Master Lease Restructuring for the Acquisition of Three Leased Acute Care Hospitals and a Free Standing Emergency Department Located in Greater Phoenix, Arizona

Transaction Overview

CHICAGO - October 14^TH, 2024 - Kaufman Hall & Associates, LLC ("Kaufman Hall") was selected as the exclusive buy-side M&A and Real Estate advisor to HonorHealth ("Honor" or "Client") in its acquisition of select assets from a for-profit regional health system operating across multiple locations in the Greater Phoenix, Arizona area ("Arizona System"). The Arizona System, comprising 301 beds, was previously owned and operated by Steward Health Care ("Steward"), which master leased approximately $200 million in real estate assets from Medical Properties Trust ("MPT"), a publicly traded healthcare real estate investment trust (NYSE: MPW).

Kaufman Hall's Role

On behalf of the Client, Kaufman Hall's dedicated real estate team engaged with MPT to restructure the Arizona System's lease. Despite a condensed timeline, the Steward bankruptcy process and specific Client-driven objectives, Kaufman Hall successfully negotiated a lease agreement that aligned with both the Client's short- and long-term strategic and financial priorities. As a result of Kaufman Hall's efforts, the Client achieved key goals related to capitalizing the acquisition, ensuring operational flexibility, mitigating risk, and securing future ownership rights for the real estate assets.

About the Companies Involved

Kaufman Hall

For more than 30 years, Kaufman Hall has provided independent, objective insights to assist clients in fulfilling their missions, achieving their goals, and tackling their toughest problems. Kaufman Hall's real estate practice provides transaction advisory services to many of the nation's top healthcare providers and developers/investors of healthcare real estate. Kaufman Hall's focused model provides clients with an unmatched level of relevant experience & independent transaction analysis, structuring and execution capabilities. Kaufman Hall's real estate practice was launched in 2021 through the acquisition of Healthcare Real Estate Capital (HRE Capital). Providing both consultative and transaction-oriented services, including asset/portfolio joint venture structuring, recapitalizations, dispositions and other related real estate advisory services, the real estate practice has been involved with more than $15 billion of sector-specific real estate transactions across the United States since 2008.

HonorHealth

HonorHealth is a non-profit health care system that serves the greater Phoenix, Arizona area. HonorHealth traces its roots to 1927 but was formed on September 13, 2013, when Scottsdale Healthcare Hospitals entered into an affiliation agreement with John C. Lincoln Health Network to form what is now known as HonorHealth. Today, HonorHealth employs approximately 14,000 people, partners with 3,500 providers across the greater Phoenix metro, and has a delivery system chassis of six acute care hospitals and additional primary, specialty and urgent care locations, ambulatory care centers, an accountable care organization, captive insurance company, food bank and charitable foundation.

Questions: Contact E. Hunter Beebe, [email protected], 917.568.8556

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