NASHVILLE, Tenn., April 27, 2017 /PRNewswire/ -- MedEquities Realty Trust, Inc. (NYSE: MRT) announced it has entered into a new master lease arrangement, effective March 20, 2017, with a subsidiary of Fundamental Healthcare ("Fundamental") for four facilities, which is guaranteed by THI of Baltimore. These facilities were previously leased under separate triple-net leases. Pursuant to the master lease, MedEquities has also agreed to make available up to a maximum amount of $11.0 million for Fundamental's expansion of the 130-bed Mountain's Edge, an acute care hospital in Las Vegas.
In addition to Mountain's Edge Hospital, the remaining facilities covered by the master lease include the 39-bed Horizon Specialty Hospital of Henderson, a long-term acute care hospital in Las Vegas, the 120-bed Physical Rehabilitation and Wellness Center of Spartanburg, a skilled nursing facility in Spartanburg, South Carolina, and the 142-bed Mira Vista Court, a skilled nursing facility in Fort Worth, Texas.
The new master lease provides for an enhanced initial aggregate annualized base rent of $8.5 million. Base rents will increase by the lesser of CPI or 1.5% on the first three anniversaries of the master lease and 2.0% on each anniversary thereafter. In addition to the enhanced portfolio rent, the initial term of the master lease for each property has been reset and extended, with the Mountain's Edge and Horizon hospitals having an initial term of 15 years with an expiration in 2032, and the two skilled nursing facilities having an initial term of 12 years with an expiration in 2029. The master lease includes two separate renewal terms of five years.
Fundamental has operated Mountain's Edge Hospital since its opening in 2015. With the continued growth in the market and the need to accommodate additional surgical demand at the hospital, Fundamental is undertaking the construction and equipping of five new surgical suites. The $11 million maximum funding commitment from MedEquities, which will result in proportionate increases to the existing facility rent as advances are made, is expected to be disbursed through the first of quarter 2018 as construction is completed.
John McRoberts, Chief Executive Officer and Chairman of MedEquities, noted, "Las Vegas is a growing and important market for Fundamental. We again are pleased to partner with Fundamental to provide the capital for these improvements at Mountain's Edge, which will allow them to better meet the increased service demand they are experiencing in that market."
About MedEquities Realty Trust
MedEquities Realty Trust (NYSE: MRT) is a self-managed and self-administered real estate investment trust that invests in a diversified mix of healthcare properties and healthcare-related real estate debt investments. The Company's management team has extensive industry experience in acquiring, owning, developing, financing, operating, leasing and monetizing many types of healthcare properties and portfolios. MedEquities' strategy is to become an integral capital partner with high-quality and growth-oriented facility-based providers of healthcare services on a nationwide basis, primarily through net-leased real estate investment. For more information, please visit www.medequities.com.
This press release contains forward-looking statements within the meaning of the U.S. federal securities laws. Forward-looking statements provide our current expectations or forecasts of future events and are not statements of historical fact. Words such as "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates," "will" and variations of these words and other similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and/or could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. Forward-looking statements involve inherent uncertainty and may ultimately prove to be incorrect or false. For a description of factors that may cause the Company's actual results or performance to differ from its forward-looking statements, see the sections entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" included in the Company's Annual Report on Form 10-K for the year ended December 31, 2016, which was filed with the Securities and Exchange Commission (the "SEC") on February 27, 2017, and other documents filed by the Company with the SEC. You are cautioned to not place undue reliance on forward-looking statements. Except as otherwise may be required by law, we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or actual operating results.
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SOURCE MedEquities Realty Trust, Inc.