interest to a global asset
manager for approximately $100 million, and Steward paid approximately $2 million on November 3, 2023. The remainder was
written off as part of the loan impairment charge in 2024 as discussed in the "Leasing Operations (Lessor)" section of this same Note
3.
In the second quarter of 2023, we received repayment of the CHF 60 million mortgage loan from Infracore that was originally
made in the fourth quarter of 2022.
Concentrations of Credit Risks
We monitor concentration risk in several ways due to the nature of our real estate assets that are vital to the communities in
which they are located and given our history of being able to replace inefficient operators of our facilities, if needed, with more
effective operators. See below for our concentration details (dollars in thousands):
Total Assets by Operator
As of December 31, 2025
As of December 31, 2024
Operators
Total Assets (1)
Percentage of
Total Assets
Total Assets (1)
Percentage of
Total Assets
.......................................................................
Circle
$
2,121,848
14.1%
$
2,026,778
14.2%
.......................................................................
Priory
1,301,888
8.7%
1,233,462
8.6%
..............................
Healthcare Systems of America
1,200,996
8.0%
1,187,006
8.3%
...........................................
Swiss Medical Network
873,703
5.8%
719,632
5.1%
................................................
Lifepoint Behavioral
809,492
5.4%
813,584
5.7%
........................................................
Other operators
6,688,287
44.6%
6,624,256
46.3%
..............................................................
Other assets
2,005,561
13.4%
1,689,876
11.8%
.....................................................................
Total
$
15,001,775
100.0%
$
14,294,594
100.0%
(1)
Total assets by operator are generally comprised of real estate assets, mortgage loans, investments in unconsolidated real
estate joint ventures, investments in unconsolidated operating entities, and other loans.
97
Total Assets by U.S. State and Country (1)
As of December 31, 2025
As of December 31, 2024
U.S. States and Other Countries
Total Assets
Percentage of
Total Assets
Total Assets
Percentage of
Total Assets
...........................................................................
Texas
$
1,427,391
9.5%
$
1,394,296
9.8%
.....................................................................
California
977,890
6.5%
935,470
6.4%
.........................................................................
Florida
834,940
5.6%
840,876
5.9%
.............................................................................
Ohio
330,189
2.2%
327,577
2.3%
........................................................................
Arizona
328,873
2.2%
379,801
2.7%
.............................................................
All other states
2,480,182
16.5%
2,636,587
18.5%
..................................................
Other domestic assets
1,072,900
7.2%
951,486
6.6%
..................................................................
Total U.S.
$
7,452,365
49.7%
$
7,466,093
52.2%
..........................................................
United Kingdom
$
4,184,188
27.9%
$
3,985,672
27.9%
..................................................................
Switzerland
873,703
5.8%
719,632
5.0%
......................................................................
Germany
751,806
5.0%
672,343
4.7%
............................................................................
Spain
302,323
2.0%
247,996
1.7%
.........................................................................
Finland
220,813
1.5%
199,721
1.4%
.......................................................
All other countries
283,916
1.9%
264,747
1.9%
............................................
Other international assets
932,661
6.2%
738,390
5.2%
.....................................................
Total international
$
7,549,410
50.3%
$
6,828,501
47.8%
...............................................................
Grand total
$
15,001,775
100.0%
$
14,294,594
100.0%
Total Assets by Facility Type (1)
As of December 31, 2025
As of December 31, 2024
Facility Types
Total Assets
Percentage of
Total Assets
Total Assets
Percentage of
Total Assets
............................................
General acute care hospitals
$
8,769,909
58.5%
$
8,493,331
59.4%
..............................................
Behavioral health facilities
2,445,418
16.3%
2,376,460
16.7%
..................................................
Post acute care facilities
1,671,616
11.1%
1,617,596
11.3%
............................
Freestanding ER/urgent care facilities
109,271
0.7%
117,331
0.8%
.....................................................................
Other assets
2,005,561
13.4%
1,689,876
11.8%
............................................................................
Total
$
15,001,775
100.0%
$
14,294,594
100.0%
(1)
For geographic and facility type concentration metrics in the tables above, we allocate our investments in unconsolidated
operating entities pro rata based on the gross book value of the real estate. Such pro rata allocations are subject to change
from period to period.
On an individual property basis, our largest investment in any single property was less than 2% of our total assets as of
December 31, 2025.
On a revenue basis, concentration for the year ended December 31, 2025 as compared to the two prior years is as follows:
The following shows those tenants that represented 10% or more of our total revenues by year (in thousands):
2025
Operator
Total Revenues
Percentage of
Total Revenues
.................................................................
Circle
$
212,719
21.9%
.................................................................
Priory
105,986
10.9%
2024
Operator
Total Revenues
Percentage of
Total Revenues
.................................................................
Circle
$
205,582
20.7%
.................................................................
Priory
101,675
10.2%
98
2023
Operator
Total Revenues
Percentage of
Total Revenues
.................................................................
Circle
$
194,390
22.3%
.................................................................
Priory
107,557
12.3%
Total Revenues by Geographic Location
For the Years Ended December 31,
2025
2024
2023
Geographic Location
Total
Revenues
Percentage of
Total
Revenues
Total
Revenues
Percentage of
Total
Revenues
Total
Revenues
Percentage of
Total
Revenues
............................................
Total U.S.
$
517,878
53.3%
$
561,673
56.4%
$
407,329
46.7%
..................................
United Kingdom
373,279
38.4%
359,991
36.2%
352,594
40.4%
...............................
All other countries
80,865
8.3%
73,883
7.4%
111,876
12.9%
......................................
Grand total
$
972,022
100.0%
$
995,547
100.0%
$
871,799
100.0%
Total Revenues by Facility Type
For the Years Ended December 31,
2025
2024
2023
Facility Types
Total Revenues
Percentage of
Total Revenues
Total Revenues
Percentage of
Total Revenues
Total Revenues
Percentage of
Total Revenues
...
General acute care hospitals
$
586,648
60.3% $
628,622
63.1% $
541,888
62.2%
.....
Behavioral health facilities
214,437
22.1%
209,668
21.1%
213,292
24.5%
.........
Post acute care facilities
162,954
16.8%
139,859
14.0%
92,787
10.6%
...............................
Freestanding ER/urgent care
facilities
7,983
0.8%
17,398
1.8%
23,832
2.7%
......................................
Total
$
972,022
100.0% $
995,547
100.0% $
871,799
100.0%
Related Party Transactions
Revenues earned from tenants and real estate joint ventures in which we had an equity interest (accounted for under either the
equity or fair value option methods) during the year were $23.7 million, $33.9 million, and $83.0 million for 2025, 2024, and 2023,
respectively.
99
4. Debt
The following is a summary of debt (dollar amounts in thousands):
As of December 31,
2025
As of December 31,
2024
................................................................................
Secured revolving credit facility(A)
$
638,063
$
361,726
............................................................................................................
Secured term loan
200,000
200,000
.................................................................
British pound sterling term loan due 2025(B)
—
617,039
....................................................
British pound sterling secured term loan due 2034(B)
850,784
790,234
................................................................
3.325% Senior Unsecured Notes due 2025(B)
—
517,700
................................................................
0.993% Senior Unsecured Notes due 2026(B)
587,300
517,700
................................................................
2.500% Senior Unsecured Notes due 2026(B)
—
625,800
......................................................................
5.250% Senior Unsecured Notes due 2026
—
500,000
......................................................................
5.000% Senior Unsecured Notes due 2027
1,400,000
1,400,000
................................................................
3.692% Senior Unsecured Notes due 2028(B)
808,500
750,960
......................................................................
4.625% Senior Unsecured Notes due 2029
900,000
900,000
................................................................
3.375% Senior Unsecured Notes due 2030(B)
471,625
438,060
......................................................................
3.500% Senior Unsecured Notes due 2031
1,300,000
1,300,000
....................................................................
7.000% Senior Secured Notes due 2032(B)
1,174,600
—
..........................................................................
8.500% Senior Secured Notes due 2032
1,500,000
—
$
9,830,872
$
8,919,219
....................................................................................
Debt issue costs and discount, net
(133,037)
(71,107)
$
9,697,835
$
8,848,112
(A)
Includes €100 million and €303 million of Euro-denominated borrowings and CHF 52 million and CHF - million of Swiss
franc-denominated borrowings that reflect the applicable exchange rates at December 31, 2025 and December 31, 2024,
respectively.
(B)
Non-U.S. dollar denominated debt that reflects the exchange rates at period-end.
As of December 31, 2025, principal payments due on our debt (which exclude the effects of any discounts, premiums, or debt
issue costs recorded) are as follows (amounts in thousands):
............................................................................................................................................
2026
$
1,225,363 (1)
............................................................................................................................................
2027
1,600,000
............................................................................................................................................
2028
808,500
............................................................................................................................................
2029
900,000
............................................................................................................................................
2030
471,625
....................................................................................................................................
Thereafter
4,825,384
..........................................................................................................................................
Total
$
9,830,872
(1)
$638 million (of which approximately $200 million was repaid in January 2026) represents the outstanding balance of the
revolving portion of our credit facility for which we have provided notice of our intent to extend to 2027 - see "Credit
Facility" subheading for further details.
2025 Activity
British Pound Sterling Term Loan due 2025
On January 15, 2025, we paid off the remaining £493 million balance of our British pound sterling term loan due 2025. With
this payoff, we also terminated the sterling-denominated term loan interest rate swap.
100
Senior Secured Notes due 2032
On February 13, 2025, we closed on a private offering that consisted of $1.5 billion aggregate principal amount of senior
secured notes due 2032 (the "USD Notes") and €1.0 billion aggregate principal amount of senior secured notes due 2032 (the "Euro
Notes"). See section titled "Senior Notes" for a description of interest rates and maturity for both notes. We may redeem some or all of
the notes at any time prior to February 15, 2028, at a redemption price equal to 100% of the principal amount, plus an applicable
“make whole” premium and accrued and unpaid interest. On or after February 15, 2028, we may redeem some or all of the notes at a
premium that will decrease over time. In addition, at any time prior to February 15, 2028, we may redeem up to 40% of the notes at a
redemption price equal to 108.500% and 107.000% for the USD Notes and Euro Notes, respectively, of the aggregate principal
amount thereof, plus accrued and unpaid interest thereon, using proceeds from one or more equity offerings.
We used the net proceeds from the notes to fund the early redemption of our 3.325% Senior Unsecured Notes due 2025, 2.500%
Senior Unsecured Notes due 2026, and 5.250% Senior Unsecured Notes due 2026. We used the remaining net proceeds to pay down
the revolving portion of our Credit Facility.
2024 Activity
During 2024, we closed on a term loan with an aggregate principal amount of approximately £631 million (approximately $800
million) secured by a portfolio of properties in the U.K. We used the majority of the net proceeds of the facility to pay down our
revolving credit facility by $375 million and British pound sterling term loan due 2025 by £105 million, and to pay off our British
pound sterling secured term loan due 2024 (approximately £105 million). During the year, we also paid down an additional $756
million on our revolving credit facility and £102 million on our British pound sterling term loan due 2025 with cash proceeds from
asset sales. In addition, on April 18, 2024, we paid off and terminated the remainder of the A$470 million (approximately $306
million) Australian term loan facility with proceeds from the Utah Transaction described in Note 3.
2023 Activity
During 2023, we paid down, prior to maturity, A$730 million (approximately $475 million) of the A$1.2 billion Australian term
loan with proceeds from the Australia Transaction as discussed in Note 3. In addition, we purchased approximately £50 million of our
2.550% Senior Unsecured Notes due 2023 at a discounted price and yield averaging approximately 13%. As a result of this
prepayment, we realized an approximate $1.1 million gain. On December 5, 2023, we fully paid off the remaining £350 million
balance of our 2.550% Senior Unsecured Notes due 2023 with cash on-hand and proceeds from the revolving portion of our credit
facility.
Credit Facility
We have a multi-currency denominated revolver and a $200 million term loan that make up our Credit Facility (the "Credit
Facility"). Our maximum borrowings under the revolving portion of the Credit Facility is $1.28 billion.
2025 Activity
At December 31, 2025 and 2024, we had $0.6 billion and $0.4 billion outstanding on the revolving portion of our Credit
Facility, respectively. At December 31, 2025 and 2024, our availability under our revolver was $0.7 billion and $0.9 billion,
respectively. The weighted-average interest rate on the revolver was 5.5% and 6.6% during 2025 and 2024, respectively.
At December 31, 2025 and 2024, the interest rate in effect on our term loan was 6.1% and 7.5%, respectively.
On February 13, 2025 and concurrent with the closing of the Senior Secured Notes due 2032 discussed above, we amended the
Credit Facility to among other things: (i) provide for the facility to be secured and guaranteed ratably with the senior notes issued
concurrently, (ii) provide notice that we plan to exercise both of our maturity extension options such that the maturity of the revolving
portion would move from June 30, 2026 to June 30, 2027, the same maturity date as our term loan facility (subject to the satisfaction
of other conditions), (iii) reset the interest rate to the Secured Overnight Financing Rate ("SOFR") plus 225 basis points (which had
previously been moved to SOFR plus 300 basis points in August 2024), and (iv) amend certain covenants as described under
"Covenants and Restrictions" in this same Note 4.
In regard to the maturity of the revolving portion of our Credit Facility, we have two 6-month extension options available to
move the maturity from June 30, 2026 to June 30, 2027. Although the extension options are at our election (and as noted above, we
have given notice of our intention to exercise both extension options), there are certain conditions that must be satisfied, with the
primary condition of not being in default at the time of each extension option date (and believe we will meet all conditions to do so).
2024 Activity
Prior to the 2024 amendments described below and at our election, loans were made as either alternate base rate loans ("ABR
Loans") or loans for an interest period of either one, three, or six months ("Term Benchmark Loans"). The applicable margin for term
101
loans that were ABR Loans was adjustable on a sliding scale from 0.00% to 0.70% based on current credit rating. The applicable
margin for term loans that were Term Benchmark Loans was adjustable on a sliding scale from 0.875% to 1.70% based on current
credit rating. The applicable margin for revolving loans that were ABR Loans was adjustable on a sliding scale from 0.00% to 0.50%
based on current credit rating. The applicable margin for revolving loans that were Term Benchmark Loans or risk-free rate loans
("RFR Loans"), as defined in the Credit Facility agreement, was adjustable on a sliding scale from 0.80% to 1.50% based on current
credit rating. The facility fee was adjustable on a sliding scale from 0.125% to 0.30% based on current credit rating and was payable
on the revolving loan facility. During 2023, our credit rating negatively changed, resulting in adjustments to the applicable margin by
0.375% and an increase to the facility fee from 0.25% to 0.30%.
On April 12, 2024, we amended our Credit Facility and certain other agreements to (i) reduce revolving commitments from $1.8
billion to $1.4 billion, (ii) apply certain proceeds from asset sales and debt transactions to repay the Australian term loan facility and
certain other outstanding obligations, including revolving loans under the Credit Facility to the extent necessary to reduce the
outstanding borrowings to no more than the amended $1.4 billion commitment, and (iii) amend or waive certain covenants to our
Credit Facility and British pound sterling term loan due 2025 as described under "Covenants and Restrictions" in this same Note 4.
On August 6, 2024, we amended the Credit Facility and the British pound sterling term loan due 2025 to (i) further reduce
revolving commitments in the Credit Facility from $1.4 billion to $1.28 billion, (ii) increase borrowing spreads to 300 basis points
during the Modified Covenant Period (defined in "Covenants" section in this same Note 4) and then to 225 basis points after the
Modified Covenant Period, (iii) require that proceeds of certain future asset sales and debt transactions (during the Modified Covenant
Period) be applied to repay certain outstanding obligations, including our revolving loans (by 15% of such proceeds but for which the
revolving loans can be reborrowed) and our British pound sterling term loan due 2025 (by 50% of such proceeds), and (iv) amend or
waive certain covenants as described under "Covenants and Restrictions" in this same Note 4.
Non-U.S. Term Loans
British Pound Sterling Secured Term Loan due 2034
On May 24, 2024, we completed a secured loan facility with a consortium of institutional investors that provides for a term loan
in aggregate principal amount of approximately £631 million (approximately $800 million) secured by a portfolio of 27 properties
located in the U.K. currently leased to affiliates of Circle. The facility carries a fixed rate of 6.877% over its 10-year term, excluding
fees and expenses, and is interest-only (payable quarterly in advance) through the maturity date. The facility is secured by first priority
mortgages or similar security instruments on the relevant properties, including assignments of rents and security over accounts, and is
non-recourse to us.
British Pound Sterling Term Loan due 2025
On January 6, 2020, we entered into a £700 million unsecured sterling-denominated term loan with Bank of America, N.A., as
administrative agent, and several lenders from time-to-time are parties thereto. The applicable margin under the term loan was
adjustable based on a pricing grid from 0.85% to 1.65% dependent on our credit rating. On March 4, 2020, we entered into an interest
rate swap transaction (effective March 6, 2020) to fix the interest rate to approximately 0.70% for the duration of the loan. The
applicable margin for the pricing grid (which varied based on our credit rating) increased from 1.25% to 1.65% on March 10, 2023
with the change in our credit rating, for an all-in fixed rate at December 31, 2023 of 2.349%. With the August 6, 2024 amendment
discussed above, our all-in fixed rate increased to 3.70%.
As noted earlier, we paid down the British pound sterling secured term loan due 2025 by £207 million in 2024 with proceeds
from the British pound sterling secured term due 2034 and asset sales. The balance of this loan of £493 million was paid in full on
January 15, 2025.
102
Senior Notes
The following are the basic terms of our senior notes at December 31, 2025 (par value amounts in thousands):
Offering
Completion Date
Maturity Date
Par Value
% of Par
Value
Interest Payment
Frequency
.
0.993% Senior Unsecured Notes due 2026
October 6, 2021
October 15, 2026
€
500,000
100.000%
Annually
.
5.000% Senior Unsecured Notes due 2027
September 21, 2017
October 15, 2027
$ 1,400,000
100.000%
Semi-annually
.
3.692% Senior Unsecured Notes due 2028
December 5, 2019
June 5, 2028
£
600,000
99.998%
Annually
.
4.625% Senior Unsecured Notes due 2029
July 26, 2019
August 1, 2029
$
900,000
99.500%
Semi-annually
.
3.375% Senior Unsecured Notes due 2030
March 24, 2021
April 24, 2030
£
350,000
99.448%
Annually
.
3.500% Senior Unsecured Notes due 2031
December 4, 2020
March 15, 2031
$ 1,300,000
100.000%
Semi-annually
.....
7.000% Senior Secured Notes due 2032
February 13, 2025
February 15, 2032 € 1,000,000
98.645%
Semi-annually
.....
8.500% Senior Secured Notes due 2032
February 13, 2025
February 15, 2032 $ 1,500,000
98.710%
Semi-annually
We may repurchase, redeem, or refinance senior notes from time-to-time. We may purchase senior notes for cash through open
market purchases, privately negotiated transactions, or a tender offer. In some cases, we may redeem some or all of the notes at any
time, but may require a redemption premium that will decrease over time. In the event of a change of control, each holder of the notes
may require us to repurchase some or all of our notes at a repurchase price equal to 101% of the aggregate principal amount of the
notes plus accrued and unpaid interest to the date of purchase. Redemptions and repurchases of debt, if any, will depend on prevailing
market conditions, our liquidity requirements, contractual restrictions, and other factors.
In regard to the 0.993% Senior Unsecured Notes due 2026, management plans to repay these notes in full closer to the maturity
date using a combination of available cash and borrowings under the revolving portion of our Credit Facility.
Debt Refinancing and Unutilized Financing Costs (Benefit)
2025 Activity
In 2025, we incurred $3.6 million of debt refinancing and unutilized financing costs. These costs were incurred primarily as a
result of the early redemption of our 3.325% Senior Unsecured Notes due 2025, 2.500% Senior Unsecured Notes due 2026, and
5.250% Senior Unsecured Notes due 2026.
2024 Activity
In 2024, we incurred $4.3 million of debt refinancing and unutilized financing costs. These costs were incurred primarily as a
result of the reduction in revolving commitments under our Credit Facility and partial paydowns of our British pound sterling term
loan due 2025.
2023 Activity
As a result of the early redemption of a portion of the Australian term loan, we incurred approximately $0.8 million to accelerate
the amortization of related debt issue costs in 2023. This charge was more than offset by the $1.1 million gain realized on the purchase
of approximately £50 million of our 2.550% Senior Unsecured Notes due 2023 at a discount in 2023.
Covenants and Restrictions
Our debt facilities impose certain restrictions on us, including, but not limited to, restrictions on our ability to: incur debts;
create or incur liens; provide guarantees in respect of obligations of any other entity; make redemptions and repurchases of our capital
stock; prepay, redeem, or repurchase debt; engage in mergers or consolidations; enter into affiliated transactions; dispose of real estate
or other assets; and change our business. In addition, the credit agreement governing our Credit Facility limits the amount of dividends
we can pay as a percentage of normalized adjusted funds from operations (“NAFFO”), as defined in the agreements, on a rolling four
quarter basis to 95% of NAFFO. The indentures governing our senior notes also limit the amount of dividends we can pay based on
the sum of 95% of NAFFO, proceeds of equity issuances, and certain other net cash proceeds. Finally, our senior notes require us to
maintain total unencumbered assets (as defined in the related indenture) of not less than 150% of our unsecured indebtedness.
In addition to these restrictions, the Credit Facility contains customary financial and operating covenants, including covenants
relating to our total leverage ratio, fixed charge coverage ratio, secured leverage ratio, consolidated adjusted net worth, unsecured
leverage ratio, and unsecured interest coverage ratio. On April 12, 2024, the Credit Facility was amended to waive the 10% cap on
103
unencumbered asset value attributable to tenants subject to a bankruptcy event for purposes of determining compliance with the
unsecured leverage ratio for the trailing four fiscal quarter period ended June 30, 2024.
On August 6, 2024, we entered into an amendment to the Credit Facility to increase the maximum total leverage ratio covenant
from 60% to 65% and the maximum unsecured leverage ratio covenant from 65% to 70% and to decrease the minimum unsecured
interest coverage ratio from 1.75:1.00 to 1.45:1.00. The amendment was effective as of June 30, 2024 and was to continue in effect
through and including September 30, 2025 (the “Modified Covenant Period”) at which point the credit agreement provided that
covenants would automatically reset to their prior levels. In addition, the amendment permanently reduced the minimum consolidated
adjusted net worth covenant from approximately $6.7 billion to $5 billion, in each case plus the sum of certain equity proceeds. The
amendment also limited the payment of dividends in cash during the Modified Covenant Period to $0.08 per share in any fiscal
quarter, but the amendment did not provide any additional restrictions on the payment of dividends outside of the Modified Covenant
Period.
On February 13, 2025 and concurrent with the closing of our private notes offering discussed previously, we further amended
the Credit Facility and (i) removed the Modified Covenant Period and any restrictions related thereto from the existing Credit Facility,
(ii) permanently removed financial covenants regarding minimum consolidated tangible net worth, maximum unsecured indebtedness
to unencumbered asset value, and minimum unsecured net operating income to unsecured interest expense, (iii) amended certain
definitions used in the financial covenant regarding maximum total indebtedness to total asset value to conform to corresponding
definitions in our existing unsecured indentures and the secured notes issued concurrently and set the covenant level at 60%, (iv) set
the maximum secured leverage ratio at 40%, and added mandatory prepayments of senior debt or addition of additional collateral in
connection with any failure to (x) maintain a 65% maximum ratio of secured first lien debt to the undepreciated real estate value of the
secured pool properties or (y) maintain a minimum senior secured debt service coverage ratio of 1.15:1.00 (which increases to
1.30:1.00 starting in March 2026).
In addition to the covenants and restrictions discussed above, our Credit Facility contains customary events of default, including
among others, nonpayment of principal or interest, material inaccuracy of representations, and failure to comply with our covenants. If
an event of default occurs and is continuing under the Credit Facility, the entire outstanding balance may become immediately due and
payable. At December 31, 2025, we were in compliance with all financial and operating covenants.
5. Income Taxes
Medical Properties Trust, Inc.
We have maintained and intend to maintain our election as a U.S. REIT under the Code. To qualify as a REIT, we must meet a
number of organizational and operational requirements, including a requirement to distribute at least 90% of our REIT taxable income
to our stockholders. As a REIT, we generally will not be subject to U.S. federal income tax if we distribute 100% of our REIT taxable
income to our stockholders and satisfy certain other requirements; instead, income tax is paid directly by our stockholders on the
dividends distributed to them. If our REIT taxable income exceeds our dividends in a tax year, REIT tax rules allow us to designate
dividends from the subsequent tax year in order to avoid current taxation on undistributed income. If we fail to qualify as a REIT in
any taxable year, we will be subject to federal income taxes at regular corporate rates. Taxable income from non-REIT activities
managed through our TRS entities is subject to applicable U.S. federal, state, and local income taxes. Our international subsidiaries are
also subject to income or withholding taxes in the jurisdictions in which they operate.
Income Tax (Expense) Benefit
From our TRS entities and our foreign operations, income tax (expense) benefit were as follows (in thousands):
For the Years Ended December 31,
2025
2024
2023
Current income tax (expense) benefit:
..........................................................................................
Domestic
$
—
$
477
$
(7,756)
.............................................................................................
Foreign
(27,987)
(31,589)
(24,257)
(27,987)
(31,112)
(32,013)
Deferred income tax (expense) benefit:
..........................................................................................
Domestic
—
(465)
8,926
.............................................................................................
Foreign
(10,631)
(12,524)
153,766
(10,631)
(12,989)
162,692
.............................................................
Income tax (expense) benefit
$
(38,618)
$
(44,101)
$
130,679
104
A reconciliation of income tax (expense) benefit from the statutory income tax rate to the effective tax rate based on our loss
before income taxes for the years ended December 31, 2025, 2024, and 2023 is as follows (in thousands):
For the Years Ended December 31,
2025*
2024
2023
Amount
Percent
Amount
Amount
........................................................
Loss before income tax
$
(237,319)
100.0%
$
(2,364,186)
$
(686,771)
...........
Income tax benefit at the U.S. statutory federal rate
49,837
21.0%
496,479
144,222
....................................................................................
State and local income tax, net of federal income tax
effect
—
—
—
1,275
Foreign tax effects:
U.K.:
.....
Statutory tax rate difference between U.K. and U.S.
4,193
1.8%
—
—
...................................
Changes in valuation allowances
(10,222)
(4.3)%
—
—
............................
Tax impact of U.K. REIT conversion
—
—
—
160,641
..............................................................................
Other
1,227
0.5%
—
—
Colombia:
................................................................................
Statutory tax rate difference between Colombia and
U.S.
3,826
1.6%
—
—
...................................
Changes in valuation allowances
(9,954)
(4.2)%
—
—
..............................................................................
Other
(1,713)
(0.7)%
—
—
...............................................
Other foreign jurisdictions
(3,210)
(1.4)%
—
—
...................................................
Foreign rate differential
—
—
4,888
(4,122)
.......................................................
Interest disallowance
—
—
(2,965)
(3,421)
.........................................
Changes in valuation allowances
(46,033)
(19.4)%
(301,468)
(45,692)
Nontaxable or nondeductible items:
..............
U.S. earnings not subject to federal income tax
(26,569)
(11.2)%
(227,080)
(115,189)
................................................................
Other adjustments
—
—
(13,955)
(7,035)
..........
Total income tax (expense) benefit/effective tax rate
$
(38,618)
(16.3)%
$
(44,101)
$
130,679
*Above is a reconciliation of the U.S. federal statutory income tax rate to our effective tax rate pursuant to the disclosure
requirements of ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" ("ASU 2023-09"), for the year
ended December 31, 2025. As allowed by ASU 2023-09, the 2024 and 2023 columns have not been restated to conform to the 2025
presentation.
The foreign provision for income taxes is based on foreign profit before income taxes of $108.4 million, $127.9 million, and
$6.3 million in 2025, 2024, and 2023, respectively.
The domestic provision for income taxes is based on loss before income taxes of $(219.2) million in 2025, $(1.4) billion in
2024, and $(144.5) million in 2023 from our TRS entities.
Income Taxes Paid
The amounts of cash taxes we paid (net of refunds) are as follows (in thousands):
Year Ended December 31,
2025
.......................................................................................................................................
Federal
$
(426)
...........................................................................................................................................
State
63
......................................................................................................................................
Foreign
20,884 (1)
..........................................................................................................................................
Total
$
20,521
(1)
Income taxes paid (net of refunds) in the U.K. and Spain were $18.2 million and $1.5 million, respectively, and exceeded
5% of total income taxes paid (net of refunds).
105
Deferred Income Taxes
At December 31, 2025 and 2024, components of our deferred tax assets and liabilities were as follows (in thousands):
2025
2024
Deferred tax assets:
.................................................
Operating loss and interest deduction carryforwards
$
334,501
$
263,523
...............................................................................................................
Depreciation
70,051
56,089
..............................................................................................
Partnership investments
143,695
112,892
............................................................................
Impairment and other loss reserves
66,969
101,834
...........................................................................................................................
Other
10,263
8,500
.............................................................................................
Total deferred tax assets
625,479
542,838
...................................................................................................
Valuation allowance
(489,604)
(418,659)
.......................................................................................
Total net deferred tax assets
$
135,875
$
124,179
Deferred tax liabilities:
..............................................................................................
Property and equipment
$
(149,602)
$
(145,835)
..................................................................................................
Net unbilled revenue
(106,088)
(82,170)
..............................................................................................
Partnership investments
(26,885)
(21,445)
...........................................................................................................................
Other
(4,102)
(3,450)
........................................................................................
Total deferred tax liabilities
(286,677)
(252,900)
.....................................................................................
Net deferred tax asset (liability)
$
(150,802)
$
(128,721)
At December 31, 2025, we had net operating losses ("NOL") and other tax attribute carryforwards as follows (in thousands):
U.S.
Foreign
.................................................................
Gross NOL carryforwards
$
929,887
$
569,760
...............................
Tax-effected carryforwards and other attributes
$
197,555
$
129,821
..........................................................................
Valuation allowance
(197,555)
(17,462)
...............
Net deferred tax asset - carryforwards and other attributes
$
—
$
112,359
Expiration periods
2034-indefinite
indefinite
Valuation Allowance
A valuation allowance has been recorded on certain foreign and domestic net operating loss carryforwards and other net
deferred tax assets that may not be realized. As of each reporting date, we consider all new evidence that could impact the future
realization of our deferred tax assets. In the evaluation of the need for a valuation allowance on our deferred income tax assets, we
consider all available positive and negative evidence, including scheduled reversals of deferred income tax liabilities, carryback of
future period losses to prior periods, projected future taxable income, tax planning strategies, and recent financial performance.
During 2025, an additional valuation allowance of $70.9 million has been recorded against a portion of our deferred tax assets to
recognize only the components of the deferred tax assets that is more likely than not to be realized. The valuation allowance was
primarily recorded against deferred tax assets for NOLs, non-depreciable basis of real property, and other tax attributes that we believe
will not be realized. Valuation allowance activity recorded generally follows the activity of the associated deferred tax asset that is not
expected to be recognized. From time-to-time, we may acquire deferred tax assets as part of real estate transactions and will assess the
need for a valuation allowance as part of the opening balance sheet. Additionally, valuation allowances will be remeasured for foreign
currency translation fluctuations through other comprehensive income.
Given the global nature of our business, we are currently and have in the past been subject to tax audits as part of normal course.
However, at December 31, 2025, we have no material uncertain tax position liabilities and/or related interest or penalties.
REIT Status
We have met the annual U.S. REIT distribution requirements by payment of at least 90% of our REIT taxable income in 2025,
2024, and 2023. Earnings and profits, which determine the taxability of such distributions, will differ from net income reported for
financial reporting purposes due primarily to differences in cost basis, differences in the estimated useful lives used to compute
depreciation, and differences between the allocation of our net income and loss for financial reporting purposes and for tax reporting
purposes.
106
A schedule of per share distributions we paid and reported to our stockholders is set forth in the following:
For the Years Ended December 31,
Per share:
2025
2024
2023
...........................................................
Ordinary dividend (1)
$
—
$
—
$
1.0639
...................................................
Long-term capital gain (2)
—
—
0.1061
...................................................................
Return of capital
0.3200
0.3800
—
.................................................................................
Total
$
0.3200 (3) $
0.3800
$
1.1700
(1) For the year ended December 31, 2023, includes Section 199A dividends of 1.0639.
(2) For the year ended December 31, 2023, includes Unrecaptured Section 1250 gains of 0.1061.
(3) The dividend declared on November 17, 2025 and paid January 8, 2026 will be applicable to the 2026 tax year and thus
is not reflected in the table above.
Similar to our U.S. REIT, we have met all requirements of our U.K. REIT as of December 31, 2025.
MPT Operating Partnership, L.P.
As a partnership, the allocated share of income of the Operating Partnership is included in the income tax returns of the general
and limited partners. Accordingly, no accounting for income taxes is generally required for such income of the Operating Partnership.
However, the Operating Partnership has formed TRS entities on behalf of Medical Properties Trust, Inc., which are subject to U.S.
federal, state, and local income taxes at regular corporate rates, and its international subsidiaries are subject to income taxes in the
jurisdictions in which they operate. See discussion above under Medical Properties Trust, Inc. for more details of income taxes
associated with our TRS entities and international operations.
6. Earnings Per Share/Unit
Medical Properties Trust, Inc.
Our earnings per share were calculated based on the following (in thousands):
For the Years Ended December 31,
2025
2024
2023
Numerator:
....................................................................................................
Net loss
$
(275,937)
$
(2,408,287)
$
(556,092)
...........................................
Non-controlling interests’ share in earnings
(1,112)
(1,984)
(384)
...............................................
Participating securities’ share in earnings
(889)
(946)
(1,644)
............................................................................................
Net loss, less participating securities’ share in
earnings
$
(277,938)
$
(2,411,217)
$
(558,120)
Denominator:
.................................................
Basic weighted-average common shares
600,892
600,248
598,518
......................................................
Dilutive potential common shares(1)
—
—
—
.........................................
Diluted weighted-average common shares
600,892
600,248
598,518
107
MPT Operating Partnership, L.P.
Our earnings per unit were calculated based on the following (in thousands):
For the Years Ended December 31,
2025
2024
2023
Numerator:
....................................................................................................
Net loss
$
(275,937)
$
(2,408,287)
$
(556,092)
...........................................
Non-controlling interests’ share in earnings
(1,112)
(1,984)
(384)
...............................................
Participating securities’ share in earnings
(889)
(946)
(1,644)
............................................................................................
Net loss, less participating securities’ share in
earnings
$
(277,938)
$
(2,411,217)
$
(558,120)
Denominator:
..................................................................
Basic weighted-average units
600,892
600,248
598,518
.......................................................................
Dilutive potential units(1)
—
—
—
..........................................................
Diluted weighted-average units
600,892
600,248
598,518
(1)
The above computation of diluted earnings per share does not include 112,452, 17,162, and 32,382 potential common
shares/units for the years ended December 31, 2025, 2024, and 2023, respectively.
7. Stock Awards
Stock Awards
During the second quarter of 2022, we amended the 2019 Equity Incentive Plan (the "Equity Incentive Plan"), which authorizes
the issuance of common stock options, restricted stock, RSUs, deferred stock units, stock appreciation rights, performance units, and
awards of interests in our Operating Partnership. Our Equity Incentive Plan is administered by the Compensation Committee of the
Board of Directors, and we have reserved 28.9 million shares of common stock for awards, of which 8.0 million shares remain
available for future stock awards as of December 31, 2025. The Equity Incentive Plan contains a limit of 5 million shares as the
maximum number of shares of common stock that may be awarded to an individual in any fiscal year. Awards under the Equity
Incentive Plan are subject to forfeiture due to termination of employment prior to vesting and/or from not achieving the respective
performance/market conditions. In the event of a change in control, outstanding and unvested options will immediately vest, unless
otherwise provided in the participant’s award or employment agreement, and restricted stock, restricted stock units, deferred stock
units, and other stock-based awards will vest if so provided in the participant’s award agreement. The term of the awards is set by the
Compensation Committee, though Incentive Stock Options may not have terms of more than ten years. Forfeited awards (along with
shares withheld for payroll tax withholding purposes) are returned to the Equity Incentive Plan and are then available to be re-issued
as future awards. For each share of common stock issued by Medical Properties Trust, Inc. pursuant to its Equity Incentive Plan, the
Operating Partnership issues a corresponding number of Operating Partnership units.
For the past three years, we have only granted restricted stock and RSUs pursuant to our Equity Incentive Plan. These awards
have been granted in the form of service-based awards, performance awards based on company-specific performance hurdles, and
market-based awards. See below for further details on each of these awards:
Service-Based Awards
In 2025, 2024, and 2023, the Compensation Committee granted service-based awards to employees and non-employee directors.
Service-based awards vest as the employee/director provides the required service (typically over three years). Dividends are generally
paid on these awards prior to vesting.
Performance-Based Awards
In 2023, the Compensation Committee granted performance-based awards to employees. Generally, dividends are not paid on
performance awards until the award is earned. See below for details of our 2023 performance-based award grants.
In 2023, a target number of stock awards were granted to employees that could be earned based on the achievement of specific
performance thresholds as set by our Compensation Committee. The performance thresholds were based on a three-year period with
the opportunity to earn a portion of the award earlier. More or less shares than the target number of shares were available to be earned
based on our performance compared to the set thresholds. At the end of each of the performance periods, any earned shares during
such period vested on January 1 of the following calendar year. The performance thresholds were based on strategic transactions
108
(including new investments and proceeds from individual property disposals and larger asset disposals through joint venture
transactions) and EBITDA.
Certain performance awards granted were subject to a modifier which increases or decreases the actual shares earned in each
performance period. The modifier for the 2023 awards was based on two components: 1) how our total shareholder return (“TSR”)
compared to the Dow Jones U.S. Real Estate Health Care Index and 2) how our TSR compared to a threshold set by the Compensation
Committee.
The three-year performance period for these awards ended in 2025 and resulted in a $10.9 million reduction of expense as less
shares were earned than our previous estimate.
Market-Based Awards
In 2025, 2024, and 2023, the Compensation Committee granted market-based awards to employees. Generally, dividends are
not paid on market-based awards until the award is earned. See details below of such market-based award grants.
On September 24, 2025, a target number of market-based restricted stock awards were granted to employees other than the
Company’s Chief Executive Officer and Chief Financial Officer. These shares will be earned at the target level only if the Company’s
total shareholder return reaches 20%, with the opportunity to earn up to three times target if the Company’s total shareholder return
reaches higher hurdles during the three-year period ending April 14, 2028. The actual number of shares to be earned pursuant to these
awards will be determined based on a total shareholder return achieved by a trailing 20-trading day average closing price of the
Company’s common stock, assuming contemporaneous reinvestment in such common stock of all dividends and other distributions.
The baseline price of common stock used in determining total shareholder return is $5.44. Earned shares will vest in equal quarterly
installments over one year following the date that the Compensation Committee makes a determination of achievement of the
performance metrics, subject to the grantee’s continued employment through such date, provided that all unvested earned shares will
vest in full following the end of the performance period.
On April 15, 2025, the Compensation Committee granted 621,061 market-based RSUs to the Company’s Chief Executive
Officer and Chief Financial Officer at the target level of achievement. The RSUs may be settled only in cash, and the cash payment
will be calculated based on the average closing price of the Company’s common stock on the five trading days ending on the vesting
date. The RSUs are earned at the target level if the Company’s total shareholder return reaches 20%, with the opportunity to earn up to
three times target if the Company’s total shareholder return reaches higher hurdles during the three-year period ending on April 14,
2028. The actual number of RSUs to be earned pursuant to these awards will be determined based on a total shareholder return
achieved by a trailing 20-trading day average closing price of the Company’s common stock, assuming contemporaneous
reinvestment in such common stock of all dividends and other distributions. The baseline price of common stock used in determining
total shareholder return is the closing price of the common stock on April 15, 2025, of $5.44. Earned RSUs will become vested on the
earlier of equal quarterly installments over the first year from the date the RSUs are earned or the date that the Committee makes a
determination of achievement of the performance metrics following the end of the three-year performance period, subject to the
grantee’s continued employment through such date, provided that all unvested earned RSUs will vest in full following the end of the
performance period.
On March 8, 2024, the Compensation Committee granted 2,700,000 market-based RSUs to the Company's Chief Executive
Officer and Chief Financial Officer at the target level of achievement, which would represent a 67% increase in the market price of
our common stock at time of grant. The RSUs may be settled only in cash, and the cash payment will be calculated based on the
average closing price of the Company's common stock on the five trading days ending on the vesting date. The RSUs will be earned at
the target level only if the Company's share price increases to $7.00 per share, with the opportunity to earn up to three times target if
the Company's share price reaches higher stock price hurdles. The actual number of shares to be earned pursuant to these awards will
be determined based on a trailing 20-trading day average closing price of the Company's common stock during the four-year period
ending December 31, 2027. Earned RSUs will become vested on the earlier of equal quarterly installments over the first year from the
date the RSUs are earned or the date that the Committee makes a determination of achievement of the performance metrics following
the end of the four-year performance period, subject to the grantee’s continued employment through such date, provided that all
unvested earned RSUs will vest in full following the end of the performance period.
On December 8, 2023, the Compensation Committee approved market-based restricted stock awards to employees other than
the Company's Chief Executive Officer and Chief Financial Officer of 2,500,000 shares of common stock at the target level of
achievement. These shares will be earned at the target level only if the Company's share price increases to $7.00 per share, with the
opportunity to earn more shares (up to three times target), based on higher stock price hurdles. The actual number of shares to be
earned pursuant to these awards will be determined based on a trailing 20-trading day average closing price of the Company's common
stock during the four-year period following the December 8, 2023 grant date or December 31, 2027, for certain awards granted after
December 8, 2023. Earned shares will vest in equal quarterly installments over two years following the date that the Compensation
Committee makes a determination of achievement of the performance metrics, subject to the grantee’s continued employment through
such date, provided that all unvested earned shares will vest in full following the end of the performance period.
109
The following summarizes award activity in 2025 and 2024 (which includes awards granted in 2025, 2024, and any applicable
prior years), respectively:
For the Year Ended December 31, 2025:
Vesting Based
on Service
Vesting Based on
Market/Performance
Conditions
Shares
Weighted-Average
Value at Award Date
Shares
Weighted-Average
Value at Award Date
........
Nonvested awards at beginning of the year
1,641,500
$
6.50
10,313,221
$
9.33
..............................................................
Awarded
2,538,451
$
5.24
1,347,895
$
11.00
..................................................................
Vested
(1,550,294) $
6.63
(89,065)
$
22.11
..............................................................
Forfeited
(21,493) $
5.77
(3,689,223)
$
11.89
........................
Nonvested awards at end of year
2,608,164
$
5.20
7,882,828 (1) $
8.97
(1)
Reflects the maximum share payout of certain market-based awards granted in 2023, 2024, and 2025. However, share
payout at target level for these market-based awards would result in nonvested awards at December 31, 2025 of 3.1
million shares.
For the Year Ended December 31, 2024:
Vesting Based
on Service
Vesting Based on
Market/Performance
Conditions
Shares
Weighted-Average
Value at Award Date
Shares
Weighted-Average
Value at Award Date
..........
Nonvested awards at beginning of the year
1,144,796
$
13.01
12,576,792
$
10.20
................................................................
Awarded
1,519,207
$
4.36
345,000
$
7.78
....................................................................
Vested
(993,312) $
10.62
(1,179,631) $
16.81
................................................................
Forfeited
(29,191) $
9.58
(1,428,940) $
10.40
..........................
Nonvested awards at end of year
1,641,500
$
6.50
10,313,221
$
9.33
Additionally, the market-based RSUs granted in 2025 and 2024 (not included in the tables above) with cash-settlement features
are nonvested as of December 31, 2025. These liability-type awards are adjusted to fair value on a quarterly basis using a Monte Carlo
valuation model, which used the following assumptions for grant date and quarterly valuations for the year ended December 31, 2025:
(i) common stock price at measurement date, (ii) annual equity volatility ranging from 59.0% to 62.0%, (iii) risk-free rate ranging
from 3.47% to 3.89%, and (iv) dividend yield ranging from 5.31% to 7.42%. The grant date fair value of the RSUs awarded April 15,
2025 was $8.1 million, and the fair value of the RSUs awarded March 8, 2024 was $13.3 million, and none of these RSUs were
earned, vested, or forfeited as of December 31, 2025.
The value of stock-based awards is charged to compensation expense over the service periods. For the years ended
December 31, 2025, 2024, and 2023, we recorded $15.1 million, $28.4 million, and $33.3 million, respectively, of non-cash
compensation expense. For the years ended December 31, 2025 and 2024, we also recorded $10.6 million and $4.6 million,
respectively, of compensation expense for the RSUs with cash-settlement features, and we had a corresponding $15.2 million and $4.6
million liability as of December 31, 2025 and 2024, respectively.
The remaining unrecognized cost from equity-settled awards at December 31, 2025, is $17.9 million, which will be recognized
over a weighted-average period of 0.93 years. The remaining unrecognized cost from cash-settled awards at December 31, 2025, is
$14.3 million, which will be recognized over a derived service period of 1.38 years as of December 31, 2025. Stock-based awards that
vested in 2025, 2024, and 2023, had a value of $7.7 million, $10.9 million, and $22.5 million, respectively.
8. Contingencies
As part of the global settlement with Steward discussed in Note 3, upon completion of the transfers to the new operators and
satisfaction of certain other conditions, in addition to approval by relevant state and local regulators, we and Steward agreed, subject
to specified exceptions, to the mutual release of claims against each other. In connection with the global settlement and reciprocal
release of claims, we have established an approximate $16 million reserve at December 31, 2025, for certain obligations due to third
parties associated with properties formerly leased to Steward.
We are, or were, party to various lawsuits as described below:
Securities and Derivative Litigation
110
On April 13, 2023, we and certain of our executives were named as defendants in a putative federal securities class action
lawsuit filed by a purported stockholder in the United States District Court for the Northern District of Alabama (Case No. 2:23-cv-
00486). This class action complaint was amended on September 22, 2023 and alleged that we made material misstatements or
omissions relating to the financial health of certain of our tenants. On September 26, 2024, the Court dismissed the amended
complaint with prejudice, and the plaintiff thereafter moved the Court to alter its judgment. On August 14, 2025, the Court denied the
plaintiff's motion and dismissed the amended complaint with prejudice.
Members of our Board of Directors were also named as defendants in two related shareholder derivative lawsuits filed by
purported stockholders in the United States District Court for the Northern District of Alabama on October 19, 2023 (Case No. 2:23-
cv-01415) and December 7, 2023 (Case No. 2:23-cv-01667). The Company was named as a nominal defendant in both complaints.
These shareholder derivative complaints both made allegations similar to those made in the now-dismissed Alabama securities lawsuit
described above relating to purported material misstatements or omissions relating to the financial health of certain of our tenants.
After the related securities case was dismissed, the plaintiffs in these derivative actions each filed a notice of voluntary dismissal and
these cases have now been dismissed without prejudice.
Members of our Board of Directors were also named as defendants in three related shareholder derivative lawsuits filed by
purported stockholders in the United States District Court for the District of Maryland on February 16, 2024 (Case No. 1:24-cv-
00471), June 28, 2024 (Case No. 1:24-cv-01899), and July 26, 2024 (Case No. 1 24-cv-02173). The Company was named as a
nominal defendant. These shareholder derivative complaints made allegations similar to those made in the now-dismissed Alabama
securities and derivative lawsuits described above relating to purported material misstatements or omissions relating to the financial
health of certain of our tenants. After the related securities case was dismissed, the plaintiffs in these derivative actions each filed a
notice of voluntary dismissal and each of these cases has now been dismissed without prejudice.
On September 29, 2023, we and certain of our executives were named as defendants in a putative federal securities class action
lawsuit filed by a purported stockholder in the United States District Court for the Southern District of New York (Case No. 1:23-cv-
08597). The complaint seeks class certification on behalf of purchasers of our common stock between May 23, 2023 and August 17,
2023 and alleges false and/or misleading statements and/or omissions in connection with certain transactions involving Prospect. This
class action complaint was amended on October 30, 2024 and alleges that we made material misstatements or omissions in connection
with certain transactions involving Prospect. Defendants filed a motion to dismiss the amended complaint on January 14, 2025. That
motion has been fully briefed and is currently pending before the Court.
Members of our Board of Directors were also named as defendants in two related shareholder derivative lawsuits filed by
purported stockholders in the United States District Court for the Southern District of New York on December 18, 2023 (Case No.
1:23-cv-10934) and March 1, 2024 (Case No. 1:24-cv-01589). The Company was named as a nominal defendant in both complaints.
These shareholder derivative complaints both make allegations similar to those made in the New York securities lawsuit described
above relating to purported false and/or misleading statements and/or omissions in connection with certain transactions involving
Prospect. The two cases have been consolidated and stayed pending further developments in the New York securities lawsuit
described above. On February 21, 2024, members of our Board of Directors were named as defendants in a shareholder derivative
lawsuit filed by a purported stockholder in the United States District Court for the District of Maryland (Case No. 1:24-cv-00527). The
Company was named as a nominal defendant. This shareholder derivative complaint makes allegations similar to those made in the
New York securities and derivative lawsuits described above relating to purported false and/or misleading statements and/or omissions
in connection with certain transactions involving Prospect. This action has been stayed pending further developments in the New York
securities action described above.
We believe these claims are without merit and intend to defend the remaining open cases vigorously. We have not recorded a
liability related to the lawsuits above because, at this time, we are unable to determine whether an unfavorable outcome is probable or
to estimate reasonably possible losses.
From time-to-time, we are a party to other legal proceedings, claims, or regulatory inquiries and investigations arising out of, or
incidental to, our business. While we are unable to predict with certainty the outcome of any particular matter, in the opinion of
management, after consultation with legal counsel, the ultimate liability, if any, with respect to those proceedings is not presently
expected to materially affect our financial position, results of operations, or cash flows.
111
9. Common Stock/Partner’s Capital
Medical Properties Trust, Inc.
On October 28, 2025, the Board of Directors of the Company authorized a stock repurchase program (the "Stock Repurchase
Program") for up to $150 million of common stock, par value $0.001 per share. Under the Stock Repurchase Program, we may
repurchase shares of our common stock from time to time in the open market or in privately negotiated transactions. In 2025, we
repurchased 4.5 million shares for a total of $23.4 million.
On August 11, 2025, we entered into an at-the-market equity offering program (the "ATM Program"), which provides for the
sale, from time to time, of up to $500 million of our common stock with a commission rate up to 2%. As of December 31, 2025, we
had not sold any shares under the ATM Program.
MPT Operating Partnership, L.P.
At December 31, 2025, the Operating Partnership is made up of a general partner, Medical Properties Trust, LLC (“General
Partner”) and limited partners, including the Company (which owns 100% of the General Partner) and MPT TRS, Inc. (which is 100%
owned by the General Partner). By virtue of its ownership of the General Partner, the Company has a 100% ownership interest in the
Operating Partnership.
In regard to distributions, the Operating Partnership shall distribute cash at such times and in such amounts as are determined by
the General Partner in its sole and absolute discretion, to common unit holders who are common unit holders on the record date.
However, per the Second Amended and Restated Agreement of Limited Partnership of MPT Operating Partnership, L.P. (“Operating
Partnership Agreement”), the General Partner shall use its reasonable efforts to cause the Operating Partnership to distribute amounts
sufficient to enable the Company to pay stockholder dividends that will allow the Company to (i) meet its distribution requirement for
qualification as a REIT and (ii) avoid any U.S. federal income or excise tax liability imposed by the Code, other than to the extent the
Company elects to retain and pay income tax on its net capital gain. In accordance with the Operating Partnership Agreement, LTIP
units are treated as common units for distribution purposes.
The Operating Partnership’s net income will generally be allocated first to the General Partner to the extent of any cumulative
losses and then to the partners in accordance with their respective percentage interests in the common units issued by the Operating
Partnership. Any losses of the Operating Partnership will be allocated pro-rata to the partners in accordance with their respective
percentage interests in the common units issued by the Operating Partnership until their adjusted capital balances are reduced to zero,
then to the General Partner. In accordance with the Operating Partnership Agreement, LTIP units are treated as common units for
purposes of income and loss allocations. Limited partners have the right to require the Operating Partnership to redeem part or all of
their common units. It is at the Operating Partnership’s discretion to redeem such common units for cash based on the fair market
value of an equivalent number of shares of the Company’s common stock at the time of redemption or, alternatively, redeem the
common units for shares of the Company’s common stock on a one-for-one basis, subject to adjustment in the event of stock splits,
stock dividends, or similar events. LTIP units must wait two years from the issuance of the LTIP units to be redeemed, and then
converted to common units. No LTIP units exist at December 31, 2025.
For each share of common stock issued/repurchased by Medical Properties Trust, Inc., the Operating Partnership
issues/repurchases a corresponding number of operating partnership units.
10. Fair Value of Financial Instruments
We have various assets and liabilities that are considered financial instruments. We estimate that the carrying value of cash and
cash equivalents and accounts payable and accrued expenses approximate their fair values. We estimate the fair value of our interest
and rent receivables using Level 2 inputs such as discounting the estimated future cash flows using the current rates at which similar
receivables would be made to others with similar credit ratings and for the same remaining maturities. The fair value of our mortgage
loans and other loans are estimated by using Level 2 inputs such as discounting the estimated future cash flows using the current rates
which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. We determine the
fair value of our senior notes using Level 2 inputs such as quotes from securities dealers and market makers. We estimate the fair
112
value of our revolving credit facility and term loans using Level 2 inputs based on the present value of future payments, discounted at
a rate which we consider appropriate for such debt.
Fair value estimates are made at a specific point in time, are subjective in nature, and involve uncertainties and matters of
significant judgment. Settlement of such fair value amounts may not be a prudent management decision.
The following table summarizes fair value estimates for our financial instruments (in thousands):
December 31, 2025
December 31, 2024
Asset (Liability)
Book
Value
Fair
Value
Book
Value
Fair
Value
....................................
Interest and rent receivables
$
19,210
$
19,907
$
36,327
$
36,432
..................................................................
Loans(1)
624,243 (2)
624,369
467,120 (2)
470,380
..................................................................
Debt, net
(9,697,835)
(8,980,547)
(8,848,112)
(7,301,395)
(1) Includes all loan investments other than those accounted for under the fair value option method, as noted below.
(2) Includes $7.5 million and $7.9 million of mortgage loans, a $388.9 million and $315.5 million shareholder loans included
in investments in unconsolidated real estate joint ventures, $45.4 million and $39.7 million of loans that are part of our
investments in unconsolidated operating entities, and $182.4 million and $104.0 million of other loans at December 31,
2025 and December 31, 2024, respectively.
Items Measured at Fair Value on a Recurring Basis
Our equity investment and related loan to the international joint venture, our loan investment in the real estate of three hospitals
operated by subsidiaries of the international joint venture in Colombia, and our investment in PHP Holdings (which was sold in July
2025) are measured at fair value on a recurring basis as we elected to account for these investments using the fair value option at the
point of initial investment. We elected to account for these investments at fair value due to the size of the investments and because we
believed this method was more reflective of current values.
At December 31, 2025 and 2024, the amounts recorded under the fair value option method were as follows (in thousands):
December 31, 2025
December 31, 2024
Asset (Liability)
Fair Value
Original
Cost
Fair Value
Original
Cost
Asset Type Classification
.................................
Mortgage loans
$
116,113
$
151,692
$
111,985
$
129,968
Mortgage loans
...
Equity investment and other loans
4,285
264,160
154,229
910,594
Investments in unconsolidated
operating entities/Other loans
Our loans to the international joint venture and its subsidiaries are recorded at fair value by discounting the estimated future
contractual cash flows using a credit-adjusted rate of return, which is derived from market rates of return on similar loans with similar
credit quality and remaining maturity. Our equity investment in the international joint venture and our investment in PHP Holdings (as
of December 31, 2024 only) are recorded at fair value by using a market approach (for our equity investment in the international joint
venture) and a market approach based on the agreed upon price in the transaction (for our investment in PHP Holdings), which
requires significant estimates of our investee, such as projected revenue, expenses, and working capital, and appropriate consideration
of the underlying risk profile of the forecasted assumptions associated with the investee. We classify our valuations of these
investments as Level 3, as we use certain unobservable inputs to the valuation methodology that are significant to the fair value
measurement, and the valuations require management judgment due to the absence of quoted market prices. For the market approach
model used for our investment in PHP Holdings (as of December 31, 2024 only), our unobservable inputs include purchase price
adjustments related to expected balance sheet values at the time of the transaction close, and an adjustment for a marketability
discount ("DLOM") of 14.2%. In regard to the underlying projections used in the discounted cash flow model for our investment in
the international joint venture, such projections are provided by the investees. However, we may modify such projections as needed
based on our review and analysis of historical results, meetings with key members of management, and our understanding of trends
and developments within the healthcare industry.
In 2025, we recorded a net unfavorable adjustment to the investments accounted for under the fair value option method of
approximately $169 million, primarily related to our investment in three hospitals in Colombia and our investment in PHP Holdings.
In 2024, we recorded a net unfavorable adjustment to the investments accounted for under the fair value option method of
approximately $790 million, primarily related to the loan to the international joint venture and our investment in PHP Holdings.
113
Items Measured at Fair Value on a Nonrecurring Basis
In addition to items that are measured at fair value on a recurring basis, we have assets and liabilities that are measured, from
time-to-time, at fair value on a nonrecurring basis, such as for impairment purposes of our real estate, financial instruments, and for
certain equity investments without a readily determinable fair value.
Impairment and Fair Value Adjustments of Non-Real Estate Investments
2024
Prior to the global settlement in September 2024 (as described in Note 3 to the consolidated financial statements) in which our
claims were released, our non-real estate investments in Steward and related affiliates included our 9.9% equity investment, working
capital and other secured loans, and a loan made to a Steward affiliate in 2021, proceeds of which were used to redeem a similarly
sized convertible loan held by Steward’s former private equity sponsor. In addition, the loan to the international joint venture was
collateralized by the equity of Steward held by an investor in both Steward and the international joint venture. To assess recovery of
these investments, we performed a valuation of Steward’s business at March 31, 2024, with assistance from a third-party, independent
valuation firm. The valuation approaches utilized included the cost, market, and income approaches. The fair value analysis was
performed under a non-going concern, orderly liquidation premise of value and assuming normal exposure to market participants. We
utilized this premise of value due to Steward’s ongoing financial distress and subsequent filing of bankruptcy. Accordingly, the
valuation approaches used, including the Level 3 inputs, were based on the financial performance of the Steward assets. For profitable
hospitals, Level 3 inputs included a weighted average EBITDA multiple of 6.48x from a selected range of 5x to 7x in reference to
comparable transactions. We also used a weighted average discount rate of 15.03% from a selected range of 15% to 16%. For
unprofitable hospitals, Level 3 inputs included a weighted average net revenue multiple of 0.275x from a selected range of 0.25x to
0.30x in reference to comparable transactions. We also considered the reported book values inclusive of various adjustments for
unprofitable hospitals. After reducing the derived fair value of Steward's business for Steward's secured debt (including our working
capital and other secured loans) and their working capital deficit, we arrived at only a nominal remaining value that could not support
the carrying value of the loan to a Steward affiliate from 2021 or our remaining 9.9% equity investment. In addition, the value of the
investor's share of the remaining 90.1% of Steward's equity that collateralized the loan to the international joint venture was deemed
insufficient to support recovery of this investment. As a result, we recorded impairment charges and negative fair value adjustments in
the 2024 first quarter of approximately $625 million, as discussed further in Note 3 to the consolidated financial statements.
In the third quarter of 2024, as a result of the Company’s global settlement with Steward (as discussed further in Note 3 to the
consolidated financial statements), the Company recorded impairment charges of approximately $425 million for the working capital
loans and other secured loans previously advanced to Steward.
2023
To assess recovery of our non-real estate investments in Steward in 2023, along with the $219 million loan to the international
joint venture that was collateralized by the equity of Steward held by an investor in both Steward and the international joint venture,
we performed a valuation of Steward's business at December 31, 2023, with assistance from a third-party, independent valuation firm,
using a market valuation approach, with Level 3 inputs including the selected revenue multiple range of 0.50x to 0.60x in reference to
comparable transactions. After reducing the derived fair value for the loans to Steward discussed above, we arrived at a fair value for
Steward's equity. We then compared our equity investment's carrying value to our 9.9% share of the fair value of Steward's equity,
which resulted in the need for an impairment charge of approximately $90 million. The value of the investor's share of the remaining
90.1% of Steward's equity that collateralized the loan to the international joint venture was deemed sufficient to support recovery of
this investment at that time.
Impairment of Real Estate Investments
See the Steward and Prospect subheadings under "Leasing Operations (Lessor)" in Note 3 to the consolidated financial
statements for a discussion around the use of fair value and related assumptions in the impairment of our real estate investments.
Equity Investments Without a Readily Determinable Fair Value
For our equity investment in Swiss Medical (which does not have a readily determinable fair value), we marked our investment
to fair value in the 2023 third quarter based on the price paid by a new investor in the same security, resulting in a CHF 20 million
favorable adjustment.
114
11. Leases (Lessee)
We lease the land underlying certain of our facilities (for which we typically sublease to our tenants), along with certain
corporate offices and equipment. Our leases have remaining lease terms that vary in years, and some of the leases have initial fixed
terms (or renewal options available) that extend the leases up to, or just beyond, the depreciable life of the properties that occupy the
leased land. Renewal options that we are reasonably certain to exercise are recognized in our right-of-use assets and lease liabilities.
As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at
lease commencement date in determining the present value of future payments.
The following is a summary of our lease expense (in thousands):
Income Statement
For the Years Ended December 31,
Classification
2025
2024
2023
.................
Operating lease cost (1)
(2)
$
9,254
$
10,725
$
11,653
Finance lease cost:
............................................
Amortization of right-of-use
assets
Real estate depreciation and amortization
51
51
51
............
Interest on lease liabilities
Interest
128
128
128
.............................
Sublease income
Other
(2,425)
(3,259)
(4,178)
...............................
Total lease cost
$
7,008
$
7,645
$
7,654
(1)
Includes short-term leases.
(2)
$4.1 million, $5.1 million, and $6.0 million included in “Property-related”, with the remainder reflected in the “General
and administrative” line of our consolidated statements of net income for 2025, 2024, and 2023, respectively.
Fixed minimum payments due over the remaining lease term under non-cancelable leases of more than one year and amounts to
be received in the future from non-cancelable subleases over their remaining lease term at December 31, 2025 are as follows (amounts
in thousands):
Operating Leases
Finance Leases
Amounts To
Be Received
From
Subleases
Net
Payments
..........................................................................
2026
$
7,109
$
133
$
(2,877)
$
4,365
..........................................................................
2027
6,567
134
(2,515)
4,186
..........................................................................
2028
6,648
135
(2,516)
4,267
..........................................................................
2029
6,706
137
(2,518)
4,325
..........................................................................
2030
6,733
138
(2,525)
4,346
..................................................................
Thereafter
160,583
4,106
(38,522)
126,167 (1)
..........
Total undiscounted minimum lease payments
$
194,346
$
4,783
$
(51,473)
$
147,656
.............................................................
Less: interest
(122,351)
(2,850)
................................
Present value of lease liabilities
$
71,995
$
1,933
(1)
Reflects certain ground leases, in which we are the lessee, that have longer initial fixed terms than our existing sublease to
our tenants. However, we would expect to either renew the related sublease, enter into a lease with a new tenant, or
attempt to early terminate the ground lease to reduce or avoid any significant impact from such ground leases.
115
Supplemental balance sheet information is as follows (in thousands, except lease terms and discount rate):
Balance Sheet
Classification
December 31,
2025
December 31,
2024
Right of use assets:
...................
Operating leases - real estate
Land
$
43,801
$
46,881
......................
Finance leases - real estate
Land
1,581
1,632
........
Total real estate right of use assets
$
45,382
$
48,513
....................
Operating leases - corporate
Other assets
17,641
20,701
.............................
Total right of use assets
$
63,023
$
69,214
Lease liabilities:
......................................
Operating leases
Obligations to tenants and
other lease liabilities
$
71,995
$
78,585
......................................
Financing leases
Obligations to tenants and
other lease liabilities
1,933
1,936
.................................
Total lease liabilities
$
73,928
$
80,521
Weighted-average remaining lease
term:
......................................
Operating leases
33.4
32.6
.........................................
Finance leases
30.9
31.9
Weighted-average discount rate:
......................................
Operating leases
6.1%
6.1%
.........................................
Finance leases
6.6%
6.6%
The following is supplemental cash flow information (in thousands):
For the Years Ended December 31,
2025
2024
2023
Cash paid for amounts included in the measurement of lease liabilities:
....................................................
Operating cash flows used for operating leases
$
8,013
$
8,447
$
8,210
.......................................................
Operating cash flows used for finance leases
131
130
129
12. Other Assets
The following is a summary of our other assets on our consolidated balance sheets (in thousands):
December 31,
2025
2024
...........................................................................................
Debt issue costs, net(1)
$
3,265
$
5,675
............................................................................................
Other corporate assets
372,751
330,638
........................................................................................
Prepaids and other assets
188,024
135,091
..................................................................................................
Total other assets
$
564,040
$
471,404
(1) Relates to our revolving credit facility
Other corporate assets include building, land and land improvements associated with our corporate headquarters, furniture and
fixtures, equipment, corporate vehicles, aircraft, enterprise and other software, deposits, and right-of-use assets associated with
corporate leases. Included in prepaids and other assets is prepaid insurance, prepaid taxes, deferred income tax assets (net of valuation
allowances, if any), non-tenant receivables, derivative assets, and lease incentives provided to tenants, among other items.
Other corporate assets increased in 2025 primarily due to additional funding of our new corporate headquarters, which we have
recently completed. Remaining funding costs are estimated to be between $10 million and $15 million. Prepaids and other assets
increased in 2025 primarily due to lease incentives provided to tenants as previously described in Note 3 to the consolidated financial
statements.
116
13. Segment Disclosures
We manage our business and report financial results as one business segment. This is consistent with the manner in which our
chief operating decision maker ("CODM"), our executive team made up of our Chief Executive Officer and Chief Financial Officer,
evaluates performance and makes resource and operating decisions for the business.
Our primary business strategy and source of revenue is from the acquisition and development of healthcare facilities that are
leased to healthcare operating companies under long-term net leases, which require the tenant to bear most of the costs associated with
the property. The majority of our leased assets are owned 100%; however, we do own some leased assets through joint ventures with
other partners. We also may make mortgage loans to healthcare operators collateralized by their real estate. In addition, we may make
noncontrolling investments in our tenants, from time-to-time, typically in conjunction with larger real estate transactions with the
tenant, which may enhance our overall return and provide for certain minority rights and protections. Although we generate our
revenues from these investments in the U.S. and eight other countries across multiple property types, we centrally manage these
business activities on a consolidated basis. The accounting policies of our business segment are the same as those described in the
summary of significant accounting policies.
The CODM evaluates performance and makes resource and operating decisions for the business on a consolidated basis using
consolidated net income from our consolidated statements of net income as our primary GAAP profit measure supplemented by
consolidated funds from operations ("FFO"). We use net income and FFO to monitor expected versus actual results to assess
performance. The measure of segment assets is total assets as reported on our consolidated balance sheets. We compute FFO in
accordance with the definition provided by the National Association of Real Estate Investment Trusts, which represents consolidated
net (loss) income (computed in accordance with GAAP), excluding gains (losses) on sales of real estate and impairment charges on
real estate assets, plus real estate depreciation and amortization, including amortization related to in-place lease intangibles, and after
adjustments for unconsolidated partnerships and joint ventures.
Given FFO excludes real estate related depreciation and amortization expense by definition and due to our typical net lease
structure which requires our tenants to bear most of the costs associated with our properties (including property taxes, insurance, etc.),
the primary expenses reviewed by the CODM include general and administrative and interest expenses from our consolidated
statements of net income.
See "Concentration of Credit Risks" in Note 3 to our consolidated financial statements for entity-wide disclosures around major
customers, geographic areas, and property types.
14. Subsequent Events
Subsequent to December 31, 2025, we moved seven additional U.K. property holding legal entities into our U.K. REIT that was
formed on July 1, 2023. With this move, we plan to adjust the deferred tax liabilities associated with these entities, which we expect
will result in an approximate $40 million one-time tax benefit in the first quarter of 2026. Going forward, these U.K. entities (like the
others in the U.K. REIT) will be subject only to a withholding tax on earnings upon distribution out of the U.K. REIT.
On February 12, 2026, we announced that our Board of Directors declared a regular quarterly cash dividend of $0.09 per share
of common stock to be paid on April 9, 2026, to shareholders of record on March 12, 2026.
On February 13, 2026, we closed on the acquisition of one property in Germany for approximately €23 million to be leased to
MEDIAN.
117
ITEM 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
None.
ITEM 9A. Controls and Procedures
Medical Properties Trust, Inc.
(a) Evaluation of Disclosure Controls and Procedures. Medical Properties Trust, Inc. maintains disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) designed to provide reasonable assurance that
information required to be disclosed in its Exchange Act reports is recorded, processed, summarized, and reported within the time
periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to its management,
including its Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), as
appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and
procedures, we recognize that no controls and procedures, no matter how well designed and operated, can provide absolute assurance
of achieving the desired control objectives. As required by Rule 13a-15(b) under the Exchange Act, the management of Medical
Properties Trust, Inc., with the participation of its Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the
effectiveness of our disclosure controls and procedures. Based on the foregoing, the Chief Executive Officer and Chief Financial
Officer concluded that these disclosure controls and procedures are effective as of the end of the period covered by this report.
(b) Management’s Report on Internal Control over Financial Reporting.
The management of Medical Properties Trust, Inc. is responsible for establishing and maintaining adequate internal control
over financial reporting for Medical Properties Trust, Inc. (as such term is defined in Rule 13a-15(f) of the Exchange Act). Internal
control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of Medical Properties Trust, Inc.’s financial statements for external reporting purposes in accordance with
GAAP.
Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because
of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management has undertaken an assessment of the effectiveness of the internal control over financial reporting for Medical
Properties Trust, Inc. as of December 31, 2025 based upon the framework established in Internal Control – Integrated Framework
(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment,
management has concluded that, as of December 31, 2025, the internal control over financial reporting for Medical Properties
Trust, Inc. was effective.
The effectiveness of the internal control over financial reporting for Medical Properties Trust, Inc. as of December 31,
2025 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their
report which appears in this Annual Report on Form 10-K.
(c) Changes in Internal Controls over Financial Reporting. There has been no change in the internal control over financial
reporting for Medical Properties Trust, Inc. during its most recent fiscal quarter that has materially affected, or is reasonably likely to
materially affect, its internal control over financial reporting.
MPT Operating Partnership, L.P.
(a) Evaluation of Disclosure Controls and Procedures. MPT Operating Partnership, L.P. maintains disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) designed to provide reasonable assurance that
information required to be disclosed in its Exchange Act reports is recorded, processed, summarized, and reported within the time
periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to its management,
including its Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), as
appropriate, of Medical Properties Trust, Inc. (the sole general partner of MPT Operating Partnership, L.P.) to allow timely decisions
regarding required disclosure. In designing and evaluating the disclosure controls and procedures, we recognize that no controls and
procedures, no matter how well designed and operated, can provide absolute assurance of achieving the desired control objectives. As
required by Rule 13a-15(b) under the Exchange Act, the management of MPT Operating Partnership, L.P., with the participation of
the Chief Executive Officer and Chief Financial Officer of Medical Properties Trust, Inc. (the sole general partner of MPT Operating
Partnership, L.P.), carried out an evaluation of the effectiveness of our disclosure controls and procedures. Based on the foregoing, the
Chief Executive Officer and Chief Financial Officer of Medical Properties Trust, Inc. (the sole general partner of MPT Operating
Partnership, L.P.) concluded that these disclosure controls and procedures are effective as of the end of the period covered by this
report.
118
(b) Management’s Report on Internal Control over Financial Reporting.
The management of MPT Operating Partnership, L.P. is responsible for establishing and maintaining adequate internal control
over financial reporting for MPT Operating Partnership, L.P. (as such term is defined in Rule 13a-15(f) of the Exchange Act).
Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of MPT Operating Partnership, L.P.’s financial statements for external reporting purposes in
accordance with GAAP.
Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because
of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management has undertaken an assessment of the effectiveness of the internal control over financial reporting for MPT
Operating Partnership, L.P. as of December 31, 2025, based upon the framework established in Internal Control – Integrated
Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment,
management has concluded that, as of December 31, 2025, the internal control over financial reporting for MPT Operating
Partnership, L.P. was effective.
The effectiveness of the internal control over financial reporting for MPT Operating Partnership, L.P. as of December 31, 2025
has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which
appears in this Annual Report on Form 10-K.
(c) Changes in Internal Controls over Financial Reporting. There has been no change in the internal control over financial
reporting for MPT Operating Partnership, L.P. during its most recent fiscal quarter that has materially affected, or is reasonably likely
to materially affect, its internal control over financial reporting.
ITEM 9B. Other Information
During the three months ended December 31, 2025, none of our officers or directors (as defined in Rule 16a-1(f) of the
Exchange Act) adopted, terminated, or modified any contract, instruction or written plan for the purchase or sale of our securities that
was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any non-Rule 10b5-1 trading arrangement (as defined
in Item 408 of Regulation S-K).
ITEM 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
None.
119
PART III
ITEM 10. Directors, Executive Officers and Corporate Governance
The Company has an insider trading policy governing the purchase, sale, and other dispositions of the Company's securities that
applies to all of the Company's directors, officers, employees, and other covered persons. The Company believes that its insider
trading policy is reasonably designed to promote compliance with insider trading laws, rules and regulations, and listing standards
applicable to the Company. It is also the policy of the Company to comply with all insider trading laws and regulations. A copy of the
Company's insider trading policy is listed as Exhibit 19.2 to this Annual Report on Form 10-K.
The other information required by this Item 10 is incorporated by reference to our definitive Proxy Statement for the 2026
Annual Meeting of Stockholders, which will be filed by us with the Commission not later than April 30, 2026.
ITEM 11. Executive Compensation
The information required by this Item 11 is incorporated by reference to our definitive Proxy Statement for the 2026 Annual
Meeting of Stockholders, which will be filed by us with the Commission not later than April 30, 2026.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this Item 12 is incorporated by reference to our definitive Proxy Statement for the 2026 Annual
Meeting of Stockholders, which will be filed by us with the Commission not later than April 30, 2026.
ITEM 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this Item 13 is incorporated by reference to our definitive Proxy Statement for the 2026 Annual
Meeting of Stockholders, which will be filed by us with the Commission not later than April 30, 2026.
ITEM 14. Principal Accountant Fees and Services
Our independent public accounting firm is PricewaterhouseCoopers LLP, Birmingham, Alabama, PCAOB Auditor ID 238. The
information required by this Item 14 is incorporated by reference to our definitive Proxy Statement for the 2026 Annual Meeting of
Stockholders, which will be filed by us with the Commission not later than April 30, 2026.
120
PART IV
ITEM 15. Exhibits and Financial Statement Schedules
(a) Financial Statements and Financial Statement Schedules
Index of Financial Statements of Medical Properties Trust, Inc. and MPT Operating Partnership, L.P. which are included in
Part II, Item 8 of this Annual Report on Form 10-K:
Report of Independent Registered Public Accounting Firm
Medical Properties Trust, Inc.
65
MPT Operating Partnership, L.P.
67
Medical Properties Trust, Inc.
Consolidated Balance Sheets as of December 31, 2025 and 2024
69
Consolidated Statements of Net Income for the Years Ended December 31, 2025, 2024, and 2023
70
Consolidated Statements of Comprehensive Loss for the Years Ended December 31, 2025, 2024, and 2023
71
Consolidated Statements of Equity for the Years Ended December 31, 2025, 2024, and 2023
72
Consolidated Statements of Cash Flows for the Years Ended December 31, 2025, 2024, and 2023
73
MPT Operating Partnership, L.P.
Consolidated Balance Sheets as of December 31, 2025 and 2024
74
Consolidated Statements of Net Income for the Years Ended December 31, 2025, 2024, and 2023
75
Consolidated Statements of Comprehensive Loss for the Years Ended December 31, 2025, 2024, and 2023
76
Consolidated Statements of Capital for the Years Ended December 31, 2025, 2024, and 2023
77
Consolidated Statements of Cash Flows for the Years Ended December 31, 2025, 2024, and 2023
78
Medical Properties Trust, Inc. and MPT Operating Partnership, L.P.
Notes to Consolidated Financial Statements
79
Financial Statement Schedules
Schedule II — Valuation and Qualifying Accounts for the Years Ended December 31, 2025, 2024, and 2023
126
Schedule III — Real Estate and Accumulated Depreciation at December 31, 2025 with reconciliations for the years ended
December 31, 2025, 2024, and 2023
127
Schedule IV — Mortgage Loans on Real Estate at December 31, 2025 with reconciliations for the years ended
December 31, 2025, 2024, and 2023
135
(b) Exhibits
Exhibit
Number
Description
Form
File Number
Exhibit
Number
Filing Date
3.1
Second Articles of Amendment and Restatement of Medical
Properties Trust, Inc.
S-11/A
333-119957
3.1
January 6, 2005
3.2
Articles of Amendment of Second Articles of Amendment
and Restatement of Medical Properties Trust, Inc.
10-Q
001-32559
3.1
November 10,
2005
3.3
Articles of Amendment of Second Articles of Amendment
and Restatement of Medical Properties Trust, Inc.
8-K
001-32559
3.1
January 13, 2009
3.4
Articles of Amendment to Second Articles of Amendment
and Restatement of Medical Properties Trust, Inc.
8-K
001-32559
3.1
January 31, 2012
3.5
Articles of Amendment to Second Articles of Amendment
and Restatement of Medical Properties Trust, Inc.
8-K
001-32559
3.1
June 26, 2015
3.6
Articles of Amendment to Second Articles of Amendment
and Restatement of Medical Properties Trust, Inc.
10-Q
001-32559
3.2
August 10, 2015
3.7
Articles of Amendment to the Second Articles of
Amendment and Restatement of Medical Properties Trust,
Inc.
8-K
001-32559
3.1
November 8, 2019
3.8
Second Amended and Restated Bylaws of Medical Properties
Trust, Inc.
8-K
001-32559
3.1
November 24,
2009
3.9
Amendment to Second Amended and Restated Bylaws of
Medical Properties Trust, Inc.
8-K
001-32559
3.2
June 26, 2015
121
3.10
Amendment to Second Amended and Restated Bylaws of
Medical Properties Trust, Inc.
8-K
001-32559
3.1
November 16,
2016
3.11
Amendment to Second Amended and Restated Bylaws of
Medical Properties Trust, Inc.
8-K
001-32559
3.1
February 22, 2017
3.12
Amendment to Second Amended and Restated Bylaws of
Medical Properties Trust, Inc.
8-K
001-32559
3.1
May 25, 2018
3.13
Amendment to Second Amended and Restated Bylaws of
Medical Properties Trust, Inc.
8-K
001-32559
3.1
May 22, 2020
4.1
Form of Common Stock Certificate
S-11/A
333-119957
4.1
January 6, 2005
4.2
Description of Securities of Medical Properties Trust, Inc.
Registered under Section 12 of the Securities Exchange Act,
as amended
10-K
001-32559
4.2
February 27, 2020
4.3
Indenture, dated as of October 10, 2013, among Medical
Properties Trust, Inc., MPT Operating Partnership, L.P.,
MPT Finance Corporation, the Subsidiary Guarantors and
Wilmington Trust, N.A., as Trustee.
8-K
001-32559
4.1
October 16, 2013
4.4
Twelfth Supplemental Indenture, dated as of September 21,
2017, by and among MPT Operating Partnership, L.P. and
MPT Finance Corporation, as issuers, Medical Properties
Trust, Inc., as parent and guarantor, and Wilmington Trust,
National Association, as trustee.
10-Q
001-32559
4.1
November 9, 2017
4.5
Thirteenth Supplemental Indenture, dated as of July 26,
2019, by and among MPT Operating Partnership, L.P., and
MPT Finance Corporation, as issuers, Medical Properties
Trust, Inc., as parent and guarantor, and Wilmington Trust,
National Association, as trustee.
8-K
001-32559
4.2
July 29, 2019
4.6
Fifteenth Supplemental Indenture, dated as of December 5,
2019, by and among MPT Operating Partnership, L.P. and
MPT Finance Corporation, as issuers, Medical Properties
Trust, Inc., as parent and guarantor, Wilmington Trust,
National Association, as trustee, Elavon Financial Services
DAC, U.K. Branch, as initial paying agent, and Elavon
Financial Services DAC, as initial registrar and transfer
agent.
8-K
001-32559
4.4
December 11,
2019
4.7
Sixteenth Supplemental Indenture, dated as of December 4,
2020, by and among MPT Operating Partnership, L.P. and
MPT Finance Corporation, as issuers, Medical Properties
Trust, Inc. as parent and guarantor, and Wilmington Trust,
National Association, as trustee.
8-K
001-32559
4.2
December 7, 2020
4.8
Eighteenth Supplemental Indenture, dated as of March 24,
2021, by and among MPT Operating Partnership, L.P. and
MPT Finance Corporation, as issuers, Medical Properties
Trust, Inc., as parent and guarantor, Wilmington Trust,
National Association, as trustee, and Elavon Financial
Services DAC, as initial paying agent, registrar and transfer
agent
8-K
001-32559
4.4
March 29, 2021
4.9
Nineteenth Supplemental Indenture, dated as of October 6,
2021, by and among MPT Operating Partnership, L.P. and
MPT Finance Corporation, as issuers, Medical Properties
Trust, Inc., as parent and guarantor, Wilmington Trust,
National Association, as trustee, and Elavon Financial
Services DAC, as initial paying agent, registrar and transfer
agent
8-K
001-32559
4.2
October 13, 2021
4.10
Indenture, dated as of February 13, 2025, among Medical
Properties Trust, Inc., MPT Operating Partnership, L.P.,
MPT Finance Corporation, the subsidiary guarantors party
thereto, Wilmington Trust, National Association, as trustee,
dollar paying agent, dollar registrar, dollar transfer agent and
notes collateral agent, and U.S. Bank Europe DAC, as euro
paying agent, euro registrar and euro transfer agent
8-K
001-32559
4.1
February 18, 2025
122
4.11
Twentieth Supplemental Indenture, dated as of February 28,
2025, among MPT Springstone REIT, Inc., as subsidiary
guarantor, and MPT Operating Partnership, L.P. and MPT
Finance Corporation, as issuers, Medical Properties Trust,
Inc., as parent and guarantor, and Wilmington Trust, National
Association, as trustee
10-K
001-32559
4.11
March 3, 2025
10.1
Second Amended and Restated Agreement of Limited
Partnership of MPT Operating Partnership, L.P.
8-K
001-32559
10.1
August 6, 2007
10.2
Medical Properties Trust, Inc. Amended and Restated 2019
Equity Incentive Plan***
DEF 14A
001-32559
A
April 28, 2022
10.3
Form of Stock Option Award***
8-K
001-32559
10.2
October 18, 2005
10.4
Form of Restricted Stock Award***
8-K
001-32559
10.4
October 18, 2005
10.5
Form of Deferred Stock Unit Award***
8-K
001-32559
10.5
October 18, 2005
10.6
Form of Award Agreement for Restricted Stock***
8-K
001-32559
10.1
December 14,
2023
10.7
Form of Award Agreement for Restricted Stock Units***
8-K
001-32559
10.1
March 14, 2024
10.8
Employment Agreement between Medical Properties Trust,
Inc. and Edward K. Aldag, Jr., dated September 10, 2003***
S-11/A
333-119957
10.3
January 6, 2005
10.9
First Amendment to Employment Agreement between
Medical Properties Trust, Inc. and Edward K. Aldag, Jr.,
dated March 8, 2004***
S-11/A
333-119957
10.4
January 6, 2005
10.10
Employment Agreement between Medical Properties Trust,
Inc. and R. Steven Hamner, dated September 10, 2003***
S-11/A
333-119957
10.6
January 6, 2005
10.11
Form of Indemnification Agreement between Medical
Properties Trust, Inc. and executive officers and directors***
S-11/A
333-119957
10.55
July 5, 2005
10.12
Second Amendment to Employment Agreement between
Medical Properties Trust, Inc. and Edward K. Aldag, Jr.,
dated September 29, 2006***
10-K
001-32559
10.58
March 14, 2008
10.13
First Amendment to Employment Agreement between
Medical Properties Trust, Inc. and R. Steven Hamner, dated
September 29, 2006***
10-K
001-32559
10.59
March 14, 2008
10.14
Second Amendment to Employment Agreement between
Medical Properties Trust, Inc. and Richard S. Hamner, dated
January 1, 2008***
10-K
001-32559
10.76
March 13, 2009
10.15
Third Amendment to Employment Agreement between
Medical Properties Trust, Inc. and R. Steven Hamner, dated
January 1, 2009***
10-K
001-32559
10.77
March 13, 2009
10.16
Third Amendment to Employment Agreement between
Medical Properties Trust, Inc. and Edward K. Aldag, Jr.,
dated January 1, 2008***
10-K
001-32559
10.78
March 13, 2009
10.17
Fourth Amendment to Employment Agreement between
Medical Properties Trust, Inc. and Edward K. Aldag, Jr.,
dated January 1, 2009***
10-K
001-32559
10.79
March 13, 2009
10.18
Amended and Restated Subscription Agreement dated as of
June 7, 2018 by and among MPT Operating Partnership,
L.P., Primotop Holding, S.a.r.l. and MPT RHM Holdco
S.a.r.l.
10-Q
001-32559
10.1
August 9, 2018
10.19
Real Property Asset Purchase Agreement, dated as of July
10, 2019, by and among Prospect Medical Holdings, Inc., as
“Prospect Medical Holdings”, and subsidiaries of Prospect
Medical Holdings, as the “Prospect Medical Subsidiaries”,
and subsidiaries of MPT Operating Partnership, L.P., as the
“MPT Parties”.
10-Q
001-32559
10.2
November 12,
2019
10.20
Form of Lease Agreement between certain subsidiaries of
MPT Operating Partnership, L.P., as Lessor, and Circle
Health Ltd. and certain of its subsidiaries, as Lessee
10-Q
001-32559
10.1
August 7, 2020
10.21
Second Amended and Restated Revolving Credit and Term
Loan Agreement, dated as of June 29, 2022, among Medical
Properties Trust, Inc., MPT Operating Partnership, L.P., the
several lenders from time to time party thereto, Bank of
8-K
001-32559
1.1
July 6, 2022
123
America, N.A., as syndication agent, and JPMorgan Chase
Bank, N.A., as administrative agent
10.22
Amendment No. 1 to Second Amended and Restated
Revolving Credit and Term Loan Agreement, dated as of
April 12, 2024, by and among Medical Properties Trust, Inc.,
MPT Operating Partnership, L.P., the several lenders from
time to time party thereto, Bank of America, N.A., as
syndication agent, and JPMorgan Chase Bank, N.A., as
administrative agent
10-Q
001-32559
10.1
August 9, 2024
10.23
Amendment No. 2 to Second Amended and Restated
Revolving Credit and Term Loan Agreement, dated as of
August 6, 2024, by and among Medical Properties Trust,
Inc., MPT Operating Partnership, L.P., the Guarantors party
hereto, the several lenders from time to time party thereto,
and JPMorgan Chase Bank, N.A., as administrative agent
10-Q/A
001-32559
10.1
November 13,
2024
10.24
Amendment No. 3 to Second Amended and Restated
Revolving Credit and Term Loan Agreement, dated as of
February 13, 2025, by and among Medical Properties Trust,
Inc., MPT Operating Partnership, L.P., the Guarantors party
hereto, the several lenders from time to time party thereto,
and JPMorgan Chase Bank, N.A., as administrative agent
8-K
001-32559
10.1
February 18, 2025
19.1
Compensation Recovery Policy
10-K
001-32559
19.1
February 29, 2024
19.2
Insider Trading Policy
10-K
001-32559
19.2
February 29, 2024
21.1*
Subsidiaries of Medical Properties Trust, Inc.
23.1*
Consent of PricewaterhouseCoopers LLP
23.2*
Consent of PricewaterhouseCoopers LLP
31.1*
Certification of Chief Executive Officer pursuant to Rule
13a-14(a) under the Securities Exchange Act of 1934.
(Medical Properties Trust, Inc.)
31.2*
Certification of Chief Financial Officer pursuant to Rule 13a-
14(a) under the Securities Exchange Act of 1934. (Medical
Properties Trust, Inc.)
31.3*
Certification of Chief Executive Officer pursuant to Rule
13a-14(a) under the Securities Exchange Act of 1934. (MPT
Operating Partnership, L.P.)
31.4*
Certification of Chief Financial Officer pursuant to Rule 13a-
14(a) under the Securities Exchange Act of 1934. (MPT
Operating Partnership, L.P.)
32.1**
Certification of Chief Executive Officer and Chief Financial
Officer pursuant to Rule 13a-14(b) under the Securities
Exchange Act of 1934 and 18 U.S.C. Section 1350 as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002. (Medical Properties Trust, Inc.)
32.2**
Certification of Chief Executive Officer and Chief Financial
Officer pursuant to Rule 13a-14(b) under the Securities
Exchange Act of 1934 and 18 U.S.C. Section 1350 as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002. (MPT Operating Partnership, L.P.)
Exhibit
101.INS
Inline XBRL Instance Document
Exhibit
101.SCH
Inline XBRL Taxonomy Extension Schema With Embedded
Linkbase Documents
104
Cover page interactive data file (Formatted as Inline XBRL
with applicable taxonomy extension information contained in
Exhibits 101.)
* Filed herewith.
** Furnished herewith.
*** Management contract or compensatory plan or arrangement.
124
ITEM 16. Form 10-K Summary
None.
125
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the registrants have duly caused this Report to be
signed on their behalf by the undersigned, thereunto duly authorized.
MEDICAL PROPERTIES TRUST, INC.
By: /s/ J. Kevin Hanna
J. Kevin Hanna
Senior Vice President, Controller, Assistant Treasurer, and
Chief Accounting Officer
MPT OPERATING PARTNERSHIP, L.P.
By: /s/ J. Kevin Hanna
J. Kevin Hanna
Senior Vice President, Controller, Assistant Treasurer, and
Chief Accounting Officer of the sole member of the general
partner of MPT Operating Partnership, L.P.
Date: February 26, 2026
Power of Attorney
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below does hereby constitute and appoint
J. Kevin Hanna and R. Steven Hamner, and each of them singly, as her or his true and lawful attorneys with full power to them, and
each of them singly, to sign for such person and in her or his name in the capacity indicated below, the Annual Report on Form 10-K
filed herewith and any and all amendments to said Annual Report on Form 10-K, and generally to do all such things in her or his name
and in her or his capacity as officer and director to enable the registrants to comply with the provisions of the Exchange Act, and all
requirements of the SEC in connection therewith, hereby ratifying and confirming our signatures as they may be signed by our said
attorneys, or any of them, to said Annual Report on Form 10-K and any and all amendments thereto.
Pursuant to the requirements of the Exchange Act, this report has been signed by the following persons on behalf of the
registrants and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ Edward K. Aldag, Jr.
Edward K. Aldag, Jr.
Chairman of the Board, President,
Chief Executive Officer and Director
(Principal Executive Officer)
February 26, 2026
/s/ R. Steven Hamner
R. Steven Hamner
Executive Vice President,
Chief Financial Officer and Director
(Principal Financial Officer)
February 26, 2026
/s/ G. Steven Dawson
G. Steven Dawson
Director
February 26, 2026
/s/ Caterina A. Mozingo
Caterina A. Mozingo
Director
February 26, 2026
/s/ Emily W. Murphy
Director
February 26, 2026
Emily W. Murphy
/s/ Elizabeth N. Pitman
Elizabeth N. Pitman
Director
February 26, 2026
/s/ D. Paul Sparks, Jr.
D. Paul Sparks, Jr.
Director
February 26, 2026
/s/ Michael G. Stewart
Michael G. Stewart
Director
February 26, 2026
/s/ C. Reynolds Thompson, III
C. Reynolds Thompson, III
Director
February 26, 2026
126
Schedule II: Valuation and Qualifying Accounts
Medical Properties Trust, Inc. and MPT Operating Partnership, L.P.
December 31, 2025
Additions
Deductions
Year Ended December 31,
Balance at
Beginning of
Year(1)
Charged
Against
Operations(1)
Charged to
Other Accounts
Net
Recoveries/
Write-offs(1)
Balance at
End of Year(1)
(In thousands)
..............................
2025
$ 2,165,754
$
602,464 (2)
$
—
$
(426,550) (3)
$
2,341,668
..............................
2024
$
878,318
$
2,783,001 (4)
$
—
$ (1,495,565) (5)
$
2,165,754
..............................
2023
$
393,057
$
755,627 (6)
$
—
$
(270,366) (7)
$
878,318
(1) Includes real estate impairment reserves, allowances for doubtful accounts, straight-line rent reserves, credit loss reserves, tax
valuation allowances, and other reserves.
(2) Represents approximately $170 million of increase in credit loss reserves on loans and financing-type investments (primarily
related to Prospect as further described in Note 3 to Item 8 of this Annual Report on Form 10-K), an approximate $350
million increase in accounts receivable reserves, and an approximate $10 million increase to real estate impairment reserves.
Also includes approximately $70 million of increase in valuation allowances to reserve against our net deferred tax assets in
2025.
(3) Includes a $191 million decrease in accounts receivable reserves and an approximate $130 million decrease in credit loss
reserves on loans (primarily related to Prospect as further described in Note 3 to Item 8 of this Annual Report on Form 10-K,
as well as the Vibra restructuring transaction), and an approximate $100 million decrease in real estate impairment reserves
related to disposals in 2025.
(4) Represents $1.5 billion increase in credit loss reserves on loans and financing-type investments (primarily related to Steward
and Prospect as further described in Note 3 to Item 8 of this Annual Report on Form 10-K) and negative fair value adjustment
on our investment in the international joint venture, $86 million increase to real estate impairment reserves, approximately
$500 million increase to equity investment impairment reserves, and a $384 million increase in accounts receivable reserves.
Also includes an approximately $302 million increase in valuation allowances to reserve against our net deferred tax assets in
2024.
(5) Includes a $520 million decrease in accounts receivable reserves and $826 million decrease in credit loss reserves on loans
(primarily related to the full release of our claims in Steward as a result of the global settlement), along with a $138 million
decrease to our equity investment reserves (primarily related to the write-off of our Steward equity investment), and a $12
million decrease in real estate impairment reserves related to disposals in 2024.
(6) Represents $261 million increase in accounts receivable reserves, $259 million increase in straight-line rent receivable
reserves, $90 million increase to equity investment impairment reserves, and $89 million increase to real estate impairment
reserves, as further described in Note 3 to Item 8 of this Annual Report on Form 10-K. Also includes an increase of $10
million in credit loss reserves and an approximately $47 million increase in valuation allowances to reserve against our net
deferred tax assets in 2023.
(7) Includes a $170 million decrease in real estate impairment reserves, an approximately $35 million decrease in credit loss
reserves related to transitioning properties back to a tenant in exchange for a first-lien mortgage, and a $50 million recovery
of previously reserved interest satisfied as part of the “Prospect Transaction” as disclosed in Note 3 to Item 8 of this Annual
Report on Form 10-K. Also includes an approximately $11 million write-off of previously reserved accounts receivable.
SCHEDULE III — REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
December 31, 2025
Initial Costs
Additions Subsequent
to Acquisition
Cost at December 31, 2025(1)
Accumulated
Life on
which
depreciation
in latest
income
statements is
Location
Type of Property
Land
Buildings
Improve-
ments
Carrying
Costs
Land
Buildings
Total
Depreciation
Encum-
brances
Date of
Construction
Date
Acquired
computed
(Years)
(Dollar amounts in thousands)
Aberdeen, UK
Acute care general hospital
$
4,501
$
106,607
$
—
$
—
$
4,501
$
106,607
$
111,108
$
16,045
$
47,809
1985
January 9, 2020
40
Algeciras, Spain
Acute care general hospital
554
8,749
—
—
554
8,749
9,303
882
—
1997
April 29, 2022
40
Altoona, WI
Acute care general hospital
—
35,500
—
—
—
35,500
35,500
8,234
— (3)
2014
August 31, 2014
40
Altrincham, UK
Behavioral health facility
15,499
26,606
—
—
15,499
26,606
42,105
2,494
— (3)
1890, 2014
December 9, 2022
40
Alvin, TX
Freestanding ER
105
4,087
—
—
105
4,087
4,192
1,177
— (3)
2014
March 19, 2014
40
Arnold, UK
Behavioral health facility
505
10,496
—
—
505
10,496
11,001
1,296
— (3)
2008
June 25, 2021
40
Ashtead, UK
Acute care general hospital
39,969
74,936
—
—
39,969
74,936
114,905
12,400
— (3)
1981
August 16, 2019
40
Austin, TX
Freestanding ER
3,507
4,200
—
—
3,507
4,200
7,707
955
—
2017
March 2, 2017
40
Avondale, AZ
Behavioral health facility
5,383
64,650
8,281
—
5,383
72,931
78,314
7,320
— (3)
2016
October 19, 2021
40
Ayr, UK
Behavioral health facility
17,982
51,498
—
—
17,982
51,498
69,480
5,917
— (3)
2004
June 25, 2021
40
Bad Salzuflen, Germany
Rehabilitation hospital
11,176
28,283
—
—
11,176
28,283
39,459
6,233
— (3)
1974, 2016
November 30, 2017
40
Bad Salzuflen, Germany
Rehabilitation hospital
7,595
24,873
—
—
7,595
24,873
32,468
5,221
— (3)
1989, 2016
November 30, 2017
40
Bad Oeynhausen, Germany
Rehabilitation hospital
1,198
2,928
—
—
1,198
2,928
4,126
662
— (3)
1973, 2010
November 30, 2017
40
Bakersfield, CA
Rehabilitation hospital
2,178
45,253
—
—
2,178
45,253
47,431
4,337
— (3)
2022
May 15, 2020
40
Barby, Germany
Rehabilitation hospital
1,938
21,619
—
—
1,938
21,619
23,557
1,681
— (3)
1995
April 19, 2023
40
Basingstoke, UK
Acute care general hospital
13,677
53,123
—
—
13,677
53,123
66,800
8,049
34,016
1984
January 9, 2020
40
Bassenheim, Germany
Rehabilitation hospital
1,179
5,628
—
—
1,179
5,628
6,807
1,079
— (3)
1887, 1983
February 9, 2019
39
Bath, UK
Acute care general hospital
1,597
33,105
—
—
1,597
33,105
34,702
9,518
— (3)
2008, 2009
July 1, 2014
40
Bath, UK
Acute care general hospital
7,613
13,816
—
—
7,613
13,816
21,429
2,153
16,326
1992
January 9, 2020
40
Beckenham, UK
Acute care general hospital
5,781
22,172
—
—
5,781
22,172
27,953
3,347
15,750
1981
January 9, 2020
40
Bedford, UK
Acute care general hospital
1,630
7,942
42
—
1,630
7,984
9,614
1,213
8,489
1982
January 9, 2020
40
Bellflower, CA
Behavioral health facility
10,155
21,296
—
—
10,155
21,296
31,451
88
—
1972
August 23, 2019
21
Big Spring, TX
Acute care general hospital
1,655
21,254
815
—
1,655
22,069
23,724
4,028
—
1973
April 12, 2019
41
Birmingham, UK
Behavioral health facility
981
10,753
—
—
981
10,753
11,734
760
— (3)
1864, 2009
April 14, 2023
40
Birmingham, UK
Acute care general hospital
8,276
44,683
—
—
8,276
44,683
52,959
6,144
— (3)
2017
April 3, 2017
40
Birmingham, UK
Acute care general hospital
10,437
99,353
—
—
10,437
99,353
109,790
15,057
— (3)
1982
January 9, 2020
40
Birmingham, UK
Rehabilitation hospital
—
18,375
—
—
—
18,375
18,375
2,527
— (3)
2018
June 29, 2020
40
Birmingham, UK
Behavioral health facility
436
20,284
—
—
436
20,284
20,720
2,445
— (3)
1900, 1984,
2016
June 25, 2021
40
Blackburn, UK
Acute care general hospital
2,816
53,982
—
—
2,816
53,982
56,798
8,146
25,085
1957
January 9, 2020
40
Blackburn, UK
Behavioral health facility
21,201
57,514
—
—
21,201
57,514
78,715
7,094
— (3)
1930
June 25, 2021
40
Blue Springs, MO
Acute care general hospital
4,347
23,494
—
—
4,347
23,494
27,841
6,737
—
1980
February 13, 2015
40
Boardman, OH
Long term acute care
hospital
79
275
—
—
79
275
354
49
—
2008
August 30, 2019
40
Boise, ID
Long term acute care
hospital
1,558
11,027
—
—
1,558
11,027
12,585
1,786
—
2008
February 29, 2012
50
Bolton, UK
Acute care general hospital
1,678
47,136
—
—
1,678
47,136
48,814
7,095
22,412
1989
January 9, 2020
40
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127
Initial Costs
Additions Subsequent
to Acquisition
Cost at December 31, 2025(1)
Accumulated
Life on
which
depreciation
in latest
income
statements is
Location
Type of Property
Land
Buildings
Improve-
ments
Carrying
Costs
Land
Buildings
Total
Depreciation
Encum-
brances
Date of
Construction
Date
Acquired
computed
(Years)
(Dollar amounts in thousands)
Bossier City, LA
Long term acute care
hospital
900
17,818
944
—
900
18,762
19,662
8,126
—
(3)
1982
April 1, 2008
40
Bowling Green, KY
Rehabilitation hospital
3,486
56,296
3,550
—
3,486
59,846
63,332
10,251
—
1992
August 30, 2019
40
Brandis, Germany
Rehabilitation hospital
2,358
25,958
—
—
2,358
25,958
28,316
2,074
—
(3)
1995
April 19, 2023
40
Braunfels, Germany
Acute care general hospital
2,314
14,415
8
—
2,314
14,423
16,737
3,825
—
(3)
1977
June 30, 2015
40
Bristol, UK
Behavioral health facility
4,980
39,538
—
—
4,980
39,538
44,518
3,270
—
(3)
1790, 2014
December 9, 2022
40
Bromley, UK
Behavioral health facility
7,646
16,428
—
—
7,646
16,428
24,074
2,053
—
(3)
1714, 1830,
2021
June 25, 2021
40
Bury, UK
Behavioral health facility
9,007
20,524
—
—
9,007
20,524
29,531
2,664
—
(3)
2003
June 25, 2021
40
Bussage, UK
Behavioral health facility
8,986
3,972
—
—
8,986
3,972
12,958
500
—
(3)
1970
June 25, 2021
40
Cadiz, Spain
Acute care general hospital
319
7,234
—
—
319
7,234
7,553
711
—
2000
April 29, 2022
40
Canterbury, UK
Acute care general hospital
9,722
29,202
—
—
9,722
29,202
38,924
4,415
20,342
1982
January 9, 2020
40
Carmarthen, UK
Acute care general hospital
963
27,071
—
—
963
27,071
28,034
4,101
16,025
1990
January 9, 2020
40
Carrollton, TX
Behavioral health facility
4,941
52,227
—
—
4,941
52,227
57,168
5,940
—
(3)
2012
October 19, 2021
40
Casper, WY
Rehabilitation hospital
1,581
—
—
—
1,581
—
1,581
—
—
(3)
2012
February 29, 2012
—
Caterham, UK
Acute care general hospital
11,169
22,065
—
—
11,169
22,065
33,234
3,704
—
(3)
1982
August 16, 2019
40
Cayce, SC
Rehabilitation hospital
1,022
20,419
—
—
1,022
20,419
21,441
1,276
—
(3)
2023
October 21, 2022
40
Cheadle, UK
Acute care general hospital
32,744
172,486
25
—
32,744
172,511
205,255
26,035
113,319
1981
January 9, 2020
40
Cheadle, UK
Behavioral health facility
31,557
100,349
—
—
31,557
100,349
131,906
12,217
—
(3)
1849, 2018
June 25, 2021
40
Clarksville, TX
Rehabilitation hospital
2,460
25,540
—
—
2,460
25,540
28,000
3,550
—
(3)
2019
December 17, 2020
39
Cologne, Germany
Acute care general hospital
4,710
15,923
—
—
4,710
15,923
20,633
3,444
—
(3)
2011
June 23, 2017
40
Columbus, OH
Behavioral health facility
2,101
44,218
—
—
2,101
44,218
46,319
5,077
—
(3)
2017
October 19, 2021
40
Conroe, TX
Behavioral health facility
3,855
38,892
—
—
3,855
38,892
42,747
4,563
—
(3)
2018
October 19, 2021
40
Converse, TX
Freestanding ER
750
4,423
—
—
750
4,423
5,173
1,189
—
(3)
2015
April 10, 2015
40
Coral Gables, FL
Acute care general hospital
26,215
84,584
2,624
—
26,215
87,208
113,423
9,771
—
1959
August 1, 2021
40
Croydon, UK
Acute care general hospital
10,524
44,143
—
—
10,524
44,143
54,667
6,708
27,085
1982
January 9, 2020
40
Culver City, CA
Acute care general hospital
37,885
178,101
—
—
37,885
178,101
215,986
517
—
1969
August 23, 2019
29
Dahlen, Germany
Rehabilitation hospital
1,428
12,065
—
—
1,428
12,065
13,493
1,796
—
(3)
1994
July 8, 2020
40
Darlington, UK
Acute care general hospital
2,210
37,911
—
—
2,210
37,911
40,121
5,265
36,188
2001
August 7, 2020
40
Darlington, UK
Behavioral health facility
22,488
51,083
—
—
22,488
51,083
73,571
6,731
—
(3)
1935, 2018,
2020
June 25, 2021
40
Darlington, UK
Behavioral health facility
5,534
27,888
—
—
5,534
27,888
33,422
3,305
—
(3)
1960, 1990
June 25, 2021
40
Dewsbury, UK
Behavioral health facility
1,185
10,795
—
—
1,185
10,795
11,980
802
—
(3)
2012
April 14, 2023
40
Diss, UK
Behavioral health facility
3,080
10,984
—
—
3,080
10,984
14,064
1,516
—
(3)
1840 (2)
June 25, 2021
40
Dorchester, UK
Acute care general hospital
571
33,173
—
—
571
33,173
33,744
5,000
—
(3)
1981
January 9, 2020
40
Dormagen, Germany
Rehabilitation hospital
2,032
6,010
—
—
2,032
6,010
8,042
1,172
—
(3)
1993, 2006
August 28, 2018
40
........................................
...................................
......................................
...................................
................................................
.............................................
...................................................
..............................................
...............................................
.........................................
........................................
...........................................
................................................
............................................
..................................................
..............................................
..............................................
..........................................
....................................
...........................................
................................................
............................................
.......................................
.............................................
.........................................
.......................................
..........................................
..........................................
..........................................
...........................................
..........................................
....................................................
..................................
128
Initial Costs
Additions Subsequent
to Acquisition
Cost at December 31, 2025(1)
Accumulated
Life on
which
depreciation
in latest
income
statements is
Location
Type of Property
Land
Buildings
Improve-
ments
Carrying
Costs
Land
Buildings
Total
Depreciation
Encum-
brances
Date of
Construction
Date
Acquired
computed
(Years)
(Dollar amounts in thousands)
Droitwich, UK
Acute care general hospital
81
16,192
—
—
81
16,192
16,273
2,461
—
(3)
1984
January 9, 2020
40
Dublin, OH
Behavioral health facility
5,118
69,346
—
—
5,118
69,346
74,464
7,804
—
(3)
2012
October 19, 2021
40
El Paso, TX
Rehabilitation hospital
4,268
21,345
—
—
4,268
21,345
25,613
3,099
—
(3)
2018
December 17, 2020
38
Englewood, CO
Behavioral health facility
3,369
65,480
—
—
3,369
65,480
68,849
7,432
—
(3)
2017
October 19, 2021
40
Essex, UK
Behavioral health facility
4,913
45,715
—
—
4,913
45,715
50,628
3,769
—
(3)
1790, 1992,
2014
December 9, 2022
40
Euxton, UK
Acute care general hospital
4,887
37,638
—
—
4,887
37,638
42,525
6,412
—
(3)
1981
August 16, 2019
40
Flagstaff, AZ
Rehabilitation hospital
3,049
22,464
—
—
3,049
22,464
25,513
4,399
—
(3)
2016
August 23, 2016
40
Florence, AZ
Acute care general hospital
900
28,462
105
—
900
28,567
29,467
9,817
—
2012
February 7, 2012
40
Floridablanca, Colombia
Acute care general hospital
836
26,157
—
—
836
26,157
26,993
2,256
—
1997
July 29, 2022
40
Folsom, CA
Long term acute care hospital
3,291
21,293
—
—
3,291
21,293
24,584
4,002
—
2009
August 30, 2019
40
Fort Worth, TX
Behavioral health facility
3,406
34,627
—
—
3,406
34,627
38,033
4,039
—
(3)
2014
October 19, 2021
40
Fresno, CA
Rehabilitation hospital
5,507
70,473
—
—
5,507
70,473
75,980
12,025
—
1991
August 30, 2019
40
Frome, UK
Behavioral health facility
3,065
18,571
—
—
3,065
18,571
21,636
2,357
—
(3)
1980
June 25, 2021
40
Frome, UK
Behavioral health facility
11,531
11,337
—
—
11,531
11,337
22,868
1,895
—
(3)
1700, 2015,
2017
June 25, 2021
40
Gainesborough, UK
Behavioral health facility
1,618
10,592
—
—
1,618
10,592
12,210
981
—
(3)
2008
April 14, 2023
40
Gardena, CA
Acute care general hospital
14,010
65,282
211
—
14,010
65,493
79,503
7,938
—
(3)
1966
July 6, 2021
40
Georgetown, TX
Behavioral health facility
4,569
22,858
10,561
—
4,569
33,419
37,988
3,208
—
(3)
2014
October 19, 2021
40
Gilbert, AZ
Behavioral health facility
4,790
45,933
9,647
—
4,790
55,580
60,370
5,272
—
(3)
2020
October 19, 2021
40
Glasgow, UK
Acute care general hospital
6,818
139,259
—
—
6,818
139,259
146,077
20,948
72,792
1983
January 9, 2020
40
Glasgow, UK
Behavioral health facility
1,512
16,531
—
—
1,512
16,531
18,043
2,016
—
(3)
1900, 1980
June 25, 2021
40
Gloucester, UK
Acute care general hospital
5,906
64,960
—
—
5,906
64,960
70,866
10,894
—
(3)
1990
August 16, 2019
40
Godalming, UK
Behavioral health facility
9,903
20,090
—
—
9,903
20,090
29,993
2,621
—
(3)
1796, 2007
June 25, 2021
40
Great Missenden, UK
Acute care general hospital
12,458
111,313
—
—
12,458
111,313
123,771
16,829
58,207
1981
January 9, 2020
40
Grefath, Germany
Rehabilitation hospital
1,277
3,222
—
—
1,277
3,222
4,499
642
—
(3)
1886, 1983
August 28, 2018
40
Guildford, UK
Acute care general hospital
7,283
38,556
—
—
7,283
38,556
45,839
5,835
23,155
1989
January 9, 2020
40
Halsall, UK
Acute care general hospital
2,132
32,980
—
—
2,132
32,980
35,112
5,546
—
(3)
1986
August 16, 2019
40
Harrow, UK
Acute care general hospital
40,647
42,777
—
—
40,647
42,777
83,424
6,505
—
(3)
1980
January 9, 2020
40
Hartsville, SC
Acute care general hospital
2,050
43,970
—
—
2,050
43,970
46,020
13,211
—
(3)
1999
August 31, 2015
34
Hassocks, UK
Behavioral health facility
5,805
30,350
—
—
5,805
30,350
36,155
4,198
—
(3)
1998
June 25, 2021
40
Hastings, PA
Acute care general hospital
603
8,834
—
—
603
8,834
9,437
2,179
—
(3)
1924
December 17, 2019
30
Hausman, TX
Acute care general hospital
1,500
8,957
—
—
1,500
8,957
10,457
2,856
—
(3)
2013
March 1, 2013
40
Heidelberg, Germany
Rehabilitation hospital
6,636
37,907
—
—
6,636
37,907
44,543
9,051
—
(3)
1885, 1991
June 22, 2016
40
Helotes, TX
Freestanding ER
1,900
5,115
—
—
1,900
5,115
7,015
1,258
—
(3)
2016
March 10, 2016
40
Helsinki, Finland
Acute care general hospital
4,347
71,714
1,164
—
4,347
72,878
77,225
6,896
—
1992, 2013
March 11, 2022
40
Hemel Hempstead, UK
Behavioral health facility
13,220
6,672
—
—
13,220
6,672
19,892
1,048
—
(3)
1901, 1990
June 25, 2021
40
Hialeah, FL
Acute care general hospital
18,802
105,316
4,784
—
18,802
110,100
128,902
12,422
—
1950
August 1, 2021
40
..............................
...................................
..................................
.............................
.....................................
...................................
.................................
.................................
................
...................................
.............................
....................................
...................................
...................................
........................
.................................
............................
...................................
.................................
.................................
..............................
............................
....................
..........................
...............................
...................................
...................................
...............................
................................
.................................
.................................
.....................
...................................
...........................
..................
...................................
129
Initial Costs
Additions Subsequent
to Acquisition
Cost at December 31, 2025(1)
Accumulated
Life on
which
depreciation
in latest
income
statements is
Location
Type of Property
Land
Buildings
Improve-
ments
Carrying
Costs
Land
Buildings
Total
Depreciation
Encum-
brances
Date of
Construction
Date
Acquired
computed
(Years)
(Dollar amounts in thousands)
Hialeah, FL
Acute care general hospital
75,339
222,271
2,564
—
75,339
224,835
300,174
28,114
—
1969
August 1, 2021
40
Highland Hills, OH
Behavioral health facility
3,148
43,891
—
—
3,148
43,891
47,039
5,042
— (3)
2015
October 19, 2021
40
Hinckley, UK
Behavioral health facility
2,610
17,786
—
—
2,610
17,786
20,396
2,167
— (3)
1892, 2007
June 25, 2021
40
Hollywood, CA
Acute care general hospital
62,916
37,051
—
—
62,916
37,051
99,967
95
—
1962
August 23, 2019
34
Hook, UK
Behavioral health facility
5,732
10,918
—
—
5,732
10,918
16,650
1,447
— (3)
1980
June 25, 2021
40
Hoover, AL
Freestanding ER
—
7,581
—
—
—
7,581
7,581
2,361
— (3)
2015
May 1, 2015
34
Hoover, AL
Freestanding ER
—
1,034
296
—
—
1,330
1,330
388
— (3)
2015
May 1, 2015
34
Hot Springs, AR
Acute care general hospital
5,622
59,432
21,221
—
5,622
80,653
86,275
21,530
— (3)
1985
August 31, 2015
40
Houston, TX
Acute care general hospital
3,274
27,324
32,499
—
3,274
59,823
63,097
24,422
—
1960
August 10, 2007
40
Houston, TX
Behavioral health facility
6,063
19,881
2,565
—
6,063
22,446
28,509
2,806
—
2020
October 25, 2019
40
Houston, TX
Acute care general hospital
29,706
101,846
90,935
—
29,706
192,781
222,487
24,195
—
1940-1950
September 29, 2017
41
Houston, TX
Freestanding ER
950
3,996
—
—
950
3,996
4,946
924
— (3)
2016
September 26, 2016
40
Huntington Park, CA
Acute care general hospital
3,935
6,103
—
—
3,935
6,103
10,038
829
— (3)
1960-1969
July 6, 2021
40
Idaho Falls, ID
Acute care general hospital
1,822
37,467
72,789
—
1,822
110,256
112,078
23,598
—
2002
April 1, 2008
40
Idaho Falls, ID
Acute care general hospital
1,880
108,498
15,146
—
1,880
123,644
125,524
16,083
— (3)
2020
December 19, 2017
40
Johnstown, PA
Acute care general hospital
8,877
247,158
—
—
8,877
247,158
256,035
50,152
— (3)
1924
December 17, 2019
30
Kansas City, KS
Acute care general hospital
2,351
13,665
—
—
2,351
13,665
16,016
1,946
— (3)
2017
June 10, 2019
50
Kansas City, MO
Acute care general hospital
10,497
64,419
—
—
10,497
64,419
74,916
17,920
—
1978
February 13, 2015
40
Katy, TX
Freestanding ER
1,491
2,870
—
—
1,491
2,870
4,361
904
—
2016
October 10, 2016
40
Kuhlungsborn, Germany
Rehabilitation hospital
7,138
18,355
—
—
7,138
18,355
25,493
1,354
— (3)
1998
June 1, 2023
40
Kuopio, Finland
Acute care general hospital
1,364
46,129
—
—
1,364
46,129
47,493
4,622
—
2017
March 11, 2022
29
Lafayette, IN
Rehabilitation hospital
800
14,968
(25)
—
800
14,943
15,743
4,816
— (3)
2013
February 1, 2013
40
Lafayette, IN
Behavioral health facility
2,829
10,795
—
—
2,829
10,795
13,624
1,504
— (3)
2012
October 19, 2021
40
Lander, WY
Acute care general hospital
757
42,849
—
—
757
42,849
43,606
6,869
— (3)
1983
December 17, 2019
40
Lauderdale Lakes, FL
Acute care general hospital
10,657
150,313
2,168
—
10,657
152,481
163,138
18,902
—
1975
August 1, 2021
40
League City, TX
Freestanding ER
1,244
3,901
—
—
1,244
3,901
5,145
1,024
—
2015
June 19, 2015
40
Leawood, KS
Acute care general hospital
2,513
13,938
—
—
2,513
13,938
16,451
1,972
— (3)
2017
June 10, 2019
50
Leeds, UK
Behavioral health facility
2,413
10,078
—
—
2,413
10,078
12,491
1,267
— (3)
1990
June 25, 2021
40
Lewiston, ID
Acute care general hospital
5,389
75,435
—
—
5,389
75,435
80,824
22,108
— (3)
1922
May 1, 2017
40
London, UK
Acute care general hospital
9,252
60,527
—
—
9,252
60,527
69,779
9,111
40,474
1984
January 9, 2020
40
London, UK
Behavioral health facility
38,386
54,940
—
—
38,386
54,940
93,326
4,554
— (3)
1811, 2014
December 9, 2022
40
London, UK
Acute care general hospital
3,477
4,390
—
—
3,477
4,390
7,867
669
— (3)
1987
January 9, 2020
40
London, UK
Behavioral health facility
30,627
15,847
—
—
30,627
15,847
46,474
1,497
—
(3)
1790, 1992,
2014
December 9, 2022
40
London, UK
Acute care general hospital
13,179
86,016
—
—
13,179
86,016
99,195
12,913
44,446
1977
January 9, 2020
40
London, UK
Behavioral health facility
6,521
16,570
—
—
6,521
16,570
23,091
2,051
— (3)
1900, 1960
June 25, 2021
40
................................................
.....................................
.............................................
..........................................
...................................................
................................................
................................................
.........................................
...............................................
...............................................
...............................................
...............................................
..................................
...........................................
...........................................
...........................................
.........................................
........................................
.....................................................
.............................
.........................................
..............................................
..............................................
................................................
.................................
.........................................
..............................................
..................................................
..............................................
...............................................
...............................................
...............................................
...............................................
...............................................
...............................................
130
Initial Costs
Additions Subsequent
to Acquisition
Cost at December 31, 2025(1)
Accumulated
Life on
which
depreciation
in latest
income
statements is
Location
Type of Property
Land
Buildings
Improve-
ments
Carrying
Costs
Land
Buildings
Total
Depreciation
Encum-
brances
Date of
Construction
Date
Acquired
computed
(Years)
(Dollar amounts in thousands)
London, UK
Behavioral health facility
14,617
7,208
—
—
14,617
7,208
21,825
928
—
(3)
1992
June 25, 2021
40
Los Angeles, CA
Acute care general hospital
12,562
40,164
394
—
12,562
40,558
53,120
4,680
—
(3)
1972
July 6, 2021
40
Los Angeles, CA
Acute care general hospital
10,579
62,948
—
—
10,579
62,948
73,527
144
—
1955
August 23, 2019
37
Lubbock, TX
Rehabilitation hospital
1,376
28,292
3,648
—
1,376
31,940
33,316
8,342
—
(3)
2008
June 16, 2015
40
Malaga, SP
Acute care general hospital
796
12,469
—
—
796
12,469
13,265
1,167
—
2018
April 29, 2022
40
Mandeville, LA
Freestanding ER
2,800
5,370
—
—
2,800
5,370
8,170
1,231
—
(3)
2016
October 28, 2016
40
Marrero, LA
Freestanding ER
1,517
5,801
—
—
1,517
5,801
7,318
1,378
—
(3)
2016
July 15, 2016
40
McKinney, TX
Freestanding ER
2,441
4,060
—
—
2,441
4,060
6,501
1,421
—
2015
July 31, 2015
30
McKinney, TX
Behavioral health facility
2,934
31,068
—
—
2,934
31,068
34,002
1,399
—
(3)
2024
October 19, 2021
40
McMinnville, OR
Acute care general hospital
5,000
97,900
—
—
5,000
97,900
102,900
24,113
—
(3)
1996
August 31, 2015
41
Melton Mowbray, UK
Behavioral health facility
6,035
16,916
—
—
6,035
16,916
22,951
2,177
—
(3)
1990
June 25, 2021
40
Mesa, AZ
Acute care general hospital
6,140
99,275
4,152
—
6,140
103,427
109,567
32,867
—
2007
September 26, 2013
40
Mesa, AZ
Acute care general hospital
2,604
16,400
—
—
2,604
16,400
19,004
1,556
—
2019
April 18, 2022
40
Meyersdale, PA
Acute care general hospital
390
4,280
—
—
390
4,280
4,670
1,096
—
(3)
1960
December 17, 2019
30
Miami, FL
Acute care general hospital
44,400
107,203
3,444
—
44,400
110,647
155,047
14,913
—
1955
August 1, 2021
40
Miami, FL
Acute care general hospital
20,430
30,276
10,947
—
20,430
41,223
61,653
3,276
—
1958, 1962,
1988, 2016
April 25, 2022
40
Milton Keynes, UK
Acute care general hospital
5,552
37,956
—
—
5,552
37,956
43,508
5,731
—
(3)
1983
January 9, 2020
40
Monmouth, UK
Behavioral health facility
16,413
12,227
—
—
16,413
12,227
28,640
1,859
—
(3)
2017
June 25, 2021
40
Montclair, NJ
Acute care general hospital
7,900
99,640
577
—
8,477
99,640
108,117
29,917
—
(3)
1920-2000
April 1, 2014
40
New Braunfels, TX
Rehabilitation hospital
1,853
10,622
—
—
1,853
10,622
12,475
1,402
—
(3)
2011
February 29, 2012
40
New Orleans, LA
Freestanding ER
2,850
6,125
—
—
2,850
6,125
8,975
1,416
—
(3)
2016
September 23, 2016
40
Newark, NJ
Acute care general hospital
32,957
24,553
—
—
32,957
24,553
57,510
3,294
—
1919, 1920-
2003
May 2, 2016
40
Newburgh, IN
Behavioral health facility
1,215
7,212
—
—
1,215
7,212
8,427
908
—
(3)
2010
October 19, 2021
40
Northland, MO
Long term acute care hospital
834
17,182
—
—
834
17,182
18,016
6,408
—
(3)
2007
February 14, 2011
40
Norwalk, CA
Acute care general hospital
2,811
5,940
—
—
2,811
5,940
8,751
835
—
(3)
1959, 1995
July 6, 2021
40
Norwalk, CA
Acute care general hospital
7,946
30,465
7,104
—
7,946
37,569
45,515
4,158
—
(3)
1958-1978
July 6, 2021
40
Norwalk, CA
Acute care general hospital
6,982
14,308
—
—
6,982
14,308
21,290
36
—
1954
August 23, 2019
37
Norwood, MA
Acute care general hospital
6,860
—
—
—
6,860
—
6,860
—
—
N/A
June 27, 2018
46
Nottingham, UK
Acute care general hospital
5,242
48,637
—
—
5,242
48,637
53,879
7,398
34,690
1983
January 9, 2020
40
Nottingham, UK
Behavioral health facility
10,596
9,483
—
—
10,596
9,483
20,079
1,401
—
(3)
2000
June 25, 2021
40
Nottingham, UK
Behavioral health facility
10,754
3,436
—
—
10,754
3,436
14,190
432
—
(3)
1980
June 25, 2021
40
Odessa, TX
Acute care general hospital
6,217
123,518
16,600
—
6,217
140,118
146,335
27,772
—
1973-2004
September 29, 2017
41
Ogden, UT
Rehabilitation hospital
1,759
16,414
—
—
1,759
16,414
18,173
4,846
—
(3)
2014
March 1, 2014
40
Oklahoma City, OK
Behavioral health facility
3,641
3,047
—
—
3,641
3,047
6,688
647
—
(3)
2017
October 19, 2021
40
Olathe, KS
Behavioral health facility
6,882
57,056
18,873
—
6,882
75,929
82,811
6,778
—
(3)
2015
October 19, 2021
40
Olathe, KS
Acute care general hospital
3,485
14,484
—
—
3,485
14,484
17,969
2,071
—
2018
June 10, 2019
50
Orpington, UK
Acute care general hospital
10,942
45,210
—
—
10,942
45,210
56,152
6,846
26,061
1987
January 9, 2020
40
Ottumwa, IA
Acute care general hospital
2,377
48,697
—
—
2,377
48,697
51,074
10,869
—
(3)
1950
December 17, 2019
30
Oulu, Finland
Acute care general hospital
3,376
47,789
—
—
3,376
47,789
51,165
4,848
—
2017
March 11, 2022
40
Overland Park, KS
Acute care general hospital
2,974
14,405
—
—
2,974
14,405
17,379
2,070
—
2017
June 10, 2019
50
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......................................
......................................
............................................
...............................................
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.......................................
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..................................
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..........................................
........................................
...........................................
...........................................
...........................................
..........................................
.......................................
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.......................................
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...............................................
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...............................................
...............................................
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...................................
131
Initial Costs
Additions Subsequent
to Acquisition
Cost at December 31, 2025(1)
Accumulated
Life on
which
depreciation
in latest
income
statements is
Location
Type of Property
Land
Buildings
Improve-
ments
Carrying
Costs
Land
Buildings
Total
Depreciation
Encum-
brances
Date of
Construction
Date
Acquired
computed
(Years)
(Dollar amounts in thousands)
Overland Park, KS
Acute care general hospital
3,191
14,263
—
—
3,191
14,263
17,454
2,152
— (3)
2019
June 10, 2019
50
Overlook, TX
Acute care general hospital
2,452
9,666
7
—
2,452
9,673
12,125
3,112
— (3)
2012
February 1, 2013
40
Palestine, TX
Acute care general hospital
1,848
95,257
—
—
1,848
95,257
97,105
14,978
— (3)
1988
December 17, 2019
40
Pasco, WA
Acute care general hospital
2,594
13,195
—
—
2,594
13,195
15,789
3,306
— (3)
1920
August 31, 2018
30
Pearland, TX
Freestanding ER
1,075
3,577
—
—
1,075
3,577
4,652
1,013
— (3)
2014
September 8, 2014
40
Petersburg, VA
Rehabilitation hospital
1,302
9,121
—
—
1,302
9,121
10,423
3,990
—
2006
July 1, 2008
40
Phoenix, AZ
Acute care general hospital
5,773
—
—
—
5,773
—
5,773
—
—
N/A
September 29, 2017
—
Poole, UK
Acute care general hospital
2,461
40,625
—
—
2,461
40,625
43,086
7,102
13,804
1996
April 3, 2019
40
Poplar Bluff, MO
Acute care general hospital
2,659
38,694
—
—
2,659
38,694
41,353
17,125
— (3)
1980
April 22, 2008
40
Port Arthur, TX
Acute care general hospital
11,432
76,746
6,877
—
11,432
83,623
95,055
25,305
—
2005
September 26, 2013
40
Port Huron, MI
Acute care general hospital
2,531
14,252
—
—
2,531
14,252
16,783
4,869
—
1953, 1973-
1983
December 31, 2015
30
Post Falls, ID
Rehabilitation hospital
417
12,175
1,905
—
767
13,730
14,497
4,128
— (3)
2013
December 31, 2013
40
Preston, UK
Behavioral health facility
9,251
33,685
—
—
9,251
33,685
42,936
3,583
—
(3)
1850, 2018,
2021
June 25, 2021
40
Princes Risborough, UK
Acute care general hospital
2,601
—
—
—
2,601
—
2,601
—
—
N/A
January 9, 2020
40
Raleigh, NC
Behavioral health facility
3,469
27,514
—
—
3,469
27,514
30,983
3,402
— (3)
2018
October 19, 2021
40
Reading, UK
Acute care general hospital
36,829
48,872
—
—
36,829
48,872
85,701
8,085
— (3)
1990
August 16, 2019
40
Reading, UK
Acute care general hospital
27,515
88,165
—
—
27,515
88,165
115,680
11,241
23,813
2012
December 18, 2020
40
Redding, CA
Long term acute care
hospital
1,856
25,586
—
—
1,856
25,586
27,442
77
—
1991
November 17, 2025
30
Remscheid, Germany
Rehabilitation hospital
1,116
2,689
—
—
1,116
2,689
3,805
523
— (3)
1951, 1983
August 28, 2018
40
Richmond, TX
Behavioral health facility
5,380
6,155
10,815
—
5,380
16,970
22,350
1,382
— (3)
2014
October 19, 2021
40
Richmond, VA
Long term acute care
hospital
1,289
10,071
—
—
1,289
10,071
11,360
2,065
—
1989
August 30, 2019
40
Riverton, WY
Acute care general hospital
1,163
29,647
—
—
1,163
29,647
30,810
5,513
— (3)
1983
December 17, 2019
36
Roaring Springs, PA
Acute care general hospital
1,446
9,549
—
—
1,446
9,549
10,995
2,432
— (3)
1924
December 17, 2019
30
Rochdale, MA
Long term acute care
hospital
654
3,368
—
—
654
3,368
4,022
625
—
1989
August 30, 2019
40
Rochdale, MA
Acute care general hospital
67
344
—
—
67
344
411
64
—
1989
August 30, 2019
40
Rochdale, UK
Acute care general hospital
3,786
43,135
—
—
3,786
43,135
46,921
6,530
23,581
1965
January 9, 2020
40
Roeland Park, KS
Acute care general hospital
1,569
15,103
—
—
1,569
15,103
16,672
2,116
— (3)
2018
June 10, 2019
50
Romford, UK
Behavioral health facility
5,667
9,278
—
—
5,667
9,278
14,945
1,317
— (3)
1980
June 25, 2021
40
Rosenberg, TX
Freestanding ER
1,217
4,505
—
—
1,217
4,505
5,722
1,126
—
2016
January 15, 2016
40
Rowley, UK
Acute care general hospital
3,078
19,371
—
—
3,078
19,371
22,449
3,359
— (3)
1986
August 16, 2019
40
Royston, UK
Behavioral health facility
7,127
21,220
—
—
7,127
21,220
28,347
3,007
— (3)
1906, 1970
June 25, 2021
40
San Antonio, TX
Acute care general hospital
7,061
10,851
7,982
—
7,061
18,833
25,894
6,730
—
1978-2002
September 29, 2017
41
San Antonio, TX
Freestanding ER
2,988
4,801
—
—
2,988
4,801
7,789
1,090
— (3)
2016
December 9, 2016
40
San Antonio, TX
Freestanding ER
351
3,952
—
—
351
3,952
4,303
1,160
— (3)
2014
January 1, 2014
40
San Antonio, TX
Acute care general hospital
2,248
5,880
—
—
2,248
5,880
8,128
1,936
— (3)
2012
October 2, 2012
40
San Antonio, TX
Freestanding ER
2,310
4,253
—
—
2,310
4,253
6,563
975
— (3)
2016
October 27, 2016
40
San Bernardino, CA
Acute care general hospital
2,209
37,498
—
—
2,209
37,498
39,707
6,488
—
1993
August 30, 2019
40
—
.....................................
.............................................
.................................................
..................................................
..............................................
..............................................
............................................
.........................................
......................................
.........................................
..........................................
.............................................
..............................................
............................
.......................................
.............................................
............................................
...............................................
..............................................
..............................................
..............................................
...........................................
................................
...........................................
...................................................................
............................................
.................................
...........................................
...................................................................
...........................................
...............................................
.......................................
...........................................
.......................................
.......................................
..................................
.......................................
.......................................
..............................................
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132
Initial Costs
Additions Subsequent
to Acquisition
Cost at December 31, 2025(1)
Accumulated
Life on
which
depreciation
in latest
income
statements is
Location
Type of Property
Land
Buildings
Improve-
ments
Carrying
Costs
Land
Buildings
Total
Depreciation
Encum-
brances
Date of
Construction
Date Acquired
computed
(Years)
(Dollar amounts in thousands)
Santa Maria de Feira,
PT
Acute care general hospital
1,979
18,981
—
—
1,979
18,981
20,960
2,083
—
2015
October 21, 2021
40
Sharon, PA
Acute care general hospital
6,179
9,066
8,513
—
6,179
17,579
23,758
4,430
—
1950-1980
May 1, 2017
41
Shawnee, KS
Acute care general hospital
3,076
14,945
—
—
3,076
14,945
18,021
2,440
—
2018
June 10, 2019
50
Sheffield, UK
Acute care general hospital
7,000
47,222
—
—
7,000
47,222
54,222
7,188
34,458
2008
January 9, 2020
40
Sherman, TX
Acute care general hospital
3,363
10,931
—
—
3,363
10,931
14,294
4,962
—
1913, 1960-
2010
October 31, 2014
40
Southampton, UK
Behavioral health facility
6,821
20,030
—
—
6,821
20,030
26,851
2,792
— (3)
1820, 1985
June 25, 2021
40
Spartanburg, SC
Rehabilitation hospital
1,135
15,717
—
—
1,135
15,717
16,852
4,866
— (3)
2013
August 1, 2013
40
Stirling, UK
Acute care general hospital
1,116
20,651
—
—
1,116
20,651
21,767
2,428
9,691
1992
July 6, 2021
40
Stockton, CA
Rehabilitation hospital
2,717
50,681
—
—
2,717
50,681
53,398
3,379
— (3)
2021
November 23, 2020
40
Surrey, UK
Behavioral health facility
15,926
9,663
—
—
15,926
9,663
25,589
1,007
— (3)
1950, 2014
December 9, 2022
40
Swindon, UK
Acute care general hospital
5,639
63,265
—
—
5,639
63,265
68,904
9,546
33,219
1984
January 9, 2020
40
Tadley, UK
Behavioral health facility
22,140
20,174
—
—
22,140
20,174
42,314
2,982
— (3)
2020
June 25, 2021
40
Tempe, AZ
Acute care general hospital
6,050
10,986
5,239
—
6,050
16,225
22,275
3,843
—
1940
September 29, 2017
41
Texarkana, TX
Acute care general hospital
14,562
—
—
—
14,562
—
14,562
—
—
N/A
September 29, 2017
-
The Woodlands, TX
Freestanding ER
1,922
4,524
—
—
1,922
4,524
6,446
1,103
— (3)
2016
March 28, 2016
40
Toledo, OH
Rehabilitation hospital
1,103
17,740
—
—
1,103
17,740
18,843
4,324
— (3)
2016
April 1, 2016
40
Tomball, TX
Long term acute care
hospital
1,299
16,185
—
—
1,299
16,185
17,484
8,684
—
2005
December 21, 2010
40
Torquay, UK
Acute care general hospital
3,155
37,831
—
—
3,155
37,831
40,986
6,177
— (3)
1981
August 16, 2019
40
Turku, Finland
Acute care general hospital
1,285
61,920
—
—
1,285
61,920
63,205
6,046
—
2018
March 11, 2022
40
Usk, UK
Behavioral health facility
1,831
32,837
—
—
1,831
32,837
34,668
3,207
—
(3)
1770, 1850,
1980
June 25, 2021
40
Valencia, SP
Acute care general hospital
11,841
74,006
—
—
11,841
74,006
85,847
8,710
—
2017
December 2, 2021
40
Valencia, SP
Acute care general hospital
27,603
25,848
—
—
27,603
25,848
53,451
1,240
—
1960, 2024
May 6, 2022
40
Vancouver, WA
Behavioral health facility
9,313
12,505
—
—
9,313
12,505
21,818
1,222
— (3)
2018
October 19, 2021
40
Van Nuys, CA
Behavioral health facility
8,041
18,436
—
—
8,041
18,436
26,477
48
—
1958
August 23, 2019
35
Viseu, Portugal
Acute care general hospital
2,697
30,733
—
—
2,697
30,733
33,430
5,243
—
2016
November 28, 2019
37
Warren, OH
Acute care general hospital
5,385
47,466
10,492
—
5,385
57,958
63,343
14,060
—
1982
May 1, 2017
41
Warren, OH
Rehabilitation hospital
2,417
15,857
1,737
—
2,417
17,594
20,011
4,367
—
1922-2000
May 1, 2017
46
West Chester, OH
Behavioral health facility
3,670
61,338
—
—
3,670
61,338
65,008
7,058
— (3)
2013
October 19, 2021
40
West Midlands, UK
Behavioral health facility
2,035
7,581
—
—
2,035
7,581
9,616
579
— (3)
2013
April 14, 2023
40
West Monroe, LA
Acute care general hospital
11,702
69,433
19,116
—
12,254
87,997
100,251
25,540
—
1962
September 26, 2013
40
Wichita, KS
Rehabilitation hospital
1,019
16,881
—
—
1,019
16,881
17,900
8,131
—
1992
April 4, 2008
40
Willenhall, UK
Behavioral health facility
7,715
17,212
—
—
7,715
17,212
24,927
2,094
— (3)
2000
June 25, 2021
40
Winchester, UK
Acute care general hospital
6,865
10,877
—
—
6,865
10,877
17,742
1,683
11,033
1911
January 9, 2020
40
Windsor, UK
Acute care general hospital
12,896
110,846
—
—
12,896
110,846
123,742
16,670
— (3)
1955
January 9, 2020
40
Woking, UK
Behavioral health facility
7,663
4,954
—
—
7,663
4,954
12,617
683
— (3)
1800, 2020
June 25, 2021
40
Worthing, UK
Acute care general hospital
7,108
31,908
—
—
7,108
31,908
39,016
4,827
18,509
1994
January 9, 2020
40
York, UK
Behavioral health facility
3,924
7,137
—
—
3,924
7,137
11,061
549
— (3)
2008
April 14, 2023
40
York, UK
Behavioral health facility
22,899
75,966
—
—
22,899
75,966
98,865
9,030
— (3)
1900, 1980
June 25, 2021
40
Youngstown, OH
Acute care general hospital
3,555
3,565
488
—
3,555
4,053
7,608
2,823
—
1929-2003
May 1, 2017
41
$
1,786,342
$
8,594,759
$
421,829
$
—
$
1,787,821
$
9,015,109
$
10,802,930
$
1,438,594
$
850,779
(1) The aggregate cost for federal income tax purposes is $12.0 billion.
(2) Date of construction is based off of best available information, but note that this facility has had multiple updates since initial construction.
(3) Equity in the legal entity holding this property is pledged as collateral for the 7.000% Senior Secured Notes due 2032 and the 8.500% Senior Secured Notes due 2032.
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..................
..................
......................
..............
.....................
...................
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...................
......................
......................
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.......
.....................
...................
....................
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.....................
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................
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133
The changes in total real estate assets (excluding construction in progress, intangible lease assets, investment in financing leases, and mortgage loans) are as follows for the
years ended (in thousands):
December 31, 2025
December 31, 2024
December 31, 2023
COST
Balance at beginning of period
$
10,086,493
$
11,813,175
$
12,300,524
Acquisitions
73,973
—
143,882
Transfers from construction in progress
—
79,385
72,791
Additions
42,326
73,523
87,873
Dispositions
(249,587)
(1,492,320)
(874,519)
Impairments
29,906
(276,572)
(67,671)
Other
819,819 (4)
(110,698) (4)
150,295 (4)
Balance at end of period
$
10,802,930 (5)
$
10,086,493 (5)
$
11,813,175 (5)
The changes in accumulated depreciation are as follows for the years ended (in thousands):
December 31, 2025
December 31, 2024
December 31, 2023
ACCUMULATED DEPRECIATION
Balance at beginning of period
$
1,239,897
$
1,227,619
$
1,008,340
Depreciation
235,053
242,802
270,816
Depreciation on disposed property
(74,103)
(220,435)
(73,765)
Other
37,747
(10,089)
22,228
Balance at end of period
$
1,438,594
$
1,239,897 (6) $
1,227,619
(4) Includes foreign currency fluctuations for all years. In addition, the 2025 column includes approximately $500 million of real estate related to the six California facilities
previously operated by Prospect and classified as financing leases.
(5) Excludes approximately $530 million, $420 million, and $400 million of construction and building improvements in progress reflected in buildings and improvements at
December 31, 2025, 2024 and 2023, respectively. Includes $52.2 million of land and building cost reflected in real estate held for sale at December 31, 2024.
(6) Includes $18.2 million of accumulated depreciation reflected in real estate held for sale at December 31, 2024.
134
135
SCHEDULE IV — MORTGAGE LOANS ON REAL ESTATE
MEDICAL PROPERTIES TRUST, INC. AND MPT OPERATING PARTNERSHIP, L.P.
December 31, 2025
Column A
Column B
Column C
Column D
Column E
Column F
Column
G(1)
Column H
Description
Interest
Rate
Final
Maturity
Date
Periodic Payment
Terms
Prior
Liens
Face
Amount of
Mortgages
Carrying
Amount of
Mortgages
Principal
Amount of
Loans
Subject to
Delinquent
Principal or
Interest
(Dollar amounts in thousands)
Long-term first mortgage
loan: (2)
........................
Colombia(3)
12.23%
2035
(4)
(5) $ 151,692
$ 116,113
(7)
..................
Hill County, TX
10.00%
2030
(4)
(5)
7,598
7,538
(7)
$ 159,290
$ 123,651
(6)
(1)
The aggregate cost for federal income tax purposes is $159.3 million.
(2)
The remaining mortgage loans of the Prospect facilities (with a face value of $99.5 million) are not included as they are part of
the ongoing bankruptcy proceedings, carrying amount has been fully reserved, and no remaining payments are expected from
these loans.
(3)
Mortgage loans covering three properties.
(4)
Payable in monthly installments of interest plus principal payable in full at maturity.
(5)
There were no prior liens on loans as of December 31, 2025.
(6)
Includes reserves/writedowns of approximately $18 million for Colombia in 2025.
(7)
Mortgage loans were not delinquent with respect to principal or interest, except for interest payments on the Colombia loan.
Changes in mortgage loans (net of allowance for credit loss) for the years ended December 31, 2025, 2024, and 2023 are
summarized as follows:
Year Ended December 31,
2025
2024
2023
(Dollar amounts in thousands)
...............................
Balance at beginning of year
$
119,912
$
310,101
$
364,420
Additions during year:
...........................................
New mortgage loans and additional advances
on existing loans
16,498
100,824
155,223
...............................
Exchange rate fluctuations
21,722
(17,748)
31,530
158,132
393,177
551,173
Deductions during year:
.....................................
Collection of principal
(16,886)
(100,000)
(241,072) (9)
................................................................
Other
(17,595) (6)
(173,265) (8)
—
(34,481)
(273,265)
(241,072)
..........................................
Balance at end of year
$
123,651
$
119,912
$
310,101
(8)
Includes reserves/writedowns of approximately $18 million for Colombia and $155 million for Prospect in 2024.
(9)
Includes a $151 million mortgage loan satisfied in exchange for non-controlling ownership interest in PHP Holdings.
At the Very Heart of Healthcare.®
OFFICERS
Edward K. Aldag, Jr.
Chairman, President and
Chief Executive Officer
R. Steven Hamner
Executive Vice President
and Chief Financial Officer
J. Kevin Hanna
Senior Vice President,
Controller and Chief
Accounting Officer
Rosa H. Williams
Senior Vice President
of Operations and Secretary
Charles R. Lambert
Senior Vice President
of Finance and Treasurer
Larry H. Portal
Senior Vice President,
Senior Advisor to the CEO
R. Lucas Savage
Vice President,
Head of Global Acquisitions
CORPORATE & SHAREHOLDER INFORMATION
DIRECTORS
Edward K. Aldag, Jr.
Chairman, President and
Chief Executive Officer
G. Steven Dawson
Private Investor
R. Steven Hamner
Executive Vice President and
Chief Financial Officer
Caterina A. Mozingo, CPA, PFS
Shareholder, Taxation at Aldridge,
Borden & Company, PC
Emily W. Murphy
Former Administrator,
U.S. General Services Administration
Elizabeth N. Pitman, JD, CHPC
Partner at Holland & Knight, LLP
D. Paul Sparks, Jr.
Retired Senior Vice President,
Energen Corporation
Michael G. Stewart
Private Investor
C. Reynolds Thompson, III
Chief Executive Officer of
the Propst Companies
LEGAL COUNSEL
Baker, Donelson, Bearman,
Caldwell & Berkowitz, PC
Birmingham, AL
Goodwin Procter, LLP
New York, NY
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
PricewaterhouseCoopers LLP
Birmingham, AL
ANNUAL MEETING
The Annual Meeting of Shareholders of Medical
Properties Trust, Inc. is scheduled for May 28, 2026,
10:30 a.m. CDT at the UAB Collat School of Business,
710 13th St. S., Birmingham, AL 35233.
CERTIFICATIONS
Medical Properties Trust, Inc.’s Chief Executive
Officer and Chief Financial Officer have filed their
certifications as required by the Securities and
Exchange Commission ("SEC") regarding the quality
of the Company’s public disclosure (included in the
2025 Annual Report on Form 10-K filed with the SEC).
Further, the Company’s Chief Executive Officer has
certified to the NYSE that he is not aware of any
violation by Medical Properties Trust, Inc., of NYSE
corporate governance listing standards, as required
by Section 303A.12(a) of the NYSE listing standards.
TRANSFER AGENT
AND REGISTRAR
Equiniti Trust Company, LLC
Operations Center
55 Challenger Road, Floor 2
Ridgefield Park, NJ 07660
Toll Free: 1-800-937-5449
Email: helpAST@equiniti.com
Website: https://equiniti.com/us/
ast-access/individuals/
CORPORATE OFFICE
Medical Properties Trust, Inc.
10500 Liberty Parkway
Birmingham, AL 35242
Main: 205.969.3755
Fax: 205.969.3756
www.mpt.com
The MPT Annual Report for the year ended
December 31, 2025, has been filed with the SEC and
may be obtained without charge by any shareholder
(including beneficial owners) upon written request to:
Investor Relations
Medical Properties Trust, Inc.
10500 Liberty Parkway, Birmingham, AL 35242.
AT THE VERY HEART OF HEALTHCARE.®
Medical Properties Trust, Inc.
10500 Liberty Parkway, Birmingham, AL 35242
NYSE: MPT | MPT.com