HCP Buys $163 Million MOB Portfolio from Struggling Community Health Systems
As part of its evolving plan to “right the ship,” Community Health Systems, Inc. (NYSE: CYH) is now actively divesting medical office buildings.
Specifically, subsidiaries of the Franklin, Tennessee-based hospital company recently completed the sale and leaseback of 10 medical office buildings to Irvine, California-based health care real estate investment trust (REIT) HCP, Inc. (NYSE: HCP) for $163 million. The move was announced Dec. 22.
The 10 buildings, which house medical, surgical and diagnostic services, are located across five U.S. states and have a combined 756,183 square feet of space.
Community Health Systems plans to pay down debt with the net proceeds from the deal, according to a press release. The company has struggled financially in recent quarters, owing in part to operating hospitals in rural and suburban areas, as well as the difficulty of managing the costs of employing physicians, according to The Wall Street Journal.
Community Health Systems’ latest earnings report highlights the company’s ongoing tribulations. The company’s third-quarter 2016 income from continuing operations attributable the company’s common shareholders amounted to a loss of $77 million, or 69 cents per share. In the third quarter of 2015, meanwhile, the company’s income from continuing operations totaled $60 million, or 51 cents per share.
Through its subsidiaries, Community Health Systems, Inc. currently leases, owns or operates 158 affiliated hospitals in 22 states with a total of almost 27,000 licensed beds. The company announced last month that it has placed a total of 17 hospitals up for sale to pay down debt and raise cash, WSJ reported.
Written by Mary Kate Nelson