UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2025
or
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 001-32559
Commission file number 333-177186
Medical Properties Trust, Inc.
MPT Operating Partnership, L.P.
(Exact Name of Registrant as Specified in Its Charter)
Maryland
Delaware
20-0191742
20-0242069
(State or Other Jurisdiction of
Incorporation or Organization)
(IRS Employer
Identification No.)
10500 Liberty Parkway
Birmingham, AL
35242
(Address of Principal Executive Offices)
(Zip Code)
(205) 969-3755
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Common stock, par value $0.001 per share, of Medical Properties Trust, Inc.
MPT
The New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Medical Properties Trust, Inc. Yes ☒ No ☐ MPT Operating Partnership, L.P. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Medical Properties Trust, Inc. Yes ☐ No ☒ MPT Operating Partnership, L.P. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in 12b-2 of the Act).
As of June 30, 2025, the aggregate market value of the 594.0 million shares of common stock, par value $0.001 per share (“Common Stock”), held by non-affiliates of Medical Properties Trust, Inc. was $2.6 billion based upon the last reported sale price of $4.31 on the New York Stock Exchange on that date. For purposes of the foregoing calculation only, all directors and executive officers of Medical Properties Trust, Inc. have been deemed affiliates.
As of February 23, 2026, 597.7 million shares of Common Stock were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the definitive Proxy Statement of Medical Properties Trust, Inc. for the Annual Meeting of Stockholders to be held on May 28, 2026 are incorporated by reference into Items 10 through 14 of Part III, of this Annual Report on Form 10-K.
EXPLANATORY NOTE
This report combines the Annual Reports on Form 10-K for the year ended December 31, 2025, of Medical Properties Trust, Inc., a Maryland corporation, and MPT Operating Partnership, L.P., a Delaware limited partnership, through which Medical Properties Trust, Inc. conducts substantially all of its operations. Unless otherwise indicated or unless the context requires otherwise, all references in this report to “we,” “us,” “our,” “Medical Properties,” “MPT,” or “company” refer to Medical Properties Trust, Inc. together with its consolidated subsidiaries, including MPT Operating Partnership, L.P. Unless otherwise indicated or unless the context requires otherwise, all references to “operating partnership” refer to MPT Operating Partnership, L.P. together with its consolidated subsidiaries.
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TABLE OF CONTENTS
A WARNING ABOUT FORWARD LOOKING STATEMENTS
4
PART I
ITEM 1.
Business
8
ITEM 1A.
Risk Factors
23
ITEM 1B.
Unresolved Staff Comments
39
ITEM 1C.
Cybersecurity
40
ITEM 2.
Properties
42
ITEM 3.
Legal Proceedings
44
ITEM 4.
Mine Safety Disclosures
PART II
ITEM 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
ITEM 6.
[Reserved]
46
ITEM 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
47
ITEM 7A.
Quantitative and Qualitative Disclosures About Market Risk
63
ITEM 8.
Financial Statements and Supplementary Data
65
ITEM 9.
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
117
ITEM 9A.
Controls and Procedures
ITEM 9B.
Other Information
118
ITEM 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
PART III
ITEM 10.
Directors, Executive Officers and Corporate Governance
119
ITEM 11.
Executive Compensation
ITEM 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
ITEM 13.
Certain Relationships and Related Transactions, and Director Independence
ITEM 14.
Principal Accountant Fees and Services
PART IV
ITEM 15.
Exhibits and Financial Statement Schedules
120
ITEM 16.
Form 10-K Summary
124
SIGNATURES
125
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This Annual Report on Form 10-K (the "Annual Report") includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements can generally be identified by the use of forward-looking words such as "may", "will", "would", "could", "expect", "intend", "plan", "estimate", "target", "anticipate", "believe", "objectives", "outlook", "guidance", or other similar words. These forward-looking statements include information about possible or assumed future results of our business, financial condition, liquidity, results of operations, plans, and objectives. Statements regarding the following subjects, among others, are forward-looking by their nature:
Forward-looking statements are based on our beliefs, assumptions, and expectations of our future performance, taking into account information currently available to us. These beliefs, assumptions, and expectations can change as a result of many possible events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity, and results of operations may vary materially from those expressed in our forward-looking statements. You should carefully consider these risks before you make an investment decision with respect to our common stock and other securities, along with, among others, the following factors that could cause actual results to vary from our forward-looking statements:
Any forward-looking statements speak only as of the date hereof. You should not place undue reliance on these forward-looking statements. Except as required by law, we disclaim any obligation to update such statements or to publicly announce the result of any revisions to any of the forward-looking statements contained in this Annual Report on Form 10-K.
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SUMMARY RISK FACTORS
Set forth below is a summary of the risks described under Item 1A. Risk Factors of this Annual Report.
RISKS RELATED TO OUR BUSINESS, TENANTS, AND STRATEGY
FINANCING RISKS
RISKS RELATING TO REAL ESTATE INVESTMENTS
6
RISKS RELATING TO THE HEALTHCARE INDUSTRY
RISKS RELATING TO OUR ORGANIZATION AND STRUCTURE
TAX RISKS
7
ITEM 1. Business
Overview
We are a self-advised REIT formed in 2003 to acquire and develop net-leased healthcare facilities. At December 31, 2025, we had investments in 384 facilities and approximately 39,000 licensed beds in 31 states in the U.S., seven countries in Europe, and Colombia in South America. We have operated as a REIT since April 6, 2004, and accordingly, elected REIT status upon the filing of our calendar year 2004 federal income tax return. Medical Properties Trust, Inc. was incorporated under Maryland law on August 27, 2003, and MPT Operating Partnership, L.P. was formed under Delaware law on September 10, 2003. We conduct substantially all of our business through MPT Operating Partnership, L.P.
Our primary business strategy is to acquire and develop healthcare facilities and lease the facilities to healthcare operating companies under long-term net leases, which require the tenant to bear most of the costs associated with the property. The majority of our leased assets are owned 100%; however, we do own some leased assets through joint ventures with other partners that share our view that healthcare facilities are part of the infrastructure of any community, which we refer to as investments in unconsolidated real estate joint ventures. We also make mortgage loans to healthcare operators collateralized by their real estate assets. In addition, we may make loans to certain of our operators through our taxable REIT subsidiaries (“TRS”), the proceeds of which are typically used for working capital and other purposes. From time-to-time, we may make noncontrolling investments in our tenants, which we refer to as investments in unconsolidated operating entities. These investments are typically made in conjunction with larger real estate transactions with the tenant that give us a right to a share in such tenant’s profits and losses, and provide for certain minority rights and protections. Our business model facilitates acquisitions and recapitalizations, and allows operators of healthcare facilities to serve their communities by unlocking the value of their real estate assets to fund facility improvements, technology upgrades, and other investments in operations.
Our investments in healthcare real estate, other loans, and any investments in our tenants are considered a single reportable segment as further discussed in Note 2 of Item 8 of this Annual Report on Form 10-K.
Assets
At December 31, 2025 and 2024, our total assets were made up of the following (dollars in thousands):
2025
2024
Real estate assets - at cost
$
12,751,022
85.0
%
12,471,543
87.2
Accumulated real estate depreciation and amortization
(1,663,056
)
(11.1
)%
(1,422,948
(10.0
Cash and cash equivalents
540,859
3.6
332,335
2.3
Investments in unconsolidated real estate joint ventures
1,399,777
9.3
1,156,397
8.1
Investments in unconsolidated operating entities
322,179
2.2
439,578
3.1
Other
1,650,994
11.0
1,317,689
Total assets
15,001,775
100.0
14,294,594
Revenues
The following is a breakdown of our revenues for the years ended December 31, 2025 and 2024 (dollars in thousands):
Rent billed
736,543
75.8
719,749
72.3
Straight-line rent
152,163
15.6
163,414
16.4
Income from financing leases
39,735
4.1
63,651
6.4
Interest and other income
43,581
4.5
48,733
4.9
Total revenues
972,022
995,547
See “Overview” in Item 7 of this Annual Report on Form 10-K for details of transaction and other activity for 2025 and 2024.
Portfolio of Properties
As of February 23, 2026, our portfolio consisted of 381 properties: 365 facilities are leased to 50 tenants, along with others in the form of developments and mortgage loans, and less than 1% of total assets that are not currently leased to a tenant, as discussed in
Note 3 to Item 8 of this Annual Report on Form 10-K. Of our portfolio of properties, 105 facilities are owned by way of our five unconsolidated real estate joint venture arrangements in which we share control with our joint venture partners. Our facilities consist of 165 general acute care hospitals, 68 behavioral health facilities, 128 post acute care facilities, and 20 freestanding ER/urgent care facilities (“FSERs”).
See Item 2 of this Annual Report on Form 10-K for further information about our properties.
Outlook and Strategy
Our strategy is to lease the facilities that we acquire or develop to experienced healthcare operators pursuant to long-term net leases. In addition, we may selectively structure certain of our investments as long-term, interest-only mortgage loans to healthcare operators. Our mortgage loans are typically structured such that we obtain annual cash returns similar to our net leases. In addition, we have obtained and may continue to obtain profits or other interests in certain of our tenants’ operations. These noncontrolling investments in our tenants are typically made in conjunction with larger real estate transactions, provide for certain minority rights and protections, and sometimes give us a right to participate in future real estate transactions and enhance our overall return.
The market for healthcare real estate is extensive and includes real estate owned by a variety of healthcare operators. For example, according to the 2024 American Hospital Association statistics report, there were approximately 5,100 community hospitals throughout the U.S. We typically acquire and develop net-leased facilities that focus on the most critical components of healthcare. We typically invest in facilities that have the highest intensity of care including:
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On a property type basis, our total assets at December 31, 2025 were as follows:
Diversification
A fundamental component of our business plan is the continued diversification of our portfolio. We monitor diversification in several ways, including concentration in any one facility. We believe facility level diversification is important because if an individual facility is needed in the community and has support from local physicians and others in the community, its operations will generally be successful regardless of who the operator is (see "Underwriting/Asset Management" section below for performance indicators we look for at the facility level). Other ways we monitor diversification include our tenant relationships, the types of hospitals we own, and the geographic areas in which we invest.
At December 31, 2025, our largest investment in any single property was less than 2% of our total assets. From a tenant relationship perspective, see section titled “Significant Tenants” below for detail. See sections titled “Portfolio of Properties” and “Outlook and Strategy” above for information on the diversification of our hospital types. From a geographical perspective, we have investments across the U.S. and in Europe and South America. See Note 3 to Item 8 of this Annual Report on Form 10-K for more detail on our geographic concentration information.
Underwriting/Asset Management
Revenues from rents we earn pursuant to lease agreements with our tenants make up approximately 95% of our total revenues with the remainder of our income coming from interest income from loans to our tenants and other facility owners and from profits or equity interests in certain of our tenants’ operations. Our tenants operate in the healthcare industry, generally providing medical, surgical, rehabilitative, and behavioral health care to patients. The capacity of our tenants to pay our rents and interest is dependent upon their ability to conduct their operations at profitable levels. We believe that the business environment of the industry segments in which our tenants operate is generally positive for efficient operators. However, our tenants’ operations are impacted by economic, regulatory, healthcare, and market conditions (along with the possibility of natural disasters, epidemics, pandemics, or other public health crises, like COVID-19) that may affect their profitability, which could impact our results. Accordingly, we monitor certain key performance indicators (based on available data provided by our tenants/borrowers) that we believe provides us with early indications of conditions that could affect the level of risk in our portfolio.
Key factors that we may consider in underwriting prospective deals and in our ongoing monitoring of our tenants’ (and guarantors’) performance, as well as the condition of our properties, include, but are not limited to, the following:
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In addition to the key factors above, we may analyze the physician relationships with the hospital and study admissions to understand how broad such referrals are to the hospital. Finally, we typically address two primary questions when underwriting an investment – 1) is this hospital truly needed in the market? and 2) would the community suffer were the hospital not there? We believe answers to these two questions can usually provide significant insight on whether or not to move forward with a particular investment.
Healthcare Industry
The delivery of the majority of healthcare services, whether in the U.S. or elsewhere, requires real estate. The global outbreak of COVID-19 further validated this, as hospitals during the pandemic were proven invaluable. As a consequence, healthcare providers depend on real estate to maintain and grow their businesses. We believe that the healthcare real estate market provides investment opportunities due to the:
As noted previously, we have investments in nine different countries across three continents. Although there are regulatory, cultural, and other differences between these countries, the importance of healthcare and its impact on the economy is a consistent theme. See below for details of the healthcare industry in each of the countries in which we currently do business (according to government sources and healthcare industry reports):
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United States (population - approximately 350 million)
United Kingdom (population - approximately 70 million)
Switzerland (population - approximately 10 million)
Germany (population - approximately 85 million)
Spain (population - approximately 50 million)
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Italy (population - approximately 60 million)
Finland (population - approximately 6 million)
Portugal (population - approximately 10 million)
Colombia (population - approximately 55 million)
Our Leases and Loans
The leases of our facilities are generally “absolute-net” leases with terms requiring the tenant to pay all ongoing operating expenses of the facility, including property, casualty, general liability, and other insurance coverages; utilities and other charges incurred in the operation of the facilities; real estate and certain other taxes; ground lease rent (if any); and the costs of repairs and maintenance (including any repairs mandated by regulatory requirements). Our tenants are also responsible for any desired capital expenditures (costs that either improve the value of the facility or extend the facility's life), subject to our approval; however, if we agree to fund such capital expenditures instead, our lease revenue will typically increase accordingly. Borrowers under our mortgage loan arrangements retain the responsibilities of ownership, including physical maintenance and improvements and all costs and expenses. Our leases and loans typically require our tenants to indemnify us for any past or future environmental liabilities, as well.
Our current leases and loans have a weighted-average remaining initial term of 16.7 years (see Item 2 for more information on remaining lease and loan terms) and most include renewal options at the election of our tenants. Based on current monthly revenue, 99% of our leases provide annual rent escalations based on increases in the Consumer Price Index (“CPI”), or similar indexes for properties outside the U.S. and/or fixed minimum annual rent escalations.
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Significant Tenants
Our top five tenants, on a total asset basis as of December 31, 2025 along with a comparison to December 31, 2024, is as follows (dollars in thousands):
As of December 31, 2025
As of December 31, 2024
Operators
Total Assets (1)
Percentage ofTotal Assets
Circle
2,121,848
14.1
2,026,778
14.2
Priory
1,301,888
8.7
1,233,462
8.6
Healthcare Systems of America
1,200,996
8.0
1,187,006
8.3
Swiss Medical Network
873,703
5.8
719,632
5.1
Lifepoint Behavioral
809,492
5.4
813,584
5.7
Other operators
6,688,287
44.6
6,624,256
46.3
Other assets
2,005,561
13.4
1,689,876
11.8
Total
Affiliates of Circle Health Ltd. ("Circle") lease 36 facilities in the U.K. pursuant to separate lease agreements. Of these leases, 34 are cross-defaulted individual leases guaranteed by Circle and have initial fixed terms ending in 2050, with two five-year extension options plus annual inflation-based escalators. The remaining two facilities are leased with a weighted-average remaining initial fixed term of 9.6 years along with annual inflation-based escalators and extension options.
Affiliates of Priory Group ("Priory"), a subsidiary of Median B.V., lease 37 facilities in the U.K. pursuant to separate lease agreements. Of these properties, 31 are cross-defaulted individual leases guaranteed by Priory and have initial fixed terms ending in 2046, with two ten-year extension options plus annual inflation-based escalators. The remaining six facilities are cross-defaulted individual leases guaranteed by Priory and have initial fixed terms ending in 2044, with annual inflation-based escalators.
At December 31, 2025, we hold a minority interest in Priory approximating $44 million, which we acquired in connection with the property acquisitions discussed above. In 2024, we sold our interest in a British pound syndicated term loan with Median Kliniken S.á.r.l. ("MEDIAN") as the borrower ("Priory syndicated term loan") for aggregate proceeds of £90 million.
We lease eight facilities in the U.S. (covering three states) to HSA pursuant to one master lease agreement. The master lease had an initial fixed term of 20 years (ending in September 2044) and contains three extension options of five years plus annual inflation-based escalators.
These facilities were leased to and operated by Steward Healthcare, Inc. (“Steward”) prior to their bankruptcy, as discussed below, and we re-leased them to HSA in September 2024 when HSA took over operating these facilities. As part of this transition, HSA (like other tenants of former Steward-operated facilities) assumed responsibility for the costs of operating the facilities (including payroll and related benefits) on a go forward basis. In addition, HSA entered into an interim transition services agreement with Steward to, among other things, assist with billing and collection. To assist HSA during this transition and minimize disruptions to patient care, we did the following:
We have elected to account for rent and interest revenue related to HSA on a cash basis. During 2025, we received $33.8 million reflecting the revenue recognized from HSA for the year.
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Affiliates of Swiss Medical Network (“Swiss Medical”) lease 18 facilities in Switzerland under individual leases through our Infracore SA real estate joint venture (“Infracore”), in which we hold a 70% non-controlling interest and have one facility under development. The weighted-average remaining term of these leases at December 31, 2025 was 25 years. These leases are subject to annual inflation-based escalators.
In addition, we hold an 8.9% passive equity ownership interest in Swiss Medical and a loan as part of a syndicated loan facility for a combined total of approximately $197 million at December 31, 2025. Swiss Medical’s parent is Aevis Victoria SA (“Aevis”), a public healthcare, lifestyle, and infrastructure investment company that also holds an interest in Infracore. We hold a passive 4.6% equity interest in Aevis at December 31, 2025.
Lifepoint Behavioral Health ("Lifepoint Behavioral") leases 19 facilities pursuant to one master lease agreement. The master lease's original initial fixed term was 20 years (ending in October 2041) and contains two extension options of five years plus inflation-based escalators.
No other tenant accounted for more than 5% of our total assets at December 31, 2025 or 2024.
Other Tenant Matters
In 2025 and 2024, we had two tenants that filed for bankruptcy.
Steward
As discussed in previous filings, Steward filed for Chapter 11 bankruptcy on May 6, 2024 with the United States Bankruptcy Court for the Southern District of Texas. On September 18, 2024, the bankruptcy court approved a global settlement between Steward, its lenders, the unsecured creditors committee, and us. The order provided for the following: a) termination of our master lease with Steward; b) the release of claims against 23 of our properties, allowing us to begin the process of re-tenanting these facilities, which we did as discussed further in Note 3 to Item 8 of this Annual Report on Form 10-K, and c) a full release of claims against us from all parties. In return, we consented to the sale of the operations and our real estate in three facilities in the Space Coast region of Florida with a substantial portion of the proceeds being transferred to Steward, along with a full release of our claims in Steward including claims to past due rent and interest, outstanding loans, and our equity investment. In regard to our real estate partnership with Macquarie Asset Management (“Macquarie”), the bankruptcy court approved the termination of the partnership’s master lease with Steward during the 2024 third quarter. In addition, we and Macquarie entered into an agreement with the mortgage lender of the partnership to transition the eight Massachusetts properties to them along with cash proceeds of approximately $40 million (representing our share), in return for full payment of the underlying mortgage debt and a release of claims against each party. With this global settlement, our relationship with Steward effectively ended.
Prospect
As discussed in past filings, Prospect previously leased six of our facilities in California and three facilities in Connecticut. In addition, we held a mortgage loan secured by a first mortgage on four facilities in Pennsylvania among other investments. Prospect filed for Chapter 11 bankruptcy on January 11, 2025 with the United States Bankruptcy Court for the Northern District of Texas. On March 20, 2025, the bankruptcy court approved a global settlement (including a recovery waterfall) between us, Prospect, and other stakeholders. As part of the global settlement, we re-leased the six California properties to NOR as a result of their successful bid to acquire the operations of the Prospect-operated California facilities. In regard to the remaining seven properties, five of these facilities have been sold to-date with the remaining two expected to be sold later in 2026.
Prospect's bankruptcy proceedings are continuing, and the ultimate outcome of such proceedings is uncertain. At this time, we cannot assure you that we will be able to recover in full the remaining $61 million of our investment in Prospect as of December 31, 2025. In addition, the bankruptcy court approved an order for up to $70 million in additional advances from us including up to $30 million in the form of a backstop facility to cover administrative and priority claims. These possible advances are conditioned on other events occurring including the sale of the final Connecticut property and the bankruptcy plan becoming effective. Any funds advanced are secured by recoveries, if any, from causes of action owned by the debtor.
See Note 3 to Item 8 of this Annual Report on Form 10-K for more information on the impact of these bankruptcies on our results of operations.
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Tax Structure
U.S.
We have operated as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, (the “Code”) since 2004. Accordingly, we are generally not subject to U.S. federal corporate income tax on our REIT taxable income, provided that we continue to qualify as a REIT and our distributions to our stockholders equal or exceed such taxable income. This treatment substantially eliminates the “double taxation” that ordinarily results from an investment in a "C" corporation.
The Code defines a REIT as a corporation that: (a) is managed by one or more directors; (b) would be taxable as a domestic corporation if not for Sections 856 through 860 of the Code; (c) is beneficially owned by 100 or more persons; (d) does not have five or fewer individuals owning more than 50% in value of the outstanding stock; and (e) meets certain asset, income, and distributions tests.
We believe that we are organized and have operated in a manner that is in line with the Code’s definition of a REIT since 2004, and we intend to operate in this manner for the foreseeable future. However, see our “Tax Risks” section in Item 1A of this Annual Report on Form 10-K for further information including the potential impact to us if we were to lose our REIT status.
Certain non-real estate activities (such as working capital loans or investments in unconsolidated operating entities) are conducted by entities which we elected to be treated as a TRS. Our TRS entities are subject to both U.S. federal and state income taxes. In the case of domestic investments in unconsolidated operating entities, these investments typically fall under a structure permitted by the REIT Investment Diversification and Empowerment Act of 2007 (“RIDEA”). Under the provisions of RIDEA, a REIT may lease “qualified health care properties” on an arm’s length basis to a TRS that owns healthcare operations so long as the property is operated by an entity that qualifies as an “eligible independent contractor.”
International
For our properties located outside the U.S., we are subject to the local taxes of the jurisdictions where our properties reside and/or legal entities are domiciled; however, we do not expect to incur additional taxes, of a significant nature, in the U.S. from foreign-based income as the majority of such income flows through our U.S. REIT.
Effective July 1, 2023, we moved a majority of our U.K. assets into a U.K. REIT regime. The REIT requirements in the U.K. are generally similar to those in the U.S. We believe we have met all requirements as of December 31, 2025.
Environmental Matters
Under various U.S. federal, state, and local environmental laws and regulations and similar international laws, a current or previous owner, operator, or tenant of real estate may be required to remediate hazardous or toxic substance releases or threats of releases. There may also be certain obligations and liabilities on property owners with respect to asbestos containing materials. Investigation, remediation, and monitoring costs may be substantial. The confirmed presence of contamination or the failure to properly remediate contamination on a property may adversely affect our ability to sell or rent that property or to borrow funds using such property as collateral and may adversely impact our investment in that property. Generally, prior to completing an acquisition or closing a mortgage loan, we obtain Phase I environmental assessments (or similar studies outside the U.S.) in order to attempt to identify potential environmental concerns at the facilities. These assessments are carried out in accordance with an appropriate level of due diligence and generally include a physical site inspection, a review of relevant environmental and health agency database records, one or more interviews with appropriate site-related personnel, review of the property’s chain of title, and review of historic aerial photographs and other information on past uses of the property. We may also conduct limited subsurface investigations and test for substances of concern where the results of the Phase I environmental assessments or other information indicates possible contamination or where our consultants recommend such procedures. Upon closing and for the remainder of the lease or loan term, our transaction documents typically require our tenants to repair and remediate environmental issues at the applicable facility, and to comply in full with all environmental laws and regulations.
Seismic Standards
California Seismic Standards
The Alfred E. Alquist Hospital Facilities Seismic Safety Act of 1983 (“Alquist Act”), establishes, under the jurisdiction of the Department of Health Care Access and Information ("HCAI"), formerly the Office of Statewide Health Planning and Development ("OSHPD"), a program of seismic safety building standards for certain hospitals constructed on and after March 7, 1973. The law requires the California Building Standards Commission to adopt earthquake performance categories, seismic evaluation procedures, standards and timeframes for upgrading certain facilities, and seismic retrofit building standards. This legislation was adopted to avoid the loss of life and the disruption of operations and the provision of emergency medical services that may result from structural damage sustained to hospitals resulting from an earthquake. A violation of any provision of the act is a misdemeanor.
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Under the Alquist Act and related rules and regulations, all general acute care hospital buildings in California are assigned a structural performance category (“SPC”). SPC ratings range from 1 to 5 with SPC-1 assigned to buildings that may be at risk of collapse during a strong earthquake and SPC-5 assigned to buildings reasonably capable of providing services to the public following a strong earthquake. Pursuant to the Alquist Act, state law initially required all SPC-1 buildings to be removed from providing general acute care services by 2020 and all SPC-2 buildings to be removed from providing general acute care services by 2030. However, in 2017, HCAI adopted a new performance category that allowed hospitals to explore the possibilities of upgrading nonconforming buildings to a new performance level that is not as rigorous. Under SPC-4D, buildings undergoing a retrofit to this level can continue functioning indefinitely beyond 2030. In addition, California AB 2190 bill required HCAI to grant an additional extension of time to an owner who was subject to the January 1, 2020, deadline if specified conditions were met. The bill authorized the additional extension to be until July 1, 2022, if the compliance plan was based upon replacement or retrofit, or until January 1, 2025, if the compliance plan was for a rebuild. As AB 2190 extensions for SPC-1 buildings concluded in 2025, AB 869 established new regulatory framework for other buildings beyond 2030 that remained noncompliant. Under extraordinary circumstances a 5-year deadline may be met for a maximum possible deadline of 2035.
As of December 31, 2025, we have 17 licensed hospitals in California totaling investments of approximately $1.0 billion. Exclusive of one hospital (representing less than 0.8% of our total assets), all of our California hospitals are seismically compliant through 2030 as determined by HCAI. For the one remaining hospital, we have requested an extension to complete a project which will result in the property being compliant. We expect this project to be completed by the third quarter of 2027.
Colombia Seismic Standards
Similar to California, the design, construction, and technical supervision of buildings in Colombia must meet certain minimum seismic standards. Such standards divide the country into seismic hazard zones: low threat, intermediate threat, and high threat. Two of our facilities are located in Bogotá, an intermediate threat zone, while the other two facilities (representing less than 1% of our total assets) are located in a high threat zone.
In addition, all buildings are classified into use groups. Clinical hospitals and health centers fall into Group IV, which are deemed indispensable buildings and are held to a higher standard of earthquake resistant construction. Buildings in Group IV are considered essential for the recovery of the community after the occurrence of an emergency, including an earthquake, and the additional structural requirements are in place to ensure that they can remain operational.
As of December 31, 2025, our two facilities in the high threat zone are seismic compliant. We estimate that our two facilities in Bogotá, an intermediate threat zone, need approximately $15 million of seismic upgrades to become compliant under Colombian law.
Under our current lease and loan agreements, our tenants (or borrowers) are responsible for capital expenditures in connection with seismic laws. However, if we elect to fund capital expenditures for seismic purposes, we would expect a corresponding increase in the lease base that would result in additional rent (such as with our commitment of up to $60 million made to NOR for seismic compliance). Other than as discussed above, we do not currently expect California or Colombia seismic standards to have an impact on our cash flows. We also do not currently expect compliance with seismic standards to materially impact the financial condition of our tenants.
Competition
We compete in acquiring and developing facilities with financial institutions, other lenders, real estate developers, healthcare operators, other REITs, other public and private real estate companies, infrastructure and other funds, and private real estate investors. Among the factors that may adversely affect our ability to compete are the following:
To the extent that we experience vacancies in our facilities, we will also face competition in leasing those facilities to prospective tenants. The actual competition for tenants varies depending on the characteristics of each local market. Virtually all of our facilities operate in highly competitive environments, and patients and referral sources, including physicians, may change their
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preferences for healthcare facilities from time-to-time. The operators of our properties compete on a local and regional basis with operators of properties that provide comparable services. Operators compete for patients based on a number of factors, including quality of care, reputation, physical appearance of a facility, location, services offered, physicians, staff, and price. We also face competition for tenants, such as physicians and other healthcare providers, from owners of comparable healthcare facilities.
For additional information, see “Risk Factors” in Item 1A of this Annual Report on Form 10-K.
Insurance
We obtain various types of insurance to mitigate the impact of property, business interruption, liability, flood, earthquake, fire, wind, and other environmental losses. We attempt to obtain the appropriate policy terms, conditions, limits, and deductibles considering the relative risk of loss and cost of coverage. However, there are certain types of extraordinary losses that may be either uninsurable or not economically insurable.
We maintain or require in our leases and mortgage loans that our tenants maintain applicable types of insurance on our facilities and their operations. In addition, we have a comprehensive insurance program to further protect our interests. At December 31, 2025, we believe that the policy specifications and insured limits of our tenant’s policies and our own policies are appropriate given the relative risk of loss, the cost of the coverage, and standard industry practice. However, no assurances can be given that we will not incur losses that are uninsured or that exceed our insurance coverage.
Healthcare Regulatory Matters
In this Section, we discuss certain material federal healthcare laws and regulations that may affect our operations and those of our tenants and borrowers. We do not address all applicable federal healthcare laws, and do not address state healthcare laws and regulations, except as otherwise indicated. Certain state laws and regulations, like the federal healthcare laws and regulations, could affect the operations of our tenants and, accordingly, our results. In some instances, we own a minority interest in our tenants’ operations and, in addition to the effect on our tenant’s ability to meet its financial obligations to us, our ownership and investment returns may also be negatively impacted by such laws and regulations. Moreover, the discussion relating to reimbursement for healthcare services addresses matters that are subject to frequent review and revision by Congress and the agencies responsible for administering federal payment programs including state agencies. Consequently, predicting future reimbursement trends or changes, along with the potential impact to us, is inherently difficult and imprecise. Finally, though we have not included a comprehensive discussion of applicable foreign laws or regulations, our tenants in Europe and South America may be subject to similar laws and regulations governing the ownership or operation of healthcare facilities including, without limitation, laws governing patient care and safety, reimbursement, licensure, and data protection.
Ownership and operation of hospitals and other healthcare facilities are subject, directly and indirectly, to substantial U.S. federal, state, and local government healthcare laws, rules, and regulations. Our tenants’ failure to comply with these laws and regulations could adversely affect their ability to meet their obligations to us. Physician investment in our facilities or in real estate joint ventures is also subject to such laws and regulations. We are not a healthcare provider or in a position to influence the referral of patients or ordering of items and services reimbursable by the federal government or any state agency. Nonetheless, to the extent that a healthcare provider engages in transactions with our tenants, such as subleases or other financial arrangements, the Anti-Kickback Statute and the Stark Law (both discussed in this section), and any state counterparts thereto, could be implicated.
As in the U.S. under the Health Insurance Portability and Accountability Act of 1996 ("HIPAA") and similar state data protection laws, our tenants in foreign jurisdictions may be subject to strict laws and regulations governing data protection (such as the European Union's General Data Protection Regulation ("GDPR")), generally, and the protection of a patient’s personal health information, specifically. Tenants may also be subject to laws and regulations addressing billing and reimbursement for healthcare items and services. Furthermore, in certain cases, as with certificate of need laws in the U.S., government approval in foreign jurisdictions may also be required prior to the transfer of a healthcare facility or prior to the establishment of new or replacement facilities, the addition of beds, the addition or expansion of services, and certain capital expenditures.
Our leases and loan documents typically require our tenants, both domestic and foreign, to comply with all applicable laws, including healthcare laws. We intend for all of our business activities and operations (including that of our tenants and borrowers) in such jurisdictions to conform in all material respects with all applicable healthcare laws, rules, and regulations.
Applicable Laws (not intended to be a complete list)
Anti-Kickback Statute. The federal Anti-Kickback Statute (codified at 42 U.S.C. § 1320a-7b(b)) prohibits, among other things, the offer, payment, solicitation, or acceptance of remuneration, directly or indirectly, in return for referring an individual to a provider
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of items or services for which payment may be made in whole, or in part, under a federal healthcare program, including the Medicare or Medicaid programs. Violation of the Anti-Kickback Statute is a crime, punishable by fines of up to $100,000 per violation, ten years imprisonment, or both. Violations may also result in civil sanctions, including civil monetary penalties of up to $50,000 per violation, exclusion from participation in federal healthcare programs, including Medicare and Medicaid, and additional monetary penalties in amounts treble to the underlying remuneration. The Anti-Kickback Statute is an intent-based statute, and has been broadly interpreted. As an example, courts have held that there is a violation of the Anti-Kickback Statute if just one purpose of an arrangement is to generate prohibited referrals even though there may be one or more other lawful purposes to the arrangement at issue.
The Office of Inspector General of the Department of Health and Human Services has issued “Safe Harbor Regulations” that describe practices that will not be considered violations of the Anti-Kickback Statute. Nonetheless, the fact that a particular arrangement does not meet safe harbor requirements does not also mean that the arrangement violates the Anti-Kickback Statute. Rather, the safe harbor regulations only provide a guaranty that qualifying arrangements will not be prosecuted under the Anti-Kickback Statute. We intend to use commercially reasonable efforts to structure our arrangements with tenants to satisfy, or meet as closely as possible, all safe harbor conditions. We also require our tenants, under our lease or loan agreements, to comply with applicable laws which would include structuring their arrangements with third parties in a manner that complies with the Anti-Kickback Statute. We cannot assure you, however, that we or our tenants will meet all the conditions for an applicable safe harbor.
Physician Self-Referral Statute (“Stark Law”). Unless subject to an exception, the Ethics in Patient Referrals Act of 1989, or the Stark Law (codified at 42 U.S.C. § 1395nn) prohibits a physician from making a direct or indirect referral to an “entity” furnishing “designated health services” (which would include, without limitation, certain inpatient and outpatient hospital services) paid by Medicare or Medicaid if the physician or a member of the physician's immediate family has a “financial relationship” with that entity. The prohibition further bars the entity from billing Medicare or Medicaid for any services furnished pursuant to a prohibited referral. Sanctions for violating the Stark Law include denial of payment, required refunding of amounts received for services provided pursuant to prohibited referrals, imposition of civil monetary penalties of up to $15,000 per prohibited service provided, and exclusion from the participation in federal healthcare programs. The statute also provides for a penalty of up to $100,000 for a circumvention scheme. The Stark Law is a strict liability statute, and therefore, no intent is required to be shown in order to prove a violation of the statute.
There are exceptions to the self-referral prohibition for many of the customary financial arrangements between physicians and providers, including, without limitation, employment contracts, rental of office space or equipment, personal services agreements and recruitment agreements. Unlike safe harbors under the Anti-Kickback Statute, the Stark Law imposes strict liability on the parties to an arrangement, and an arrangement must comply with every requirement of a Stark Law exception or the arrangement is in violation of the Stark Law.
CMS has issued multiple phases of final regulations implementing the Stark Law and continues to make changes to these regulations. Although our lease and loan agreements require tenants and borrowers to comply with the Stark Law (and we intend for them to comply with the Stark Law), we cannot offer assurance that the arrangements entered into by us, our facilities, or our tenants and borrowers will be found to be in compliance with the Stark Law, as it ultimately may be implemented or interpreted. In addition, changes to the Stark Law could require our tenants to restructure certain arrangements with physicians, which could impact the business of our tenants.
False Claims Act. The federal False Claims Act prohibits the making or presenting of any false claim for payment to the federal government. It is the civil equivalent to federal criminal provisions prohibiting the submission of false claims to federally funded programs. Additionally, qui tam, or whistleblower, provisions of the federal False Claims Act allow private individuals to bring actions on behalf of the federal government alleging that the defendant has defrauded the federal government. Whistleblowers may collect a portion of the federal government’s recovery — an incentive for private parties to bring such actions. A successful federal False Claims Act case may result in a penalty of three times the actual damages, plus additional civil penalties payable to the government, plus reimbursement of the fees of counsel for the whistleblower. Many states have enacted similar statutes preventing the presentation of a false claim to a state government.
The Civil Monetary Penalties Law. The Civil Monetary Penalties Law (“CMPL”) is a comprehensive statute that covers an array of fraudulent and abusive activities and is very similar to the False Claims Act. Among other things, the CMPL prohibits the knowing presentation of a claim for certain healthcare services that is false or fraudulent, the presentation of false or misleading information in connection with claims for payment, and other acts involving fraudulent conduct. Violation of the CMPL may result in penalties ranging from $20,000 to in excess of $100,000 (penalties are periodically adjusted). Notably, such penalties apply to each instance of prohibited conduct, including each item or service not provided as claimed and each provision of false information or each false record. In addition, violators of the CMPL may be penalized up to three times the amount unlawfully claimed and may be excluded from participation in federal healthcare programs.
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Licensure. Our tenants are subject to extensive federal, state, and local licensure, certification, and inspection laws and regulations, including, in some cases, certificate of need laws. Further, various licenses and permits are required to dispense narcotics, operate pharmacies, handle radioactive materials, and operate equipment. Failure to comply with any of these laws could result in loss of licensure, certification or accreditation, denial of reimbursement, imposition of fines, and suspension or decertification from federal and state healthcare programs.
Data Privacy and Security. There are numerous laws and regulations at the U.S. federal and state levels, and globally, addressing data privacy and cybersecurity. As one example, HIPAA restricts the use and disclosure of individually identifiable health information (“PHI”), provides for safeguards of PHI, and requires healthcare providers to notify patients of breaches of unsecured PHI. In general, our tenants based in the U.S. are subject to HIPAA, and they may also be subject to similar state laws addressing the privacy and security of protected health information. As discussed previously, our tenants in jurisdictions outside the U.S. may be subject to GDPR and to other various laws and regulations addressing the privacy and security of protected health information. Moreover, at the U.S. federal and state levels, and globally, legislative and regulatory bodies continue to enact various comprehensive data privacy and cybersecurity legislation to which our tenants may be subject. In general, we rely on our tenants to comply with their obligations with respect to HIPAA and other similar privacy and security laws and regulations, and our leases and loan agreements require that our tenants conduct their business in substantial compliance with applicable privacy and security laws.
EMTALA. Our tenants that provide emergency care in the U.S. are subject to the Emergency Medical Treatment and Active Labor Act (“EMTALA”). Regardless of an individual’s ability to pay, this federal law requires such healthcare facilities to conduct an appropriate medical screening examination of every individual who presents to the hospital’s emergency room for treatment and, if the individual is suffering from an emergency medical condition, to either stabilize the condition or make an appropriate transfer of the individual to a facility able to handle the condition. Liability for violations of EMTALA are severe and include, among other things, civil monetary penalties and exclusion from participation in federal healthcare programs. Our lease and loan agreements require our tenants to comply with EMTALA, and we believe our tenants conduct business in substantial compliance with EMTALA.
Antitrust Laws. The federal government and most states have enacted antitrust laws that prohibit certain types of conduct deemed to be anti-competitive, which include, among other things, price fixing, market allocation, market monopolization, price discrimination, or acquisitions of competitors. Antitrust enforcement in the healthcare industry has been a priority of the Federal Trade Commission and the Department of Justice, including with respect to hospitals, managed care plans, and physician practice acquisitions. As a REIT, our transactions involving solely the purchase and sale of real estate are generally exempt from federal antitrust laws. Some states, however, have enacted antitrust laws or similar statutes that have broad application and could apply to transactions involving the purchase and sale of healthcare real estate. Moreover, our tenants who operate hospitals, managed care plans, and physician practices may be subject to these laws governing anti-competitive behavior, and we cannot predict how the enforcement of these antitrust laws may affect the operations, the growth, or divestiture plans of our tenants and borrowers.
Reimbursement Pressures. Since the passage of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, reimbursement models and healthcare delivery systems continue to evolve. Healthcare facility operating margins have faced significant pressure due to the deterioration in pricing flexibility and payor mix, a continued shift toward alternative payment models, increases in operating expenses (particularly labor costs), reductions in levels of Medicaid funding due to state budget shortfalls, delays in Medicaid supplemental payments, and other healthcare industry-specific cost pressures on our tenants. Private payors may also rely, to a certain extent, on government reimbursement programs to set reimbursement rates which could further negatively impact the results and operations of our tenants. It remains difficult to predict how future changes to reimbursement models and healthcare delivery systems could impact the business of our tenants.
Corporate Responsibility
Corporate responsibility is an important part of our overall business. Our approach to sustainability is overseen by our Board of Directors, executive management team, and our Environmental and Social Committee, a committee of the Board of Directors that was formed to continuously improve programs, policies, and practices relating to environmental, social, and governance initiatives across all aspects of our business. In addition, our Ethics, Nominating and Governance Committee of the Board of Directors is responsible for developing and recommending corporate governance guidelines and policies. We also have an employee-led working group with responsibility for driving further environmental performance improvements across all aspects of our business.
We annually publish our Corporate Responsibility Report, which describes how our approach to key corporate responsibility issues enables us to support our employees, to build strong tenant relationships, and position us for sustainable success. Our environmental sustainability initiatives focus on improvements to our corporate operations and hospital facilities. As such, in 2025, we measured and reported greenhouse gas emissions from our controlled and part of our noncontrolled operations and increased the number of green provisions in our lease agreements.
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To more effectively track and communicate our performance, we are guided by various frameworks and methodologies, including participation in GRESB's Real Estate Assessment and reporting disclosures better aligned with the Sustainability Accounting Standards Board and the Task Force on Climate-Related Disclosure.
Our corporate responsibility achievements over the past year include the following:
For additional information regarding our initiatives and to view our Corporate Responsibility Report, please visit our website at www.mpt.com.
Human Capital
Our employees are our most valuable asset. Led by our founding executives, we have a total of 121 employees as of February 23, 2026, located in the U.S., Luxembourg, and the U.K. None of our employees are subject to a collective bargaining agreement.
We believe that our relations with our employees are good, and we are committed to providing a dynamic and supportive workplace for our employees that encourages both personal and professional growth through significant training and continuing education opportunities. We offer employees the opportunity to attend continuing education courses in order to maintain their professional certifications, participate in seminars and workshops on topics related to their job responsibilities, and build upon their leadership abilities through management development programs. In addition, we provide regular training for all employees on topics such as personal safety, cybersecurity, and data security awareness, and we have established company-wide human rights, and health and safety policies.
We offer a competitive benefits package that includes annual discretionary performance-based bonuses and stock compensation, a 401(k) plan, leading healthcare and insurance benefits, paid time off, and health and wellness reimbursement programs, designed to help recruit and retain high-quality, motivated employees, and to contribute to their health and security. We routinely evaluate and benchmark the competitiveness of our compensation and benefit programs to ensure that we are rewarding our employees and supporting their needs.
In 2025, a third party firm conducted an employee satisfaction survey to measure the level of satisfaction of each employee and gain insight into the health of our company. The responses and comments we received were overwhelmingly positive. As a result, MPT was selected as one of Modern Healthcare’s Best Places to Work in healthcare for 2025.
We believe it is important to be a good corporate citizen around the world, particularly in the communities where our employees live and work. We do this by providing financial support to non-profit programs aimed at improving community public health and supporting the diverse interests of our employees. In addition, we encourage each of our employees to get involved in their communities to make a positive difference, and we provide paid time off to do so.
We are firmly committed to providing equal opportunity in all aspects of employment. We forbid discrimination against any person or harassment, intimidation, or hostility of any kind, retaliation or any other characteristic or conduct that may be protected by applicable local, state, or federal law. Our hiring process includes a robust search for the best available candidate and each candidate is properly vetted through interviews with numerous MPT employees. The company also retains the services of an experienced independent industrial psychologist to ensure a strong fit exists between the company and the candidate and that the candidate meets the standards for the specific job and the needs of the company. We provide regular training on anti-harassment policies.
Available Information
Our website address is www.mpt.com and provides access in the “Investor Relations” section, free of charge, to our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, including exhibits, and all amendments to these
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reports as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission ("SEC"). We use, and intend to continue to use, the “Investor Relations” section of our website as a means of disclosing material nonpublic information and of complying with our disclosure obligations under Regulation FD, including, without limitation, through the posting of investor presentations that may include material nonpublic information. Accordingly, investors should monitor the “Investor Relations” section, in addition to following our press releases, SEC filings, public conference calls, presentations, and webcasts. Also available on our website, free of charge, are our Corporate Governance Guidelines, the charters of our Ethics, Nominating, and Corporate Governance, Audit and Compensation Committees and our Code of Ethics and Business Conduct. If you are not able to access our website, the information is available in print free of charge to any stockholder who should request the information directly from us at (205) 969-3755. Information on or connected to our website is neither part of nor incorporated by reference into this Annual Report on Form 10-K or any other SEC filings.
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ITEM 1A. Risk Factors
The risks and uncertainties described herein are not the only ones facing us. There may be additional risk factors that we do not presently know of or that we currently consider not likely to have a significant impact on us, and it is not possible for us to assess the impact of all such risk factors on our business or the extent to which any factor, or combination of factors, may affect our business. Investors should also refer to our quarterly reports on Form 10-Q for future periods and current reports on Form 8-K for material updates to these risk factors. All of these risk factors could adversely affect our business, results of operations, financial condition, and our ability to service our debt and make distributions to our stockholders. Some statements in this Annual Report, including statements in the following risk factors, constitute forward-looking statements. See “A Warning About Forward Looking Statements” at the beginning of this Annual Report.
Risk factors pertaining to our Company generally fall within the following broad areas:
Adverse U.S. and global market, economic and political conditions, health crises and other events beyond our control could have a material adverse effect on our business, results of operations, and financial condition.
Economic crises, significant concerns over energy costs, inflation or the impact of tariff or similar policies, elevated interest rates, the availability and cost of credit, geopolitical issues (including as a result of existing and potential armed conflicts), or a declining real estate market in the U.S. or abroad have in the past, and may in the future, contribute to increased volatility, diminished expectations for the economy and the markets, reduced capital availability, shortage of available healthcare workers and related increased labor costs, and high levels of unemployment by historical standards. Some or all of these factors, combined with fluctuating business and consumer confidence, can precipitate an economic decline.
Adverse U.S. and global market, economic and political conditions, including dislocations and volatility in the credit markets, elevated levels of inflation and interest rates, and general global economic uncertainty, could have a material adverse effect on our business, results of operations, and financial condition as a result of the following potential consequences, among others:
Public health crises, pandemics and epidemics, such as those caused by viruses such as H5N1 (avian flu), severe acute respiratory syndrome (SARS), and COVID-19, could adversely impact our and our tenants’ business by disrupting supply chains and transactional activities, creating labor shortages and increasing operating expenses, and negatively impacting local, national, or global economies, including the availability of capital.
Our revenues are dependent upon our relationships with and success of our tenants, particularly our largest tenants, like Circle, Priory, HSA, Swiss Medical, and Lifepoint Behavioral.
Our tenants’ financial performance and resulting ability to satisfy their lease and loan obligations to us are material to our financial results and our ability to service our debt and make distributions to our stockholders. We have no operational control over the business of our tenants and associated health systems. Our tenants experience operational challenges from time-to-time, and this can be even more of a risk for those tenants that grow (or have grown) via acquisitions in a short time frame, like Circle, and others. Such operational challenges can result in our tenants and operators having to write-off uncollectible accounts receivable, incurring higher expenses, or even undergoing insolvency in certain cases.
We recorded real estate and other impairment charges along with negative fair value adjustments in 2024 and 2025 related to Steward and Prospect. For more information on these charges, see Note 3 to Item 8 of this Annual Report. We are dependent upon the ability of our tenants to make rent and loan payments to us, and any failure to meet these obligations could have a material adverse effect on our financial condition and results of operations. As of December 31, 2025, our largest tenants – Circle, Priory, HSA, Swiss Medical, and Lifepoint Behavioral – represented 14.1%, 8.7%, 8.0%, 5.8%, and 5.4%, respectively, of our total assets.
We rely on our tenants to provide us with accurate financial and other information under the terms of our leases or in the ordinary course of our business relationship, which we, in turn, use for making business decisions, assessing risk, and calculating and reporting tenant coverage and other data. Because most of our tenants are private companies, the financial information they provide us with might not be audited. If the financial or other information provided to us by our tenants is not accurate or timely, our reported tenant coverage and other data, which is based on such tenant-provided information, might prevent us from making a timely or accurate business decision or adequately assessing risk in connection with a tenant, which could adversely impact our financial condition, results of operations, stock price, and reputation.
In addition, our tenants operate in the healthcare industry, which is highly regulated by U.S. federal, state, and local laws along with laws in Europe and South America and changes in applicable laws and regulations may temporarily impact our tenants’ operations until they are able to make the appropriate adjustments to their business. Any adverse result to our tenants (particularly Circle, Priory, HSA, Swiss Medical, and Lifepoint Behavioral) in regulatory proceedings or financial or operational setbacks (including cybersecurity incidents affecting electronic health records, billing functions, telehealth platforms, or other systems containing patient data that may result in reputational harm, regulatory investigations or enforcement actions, litigation and remediation costs, among others) may have a material adverse effect on the relevant tenant’s operations and on its ability to make required lease and loan payments to us.
We have made investments in certain operators of our healthcare facilities and the cash flows (and related returns) from these investments are subject to more volatility than our properties with traditional net leasing structures.
At December 31, 2025, we had approximately $0.3 billion of investments in unconsolidated operating entities, or 2% of our total assets. These investments include loans but also equity investments that generate returns dependent upon the operator’s performance. As a result, the cash flows and returns from these investments may be more volatile than that of our traditional net leasing structures.
As disclosed elsewhere in this Annual Report, operational challenges for certain operators have in the past, and may in the future, impact our ability to recover our investments, in part or at all, and therefore could have a material adverse impact on our financial condition, results of operations, stock price, and ability to service our debt and make distributions to our stockholders. See the risk factor titled “Our revenues are dependent upon our relationships with and success of our tenants, particularly our largest tenants, like Circle, Priory, HSA, Swiss Medical, and Lifepoint Behavioral” and Item 7 of this Annual Report.
The bankruptcy or insolvency of our tenants or investees could harm our results of operations, financial condition, and liquidity.
Any bankruptcy filing by one of our tenants (such as Steward in 2024 and Prospect in 2025) could harm our operating results and financial condition. A tenant bankruptcy is likely to delay our efforts to collect past due balances under our leases and loans, and could ultimately preclude collection of such balances. If a lease is assumed by a tenant in bankruptcy (as was the case with Pipeline Health System, LLC ("Pipeline") in 2022), we expect that all pre-bankruptcy balances due under the lease would be paid to us in full. However, if we are required to seek one or more replacement operators for our facilities, this may result in delays and increase costs as transferring operations of healthcare facilities is highly regulated. If a lease is rejected by a tenant in bankruptcy, we could have only a secured claim for damages. Any secured claims we have against our tenants may only be paid to the extent of the value of the collateral, which may not cover any or all of our losses. Any unsecured claim (such as our equity interests in our tenants) we hold against a bankrupt entity may be paid only to the extent that funds are available and only in the same percentage as is paid to all other holders of unsecured claims. We may recover none or substantially less than the full value of any unsecured claims, which would harm our financial condition. In addition, any bankruptcy filing by one of our tenants may require a disproportionate amount of our
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management’s attention, cause us to incur increased professional fees that may not be recovered, and negatively impact our reputation and the market price of our common stock.
Declines in the fair value of our assets may force us to recognize impairment charges, which could adversely impact our results of operations, financial condition, liquidity, and the market price of our common stock.
We periodically evaluate our investments for impairment under generally accepted accounting principles (“GAAP”) in the U.S. based on factors such as market conditions, tenant performance, and investment structure. If we determine that an impairment has occurred, we are required to make a downward adjustment to the net carrying value of the property. For example, the early termination of, or default under, a lease by a tenant or operator may lead to an impairment charge with respect to the relevant asset. During the year ended December 31, 2024, we incurred impairment charges and negative fair value adjustments relating to our investments in Steward and Prospect and additional charges relating to our investments in Prospect in 2025. For more information on these impairment charges and negative fair value adjustments, see Note 3 to Item 8 of this Annual Report.
Impairment charges also indicate a potential permanent adverse change in the fundamental operating characteristics of the impaired asset. There is no assurance that adverse impairment charges will be reversed in the future and the decline in the impaired asset’s value could be permanent. There can be no assurance that we will not take additional impairment charges in the future. Any future impairment could have a material adverse effect on our results of operations, financial condition, liquidity, and the market price of our common stock.
It may be costly to replace defaulting tenants or find new tenants when lease terms end, and we may not be able to find replacements on comparable or otherwise suitable terms.
Failure on the part of a tenant to comply materially with the terms of a lease could give us the right to terminate the lease, repossess the facility, cross default certain other leases and loans with that tenant, and enforce the payment obligations under the lease. The process of terminating a lease with a defaulting tenant and repossessing the applicable facility may be costly and require a disproportionate amount of management’s attention. In addition, defaulting tenants may initiate litigation in connection with a lease termination or repossession against us. Defaults by our significant tenants under master or cross-defaulted leases (like Circle, Priory, HSA, Swiss Medical and Lifepoint Behavioral) would have an even more pronounced negative impact.
Additionally, failure on the part of a tenant to renew or extend the lease at the end of its fixed term could result in us having to search for, negotiate with, and execute new lease agreements. This risk is even greater for those properties under master or cross-defaulted leases (like Circle) because several properties have the same lease ending dates. See Item 2 for our lease and loan maturity schedule.
If a tenant-operator defaults and we choose to terminate the lease, or if a tenant fails to renew or extend the lease at the end of its fixed term, we would be required to find another tenant-operator or to sell the facility. The process of finding and negotiating with a new tenant, along with costs (such as maintenance, property taxes, utilities, ground lease expenses, etc.) that we will incur while the facility is potentially untenanted, may be costly and require a disproportionate amount of our management’s attention. Additionally, the transfer of healthcare facilities is highly regulated, which may result in delays and increased costs in locating a suitable replacement tenant. There can be no assurance that we would be able to find another tenant in a timely fashion, or at all, or that, if another tenant were found, we would be able to enter into a new lease on favorable terms. If we are unable to re-let the properties to healthcare operators, we may be forced to sell the properties at a loss due to the repositioning expenses likely to be incurred by non-healthcare purchasers. Alternatively, we may be required to spend substantial amounts to adapt the facility to other uses. Thus, defaults under or the non-renewal or non-extension of leases may adversely affect our results of operations, financial condition, and our ability to service our debt and make distributions to our stockholders.
Our employees are responsible for all aspects of managing our portfolio of over 380 properties across nine countries, and our failure to effectively manage our properties along with any growth may adversely impact our financial condition and cash flows, which could negatively affect our ability to service our debt and make distributions.
We currently employ 121 employees that are responsible for identifying, underwriting and closing new investments; managing existing properties and those under development; and handling all finance and accounting duties; among other things for a portfolio of over 380 properties across nine countries. There is no assurance that we will be able to adapt our management, administrative, accounting, and operational systems, or hire and retain sufficient operational staff, to manage our existing portfolio or facilities that we may acquire or develop in the future. Additionally, investing in real estate located in foreign countries creates risks associated with the uncertainty of foreign laws, economies, and markets, and exposes us to local economic downturns and adverse market developments. Our failure to manage our portfolio effectively may adversely impact our financial condition and cash flows, which could negatively affect our ability to service our debt and make distributions to our stockholders.
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We have less experience with healthcare facilities located outside the U.S.
At December 31, 2025, we had approximately 50.3% of our total assets located in eight different countries outside the U.S. We have less experience investing in healthcare properties or other real estate-related assets located outside the U.S. Investing in real estate located in foreign countries creates risks associated with the uncertainty of foreign laws and markets including, without limitation, laws respecting foreign ownership, the enforceability of loan and lease documents, and foreclosure laws. Foreign real estate and tax laws are complex and subject to change, and we cannot assure you we will always be in compliance with those laws or that compliance will not expose us to additional expense. The properties we have acquired internationally will face risks in connection with, among others, unexpected changes in regulatory requirements, political and economic instability, potential imposition of adverse or confiscatory taxes, possible challenges to the anticipated tax treatment of the structures that allow us to acquire and hold investments, possible currency transfer restrictions, the difficulty in enforcing obligations in foreign jurisdictions, and the burden of complying with a wide variety of foreign laws. In addition, to qualify as a REIT, we generally will be required to operate any non-U.S. investments in accordance with the rules applicable to U.S. REITs, which may be inconsistent with local practices. We may also be subject to fluctuations in local real estate values or markets or the economy as a whole, which may adversely affect our investments.
In addition, the revenues and expenses incurred internationally are denominated in either euros, British pounds, Swiss francs, or Colombian pesos, which could expose us to losses resulting from fluctuations in exchange rates to the extent we have not hedged our position, which in turn could adversely affect our revenues, operating margins, and dividends, and may also affect the book value of our assets and stockholders’ equity. While we may hedge some of our foreign currency risk, we may not be able to do so successfully and may incur losses on our investments as a result of exchange rate fluctuations. Furthermore, we are subject to laws and regulations, such as the Foreign Corrupt Practices Act and similar local anti-bribery laws, which generally prohibit companies and their employees, agents, and contractors from making improper payments to governmental officials for the purpose of obtaining or retaining business. Failure to comply with these laws could subject us to civil and criminal penalties that could materially and adversely affect our results of operations, the value of our international investments, and our ability to service our debt and make distributions to our stockholders.
We and our tenants have exposure to contingent rent escalators, which could impact profitability.
We receive a significant portion of our revenues by leasing assets under long-term net leases that generally provide for fixed rental rates subject to annual escalations. These annual escalations may be contingent on changes in CPI (or a similar index internationally), typically with specified caps and floors. If, as a result of weak economic conditions or other factors, the CPI does not increase, our growth and profitability may be hindered by these leases. In addition, if strong economic conditions or higher than normal inflation results in significant increases in CPI (as was the case in 2023), but the escalations under our leases are capped, our growth and profitability may be limited.
Conversely, higher than normal increases in CPI could negatively impact our tenants' profitability, particularly if reimbursement revenues from governmental programs, like Medicare, do not keep pace. Even if these governmental programs eventually increase reimbursement rates in line with CPI, there could be interim shortfalls for our tenants, which may adversely impact our ability to collect rent/interest on a timely basis.
Our business is highly competitive, and we may be unable to compete successfully.
We compete for acquisition and development opportunities with, among others, private investors, including large private equity funds; healthcare providers, including physicians; other REITs; real estate developers; government-sponsored and/or not-for-profit agencies; financial institutions; and other lenders. Some of these competitors may have substantially greater financial resources than we have and may have better relationships with lenders and sellers. Competition for healthcare facilities may adversely affect our ability to acquire or develop healthcare facilities and the prices we pay for those facilities. If we are unable to acquire or develop facilities or if we pay too much for facilities, our revenue, earnings growth, and financial return could be materially adversely affected. Certain of our facilities, or facilities we may acquire or develop in the future, will face competition from other nearby facilities that provide services comparable to those offered at our facilities. Some of those facilities are owned by governmental agencies and supported by tax revenues, and others are owned by tax-exempt corporations and may be supported to a large extent by endowments and charitable contributions. Those types of support are not generally available to our facilities. In addition, competing healthcare facilities located in the areas served by our facilities may provide healthcare services that are not available at our facilities. From time-to-time, referral sources, including physicians and managed care organizations, may change the healthcare facilities to which they
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refer patients. Each of these circumstances could adversely affect our tenants and indirectly our results of operations, financial condition, and ability to service our debt and make distributions.
Many of our tenants have an option to purchase the facilities we lease to them, which could disrupt our operations.
Many of our tenants have the option to purchase the facilities we lease to them. In the event our tenants decide to purchase the facilities at the end of the lease term, we may not be able to re-invest the capital on as favorable terms, or at all. Our inability to effectively manage the turnover of our facilities could materially adversely affect the execution of our business plan and our results of operations.
We have 90 leased properties that are subject to purchase options as of December 31, 2025. For 84 of these properties, the purchase option generally allows the lessee to purchase the real estate at the end of the lease term, assuming not in default at that time, at a price equivalent to the greater of (i) fair market value or (ii) our original purchase price (increased, in some cases, by a certain annual rate of return from the lease commencement date). The lease agreements generally provide for an appraisal process to determine fair market value. For two of these properties, the purchase option generally allows the lessee to purchase the real estate at the end of the lease term, assuming not in default at that time, at our purchase price (increased, in some cases, by a certain annual rate of return from lease commencement date). For the remaining four properties, the purchase options approximate fair value.
In certain circumstances, a prospective purchaser of our hospital real estate may be deemed to be subject to Anti-Kickback and Stark statutes, which are described in the “Healthcare Regulatory Matters” section in Item 1 of this Annual Report. In such event, it may not be practicable for us to sell a property to such prospective purchaser at a price other than fair market value.
Merger and acquisition activity or consolidation in the healthcare industry may result in a change of control of, or a competitor’s investment in, one or more of our tenants or operators, which could have a material adverse effect on us.
The healthcare industry continues to experience consolidation, including among owners of real estate and healthcare providers. We compete with other healthcare REITs, healthcare providers, healthcare lenders, real estate partnerships, banks, insurance companies, private equity firms, and other investors that pursue a variety of investments, which may include investments in our tenants. A competitor’s investment in one of our tenants, any change of control of a tenant, or a change in the tenant’s management team could enable our competitor to influence or control that tenant’s business and strategy. This influence could have a material adverse effect on us by impairing our relationship with the tenant, negatively affecting our interest, or impacting the tenant’s financial and operational performance, including their ability to pay us rent or interest. Depending on our contractual agreements and the specific facts and circumstances, we may have consent rights, termination rights, remedies upon default, or other rights and remedies related to a competitor’s investment in, a change of control of, or other transactions impacting a tenant. In deciding whether to exercise our rights and remedies, including termination rights or remedies upon default, we assess numerous factors, including legal, contractual, regulatory, business, and other relevant considerations.
Our investments in joint ventures could be adversely affected by our lack of control, our partners’ failure to meet their obligations, and disputes with our partners.
We have investments in five unconsolidated real estate joint ventures with independent parties that total approximately $1.4 billion at December 31, 2025. Joint venture arrangements involve risks including the possibility that the other party may refuse or not be able to make capital contributions if needed, that our partner might have economic or other interests that are inconsistent with the joint venture’s interests, or that we may become engaged in a dispute with our partner. If any of these events occur, we may need to provide additional funding to the joint ventures to meet our obligations, incur additional expenses to resolve disputes, or be forced to buy out the partner’s interest or to sell our interest at a time that is not advantageous to us. Any loss of income, cash flows, or disruption of management’s time could have a negative impact on the rest of our business.
Increased scrutiny, politicization, and changing expectations from investors, employees, tenants, and other stakeholders regarding corporate responsibility and sustainability matters could adversely impact our reputation, tenant and employee acquisition and retention, and access to capital.
Companies across all industries have faced scrutiny related to their corporate responsibility practices and reporting. Certain investors, employees, and other stakeholders have focused on corporate responsibility practices and placed importance on the implications and broader societal impacts of their investments and business decisions. For example, some investment funds and certain institutional investors have previously incorporated aspects of corporate responsibility and sustainability (including third‑party scores) into stewardship, engagement, and, in some cases, investment or voting decisions, although these approaches vary and have shifted recently in response to market, regulatory, and political developments. Our failure, or perceived failure, to meet the goals and objectives we set in our sustainability disclosure, or to maintain accurate, consistent, and appropriately supported disclosures, could
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negatively impact our reputation, tenant and employee retention, and access to capital. At the same time, in the U.S., corporate responsibility initiatives and disclosures have become increasingly politicized, including through anti‑environmental, social and governance (“ESG”) policy statements at the federal and state level, and legislative, regulatory, and enforcement initiatives in certain states. As a result, stakeholder expectations may be divergent, rapidly changing, and, in some cases, conflicting. Certain investors, lenders, counterparties, tenants, employees, and other stakeholders may seek greater corporate responsibility commitments and disclosure, while others may oppose or seek to limit corporate responsibility initiatives or the use of ESG‑related criteria in investment, lending, or contracting decisions as incompatible with fiduciary duties to maximize financial returns.
This evolving and polarized environment could adversely affect us in a number of ways, including by (i) increasing the cost and complexity of compliance and reporting as legal requirements, regulatory guidance, and market standards change, including as rules are proposed, modified, delayed, rescinded, or subject to litigation; (ii) exposing us to litigation, regulatory inquiries, or enforcement actions (including allegations of “greenwashing” or, conversely, claims that certain initiatives are impermissible or inconsistent with applicable law or fiduciary duties); and (iii) creating reputational risk, including the risk of negative publicity, activism, boycotts, or divestment from stakeholders on either side of these issues.
Our indebtedness could adversely affect our financial condition, and may otherwise adversely impact our business operations and our ability to make distributions to stockholders.
As of February 23, 2026, we had approximately $9.6 billion of debt outstanding - see "Contractual Commitments" in Item 7 of this Annual Report for a schedule of our debt coming due over the next five years. Our indebtedness could have significant adverse effects on our business, including by:
Future borrowings under our loan facilities may bear interest at variable rates in addition to the $0.6 billion in variable interest rate debt that we had outstanding as of February 23, 2026. If interest rates increase significantly, our operating results would decline along with the cash available for distributions to our stockholders.
In addition, most of our current debt is, and we anticipate that much of our future debt will be, non-amortizing and payable in balloon payments. Therefore, we will likely need to refinance at least a portion of that debt as it matures. There is a risk that we may not be able to extend, refinance, or pay off debt maturing in 2026 and future years or that the terms of any refinancing will not be as favorable as the terms of the then-existing debt. If principal payments due at maturity cannot be refinanced, extended, or repaid with proceeds from other sources, such as new equity capital, joint venture proceeds, or sales of facilities, our cash flows may not be sufficient to repay all maturing debt in years when significant balloon payments come due. Any failure to make required payments when due could result in an event of default, which could lead to, among other things, the acceleration of some or all of our indebtedness, the imposition of default interest and other charges, the termination of commitments under our Credit Facility, and, where applicable, the exercise of remedies against collateral, any of which could materially adversely affect our financial condition, business operations, and ability to make distributions to our stockholders. See Item 7 of this Annual Report for further information on our debt maturities.
Covenants in our debt instruments limit our operational flexibility, and a breach of these covenants could materially affect our financial condition and results of operations.
The terms of our Credit Facility and the indentures governing our outstanding senior notes and other debt instruments that we may enter into in the future are subject to customary financial, operational, and reporting covenants. For example, our Credit Facility imposes certain restrictions on us, including restrictions on our ability to: incur debts; create or incur liens; provide guarantees in
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respect of obligations of any other entity; make redemptions and repurchases of our capital stock; prepay, redeem, or repurchase debt; engage in mergers or consolidations; enter into affiliated transactions; dispose of real estate; and change our business. In addition, our Credit Facility and senior notes limit the amount of dividends we can pay. Furthermore, our senior notes require us to maintain total unencumbered assets (as defined in the related indenture) of not less than 150% of our unsecured indebtedness, and the terms of our senior secured notes issued in February 2025 limit the amount of first lien debt that can be secured on the collateral of such notes. Finally, our Credit Facility requires compliance with certain borrowing base conditions, as well as maintenance of maximum total leverage and secured leverage ratios and a minimum fixed charge coverage ratio. From time-to-time, the lenders of our Credit Facility may adjust certain covenants to give us more flexibility (as was done in 2024); however, such modified covenants could be temporary, and we must be in a position to meet the lowered reset covenants in the future. Our continued ability to incur debt and operate our business is subject to compliance with the covenants in our debt instruments. Breaches of these covenants could result in defaults under applicable debt instruments and other debt instruments due to cross-default provisions, even if payment obligations are satisfied. Financial and other covenants, among others, that limit our operational flexibility, as well as defaults resulting from a breach of any of these covenants in our debt instruments, could have a material adverse effect on our financial condition and results of operations.
Failure to hedge effectively against interest rate changes may adversely affect our results of operations and our ability to make distributions to our stockholders.
As of February 23, 2026, we had approximately $0.6 billion in variable interest rate debt. This variable rate debt subjects us to interest rate volatility. To manage interest rate volatility, from time-to-time, we have entered into interest rate swaps to fix the interest rate. However, these hedging arrangements involve risk, including the risk that counterparties may fail to honor their obligations, and that the arrangements may not be effective in reducing our exposure to interest rate changes, and may result in higher interest rates than we would otherwise have. Moreover, no hedging activity can completely insulate us from the risks associated with changes in interest rates. Failure to hedge effectively against interest rate changes may materially adversely affect our results of operations and our ability to service our debt and make distributions to our stockholders.
The market price and trading volume of our common stock may be volatile and may decline regardless of our operating performance, and you may lose all or part of your investment.
As observed in recent years, the market price of our common stock may be highly volatile and subject to wide fluctuations. In addition, the trading volume in our common stock may fluctuate and cause significant price variations to occur. A variety of factors may cause significant price variations, including, we believe, the amount and status of short interest in our securities and any coordinated trading activities or large derivative positions in our common stock. For example, the potential for a "short squeeze" whereby a number of investors take a short position in a stock and have to buy the borrowed securities to close out the position at a time that other short sellers of the same security also want to close out their positions, may result in volatility in our stock price. If the market price of our common stock declines significantly, you may be unable to sell your shares at or above your purchase price.
We cannot assure you that the market price of our common stock will not fluctuate or decline significantly in the future. Although not a comprehensive list, some possible factors that could negatively affect our share price or result in fluctuations in the price or trading volume of our common stock include:
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Future sales of common stock may adversely affect our stock price.
We cannot predict the effect, if any, of future sales of common stock on the market price of our common stock. Sales of substantial amounts of common stock, or the perception that these sales could occur, may adversely affect prevailing market prices for our common stock. If the market price of our common stock declines significantly, you may be unable to sell your shares at or above your purchase price. In addition, such a share price decline could impair our ability to raise future capital through a sale of additional equity securities.
Downgrades in our credit ratings could have a material adverse effect on our cost and availability of capital.
As of February 23, 2026, S&P Global rates Medical Properties Trust and our unsecured notes at CCC+. Our corporate family rating for Moody's was upgraded in February 2025 to B3 and Moody's assigned a B2 rating to the new secured debt that was issued in February 2025 (see Note 4 to Item 8 of this Annual Report for more information on this offering). However, S&P currently has a negative outlook on our ratings, and there can be no assurance that we will be able to maintain or improve our current credit ratings. Any downgrades in terms of ratings or outlook by any or all of the rating agencies could have a material adverse effect on our cost and availability of capital, which could in turn have a material adverse effect on our financial condition and results of operations.
Elevated interest rates may adversely affect the market price of our securities.
One of the factors that investors may consider in deciding whether to buy or sell our securities is our dividend rate as a percentage of our price per share of common stock, relative to market interest rates. In recent years, elevated inflation has prompted central banks to tighten monetary policies and raise interest rates, which can create headwinds to economic growth. Previous rate hikes enacted by the Federal Reserve in 2022 and 2023 have had a significant impact on interest rate indexes, such as SOFR and the Prime Rate. In 2024, and amid cooling inflation, the Federal Reserve cut interest rates. However, if market interest rates were to begin rising again, prospective investors may desire a higher distribution on our securities or seek securities paying higher distributions. The market price of our common stock likely will be based primarily on the earnings that we derive from rental and interest income with respect to our facilities and our related distributions to stockholders, and not from the underlying appraised value of the facilities themselves. As a result, interest rate fluctuations and capital market conditions can affect the market price of our common stock. In addition, elevated interest rates would result in increased interest expense on our variable-rate debt and any refinancing of existing debt, thereby adversely affecting cash flows and our ability to service our indebtedness and make distributions.
Limited access to capital may restrict our growth.
Our business plan contemplates growth through acquisitions and development of facilities. As a REIT, we are required to make distributions, which (if paid in cash) reduce our ability to fund acquisitions and developments with retained earnings. Thus, access to the capital markets, bank borrowings, and other financing vehicles is important to fund new opportunistic investments. Due to market or other conditions, we may not be able to obtain additional equity or debt capital or dispose of assets on favorable terms, or at all, at the time we need additional capital to acquire healthcare properties, which could have a material adverse effect on our results of operations and our ability to service our debt and make distributions to our stockholders. Our continued ability to incur and refinance debt is subject to maintaining sufficient unencumbered assets, in the case of unsecured indebtedness, or additional collateral, in the case of secured indebtedness, to incur such debt and, if sufficient unencumbered assets or additional collateral cannot be provided, we may be unable to incur or refinance debt.
Our investments are, and are expected to continue to be, concentrated in a single industry, making us more vulnerable economically than if our investments were more diversified.
We acquire, develop, and make investments in healthcare real estate. In addition, we selectively make investments in healthcare operators. We are subject to risks inherent in concentrating investments in real estate. The risks resulting from a lack of diversification become even greater as a result of our business strategy to invest solely in healthcare facilities. A downturn in the real estate industry could materially adversely affect the value of our facilities. A downturn in the healthcare industry could negatively affect our tenants’
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ability to make lease or loan payments to us as well as our return on equity investments. Consequently, our ability to meet debt service obligations or make distributions to our stockholders is dependent on the real estate and healthcare industries.
The illiquidity of real estate investments could significantly impede our ability to respond to adverse changes in the performance of our facilities and harm our financial condition.
Real estate investments are relatively illiquid. Additionally, the real estate market is affected by many factors beyond our control, including adverse changes in global, national, and local economic and market conditions and the availability, costs, and terms of financing. Our ability to quickly sell or exchange any of our facilities in response to changes in economic and other conditions will be limited. No assurances can be given that we will recognize full value for any facility that we are required to sell for liquidity reasons. Our inability to respond rapidly to changes in the performance of our investments could adversely affect our financial condition and results of operations.
Development and construction risks could adversely affect our ability to service our debt and make distributions to our stockholders.
We have developed and constructed facilities in the past and are currently developing several facilities. Our development and related construction activities may subject us to a number of risks, including:
We expect to fund our development projects over time. The time frame required for development and construction of these facilities means that we may have to wait for some time to earn significant cash returns. In addition, our tenants may not be able to obtain managed care provider contracts for new developments in a timely manner or at all. Risks associated with our development projects may reduce anticipated rental revenue, which could affect our ability to service our debt and make distributions.
We may be subject to risks arising from future acquisitions of real estate.
We may be subject to risks in connection with our acquisition of healthcare real estate, including:
We cannot assure you that we will be able to manage the new properties without encountering difficulties or that any such difficulties will not have a material adverse effect on us.
Our facilities may not achieve expected results, which may harm our results of operations and financial condition, as well as our ability to service our debt and make the distributions to our stockholders required to maintain our REIT status.
Acquisitions and developments entail risks that investments will fail to perform in accordance with expectations and that cost estimates may prove inaccurate, as well as general investment risks associated with any new real estate investment. Newly-developed
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or newly-renovated facilities may not have operating histories that are helpful in making objective pricing decisions. The purchase prices for such facilities will be based, in part, upon projections by management as to the expected operating results of the facilities, subjecting us to risks that they may not achieve anticipated operating results within anticipated time frames or at all. If our facilities do not achieve expected results and fail to generate anticipated cash flows from operations, amounts available to service our debt or to make distributions to our stockholders required to maintain our REIT status could be adversely affected.
We may suffer losses that are not covered by insurance or that are in excess of our insurance coverage limits.
Our leases and mortgage loans generally require our tenants/borrowers to carry property, general liability, professional liability, loss of earnings, all risk, and extended coverage insurance in amounts sufficient to permit the replacement of the facility in the event of a total loss, subject to applicable deductibles. We carry general liability insurance and loss of earnings coverage on all of our properties as a contingent measure in case our tenant’s coverage is not sufficient. However, there are certain types of losses, generally of a catastrophic nature, such as earthquakes, fires, floods, hurricanes, and acts of terrorism, which may be uninsurable or not insurable at a price we or our tenants/borrowers can afford. Inflation, changes in building codes and ordinances, environmental considerations, and other factors also might make it impracticable to use insurance proceeds to replace a facility after it has been damaged or destroyed. Under such circumstances, the insurance proceeds we receive might not be adequate to restore our economic position with respect to the affected facility. If any of these or similar events occur, it may reduce our return from the facility and the value of our investment. We continually review the insurance maintained by our tenants/borrowers and believe the coverage provided to be adequate and customary for similarly situated companies in our industry. However, we cannot provide any assurances that such insurance will be available at a reasonable cost in the future. Also, we cannot assure you that material uninsured losses, or losses in excess of insurance proceeds, will not occur in the future.
Capital expenditures for facility renovation may be greater than anticipated and may adversely impact rent payments by our tenants and our ability to service our debt and make distributions to our stockholders.
Facilities, particularly those that consist of older structures, have an ongoing need for capital improvements, including periodic replacement of fixtures and fixed equipment. Although our leases generally require our tenants to be primarily responsible for the cost of such expenditures, renovation of facilities involves certain risks, including the possibility of environmental problems, regulatory requirements, construction cost overruns and delays, uncertainties as to market demand or deterioration in market demand after commencement of renovation, and the emergence of unanticipated competition from other facilities. All of these factors could adversely impact rent and loan payments by our tenants and returns on our equity investments, which in turn could have a material adverse effect on our financial condition, results of operations, and our ability to service debt and make distributions.
Certain of our healthcare facilities are subject to property taxes that may increase in the future and adversely affect our business.
Our facilities are subject to real and personal property taxes that may increase as property tax rates change and as the facilities are assessed or reassessed by taxing authorities. Our leases generally provide that the property taxes are charged to our tenants as an expense related to the facilities that they occupy. As the owner of the facilities, however, we are ultimately responsible for payment of the taxes to the government. If property taxes increase, our tenants may be unable to make the required tax payments, ultimately requiring us to pay the taxes. If we incur these tax liabilities, our ability to service our debt and make expected distributions to our stockholders could be adversely affected. In addition, if such taxes increase on properties in which we have an equity investment in the tenant, our return on investment may be negatively affected.
As an owner and lessor of real estate, we are subject to risks under applicable environmental laws, the cost of compliance with which and any violation of which could materially adversely affect us.
Various environmental laws may impose liability on the current or prior owner or operator of real property for removal or remediation of hazardous or toxic substances. Current or prior owners or operators may also be liable for government fines and damages for injuries to persons, natural resources, and adjacent property. These environmental laws often impose liability whether or not the owner or operator knew of, or was responsible for, the presence or disposal of the hazardous or toxic substances. The cost of complying with environmental laws could materially adversely affect our ability to service our debt or make distributions to our stockholders. In addition, the presence of hazardous or toxic substances, or the failure of our tenants to properly manage, dispose of, or remediate such substances, including medical waste, may adversely affect our tenants or our ability to use, sell, or rent such property or to borrow using such property as collateral which, in turn, could reduce our revenue and our financing ability. We typically obtain Phase I environmental assessments (or similar studies) on facilities we acquire or develop or on which we make mortgage loans. However, even if the Phase I environmental assessment reports do not reveal any material environmental contamination, it is possible that material environmental contamination and liabilities may exist, of which we are unaware.
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Although our leases and mortgage loans require our operators to comply with laws and regulations governing their operations, including the disposal of medical waste, and to indemnify us for environmental liabilities, the scope of their obligations may be limited. We cannot assure you that our tenants would be able to fulfill their indemnification obligations and, therefore, any material violation of environmental laws could have a material adverse effect on us. In addition, environmental laws are constantly evolving, and changes in laws or regulations, or changes in interpretations of the foregoing, could create liabilities where none exist today.
Our interests in facilities through ground leases expose us to the risk of loss of the facility upon breach or termination of the underlying ground lease, may limit our use of the facility, and may result in additional expenses to us if our tenants vacate the facility.
We have acquired interests in 20 facilities, at least in part, by acquiring leasehold interests in the land on which the facility is located rather than an ownership interest in the land. As lessee under ground leases, we are exposed to the possibility of losing the property upon termination, or an earlier breach by us, which could adversely impact our financial condition. Ground leases may also restrict our use of the related facility, which may limit our flexibility in renting the facility and may impede our ability to sell the property. Finally, if our facility lease expires or is terminated for whatever reason resulting in the tenant vacating the facility, we would be responsible for the ground lease payments until we find a replacement tenant, which would negatively impact our cash flows and results of operations.
The continued pressure on healthcare reimbursement in the U.S. and other countries in which we do business, including shifts from fee-for-service reimbursement towards alternative payment models, other healthcare policy reforms, and government cost cutting measures, could adversely affect the profitability of our tenants and their ability to make payments to us.
Sources of revenue for our tenants may include the U.S. Medicare and Medicaid programs, other government-sponsored payment programs, private insurance carriers, and health maintenance organizations, among others. In addition to ongoing efforts to reduce healthcare costs, the failure of any of our tenants to comply with various laws and regulations could jeopardize their ability to continue participating in Medicare, Medicaid, and other government-sponsored payment programs. Recently, the One Big Beautiful Bill Act of 2025 included Medicaid reforms (including work requirements and other eligibility-related changes) as well as other program integrity measures that could reduce coverage or lead to more frequent changes in coverage status, increase uncompensated care, and further pressure provider reimbursement and liquidity, which could adversely affect our tenants’ revenues and cash flows.
The shift in our tenant payor mix away from fee-for-service payors results in an increase in the percentage of revenues attributable to alternative payment models implemented by private and government payors, which can lead to reductions in reimbursement for services provided by our tenants. In the U.S., there is continued focus on transitioning Medicare from its traditional fee-for-service model to models that employ one or more capitated, value-based, or bundled payment approaches, and private payors have implemented similar types of alternative payment models. Other countries where we do business have implemented various strategies to reduce overall healthcare cost or may do so in the future. Such efforts from private and government payors, in addition to general industry trends, continue to place pressures on our tenants to control healthcare costs. Furthermore, pressures to control healthcare costs and a shift away from traditional health insurance reimbursement have resulted in an increase in the number of patients whose healthcare coverage is provided under managed care plans, such as health maintenance organizations and preferred provider organizations. These shifts place further cost pressures on our tenants. We also continue to believe that, due to the aging of the population and the expansion of governmental payor programs, there will be a marked increase in the number of patients relying on healthcare coverage provided by governmental payors. In instances where we have an equity investment in our tenants’ operations, in addition to the effect on these tenants’ ability to meet their financial obligations to us, our ownership and investment interests may also be negatively impacted.
Additionally, government and commercial payors in the U.S., and in other countries (like Colombia) in which we do business, have the ability to withhold or delay payments to our tenants. Delayed or withheld payments may be due to a variety of reasons including, but not limited to, initial denials based on incomplete or inaccurate documentation, payors strategically slowing payments, a lack of funds available, or a combination of these and other factors. Delayed or withheld payments to our tenants may impact our tenants’ cash flows and working capital. We cannot predict when and to what extent these delays may occur, nor whether our business will be adversely impacted.
The CMS regulatory restrictions on reimbursement for LTACHs and IRFs can lead to reduced reimbursement for our tenants that operate such facilities and departments. CMS continues to explore restrictions on LTACH and IRF reimbursement focused on more targeted facility and patient level criteria.
The Reform Law enacted in 2010 represented a major shift in the U.S. healthcare industry by, among other things, allowing millions of formerly uninsured individuals to obtain health insurance coverage and by significantly expanding Medicaid.
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In addition to the items above, governments may look for cost cutting measures and strategies to balance budgets and/or control government deficits. Such cost cutting measures may add pressure on healthcare reimbursement to our tenants, some of which rely heavily on such reimbursements.
We cannot predict with absolute precision how these changes will affect the long-term financial condition of our tenants. However, any significant negative impact to our tenants could have a material adverse effect on our financial condition and results of operations and could negatively affect our ability to service our debt and make distributions to our stockholders.
Significant regulation and loss of licensure or certification or failure to obtain licensure or certification could negatively impact our tenants' financial condition and results of operations and affect their ability to make payments to us.
The U.S. healthcare industry is highly regulated by federal, state, and local laws and is directly affected by federal conditions of participation, state licensing requirements, facility inspections, state and federal reimbursement policies, regulations concerning capital and other expenditures, certification requirements and other such laws, regulations, and rules. As with the U.S. healthcare industry, our tenants in the U.K., other parts of Europe, and South America are also subject in some instances to comparable types of laws, regulations, and rules that affect their ownership and operation of healthcare facilities. Although our lease and mortgage loan agreements require our tenants/borrowers to comply with applicable laws, and we intend for these facilities to comply with such laws, we do not actively monitor compliance. Therefore, we cannot offer any assurance that our tenants/borrowers will be found to be in compliance with such, as the same may ultimately be implemented or interpreted.
From time-to-time, our tenants are subject to various federal and state inquiries, investigations, and other proceedings and would expect such governmental compliance and enforcement activities to be ongoing at any given time with respect to one or more of our tenants, either on a confidential or public basis. An adverse result to our tenant/borrower in one or more such governmental proceedings may have a material adverse effect on their operations and financial condition and on its ability to make required lease and/or loan payments to us. In instances where we have an equity investment in the operator, in addition to the effect on these tenants’/borrowers’ ability to meet their financial obligation to us, our ownership and investment interests may be negatively impacted.
In the U.S., licensed health care facilities must comply with minimum health and safety standards and are subject to survey and inspection by state and federal agencies and their agents or affiliates, including CMS, The Joint Commission, and state departments of health. CMS develops Conditions of Participation and Conditions for Coverage that health care organizations must meet in order to begin and continue participating in the Medicare and Medicaid programs and receive payment under such programs. These minimum health and safety standards are aimed at improving quality and protecting the health and safety of beneficiaries, and there are several common criteria that exist across health entities. The failure to comply with any of these standards could jeopardize a healthcare organization’s Medicare certification and, in turn, its right to receive payment under the Medicare and Medicaid programs.
Further, many hospitals and other institutional providers in the U.S. are accredited by accrediting organizations, such as The Joint Commission. The Joint Commission was created to accredit healthcare providers, including our tenants that meet its minimum health and safety standards. Once hospitals achieve a minimum number of patients and approximately every three years thereafter, surveyors for The Joint Commission conduct on site surveys of facilities for compliance with a multitude of patient safety, treatment, and administrative requirements. Facilities may lose accreditation for failure to meet such requirements, which in turn may result in the loss of license or certification including under the Medicare and Medicaid programs, as well as inability to participate in certain managed care plans, which require the healthcare provider to be accredited.
Finally, healthcare facility reimbursement practices and quality of care issues may result in loss of license or certification, such as engaging in the practice of “upcoding,” whereby services are billed for higher procedure codes, or an event involving poor quality of care, which leads to the serious injury or death of a patient. The failure of any tenant/borrower to comply with such laws, requirements, and regulations resulting in a loss of its license would affect its ability to continue its operation of the facility and would adversely affect its ability to make lease and/or loan payments to us. This, in turn, could have a material adverse effect on our financial condition and results of operations and could negatively affect our ability to service our debt and make distributions to our stockholders.
In addition, establishment of healthcare facilities and transfers of operations of healthcare facilities in the U.S. are typically subject to federal and state regulatory approvals, such as federal antitrust laws and state certificate of need laws in the U.S. Restrictions and delays in transferring the operations of healthcare facilities, in obtaining new third-party payor contracts, including Medicare and Medicaid provider agreements, and in receiving licensure and certification approval from appropriate state and federal agencies by new tenants, may affect our ability to terminate lease agreements, remove tenants that violate lease terms, and replace existing tenants with new tenants. Furthermore, these matters may affect a new tenant’s/borrower’s ability to obtain reimbursement for services rendered, which could adversely affect its ability to make lease and/or loan payments to us. In instances where we have an
34
equity investment in the operator, in addition to the effect on these tenants’/borrowers’ ability to meet their financial obligations to us, our ownership and investment interests may also be negatively impacted.
Our tenants are subject to fraud and abuse laws, the violation of which may jeopardize their ability to make payments to us and adversely affect their profitability.
As noted earlier, in the U.S., the federal government and numerous state governments have passed laws and regulations that attempt to eliminate healthcare fraud and abuse by prohibiting business arrangements that induce patient referrals, the ordering of specific ancillary services, or the submission of false claims for payment. The trend towards increased investigation and enforcement activity in the areas of fraud and abuse and patient self-referrals to detect and eliminate fraud and abuse in the Medicare and Medicaid programs is likely to continue in future years. As described above, the penalties for violations of these laws can be substantial and may result in the imposition of criminal and civil penalties and possible exclusion from federal and state healthcare programs. Imposition of any of these penalties upon any of our tenants could jeopardize a tenant’s ability to operate a facility or to make lease and/or loan payments, thereby potentially adversely affecting us.
In the case of an acquisition of a provider’s operations, some of our tenants have accepted an assignment of the previous operator’s Medicare provider agreement. Such operators that take assignment of Medicare provider agreements might be subject to liability for federal or state regulatory, civil, and criminal investigations of the previous owner’s operations and claims submissions. These types of issues may not be discovered prior to purchase or after our tenants commence operations in these facilities. Adverse decisions, fines, or recoupments might negatively impact our tenants’ financial condition, and in turn their ability to make lease and/or loan payments to us.
Certain of our lease arrangements may be subject to laws related to fraud and abuse or physician self-referrals.
Physician investment in, or other financial arrangements with, subsidiaries that lease our facilities could subject our leases to scrutiny under fraud and abuse and physician self-referral laws. Under the Stark Law, and its implementing regulations, if our leases do not satisfy the requirements of an applicable exception, the ability of our tenants to bill for services provided to Medicare beneficiaries pursuant to referrals from physician investors could be adversely impacted and subject our tenants to fines, which could impact our tenants’ ability to make lease and/or loan payments to us. In instances where we have an equity investment in our tenants’ operations, in addition to the effect on the tenants’ ability to meet their financial obligations to us, our ownership and investment interests may also be negatively impacted. Therefore, in all cases, we intend to use our good faith efforts to structure our lease arrangements to comply with these laws.
We may incur substantial capital expenditures to make our healthcare facilities suitable for tenants or compliant with applicable regulatory requirements.
Healthcare facilities are typically highly customized and subject to healthcare-specific building code requirements. The improvements generally required to conform a property to healthcare use can be costly and at times tenant-specific. A new or replacement operator may require different features in a property, depending on that operator’s particular business. If a current operator is unable to pay rent and/or vacates a property, we may incur substantial capital expenditures to modify a property before we are able to secure another tenant. Also, if the property needs to be renovated to accommodate multiple tenants, or be compliant with additional regulatory requirements, we may similarly incur substantial capital expenditures before we are able to re-lease the space. These capital expenditures may have a material adverse effect on our results of operations, financial condition, and liquidity.
State certificate of need laws may adversely affect our development of facilities and the operations of our tenants.
Certain U.S. healthcare facilities in which we invest may be subject to state laws that require regulatory approval in the form of a certificate of need prior to the transfer of a healthcare facility or prior to initiation of certain projects, including the establishment of new or replacement facilities, the addition of beds, the addition of new or expansion of existing services, and certain capital expenditures. State certificate of need laws are not uniform throughout the U.S., are subject to change, and may delay developments of facilities or acquisitions or certain other transfers of ownership of facilities. We cannot predict with certainty the impact of state certificate of need laws on our activities or on the operations of our tenants. Certificate of need laws often materially impact the ability of competitors to enter into the marketplace of our facilities. As a result, a portion of the value of the facility may be related to the limitation on new competitors. In the event of a change in the certificate of need laws, this attributed value may markedly change.
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Regulatory restrictions on healthcare transactions involving REITs could adversely affect our business, results of operations, and financial condition.
Certain states have enacted, and other states are considering, laws and regulatory regimes that seek to increase oversight of transactions involving REIT ownership or leasing of healthcare facilities. These measures include, among other things, prohibitions on certain sale-leaseback transactions involving acute-care hospitals; restrictions on the issuance of new hospital licenses for facilities leased from REITs; requirements that REIT investments be subject to enhanced transaction review and ongoing financial reporting obligations; and pre-transaction notice and review regimes applicable to certain healthcare transactions, including the sale, transfer, or lease of a material portion of a health care entity’s assets. Covered transactions may be subject to extended regulatory review periods, which could delay, condition, and/or increase the cost and complexity of completing such transactions. If these or similar regulatory restrictions are adopted more broadly, they could limit our ability to acquire and lease hospital properties, delay transactions, increase compliance costs, expose us to greater regulatory and legal risk, and adversely affect our business, results of operations, and financial condition.
We depend on key personnel, the loss of any one of whom may threaten our ability to operate our business successfully.
We depend on the services of our executives and other officers to carry out our business and investment strategy. If we were to lose any of these, it may be more difficult for us to locate attractive acquisition targets, complete our acquisitions, and manage the facilities that we have acquired or developed. Additionally, we will continue to need to attract and retain additional qualified officers and employees. The loss of the services of any of our officers, or our inability to recruit and retain qualified personnel in the future, could have a material adverse effect on our business and financial results.
Pursuant to Maryland law, our charter and bylaws contain provisions that may have the effect of deterring changes in management and third-party acquisition proposals, which in turn could depress the price of our common stock or cause dilution.
Our charter contains ownership limitations that may restrict business combination opportunities, inhibit change of control transactions, and reduce the value of our common stock. To qualify as a REIT under the Code, no more than 50% in value of our outstanding stock, after taking into account options to acquire stock, may be owned, directly or indirectly, by five or fewer persons during the last half of each taxable year. Our charter generally prohibits direct or indirect ownership by any person of more than 9.8% in value or in number, whichever is more restrictive, of outstanding shares of any class or series of our securities, including our common stock. Generally, our common stock owned by affiliated owners will be aggregated for purposes of the ownership limitation. The ownership limitation could have the effect of delaying, deterring, or preventing a change in control or other transaction in which holders of common stock might receive a premium for their common stock over the then-current market price or which such holders otherwise might believe to be in their best interests. The ownership limitation provisions also may make our common stock an unsuitable investment vehicle for any person seeking to obtain, either alone or with others as a group, ownership of more than 9.8% of either the value or number of the outstanding shares of our common stock.
Our charter and bylaws contain provisions that may impede third-party acquisition proposals. Our charter and bylaws also provide restrictions on replacing or removing directors. Directors may be removed by the affirmative vote of the holders of two-thirds of our common stock. Additionally, stockholders are required to give us advance notice of director nominations. Special meetings of stockholders can only be called by our president, our Board of Directors, or the holders of at least 25% of stock entitled to vote at the meetings. These and other charter and bylaw provisions may delay or prevent a change of control or other transactions in which holders of our common stock might receive a premium for their common stock over the then-current market price or which such holders otherwise might believe to be in their best interests.
We rely on information technology in our operations, and any material failure, inadequacy, interruption, or security failure of our technology (or that of our third-party vendors) could harm our business.
We rely on information technology networks and systems, including the Internet, to process, transmit, and store electronic information, and to manage or support a variety of business processes, including financial transactions and records, and maintaining personal identifying information (in accordance with GDPR law in Europe and similar laws elsewhere) along with tenant and lease data. We purchase or license some of our information technology from vendors. We rely on commercially available systems, software, tools, and monitoring to provide security for the processing, transmission, and storage of confidential data. Although we have taken steps to protect the security of our information systems and the data maintained in those systems, it is possible that our safety and security measures will not prevent the systems’ improper functioning or the improper access or disclosure of our or our tenant’s
36
information, such as in the event of cyber attacks. Further, our failure to protect the security of our information systems and data maintained in those systems could subject us to liability under various U.S. federal and state, and foreign privacy laws and regulations.
Even well-protected information systems remain potentially vulnerable because the techniques used in security breaches evolve and generally are not recognized until launched against a target, and in some cases are designed not to be detected and, in fact, may not be detected. Accordingly, we may be unable to anticipate these techniques or to implement adequate security barriers or other preventative measures, and thus it is impossible for us to entirely mitigate this risk.
A security breach, including physical or electronic break-ins, computer viruses, attacks by hackers and similar breaches, or other significant disruption involving our IT networks and related systems (or that of our third-party vendors) could:
Any of the foregoing could have a materially adverse effect on our business, financial condition, and results of operations.
Unfavorable resolution of pending and future litigation, regulatory proceedings, or governmental inquiries could have a material adverse effect on our and our tenants' business, results of operations, financial condition, and reputation.
We are, and from time-to-time may be, involved in litigation, regulatory proceedings and other governmental inquiries. In particular, recent media and political focus on private investments in healthcare has led to heightened regulatory focus in this area, including Congressional efforts to increase federal oversight over healthcare facilities, state-level legislative and regulatory initiatives (including in Massachusetts and California) to expand notice, review, transparency, and oversight requirements for healthcare facilities and healthcare-related transactions, and federal and state-level government investigations relating to certain of our assets and tenants. An unfavorable resolution of pending or future litigation, regulatory proceedings, governmental inquiries, or other claims could have a material adverse effect on our and our tenants’ business, results of operations and financial condition. Regardless of outcome, any litigation, regulatory proceeding or governmental inquiry, and related adverse publicity, may result in substantial costs and expenses, significantly divert the attention of management, and materially damage our reputation. An unfavorable outcome may result in our having to pay significant fines, judgments, or settlements, which, if not indemnifiable by our tenants, or if uninsured, or if exceeding insurance coverage, could adversely impact our financial condition, cash flows, results of operations, and the trading price of our common stock.
Changes in accounting pronouncements could adversely affect us and the reported financial performance of our tenants.
Uncertainties posed by various initiatives of accounting standard-setting by the Financial Accounting Standards Board (“FASB”) and the SEC, which create and interpret applicable accounting standards for U.S. companies, may change the financial accounting and reporting standards or their interpretation and application of these standards that govern the preparation of our financial statements.
These changes could have a material impact on our reported financial condition and results of operations. In some cases, we could be required to apply a new or revised standard retroactively, resulting in potentially material restatements of prior period financial statements. Similarly, these changes could have a material impact on our tenants’/borrowers’ reported financial condition or results of operations or could affect our tenants’ preferences regarding leasing real estate.
Loss of our tax status as a REIT would have significant adverse consequences to us and the value of our common stock.
We believe that we qualify as a REIT for U.S. federal income tax purposes as of December 31, 2025. In addition, we own a direct interest in a subsidiary REIT that has elected to be taxed as a REIT for U.S. federal income tax purposes commencing with the 2022 tax year. The REIT qualification requirements are extremely complex, and interpretations of the U.S. federal income tax laws governing qualification as a REIT are limited. Accordingly, there is no assurance that we will be successful in operating so as to
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qualify as a REIT. At any time, new laws, regulations, interpretations, or court decisions may change the U.S. federal or state tax laws relating to, or the U.S. federal or state income tax consequences of, qualification as a REIT. It is possible that future economic, market, legal, tax, or other considerations may cause our Board of Directors to revoke the REIT election, which it may do without stockholder approval.
If we lose or revoke our REIT status (currently or with respect to any tax years for which the statute of limitations has not yet expired), we will face serious tax consequences that will substantially reduce the funds available for distribution because we would not be allowed a deduction for distributions to stockholders in computing our taxable income; therefore, we would be subject to U.S. federal income tax at regular corporate rates, and we might need to borrow money or sell assets in order to pay any such tax. We also could be subject to increased state and local taxes. Unless we are entitled to relief under statutory provisions, we also would be disqualified from taxation as a REIT for the four taxable years following the year during which we ceased to qualify.
Separately, as of July 1, 2023, the majority of our real estate operations in the U.K. operate as a U.K. REIT (and seven more property holding entities were added in February 2026) and generally are subject only to a withholding tax on earnings upon distribution out of the U.K. REIT. If we were to fail the requirements of a U.K. REIT, the related U.K. operations would be subject to higher tax rates like non-REITs.
As a result of all these factors, a loss or revocation of our REIT status (whether in the U.S. or U.K.) could have a material adverse effect on our financial condition and results of operations and could adversely affect the value of our common stock.
Failure to make required distributions as a REIT would increase our tax burden.
In order to qualify as a U.S. REIT, each year we must distribute to our stockholders at least 90% of our REIT taxable income, excluding net capital gains. To the extent that we satisfy the distribution requirement, but distribute less than 100% of our taxable income, we will be subject to U.S. federal corporate income tax on our undistributed income. In addition, we will incur a 4% nondeductible excise tax on the amount, if any, by which our distributions in any year are less than the sum of (1) 85% of our ordinary income for that year; (2) 95% of our capital gain net income for that year; and (3) 100% of our undistributed taxable income from prior years.
We may be required to make distributions to stockholders at disadvantageous times or when we do not have funds readily available for distribution. Differences in timing between the recognition of income and the related cash receipts or the effect of required debt amortization payments could require us to borrow money or sell assets to pay out enough of our taxable income to satisfy the distribution requirement and to avoid corporate income tax and the 4% excise tax in a particular year. In the future, we may borrow to pay distributions to our stockholders. Any funds that we borrow would subject us to interest rate and other market risks.
Complying with REIT requirements may cause us to forego otherwise attractive opportunities.
To qualify as a REIT for U.S. federal income tax purposes, we must continually satisfy tests concerning, among other things, the sources of our income, the nature and diversification of our assets, the amounts we distribute to our stockholders, and the ownership of our stock. In order to meet these tests, we may be required to forego attractive business or investment opportunities. Currently, no more than 20% of the value of our assets may consist of securities of one or more TRS and no more than 25% of the value of our assets may consist of securities that are not qualifying assets under the test requiring that 75% of a REIT’s assets consist of real estate and other related assets. In addition, at least 95% of our gross income in any year must be derived from qualifying sources and at least 75% of our gross income must be generated from either rents from real estate or interest on loans secured by real estate (i.e. mortgage loans). Further, a TRS may not directly or indirectly operate or manage a healthcare facility. Compliance with current and future changes to REIT requirements may limit our flexibility in executing our business plan.
Similar to the U.S. REIT qualification requirements, we must satisfy tests for our U.K. REIT concerning, among other things, the sources of our U.K. income, the nature and diversification of our U.K. assets, the amounts we distribute to the shareholders of the U.K. REIT, and the ownership of the U.K. REIT shares. In order to meet these tests, we may be required to forego attractive business or investment opportunities.
If certain sale-leaseback transactions are not characterized by the Internal Revenue Service (“IRS”) or similar tax authorities internationally as “true leases,” we may be subject to adverse tax consequences.
We have purchased certain properties and leased them back to the sellers of such properties. For almost all of our leases, we intend for any such sale-leaseback transactions to be structured in a manner that the lease will be characterized as a “true lease,” thereby allowing us to be treated as the owner of the property for U.S. federal income tax purposes. However, depending on the terms of any specific transaction, taxing authorities might take the position that the transaction is not a “true lease”. In the event any
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sale-leaseback transaction is challenged and successfully re-characterized, we might not be able to deduct depreciation expense on the real estate, resulting in potential higher income taxes.
Transactions with TRSs may be subject to excise tax.
We have historically entered into leases and other transactions with our TRS and its subsidiaries and expect to continue to do so in the future. Under applicable rules, transactions such as leases between our TRS and its parent U.S. REIT that are not conducted on a market terms basis may be subject to a 100% excise tax. While we believe that all of our transactions with our TRS are at arm’s length, imposition of a 100% excise tax could have a material adverse effect on our financial condition and results of operations.
Loans to our tenants could be characterized as equity, in which case our income from that tenant might not be qualifying income under the REIT rules and we could lose our REIT status.
Our TRS may make loans to tenants of our facilities to acquire operations or for working capital purposes. The IRS may take the position that certain loans to tenants should be treated as equity interests rather than debt, and that our interest income from such tenant should not be treated as qualifying income for purposes of the REIT gross income tests. If the IRS were to successfully treat a loan to a particular tenant as an equity interest, the tenant would be a “related party tenant” with respect to our company and the rent that we receive from the tenant would not be qualifying income for purposes of the REIT gross income tests. As a result, we could be in jeopardy of failing the 75% income test discussed above, which if we did would cause us to lose our REIT status. In addition, if the IRS were to successfully treat a particular loan as interests held by our operating partnership rather than by our TRS, we could fail the 5% asset test, and if the IRS further successfully treated the loan as other than straight debt, we could fail the 10% asset test with respect to such interest. As a result of the failure of either test, we could lose our REIT status, which would subject us to corporate level income tax and adversely affect our ability to service our debt and make distributions to our stockholders.
Certain transfers may generate prohibited transaction income, resulting in a penalty tax on gain attributable to the transaction.
From time-to-time, we may transfer or otherwise dispose of some of our properties, including by contributing properties as part of joint venture investments. Under the Code, any gain resulting from transfers of properties we hold as inventory or primarily for sale to customers in the ordinary course of business is treated as income from a prohibited transaction subject to a 100% penalty tax. We do not believe that our transfers or disposals of property or our contributions of properties into joint venture investments are prohibited transactions. However, whether property is held for investment purposes is a question of fact that depends on all the facts and circumstances surrounding the particular transaction. The IRS may contend that these types of transfers or dispositions are prohibited transactions. While we believe that the IRS would not prevail in any such dispute, if the IRS were to argue successfully that a transfer, disposition, or contribution of property constituted a prohibited transaction, we would be required to pay a 100% penalty tax on any gain allocable to us from the prohibited transaction. In addition, income from a prohibited transaction might adversely affect our ability to satisfy the income tests for qualification as a REIT.
Changes in U.S. or foreign tax laws, regulations, including changes to tax rates, may adversely affect our results of operations.
We are headquartered in the U.S. with subsidiaries and investments globally and are subject to income taxes in these jurisdictions. Significant judgment is required in determining our provision for income taxes. Although we believe that we have adequately assessed and accounted for our potential tax liabilities, and that our tax estimates are reasonable, there can be no assurance that additional taxes will not be due upon audit of our tax returns, which could materially and adversely impact our results of operations and cash flows. In addition, the U.S. government, as well as the governments of many of the locations in which we operate (such as Germany, the U.K., Colombia, Portugal, Spain, Finland, and Luxembourg, which is where most of our Europe entities are domiciled) are actively discussing changes to corporate taxation. Our future tax expense could be adversely affected by these changes in tax laws or their interpretation, both domestically and internationally. Potential tax reforms being considered by many countries include changes that could impact, among other things, global tax reporting, intercompany transfer pricing arrangements, the definition of taxable permanent establishments, and other legal or financial arrangements. The nature and timing of any changes to each jurisdiction’s tax laws and the impact on our future tax exposure both in the U.S. and abroad cannot be predicted with any accuracy but could materially and adversely impact our results of operations and cash flows.
ITEM 1B. Unresolved Staff Comments
None.
ITEM 1C. Cybersecurity
Cyber Risk Management and Strategy
We have developed, implemented, and continue to maintain processes and procedures to identify and mitigate cybersecurity risks across our company (including our offices in Europe). Because we rely on various information technology systems and software programs to operate our business, we have an extensive cybersecurity program designed to protect our properties and confidential data. Our cybersecurity risk management and strategy program includes the following:
We have not identified any known cybersecurity threats or incidents within the prior year that have materially affected or are reasonably likely to materially affect us, including our overall business strategy, results of operations, or financial condition. Although we have taken steps to protect the security of our information systems and the data maintained in those systems, there is no guarantee the measures and security we have implemented will be successful in detecting and preventing a cybersecurity incident. Please refer to Item 1A of this Annual Report on Form 10-K for more information regarding additional risks related to cybersecurity and information technology.
Cyber Governance
Cybersecurity holds a pivotal role in our comprehensive risk management processes and is a key focus for both our Board of Directors and management. Our management has primary responsibility for identifying, assessing, and managing our exposure to cybersecurity threats and incidents. However, the Board of Directors, led by members of the Risk Committee, oversees the enterprise risk management process, specifically addressing material risks stemming from cybersecurity threats.
The Board of Directors receives regular updates from the Computer Security Incident Response Team (“CSIRT”) to provide insight into significant cybersecurity risks, potential impacts on business operations, and management's strategies for identifying, monitoring, and mitigating these risks. This includes sharing results from assessments or audits of relevant processes.
Led by our Head of Technology with years of experience in Information Technology, our CSIRT, comprising cross-functional professionals, collaborates to execute our cybersecurity risk assessment and management processes by reviewing and assessing cybersecurity initiatives, including the incident response plan, cybersecurity compliance, training, and overall risk management efforts. The collaborative efforts of the Board of Directors and our skilled CSIRT team underscore our commitment to effectively addressing and mitigating cybersecurity risks within the organization.
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ITEM 2. Properties
At December 31, 2025, our portfolio (including properties in our five real estate joint ventures) consisted of 384 properties (including properties under construction or in the form of a first lien mortgage loan) operated by 52 different operators. Our vacant facilities represent less than 1% of total assets at December 31, 2025.
TotalProperties
Total 2025Revenues
TotalAssets(A)
(Dollars in thousands)
United States:
Alabama
791
6,162
Arizona
37,519
328,873
Arkansas
1
10,582
65,030
California
69,157
977,890
Colorado
10,746
102,549
Connecticut
60
41,414
Florida
21,696
834,940
(B)
Idaho
42,180
299,826
Indiana
7,148
58,522
Iowa
5,396
44,374
Kansas
15,982
208,893
Kentucky
10,288
53,080
Louisiana
6,060
106,713
Massachusetts
436
244,824
(D)
Michigan
3,521
13,038
Missouri
23,986
117,424
Montana
2,049
19,134
New Jersey
21,520
142,121
New Mexico
5,271
50,519
North Carolina
3,163
30,027
Ohio
25,910
330,189
Oklahoma
7,082
6,855
Oregon
12,588
80,539
Pennsylvania
31,450
304,372
South Carolina
17,174
123,512
Texas
100,839
1,427,391
(C)
Utah
4,288
193,752
(E)
Virginia
2,940
15,728
Washington
4,319
35,334
Wisconsin
3,703
27,266
Wyoming
10,034
89,174
—
1,072,900
Total United States
161
517,878
7,452,365
International:
Colombia
6,216
147,620
Germany
85
42,686
751,806
Italy
86,091
Portugal
3,748
50,205
Spain
12,599
302,323
(D)(E)
Switzerland
2,877
United Kingdom
92
373,279
4,184,188
Finland
12,739
220,813
932,661
Total International
223
454,144
7,549,410
384
Total 2025 Revenues
71
70,614
24,733
61,077
7,463
7,111
105
170,998
A breakout of our facilities at December 31, 2025 based on property type is as follows:
Number ofProperties
TotalSquareFootage
TotalLicensedBeds(A)
General acute care hospitals
168
27,501,398
17,184
Behavioral health facilities
68
3,067,544
4,238
Post acute care facilities
128
13,788,289
17,109
FSERs
170,642
44,527,873
38,531
The following table shows lease and loan expirations, assuming that none of the tenants/borrowers exercise any of their renewal options (dollars in thousands):
Total Lease and Loan Portfolio(1)
TotalLeases/Loans(2)
AnnualizedBaseRent/Interest(3)
% of TotalAnnualizedBaseRent/Interest
TotalLicensedBeds
2026
228
7,040
2027
3,681
0.3
107,849
2028
17,746
1.5
1,946,588
559
2029
16,112
1.4
775,575
527
2030
7,128
0.6
309,615
84
2031
3,852
133,505
123
2032
60,495
5.2
1,067,663
743
2033
6,201
85,477
2034
62,889
5.5
1,968,674
1,345
2035
25,516
750,199
983
Thereafter
301
950,848
82.4
34,793,831
33,402
369
1,154,696
41,946,016
37,803
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ITEM 3. Legal Proceedings
We are party to various lawsuits as further described in Note 8 to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K. We have not recorded a liability related to these lawsuits because, at this time, we are unable to determine whether an unfavorable outcome is possible or to estimate reasonably possible losses.
In addition to the foregoing, we are currently and have in the past been subject to various other legal proceedings and regulatory actions in connection with our business. We believe that the resolution of any current pending legal or regulatory matters will not have a material adverse effect on our business, financial condition, results of operations, or cash flows. Nonetheless, we cannot predict the outcome of these proceedings, as legal and regulatory matters are subject to inherent uncertainties, and there exists the possibility that the ultimate resolution of such matters could have a material adverse effect on our financial condition, cash flows, results of operations, and the trading price of our common stock.
ITEM 4. Mine Safety Disclosures
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities
(a) Our common stock is traded on the New York Stock Exchange under the symbol “MPT.” The following table sets forth the high and low sales prices for the common stock for the periods indicated, as reported by the New York Stock Exchange Composite Tape, and the dividends per share declared by us with respect to each such period.
High
Low
Dividends
Year Ended December 31, 2025
First Quarter
6.34
3.51
0.08
Second Quarter
6.09
4.25
Third Quarter
5.17
3.95
Fourth Quarter
5.82
4.80
0.09
Year Ended December 31, 2024
5.16
2.92
6.54
3.94
0.30
6.55
3.92
5.91
3.63
On February 23, 2026, the closing price for our common stock, as reported on the New York Stock Exchange, was $5.78 per share. As of February 23, 2026, there were 34 holders of record of our common stock. This figure does not reflect the beneficial ownership of shares held in nominee name.
(b) Not applicable.
(c) Stock repurchases:
The table below summarizes repurchases of our common stock made during the quarter ended December 31, 2025:
Period
Total number ofshares purchased(1)(in thousands)
Average priceper share
Total number of sharespurchased as part ofpublicly announcedplans or programs(2)(in thousands)
Approximate dollarvalue of shares thatmay yet bepurchased under theplans or programs(in thousands)
October 1, 2025-October 31, 2025
199
5.01
150,000
November 1, 2025-November 30, 2025
December 1, 2025-December 31, 2025
4,504
5.20
126,560
4,703
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The following graph provides a comparison of cumulative total stockholder returns for the period from December 31, 2020 through December 31, 2025, among us, the S&P 500 Index, MSCI U.S. REIT Index, and Dow Jones U.S. Real Estate Health Care Index. The stock performance graph assumes an investment of $100 in us and the three indices, and the reinvestment of dividends. The historical information below is not indicative of future performance.
Period Ending
12/31/2020
12/31/2021
12/31/2022
12/31/2023
12/31/2024
12/31/2025
100.00
114.26
58.27
29.00
25.74
34.80
S&P 500 Index
128.71
105.40
133.10
166.40
196.16
MSCI U.S. REIT Index
143.06
108.00
122.84
133.59
137.53
Dow Jones U.S. Real Estate Health Care Index
116.24
90.83
103.43
133.58
181.61
The graph and accompanying text shall not be deemed incorporated by reference by any general statement incorporating by reference this Annual Report on Form 10-K into any filing under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended.
ITEM 6. [Reserved]
ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Unless otherwise indicated, references to “our,” “we,” and “us” in this management’s discussion and analysis of financial condition and results of operations refer to Medical Properties Trust, Inc. and its consolidated subsidiaries, including MPT Operating Partnership, L.P.
We are a self-advised healthcare REIT that was incorporated in Maryland on August 27, 2003, primarily for the purpose of investing in and owning healthcare facilities to be leased to healthcare operators under long-term net leases. We may also make mortgage loans to healthcare operators that are collateralized by the underlying real estate. We conduct our business operations in one segment. We currently have healthcare investments in the U.S., Europe, and South America. Our existing tenants are, and our prospective tenants will generally be, healthcare operating companies and other healthcare providers that use substantial real estate assets in their operations. We offer financing to these operators through 100% lease and mortgage financing and generally seek lease and loan terms on a long-term basis (typically at least 15 years) with a series of shorter renewal terms, generally in five year increments, at the option of our tenants and borrowers. We also have included and intend to include in our lease and loan agreements annual contractual minimum rate increases. Our existing portfolio’s minimum escalators are typically 2.0%. In addition, most of our leases and loans include rate increases based on the general rate of inflation (based on CPI or similar indices) if greater than the minimum contractual increases. Beyond rent or mortgage interest, our leases and loans typically require our tenants to pay all operating costs and expenses associated with the facility. Finally, from time-to-time, we may make noncontrolling investments in our tenants, typically in conjunction with larger real estate transactions with the tenant, that give us a right to share in such tenant’s profits and losses and provide for certain minority rights and protections.
We may make other loans to certain of our operators through our TRSs, which the operators use for working capital. Although it represents approximately 1% of our total assets at December 31, 2025, we consider our lending business an important element of our overall business strategy for two primary reasons: (1) it provides opportunities to make income-earning investments that could yield attractive risk-adjusted returns in an industry in which our management has expertise, and (2) by making debt capital available to certain qualified operators, we believe we create a competitive advantage for our company over other buyers of, and financing sources for, healthcare facilities.
At December 31, 2025, our portfolio (including real estate assets in joint ventures) consisted of 384 properties, of which 373 properties are leased or loaned to 52 operators, including facilities under development or in the form of mortgage loans.
The information set forth in this Item 7 is intended to provide readers with an understanding of our financial condition, changes in financial condition, and results of operations. This section generally discusses the results of our operations for the year ended December 31, 2025 compared to the year ended December 31, 2024. For a discussion of the year ended December 31, 2024 compared to the year ended December 31, 2023, please refer to Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 3, 2025.
Selected Financial Data
The following sets forth selected consolidated financial and operating data. You should read the following selected financial data in conjunction with the consolidated financial statements and notes thereto of each of Medical Properties Trust, Inc. and MPT Operating Partnership, L.P. and their respective subsidiaries included in Item 8 of this Annual Report on Form 10-K.
For the Years Ended December 31,
(In thousands except per share data)
OPERATING DATA
Expenses:
Interest
510,362
417,824
Real estate depreciation and amortization
265,405
447,657
Property-related
36,415
27,255
General and administrative
130,427
133,789
Total expenses
942,609
1,026,525
Other (expense) income:
Gain on sale of real estate
5,545
478,693
Real estate and other impairment charges, net
(193,947
(1,825,402
Earnings (loss) from equity interests
97,851
(366,642
Debt refinancing and unutilized financing costs
(3,629
(4,292
Other (including fair value adjustments on securities)
(172,552
(615,565
Income tax expense
(38,618
(44,101
Net loss
(275,937
(2,408,287
Net income attributable to non-controlling interests
(1,112
(1,984
Net loss attributable to MPT common stockholders
(277,049
(2,410,271
Net loss attributable to MPT common stockholders per diluted share
(0.46
(4.02
Weighted-average shares outstanding — basic and diluted
600,892
600,248
OTHER DATA
Dividends declared per common share
0.33
0.46
FFO(1)
183,924
(1,400,123
Normalized FFO(1)
346,277
482,705
Normalized FFO per share(1)
0.58
0.80
Cash paid for acquisitions and other related investments
142,089
105,618
December 31,
(In thousands)
BALANCE SHEET DATA
Real estate assets — at cost
Real estate accumulated depreciation/amortization
Other loans
186,292
109,175
1,464,702
1,208,514
Debt, net
9,697,835
8,848,112
Other liabilities
696,691
612,699
Total Medical Properties Trust, Inc. stockholders’ equity
4,606,195
4,832,729
Non-controlling interests
1,054
Total equity
4,607,249
4,833,783
Total liabilities and equity
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2025 Highlights
In 2025, our primary objectives were to manage our near-term debt maturities, securing as much value as possible while exiting our relationship with Prospect, restructuring our investments in Vibra, and continuing the ramp up of rents on the re-tenanted properties formerly leased to Steward. In regard to our near-term debt maturities, we made significant progress in refinancing our debt in 2025, clearing all debt maturities through June 30, 2027 (as we expect the revolving portion of our Credit Facility will be extended to June 2027), other than one issue of unsecured notes of €500 million due in October 2026 which we believe can be paid off with cash on-hand and/or availability under the revolving portion of our Credit Facility – see “Contractual Commitments” in Item 7 of this Annual Report on Form 10-K for further details of our debt maturity schedule.
See below for details of our 2025 activities:
We expect to receive our remaining investment of $61 million in 2026. With that said, Prospect's bankruptcy proceedings are continuing, and the ultimate outcome of such proceedings is uncertain. At this time, we cannot assure you that we will be able to recover in full our remaining investment in Prospect as of December 31, 2025. In addition, the bankruptcy court approved an order for up to $70 million in additional advances which we may be required to fund. However, any funds advanced are expected to be secured by recoveries, if any, from causes of action owned by the debtor;
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Completed the sale of nine facilities (including two former Steward-operated facilities that were being leased to College Health for nominal rent) along with certain ancillary land and facilities for aggregate cash proceeds of approximately $121 million, resulting in a gain on real estate of approximately $5.5 million.
Subsequent to December 31, 2025, the following activities took place:
2024 Highlights
In 2024, our focus was on improving our liquidity position, managing our near-term debt maturities, and securing as much value as possible while exiting our relationship with Steward. In regard to improving liquidity, we set a target to generate $2 billion of liquidity in 2024, which we surpassed by approximately $800 million through a combination of real estate asset sales (discussed below) that resulted in approximately $500 million of gains on sale and closing on a new secured loan facility with a 10-year term for approximately £631 million (approximately $800 million). In addition, we reduced our dividend from $0.15 per share to $0.08 per share for the last two quarters of the year, which resulted in cash savings of approximately $40 million per quarter. In regard to Steward, the bankruptcy court approved a global settlement in September 2024 between Steward, its lenders, the unsecured creditors committee, and us. The settlement is more fully described in "Significant Tenants"; however, in summary, the settlement effectively ended our relationship with Steward and allowed us to regain control of 23 of our properties and begin the process of re-tenanting the properties as discussed below.
See below for more detail on our 2024 activities:
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Critical Accounting Estimates
In order to prepare financial statements in conformity with GAAP in the U.S., we must make estimates about certain types of transactions and account balances. We believe that our estimates of the amount and timing of credit losses, fair value adjustments (either as part of a purchase price allocation, recurring accounting for those investments that we have elected the fair value option method, or impairment analyses), and periodic depreciation of our real estate assets, along with our assessment as to whether investments we make in certain businesses/entities should be consolidated with our results, have significant effects on our financial statements. Each of these items involves estimates that require us to make subjective judgments. We rely on our experience, collect historical and current market data, and develop relevant assumptions to arrive at what we believe to be reasonable estimates. Under different conditions or assumptions, materially different amounts could be reported related to these critical accounting policies as described below. In addition, application of these critical accounting policies involves the exercise of judgment on the use of assumptions as to future uncertainties and, as a result, actual results could materially differ from these estimates. See Note 2 to Item 8 of this Annual Report on Form 10-K for more information regarding our accounting policies and recent accounting developments. Our critical accounting estimates include the following:
Credit Losses:
Losses from Rent Receivables: For our leases, we review tenant provided financial data and monitor the performance of our tenants in areas generally consisting of: admission levels and surgery/procedure volumes by type; current operating margins; ratio of our tenant's operating margins both to facility rent and to facility rent plus other fixed costs; trends in revenue, cash collections, patient
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mix; and the effect of evolving healthcare regulations, adverse economic and political conditions, such as inflation and interest rates, and other events ongoing on a tenant's profitability and liquidity.
Operating Lease Receivables: We utilize the information above along with the tenant's payment and default history in evaluating (on a lease-by-lease basis) whether or not lease payments are deemed probable of collection. If not deemed probable of collection, rent revenue, under lease accounting guidance, is constrained to the lower of 1) the revenue that would have been recognized if collection were probable and 2) the amount of lease payments received in cash.
Financing Lease Receivables: We apply a forward-looking “expected credit loss” model to all of our financing receivables, including financing leases. To do this, we group our financial instruments into two primary pools of similar credit risk: secured and unsecured. The secured instruments include our investments in financing receivables as all are secured by the underlying real estate, among other collateral. Within the two primary pools, we further group our instruments into sub-pools based on several tenant/borrower characteristics, including years of experience in the healthcare industry and in a particular market or region and overall capitalization. We then determine a credit loss percentage per pool based on our history over a period of time that closely matches the remaining terms of the financial instruments being analyzed and adjust as needed for current trends or unusual circumstances. We apply these credit loss percentages to the cost basis of the related instruments to establish a credit loss reserve on our financing lease receivables and such credit loss reserve (including the underlying assumptions) is reviewed and adjusted quarterly. If a financing receivable is underperforming and is deemed uncollectible based on the lessee’s overall financial condition, we will adjust the credit loss reserve based on the fair value of the underlying collateral.
We exclude interest receivables from the credit loss reserve model. Instead, such receivables are impaired and an allowance recorded when it is deemed probable that we will be unable to collect all amounts due. The need for an allowance is based upon our assessment of the lessee’s overall financial condition, economic resources and payment record, the prospects for support from any financially responsible guarantors, and, if appropriate, the realizable value of any collateral. Financing leases are placed on non-accrual status when we determine that the collectibility of contractual amounts is not reasonably assured. If on non-accrual status, we generally account for the financing lease on a cash basis, in which income is recognized only upon receipt of cash.
Loans: Loans consist of mortgage loans, working capital loans, and other loans. Mortgage loans are collateralized by interests in real property. Working capital and other loans are generally collateralized by interests in receivables and/or personal property and may include corporate and individual guarantees. We record loans at cost. Like our financing lease receivables, we establish credit loss reserves on all outstanding loans based on historical credit losses of similar instruments. Such credit loss reserves, including the underlying assumptions, are reviewed and adjusted quarterly. If a loan’s performance worsens and foreclosure is deemed probable for our collateral-based loans (after considering the borrower’s overall financial condition as described above for leases), we will adjust the allowance for expected credit losses based on the current fair value of such collateral at the time the loan is deemed uncollectible. If the loan is not collateralized, the loan will be reserved for/written-off once it is determined that such loan is no longer collectible.
Interest receivables on loans are excluded from the forward-looking credit loss reserve model; however, an allowance is recorded when it is deemed probable that we will be unable to collect all amounts due. Loans are placed on non-accrual status when we determine that the collectibility of contractual amounts is not reasonable assured. If on non-accrual status, we generally account for the loan on a cash basis, in which income is recognized only upon receipt of cash.
Investments in Real Estate: We maintain our investments in real estate at cost, and we capitalize improvements and replacements when they extend the useful life or improve the efficiency of the asset. While our tenants are generally responsible for all operating costs at a facility, in the event we incur costs of repairs and maintenance, we expense those costs as incurred. We compute depreciation using the straight-line method over the estimated useful lives of the assets, which at December 31, 2025, the weighted-average life is approximately 38.6 years for buildings and improvements.
When circumstances indicate a possible impairment of the value of our real estate investments, we review the recoverability of the facility’s carrying value. The review of the recoverability is generally based on our estimate of the future undiscounted cash flows from the facility’s use and eventual disposition. Our forecast of these cash flows considers factors such as expected future operating income, market and other applicable trends, and residual value, as well as the effects of leasing demand, competition, and other factors. If impairment exists due to the inability to recover the carrying value of a facility on an undiscounted basis, an impairment loss is recorded to the extent that the carrying value exceeds the estimated fair value of the facility. In making estimates of fair value for purposes of impairment assessments, we will look to a number of sources including independent appraisals, available broker data, or our internal data from recent transactions involving similar properties in similar markets. Given the highly specialized aspects of our properties, no assurance can be given that future impairment charges will not be needed.
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Acquired Real Estate Purchase Price Allocation: For properties acquired for operating leasing purposes, we currently account for such acquisitions based on asset acquisition accounting rules. Under this accounting method, we allocate the purchase price of acquired properties to net tangible and identified intangible assets acquired based on their relative fair values. In making estimates of fair value for purposes of allocating purchase prices of acquired real estate, we may utilize a number of sources, including available real estate broker data, independent appraisals that may be obtained in connection with the acquisition or financing of the respective property, internal data from previous acquisitions or developments, and other market data, including market comparables for significant assumptions such as market rents, capitalization, and discount rates. We also consider information obtained about each property as a result of our pre-acquisition due diligence, marketing, and leasing activities in estimating the fair value of the tangible and intangible assets acquired.
We record above-market and below-market in-place lease values, if any, for the facilities we own which are based on the present value of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining term of the lease. We amortize any resulting capitalized above-market lease values as a reduction of rental income over the lease term. We amortize any resulting capitalized below-market lease values as an increase to rental income over the lease term. Because our strategy to a large degree involves the origination and acquisition of long-term lease arrangements at market rates with independent parties, we do not expect the above-market or below-market in-place lease values to be significant for many of our transactions.
We measure the aggregate value of other lease intangible assets to be acquired based on the difference between (i) the property valued with new or in-place leases adjusted to market rental rates and (ii) the property valued as if vacant when acquired. Management’s estimates of value are made using methods similar to those used by independent appraisers (e.g., discounted cash flow analysis). Factors considered by management in our analysis include an estimate of carrying costs during hypothetical expected lease-up periods, considering current market conditions, and costs to execute similar leases. We also consider information obtained about each targeted facility as a result of our pre-acquisition due diligence, marketing, and leasing activities in estimating the fair value of the intangible assets acquired. In estimating carrying costs, management includes real estate taxes, insurance, and other operating expenses, and estimates of lost rentals at market rates during the expected lease-up periods, which we expect to be about six months (based on experience) but can be longer depending on specific local market conditions. Management also estimates costs to execute similar leases including leasing commissions, legal costs, and other related expenses to the extent that such costs are not already incurred in connection with a new lease origination.
Other intangible assets acquired may include customer relationship intangible values, which are based on management’s evaluation of the specific characteristics of each prospective tenant’s lease and our overall relationship with that tenant. Characteristics to be considered by management in allocating these values include the nature and extent of our existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality, and expectations of lease renewals, including those existing under the terms of the lease agreement, among other factors. At December 31, 2025, we have not assigned any value to customer relationship intangibles.
We amortize the value of lease intangibles to expense over the term of the respective leases, which have a weighted-average useful life of 28.2 years at December 31, 2025. If a lease is terminated early, the unamortized portion of the lease intangible is charged to expense, as was the case in 2023 with the re-leasing of the Utah properties to CommonSpirit as more fully described in Note 3 to Item 8 of this Annual Report on Form 10-K.
Investments in Unconsolidated Entities: Investments in entities in which we have the ability to significantly influence (but not control) are accounted for by the equity method. This includes the five investments in unconsolidated real estate joint ventures at December 31, 2025. Under the equity method of accounting, our share of the investee’s earnings or losses are included in the “Earnings (loss) from equity interests” line of our consolidated statements of net income. Except for our joint venture with Primotop Holdings S.à.r.l. (“Primotop”) (for which we handle the accounting of), we have elected to record our share of such investee’s earnings or losses on a lag basis (not to exceed three months). The initial carrying value of investments in unconsolidated entities is based on the amount paid to purchase the interest in the investee entity. Subsequently, our investments are increased/decreased by our share in the investees’ earnings/losses and decreased by cash distributions from our investees. To the extent that our cost basis is different from the basis reflected at the investee entity level, the basis difference is generally amortized over the lives of the related assets and liabilities, and such amortization is included in our share of equity in earnings of the investee.
We evaluate our equity method investments for impairment based upon a comparison of the fair value of the equity method investment to its carrying value, when impairment indicators exist. If we determine a decline in the fair value of an investment in an unconsolidated investee entity below its carrying value is other-than-temporary, an impairment is recorded.
Investments in entities in which we do not control nor do we have the ability to significantly influence and for which there is no readily determinable fair value are accounted for at cost, less any impairment, plus or minus changes resulting from observable price
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changes in orderly transactions involving the investee. Cash distributions on these types of investments are recorded to either income upon receipt (if a return on investment) or as a reduction of our investment (if the distributions received are in excess of our share of the investee’s earnings). For similar investments but for which there are readily determinable fair values, such investments are measured at fair value, with unrealized gains and losses recorded in income.
Fair Value Option Election: We elected to account for certain investments using the fair value option method, which means we mark these investments to fair market value on a recurring basis. At December 31, 2025, the fair value amount of investments recorded using the fair value option was less than $150 million made up of loans and equity investments (see Note 10 to Item 8 of this Annual Report on Form 10-K for additional details). Our loans are recorded at fair value based on Level 2 or Level 3 inputs by discounting the estimated cash flows using the market rates which similar loans would be made to borrowers with similar credit ratings and the same remaining maturities.
For our equity investment in the international joint venture at December 31, 2025, fair value was determined based on Level 3 inputs, by using a market approach, which requires significant estimates of our investee such as projected revenue, expenses, and working capital and appropriate consideration of the underlying risk profile of the forecasted assumptions associated with the investee. We classify our valuation of this investment as Level 3, as we use certain unobservable inputs to the valuation methodology that are significant to the fair value measurement, and the valuation requires management judgment due to the absence of quoted market prices. In regard to the underlying projections used in the discounted cash flow model, such projections are provided by the investees. However, we may modify such projections as needed based on our review and analysis of historical results, meetings with key members of management, and our understanding of trends and developments within the healthcare industry. See Note 10 to Item 8 of this Annual Report on Form 10-K for additional details.
Principles of Consolidation: Property holding entities and other subsidiaries of which we own 100% of the equity or have a controlling financial interest evidenced by ownership of a majority voting interest are consolidated. All inter-company balances and transactions are eliminated. For entities in which we own less than 100% of the equity interest, we consolidate the property if we have the direct or indirect ability to control the entity’s activities based upon the terms of the respective entity's ownership agreements. For these entities, we record a non-controlling interest representing equity held by non-controlling interests.
We continually evaluate all of our transactions and investments to determine if they represent variable interests in a variable interest entity. If we determine that we have a variable interest in a variable interest entity, we then evaluate if we are the primary beneficiary of the variable interest entity. The evaluation is a qualitative assessment as to whether we have the ability to direct the activities of a variable interest entity that most significantly impact the entity’s economic performance. We consolidate each variable interest entity in which we, by virtue of or transactions with our investments in the entity, are considered to be the primary beneficiary. At December 31, 2025 and 2024, we determined that we were not the primary beneficiary of any variable interest entity in which we hold a variable interest because we do not control the activities (such as the day-to-day operations) that most significantly impact the economic performance of these entities.
Liquidity and Capital Resources
Our typical sources of cash include our monthly rent and interest receipts, distributions from our real estate joint ventures, borrowings under our revolving Credit Facility, public and private issuances of debt, public issuances of our equity securities, and proceeds from bank debt, asset dispositions (either one-off or group asset sales through joint venture transactions), and principal payments on loans. Our primary uses of cash include dividend distributions, debt service (including principal and interest), new investments (including acquisitions, developments, or capital improvement projects), loan advances, property expenses, and general and administrative expenses.
Absent our requirements to make distributions to maintain our REIT qualification (as described earlier and further described in Note 5 within Item 8 of this Annual Report on Form 10-K) and our current contractual commitments discussed later in this section, we do not have any material off-balance sheet arrangements that we expect would materially affect our liquidity and capital resources.
See below for highlights of our sources and uses of cash for the past two years:
2025 Cash Flow Activity
We generated cash of approximately $231 million from operating activities during 2025, consisting of rent and interest along with distributions from our real estate joint ventures. Our 2025 operating cash flows were lower than the prior year primarily due to an approximately $38 million increase in interest paid in 2025 compared to 2024, partially offset by increases in cash received due to inflation based escalators in our leases, among other things. We used these operating cash flows, proceeds from the revolving portion of our Credit Facility, and proceeds from asset sales to fund our dividends and other investing activities.
See below for further details of these transactions along with additional liquidity activity in 2025:
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Subsequent to December 31, 2025, the following events occurred:
2024 Cash Flow Activity
We generated cash of approximately $245 million from operating activities during 2024, primarily consisting of rent and interest from mortgage and other loans and distributions from our real estate joint ventures. In addition to operating cash flows, we generated approximately $1.85 billion from the Utah Transaction and the sale of about 30 properties (as further discussed in Note 3 to Item 8 of this Annual Report on Form 10-K), along with approximately $130 million from the sale of our interest in the syndicated Priory term
55
loan and remaining minority interest in Lifepoint Behavioral. In May 2024, we closed on a new secured term loan, generating proceeds of approximately $800 million. We used our operating cash flows, asset sale proceeds, and term loan proceeds to fund our investment activities and our dividends of $321 million, pay down over $1 billion of our revolving credit facility and £207 million (or $266 million) on our British pound sterling term loan due 2025, and to pay off both of our Australian term loan facility of A$470 million (or $306 million) and our British pound sterling secured term loan due 2024 of £105 million (or $134 million).
See below for further details of these transactions along with additional liquidity activity in 2024:
Debt Amendments, Restrictions, and Covenant Compliance
Our debt facilities impose certain restrictions on us, including, but not limited to, restrictions on our ability to: incur debt; create or incur liens; provide guarantees in respect of obligations of any other entity; make redemptions and repurchases of our capital stock; prepay, redeem, or repurchase debt; engage in mergers or consolidations; enter into affiliated transactions; dispose of real estate or other assets; and change our business. In addition, the credit agreement governing our Credit Facility limits the amount of dividends we can pay as a percentage of normalized adjusted funds from operations ("NAFFO"), as defined in the agreements, on a rolling four quarter basis to 95% of NAFFO. The indentures governing our senior notes also limit the amount of dividends we can pay based on the sum of 95% of NAFFO, proceeds of equity issuances, and certain other net cash proceeds. Finally, our senior notes require us to maintain total unencumbered assets (as defined in the related indenture) of not less than 150% of our unsecured indebtedness.
In addition to these restrictions, the Credit Facility contains customary financial and operating covenants, along with customary events of default, including among others, nonpayment of principal or interest, material inaccuracy of representations, and failure to comply with our covenants. If an event of default occurs and is continuing under the facility, the entire outstanding balance may become immediately due and payable.
On April 12, 2024, we amended the Credit Facility and certain other agreements to, among other things, (i) reduce revolving commitments from $1.8 billion to $1.4 billion, (ii) lower the maximum permitted secured leverage ratio from 40% to 25%, and (iii) waive the 10% cap on unencumbered asset value attributable to tenants subject to a bankruptcy event for purposes of determining compliance with the unsecured leverage ratio for the trailing four fiscal quarter period ended June 30, 2024.
On August 6, 2024, we entered into an amendment to the Credit Facility and the British pound sterling term loan due 2025 to, among other things, (i) further reduce our maximum borrowing in the Credit Facility from $1.4 billion to $1.28 billion, (ii) increase borrowing spreads to 300 basis points during the Modified Covenant Period (defined below) and then to 225 basis points after the
56
Modified Covenant Period, and (iii) require that proceeds of certain future asset sales and debt transactions (during the Modified Covenant Period) be applied to repay certain outstanding obligations.
The amendments also amended certain covenants from June 30, 2024 to September 30, 2025 (the “Modified Covenant Period”) at which point the credit agreement provided that covenants would automatically reset to their prior levels. The amendments also limited the payment of dividends in cash during the Modified Covenant Period to $0.08 per share in any fiscal quarter, but the amendments did not provide any additional restrictions on the payment of dividends outside of the Modified Covenant Period.
On February 13, 2025 and concurrent with the closing of our private notes offering discussed previously, we further amended the Credit Facility and (i) removed the Modified Covenant Period and any restrictions related thereto from the existing Credit Facility, (ii) permanently removed financial covenants regarding minimum consolidated tangible net worth, maximum unsecured indebtedness to unencumbered asset value and minimum unsecured net operating income to unsecured interest expense, (iii) amended certain definitions used in the financial covenant regarding maximum total indebtedness to total asset value to conform to corresponding definitions in our existing unsecured indentures and the secured notes issued concurrently and set the covenant level at 60%, (iv) provided notice that we plan to exercise both of our 6-month extension options such that the maturity of the revolving portion of our Credit Facility would move to June 30, 2027 (subject to the satisfaction of certain conditions with the primary condition of not being in default at the time of each extension option date), (v) reset the interest rate to SOFR plus 225 basis points, (vi) provided for the loans thereunder to be secured and guaranteed ratably with the secured notes issued in February 2025, (vii) set the maximum secured leverage ratio at 40%, and (viii) added mandatory prepayments of senior debt or addition of additional collateral in connection with any failure to (x) maintain a 65% maximum ratio of secured first lien debt to the undepreciated real estate value of the secured pool properties or (y) maintain a minimum senior secured debt service coverage ratio of 1.15:1.00 (which increases to 1.30:1.00 starting in March 2026).
As of December 31, 2025, we are in compliance with all financial and operating covenants.
Short-term Liquidity Requirements:
Our short-term liquidity requirements typically consist of general and administrative expenses, dividends in order to comply with REIT requirements, interest payments on our debt, and planned funding commitments on development and capital improvement projects for the next twelve months. Our monthly rent and interest receipts and distributions from our joint venture arrangements are typically enough to cover our short-term liquidity requirements.
Over the next twelve months, we expect our monthly rent and interest receipts to increase with our contractually required annual escalations, from the ramp up of cash rents from certain of the tenants that last year replaced Steward, and expected ramping up of rent revenue from the replacement tenant of the six Prospect California facilities. We would expect these rent and interest increases to outpace the higher interest cost from the 2025 refinancings.
At February 23, 2026, we only have €500 million of our 0.993% Senior Unsecured Notes due 2026 coming due in the next twelve months, as we have provided notice of our intent (and believe we will meet all conditions to do so) to extend the revolving portion of our Credit Facility to June 2027. In addition, we have liquidity of $1.0 billion (including cash on hand and availability under the $1.28 billion revolving portion of our Credit Facility). We believe this liquidity along with the expected cash receipts of rent and interest pursuant to our contractual agreements with our tenants/borrowers and distributions from our joint venture arrangements is sufficient to fund our short-term liquidity requirements (including the payoff of the notes coming due in 2026 as discussed above).
However, as noted earlier, we have access to an ATM program for the sale of up to $500 million of our common stock, if needed.
Long-term Liquidity Requirements:
Our long-term liquidity requirements generally consist of the same requirements described above under “Short-term Liquidity Requirements” along with new investments in real estate and the funding of debt maturities coming due after the next twelve months. At this time, we do not expect any material new investments in real estate in the foreseeable future.
As described previously, we believe our monthly rent and interest receipts and distributions from our joint venture arrangements along with our current liquidity of approximately $1.0 billion at February 23, 2026, is enough to cover our short-term liquidity requirements. However, to further improve cash flows and to fund future debt maturities, we will need to look to other sources, which may include one or a combination of the following:
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However, there is no assurance that conditions will be favorable for such possible transactions or that our plans will be successful.
Contractual Commitments
The following table summarizes known material contractual commitments including debt service commitments (principal and interest payments) as of February 23, 2026 (amounts in thousands):
Commitments (1)
Senior unsecured notes
777,238
(2)
1,602,949
942,469
1,003,062
533,657
1,322,750
6,182,125
Senior secured notes
104,998
209,995
2,993,493
3,938,471
Revolving credit facility(3)
449,034
Term loan
11,200
206,055
217,255
British pound secured loan facility
58,582
58,743
998,232
1,291,303
Operating lease commitments(4)
6,004
6,495
6,640
6,637
6,666
164,275
196,717
Purchase obligations(5)
179,657
34,037
23,000
24,000
260,694
Totals
1,586,713
2,118,113
1,240,847
1,302,276
808,900
5,478,750
12,535,599
Results of Operations
Our operating results may vary significantly from year-to-year due to a variety of reasons including acquisitions made during the year, incremental revenues and expenses from acquisitions made in the prior year, revenues and expenses from completed development properties, property disposals, annual escalation provisions, cash rents received from cash basis tenants (particularly those that are in a period of ramp up), interest rate changes, foreign currency exchange rate changes, new or amended debt agreements, issuances of shares through an equity offering, impact from accounting changes, lease terminations/re-tenanting, etc. Thus, our operating results for the current year are not necessarily indicative of the results that may be expected in future years.
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Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024
Net loss for the year ended December 31, 2025, was $(0.3) billion ($(0.46) per share) compared to net loss of $(2.4) billion ($(4.02) per share) for the year ended December 31, 2024. This change in net loss was primarily driven by a total of $2.8 billion of impairment charges and negative fair value adjustments in 2024 primarily related to Steward (including our Massachusetts-based partnership), Prospect (including our investment in PHP), and the international joint venture, whereas, we incurred approximately $340 million in 2025, primarily related to Prospect (including our investment in PHP). See below for further details of these charges and where reflected in the consolidated statements of net income. This change was partially offset by approximately $479 million of gains on real estate sales in 2024. Normalized FFO, after adjusting for certain items (as more fully described in the section titled “Non-GAAP Financial Measures” in this Item 7 of this Annual Report on Form 10-K), was $346 million for 2025, or $0.58 per share, as compared to $483 million, or $0.80 per share, for 2024. This 28% decrease in Normalized FFO is primarily due to lower revenues as a result of various disposals in 2024 and 2025, along with less cash revenue received from Steward and Prospect, and higher interest expense from our recent refinancing activities.
A comparison of revenues for the years ended December 31, 2025 and 2024 is as follows (dollar amounts in thousands):
Change
16,794
(11,251
(23,916
(5,152
(23,525
Our total revenues for 2025 decreased by $24 million or 2.4% over the prior year. This change is made up of the following:
See Note 3 to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K for more details regarding the transaction activity above.
Interest Expense
Interest expense for 2025 and 2024 totaled $510.4 million and $417.8 million, respectively. This increase is primarily related to higher interest from our February 2025 debt refinancing activities (see Note 4 to the consolidated financial statements for further details), partially offset by lower interest expense from the decrease in average borrowings on our Credit Facility in 2025, compared to 2024, along with the payoff of our £493 million British pound sterling term loan in the first quarter of 2025. Overall, our weighted-average interest rate was 5.2% for 2025, compared to 4.3% for 2024.
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Real Estate Depreciation and Amortization
Real estate depreciation and amortization during 2025 decreased to $265.4 million from $447.7 million in 2024 primarily due to $170 million of additional amortization expense recorded in 2024 primarily to fully amortize the intangibles associated with two master leases, including the Steward master lease that was terminated effective September 11, 2024. The remaining decrease is due to the sale of various properties in 2024 and 2025.
Property-related expenses for 2025 increased to $36.4 million, compared to $27.3 million in 2024. Of the property expenses in 2025 and 2024, approximately $12.3 million and $13.7 million, respectively, represents costs (primarily property taxes and insurance premiums) that were reimbursed by our tenants and included in the “Interest and other income” line on our consolidated statements of net income. The remaining non-reimbursed property expenses are higher year-over-year primarily due to ongoing expenses (such as property taxes, insurance, maintenance, etc.) incurred at our vacant facilities.
General and Administrative
General and administrative expenses was $130.4 million in 2025, compared to $133.8 million in 2024 as share-based compensation expense declined to $25.7 million in 2025, compared to $32.9 million in 2024. The decrease in share-based compensation expense is primarily due to the $10.9 million adjustment from changes in estimated payouts of certain performance awards.
As more fully described in Note 7 to Item 8 of this Annual Report on Form 10-K, we have certain performance awards granted in 2025 and 2024 that have cash-settlement features. Awards that can be cash settled are required to be adjusted each quarter to fair value in determining share-based compensation expense; whereas, an award without cash settlement features (which is our typical award structure) are expensed based on the grant date fair value. Although we did not have significant fluctuations in expense year-over-year from these awards, we did have significant volatility from quarter to quarter and would expect further volatility in future years until the service period for these awards ends.
Gain on Sale of Real Estate
During 2025, the gain on sale of real estate of $5.5 million primarily related to the disposal of nine properties. During 2024, the gain on sale of real estate of $478.7 million primarily related to the disposal of five Prime facilities, the sale of a 75% interest in five Utah facilities as part of the Utah Transaction, and the sale of eight Dignity Health facilities and 11 UCHealth facilities. See Note 3 to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K for more details regarding these disposals.
Real Estate and Other Impairment Charges, Net
In 2025, we recognized $193.9 million of real estate and other impairment charges, primarily associated with our investments in Prospect and three hospitals in Colombia, as well as, ongoing property taxes and other obligations not paid by our cash basis tenants. In 2024, we recognized $1.8 billion of real estate and other impairment charges and negative fair value adjustments, primarily associated with our investments in Steward, Prospect, and the international joint venture. See Note 3 to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K for more information about these charges.
Earnings (loss) from Equity Interests
Earnings from equity interests was $97.9 million for 2025, compared to a loss of ($366.6) million in 2024. This increase is primarily due to the $410 million charge in the second quarter of 2024 associated with the real estate impairment in our Massachusetts-based partnership with Macquarie. In addition, our share of income increased year-over-year in the Utah partnership that was formed in the 2024 second quarter by approximately $48.7 million, as prior year only included three months of activity versus a full year in 2025 and the year ended December 31, 2025 included approximately $49 million of positive fair value adjustments (primarily real estate related) compared to $6.9 million in 2024. Finally, our share of income in the MEDIAN joint venture increased by approximately $7.4 million year-over-year, primarily driven by the $13 million deferred tax benefit from the reduction in future German tax rates, partially offset by higher interest expense from the refinancing in 2025.
Debt Refinancing and Unutilized Financing Costs
Debt refinancing and unutilized financing costs were $3.6 million for 2025. These costs were incurred primarily as a result of the early redemption of our 3.325% Senior Unsecured Notes due 2025, 2.500% Senior Unsecured Notes due 2026, and 5.250% Senior
Unsecured Notes due 2026. For 2024, we incurred $4.3 million as a result of the reduction in revolving commitments under our Credit Facility and partial paydown of our British pound sterling term loan due 2025.
Other (Including Fair Value Adjustments on Securities)
Other expense for 2025 was $172.6 million, compared to $615.6 million in the prior year. We recognized approximately $147 million of unfavorable fair value adjustments to our investment in PHP Holdings in 2025, compared to approximately $550 million of unfavorable fair value adjustments in 2024. In addition, we incurred approximately $13.5 million in 2025 of legal and other professional expenses associated with the Prospect and Steward bankruptcies and responding to certain defamatory statements published by certain parties, among other things, compared to $51.3 million in 2024. We also incurred a $7.8 million economic loss in 2024 from the sale of our interest in the Priory syndicated term loan.
Income Tax Expense
Income tax expense includes U.S. federal and state income taxes on our TRS entities, as well as non-U.S. income based or withholding taxes on certain investments located in jurisdictions outside the U.S. The $38.6 million of income tax expense for 2025 is primarily based on the income generated by our investments in the U.K. and Germany and is less than the $44.1 million of income tax expense in 2024 due to $5 million of additional tax expense in the second quarter of 2024 as a result of the gain on the interest rate swap associated with the internal restructuring of the British pound sterling term loan due 2025.
We utilize the asset and liability method of accounting for income taxes. Deferred tax assets are recorded to the extent we believe these assets will more likely than not be realized. In making such determination, all available positive and negative evidence is considered, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies, and recent financial performance. Based upon our review of all positive and negative evidence, including our three-year cumulative pre-tax book loss position in certain entities, we concluded that a valuation allowance of approximately $490 million should be reflected against certain of our international and domestic net deferred tax assets at December 31, 2025. In the future, if we determine that it is more likely than not that we will realize our net deferred tax assets, we will reverse the applicable portion of the valuation allowance, recognize an income tax benefit in the period in which such determination is made, and potentially incur higher income tax expense in future periods as income is earned. For more detailed information, see Note 5 to Item 8 of this Annual Report on Form 10-K.
Subsequent to December 31, 2025, we moved seven additional U.K. property holding legal entities into our U.K. REIT that was formed on July 1, 2023. With this move, we plan to adjust the deferred tax liabilities associated with these entities, which we expect will result in an approximate $40 million one-time tax benefit in the first quarter of 2026. Going forward, these U.K. entities (like the others in the U.K. REIT) will be subject only to a withholding tax on earnings upon distribution out of the U.K. REIT.
Non-GAAP Financial Measures
We consider non-GAAP financial measures to be useful supplemental measures of our operating performance. A non-GAAP financial measure is a measure of financial performance, financial position, or cash flows that excludes or includes amounts that are not so excluded from or included in the most directly comparable measure calculated and presented in accordance with GAAP. Described below are the non-GAAP financial measures used by management to supplement our evaluation of operating performance and that we consider useful to investors, together with reconciliations of these measures to the most directly comparable GAAP measures.
Funds From Operations and Normalized Funds From Operations
Investors and analysts following the real estate industry utilize funds from operations, or FFO, as a supplemental performance measure. FFO, reflecting the assumption that real estate asset values rise or fall with market conditions, principally adjusts for the effects of GAAP depreciation and amortization of real estate assets, which assumes that the value of real estate diminishes predictably over time. We compute FFO in accordance with the definition provided by the National Association of Real Estate Investment Trusts, or Nareit, which represents net income (loss) (computed in accordance with GAAP), excluding gains (losses) on sales of real estate and impairment charges on real estate assets, plus real estate depreciation and amortization, including amortization related to in-place lease intangibles, and after adjustments for unconsolidated partnerships and joint ventures.
In addition to presenting FFO in accordance with the Nareit definition, we disclose normalized FFO, which adjusts FFO for items that relate to unanticipated or non-core events or activities or accounting changes that, if not noted, would make comparison to prior period results and market expectations less meaningful to investors and analysts.
We believe that the use of FFO, combined with the required GAAP presentations, improves the understanding of our operating results among investors and the use of normalized FFO makes comparisons of our operating results with prior periods and other companies more meaningful. While FFO and normalized FFO are relevant and widely used supplemental measures of operating and
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financial performance of REITs, they should not be viewed as a substitute measure of our operating performance since the measures do not reflect either depreciation and amortization costs or the level of capital expenditures and leasing costs (if any are not paid by our tenants) to maintain the operating performance of our properties, which can be significant economic costs that could materially impact our results of operations. FFO and normalized FFO should not be considered an alternative to net income (loss) (computed in accordance with GAAP) as indicators of our financial performance or to cash flow from operating activities (computed in accordance with GAAP) as an indicator of our liquidity.
The following table presents a reconciliation of net loss attributable to MPT common stockholders to FFO and Normalized FFO for the years ended December 31, 2025 and 2024 (in thousands except per share data):
FFO Information
Participating securities’ share in earnings
(889
(946
Net loss, less participating securities’ share in earnings
(277,938
(2,411,217
Depreciation and amortization
322,712
509,524
(6,200
(478,693
Real estate impairment charges
145,350
980,263
Funds from operations
Other impairment charges, net
59,651
1,258,443
Litigation, bankruptcy and other costs
13,477
51,308
Share-based compensation (fair value adjustments) (1)
(10,259
Non-cash fair value adjustments
106,442
563,666
Tax rate changes and other
(11,231
5,119
4,273
4,292
Normalized funds from operations
Per diluted share data
0.54
0.86
(0.01
(0.80
0.24
1.63
0.31
(2.33
0.10
2.08
0.02
(0.02
0.18
0.94
0.01
Distribution Policy
We have elected to be taxed as a REIT commencing with our taxable year that began on April 6, 2004 and ended on December 31, 2004. To qualify as a REIT, we must meet a number of organizational and operational requirements, including a requirement that we distribute (in the form of cash or stock) at least 90% of our REIT taxable income, excluding net capital gains, to our stockholders. It is our current intention to comply with these requirements and maintain such status going forward.
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The table below is a summary of our distributions declared (and paid in cash) during the three year period ended December 31, 2025:
Declaration Date
Record Date
Date of Distribution
Distribution per Share
November 17, 2025
December 11, 2025
January 8, 2026
August 14, 2025
September 11, 2025
October 9, 2025
May 29, 2025
June 18, 2025
July 17, 2025
February 13, 2025
March 10, 2025
April 10, 2025
November 21, 2024
December 12, 2024
January 9, 2025
August 22, 2024
September 9, 2024
October 10, 2024
May 30, 2024
June 10, 2024
July 9, 2024
0.15
April 12, 2024
April 22, 2024
May 1, 2024
November 9, 2023
December 7, 2023
January 11, 2024
August 21, 2023
September 14, 2023
October 12, 2023
April 27, 2023
June 15, 2023
July 13, 2023
0.29
February 16, 2023
March 16, 2023
April 13, 2023
On February 12, 2026, we announced that our Board of Directors declared a regular quarterly cash dividend of $0.09 per share of common stock to be paid on April 9, 2026, to shareholders of record on March 12, 2026.
We intend to pay to our stockholders, within the time periods prescribed by the Code, all or substantially all of our annual taxable income, including taxable gains from the sale of real estate and recognized gains on the sale of securities. It is our policy to make sufficient distributions to stockholders in order for us to maintain our status as a REIT under the Code and to efficiently manage corporate income and excise taxes on undistributed income, although there is no assurance as to further dividends because they depend on future earnings, capital requirements, and our financial condition. Although we have only made cash distributions historically, we may consider making stock dividends in the future for liquidity purposes, while still complying with REIT requirements. In addition, our Credit Facility limits the amount of cash dividends we can make — see Note 4 to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K for further information.
ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk
Market risk includes risks that arise from changes in interest rates, foreign currency exchange rates, commodity prices, equity prices, and other market changes that affect market sensitive instruments. We seek to mitigate the effects of fluctuations in interest rates by matching the terms of new investments with new long-term fixed rate borrowings to the extent possible. We may or may not elect to use financial derivative instruments to hedge interest rate or foreign currency exposure. For interest rate hedging, these decisions are principally based on our policy to match investments with comparable borrowings, but are also based on the general trend in interest rates at the applicable dates and our perception of the future volatility of interest rates. For foreign currency hedging, these decisions are principally based on how our investments are financed, the long-term nature of our investments, the need to repatriate earnings back to the U.S., and the general trend in foreign currency exchange rates.
In addition, the value of our facilities are subject to fluctuations based on changes in local and regional economic conditions and changes in the ability of our tenants to generate profits.
Our primary exposure to market risks relates to fluctuations in interest rates and foreign currency. The following analyses present the sensitivity of the market value, earnings, and cash flows of our significant financial instruments to hypothetical changes in interest rates and exchange rates as if these changes had occurred. The hypothetical changes chosen for these analyses reflect our view of changes that are reasonably possible over a one-year period. These forward looking disclosures are selective in nature and only address the potential impact from these hypothetical changes. They do not include other potential effects which could impact our business as a result of changes in market conditions. In addition, they do not include measures we may take to minimize our exposure such as entering into future interest rate swaps to hedge against interest rate increases on our variable rate debt.
Interest Rate Sensitivity
For fixed rate debt, interest rate changes affect the fair market value but do not impact net income to common stockholders or cash flows. Conversely, for floating rate debt, interest rate changes generally do not affect the fair market value but do impact net income to common stockholders and cash flows, assuming other factors are held constant. At December 31, 2025, our outstanding debt totaled $9.8 billion (excluding debt issue costs and discounts), which consisted of fixed-rate debt of approximately $9.0 billion and variable rate debt of $0.8 billion. If market interest rates increase or decrease by 10%, the fair value of our debt at December 31,
2025 would decrease or increase by approximately $220 million. Changes in the fair value of our fixed rate debt will not have any impact on us unless we decided to repurchase the debt in the open market.
If market rates of interest on our variable rate debt increase by 10%, the increase in annual interest expense on our variable rate debt would decrease future earnings and cash flows by $5.1 million per year. If market rates of interest on our variable rate debt decrease by 10%, the decrease in interest expense on our variable rate debt would increase future earnings and cash flows by $5.1 million per year. This assumes that the average amount outstanding under our variable rate debt for a year is $0.8 billion, the balance of such variable rate debt at December 31, 2025.
Foreign Currency Sensitivity
With our investments in the U.K., Germany, Spain, Italy, Portugal, Switzerland, Finland, and Colombia, we are subject to fluctuations in the British pound, euro, Swiss franc, and Colombian peso to U.S. dollar currency exchange rates. Although we generally deem investments in these countries to be of a long-term nature, are typically able to match any non-U.S. dollar borrowings with investments in such currencies, and historically have not needed to repatriate a material amount of earnings back to the U.S., increases or decreases in the value of the respective non-U.S. dollar currencies to U.S. dollar exchange rates may impact our financial condition and/or our results of operations. Based on our 2025 results, a 10% increase or decrease in exchange rates would decrease or increase our net loss by $8.1 million.
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ITEM 8. Financial Statements and Supplementary Data
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of Medical Properties Trust, Inc.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Medical Properties Trust, Inc. and its subsidiaries (the "Company") as of December 31, 2025 and 2024, and the related consolidated statements of net income, of comprehensive loss, of equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes and financial statement schedules listed in the index appearing under Item 15(a) (collectively referred to as the "consolidated financial statements"). We also have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Impairment Assessment of Real Estate Investments
As described in Notes 2 and 3 to the consolidated financial statements, the carrying value of the Company’s real estate investments was $10.5 billion as of December 31, 2025, including land, buildings and improvements net of accumulated depreciation and intangible assets net of accumulated amortization. Management reviews real estate investments for impairment when events and circumstances indicate that the assets may not be recoverable. Management analyzes recoverability by comparing the carrying value of the real estate assets to a probability-weighted set of estimated undiscounted cash flows to be generated by those assets, including an estimated liquidation amount, during the expected holding periods. Assumptions used in determining undiscounted cash flows may include, but are not limited to, market rental rates, capitalization rates, and holding periods. If the recoverability analysis indicates that the carrying value of the real estate asset is greater than the expected future undiscounted cash flows, impairment losses are measured as the difference between carrying value and fair value of the assets. Estimated future cash flows used in such analysis are based on the Company’s plans for the real estate asset and their view of market economic conditions. Assumptions used in determining fair value may include, but are not limited to, market rental rates, discount rates, and capitalization rates.
The principal considerations for our determination that performing procedures relating to the impairment assessment of real estate investments is a critical audit matter are (i) the significant judgment by management when developing the undiscounted cash flows to be generated by the assets, and developing the fair value estimate, and (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures related to evaluating management’s undiscounted cash flows to be generated by the assets and significant assumptions related to market rental rates and the holding period used in developing the undiscounted cash flows, and the market rental rates and capitalization rates, used in the fair value estimate.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the Company’s impairment assessment, including controls over the development of the undiscounted cash flows to be generated by the assets and fair value estimate. These procedures also included, among others, (i) testing management’s process for developing the estimated future undiscounted cash flows and for developing the fair value used in the impairment assessment of real estate investments, (ii) evaluating the appropriateness of the undiscounted cash flows and direct capitalization models, (iii) testing the completeness and accuracy of underlying data used in the models, and (iv) evaluating the reasonableness of the significant assumptions used by management related to the market rental rates and holding period used in the undiscounted cash flow model and the market rental rates and capitalization rates used in the direct capitalization model. Evaluating management's assumptions related to market rental rates, capitalization rates and holding period involved evaluating whether the assumptions used by management were reasonable considering the consistency with external market data and comparable transactions.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Birmingham, Alabama
February 26, 2026
We have served as the Company’s auditor since 2008.
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To the Partners of MPT Operating Partnership, L.P.:
We have audited the accompanying consolidated balance sheets of MPT Operating Partnership, L.P. and its subsidiaries (the "Company") as of December 31, 2025 and 2024, and the related consolidated statements of net income, of comprehensive loss, of capital and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes and financial statement schedules listed in the index appearing under Item 15(a) (collectively referred to as the "consolidated financial statements"). We also have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
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MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Amounts in thousands,except for per share data)
ASSETS
Real estate assets
Land
1,790,154
1,607,869
Buildings and improvements
9,543,162
8,847,892
Intangible lease assets
872,371
804,081
Investment in financing leases
421,684
1,057,770
Real estate held for sale
34,019
Mortgage loans
123,651
119,912
Gross investment in real estate assets
Accumulated depreciation
(1,438,594
(1,221,644
Accumulated amortization
(224,462
(201,304
Net investment in real estate assets
11,087,966
11,048,595
Interest and rent receivables
19,210
36,327
Straight-line rent receivables
881,452
700,783
564,040
471,404
Total Assets
LIABILITIES AND EQUITY
Liabilities
Accounts payable and accrued expenses
549,105
454,209
Deferred revenue
19,289
29,445
Obligations to tenants and other lease liabilities
128,297
129,045
Total Liabilities
10,394,526
9,460,811
Commitments and Contingencies
Equity
Preferred stock, $0.001 par value. Authorized 10,000 shares; no shares outstanding
Common stock, $0.001 par value. Authorized 750,000 shares; issued and outstanding — 597,008 shares at December 31, 2025 and 600,403 shares at December 31, 2024
597
600
Additional paid-in capital
8,573,396
8,584,917
Retained deficit
(4,136,011
(3,658,516
Accumulated other comprehensive income (loss)
168,213
(94,272
Total Equity
Total Liabilities and Equity
See accompanying notes to consolidated financial statements.
69
Consolidated Statements of Net Income
2023
803,375
(127,894
127,141
69,177
871,799
Expenses
411,171
603,360
41,567
145,588
1,201,686
Other (expense) income
Gain (loss) on sale of real estate
(1,815
(376,907
13,967
Debt refinancing and unutilized financing (costs) benefit
285
7,586
Total other expense
(266,732
(2,333,208
(356,884
Loss before income tax
(237,319
(2,364,186
(686,771
Income tax (expense) benefit
130,679
(556,092
(384
(556,476
Earnings per common share — basic and diluted
(0.93
Weighted average shares outstanding — basic
598,518
Weighted average shares outstanding — diluted
70
Consolidated Statements of Comprehensive Loss
Other comprehensive (loss) income:
Unrealized loss on interest rate hedges, net of tax
(4,208
(20,779
(34,932
Reclassification of interest rate hedges gain from AOCI to earnings, net of tax
(18,926
(28,553
Foreign currency translation gain (loss)
266,693
(97,068
162,680
Reclassification of foreign currency translation loss from AOCI to earnings
2,490
Total comprehensive loss
(13,452
(2,545,060
(454,407
Comprehensive income attributable to non-controlling interests
Comprehensive loss attributable to MPT common stockholders
(14,564
(2,547,044
(454,791
Consolidated Statements of Equity
For the Years Ended December 31, 2025, 2024 and 2023
Preferred
Common
(In thousands, except per share amounts)
Shares
ParValue
AdditionalPaid-inCapital
RetainedEarnings (Deficit)
AccumulatedOtherComprehensive(Loss) Income
Non-ControllingInterests
TotalEquity
Balance at December 31, 2022
597,476
8,535,140
116,285
(59,184
1,569
8,594,407
Net (loss) income
Reclassification of interest rate hedge gain to earnings, net of tax
Foreign currency translation gain
Reclassification of foreign currency translation loss to earnings
Stock vesting and amortization of stock-based compensation
2,457
33,248
33,250
Stock vesting - satisfaction of tax withholdings
(942
(8,079
Issuance of non-controlling interests
1,375
Distributions to non-controlling interests
(1,063
Dividends declared ($0.88 per common share)
(531,618
Balance at December 31, 2023
598,991
599
8,560,309
(971,809
42,501
2,265
7,633,865
1,984
Foreign currency translation loss
2,173
28,412
28,414
(761
(1
(3,804
(3,805
Acquisitions of non-controlling interests
(1,500
(1,695
Dividends declared ($0.46 per common share)
(276,436
Balance at December 31, 2024
600,403
1,112
1,639
15,116
15,118
(529
(2,474
Repurchase of common stock
(4,505
(5
(23,436
(23,441
Offering costs
(727
Dividends declared ($0.33 per common share)
(200,446
Balance at December 31, 2025
597,008
72
Consolidated Statements of Cash Flows
(Amounts in thousands)
Operating activities
Adjustments to reconcile net loss to net cash provided by operating activities:
272,817
453,749
616,127
Amortization of deferred financing costs and debt discount
26,283
17,348
15,775
Straight-line rent revenue and other
(158,172
(172,765
(233,703
Stock-based compensation
25,746
32,976
(Gain) loss on sale of real estate
(5,545
1,815
193,947
1,825,402
376,907
Equity interest real estate impairment
410,790
Straight-line rent and other write-off
11,054
2,514
649,911
Debt refinancing and unutilized financing costs (benefit)
3,629
(285
(167,332
(34,157
Non-cash revenue from debt and equity securities received
(81,706
Other adjustments
7,580
4,975
10,287
Changes in:
2,778
(141,729
14,971
(36,109
13,750
21,680
23,481
(4,599
(9,608
(5,753
7,567
Net cash provided by operating activities
230,767
245,483
505,786
Investing activities
(142,089
(105,618
(235,187
Net proceeds from sale of real estate
120,550
1,854,077
897,500
Principal received from sale and repayment of loans receivable
116,309
214,416
501,630
Investment in loans receivable
(205,752
(420,324
(250,223
Construction in progress and other
(80,003
(79,788
(114,425
Proceeds from sale and return of equity investments
11,656
12,430
Capital additions and other investments, net
(73,753
(156,078
(294,167
Net cash (used for) provided by investing activities
(264,738
1,318,341
517,558
Financing activities
Proceeds from term debt
2,512,970
804,188
Payments of term debt
(2,252,731
(701,809
(988,162
Revolving credit facilities, net
241,530
(1,131,312
567,910
Dividends paid
(193,259
(321,080
(615,390
Lease deposits and other obligations to tenants
(3,202
2,237
10,139
Payment of debt refinancing and deferred financing costs and other financing activities
(50,585
(127,798
13,255
Net cash provided by (used for) financing activities
228,081
(1,479,379
(1,020,327
Increase in cash, cash equivalents, and restricted cash for the year
194,110
84,445
3,017
Effect of exchange rate changes
14,712
(5,224
11,397
Cash, cash equivalents, and restricted cash at beginning of year
335,173
255,952
241,538
Cash, cash equivalents, and restricted cash at end of year
543,995
Interest paid, including capitalized interest of $12,920 in 2025, $7,642 in 2024, and $14,178 in 2023
458,225
420,315
406,141
Supplemental schedule of non-cash investing activities:
Debt and equity securities received for certain obligations, real estate, and revenue
804,520
Certain obligations and receivables satisfied and real estate sold
50,000
722,814
Lease incentive provided
Supplemental schedule of non-cash financing activities:
Dividends declared, unpaid
55,351
48,164
92,808
Cash, cash equivalents, and restricted cash are comprised of the following:
Beginning of period:
250,016
235,668
Restricted cash, included in Other assets
2,838
5,936
5,870
End of period:
3,136
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MPT OPERATING PARTNERSHIP, L.P. AND SUBSIDIARIES
(Amounts in thousands,except for per unit data)
LIABILITIES AND CAPITAL
493,364
405,655
Payable due to Medical Properties Trust, Inc.
10,394,136
9,460,421
Capital
General Partner — issued and outstanding — 5,972 units at December 31, 2025 and 6,006 units at December 31, 2024
44,457
49,348
Limited Partners — issued and outstanding — 591,036 units at December 31, 2025 and 594,397 units at December 31, 2024
4,393,915
4,878,043
Total MPT Operating Partnership, L.P. capital
4,606,585
4,833,119
Total Capital
4,607,639
4,834,173
Total Liabilities and Capital
74
Net loss attributable to MPT Operating Partnership partners
Earnings per unit — basic and diluted
Weighted average units outstanding — basic
Weighted average units outstanding — diluted
75
Comprehensive loss attributable to MPT Operating Partnership partners
76
Consolidated Statements of Capital
General
Limited
Accumulated
Partner
Partners
Non-
(In thousands, except per unit amounts)
Units
UnitValue
Comprehensive(Loss) Income
ControllingInterests
TotalCapital
5,976
86,599
591,500
8,565,813
8,594,797
(5,564
(550,912
Unit vesting and amortization of unit-based compensation
332
2,432
32,918
Unit vesting - satisfaction of tax withholdings
(10
(81
(932
(7,998
Distributions declared ($0.88 per unit)
(5,317
(526,301
5,991
75,969
593,000
7,513,520
7,634,255
(24,102
(2,386,169
2,150
28,129
(8
(39
(753
(3,766
Distributions declared ($0.46 per unit)
(2,765
(273,671
6,006
594,397
(2,771
(274,278
151
1,622
14,967
(6
(25
(523
(2,449
Repurchase of units
(45
(234
(4,460
(23,207
(7
(720
Distributions declared ($0.33 per unit)
(2,005
(198,441
5,972
591,036
77
Unit-based compensation
Distributions paid
Cash, cash equivalents and restricted cash at end of year
Distributions declared, unpaid
78
Notes To Consolidated Financial Statements
1. Organization
Medical Properties Trust, Inc., a Maryland corporation, was formed on August 27, 2003, under the Maryland General Corporation Law for the purpose of engaging in the business of investing in, owning, and leasing healthcare real estate. Our operating partnership subsidiary, MPT Operating Partnership, L.P. (the “Operating Partnership”), through which we conduct substantially all of our operations, was formed in September 2003. At present, we own, directly and indirectly, all of the partnership interests in the Operating Partnership and have elected to report our required disclosures and that of the Operating Partnership on a combined basis, except where material differences exist.
We operate as a real estate investment trust (“REIT”). Accordingly, we are generally not subject to United States (“U.S.”) federal income tax on our REIT taxable income, provided that we continue to qualify as a REIT and our distributions to our stockholders equal or exceed such taxable income. Similarly, the majority of our real estate operations in the United Kingdom ("U.K.") operate as a REIT and generally are subject only to a withholding tax on earnings upon distribution out of the U.K. REIT. Certain non-real estate activities we undertake in the U.S. are conducted by entities which we elected to be treated as taxable REIT subsidiaries (“TRS”). Our TRS entities are subject to both U.S. federal and state income taxes. For our properties located outside the U.S. (excluding those assets that are in the U.K. REIT), we are subject to the local income taxes of the jurisdictions where our properties reside and/or legal entities are domiciled; however, we do not expect to incur additional taxes, of a significant nature, in the U.S. from foreign-based income as the majority of such income flows through our REIT.
Our primary business strategy is to acquire and develop healthcare facilities and lease the facilities to healthcare operating companies under long-term net leases, which require the tenant to bear most of the costs associated with the property. The majority of our leased assets are owned 100%; however, we do own some leased assets through joint ventures with other partners that share our view that healthcare facilities are part of the infrastructure of any community, which we refer to as investments in unconsolidated real estate joint ventures. We also may make mortgage loans to healthcare operators collateralized by their real estate. In addition, we may make noncontrolling investments in our tenants (which we refer to as investments in unconsolidated operating entities), from time-to-time, typically in conjunction with larger real estate transactions with the tenant, which may enhance our overall return and provide for certain minority rights and protections.
Our business model facilitates acquisitions and recapitalizations, and allows operators of healthcare facilities to unlock the value of their real estate to fund facility improvements, technology upgrades, and other investments in operations. At December 31, 2025, we have investments in 384 facilities in 31 states in the U.S., in seven countries in Europe, and one country in South America. Our properties consist of general acute care hospitals, behavioral health facilities, post acute care facilities (including inpatient physical rehabilitation facilities and long-term acute care hospitals), and freestanding ER/urgent care facilities.
2. Summary of Significant Accounting Policies
Use of Estimates: The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We believe the estimates and assumptions underlying our consolidated financial statements at December 31, 2025 are reasonable and supportable based on the information available (particularly as it relates to our assessments of the recoverability of our real estate and the adequacy of our credit loss reserves on loans and financing receivables). Actual results could differ from those estimates.
Principles of Consolidation: Property holding entities and other subsidiaries of which we own 100% of the equity or have a controlling financial interest evidenced by ownership of a majority voting interest are consolidated. All inter-company balances and transactions are eliminated. For entities in which we own less than 100% of the equity interest, we consolidate the property if we have the direct or indirect ability to control the entities’ activities based upon the terms of the respective entities’ ownership agreements. For these entities, we record a non-controlling interest representing equity held by non-controlling interests.
We continually evaluate all of our transactions and investments to determine if they represent variable interests in a variable interest entity ("VIE"). If we determine that we have a variable interest in a VIE, we then evaluate if we are the primary beneficiary of the VIE. The evaluation is a qualitative assessment as to whether we have the ability to direct the activities of a VIE that most significantly impact the entity’s economic performance. We consolidate each VIE in which we, by virtue of or transactions with our investments in the entity, are considered to be the primary beneficiary.
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At December 31, 2025, we had loans and/or equity investments in certain VIEs, which may also be tenants of our facilities. We have determined that we were not the primary beneficiary of these VIEs. The carrying value and classification of the related assets and maximum exposure to loss as a result of our involvement with these VIEs at December 31, 2025 are presented below (in thousands):
VIE Type
CarryingAmount(1)
Asset TypeClassification
Maximum LossExposure(2)
Loans, net and equity investments
Investments in UnconsolidatedOperating Entities
Loans, net
120,398
Mortgage and other loans
For the VIE types above, we do not consolidate the VIEs because we do not have the ability to control the activities (such as the day-to-day healthcare operations of our borrowers or investees) that most significantly impact the VIE's economic performance. As of December 31, 2025, we were not required to provide financial support through a liquidity arrangement or otherwise to our unconsolidated VIEs, including circumstances in which they could be exposed to further losses (e.g. cash short falls).
Investments in entities in which we do not control nor do we have the ability to significantly influence and for which there is no readily determinable fair value are accounted for at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions involving the investee. Cash distributions on these types of investments are recorded to either income upon receipt (if a return on investment) or as a reduction of our investment (if the distributions received are in excess of our share of the investee’s earnings). For similar investments but for which there are readily determinable fair values, such investments are measured at fair value, with unrealized gains and losses recorded in income.
Cash and Cash Equivalents: Certificates of deposit, short-term investments with original maturities of three months or less, and money-market mutual funds are considered cash equivalents. The majority of our cash and cash equivalents are held at major commercial banks, which at times may exceed the Federal Deposit Insurance Corporation limit. We have not experienced any losses to-date on our invested cash. Cash and cash equivalents which have been restricted as to its use are recorded in other assets.
Revenue Recognition: Our revenues are primarily from leases and loans. For leases, we follow Accounting Standards Codification (“ASC”) 842, “Leases”, (“ASC 842”). ASC 842 sets out the principles for the recognition, measurement, presentation, and disclosure of leases for both parties to a contract (i.e. lessees and lessors). For lessors, we apply this standard as follows:
Operating Lease Revenue
We receive income from operating leases based on the fixed required rents (base rents) per the lease agreements. Rent revenue from base rents is recorded on the straight-line method, when collectibility of the lease payments is deemed probable, over the terms of the related lease agreements for new leases and the remaining terms of existing leases for those acquired as part of a property
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acquisition. The straight-line method records the periodic average amount of base rents earned over the term of a lease, taking into account contractual rent increases over the lease term. The straight-line method typically has the effect of recording more rent revenue from a lease than a tenant is required to pay early in the term of the lease. During the later parts of a lease term, this effect reverses with less rent revenue recorded than a tenant is required to pay. Rent revenue, as recorded on the straight-line method, in our consolidated statements of net income is presented as two amounts: rent billed and straight-line rent. Rent billed revenue is the amount of base rent actually billed to our tenants each period as required by the lease. Straight-line rent revenue is the difference between rent revenue earned based on the straight-line method and the amount recorded as rent billed revenue. We record the difference between rent revenues earned and amounts due per the respective lease agreements, as applicable, as an increase or decrease to straight-line rent receivables.
In instances where collectibility of the lease payments is not deemed probable, rent revenue is constrained to the lower of 1) the revenue that would have been recognized if collection were probable (i.e., straight-line method) and 2) the amount of lease payments received in cash.
Rental payments received prior to their recognition as income are classified as deferred revenue.
Financing Lease Revenue
Under ASC 842, if an acquisition and subsequent lease of a property back to the seller does not meet the definition of a sale, we must account for the transaction as a financing lease with income recognized using the imputed interest method.
Another type of financing lease is a direct financing lease (“DFL”). For leases accounted for as DFLs, the future minimum lease payments are recorded as a receivable at lease inception, while, the difference between the future minimum lease payments and the estimated residual values less the cost of the properties is recorded as unearned income. Unearned income is deferred and amortized to income over the lease term to provide a constant yield when collectability of the lease payments is reasonably assured. Investments in DFLs are presented net of unearned income.
Other Leasing Revenue
We begin recording base rent income from our development projects when the lessee takes physical possession of the facility, which may be different from the stated start date of the lease. Also, during construction of our development projects, we may be entitled to accrue rent based on the cost paid during the construction period (construction period rent). We accrue construction period rent as a receivable with a corresponding offset to deferred revenue during the construction period. When the lessee takes physical possession of the facility, we begin recognizing the deferred construction period revenue on the straight-line method over the term of the lease.
We also receive additional rent (contingent rent) under some leases based on increases in the consumer price index (“CPI”) (or similar index outside the U.S.) or when CPI exceeds the annual minimum percentage increase as stipulated in the lease. Contingent rents are recorded as rent billed revenue in the period earned.
Tenant payments for ground leases along with other operating expenses, such as property taxes and insurance, that are paid directly by us and reimbursed by our tenants are presented on a gross basis with the related revenues recorded in “Interest and other income” and the related expenses in “Property-related” in our consolidated statements of net income. All payments of other operating expenses made directly by the tenant to the applicable government or appropriate third-party vendor are recorded on a net basis.
Interest Revenue
We receive interest income from our tenants/borrowers on mortgage loans, working capital loans, and other loans. Interest income from these loans is recognized as earned based upon the principal outstanding and terms of the loans.
Other Revenue
Commitment fees received on operating leases for development and leasing services are initially recorded as deferred revenue and recognized as income over the initial term of a lease on the straight-line method. Commitment and origination fees from lending services are also recorded as deferred revenue initially and recognized as income over the life of the loan using the interest method.
Acquired Real Estate Purchase Price Allocation: We account for acquisitions of real estate under asset acquisition accounting rules. Under this accounting standard, we allocate the purchase price (including any third-party transaction costs directly related to the acquisition) of acquired properties to tangible and identified intangible assets acquired and liabilities assumed (if any) based on their
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relative fair values. In making estimates of fair values for purposes of allocating purchase prices of acquired real estate, we may utilize a number of sources, from time-to-time, including available real estate broker data, independent appraisals that may be obtained in connection with the acquisition, internal data from previous acquisitions or developments, and other market data, including market comparables for significant assumptions such as market rents, capitalization, and discount rates. We also consider information obtained about each property as a result of our pre-acquisition due diligence, marketing, and leasing activities in estimating the fair value of the tangible and intangible assets acquired.
We measure the aggregate value of lease intangible assets acquired based on the difference between (i) the property valued with new or in-place leases adjusted to market rental rates and (ii) the property valued as if vacant. Management’s estimates of value are made using methods similar to those used by independent appraisers (e.g., discounted cash flow analysis). Factors considered by management in our analysis include an estimate of carrying costs during hypothetical expected lease-up periods, considering current market conditions, and costs to execute similar leases. We also consider information obtained about each targeted facility as a result of our pre-acquisition due diligence, marketing, and leasing activities in estimating the fair value of the intangible assets acquired. In estimating carrying costs, management includes real estate taxes, insurance, and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods, which we expect to be about six months, but can be longer depending on specific local market conditions. Management also estimates costs to execute similar leases including leasing commissions, legal costs, and other related expenses to the extent that such costs are not already incurred in connection with a new lease origination as part of the transaction.
Other intangible assets acquired may include customer relationship intangible values which are based on management’s evaluation of the specific characteristics of each prospective tenant’s lease and our overall relationship with that tenant. Characteristics to be considered by management in allocating these values include the nature and extent of our existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality, and expectations of lease renewals, including those existing under the terms of the lease agreement, among other factors.
We amortize the value of our lease intangible assets to expense over the term of the respective leases. If a lease is terminated early, the unamortized portion of the lease intangibles are charged to expense. This amortization expense is included in the "Real estate depreciation and amortization" line of our consolidated statements of net income.
We record above-market and below-market in-place lease values, if any, for our facilities, which are based on the present value of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of the lease. We amortize any resulting capitalized above-market lease values as a reduction of rental income over the lease term. We amortize any resulting capitalized below-market lease values as an increase to rental income over the lease term. If a lease is terminated early, the unamortized portion of the capitalized above/below market lease value is recognized in rental income at that time.
Real Estate and Depreciation: Real estate, consisting of land, buildings and improvements, is maintained at cost. Although typically paid by our tenants, any expenditure for ordinary maintenance and repairs that we pay are expensed to operations as incurred. Significant renovations and improvements, which improve and/or extend the useful life of the asset, are capitalized and depreciated over their estimated useful lives. We review real estate investments for impairment when events and circumstances indicate that the assets may not be recoverable. We analyze recoverability by comparing the carrying value of the real estate assets to a probability-weighted set of estimated undiscounted cash flows to be generated by those assets, including an estimated liquidation amount, during the expected holding periods. Assumptions used in determining undiscounted cash flows may include, but are not limited to, market rental rates, capitalization rates, and holding periods. If the recoverability analysis indicates that the carrying value of the real estate asset is greater than the expected future undiscounted cash flows, impairment losses are measured as the difference between carrying value and fair value of the assets. Future cash flows are discounted when determining fair value of an asset. Estimated future cash flows used in such analysis are based on our plans for the real estate asset and our view of market economic conditions. Assumptions used in determining fair value may include, but are not limited to, market rental rates, discount rates, and capitalization rates.
When a real estate investment is designated as held for sale, we cease recording depreciation expense and adjust the assets’ value to the lower of its carrying value or fair value, less cost of disposal. Fair value is typically based on estimated cash flows discounted at a risk-adjusted rate of interest. We classify real estate assets as held for sale when we have commenced an active program to sell the assets, and in the opinion of management, it is probable the asset will be sold within the next 12 months.
Construction in progress includes the cost of land, the cost of construction of buildings, improvements, and fixed equipment, and costs for design and engineering. Other costs, such as interest, legal, property taxes, and corporate project supervision, which can be directly associated with the project during construction, are also included in construction in progress. We commence capitalization of costs associated with a development project when the development of the future asset is probable and activities necessary to get the
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underlying property ready for its intended use have been initiated. We stop the capitalization of costs when the property is substantially complete and ready for its intended use.
Depreciation is calculated on the straight-line method over the estimated useful lives of the related real estate and other assets. Our weighted-average useful lives at December 31, 2025 are as follows:
38.6 years
Lease intangibles
28.2 years
Leasehold improvements
14.3 years
Furniture, equipment, and other
5.0 years
Losses from Rent Receivables: For our leases, we review tenant provided financial data and monitor the performance of our tenants in areas generally consisting of: admission levels and surgery/procedure volumes by type; current operating margins; ratio of our tenant's operating margins both to facility rent and to facility rent plus other fixed costs; trends in revenue, cash collections, patient mix; and the effect of evolving healthcare regulations, adverse economic and political conditions, such as inflation and interest rates, and other events ongoing on a tenant's profitability and liquidity.
Operating Lease Receivables: We utilize the information above along with the tenant’s payment and default history in evaluating (on a lease-by-lease basis) whether or not lease payments are deemed probable of collection. As noted earlier, if not deemed probable of collection, rent revenue, under lease accounting rules, is constrained to the lesser of 1) the revenue that would have been recognized if collection were probable (i.e., straight-line method) and 2) the amount of lease payments received in cash.
Financing Lease Receivables: We apply a forward-looking “expected credit loss” model to all of our financing receivables, including financing leases and loans. To do this, we group our financial instruments into two primary pools of similar credit risk: secured and unsecured. The secured instruments include our investments in financing receivables as all are secured by the underlying real estate, among other collateral. Within the two primary pools, we further group our instruments into sub-pools based on several tenant/borrower characteristics, including years of experience in the healthcare industry and in a particular market or region and overall capitalization. We then determine a credit loss percentage per pool based on our history over a period of time that closely matches the remaining terms of the financial instruments being analyzed and adjust as needed for current trends or unusual circumstances. We apply these credit loss percentages to the book value of the related instruments to establish a credit loss reserve on our financing lease receivables and such credit loss reserve (including the underlying assumptions) is reviewed and adjusted quarterly. If a financing receivable is under performing and is deemed uncollectible based on the lessee’s overall financial condition, we will adjust the credit loss reserve based on the fair value of the underlying collateral.
We made the accounting policy election to exclude interest receivables from the credit loss reserve model. Instead, such receivables are impaired and an allowance recorded when it is deemed probable that we will be unable to collect all amounts due. The need for an allowance is based upon our assessment of the lessee’s overall financial condition, economic resources and payment record, the prospects for support from any financially responsible guarantors, and, if appropriate, the realizable value of any collateral. Financing leases are placed on non-accrual status when we determine that the collectability of contractual amounts is not reasonably assured. If on non-accrual status, we generally account for the financing lease on a cash basis, in which income is recognized only upon receipt of cash.
Loans: Loans consist of mortgage loans, working capital loans, and other loans. Mortgage loans are collateralized by interests in real property. Working capital and other loans are typically collateralized by interests in receivables, personal property, and corporate and individual guarantees. We record loans at cost. Like our financing lease receivables, we establish credit loss reserves on all outstanding loans based on historical credit losses of similar instruments. Such credit loss reserves, including the underlying assumptions, are reviewed and adjusted quarterly. If a loan’s performance worsens and foreclosure is deemed probable for our collateral-based loans (after considering the borrower’s overall financial condition as described above for leases), we will adjust the allowance for expected credit losses based on the current fair value of such collateral at the time the loan is deemed uncollectible. If the loan is not collateralized, the loan will be reserved for/written-off once it is determined that such loan is no longer collectible.
Interest receivables on loans are excluded from the forward looking credit loss reserve model; however, an allowance is recorded when it is deemed probable that we will be unable to collect all amounts due. Loans are placed on non-accrual status when we determined that the collectibility of contractual amounts is not reasonably assured. If on non-accrual status, we generally account for the loan on the cash basis, in which income is recognized only upon receipt of cash.
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The following table summarizes our credit loss reserves (in thousands):
December 31, 2025
December 31, 2024
Balance at beginning of the year
511,473
96,001
Provision for credit loss, net
168,186
1,241,020
Expected credit loss reserve written off or related to financial instruments sold, repaid, or satisfied
(126,362
(825,548
Balance at end of year
553,297
Earnings Per Share/Units: Basic earnings per common share/unit is computed by dividing net income by the weighted-average number of shares/units outstanding during the period. Diluted earnings per common share/unit is calculated by including the effect of dilutive securities.
Our unvested restricted stock awards contain non-forfeitable rights to dividends, and accordingly, these awards are deemed to be participating securities. These participating securities are included in the earnings allocation in computing both basic and diluted earnings per common share/unit.
Income Taxes: We conduct our business as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (“the Code”). To qualify as a REIT, we must meet certain organizational and operational requirements, including a requirement to distribute to stockholders at least 90% of our REIT’s ordinary taxable income. As a REIT, we generally pay little U.S. federal and state income tax because of the dividends paid deduction that we are allowed to take. If we fail to qualify as a REIT in any taxable year, we will then be subject to U.S. federal income taxes on our taxable income at regular corporate rates and will not be permitted to qualify for treatment as a REIT for U.S. federal income tax purposes for four years following the year during which qualification is lost, unless the Internal Revenue Service grants us relief under certain statutory provisions. Such an event could materially adversely affect our net income and net cash available for distribution to stockholders. However, we intend to operate in such a manner so that we will remain qualified as a REIT for U.S. federal income tax purposes.
Our financial statements include the operations of TRS entities. None of our TRS entities are entitled to a dividends paid deduction and are subject to U.S. federal, state, and local income taxes. Our TRS entities are authorized to provide property development, leasing, and management services for third-party owned properties, and we will make non-mortgage loans to and/or investments in our lessees through these entities.
With the property acquisitions and investments in Europe and South America, we are subject to income taxes internationally. However, we do not expect to incur any additional income taxes, of a significant nature, in the U.S. as the majority of such income from our international properties flows through our REIT income tax returns. For our TRS entities and international subsidiaries, we determine deferred tax assets and liabilities based on the differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Any increase or decrease in our deferred tax assets/liabilities that results from a change in circumstances and that causes us to change our judgment about expected future tax consequences of events, is reflected in our tax provision when such changes occur. Deferred income taxes also reflect the impact of operating loss carryforwards. A valuation allowance is provided if we believe it is more likely than not that all or some portion of our deferred tax assets will not be realized. Any increase or decrease in the valuation allowance that results from a change in circumstances, and that causes us to change our judgment about our ability to realize the related deferred tax asset, is reflected in our tax provision when such changes occur.
The calculation of our income taxes involves dealing with uncertainties in the application of complex tax laws and regulations in a multitude of jurisdictions across our global operations. An income tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, on the basis of technical merits. However, if a more likely than not position cannot be reached, we record a liability as an offset to the tax benefit and adjust the liabilities when our judgment changes as a result of the evaluation of new information not previously available. Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the uncertain tax position liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which new information is available.
Stock-Based Compensation: We adopted the 2019 Equity Incentive Plan (the “Equity Incentive Plan”) during the second quarter of 2019, which was amended during the second quarter of 2022. Equity awards of restricted stock with service conditions are valued at the average stock price per share on the date of grant and are amortized to compensation expense over the service periods (typically three years), using the straight-line method. Equity awards that contain market conditions are valued on the grant date using a Monte Carlo valuation model and are amortized to compensation expense over the derived service periods, which correspond to the periods over which we estimate the awards will be earned, which generally range from three to five years, using the straight-line method.
Equity awards with performance conditions are valued at the average stock price per share on the date of grant and are amortized using the straight-line method over the service period, adjusted for the probability of achieving the performance conditions. In 2024 and 2025, certain market-based restricted stock units ("RSUs") were issued with cash-settlement features. These liability-type awards are adjusted to fair value (using a Monte Carlo valuation model) on a quarterly basis and amortized over the derived service period, which is also adjusted on a quarterly basis. Forfeitures of stock-based awards are recognized as they occur.
Deferred Costs: Costs incurred that directly relate to the offerings of stock are deferred and netted against proceeds received from the offering. Leasing commissions and other third-party leasing costs that would not have been incurred if the lease was not obtained are capitalized as deferred leasing costs and amortized on the straight-line method over the terms of the related lease agreements. Costs identifiable with loans made to borrowers are capitalized and recognized as a reduction in interest income over the life of the loan.
Deferred Financing Costs: We generally capitalize financing costs incurred in connection with new financings and refinancings of debt. These costs are amortized over the lives of the related debt as an addition to interest expense. For debt with defined principal re-payment terms, the deferred costs are amortized to produce a constant effective yield on the debt (interest method) and are included within “Debt, net” on our consolidated balance sheets. For debt without defined principal repayment terms, such as our revolving credit facility, the deferred costs are amortized on the straight-line method over the term of the debt and are included as a component of “Other assets” on our consolidated balance sheets.
Foreign Currency Translation and Transactions: Certain of our international subsidiaries’ functional currencies are the local currencies of their respective countries. We translate the results of operations of our foreign subsidiaries into U.S. dollars using average rates of exchange in effect during the period, and we translate balance sheet accounts using exchange rates in effect at the end of the period. We record resulting currency translation adjustments in accumulated other comprehensive income (loss), a component of stockholders’ equity/partnership capital on our consolidated balance sheets.
Certain of our U.S. subsidiaries will enter into short-term and long-term transactions denominated in a foreign currency from time-to-time. Gains or losses resulting from these foreign currency transactions are revalued into U.S. dollars at the rates of exchange prevailing at the dates of the transactions. The effects of revaluation gains or losses on our short-term transactions are included in other income (expense) in the consolidated statements of income, while the revaluation effects on our long-term investments are recorded in accumulated other comprehensive income (loss) on our consolidated balance sheets.
Derivative Financial Investments and Hedging Activities: During our normal course of business, we may use certain types of derivative instruments for the purpose of managing interest rate and/or foreign currency risk. We record our derivative and hedging instruments at fair value on the balance sheet. Changes in the estimated fair value of derivative instruments that are not designated as hedges or that do not meet the criteria for hedge accounting are recognized in earnings. For derivatives designated as cash flow hedges, the change in the estimated fair value of the effective portion of the derivative is recognized in accumulated other comprehensive income (loss) on our consolidated balance sheets, whereas the change in the estimated fair value of the ineffective portion is recognized in earnings. For derivatives designated as fair value hedges, the change in the estimated fair value of the effective portion of the derivative offsets the change in the estimated fair value of the hedged item, whereas the change in the estimated fair value of the ineffective portion is recognized in earnings.
To qualify for hedge accounting, we formally document all relationships between hedging instruments and hedged items, as well as our risk management objective and strategy for undertaking the hedge prior to entering into a derivative transaction. This process includes specific identification of the hedging instrument and the hedge transaction, the nature of the risk being hedged and how the hedging instrument’s effectiveness in hedging the exposure to the hedged transaction’s variability in cash flows attributable to the hedged risk will be assessed. Both at the inception of the hedge and on an ongoing basis, we assess whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows or fair values of hedged items. In addition, for cash flow hedges, we assess whether the underlying forecasted transaction will occur. We discontinue hedge accounting if a derivative is not determined to be highly effective as a hedge or that it is probable that the underlying forecasted transaction will not occur.
Fair Value Measurement: We measure and disclose the estimated fair value of financial assets and liabilities utilizing a hierarchy of valuation techniques based on whether the inputs to a fair value measurement are considered to be observable or unobservable in a marketplace. Observable inputs reflect market data obtained from independent sources, while unobservable inputs
reflect our market assumptions. This hierarchy requires the use of observable market data when available. These inputs have created the following fair value hierarchy:
We measure fair value using a set of standardized procedures that are outlined herein for all assets and liabilities which are required to be measured at their estimated fair value on either a recurring or non-recurring basis. When available, we utilize quoted market prices from an independent third party source to determine fair value and classify such items in Level 1. In some instances where a market price is available, but the instrument is in an inactive or over-the-counter market, we apply the dealer (market maker) pricing estimate and classify the asset or liability in Level 2.
If quoted market prices or inputs are not available, fair value measurements are based upon valuation models that utilize current market or independently sourced market inputs, such as interest rates, option volatilities, credit spreads, market capitalization rates, etc. Items valued using such internally-generated valuation techniques are classified according to the lowest level input that is significant to the fair value measurement. As a result, the asset or liability could be classified in either Level 2 or 3 even though there may be some significant inputs that are readily observable. Internal fair value models and techniques that have been used by us include discounted cash flow, market approach valuations, and Monte Carlo valuation models. We also consider counterparty’s and our own credit risk on derivatives and other liabilities measured at their estimated fair value.
Fair Value Option Election: For our equity investment in the international joint venture and PHP Holdings (which we sold on July 1, 2025), along with any related investments such as loans (see Note 10 for more details), we elected to account for these investments at fair value due to the size of the investments and because we believed this method was more reflective of current values. We have not made a similar election for other investments that exist at December 31, 2025.
Leases (Lessee)
Pursuant to ASC 842, we are required to apply a dual approach, classifying leases (in which we are the lessee) as either financing or operating leases based on the principle of whether or not the lease is effectively a financed purchase. This classification determines whether lease expense is recognized based on an effective interest method (for finance leases) or on a straight-line basis (for operating leases) over the term of the lease. We record a right-of-use asset and a lease liability for all material leases with a term greater than 12 months regardless of their classification. Leases with a term of 12 months or less are off balance sheet with lease expense recognized on a straight-line basis over the lease term.
Segment Reporting
In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures" ("ASU 2023-07") to improve reportable segment disclosure requirements. We adopted this guidance in the fourth quarter of 2024 and have included the required disclosures within Note 13 - Segment Disclosures.
Reclassifications: Certain amounts in the consolidated financial statements for prior periods have been reclassified to conform to the current period presentation.
Recent Accounting Developments
Disaggregation of Income Statement Expenses
In November 2024, the FASB issued ASU 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses" ("ASU 2024-03") to improve the disclosures about a public company's expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions. ASU 2024-03 is effective for annual periods beginning after December 15, 2026. We are currently evaluating the potential impact of the adoption of this standard on our consolidated financial statements.
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3. Real Estate and Other Activities
New Investments
For the years ended December 31, 2025, 2024, and 2023, we acquired or invested in the following net assets (in thousands):
Land and land improvements
25,231
28,916
Buildings
48,742
114,966
Intangible lease assets — subject to amortization (weighted-average useful life of 19.9 years in 2025 and 24.8 years in 2023)
5,101
16,305
63,015
107,908
25,000
Liabilities assumed
(2,290
235,187
Loans repaid(1)
(22,900
Total net assets acquired
212,287
2025 Activity
In 2025, our real estate and other investments totaling approximately $142 million included:
2024 Activity
Utah Transaction
On April 12, 2024, we sold our interests in five Utah hospitals for an aggregate agreed valuation of approximately $1.2 billion to a newly formed joint venture (the "Utah partnership") with an institutional asset manager (the "Fund"), which we call the Utah Transaction, and we recognized a gain on real estate of approximately $380 million, partially offset by a $20 million write-off of unbilled straight-line rent receivables. We retained an approximately 25% interest in the Utah partnership valued initially at approximately $108 million, which is being accounted for on the equity method on a quarterly lag basis and included in the "Investments in unconsolidated real estate joint ventures" line of the consolidated balance sheets. The Fund purchased an approximate 75% interest for $886 million. In conjunction with this transaction closing, the Utah partnership placed new non-recourse secured financing, providing $190 million of additional cash to us. In total, the Utah Transaction generated $1.1 billion of cash to us. The Utah lessee (an affiliate of CommonSpirit Health ("CommonSpirit")) may acquire the leased real estate at a price equal to the greater of fair market value and the approximate $1.2 billion lease base at the fifth or tenth anniversary of the 2023 master lease commencement. We granted the Fund certain limited and conditional preferences based on the possible execution of the purchase option, which we accounted for as a derivative liability with an initial value of approximately $2.3 million.
2023 Activity
Lifepoint Transaction
On February 7, 2023, a subsidiary of Lifepoint Health, Inc. ("Lifepoint") acquired a majority interest in Springstone (now Lifepoint Behavioral Health, "Lifepoint Behavioral") (the "Lifepoint Transaction") based on an enterprise value of $250 million. As part of the transaction, we received approximately $205 million in full satisfaction of our initial acquisition loan, including accrued interest, and we retained (at that time) our minority equity investment in the operations of Lifepoint Behavioral. Separately, we
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converted an approximate $23 million mortgage loan (made as part of our initial acquisition in 2021) into the fee simple ownership of a property in Washington, which is leased, along with other behavioral health hospitals, to Lifepoint Behavioral, under a master lease agreement. In connection with the Lifepoint Transaction, Lifepoint extended its lease on eight existing general acute care hospitals by five years to 2041.
In the first quarter of 2024, we sold our minority equity investment in Lifepoint Behavioral for approximately $12 million.
Other Transactions
In the second quarter of 2023, we acquired three inpatient rehabilitation facilities for a total of approximately €70 million (approximately $77 million). These hospitals are leased to Median Kliniken S.á.r.l ("MEDIAN") pursuant to a long-term master lease with annual inflation-based escalators.
On April 14, 2023, we acquired five behavioral health hospitals located in the U.K. for approximately £44 million (approximately $58 million). These hospitals are leased to Priory pursuant to five separate lease agreements with annual inflation-based escalators.
In the first quarter of 2023, we originated a $50 million convertible loan to PHP Holdings, the managed care business of Prospect at that time. See subheading "Leasing Operations (Lessor)" in this Note 3 for further updates on Prospect.
Development and Capital Addition Activities
See table below for a status summary of our current development and capital addition projects (in thousands):
Property
Commitment
CostsPaid as ofDecember 31, 2025
Cost Remaining
IMED Hospitales ("IMED") (Spain)
67,054
39,954
27,100
Healthcare Systems of America (Florida)
43,500
2,064
41,436
IMED (Spain)
43,495
39,797
3,698
Lifepoint Behavioral (Arizona)
10,659
8,281
2,378
Other (Various)
554
210
344
165,262
90,306
74,956
We have two other development projects ongoing in Texas (Texarkana development) and Massachusetts (Norwood redevelopment). These are not highlighted above; however, we have completed construction to the stage where the building is "weathered in" and environmentally secure so as to physically protect our investment while we actively market the hospitals for sale or lease. As of December 31, 2025, we estimate that the cost of additional construction that we believe will be more efficient if completed in the near-term (such as electing to accelerate completion of a parking structure at one hospital), approximates between $10 million and $15 million.
Separately, on the Norwood redevelopment, we recovered from our casualty insurers cash in November 2024 that was in excess of our recovery receivable related to the 2020 storm losses (included in "Other assets" in the consolidated balance sheets), resulting in a $24 million additional recovery in the 2024 third quarter.
During 2025, we completed construction, and began recording rental income, on three projects totaling approximately $46.5 million, two of which are leased to Lifepoint Behavioral and the other to Surgery Partners.
During the fourth quarter of 2024, we completed construction and began recording rental income on an existing general acute care facility located in Idaho Falls, Idaho for a total amount of approximately $50 million.
During the first quarter of 2024, we completed construction, and began recording rental income, on a $35.4 million behavioral health facility located in McKinney, Texas, that is leased to Lifepoint Behavioral. We also completed construction and began recording rental income on a €46 million (approximately $49.0 million) general acute care facility located in Spain that is leased to IMED.
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During 2023, we completed construction and began recording rental income on one inpatient rehabilitation facility located in Lexington, South Carolina, which commenced rent on July 1, 2023, and another inpatient rehabilitation facility located in Stockton, California, which commenced rent on May 1, 2023. Both of these facilities are leased to Ernest Health, Inc. ("Ernest") pursuant to an existing long-term master lease.
Disposals
During 2025, we completed the sale of nine facilities (including two former Steward-operated facilities that were being leased to College Health for nominal rent) along with certain ancillary land and facilities for aggregate cash proceeds of approximately $121 million, resulting in a gain on real estate of approximately $5.5 million. For one of the properties sold, we agreed for the tenant to retain the cash proceeds of approximately $50 million as an incentive to close on a substitute property and keep cash rents the same. The $50 million lease incentive will be amortized over the remaining 16-year master lease term as a reduction of revenue.
During 2024, we had the following disposal activities:
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On March 30, 2023, we entered into a definitive agreement to sell our 11 general acute care facilities located in Australia and operated by Healthscope Ltd. ("Healthscope") (the "Australia Transaction") to affiliates of HMC Capital for cash proceeds of approximately A$1.2 billion. As a result, we designated the Australian portfolio as held for sale in the first quarter of 2023 and recorded approximately $79 million of net impairment charges at that time, which included $37.4 million of straight-line rent receivable write-offs and approximately $8 million in fees to sell the hospitals, partially offset by approximately $16 million of gains from our interest rate swap and foreign currency translation amounts in accumulated other comprehensive income that were reclassified to earnings in 2023 as part of the transaction. This transaction closed in two phases. The first phase closed on May 18, 2023, in which we sold seven of the 11 facilities for A$730 million, and the final phase closed on October 10, 2023, in which we sold the remaining four facilities for approximately A$470 million.
On March 8, 2023, we received notice that Prime planned to exercise its right to repurchase from us the real estate associated with one master lease for approximately $100 million. As such, we recorded an approximate $11 million impairment charge in the first quarter of 2023 related to non-cash rent receivables on the three facilities that were sold on July 11, 2023.
Intangible Assets
At December 31, 2025 and 2024, our intangible lease assets were $0.9 billion ($0.6 billion, net of accumulated amortization) and $0.8 billion ($0.6 billion, net of accumulated amortization), respectively.
We recorded amortization expense related to intangible lease assets of $30.4 million, $205.6 million (including $170 million for accelerating the amortization of the in-place lease intangibles associated with two master leases, including the Steward master lease that was terminated effective September 18, 2024), and $332.5 million (including $286 million for accelerating the amortization of the in-place lease intangibles related to re-leasing the Utah properties to CommonSpirit as described in this same Note 3), in 2025, 2024, and 2023, respectively, and expect to recognize amortization expense from existing lease intangible assets as follows (amounts in thousands):
For the Year Ended December 31:
32,165
31,847
31,684
29,840
29,173
As of December 31, 2025, capitalized lease intangibles have a weighted-average remaining life of 22.7 years.
Leasing Operations (Lessor)
We acquire and develop healthcare facilities and lease the facilities to healthcare operating companies. The initial fixed lease terms of these infrastructure-type assets are typically at least 15 years, and most include renewal options at the election of our tenants, generally in five year increments. Over 99% of our leases provide annual rent escalations based on increases in the CPI (or similar indices outside the U.S.) and/or fixed minimum annual rent escalations. Many of our domestic leases contain purchase options with pricing set at various terms but in no case less than our total initial investment. Our leases typically require the tenant to handle and bear most of the costs associated with our properties including repair/maintenance, property taxes, and insurance.
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The following table summarizes total future contractual minimum lease payments, excluding operating expense reimbursements, tenant recoveries, and other lease-related adjustments to revenue (i.e., straight-line rents, deferred revenues, or reserves/write-offs), from tenants under noncancelable leases as of December 31, 2025 (amounts in thousands):
Total UnderOperating Leases
Total UnderFinancing Leases
842,559
34,726
877,285
933,571
35,477
969,048
942,705
36,243
978,948
946,839
37,025
983,864
952,310
37,822
990,132
20,829,144
840,542
21,669,686
25,447,128
1,021,835
26,468,963
For all of our properties subject to lease, we are the legal owner of the property and the tenant's right to use and possess such property is guided by the terms of a lease. At December 31, 2025, we account for all of these leases as operating leases, except where generally accepted accounting principles (“GAAP”) requires alternative classification, including leases on certain Ernest Health, Inc. ("Ernest") and Prospect facilities that are accounted for as either direct financing or other financing type leases. The components of our total investment in financing leases consisted of the following (in thousands):
Minimum lease payments receivable
570,150
591,142
Estimated unguaranteed residual values
203,818
Less: Unearned income and allowance for credit loss
(523,746
(547,770
Net investment in direct financing leases
250,222
247,190
Other financing leases (net of allowance for credit loss)
171,462
810,580
Total investment in financing leases
The decrease in our investment in financing leases is primarily due to the re-leasing of six California properties formerly operated by Prospect, with a net book value of approximately $510 million, to NOR Healthcare Systems Corporation ("NOR") as a result of their successful bid to acquire the hospital operations. These six properties are now accounted for as operating leases as further discussed in this same Note 3.
Other Leasing Activities
At December 31, 2025, our vacant properties (excluding developments) represent less than 1% of total assets. We are in various stages of either re-leasing or selling these vacant properties.
Our tenants’ financial performance and resulting ability to satisfy their lease and loan obligations to us are material to our financial results and our ability to service our debt and make distributions to our stockholders. Our tenants operate in the healthcare industry, which is highly regulated, and changes in regulation (or delays in enacting regulation) may temporarily impact our tenants’ operations until they are able to make the appropriate adjustments to their business. In addition, our tenants may experience operational challenges from time-to-time as a result of many factors, including those external to them, such as cybersecurity attacks, public health crises, economic issues resulting in high inflation and spikes in labor costs, extreme or severe weather and climate-related events, and adverse market and political conditions. We monitor our tenants' operating results and the potential impact from these challenges. We may elect to provide support to our tenants from time-to-time in the form of short-term rent deferrals to be paid back in full, or in the form of temporary loans. See below for an update on some of our tenants.
Steward Health Care System
Steward filed for Chapter 11 bankruptcy on May 6, 2024 with the United States Bankruptcy Court for the Southern District of Texas. On September 18, 2024, the bankruptcy court approved a global settlement between Steward, its lenders, the unsecured creditors committee, and the Company. The order provided for the following: a) termination of our master lease with Steward; b) the release of claims against 23 of our properties allowing us to begin the process of re-tenanting these properties; and c) a full release of claims against us from all parties. In return, we consented to the sale of the operations and our real estate in three facilities in the Space Coast region of Florida (as discussed earlier), along with a full release of our claims in Steward including claims to past due rent and interest, outstanding loans, and our equity investment.
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In regard to our real estate partnership with Macquarie that owned and leased eight properties in Massachusetts to Steward, the bankruptcy court approved the termination of the master lease with Steward during the 2024 third quarter. We and Macquarie entered into an agreement with the mortgage lender of the joint venture to transition the eight properties to them along with cash proceeds of approximately $40 million (representing our share), in return for full payment of the underlying mortgage debt and a release of claims against each party.
With this global settlement and termination of the joint venture master lease, our relationship with Steward effectively ended.
Impairment Charges
Due to the events discussed above, we recorded various impairment charges during 2024 and 2023, which included the following (in millions):
Description
Income StatementClassification
Reserve for unpaid rent and interest and straight-line rent receivables
413
Working capital and other loans(1)
787
Real estate and otherimpairment charges, net
Investment in Massachusetts partnership(2)
445
Earnings (loss) fromequity interests
Real estate(2)
277
100
Equity investment and other(1)
171
1,563
714
In addition with the lease termination discussed above, we fully amortized the related in-place lease intangibles resulting in $149 million of amortization expense in 2024 as reflected in the real estate depreciation and amortization line of our consolidated statements of net income.
Re-tenanting Activity
Subsequent to the release of claims on the 23 properties as part of the global settlement, we reached definitive agreements with six operators (Healthcare Systems of America, Honor Health, Insight Health ("Insight"), Quorum, College Health, and Tenor Health ("Tenor")) to lease 18 of these facilities. These leases included a rent ramp up period. In the 2025 first quarter, cash rents received from these operators were approximately $3.4 million, ramping up to $11 million in the 2025 second quarter, approximately $12 million in the 2025 third quarter, and $26.1 million in the 2025 fourth quarter. Based on these lease contracts (adjusted for the sale of the two properties to College Health in 2025), rent payments are to increase to approximately 79% of contractual rent by second quarter 2026, and 100% of contractual rent starting October 2026. As of December 31, 2025, all of these new operators have paid the rent due under their respective leases, except for cash-basis tenants Insight/Tenor who represent less than 1% of our annual revenues.
As of December 31, 2025, we have provided approximately $140 million in working capital related loans to these operators to assist in the takeover of these operations and the transition of certain services (such as revenue cycle management). These loans are
generally secured by accounts receivables and/or other assets (like personal property). Our maximum loss exposure to these tenants at December 31, 2025 is the loan carrying value along with up to $30 million, which reflects the remaining amount available under the loans.
The remaining five former Steward properties (with a net book value of approximately 4% of our total assets), including two developments (see "Development and Capital Addition Activities" above), are in various stages of being re-tenanted or sold.
Other Activity
During 2024, we received and recorded rent and interest revenue from Steward of $40 million for the year ended December 31, 2024. In addition, we were benefited from rent paid by Steward to the Massachusetts joint venture of $76 million ($38 million representing our share) for the year ended December 31, 2024.
In August 2019, we invested in a portfolio of 14 acute care hospitals in three states (California, Pennsylvania, and Connecticut) operated by and master leased to or mortgaged by Prospect Medical Holdings, Inc. ("Prospect") for a combined investment of approximately $1.6 billion.
On May 23, 2023, Prospect completed a recapitalization plan, which included receiving $375 million in new financing from several lenders. Along with this new capital from third-party lenders, we agreed to the following restructuring of our then $1.7 billion investment including: a) maintaining the master lease covering six California hospitals without any changes in rental rates or escalator provisions, b) transitioning the Pennsylvania properties back to Prospect in return for a $150 million first lien mortgage, c) providing up to $75 million in a loan secured by a first lien on Prospect's accounts receivable and certain other assets, and d) obtaining a non-controlling ownership interest in PHP Holdings in exchange for unpaid rent and interest, among other things.
Prospect filed for Chapter 11 bankruptcy on January 11, 2025 with the United States Bankruptcy Court for the Northern District of Texas. On March 20, 2025, the bankruptcy court approved a global settlement (including a recovery waterfall) between us, Prospect, and other stakeholders. Due to the bankruptcy, we recorded more than $400 million of impairment charges and negative fair value adjustments associated with our investments in Prospect in the 2024 fourth quarter, resulting in a full reserve of the asset-backed loan and our Pennsylvania mortgage loan, along with a decrease in the value in our Connecticut properties. No charge was recorded on our California properties. In determining the impairment charges needed for these investments, we compared the carrying value of each investment to the fair value of the underlying collateral less costs to sell and factored in the priority of claims associated with the bankruptcy. In estimating the fair value of real estate, we, along with assistance from a third-party independent valuation firm, used a combination of cost, market, and income approaches using Level 3 inputs. The cost approach used comparable sales to value the land and cost manuals to value the improvements. The value derived from the market approach was based on sales prices of similar properties. For the income approach, we divided the expected operating income from the property by an estimated market capitalization rate (ranging from 8.25% to 8.5%).
In 2025 and in accordance with the global settlement and the estimated recovery waterfall, we recorded approximately $140 million of additional impairment charges. In determining the 2025 impairment charges, we compared the carrying value of our investments to our current estimate of expected proceeds (net of any possible future cash outlays) to be received under the bankruptcy court approved recovery waterfall, factoring in an estimated recovery of Prospect assets (including our real estate assets as applicable) and applying the priority of claims associated with the bankruptcy. In estimating the fair value of the California, Pennsylvania, and Connecticut real estate, we applied the same approach as discussed above for the 2024 impairment charges, except we used bids received for valuing the Pennsylvania and Connecticut properties in the third and fourth quarters of 2025.
At December 31, 2025, our investment in Prospect is approximately $61 million with recoveries limited to collection of Connecticut accounts receivable and minor proceeds from remaining asset sales. Prospect's bankruptcy proceedings are continuing, and the ultimate outcome of such proceedings is uncertain. At this time, we cannot assure you that we will be able to recover our remaining investment in full as of December 31, 2025.
Possible Additional Funding
In 2025, the bankruptcy court approved an order for up to $70 million in additional advances which we may be required to fund. This possible loan advance is conditioned on other events occurring including the sale of the last Connecticut facility and the bankruptcy plan becoming effective. Any funds advanced are expected to be secured by recoveries, if any, from causes of action owned by the debtor. At this time, we cannot predict with full certainty as to the amount or timing of such recoveries from these causes of action.
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In December 2025, we re-leased the six California properties to NOR as a result of their successful bid to acquire the hospital operations. Terms of the lease include an initial annualized rent almost identical to the previous rent amount due from Prospect in 2025, annual inflation-based escalators starting in the 2027 first quarter, and an initial fixed term of 15 years. All rent is to be deferred for six months, and 50% of rent is to be deferred for an additional six months, after which the aggregate deferred rent will be paid over the remaining lease term. We have committed to fund up to $60 million in seismic improvements that may be required by California regulators over the next four years, which will increase the lease base and result in additional rent.
PHP Investment
In regard to our investment in PHP Holdings, we accounted for this investment using the fair value option method. Each quarter, we marked such investment to fair value as more fully described in Note 10 to the consolidated financial statements. In 2025, we recorded an approximate $147 million negative fair value adjustment, whereas this adjustment was approximately $550 million in 2024. The adjustment in 2025 was made based on changes to the purchase agreement between PHP Holdings and Astrana Health and updates to PHP Holdings' working capital position. On July 1, 2025, we received $2.3 million from the sale of PHP Holdings to Astrana Health.
International Joint Venture
We placed our loan to the international joint venture on the cash basis of accounting in 2023, as we determined that it was no longer probable that the borrower would pay its future interest in full. This loan, accounted for under the fair value option method, was collateralized by the equity of Steward held by an investor in both Steward and the international joint venture. Consistent with the discussion above on non-real estate investments in Steward, we recorded a $225 million unfavorable fair value adjustment in the 2024 first quarter to fully reserve for the loan and related equity investment. These investments, which are included in “Investments in unconsolidated operating entities” on our consolidated balance sheets, were adjusted for after comparing our carrying value to an updated fair value analysis of the underlying collateral, with assistance from a third-party, independent valuation firm.
CommonSpirit
On May 1, 2023, Catholic Health Initiatives Colorado ("CHIC"), a wholly owned subsidiary of CommonSpirit, acquired the Utah hospital operations of five general acute care facilities previously operated by Steward. The new lease, at the time, for these Utah assets had an initial fixed term of 15 years with annual escalation provisions. As part of this transaction, we severed these facilities from the master lease with Steward, and accordingly accelerated the amortization of the associated in-place lease intangibles (approximately $286 million) and wrote-off approximately $95 million of straight-line rent receivables related to the former lease. As described earlier, these five properties make up the Utah Transaction.
Vibra
In the 2023 third quarter, we moved to cash basis of accounting for Vibra due to declines in operating results. As a result, we recorded a $49 million charge to reserve billed and straight-line rent receivables. During the 2024 third quarter, we terminated the lease with this tenant, resulting in the acceleration of lease intangible amortization of $22 million. On December 31, 2024, we entered into a forbearance and restructuring agreement with the former tenant, which was later amended. The substantive terms of the forbearance and restructuring agreement included, among other things, the repayment of $10 million of unpaid rent in cash, which we received on December 31, 2024 and recognized as revenue; Vibra's acquisition of certain of our facilities, one of which closed in early January 2025 for approximately $3 million (and we received payment in full); and entering into a new lease agreement.
In the 2025 fourth quarter, we completed the restructuring of our relationship with Vibra including entering into a new 20-year master lease agreement with annual inflation escalators covering several properties; the acquisition by us of one post-acute property for $32 million that was joined to the master lease with Vibra; the transition of one post-acute property with a net book value of approximately $53 million to a new tenant (joint venture with Select Medical) that is subject to a 20-year master lease agreement with annual inflation escalators; the cash receipt of approximately $18 million for past rent obligations that we recognized as revenue; and the sale of one post-acute property to Vibra for $12 million at a small gain in February 2026, proceeds of which we had previously received in advance of such sale. We are continuing to account for revenue associated from Vibra on a cash basis at this time.
Investments in Unconsolidated Entities
Investments in Unconsolidated Real Estate Joint Ventures
Our primary business strategy is to acquire real estate and lease to providers of healthcare services. Typically, we directly own 100% of such investments. However, from time-to-time, we will co-invest with other investors that share a similar view that hospital
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real estate is a necessary infrastructure-type asset in communities. In these types of investments, we will own undivided interests of less than 100% of the real estate through unconsolidated real estate joint ventures. The underlying real estate and leases in these unconsolidated real estate joint ventures are generally structured similarly and carry a similar risk profile to the rest of our real estate portfolio.
The following is a summary of our investments in unconsolidated real estate joint ventures by operator (amounts in thousands):
Operator
Ownership Percentage
70%
611,347
483,770
MEDIAN
50%
486,695
431,964
CommonSpirit (Utah partnership)
25%
162,278
113,202
Policlinico di Monza
77,592
HM Hospitales
45%
53,366
49,869
The increase in the Swiss Medical Network real estate joint venture is due to the new investment made in 2025 as described earlier in this same Note 3 along with the impact from foreign currency changes.
For our unconsolidated real estate joint venture that leases more than 70 healthcare facilities to MEDIAN, we, along with our joint venture partner, finalized a refinancing of the €655 million secured debt on June 17, 2025, that was due on June 30, 2025. The new €702.5 million non-recourse, 10-year non-amortizing secured debt has an approximately 5.1% fixed rate, and the majority of the proceeds were used to fund the repayment of the prior €655 million secured loan that carried a lower rate. In the 2025 third quarter, Germany enacted legislation that will reduce future income tax rates by 5%, which resulted in a $13 million (our share) deferred income tax benefit in the period.
The Utah partnership applies specialized accounting and reporting for investment companies under Topic 946, which measures the underlying investments at fair value. For the year ended December 31, 2025, our share of the Utah partnership's income included a favorable fair value adjustment of approximately $49 million, primarily related to an unrealized gain on investments in real estate.
For 2025 and 2024, we received $62 million and $45 million, respectively, in dividends from these real estate joint ventures.
The following tables present summary financial information on a combined basis for our investments in unconsolidated real estate joint ventures (amounts in thousands):
For the Year Ended December 31,
Revenue
357,823
348,404
315,108
Net income (loss)
313,593
(739,393
14,701
As of December 31,
5,614,938
4,872,918
2,831,599
2,599,078
The summary above by year reflects the financial information of all five of our current investments, except for the Utah Partnership that was formed in April 2024 with reporting starting in the 2024 third quarter. In addition, we have included financial information for the Macquarie partnership in 2023 and through the 2024 second quarter - see discussion under "Leasing Operations (Lessor)" in this same Note 3 for more details on this investment and its conclusion.
Investments in Unconsolidated Operating Entities
Our investments in unconsolidated operating entities are noncontrolling investments that are typically made in conjunction with larger real estate transactions in which the operators are vetted as part of our overall underwriting process. In many cases, we would
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not be able to acquire the larger real estate portfolio without such investments in operators. These investments also offer the opportunity to enhance our overall return and provide for certain minority rights and protections.
The following is a summary of our investments in unconsolidated operating entities (amounts in thousands):
As of December 31,2024
197,497
172,453
Aevis Victoria SA ("Aevis")
64,859
63,409
43,913
38,739
Aspris Children's Services ("Aspris")
15,910
15,950
PHP Holdings
149,027
For our investments marked to fair value (including our investments in PHP Holdings (through the 2025 third quarter), Aevis, and the international joint venture), we recorded approximately $154 million of unfavorable non-cash fair value adjustments during 2025; whereas, this was an approximately $794 million of unfavorable non-cash fair value adjustments during 2024. The amount recorded in 2025 and included in "Other (including fair value adjustments on securities)" line of our consolidated statements of net income was primarily related to our investment in PHP Holdings, which was sold on July 1, 2025. The amount recorded in 2024 includes an approximate $550 million unfavorable fair market value adjustment to our investment in PHP Holdings - see "Prospect" subheading of this Note 3 for more information. In addition, we recorded a $225 million unfavorable fair value adjustment in the 2024 first quarter related to our international joint venture investments as described in Note 3 and included in the "Real estate and other impairment charges, net" line of the consolidated statements of net income.
In the first quarter of 2024, we sold our interest in the Priory syndicated term loan for £90 million (approximately $115 million), resulting in an approximate £6 million ($7.8 million) economic loss.
Other Investment Activities
In the third quarter of 2023, we invested approximately $105 million for a participation in Steward's syndicated asset-backed credit facility, and we loaned an additional $40 million. On August 17, 2023, we sold the $105 million interest to a global asset manager for approximately $100 million, and Steward paid approximately $2 million on November 3, 2023. The remainder was written off as part of the loan impairment charge in 2024 as discussed in the "Leasing Operations (Lessor)" section of this same Note 3.
In the second quarter of 2023, we received repayment of the CHF 60 million mortgage loan from Infracore that was originally made in the fourth quarter of 2022.
Concentrations of Credit Risks
We monitor concentration risk in several ways due to the nature of our real estate assets that are vital to the communities in which they are located and given our history of being able to replace inefficient operators of our facilities, if needed, with more effective operators. See below for our concentration details (dollars in thousands):
Total Assets by Operator
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Total Assets by U.S. State and Country (1)
U.S. States and Other Countries
9.5
1,394,296
9.8
6.5
935,470
5.6
840,876
5.9
327,577
379,801
2.7
All other states
2,480,182
16.5
2,636,587
18.5
Other domestic assets
7.2
951,486
6.6
Total U.S.
49.7
7,466,093
52.2
27.9
3,985,672
5.0
672,343
4.7
2.0
247,996
1.7
199,721
All other countries
283,916
1.9
264,747
Other international assets
6.2
738,390
Total international
50.3
6,828,501
47.8
Grand total
Total Assets by Facility Type (1)
Facility Types
8,769,909
58.5
8,493,331
59.4
2,445,418
16.3
2,376,460
16.7
1,671,616
11.1
1,617,596
11.3
Freestanding ER/urgent care facilities
109,271
0.7
117,331
0.8
On an individual property basis, our largest investment in any single property was less than 2% of our total assets as of December 31, 2025.
On a revenue basis, concentration for the year ended December 31, 2025 as compared to the two prior years is as follows:
The following shows those tenants that represented 10% or more of our total revenues by year (in thousands):
Total Revenues
Percentage ofTotal Revenues
212,719
21.9
105,986
10.9
205,582
20.7
101,675
10.2
97
194,390
22.3
107,557
12.3
Total Revenues by Geographic Location
Geographic Location
53.3
561,673
56.4
407,329
46.7
38.4
359,991
36.2
352,594
40.4
80,865
73,883
7.4
111,876
12.9
Total Revenues by Facility Type
586,648
60.3
628,622
63.1
541,888
62.2
214,437
22.1
209,668
21.1
213,292
24.5
162,954
16.8
139,859
14.0
92,787
10.6
7,983
17,398
1.8
23,832
Related Party Transactions
Revenues earned from tenants and real estate joint ventures in which we had an equity interest (accounted for under either the equity or fair value option methods) during the year were $23.7 million, $33.9 million, and $83.0 million for 2025, 2024, and 2023, respectively.
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4. Debt
The following is a summary of debt (dollar amounts in thousands):
Secured revolving credit facility(A)
638,063
361,726
Secured term loan
200,000
British pound sterling term loan due 2025(B)
617,039
British pound sterling secured term loan due 2034(B)
850,784
790,234
3.325% Senior Unsecured Notes due 2025(B)
517,700
0.993% Senior Unsecured Notes due 2026(B)
587,300
2.500% Senior Unsecured Notes due 2026(B)
625,800
5.250% Senior Unsecured Notes due 2026
500,000
5.000% Senior Unsecured Notes due 2027
1,400,000
3.692% Senior Unsecured Notes due 2028(B)
808,500
750,960
4.625% Senior Unsecured Notes due 2029
900,000
3.375% Senior Unsecured Notes due 2030(B)
471,625
438,060
3.500% Senior Unsecured Notes due 2031
1,300,000
7.000% Senior Secured Notes due 2032(B)
1,174,600
8.500% Senior Secured Notes due 2032
1,500,000
9,830,872
8,919,219
Debt issue costs and discount, net
(133,037
(71,107
As of December 31, 2025, principal payments due on our debt (which exclude the effects of any discounts, premiums, or debt issue costs recorded) are as follows (amounts in thousands):
1,225,363
(1)
1,600,000
4,825,384
British Pound Sterling Term Loan due 2025
On January 15, 2025, we paid off the remaining £493 million balance of our British pound sterling term loan due 2025. With this payoff, we also terminated the sterling-denominated term loan interest rate swap.
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Senior Secured Notes due 2032
On February 13, 2025, we closed on a private offering that consisted of $1.5 billion aggregate principal amount of senior secured notes due 2032 (the "USD Notes") and €1.0 billion aggregate principal amount of senior secured notes due 2032 (the "Euro Notes"). See section titled "Senior Notes" for a description of interest rates and maturity for both notes. We may redeem some or all of the notes at any time prior to February 15, 2028, at a redemption price equal to 100% of the principal amount, plus an applicable “make whole” premium and accrued and unpaid interest. On or after February 15, 2028, we may redeem some or all of the notes at a premium that will decrease over time. In addition, at any time prior to February 15, 2028, we may redeem up to 40% of the notes at a redemption price equal to 108.500% and 107.000% for the USD Notes and Euro Notes, respectively, of the aggregate principal amount thereof, plus accrued and unpaid interest thereon, using proceeds from one or more equity offerings.
We used the net proceeds from the notes to fund the early redemption of our 3.325% Senior Unsecured Notes due 2025, 2.500% Senior Unsecured Notes due 2026, and 5.250% Senior Unsecured Notes due 2026. We used the remaining net proceeds to pay down the revolving portion of our Credit Facility.
During 2024, we closed on a term loan with an aggregate principal amount of approximately £631 million (approximately $800 million) secured by a portfolio of properties in the U.K. We used the majority of the net proceeds of the facility to pay down our revolving credit facility by $375 million and British pound sterling term loan due 2025 by £105 million, and to pay off our British pound sterling secured term loan due 2024 (approximately £105 million). During the year, we also paid down an additional $756 million on our revolving credit facility and £102 million on our British pound sterling term loan due 2025 with cash proceeds from asset sales. In addition, on April 18, 2024, we paid off and terminated the remainder of the A$470 million (approximately $306 million) Australian term loan facility with proceeds from the Utah Transaction described in Note 3.
During 2023, we paid down, prior to maturity, A$730 million (approximately $475 million) of the A$1.2 billion Australian term loan with proceeds from the Australia Transaction as discussed in Note 3. In addition, we purchased approximately £50 million of our 2.550% Senior Unsecured Notes due 2023 at a discounted price and yield averaging approximately 13%. As a result of this prepayment, we realized an approximate $1.1 million gain. On December 5, 2023, we fully paid off the remaining £350 million balance of our 2.550% Senior Unsecured Notes due 2023 with cash on-hand and proceeds from the revolving portion of our credit facility.
Credit Facility
We have a multi-currency denominated revolver and a $200 million term loan that make up our Credit Facility (the "Credit Facility"). Our maximum borrowings under the revolving portion of the Credit Facility is $1.28 billion.
At December 31, 2025 and 2024, we had $0.6 billion and $0.4 billion outstanding on the revolving portion of our Credit Facility, respectively. At December 31, 2025 and 2024, our availability under our revolver was $0.7 billion and $0.9 billion, respectively. The weighted-average interest rate on the revolver was 5.5% and 6.6% during 2025 and 2024, respectively.
At December 31, 2025 and 2024, the interest rate in effect on our term loan was 6.1% and 7.5%, respectively.
On February 13, 2025 and concurrent with the closing of the Senior Secured Notes due 2032 discussed above, we amended the Credit Facility to among other things: (i) provide for the facility to be secured and guaranteed ratably with the senior notes issued concurrently, (ii) provide notice that we plan to exercise both of our maturity extension options such that the maturity of the revolving portion would move from June 30, 2026 to June 30, 2027, the same maturity date as our term loan facility (subject to the satisfaction of other conditions), (iii) reset the interest rate to the Secured Overnight Financing Rate ("SOFR") plus 225 basis points (which had previously been moved to SOFR plus 300 basis points in August 2024), and (iv) amend certain covenants as described under "Covenants and Restrictions" in this same Note 4.
In regard to the maturity of the revolving portion of our Credit Facility, we have two 6-month extension options available to move the maturity from June 30, 2026 to June 30, 2027. Although the extension options are at our election (and as noted above, we have given notice of our intention to exercise both extension options), there are certain conditions that must be satisfied, with the primary condition of not being in default at the time of each extension option date (and believe we will meet all conditions to do so).
Prior to the 2024 amendments described below and at our election, loans were made as either alternate base rate loans ("ABR Loans") or loans for an interest period of either one, three, or six months ("Term Benchmark Loans"). The applicable margin for term
loans that were ABR Loans was adjustable on a sliding scale from 0.00% to 0.70% based on current credit rating. The applicable margin for term loans that were Term Benchmark Loans was adjustable on a sliding scale from 0.875% to 1.70% based on current credit rating. The applicable margin for revolving loans that were ABR Loans was adjustable on a sliding scale from 0.00% to 0.50% based on current credit rating. The applicable margin for revolving loans that were Term Benchmark Loans or risk-free rate loans ("RFR Loans"), as defined in the Credit Facility agreement, was adjustable on a sliding scale from 0.80% to 1.50% based on current credit rating. The facility fee was adjustable on a sliding scale from 0.125% to 0.30% based on current credit rating and was payable on the revolving loan facility. During 2023, our credit rating negatively changed, resulting in adjustments to the applicable margin by 0.375% and an increase to the facility fee from 0.25% to 0.30%.
On April 12, 2024, we amended our Credit Facility and certain other agreements to (i) reduce revolving commitments from $1.8 billion to $1.4 billion, (ii) apply certain proceeds from asset sales and debt transactions to repay the Australian term loan facility and certain other outstanding obligations, including revolving loans under the Credit Facility to the extent necessary to reduce the outstanding borrowings to no more than the amended $1.4 billion commitment, and (iii) amend or waive certain covenants to our Credit Facility and British pound sterling term loan due 2025 as described under "Covenants and Restrictions" in this same Note 4.
On August 6, 2024, we amended the Credit Facility and the British pound sterling term loan due 2025 to (i) further reduce revolving commitments in the Credit Facility from $1.4 billion to $1.28 billion, (ii) increase borrowing spreads to 300 basis points during the Modified Covenant Period (defined in "Covenants" section in this same Note 4) and then to 225 basis points after the Modified Covenant Period, (iii) require that proceeds of certain future asset sales and debt transactions (during the Modified Covenant Period) be applied to repay certain outstanding obligations, including our revolving loans (by 15% of such proceeds but for which the revolving loans can be reborrowed) and our British pound sterling term loan due 2025 (by 50% of such proceeds), and (iv) amend or waive certain covenants as described under "Covenants and Restrictions" in this same Note 4.
Non-U.S. Term Loans
British Pound Sterling Secured Term Loan due 2034
On May 24, 2024, we completed a secured loan facility with a consortium of institutional investors that provides for a term loan in aggregate principal amount of approximately £631 million (approximately $800 million) secured by a portfolio of 27 properties located in the U.K. currently leased to affiliates of Circle. The facility carries a fixed rate of 6.877% over its 10-year term, excluding fees and expenses, and is interest-only (payable quarterly in advance) through the maturity date. The facility is secured by first priority mortgages or similar security instruments on the relevant properties, including assignments of rents and security over accounts, and is non-recourse to us.
On January 6, 2020, we entered into a £700 million unsecured sterling-denominated term loan with Bank of America, N.A., as administrative agent, and several lenders from time-to-time are parties thereto. The applicable margin under the term loan was adjustable based on a pricing grid from 0.85% to 1.65% dependent on our credit rating. On March 4, 2020, we entered into an interest rate swap transaction (effective March 6, 2020) to fix the interest rate to approximately 0.70% for the duration of the loan. The applicable margin for the pricing grid (which varied based on our credit rating) increased from 1.25% to 1.65% on March 10, 2023 with the change in our credit rating, for an all-in fixed rate at December 31, 2023 of 2.349%. With the August 6, 2024 amendment discussed above, our all-in fixed rate increased to 3.70%.
As noted earlier, we paid down the British pound sterling secured term loan due 2025 by £207 million in 2024 with proceeds from the British pound sterling secured term due 2034 and asset sales. The balance of this loan of £493 million was paid in full on January 15, 2025.
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Senior Notes
The following are the basic terms of our senior notes at December 31, 2025 (par value amounts in thousands):
OfferingCompletion Date
Maturity Date
Par Value
% of ParValue
Interest Payment Frequency
0.993% Senior Unsecured Notes due 2026
October 6, 2021
October 15, 2026
€
100.000
Annually
September 21, 2017
October 15, 2027
Semi-annually
3.692% Senior Unsecured Notes due 2028
December 5, 2019
June 5, 2028
£
600,000
99.998
July 26, 2019
August 1, 2029
99.500
3.375% Senior Unsecured Notes due 2030
March 24, 2021
April 24, 2030
350,000
99.448
December 4, 2020
March 15, 2031
7.000% Senior Secured Notes due 2032
February 15, 2032
1,000,000
98.645
98.710
We may repurchase, redeem, or refinance senior notes from time-to-time. We may purchase senior notes for cash through open market purchases, privately negotiated transactions, or a tender offer. In some cases, we may redeem some or all of the notes at any time, but may require a redemption premium that will decrease over time. In the event of a change of control, each holder of the notes may require us to repurchase some or all of our notes at a repurchase price equal to 101% of the aggregate principal amount of the notes plus accrued and unpaid interest to the date of purchase. Redemptions and repurchases of debt, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors.
In regard to the 0.993% Senior Unsecured Notes due 2026, management plans to repay these notes in full closer to the maturity date using a combination of available cash and borrowings under the revolving portion of our Credit Facility.
Debt Refinancing and Unutilized Financing Costs (Benefit)
In 2025, we incurred $3.6 million of debt refinancing and unutilized financing costs. These costs were incurred primarily as a result of the early redemption of our 3.325% Senior Unsecured Notes due 2025, 2.500% Senior Unsecured Notes due 2026, and 5.250% Senior Unsecured Notes due 2026.
In 2024, we incurred $4.3 million of debt refinancing and unutilized financing costs. These costs were incurred primarily as a result of the reduction in revolving commitments under our Credit Facility and partial paydowns of our British pound sterling term loan due 2025.
As a result of the early redemption of a portion of the Australian term loan, we incurred approximately $0.8 million to accelerate the amortization of related debt issue costs in 2023. This charge was more than offset by the $1.1 million gain realized on the purchase of approximately £50 million of our 2.550% Senior Unsecured Notes due 2023 at a discount in 2023.
Covenants and Restrictions
Our debt facilities impose certain restrictions on us, including, but not limited to, restrictions on our ability to: incur debts; create or incur liens; provide guarantees in respect of obligations of any other entity; make redemptions and repurchases of our capital stock; prepay, redeem, or repurchase debt; engage in mergers or consolidations; enter into affiliated transactions; dispose of real estate or other assets; and change our business. In addition, the credit agreement governing our Credit Facility limits the amount of dividends we can pay as a percentage of normalized adjusted funds from operations (“NAFFO”), as defined in the agreements, on a rolling four quarter basis to 95% of NAFFO. The indentures governing our senior notes also limit the amount of dividends we can pay based on the sum of 95% of NAFFO, proceeds of equity issuances, and certain other net cash proceeds. Finally, our senior notes require us to maintain total unencumbered assets (as defined in the related indenture) of not less than 150% of our unsecured indebtedness.
In addition to these restrictions, the Credit Facility contains customary financial and operating covenants, including covenants relating to our total leverage ratio, fixed charge coverage ratio, secured leverage ratio, consolidated adjusted net worth, unsecured leverage ratio, and unsecured interest coverage ratio. On April 12, 2024, the Credit Facility was amended to waive the 10% cap on
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unencumbered asset value attributable to tenants subject to a bankruptcy event for purposes of determining compliance with the unsecured leverage ratio for the trailing four fiscal quarter period ended June 30, 2024.
On August 6, 2024, we entered into an amendment to the Credit Facility to increase the maximum total leverage ratio covenant from 60% to 65% and the maximum unsecured leverage ratio covenant from 65% to 70% and to decrease the minimum unsecured interest coverage ratio from 1.75:1.00 to 1.45:1.00. The amendment was effective as of June 30, 2024 and was to continue in effect through and including September 30, 2025 (the “Modified Covenant Period”) at which point the credit agreement provided that covenants would automatically reset to their prior levels. In addition, the amendment permanently reduced the minimum consolidated adjusted net worth covenant from approximately $6.7 billion to $5 billion, in each case plus the sum of certain equity proceeds. The amendment also limited the payment of dividends in cash during the Modified Covenant Period to $0.08 per share in any fiscal quarter, but the amendment did not provide any additional restrictions on the payment of dividends outside of the Modified Covenant Period.
On February 13, 2025 and concurrent with the closing of our private notes offering discussed previously, we further amended the Credit Facility and (i) removed the Modified Covenant Period and any restrictions related thereto from the existing Credit Facility, (ii) permanently removed financial covenants regarding minimum consolidated tangible net worth, maximum unsecured indebtedness to unencumbered asset value, and minimum unsecured net operating income to unsecured interest expense, (iii) amended certain definitions used in the financial covenant regarding maximum total indebtedness to total asset value to conform to corresponding definitions in our existing unsecured indentures and the secured notes issued concurrently and set the covenant level at 60%, (iv) set the maximum secured leverage ratio at 40%, and added mandatory prepayments of senior debt or addition of additional collateral in connection with any failure to (x) maintain a 65% maximum ratio of secured first lien debt to the undepreciated real estate value of the secured pool properties or (y) maintain a minimum senior secured debt service coverage ratio of 1.15:1.00 (which increases to 1.30:1.00 starting in March 2026).
In addition to the covenants and restrictions discussed above, our Credit Facility contains customary events of default, including among others, nonpayment of principal or interest, material inaccuracy of representations, and failure to comply with our covenants. If an event of default occurs and is continuing under the Credit Facility, the entire outstanding balance may become immediately due and payable. At December 31, 2025, we were in compliance with all financial and operating covenants.
5. Income Taxes
We have maintained and intend to maintain our election as a U.S. REIT under the Code. To qualify as a REIT, we must meet a number of organizational and operational requirements, including a requirement to distribute at least 90% of our REIT taxable income to our stockholders. As a REIT, we generally will not be subject to U.S. federal income tax if we distribute 100% of our REIT taxable income to our stockholders and satisfy certain other requirements; instead, income tax is paid directly by our stockholders on the dividends distributed to them. If our REIT taxable income exceeds our dividends in a tax year, REIT tax rules allow us to designate dividends from the subsequent tax year in order to avoid current taxation on undistributed income. If we fail to qualify as a REIT in any taxable year, we will be subject to federal income taxes at regular corporate rates. Taxable income from non-REIT activities managed through our TRS entities is subject to applicable U.S. federal, state, and local income taxes. Our international subsidiaries are also subject to income or withholding taxes in the jurisdictions in which they operate.
Income Tax (Expense) Benefit
From our TRS entities and our foreign operations, income tax (expense) benefit were as follows (in thousands):
Current income tax (expense) benefit:
Domestic
477
(7,756
Foreign
(27,987
(31,589
(24,257
(31,112
(32,013
Deferred income tax (expense) benefit:
(465
8,926
(10,631
(12,524
153,766
(12,989
162,692
103
A reconciliation of income tax (expense) benefit from the statutory income tax rate to the effective tax rate based on our loss before income taxes for the years ended December 31, 2025, 2024, and 2023 is as follows (in thousands):
2025*
Amount
Percent
Income tax benefit at the U.S. statutory federal rate
49,837
21.0
496,479
144,222
State and local income tax, net of federal income tax effect
1,275
Foreign tax effects:
U.K.:
Statutory tax rate difference between U.K. and U.S.
4,193
Changes in valuation allowances
(10,222
(4.3
Tax impact of U.K. REIT conversion
160,641
1,227
0.5
Colombia:
Statutory tax rate difference between Colombia and U.S.
3,826
1.6
(9,954
(4.2
(1,713
(0.7
Other foreign jurisdictions
(3,210
(1.4
Foreign rate differential
4,888
(4,122
Interest disallowance
(2,965
(3,421
(46,033
(19.4
(301,468
(45,692
Nontaxable or nondeductible items:
U.S. earnings not subject to federal income tax
(26,569
(11.2
(227,080
(115,189
(13,955
(7,035
Total income tax (expense) benefit/effective tax rate
(16.3
*Above is a reconciliation of the U.S. federal statutory income tax rate to our effective tax rate pursuant to the disclosure requirements of ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" ("ASU 2023-09"), for the year ended December 31, 2025. As allowed by ASU 2023-09, the 2024 and 2023 columns have not been restated to conform to the 2025 presentation.
The foreign provision for income taxes is based on foreign profit before income taxes of $108.4 million, $127.9 million, and $6.3 million in 2025, 2024, and 2023, respectively.
The domestic provision for income taxes is based on loss before income taxes of $(219.2) million in 2025, $(1.4) billion in 2024, and $(144.5) million in 2023 from our TRS entities.
Income Taxes Paid
The amounts of cash taxes we paid (net of refunds) are as follows (in thousands):
Year Ended December 31,
Federal
(426
State
20,884
20,521
104
Deferred Income Taxes
At December 31, 2025 and 2024, components of our deferred tax assets and liabilities were as follows (in thousands):
Deferred tax assets:
Operating loss and interest deduction carryforwards
334,501
263,523
Depreciation
70,051
56,089
Partnership investments
143,695
112,892
Impairment and other loss reserves
66,969
101,834
10,263
8,500
Total deferred tax assets
625,479
542,838
Valuation allowance
(489,604
(418,659
Total net deferred tax assets
135,875
124,179
Deferred tax liabilities:
Property and equipment
(149,602
(145,835
Net unbilled revenue
(106,088
(82,170
(26,885
(21,445
(4,102
(3,450
Total deferred tax liabilities
(286,677
(252,900
Net deferred tax asset (liability)
(150,802
(128,721
At December 31, 2025, we had net operating losses ("NOL") and other tax attribute carryforwards as follows (in thousands):
Gross NOL carryforwards
929,887
569,760
Tax-effected carryforwards and other attributes
197,555
129,821
(197,555
(17,462
Net deferred tax asset - carryforwards and other attributes
112,359
Expiration periods
2034-indefinite
indefinite
Valuation Allowance
A valuation allowance has been recorded on certain foreign and domestic net operating loss carryforwards and other net deferred tax assets that may not be realized. As of each reporting date, we consider all new evidence that could impact the future realization of our deferred tax assets. In the evaluation of the need for a valuation allowance on our deferred income tax assets, we consider all available positive and negative evidence, including scheduled reversals of deferred income tax liabilities, carryback of future period losses to prior periods, projected future taxable income, tax planning strategies, and recent financial performance.
During 2025, an additional valuation allowance of $70.9 million has been recorded against a portion of our deferred tax assets to recognize only the components of the deferred tax assets that is more likely than not to be realized. The valuation allowance was primarily recorded against deferred tax assets for NOLs, non-depreciable basis of real property, and other tax attributes that we believe will not be realized. Valuation allowance activity recorded generally follows the activity of the associated deferred tax asset that is not expected to be recognized. From time-to-time, we may acquire deferred tax assets as part of real estate transactions and will assess the need for a valuation allowance as part of the opening balance sheet. Additionally, valuation allowances will be remeasured for foreign currency translation fluctuations through other comprehensive income.
Given the global nature of our business, we are currently and have in the past been subject to tax audits as part of normal course. However, at December 31, 2025, we have no material uncertain tax position liabilities and/or related interest or penalties.
REIT Status
We have met the annual U.S. REIT distribution requirements by payment of at least 90% of our REIT taxable income in 2025, 2024, and 2023. Earnings and profits, which determine the taxability of such distributions, will differ from net income reported for financial reporting purposes due primarily to differences in cost basis, differences in the estimated useful lives used to compute depreciation, and differences between the allocation of our net income and loss for financial reporting purposes and for tax reporting purposes.
A schedule of per share distributions we paid and reported to our stockholders is set forth in the following:
Per share:
Ordinary dividend (1)
1.0639
Long-term capital gain (2)
0.1061
Return of capital
0.3200
0.3800
(3)
1.1700
Similar to our U.S. REIT, we have met all requirements of our U.K. REIT as of December 31, 2025.
As a partnership, the allocated share of income of the Operating Partnership is included in the income tax returns of the general and limited partners. Accordingly, no accounting for income taxes is generally required for such income of the Operating Partnership. However, the Operating Partnership has formed TRS entities on behalf of Medical Properties Trust, Inc., which are subject to U.S. federal, state, and local income taxes at regular corporate rates, and its international subsidiaries are subject to income taxes in the jurisdictions in which they operate. See discussion above under Medical Properties Trust, Inc. for more details of income taxes associated with our TRS entities and international operations.
6. Earnings Per Share/Unit
Our earnings per share were calculated based on the following (in thousands):
Numerator:
Non-controlling interests’ share in earnings
(1,644
(558,120
Denominator:
Basic weighted-average common shares
Dilutive potential common shares(1)
Diluted weighted-average common shares
106
Our earnings per unit were calculated based on the following (in thousands):
Basic weighted-average units
Dilutive potential units(1)
Diluted weighted-average units
7. Stock Awards
Stock Awards
During the second quarter of 2022, we amended the 2019 Equity Incentive Plan (the "Equity Incentive Plan"), which authorizes the issuance of common stock options, restricted stock, RSUs, deferred stock units, stock appreciation rights, performance units, and awards of interests in our Operating Partnership. Our Equity Incentive Plan is administered by the Compensation Committee of the Board of Directors, and we have reserved 28.9 million shares of common stock for awards, of which 8.0 million shares remain available for future stock awards as of December 31, 2025. The Equity Incentive Plan contains a limit of 5 million shares as the maximum number of shares of common stock that may be awarded to an individual in any fiscal year. Awards under the Equity Incentive Plan are subject to forfeiture due to termination of employment prior to vesting and/or from not achieving the respective performance/market conditions. In the event of a change in control, outstanding and unvested options will immediately vest, unless otherwise provided in the participant’s award or employment agreement, and restricted stock, restricted stock units, deferred stock units, and other stock-based awards will vest if so provided in the participant’s award agreement. The term of the awards is set by the Compensation Committee, though Incentive Stock Options may not have terms of more than ten years. Forfeited awards (along with shares withheld for payroll tax withholding purposes) are returned to the Equity Incentive Plan and are then available to be re-issued as future awards. For each share of common stock issued by Medical Properties Trust, Inc. pursuant to its Equity Incentive Plan, the Operating Partnership issues a corresponding number of Operating Partnership units.
For the past three years, we have only granted restricted stock and RSUs pursuant to our Equity Incentive Plan. These awards have been granted in the form of service-based awards, performance awards based on company-specific performance hurdles, and market-based awards. See below for further details on each of these awards:
Service-Based Awards
In 2025, 2024, and 2023, the Compensation Committee granted service-based awards to employees and non-employee directors. Service-based awards vest as the employee/director provides the required service (typically over three years). Dividends are generally paid on these awards prior to vesting.
Performance-Based Awards
In 2023, the Compensation Committee granted performance-based awards to employees. Generally, dividends are not paid on performance awards until the award is earned. See below for details of our 2023 performance-based award grants.
In 2023, a target number of stock awards were granted to employees that could be earned based on the achievement of specific performance thresholds as set by our Compensation Committee. The performance thresholds were based on a three-year period with the opportunity to earn a portion of the award earlier. More or less shares than the target number of shares were available to be earned based on our performance compared to the set thresholds. At the end of each of the performance periods, any earned shares during such period vested on January 1 of the following calendar year. The performance thresholds were based on strategic transactions
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(including new investments and proceeds from individual property disposals and larger asset disposals through joint venture transactions) and EBITDA.
Certain performance awards granted were subject to a modifier which increases or decreases the actual shares earned in each performance period. The modifier for the 2023 awards was based on two components: 1) how our total shareholder return (“TSR”) compared to the Dow Jones U.S. Real Estate Health Care Index and 2) how our TSR compared to a threshold set by the Compensation Committee.
The three-year performance period for these awards ended in 2025 and resulted in a $10.9 million reduction of expense as less shares were earned than our previous estimate.
Market-Based Awards
In 2025, 2024, and 2023, the Compensation Committee granted market-based awards to employees. Generally, dividends are not paid on market-based awards until the award is earned. See details below of such market-based award grants.
On September 24, 2025, a target number of market-based restricted stock awards were granted to employees other than the Company’s Chief Executive Officer and Chief Financial Officer. These shares will be earned at the target level only if the Company’s total shareholder return reaches 20%, with the opportunity to earn up to three times target if the Company’s total shareholder return reaches higher hurdles during the three-year period ending April 14, 2028. The actual number of shares to be earned pursuant to these awards will be determined based on a total shareholder return achieved by a trailing 20-trading day average closing price of the Company’s common stock, assuming contemporaneous reinvestment in such common stock of all dividends and other distributions. The baseline price of common stock used in determining total shareholder return is $5.44. Earned shares will vest in equal quarterly installments over one year following the date that the Compensation Committee makes a determination of achievement of the performance metrics, subject to the grantee’s continued employment through such date, provided that all unvested earned shares will vest in full following the end of the performance period.
On April 15, 2025, the Compensation Committee granted 621,061 market-based RSUs to the Company’s Chief Executive Officer and Chief Financial Officer at the target level of achievement. The RSUs may be settled only in cash, and the cash payment will be calculated based on the average closing price of the Company’s common stock on the five trading days ending on the vesting date. The RSUs are earned at the target level if the Company’s total shareholder return reaches 20%, with the opportunity to earn up to three times target if the Company’s total shareholder return reaches higher hurdles during the three-year period ending on April 14, 2028. The actual number of RSUs to be earned pursuant to these awards will be determined based on a total shareholder return achieved by a trailing 20-trading day average closing price of the Company’s common stock, assuming contemporaneous reinvestment in such common stock of all dividends and other distributions. The baseline price of common stock used in determining total shareholder return is the closing price of the common stock on April 15, 2025, of $5.44. Earned RSUs will become vested on the earlier of equal quarterly installments over the first year from the date the RSUs are earned or the date that the Committee makes a determination of achievement of the performance metrics following the end of the three-year performance period, subject to the grantee’s continued employment through such date, provided that all unvested earned RSUs will vest in full following the end of the performance period.
On March 8, 2024, the Compensation Committee granted 2,700,000 market-based RSUs to the Company's Chief Executive Officer and Chief Financial Officer at the target level of achievement, which would represent a 67% increase in the market price of our common stock at time of grant. The RSUs may be settled only in cash, and the cash payment will be calculated based on the average closing price of the Company's common stock on the five trading days ending on the vesting date. The RSUs will be earned at the target level only if the Company's share price increases to $7.00 per share, with the opportunity to earn up to three times target if the Company's share price reaches higher stock price hurdles. The actual number of shares to be earned pursuant to these awards will be determined based on a trailing 20-trading day average closing price of the Company's common stock during the four-year period ending December 31, 2027. Earned RSUs will become vested on the earlier of equal quarterly installments over the first year from the date the RSUs are earned or the date that the Committee makes a determination of achievement of the performance metrics following the end of the four-year performance period, subject to the grantee’s continued employment through such date, provided that all unvested earned RSUs will vest in full following the end of the performance period.
On December 8, 2023, the Compensation Committee approved market-based restricted stock awards to employees other than the Company's Chief Executive Officer and Chief Financial Officer of 2,500,000 shares of common stock at the target level of achievement. These shares will be earned at the target level only if the Company's share price increases to $7.00 per share, with the opportunity to earn more shares (up to three times target), based on higher stock price hurdles. The actual number of shares to be earned pursuant to these awards will be determined based on a trailing 20-trading day average closing price of the Company's common stock during the four-year period following the December 8, 2023 grant date or December 31, 2027, for certain awards granted after December 8, 2023. Earned shares will vest in equal quarterly installments over two years following the date that the Compensation Committee makes a determination of achievement of the performance metrics, subject to the grantee’s continued employment through such date, provided that all unvested earned shares will vest in full following the end of the performance period.
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The following summarizes award activity in 2025 and 2024 (which includes awards granted in 2025, 2024, and any applicable prior years), respectively:
For the Year Ended December 31, 2025:
Vesting Basedon Service
Vesting Based onMarket/PerformanceConditions
Weighted-AverageValue at Award Date
Nonvested awards at beginning of the year
1,641,500
6.50
10,313,221
9.33
Awarded
2,538,451
5.24
1,347,895
11.00
Vested
(1,550,294
6.63
(89,065
22.11
Forfeited
(21,493
5.77
(3,689,223
11.89
Nonvested awards at end of year
2,608,164
7,882,828
8.97
For the Year Ended December 31, 2024:
1,144,796
13.01
12,576,792
10.20
1,519,207
4.36
345,000
7.78
(993,312
10.62
(1,179,631
16.81
(29,191
9.58
(1,428,940
10.40
Additionally, the market-based RSUs granted in 2025 and 2024 (not included in the tables above) with cash-settlement features are nonvested as of December 31, 2025. These liability-type awards are adjusted to fair value on a quarterly basis using a Monte Carlo valuation model, which used the following assumptions for grant date and quarterly valuations for the year ended December 31, 2025: (i) common stock price at measurement date, (ii) annual equity volatility ranging from 59.0% to 62.0%, (iii) risk-free rate ranging from 3.47% to 3.89%, and (iv) dividend yield ranging from 5.31% to 7.42%. The grant date fair value of the RSUs awarded April 15, 2025 was $8.1 million, and the fair value of the RSUs awarded March 8, 2024 was $13.3 million, and none of these RSUs were earned, vested, or forfeited as of December 31, 2025.
The value of stock-based awards is charged to compensation expense over the service periods. For the years ended December 31, 2025, 2024, and 2023, we recorded $15.1 million, $28.4 million, and $33.3 million, respectively, of non-cash compensation expense. For the years ended December 31, 2025 and 2024, we also recorded $10.6 million and $4.6 million, respectively, of compensation expense for the RSUs with cash-settlement features, and we had a corresponding $15.2 million and $4.6 million liability as of December 31, 2025 and 2024, respectively.
The remaining unrecognized cost from equity-settled awards at December 31, 2025, is $17.9 million, which will be recognized over a weighted-average period of 0.93 years. The remaining unrecognized cost from cash-settled awards at December 31, 2025, is $14.3 million, which will be recognized over a derived service period of 1.38 years as of December 31, 2025. Stock-based awards that vested in 2025, 2024, and 2023, had a value of $7.7 million, $10.9 million, and $22.5 million, respectively.
8. Contingencies
As part of the global settlement with Steward discussed in Note 3, upon completion of the transfers to the new operators and satisfaction of certain other conditions, in addition to approval by relevant state and local regulators, we and Steward agreed, subject to specified exceptions, to the mutual release of claims against each other. In connection with the global settlement and reciprocal release of claims, we have established an approximate $16 million reserve at December 31, 2025, for certain obligations due to third parties associated with properties formerly leased to Steward.
We are, or were, party to various lawsuits as described below:
Securities and Derivative Litigation
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On April 13, 2023, we and certain of our executives were named as defendants in a putative federal securities class action lawsuit filed by a purported stockholder in the United States District Court for the Northern District of Alabama (Case No. 2:23-cv-00486). This class action complaint was amended on September 22, 2023 and alleged that we made material misstatements or omissions relating to the financial health of certain of our tenants. On September 26, 2024, the Court dismissed the amended complaint with prejudice, and the plaintiff thereafter moved the Court to alter its judgment. On August 14, 2025, the Court denied the plaintiff's motion and dismissed the amended complaint with prejudice.
Members of our Board of Directors were also named as defendants in two related shareholder derivative lawsuits filed by purported stockholders in the United States District Court for the Northern District of Alabama on October 19, 2023 (Case No. 2:23- cv-01415) and December 7, 2023 (Case No. 2:23-cv-01667). The Company was named as a nominal defendant in both complaints. These shareholder derivative complaints both made allegations similar to those made in the now-dismissed Alabama securities lawsuit described above relating to purported material misstatements or omissions relating to the financial health of certain of our tenants. After the related securities case was dismissed, the plaintiffs in these derivative actions each filed a notice of voluntary dismissal and these cases have now been dismissed without prejudice.
Members of our Board of Directors were also named as defendants in three related shareholder derivative lawsuits filed by purported stockholders in the United States District Court for the District of Maryland on February 16, 2024 (Case No. 1:24-cv-00471), June 28, 2024 (Case No. 1:24-cv-01899), and July 26, 2024 (Case No. 1 24-cv-02173). The Company was named as a nominal defendant. These shareholder derivative complaints made allegations similar to those made in the now-dismissed Alabama securities and derivative lawsuits described above relating to purported material misstatements or omissions relating to the financial health of certain of our tenants. After the related securities case was dismissed, the plaintiffs in these derivative actions each filed a notice of voluntary dismissal and each of these cases has now been dismissed without prejudice.
On September 29, 2023, we and certain of our executives were named as defendants in a putative federal securities class action lawsuit filed by a purported stockholder in the United States District Court for the Southern District of New York (Case No. 1:23-cv- 08597). The complaint seeks class certification on behalf of purchasers of our common stock between May 23, 2023 and August 17, 2023 and alleges false and/or misleading statements and/or omissions in connection with certain transactions involving Prospect. This class action complaint was amended on October 30, 2024 and alleges that we made material misstatements or omissions in connection with certain transactions involving Prospect. Defendants filed a motion to dismiss the amended complaint on January 14, 2025. That motion has been fully briefed and is currently pending before the Court.
Members of our Board of Directors were also named as defendants in two related shareholder derivative lawsuits filed by purported stockholders in the United States District Court for the Southern District of New York on December 18, 2023 (Case No. 1:23-cv-10934) and March 1, 2024 (Case No. 1:24-cv-01589). The Company was named as a nominal defendant in both complaints. These shareholder derivative complaints both make allegations similar to those made in the New York securities lawsuit described above relating to purported false and/or misleading statements and/or omissions in connection with certain transactions involving Prospect. The two cases have been consolidated and stayed pending further developments in the New York securities lawsuit described above. On February 21, 2024, members of our Board of Directors were named as defendants in a shareholder derivative lawsuit filed by a purported stockholder in the United States District Court for the District of Maryland (Case No. 1:24-cv-00527). The Company was named as a nominal defendant. This shareholder derivative complaint makes allegations similar to those made in the New York securities and derivative lawsuits described above relating to purported false and/or misleading statements and/or omissions in connection with certain transactions involving Prospect. This action has been stayed pending further developments in the New York securities action described above.
We believe these claims are without merit and intend to defend the remaining open cases vigorously. We have not recorded a liability related to the lawsuits above because, at this time, we are unable to determine whether an unfavorable outcome is probable or to estimate reasonably possible losses.
From time-to-time, we are a party to other legal proceedings, claims, or regulatory inquiries and investigations arising out of, or incidental to, our business. While we are unable to predict with certainty the outcome of any particular matter, in the opinion of management, after consultation with legal counsel, the ultimate liability, if any, with respect to those proceedings is not presently expected to materially affect our financial position, results of operations, or cash flows.
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9. Common Stock/Partner’s Capital
On October 28, 2025, the Board of Directors of the Company authorized a stock repurchase program (the "Stock Repurchase Program") for up to $150 million of common stock, par value $0.001 per share. Under the Stock Repurchase Program, we may repurchase shares of our common stock from time to time in the open market or in privately negotiated transactions. In 2025, we repurchased 4.5 million shares for a total of $23.4 million.
On August 11, 2025, we entered into an at-the-market equity offering program (the "ATM Program"), which provides for the sale, from time to time, of up to $500 million of our common stock with a commission rate up to 2%. As of December 31, 2025, we had not sold any shares under the ATM Program.
At December 31, 2025, the Operating Partnership is made up of a general partner, Medical Properties Trust, LLC (“General Partner”) and limited partners, including the Company (which owns 100% of the General Partner) and MPT TRS, Inc. (which is 100% owned by the General Partner). By virtue of its ownership of the General Partner, the Company has a 100% ownership interest in the Operating Partnership.
In regard to distributions, the Operating Partnership shall distribute cash at such times and in such amounts as are determined by the General Partner in its sole and absolute discretion, to common unit holders who are common unit holders on the record date. However, per the Second Amended and Restated Agreement of Limited Partnership of MPT Operating Partnership, L.P. (“Operating Partnership Agreement”), the General Partner shall use its reasonable efforts to cause the Operating Partnership to distribute amounts sufficient to enable the Company to pay stockholder dividends that will allow the Company to (i) meet its distribution requirement for qualification as a REIT and (ii) avoid any U.S. federal income or excise tax liability imposed by the Code, other than to the extent the Company elects to retain and pay income tax on its net capital gain. In accordance with the Operating Partnership Agreement, LTIP units are treated as common units for distribution purposes.
The Operating Partnership’s net income will generally be allocated first to the General Partner to the extent of any cumulative losses and then to the partners in accordance with their respective percentage interests in the common units issued by the Operating Partnership. Any losses of the Operating Partnership will be allocated pro-rata to the partners in accordance with their respective percentage interests in the common units issued by the Operating Partnership until their adjusted capital balances are reduced to zero, then to the General Partner. In accordance with the Operating Partnership Agreement, LTIP units are treated as common units for purposes of income and loss allocations. Limited partners have the right to require the Operating Partnership to redeem part or all of their common units. It is at the Operating Partnership’s discretion to redeem such common units for cash based on the fair market value of an equivalent number of shares of the Company’s common stock at the time of redemption or, alternatively, redeem the common units for shares of the Company’s common stock on a one-for-one basis, subject to adjustment in the event of stock splits, stock dividends, or similar events. LTIP units must wait two years from the issuance of the LTIP units to be redeemed, and then converted to common units. No LTIP units exist at December 31, 2025.
For each share of common stock issued/repurchased by Medical Properties Trust, Inc., the Operating Partnership issues/repurchases a corresponding number of operating partnership units.
10. Fair Value of Financial Instruments
We have various assets and liabilities that are considered financial instruments. We estimate that the carrying value of cash and cash equivalents and accounts payable and accrued expenses approximate their fair values. We estimate the fair value of our interest and rent receivables using Level 2 inputs such as discounting the estimated future cash flows using the current rates at which similar receivables would be made to others with similar credit ratings and for the same remaining maturities. The fair value of our mortgage loans and other loans are estimated by using Level 2 inputs such as discounting the estimated future cash flows using the current rates which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. We determine the fair value of our senior notes using Level 2 inputs such as quotes from securities dealers and market makers. We estimate the fair
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value of our revolving credit facility and term loans using Level 2 inputs based on the present value of future payments, discounted at a rate which we consider appropriate for such debt.
Fair value estimates are made at a specific point in time, are subjective in nature, and involve uncertainties and matters of significant judgment. Settlement of such fair value amounts may not be a prudent management decision.
The following table summarizes fair value estimates for our financial instruments (in thousands):
Asset (Liability)
BookValue
FairValue
19,907
36,432
Loans(1)
624,243
624,369
467,120
470,380
(9,697,835
(8,980,547
(8,848,112
(7,301,395
Items Measured at Fair Value on a Recurring Basis
Our equity investment and related loan to the international joint venture, our loan investment in the real estate of three hospitals operated by subsidiaries of the international joint venture in Colombia, and our investment in PHP Holdings (which was sold in July 2025) are measured at fair value on a recurring basis as we elected to account for these investments using the fair value option at the point of initial investment. We elected to account for these investments at fair value due to the size of the investments and because we believed this method was more reflective of current values.
At December 31, 2025 and 2024, the amounts recorded under the fair value option method were as follows (in thousands):
Fair Value
Original Cost
Asset Type Classification
116,113
151,692
111,985
129,968
Equity investment and other loans
4,285
264,160
154,229
910,594
Investments in unconsolidatedoperating entities/Other loans
Our loans to the international joint venture and its subsidiaries are recorded at fair value by discounting the estimated future contractual cash flows using a credit-adjusted rate of return, which is derived from market rates of return on similar loans with similar credit quality and remaining maturity. Our equity investment in the international joint venture and our investment in PHP Holdings (as of December 31, 2024 only) are recorded at fair value by using a market approach (for our equity investment in the international joint venture) and a market approach based on the agreed upon price in the transaction (for our investment in PHP Holdings), which requires significant estimates of our investee, such as projected revenue, expenses, and working capital, and appropriate consideration of the underlying risk profile of the forecasted assumptions associated with the investee. We classify our valuations of these investments as Level 3, as we use certain unobservable inputs to the valuation methodology that are significant to the fair value measurement, and the valuations require management judgment due to the absence of quoted market prices. For the market approach model used for our investment in PHP Holdings (as of December 31, 2024 only), our unobservable inputs include purchase price adjustments related to expected balance sheet values at the time of the transaction close, and an adjustment for a marketability discount ("DLOM") of 14.2%. In regard to the underlying projections used in the discounted cash flow model for our investment in the international joint venture, such projections are provided by the investees. However, we may modify such projections as needed based on our review and analysis of historical results, meetings with key members of management, and our understanding of trends and developments within the healthcare industry.
In 2025, we recorded a net unfavorable adjustment to the investments accounted for under the fair value option method of approximately $169 million, primarily related to our investment in three hospitals in Colombia and our investment in PHP Holdings. In 2024, we recorded a net unfavorable adjustment to the investments accounted for under the fair value option method of approximately $790 million, primarily related to the loan to the international joint venture and our investment in PHP Holdings.
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Items Measured at Fair Value on a Nonrecurring Basis
In addition to items that are measured at fair value on a recurring basis, we have assets and liabilities that are measured, from time-to-time, at fair value on a nonrecurring basis, such as for impairment purposes of our real estate, financial instruments, and for certain equity investments without a readily determinable fair value.
Impairment and Fair Value Adjustments of Non-Real Estate Investments
Prior to the global settlement in September 2024 (as described in Note 3 to the consolidated financial statements) in which our claims were released, our non-real estate investments in Steward and related affiliates included our 9.9% equity investment, working capital and other secured loans, and a loan made to a Steward affiliate in 2021, proceeds of which were used to redeem a similarly sized convertible loan held by Steward’s former private equity sponsor. In addition, the loan to the international joint venture was collateralized by the equity of Steward held by an investor in both Steward and the international joint venture. To assess recovery of these investments, we performed a valuation of Steward’s business at March 31, 2024, with assistance from a third-party, independent valuation firm. The valuation approaches utilized included the cost, market, and income approaches. The fair value analysis was performed under a non-going concern, orderly liquidation premise of value and assuming normal exposure to market participants. We utilized this premise of value due to Steward’s ongoing financial distress and subsequent filing of bankruptcy. Accordingly, the valuation approaches used, including the Level 3 inputs, were based on the financial performance of the Steward assets. For profitable hospitals, Level 3 inputs included a weighted average EBITDA multiple of 6.48x from a selected range of 5x to 7x in reference to comparable transactions. We also used a weighted average discount rate of 15.03% from a selected range of 15% to 16%. For unprofitable hospitals, Level 3 inputs included a weighted average net revenue multiple of 0.275x from a selected range of 0.25x to 0.30x in reference to comparable transactions. We also considered the reported book values inclusive of various adjustments for unprofitable hospitals. After reducing the derived fair value of Steward's business for Steward's secured debt (including our working capital and other secured loans) and their working capital deficit, we arrived at only a nominal remaining value that could not support the carrying value of the loan to a Steward affiliate from 2021 or our remaining 9.9% equity investment. In addition, the value of the investor's share of the remaining 90.1% of Steward's equity that collateralized the loan to the international joint venture was deemed insufficient to support recovery of this investment. As a result, we recorded impairment charges and negative fair value adjustments in the 2024 first quarter of approximately $625 million, as discussed further in Note 3 to the consolidated financial statements.
In the third quarter of 2024, as a result of the Company’s global settlement with Steward (as discussed further in Note 3 to the consolidated financial statements), the Company recorded impairment charges of approximately $425 million for the working capital loans and other secured loans previously advanced to Steward.
To assess recovery of our non-real estate investments in Steward in 2023, along with the $219 million loan to the international joint venture that was collateralized by the equity of Steward held by an investor in both Steward and the international joint venture, we performed a valuation of Steward's business at December 31, 2023, with assistance from a third-party, independent valuation firm, using a market valuation approach, with Level 3 inputs including the selected revenue multiple range of 0.50x to 0.60x in reference to comparable transactions. After reducing the derived fair value for the loans to Steward discussed above, we arrived at a fair value for Steward's equity. We then compared our equity investment's carrying value to our 9.9% share of the fair value of Steward's equity, which resulted in the need for an impairment charge of approximately $90 million. The value of the investor's share of the remaining 90.1% of Steward's equity that collateralized the loan to the international joint venture was deemed sufficient to support recovery of this investment at that time.
Impairment of Real Estate Investments
See the Steward and Prospect subheadings under "Leasing Operations (Lessor)" in Note 3 to the consolidated financial statements for a discussion around the use of fair value and related assumptions in the impairment of our real estate investments.
Equity Investments Without a Readily Determinable Fair Value
For our equity investment in Swiss Medical (which does not have a readily determinable fair value), we marked our investment to fair value in the 2023 third quarter based on the price paid by a new investor in the same security, resulting in a CHF 20 million favorable adjustment.
113
11. Leases (Lessee)
We lease the land underlying certain of our facilities (for which we typically sublease to our tenants), along with certain corporate offices and equipment. Our leases have remaining lease terms that vary in years, and some of the leases have initial fixed terms (or renewal options available) that extend the leases up to, or just beyond, the depreciable life of the properties that occupy the leased land. Renewal options that we are reasonably certain to exercise are recognized in our right-of-use assets and lease liabilities. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at lease commencement date in determining the present value of future payments.
The following is a summary of our lease expense (in thousands):
Income Statement
Classification
Operating lease cost (1)
9,254
10,725
11,653
Finance lease cost:
Amortization of right-of-use assets
Interest on lease liabilities
Sublease income
(2,425
(3,259
(4,178
Total lease cost
7,008
7,645
7,654
Fixed minimum payments due over the remaining lease term under non-cancelable leases of more than one year and amounts to be received in the future from non-cancelable subleases over their remaining lease term at December 31, 2025 are as follows (amounts in thousands):
Operating Leases
Finance Leases
Amounts ToBe ReceivedFromSubleases
NetPayments
7,109
133
(2,877
4,365
6,567
134
(2,515
4,186
6,648
135
(2,516
4,267
6,706
137
(2,518
4,325
6,733
138
(2,525
4,346
160,583
4,106
(38,522
126,167
Total undiscounted minimum lease payments
194,346
4,783
(51,473
147,656
Less: interest
(122,351
(2,850
Present value of lease liabilities
71,995
1,933
114
Supplemental balance sheet information is as follows (in thousands, except lease terms and discount rate):
Balance SheetClassification
December 31,2025
December 31,2024
Right of use assets:
Operating leases - real estate
43,801
46,881
Finance leases - real estate
1,581
1,632
Total real estate right of use assets
45,382
48,513
Operating leases - corporate
17,641
20,701
Total right of use assets
63,023
69,214
Lease liabilities:
Operating leases
Obligations to tenants andother lease liabilities
78,585
Financing leases
1,936
Total lease liabilities
73,928
80,521
Weighted-average remaining lease term:
33.4
32.6
Finance leases
30.9
31.9
Weighted-average discount rate:
6.1
The following is supplemental cash flow information (in thousands):
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used for operating leases
8,013
8,447
8,210
Operating cash flows used for finance leases
131
130
129
12. Other Assets
The following is a summary of our other assets on our consolidated balance sheets (in thousands):
Debt issue costs, net(1)
3,265
5,675
Other corporate assets
372,751
330,638
Prepaids and other assets
188,024
135,091
Total other assets
Other corporate assets include building, land and land improvements associated with our corporate headquarters, furniture and fixtures, equipment, corporate vehicles, aircraft, enterprise and other software, deposits, and right-of-use assets associated with corporate leases. Included in prepaids and other assets is prepaid insurance, prepaid taxes, deferred income tax assets (net of valuation allowances, if any), non-tenant receivables, derivative assets, and lease incentives provided to tenants, among other items.
Other corporate assets increased in 2025 primarily due to additional funding of our new corporate headquarters, which we have recently completed. Remaining funding costs are estimated to be between $10 million and $15 million. Prepaids and other assets increased in 2025 primarily due to lease incentives provided to tenants as previously described in Note 3 to the consolidated financial statements.
115
13. Segment Disclosures
We manage our business and report financial results as one business segment. This is consistent with the manner in which our chief operating decision maker ("CODM"), our executive team made up of our Chief Executive Officer and Chief Financial Officer, evaluates performance and makes resource and operating decisions for the business.
Our primary business strategy and source of revenue is from the acquisition and development of healthcare facilities that are leased to healthcare operating companies under long-term net leases, which require the tenant to bear most of the costs associated with the property. The majority of our leased assets are owned 100%; however, we do own some leased assets through joint ventures with other partners. We also may make mortgage loans to healthcare operators collateralized by their real estate. In addition, we may make noncontrolling investments in our tenants, from time-to-time, typically in conjunction with larger real estate transactions with the tenant, which may enhance our overall return and provide for certain minority rights and protections. Although we generate our revenues from these investments in the U.S. and eight other countries across multiple property types, we centrally manage these business activities on a consolidated basis. The accounting policies of our business segment are the same as those described in the summary of significant accounting policies.
The CODM evaluates performance and makes resource and operating decisions for the business on a consolidated basis using consolidated net income from our consolidated statements of net income as our primary GAAP profit measure supplemented by consolidated funds from operations ("FFO"). We use net income and FFO to monitor expected versus actual results to assess performance. The measure of segment assets is total assets as reported on our consolidated balance sheets. We compute FFO in accordance with the definition provided by the National Association of Real Estate Investment Trusts, which represents consolidated net (loss) income (computed in accordance with GAAP), excluding gains (losses) on sales of real estate and impairment charges on real estate assets, plus real estate depreciation and amortization, including amortization related to in-place lease intangibles, and after adjustments for unconsolidated partnerships and joint ventures.
Given FFO excludes real estate related depreciation and amortization expense by definition and due to our typical net lease structure which requires our tenants to bear most of the costs associated with our properties (including property taxes, insurance, etc.), the primary expenses reviewed by the CODM include general and administrative and interest expenses from our consolidated statements of net income.
See "Concentration of Credit Risks" in Note 3 to our consolidated financial statements for entity-wide disclosures around major customers, geographic areas, and property types.
14. Subsequent Events
On February 13, 2026, we closed on the acquisition of one property in Germany for approximately €23 million to be leased to MEDIAN.
116
ITEM 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
ITEM 9A. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures. Medical Properties Trust, Inc. maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) designed to provide reasonable assurance that information required to be disclosed in its Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to its management, including its Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, we recognize that no controls and procedures, no matter how well designed and operated, can provide absolute assurance of achieving the desired control objectives. As required by Rule 13a-15(b) under the Exchange Act, the management of Medical Properties Trust, Inc., with the participation of its Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures. Based on the foregoing, the Chief Executive Officer and Chief Financial Officer concluded that these disclosure controls and procedures are effective as of the end of the period covered by this report.
(b) Management’s Report on Internal Control over Financial Reporting.
The management of Medical Properties Trust, Inc. is responsible for establishing and maintaining adequate internal control over financial reporting for Medical Properties Trust, Inc. (as such term is defined in Rule 13a-15(f) of the Exchange Act). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Medical Properties Trust, Inc.’s financial statements for external reporting purposes in accordance with GAAP.
Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management has undertaken an assessment of the effectiveness of the internal control over financial reporting for Medical Properties Trust, Inc. as of December 31, 2025 based upon the framework established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management has concluded that, as of December 31, 2025, the internal control over financial reporting for Medical Properties Trust, Inc. was effective.
The effectiveness of the internal control over financial reporting for Medical Properties Trust, Inc. as of December 31, 2025 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears in this Annual Report on Form 10-K.
(c) Changes in Internal Controls over Financial Reporting. There has been no change in the internal control over financial reporting for Medical Properties Trust, Inc. during its most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.
(a) Evaluation of Disclosure Controls and Procedures. MPT Operating Partnership, L.P. maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) designed to provide reasonable assurance that information required to be disclosed in its Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to its management, including its Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), as appropriate, of Medical Properties Trust, Inc. (the sole general partner of MPT Operating Partnership, L.P.) to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, we recognize that no controls and procedures, no matter how well designed and operated, can provide absolute assurance of achieving the desired control objectives. As required by Rule 13a-15(b) under the Exchange Act, the management of MPT Operating Partnership, L.P., with the participation of the Chief Executive Officer and Chief Financial Officer of Medical Properties Trust, Inc. (the sole general partner of MPT Operating Partnership, L.P.), carried out an evaluation of the effectiveness of our disclosure controls and procedures. Based on the foregoing, the Chief Executive Officer and Chief Financial Officer of Medical Properties Trust, Inc. (the sole general partner of MPT Operating Partnership, L.P.) concluded that these disclosure controls and procedures are effective as of the end of the period covered by this report.
The management of MPT Operating Partnership, L.P. is responsible for establishing and maintaining adequate internal control over financial reporting for MPT Operating Partnership, L.P. (as such term is defined in Rule 13a-15(f) of the Exchange Act). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of MPT Operating Partnership, L.P.’s financial statements for external reporting purposes in accordance with GAAP.
Management has undertaken an assessment of the effectiveness of the internal control over financial reporting for MPT Operating Partnership, L.P. as of December 31, 2025, based upon the framework established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management has concluded that, as of December 31, 2025, the internal control over financial reporting for MPT Operating Partnership, L.P. was effective.
The effectiveness of the internal control over financial reporting for MPT Operating Partnership, L.P. as of December 31, 2025 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears in this Annual Report on Form 10-K.
(c) Changes in Internal Controls over Financial Reporting. There has been no change in the internal control over financial reporting for MPT Operating Partnership, L.P. during its most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.
ITEM 9B. Other Information
During the three months ended December 31, 2025, none of our officers or directors (as defined in Rule 16a-1(f) of the Exchange Act) adopted, terminated, or modified any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any non-Rule 10b5-1 trading arrangement (as defined in Item 408 of Regulation S-K).
ITEM 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
ITEM 10. Directors, Executive Officers and Corporate Governance
The Company has an insider trading policy governing the purchase, sale, and other dispositions of the Company's securities that applies to all of the Company's directors, officers, employees, and other covered persons. The Company believes that its insider trading policy is reasonably designed to promote compliance with insider trading laws, rules and regulations, and listing standards applicable to the Company. It is also the policy of the Company to comply with all insider trading laws and regulations. A copy of the Company's insider trading policy is listed as Exhibit 19.2 to this Annual Report on Form 10-K.
The other information required by this Item 10 is incorporated by reference to our definitive Proxy Statement for the 2026 Annual Meeting of Stockholders, which will be filed by us with the Commission not later than April 30, 2026.
ITEM 11. Executive Compensation
The information required by this Item 11 is incorporated by reference to our definitive Proxy Statement for the 2026 Annual Meeting of Stockholders, which will be filed by us with the Commission not later than April 30, 2026.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this Item 12 is incorporated by reference to our definitive Proxy Statement for the 2026 Annual Meeting of Stockholders, which will be filed by us with the Commission not later than April 30, 2026.
ITEM 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this Item 13 is incorporated by reference to our definitive Proxy Statement for the 2026 Annual Meeting of Stockholders, which will be filed by us with the Commission not later than April 30, 2026.
ITEM 14. Principal Accountant Fees and Services
Our independent public accounting firm is PricewaterhouseCoopers LLP, Birmingham, Alabama, PCAOB Auditor ID 238. The information required by this Item 14 is incorporated by reference to our definitive Proxy Statement for the 2026 Annual Meeting of Stockholders, which will be filed by us with the Commission not later than April 30, 2026.
ITEM 15. Exhibits and Financial Statement Schedules
(a) Financial Statements and Financial Statement Schedules
Index of Financial Statements of Medical Properties Trust, Inc. and MPT Operating Partnership, L.P. which are included in Part II, Item 8 of this Annual Report on Form 10-K:
Consolidated Balance Sheets as of December 31, 2025 and 2024
Consolidated Statements of Net Income for the Years Ended December 31, 2025, 2024, and 2023
Consolidated Statements of Comprehensive Loss for the Years Ended December 31, 2025, 2024, and 2023
Consolidated Statements of Equity for the Years Ended December 31, 2025, 2024, and 2023
Consolidated Statements of Cash Flows for the Years Ended December 31, 2025, 2024, and 2023
Consolidated Statements of Capital for the Years Ended December 31, 2025, 2024, and 2023
Medical Properties Trust, Inc. and MPT Operating Partnership, L.P.
Notes to Consolidated Financial Statements
Financial Statement Schedules
Schedule II — Valuation and Qualifying Accounts for the Years Ended December 31, 2025, 2024, and 2023
126
Schedule III — Real Estate and Accumulated Depreciation at December 31, 2025 with reconciliations for the years ended December 31, 2025, 2024, and 2023
127
Schedule IV — Mortgage Loans on Real Estate at December 31, 2025 with reconciliations for the years ended December 31, 2025, 2024, and 2023
(b) Exhibits
Exhibit Number
Form
File Number
Filing Date
Second Articles of Amendment and Restatement of Medical Properties Trust, Inc.
S-11/A
333-119957
January 6, 2005
3.2
Articles of Amendment of Second Articles of Amendment and Restatement of Medical Properties Trust, Inc.
10-Q
001-32559
November 10, 2005
3.3
8-K
January 13, 2009
3.4
Articles of Amendment to Second Articles of Amendment and Restatement of Medical Properties Trust, Inc.
January 31, 2012
3.5
June 26, 2015
August 10, 2015
3.7
Articles of Amendment to the Second Articles of Amendment and Restatement of Medical Properties Trust, Inc.
November 8, 2019
3.8
Second Amended and Restated Bylaws of Medical Properties Trust, Inc.
November 24, 2009
3.9
Amendment to Second Amended and Restated Bylaws of Medical Properties Trust, Inc.
3.10
November 16, 2016
3.11
February 22, 2017
3.12
May 25, 2018
3.13
May 22, 2020
Form of Common Stock Certificate
4.2
Description of Securities of Medical Properties Trust, Inc. Registered under Section 12 of the Securities Exchange Act, as amended
10-K
February 27, 2020
4.3
Indenture, dated as of October 10, 2013, among Medical Properties Trust, Inc., MPT Operating Partnership, L.P., MPT Finance Corporation, the Subsidiary Guarantors and Wilmington Trust, N.A., as Trustee.
October 16, 2013
4.4
Twelfth Supplemental Indenture, dated as of September 21, 2017, by and among MPT Operating Partnership, L.P. and MPT Finance Corporation, as issuers, Medical Properties Trust, Inc., as parent and guarantor, and Wilmington Trust, National Association, as trustee.
November 9, 2017
Thirteenth Supplemental Indenture, dated as of July 26, 2019, by and among MPT Operating Partnership, L.P., and MPT Finance Corporation, as issuers, Medical Properties Trust, Inc., as parent and guarantor, and Wilmington Trust, National Association, as trustee.
July 29, 2019
4.6
Fifteenth Supplemental Indenture, dated as of December 5, 2019, by and among MPT Operating Partnership, L.P. and MPT Finance Corporation, as issuers, Medical Properties Trust, Inc., as parent and guarantor, Wilmington Trust, National Association, as trustee, Elavon Financial Services DAC, U.K. Branch, as initial paying agent, and Elavon Financial Services DAC, as initial registrar and transfer agent.
December 11, 2019
Sixteenth Supplemental Indenture, dated as of December 4, 2020, by and among MPT Operating Partnership, L.P. and MPT Finance Corporation, as issuers, Medical Properties Trust, Inc. as parent and guarantor, and Wilmington Trust, National Association, as trustee.
December 7, 2020
4.8
Eighteenth Supplemental Indenture, dated as of March 24, 2021, by and among MPT Operating Partnership, L.P. and MPT Finance Corporation, as issuers, Medical Properties Trust, Inc., as parent and guarantor, Wilmington Trust, National Association, as trustee, and Elavon Financial Services DAC, as initial paying agent, registrar and transfer agent
March 29, 2021
Nineteenth Supplemental Indenture, dated as of October 6, 2021, by and among MPT Operating Partnership, L.P. and MPT Finance Corporation, as issuers, Medical Properties Trust, Inc., as parent and guarantor, Wilmington Trust, National Association, as trustee, and Elavon Financial Services DAC, as initial paying agent, registrar and transfer agent
October 13, 2021
4.10
Indenture, dated as of February 13, 2025, among Medical Properties Trust, Inc., MPT Operating Partnership, L.P., MPT Finance Corporation, the subsidiary guarantors party thereto, Wilmington Trust, National Association, as trustee, dollar paying agent, dollar registrar, dollar transfer agent and notes collateral agent, and U.S. Bank Europe DAC, as euro paying agent, euro registrar and euro transfer agent
February 18, 2025
121
4.11
Twentieth Supplemental Indenture, dated as of February 28, 2025, among MPT Springstone REIT, Inc., as subsidiary guarantor, and MPT Operating Partnership, L.P. and MPT Finance Corporation, as issuers, Medical Properties Trust, Inc., as parent and guarantor, and Wilmington Trust, National Association, as trustee
March 3, 2025
10.1
Second Amended and Restated Agreement of Limited Partnership of MPT Operating Partnership, L.P.
August 6, 2007
Medical Properties Trust, Inc. Amended and Restated 2019 Equity Incentive Plan***
DEF 14A
A
April 28, 2022
10.3
Form of Stock Option Award***
October 18, 2005
10.4
Form of Restricted Stock Award***
10.5
Form of Deferred Stock Unit Award***
Form of Award Agreement for Restricted Stock***
December 14, 2023
10.7
Form of Award Agreement for Restricted Stock Units***
March 14, 2024
10.8
Employment Agreement between Medical Properties Trust, Inc. and Edward K. Aldag, Jr., dated September 10, 2003***
First Amendment to Employment Agreement between Medical Properties Trust, Inc. and Edward K. Aldag, Jr., dated March 8, 2004***
10.10
Employment Agreement between Medical Properties Trust, Inc. and R. Steven Hamner, dated September 10, 2003***
10.11
Form of Indemnification Agreement between Medical Properties Trust, Inc. and executive officers and directors***
10.55
July 5, 2005
10.12
Second Amendment to Employment Agreement between Medical Properties Trust, Inc. and Edward K. Aldag, Jr., dated September 29, 2006***
10.58
March 14, 2008
10.13
First Amendment to Employment Agreement between Medical Properties Trust, Inc. and R. Steven Hamner, dated September 29, 2006***
10.59
10.14
Second Amendment to Employment Agreement between Medical Properties Trust, Inc. and Richard S. Hamner, dated January 1, 2008***
10.76
March 13, 2009
10.15
Third Amendment to Employment Agreement between Medical Properties Trust, Inc. and R. Steven Hamner, dated January 1, 2009***
10.77
10.16
Third Amendment to Employment Agreement between Medical Properties Trust, Inc. and Edward K. Aldag, Jr., dated January 1, 2008***
10.78
10.17
Fourth Amendment to Employment Agreement between Medical Properties Trust, Inc. and Edward K. Aldag, Jr., dated January 1, 2009***
10.79
10.18
Amended and Restated Subscription Agreement dated as of June 7, 2018 by and among MPT Operating Partnership, L.P., Primotop Holding, S.a.r.l. and MPT RHM Holdco S.a.r.l.
August 9, 2018
10.19
Real Property Asset Purchase Agreement, dated as of July 10, 2019, by and among Prospect Medical Holdings, Inc., as “Prospect Medical Holdings”, and subsidiaries of Prospect Medical Holdings, as the “Prospect Medical Subsidiaries”, and subsidiaries of MPT Operating Partnership, L.P., as the “MPT Parties”.
November 12, 2019
Form of Lease Agreement between certain subsidiaries of MPT Operating Partnership, L.P., as Lessor, and Circle Health Ltd. and certain of its subsidiaries, as Lessee
August 7, 2020
10.21
Second Amended and Restated Revolving Credit and Term Loan Agreement, dated as of June 29, 2022, among Medical Properties Trust, Inc., MPT Operating Partnership, L.P., the several lenders from time to time party thereto, Bank of
1.1
July 6, 2022
122
America, N.A., as syndication agent, and JPMorgan Chase Bank, N.A., as administrative agent
10.22
Amendment No. 1 to Second Amended and Restated Revolving Credit and Term Loan Agreement, dated as of April 12, 2024, by and among Medical Properties Trust, Inc., MPT Operating Partnership, L.P., the several lenders from time to time party thereto, Bank of America, N.A., as syndication agent, and JPMorgan Chase Bank, N.A., as administrative agent
August 9, 2024
10.23
Amendment No. 2 to Second Amended and Restated Revolving Credit and Term Loan Agreement, dated as of August 6, 2024, by and among Medical Properties Trust, Inc., MPT Operating Partnership, L.P., the Guarantors party hereto, the several lenders from time to time party thereto, and JPMorgan Chase Bank, N.A., as administrative agent
10-Q/A
November 13, 2024
10.24
Amendment No. 3 to Second Amended and Restated Revolving Credit and Term Loan Agreement, dated as of February 13, 2025, by and among Medical Properties Trust, Inc., MPT Operating Partnership, L.P., the Guarantors party hereto, the several lenders from time to time party thereto, and JPMorgan Chase Bank, N.A., as administrative agent
19.1
Compensation Recovery Policy
February 29, 2024
19.2
Insider Trading Policy
21.1*
Subsidiaries of Medical Properties Trust, Inc.
23.1*
Consent of PricewaterhouseCoopers LLP
23.2*
31.1*
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934. (Medical Properties Trust, Inc.)
31.2*
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934. (Medical Properties Trust, Inc.)
31.3*
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934. (MPT Operating Partnership, L.P.)
31.4*
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934. (MPT Operating Partnership, L.P.)
32.1**
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (Medical Properties Trust, Inc.)
32.2**
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (MPT Operating Partnership, L.P.)
Exhibit 101.INS
Inline XBRL Instance Document
Exhibit 101.SCH
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents
Cover page interactive data file (Formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101.)
* Filed herewith.
** Furnished herewith.
*** Management contract or compensatory plan or arrangement.
ITEM 16. Form 10-K Summary
Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the registrants have duly caused this Report to be signed on their behalf by the undersigned, thereunto duly authorized.
MEDICAL PROPERTIES TRUST, INC.
By:
/s/ J. Kevin Hanna
J. Kevin Hanna
Senior Vice President, Controller, Assistant Treasurer, and Chief Accounting Officer
MPT OPERATING PARTNERSHIP, L.P.
Senior Vice President, Controller, Assistant Treasurer, and Chief Accounting Officer of the sole member of the general partner of MPT Operating Partnership, L.P.
Date: February 26, 2026
Power of Attorney
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below does hereby constitute and appoint J. Kevin Hanna and R. Steven Hamner, and each of them singly, as her or his true and lawful attorneys with full power to them, and each of them singly, to sign for such person and in her or his name in the capacity indicated below, the Annual Report on Form 10-K filed herewith and any and all amendments to said Annual Report on Form 10-K, and generally to do all such things in her or his name and in her or his capacity as officer and director to enable the registrants to comply with the provisions of the Exchange Act, and all requirements of the SEC in connection therewith, hereby ratifying and confirming our signatures as they may be signed by our said attorneys, or any of them, to said Annual Report on Form 10-K and any and all amendments thereto.
Pursuant to the requirements of the Exchange Act, this report has been signed by the following persons on behalf of the registrants and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ Edward K. Aldag, Jr.
Edward K. Aldag, Jr.
Chairman of the Board, President,
Chief Executive Officer and Director
(Principal Executive Officer)
/s/ R. Steven Hamner
R. Steven Hamner
Executive Vice President,
Chief Financial Officer and Director
(Principal Financial Officer)
/s/ G. Steven Dawson
G. Steven Dawson
Director
/s/ Caterina A. Mozingo
Caterina A. Mozingo
/s/ Emily W. Murphy
Emily W. Murphy
/s/ Elizabeth N. Pitman
Elizabeth N. Pitman
/s/ D. Paul Sparks, Jr.
D. Paul Sparks, Jr.
/s/ Michael G. Stewart
Michael G. Stewart
/s/ C. Reynolds Thompson, III
C. Reynolds Thompson, III
Schedule II: Valuation and Qualifying Accounts
Additions
Deductions
Balance atBeginning ofYear(1)
ChargedAgainstOperations(1)
Charged toOther Accounts
NetRecoveries/Write-offs(1)
Balance atEnd of Year(1)
2,165,754
602,464
(426,550
2,341,668
878,318
2,783,001
(4)
(1,495,565
(5)
393,057
755,627
(6)
(270,366
(7)
SCHEDULE III — REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
Initial Costs
Additions Subsequentto Acquisition
Cost at December 31, 2025(1)
Life onwhichdepreciationin latestincomestatements is
Location
Type of Property
Improve-ments
CarryingCosts
Encum-brances
Date ofConstruction
DateAcquired
computed(Years)
(Dollar amounts in thousands)
Aberdeen, UK
Acute care general hospital
4,501
106,607
111,108
16,045
47,809
1985
January 9, 2020
Algeciras, Spain
8,749
9,303
882
1997
April 29, 2022
Altoona, WI
35,500
8,234
2014
August 31, 2014
Altrincham, UK
Behavioral health facility
15,499
26,606
42,105
2,494
1890, 2014
December 9, 2022
Alvin, TX
Freestanding ER
4,087
4,192
1,177
March 19, 2014
Arnold, UK
505
10,496
11,001
1,296
2008
June 25, 2021
Ashtead, UK
39,969
74,936
114,905
12,400
1981
August 16, 2019
Austin, TX
3,507
4,200
7,707
955
2017
March 2, 2017
Avondale, AZ
5,383
64,650
72,931
78,314
7,320
2016
October 19, 2021
Ayr, UK
17,982
51,498
69,480
5,917
2004
Bad Salzuflen, Germany
Rehabilitation hospital
11,176
28,283
39,459
6,233
1974, 2016
November 30, 2017
7,595
24,873
32,468
5,221
1989, 2016
Bad Oeynhausen, Germany
1,198
2,928
4,126
662
1973, 2010
Bakersfield, CA
2,178
45,253
47,431
4,337
2022
May 15, 2020
Barby, Germany
1,938
21,619
23,557
1,681
1995
April 19, 2023
Basingstoke, UK
13,677
53,123
66,800
8,049
34,016
1984
Bassenheim, Germany
1,179
5,628
6,807
1,079
1887, 1983
February 9, 2019
Bath, UK
1,597
33,105
34,702
9,518
2008, 2009
July 1, 2014
7,613
13,816
21,429
2,153
16,326
1992
Beckenham, UK
5,781
22,172
27,953
3,347
15,750
Bedford, UK
1,630
7,942
7,984
9,614
1,213
8,489
1982
Bellflower, CA
10,155
21,296
31,451
1972
August 23, 2019
Big Spring, TX
1,655
21,254
815
22,069
23,724
4,028
1973
April 12, 2019
Birmingham, UK
981
10,753
11,734
760
1864, 2009
April 14, 2023
8,276
44,683
52,959
6,144
April 3, 2017
10,437
99,353
109,790
15,057
18,375
2,527
2018
June 29, 2020
20,284
20,720
2,445
1900, 1984, 2016
Blackburn, UK
2,816
53,982
56,798
8,146
25,085
1957
21,201
57,514
78,715
7,094
1930
Blue Springs, MO
4,347
23,494
27,841
6,737
1980
February 13, 2015
Boardman, OH
Long term acute care hospital
275
354
August 30, 2019
Boise, ID
1,558
11,027
12,585
1,786
February 29, 2012
Bolton, UK
1,678
47,136
48,814
7,095
22,412
1989
Life onwhichdepreciationin latestincome statements is
Bossier City, LA
900
17,818
944
18,762
19,662
8,126
April 1, 2008
Bowling Green, KY
3,486
56,296
3,550
59,846
63,332
10,251
Brandis, Germany
2,358
25,958
28,316
2,074
Braunfels, Germany
2,314
14,415
14,423
16,737
3,825
1977
June 30, 2015
Bristol, UK
4,980
39,538
44,518
3,270
1790, 2014
Bromley, UK
7,646
16,428
24,074
2,053
1714, 1830, 2021
Bury, UK
9,007
20,524
29,531
2,664
2003
Bussage, UK
8,986
3,972
12,958
500
1970
Cadiz, Spain
319
7,234
7,553
711
2000
Canterbury, UK
9,722
29,202
38,924
4,415
20,342
Carmarthen, UK
963
27,071
28,034
4,101
16,025
1990
Carrollton, TX
4,941
52,227
57,168
5,940
2012
Casper, WY
Caterham, UK
11,169
22,065
33,234
3,704
Cayce, SC
1,022
20,419
21,441
1,276
October 21, 2022
Cheadle, UK
32,744
172,486
172,511
205,255
26,035
113,319
31,557
100,349
131,906
12,217
1849, 2018
Clarksville, TX
2,460
25,540
28,000
2019
December 17, 2020
Cologne, Germany
4,710
15,923
20,633
3,444
2011
June 23, 2017
Columbus, OH
2,101
44,218
46,319
5,077
Conroe, TX
3,855
38,892
42,747
4,563
Converse, TX
750
4,423
5,173
1,189
2015
April 10, 2015
Coral Gables, FL
26,215
84,584
2,624
87,208
113,423
9,771
1959
August 1, 2021
Croydon, UK
10,524
44,143
54,667
6,708
27,085
Culver City, CA
37,885
178,101
215,986
517
1969
Dahlen, Germany
1,428
12,065
13,493
1,796
1994
July 8, 2020
Darlington, UK
2,210
37,911
40,121
5,265
36,188
2001
22,488
51,083
73,571
6,731
1935, 2018, 2020
5,534
27,888
33,422
3,305
1960, 1990
Dewsbury, UK
1,185
10,795
11,980
802
Diss, UK
3,080
10,984
14,064
1,516
1840 (2)
Dorchester, UK
571
33,173
33,744
5,000
Dormagen, Germany
2,032
6,010
8,042
1,172
1993, 2006
August 28, 2018
Droitwich, UK
16,192
16,273
2,461
Dublin, OH
5,118
69,346
74,464
7,804
El Paso, TX
4,268
21,345
25,613
3,099
Englewood, CO
3,369
65,480
68,849
7,432
Essex, UK
4,913
45,715
50,628
3,769
1790, 1992, 2014
Euxton, UK
4,887
37,638
42,525
6,412
Flagstaff, AZ
3,049
22,464
25,513
4,399
August 23, 2016
Florence, AZ
28,462
28,567
29,467
9,817
February 7, 2012
Floridablanca, Colombia
836
26,157
26,993
2,256
July 29, 2022
Folsom, CA
3,291
21,293
24,584
4,002
2009
Fort Worth, TX
3,406
34,627
38,033
4,039
Fresno, CA
5,507
70,473
75,980
12,025
1991
Frome, UK
3,065
18,571
21,636
2,357
11,531
11,337
22,868
1,895
1700, 2015, 2017
Gainesborough, UK
1,618
10,592
12,210
Gardena, CA
14,010
65,282
211
65,493
79,503
7,938
1966
July 6, 2021
Georgetown, TX
4,569
22,858
10,561
33,419
37,988
3,208
Gilbert, AZ
4,790
45,933
9,647
55,580
60,370
5,272
2020
Glasgow, UK
6,818
139,259
146,077
20,948
72,792
1983
1,512
16,531
18,043
2,016
1900, 1980
Gloucester, UK
5,906
64,960
70,866
10,894
Godalming, UK
9,903
20,090
29,993
2,621
1796, 2007
Great Missenden, UK
12,458
111,313
123,771
16,829
58,207
Grefath, Germany
1,277
3,222
4,499
642
1886, 1983
Guildford, UK
7,283
38,556
45,839
5,835
23,155
Halsall, UK
2,132
32,980
35,112
5,546
1986
Harrow, UK
40,647
42,777
83,424
6,505
Hartsville, SC
2,050
43,970
46,020
13,211
1999
August 31, 2015
Hassocks, UK
5,805
30,350
36,155
4,198
1998
Hastings, PA
603
8,834
9,437
2,179
1924
December 17, 2019
Hausman, TX
1,500
8,957
10,457
2,856
2013
March 1, 2013
Heidelberg, Germany
6,636
37,907
44,543
9,051
1885, 1991
June 22, 2016
Helotes, TX
1,900
5,115
7,015
1,258
March 10, 2016
Helsinki, Finland
71,714
1,164
72,878
77,225
6,896
1992, 2013
March 11, 2022
Hemel Hempstead, UK
13,220
6,672
19,892
1,048
1901, 1990
Hialeah, FL
18,802
105,316
4,784
110,100
128,902
12,422
1950
75,339
222,271
2,564
224,835
300,174
28,114
Highland Hills, OH
3,148
43,891
47,039
5,042
Hinckley, UK
2,610
17,786
20,396
2,167
1892, 2007
Hollywood, CA
62,916
37,051
99,967
1962
Hook, UK
5,732
10,918
16,650
1,447
Hoover, AL
7,581
2,361
May 1, 2015
1,034
296
1,330
388
Hot Springs, AR
5,622
59,432
21,221
80,653
86,275
21,530
Houston, TX
3,274
27,324
32,499
59,823
63,097
24,422
1960
August 10, 2007
6,063
19,881
2,565
22,446
28,509
2,806
October 25, 2019
29,706
101,846
90,935
192,781
222,487
24,195
1940-1950
September 29, 2017
950
3,996
4,946
924
September 26, 2016
Huntington Park, CA
3,935
6,103
10,038
829
1960-1969
Idaho Falls, ID
1,822
37,467
72,789
110,256
112,078
23,598
2002
1,880
108,498
15,146
123,644
125,524
16,083
December 19, 2017
Johnstown, PA
8,877
247,158
256,035
50,152
Kansas City, KS
2,351
13,665
16,016
1,946
June 10, 2019
Kansas City, MO
10,497
64,419
74,916
17,920
1978
Katy, TX
1,491
2,870
4,361
904
October 10, 2016
Kuhlungsborn, Germany
7,138
18,355
25,493
1,354
June 1, 2023
Kuopio, Finland
1,364
46,129
47,493
4,622
Lafayette, IN
800
14,968
14,943
15,743
4,816
February 1, 2013
2,829
13,624
1,504
Lander, WY
757
42,849
43,606
6,869
Lauderdale Lakes, FL
10,657
150,313
2,168
152,481
163,138
18,902
1975
League City, TX
1,244
3,901
5,145
1,024
June 19, 2015
Leawood, KS
2,513
13,938
16,451
1,972
Leeds, UK
2,413
10,078
12,491
1,267
Lewiston, ID
5,389
75,435
80,824
22,108
1922
May 1, 2017
London, UK
9,252
60,527
69,779
9,111
40,474
38,386
54,940
93,326
4,554
1811, 2014
3,477
4,390
7,867
669
1987
30,627
15,847
46,474
1,497
13,179
86,016
99,195
12,913
44,446
6,521
16,570
23,091
2,051
1900, 1960
14,617
7,208
21,825
928
Los Angeles, CA
12,562
40,164
394
40,558
53,120
4,680
10,579
62,948
73,527
144
1955
Lubbock, TX
1,376
28,292
3,648
31,940
33,316
8,342
June 16, 2015
Malaga, SP
796
12,469
13,265
1,167
Mandeville, LA
2,800
5,370
8,170
1,231
October 28, 2016
Marrero, LA
1,517
5,801
7,318
1,378
July 15, 2016
McKinney, TX
2,441
4,060
6,501
1,421
July 31, 2015
2,934
31,068
34,002
1,399
McMinnville, OR
97,900
102,900
24,113
1996
Melton Mowbray, UK
6,035
16,916
22,951
2,177
Mesa, AZ
6,140
99,275
4,152
103,427
109,567
32,867
2007
September 26, 2013
2,604
16,400
19,004
1,556
April 18, 2022
Meyersdale, PA
390
4,280
4,670
1,096
Miami, FL
44,400
107,203
110,647
155,047
14,913
20,430
30,276
10,947
41,223
61,653
3,276
1958, 1962, 1988, 2016
April 25, 2022
Milton Keynes, UK
5,552
37,956
43,508
5,731
Monmouth, UK
16,413
12,227
28,640
1,859
Montclair, NJ
7,900
99,640
577
8,477
108,117
29,917
1920-2000
April 1, 2014
New Braunfels, TX
1,853
10,622
12,475
1,402
New Orleans, LA
2,850
6,125
8,975
1,416
September 23, 2016
Newark, NJ
32,957
24,553
57,510
3,294
1919, 1920-2003
May 2, 2016
Newburgh, IN
1,215
7,212
8,427
908
2010
Northland, MO
834
17,182
18,016
6,408
February 14, 2011
Norwalk, CA
2,811
8,751
835
1959, 1995
7,946
30,465
7,104
37,569
45,515
4,158
1958-1978
6,982
14,308
21,290
1954
Norwood, MA
6,860
N/A
June 27, 2018
Nottingham, UK
5,242
48,637
53,879
7,398
34,690
10,596
9,483
20,079
1,401
10,754
3,436
14,190
432
Odessa, TX
6,217
123,518
16,600
140,118
146,335
27,772
1973-2004
Ogden, UT
1,759
16,414
18,173
4,846
March 1, 2014
Oklahoma City, OK
3,641
3,047
6,688
647
Olathe, KS
6,882
57,056
18,873
75,929
82,811
6,778
3,485
14,484
17,969
2,071
Orpington, UK
10,942
45,210
56,152
6,846
26,061
Ottumwa, IA
2,377
48,697
51,074
10,869
Oulu, Finland
3,376
47,789
51,165
4,848
Overland Park, KS
2,974
14,405
17,379
2,070
3,191
14,263
17,454
2,152
Overlook, TX
2,452
9,666
9,673
12,125
3,112
Palestine, TX
1,848
95,257
97,105
14,978
1988
Pasco, WA
2,594
13,195
15,789
3,306
1920
August 31, 2018
Pearland, TX
1,075
3,577
4,652
1,013
September 8, 2014
Petersburg, VA
1,302
9,121
10,423
3,990
2006
July 1, 2008
Phoenix, AZ
5,773
Poole, UK
40,625
43,086
7,102
13,804
April 3, 2019
Poplar Bluff, MO
2,659
38,694
41,353
17,125
April 22, 2008
Port Arthur, TX
11,432
76,746
6,877
83,623
95,055
25,305
2005
Port Huron, MI
2,531
14,252
16,783
4,869
1953, 1973-1983
December 31, 2015
Post Falls, ID
417
12,175
1,905
767
13,730
14,497
4,128
December 31, 2013
Preston, UK
9,251
33,685
42,936
3,583
1850, 2018, 2021
Princes Risborough, UK
2,601
Raleigh, NC
3,469
27,514
30,983
3,402
Reading, UK
36,829
48,872
85,701
8,085
27,515
88,165
115,680
11,241
23,813
December 18, 2020
Redding, CA
1,856
25,586
27,442
Remscheid, Germany
1,116
2,689
3,805
523
1951, 1983
Richmond, TX
5,380
6,155
10,815
16,970
22,350
1,382
Richmond, VA
1,289
10,071
11,360
2,065
Riverton, WY
1,163
29,647
30,810
5,513
Roaring Springs, PA
1,446
9,549
10,995
Rochdale, MA
654
3,368
4,022
625
411
Rochdale, UK
3,786
43,135
46,921
6,530
23,581
1965
Roeland Park, KS
15,103
16,672
2,116
Romford, UK
5,667
9,278
14,945
1,317
Rosenberg, TX
1,217
4,505
5,722
1,126
January 15, 2016
Rowley, UK
3,078
19,371
22,449
3,359
Royston, UK
7,127
21,220
28,347
3,007
1906, 1970
San Antonio, TX
7,061
10,851
7,982
18,833
25,894
6,730
1978-2002
2,988
4,801
7,789
1,090
December 9, 2016
351
3,952
4,303
1,160
January 1, 2014
2,248
5,880
8,128
October 2, 2012
2,310
4,253
6,563
975
October 27, 2016
San Bernardino, CA
2,209
37,498
39,707
6,488
1993
132
Life on whichdepreciationin latestincomestatements is
Date Acquired
Santa Maria de Feira, PT
1,979
18,981
20,960
2,083
October 21, 2021
Sharon, PA
6,179
9,066
8,513
17,579
23,758
4,430
1950-1980
Shawnee, KS
3,076
18,021
2,440
Sheffield, UK
7,000
47,222
54,222
7,188
34,458
Sherman, TX
3,363
10,931
14,294
4,962
1913, 1960-2010
October 31, 2014
Southampton, UK
6,821
20,030
26,851
2,792
1820, 1985
Spartanburg, SC
1,135
15,717
16,852
4,866
August 1, 2013
Stirling, UK
20,651
21,767
2,428
9,691
Stockton, CA
2,717
50,681
53,398
3,379
2021
November 23, 2020
Surrey, UK
15,926
9,663
25,589
1,007
1950, 2014
Swindon, UK
5,639
63,265
68,904
9,546
33,219
Tadley, UK
22,140
20,174
42,314
2,982
Tempe, AZ
6,050
10,986
5,239
16,225
22,275
3,843
1940
Texarkana, TX
14,562
-
The Woodlands, TX
1,922
4,524
6,446
1,103
March 28, 2016
Toledo, OH
17,740
18,843
4,324
April 1, 2016
Tomball, TX
1,299
16,185
17,484
8,684
December 21, 2010
Torquay, UK
3,155
37,831
40,986
6,177
Turku, Finland
1,285
61,920
63,205
6,046
Usk, UK
1,831
32,837
34,668
3,207
1770, 1850, 1980
Valencia, SP
11,841
74,006
85,847
8,710
December 2, 2021
27,603
25,848
53,451
1,240
1960, 2024
May 6, 2022
Vancouver, WA
9,313
12,505
21,818
1,222
Van Nuys, CA
8,041
18,436
26,477
1958
Viseu, Portugal
2,697
30,733
33,430
5,243
November 28, 2019
Warren, OH
5,385
47,466
10,492
57,958
63,343
14,060
2,417
15,857
1,737
17,594
20,011
4,367
1922-2000
West Chester, OH
3,670
61,338
65,008
7,058
West Midlands, UK
2,035
9,616
579
West Monroe, LA
11,702
69,433
19,116
12,254
87,997
100,251
Wichita, KS
1,019
16,881
17,900
8,131
April 4, 2008
Willenhall, UK
7,715
17,212
24,927
2,094
Winchester, UK
6,865
10,877
17,742
1,683
11,033
1911
Windsor, UK
12,896
110,846
123,742
16,670
Woking, UK
7,663
4,954
12,617
683
1800, 2020
Worthing, UK
7,108
31,908
39,016
4,827
18,509
York, UK
3,924
7,137
11,061
549
22,899
75,966
98,865
9,030
Youngstown, OH
3,555
3,565
488
4,053
7,608
2,823
1929-2003
1,786,342
8,594,759
421,829
1,787,821
9,015,109
10,802,930
1,438,594
850,779
The changes in total real estate assets (excluding construction in progress, intangible lease assets, investment in financing leases, and mortgage loans) are as follows for the years ended (in thousands):
December 31, 2023
COST
Balance at beginning of period
10,086,493
11,813,175
12,300,524
Acquisitions
73,973
143,882
Transfers from construction in progress
79,385
72,791
42,326
73,523
87,873
Dispositions
(249,587
(1,492,320
(874,519
Impairments
29,906
(276,572
(67,671
819,819
(110,698
150,295
Balance at end of period
The changes in accumulated depreciation are as follows for the years ended (in thousands):
ACCUMULATED DEPRECIATION
1,239,897
1,227,619
1,008,340
235,053
242,802
270,816
Depreciation on disposed property
(74,103
(220,435
(73,765
37,747
(10,089
22,228
SCHEDULE IV — MORTGAGE LOANS ON REAL ESTATE
MEDICAL PROPERTIES TRUST, INC. AND MPT OPERATING PARTNERSHIP, L.P.
Column A
Column B
Column C
Column D
Column E
Column F
Column G(1)
Column H
InterestRate
FinalMaturityDate
Periodic PaymentTerms
PriorLiens
FaceAmount ofMortgages
CarryingAmount ofMortgages
PrincipalAmount ofLoansSubject toDelinquentPrincipal orInterest
Long-term first mortgage loan: (2)
Colombia(3)
12.23
(4
Hill County, TX
10.00
7,598
7,538
159,290
Changes in mortgage loans (net of allowance for credit loss) for the years ended December 31, 2025, 2024, and 2023 are summarized as follows:
Balance at beginning of year
310,101
364,420
Additions during year:
New mortgage loans and additional advances on existing loans
16,498
100,824
155,223
Exchange rate fluctuations
21,722
(17,748
31,530
158,132
393,177
551,173
Deductions during year:
Collection of principal
(16,886
(100,000
(241,072
(9)
(17,595
(173,265
(8)
(34,481
(273,265