MedEquities Enters Master Lease, Pledges $11M for Las Vegas Hospital Expansion
- May 09, 2017
MedEquities Realty Trust Inc. and a subsidiary of Fundamental Healthcare have entered into a new master lease arrangement guaranteed by THI of Baltimore for four facilities, which will replace the separate triple-net leases. MedEquities has also pledged $11 million for the expansion of one of the four properties, the 130-bed Mountain’s Edge, a 72,140-square-foot acute care hospital in Las Vegas built by Bentar Development.
Fundamental has operated Mountain’s Edge Hospital since its opening in 2015. The health care services provider plans to develop and equip five new surgical suites, slated for completion early next year, due to increased demand. The $11 million funding is expected to be disbursed through the first of quarter 2018. The other facilities covered by the new lease include the 39-bed Horizon Specialty Hospital of Henderson, a 37,209-square-foot long-term, acute care hospital in Las Vegas, and two nursing facilities: the 120-bed Physical Rehabilitation and Wellness Center of Spartanburg in Spartanburg, S.C., and the 142-bed Mira Vista Court 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 percent on the first three anniversaries of agreement and 2 percent on each anniversary thereafter. In addition, the lease terms have been extended to 15 years with an expiration in 2032 for the Mountain’s Edge and Horizon hospitals and to 12 years with an expiration in 2029 for the two nursing facilities. The master lease includes two separate renewal terms of five years.
Images courtesy of MedEquities