Why Healthcare Assets Trust Stocks Today

stock Medical Property Trust (MPW 18.59%) A healthcare facility-focused real estate investment trust (REIT) surged 18.6% on Wednesday after its largest tenant announced it would sell its physician network. UnitedHealth (UNH 0.16%) Subsidiary Optum.

Medical Properties’ largest tenant can finally pay its bills.

In a story first reported by the Boston Globe late yesterday, embattled hospital operator Steward Health Care has struck a deal to sell its national physician network to UnitedHealth’s Optum division. The exact terms of the deal were not disclosed. However, given that Steward Health Care has been experiencing financial difficulties in recent quarters and has not been paying rent to Medical Properties Trust, and that Steward previously accounted for up to 20% of Medical Properties Trust’s total revenue, it is likely that Steward will be able to meet its past-due obligations. Given the prospect of catching up, Properties Trust stock is understandably on the rise.

Medical Properties Trust previously cut its August dividend by nearly 50% to $0.15 per share due to Steward Health Care’s inability to pay rent. Medical Properties Trust said in a January update that Steward owes the REIT a total of $50 million in unpaid rent at the end of 2023.

What’s next for Medical Properties Trust investors?

Steward Health Care’s contract is not yet complete. The deal is widely expected to face pushback from antitrust regulators, who worry that Optum’s latest acquisition spree could threaten competition across the country.

But if the deal passes regulatory muster, it could be a huge boon for Medical Properties Trust investors, who have watched helplessly as the company’s single largest tenant failed to pay significant rent.