- Massachusetts is the latest state to propose legislation to restrict health care private equity transactions. The bill covers traditional corporate transactions and hospital sale-leasebacks with real estate investment trusts (“REITs”). The legislation was proposed in light of the Steward Health Care bankruptcy. Steward has eight hospitals in Massachusetts that are leased from Medical Properties Trust. The bill was approved by an overwhelming majority of legislators in the state’s House of Representatives.
- Kentucky officials held an open forum in late June to determine if changes to the state’s Certificate of Need (“CON”) law should be made. Proponents of change argued that certain communities need greater access to health care. Opponents argued that modifying CON laws could harm safety net providers.
- Residents living in senior housing communities have a lower rate of admission to emergency departments when compared to seniors living in the community at large according to a recent NIC study.
- A new article looks at private equity’s (“PE”) role in the assisted living (“AL”) industry. Key takeaways: 1) the AL industry should be viewed differently than other health care sectors because private and government payers typically don’t reimburse AL operators for services; 2) residents often pay out of pocket for the services; and 3) AL communities have historically been funded by private investors without any government funding.
- Hall Render published an article on the importance of recording a memorandum of lease. In some states, a tenant’s rights can be placed in jeopardy if the property is sold and the buyer did not have notice of the lease.
- Texas Governor Greg Abbott announced seven new state hospital projects. The projects will be funded by a $1.5B state allowance approved in 2023. The projects involve new hospital projects in Amarillo, El Paso, Harlingen, Lubbock, San Antonio, Terrell and Wichita Falls.
- Banner Health has over $1B in construction projects planned in Arizona according to a new article. Projects include a $400M hospital campus in Scottsdale, expansion of the Banner MD Anderson Cancer Center, construction of a rehabilitation hospital in Tucson, a new bed tower at Thunderbird Medical Center in Glendale, an expansion of Estrella Medical Center in Phoenix and an expansion of the Banner Health Center in Buckeye. Banner has 33 hospitals, 50 urgent care locations, hundreds of health clinics and operates in six states.
- A new article looks at the impact of rural hospital closures across the country and the challenges associated with repurposing real estate. Since 2010, 149 rural hospitals have closed in the U.S. Texas and Tennessee have had the most rural hospital closures. Ways to repurpose shuttered hospitals include converting them to medical clinics, educational facilities and technology facilities because of the existing infrastructure in place.
- A number of health systems had credit rating upgrades, which is a sign that health system economics are improving. Notable upgrades: CommonSpirit – Baa1 to A3 (Moody’s); NYU Lagone Health – A2 to A1 (Moody’s); and Prime Healthcare – BBB to BBB+ (Fitch).
- Colliers released its Q2 Health Care Report that focuses on behavioral health (“BH”) assets. Key takeaways: 1) 770 BH facilities exist in the U.S.; 2) most BH assets are more than 50 years old; 3) Louisiana has the lowest number of facilities per population and Iowa has the highest number; 4) average sale price for a BH is $273 per sf; and 5) the most active buyers in recent years have been Medical Property Trust and Sabra Healthcare REIT.
For more information on real estate matters, please contact:
- Andrew Dick at adick@hallrender.com or (317) 977-1491;
- Joel Swider at jswider@hallrender.com or (317) 429-3638; or
- Your primary Hall Render contact.
Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot give legal advice outside of an attorney-client relationship.
