Healthcare Realty Trust Announces $338 Million Of Fourth Quarter 2023 Asset Sales

Healthcare Realty Trust Incorporated just announced the completion of $338 million of asset sales during the fourth quarter of 2023 bringing full year additional dispositions to $656 million at an average cap rate of 6.6%.

The full year additional dispositions resulted in proceeds of $597 million as well as $59 million of seller financing across three transactions, including $14 million of seller financing in the fourth quarter. Proceeds were used for general corporate purposes, including the funding of development commitments and repayment of debt. Healthcare Realty had no outstanding balance on its revolving credit facility as of December 31, 2023.

The 2023 additional dispositions of $656 million do not include the $112.5 million of asset sales in January 2023 that fully repaid the July 2022 merger-related special dividend.

Healthcare Realty is a real estate investment trust that owns and operates medical outpatient buildings primarily located around market-leading hospital campuses. The company selectively grows its portfolio through property acquisition and development. As the first and largest REIT to specialize in medical outpatient buildings, Healthcare Realty’s portfolio includes more than 700 properties totaling over 40 million square feet concentrated in 15 growth markets.

In addition to the historical information contained within, the matters discussed in this press release may contain forward-looking statements that involve risks and uncertainties. These risks are discussed in filings with the Securities and Exchange Commission by Healthcare Realty Trust, including its Annual Report on Form 10-K for the year ended December 31, 2022 under the heading “Risk Factors,” and as updated in its Quarterly Reports on Form 10-Q filed thereafter. Forward-looking statements represent the company’s judgment as of the date of this release. Healthcare Realty disclaims any obligation to update forward-looking statements.

 

Source: HREI

UCHealth’s Merger With A 100-Year-Old Pueblo Hospital Strengthens Its Dominant Spot In The Health Care Market

On a chilly morning last month, Darrin Smith, the president and CEO of Pueblo’s Parkview Health System, stood outside the 100-year-old system’s flagship hospital and gazed upon a bundled-up crowd.

“This is a wow moment,” Smith said. “This is a wow moment for Parkview and for the citizens of southern Colorado.”

The occasion was to announce that Parkview would no longer be an independent health care system. Instead, with Parkview’s absorption into the UCHealth system, it became the latest example of a trend of consolidation sweeping through the hospital industry, including in Colorado.

Both systems are nonprofit, so this was a merger and not a purchase. Terms of the deal were simple: As part of the merger, UCHealth committed to spending at least $175 million over the next 10 years for the benefit of Parkview, and it cut a $5 million check to the related Parkview Foundation to fund various projects and services in the community. The merger also provides additional strength to UCHealth, which has been expanding its footprint. Already, UCHealth is the state’s largest hospital system in terms of net patient revenue.

“It’s just the next step in an overall trend of the last 15 years or more of consolidation of hospitals and hospital systems,” said Allan Baumgarten, a Minnesota-based health care analyst who produces studies on the Colorado hospital market. “In the case of UCHealth, they’ve been expanding and basically establishing a presence certainly along the entire Front Range and a little bit into the mountains.”

Why Parkview Wanted The Merger

The two health systems first agreed to a merger letter of intent in October 2022, and Colorado Attorney General Phil Weiser signed off on the merger in May. But Judy Fonda, the chair of Parkview’s board of directors, said at last month’s ceremony to mark the transition that discussion around a merger with another health care system had been ongoing for quite a while.

“Our board has recognized for some time that the hospital would be strengthened by partnering with a larger health care system,” Fonda said.

The motivation for that can be found in Parkview’s balance sheets. Like many non-metro Denver hospitals, Parkview has struggled financially in recent years. The health system lost $11 million last fiscal year and $43 million the year before that, according to an audited financial statement filed with the federal Municipal Securities Rulemaking Board. The bulk of those losses came from operations — meaning the hospital wasn’t getting paid enough to cover its costs of providing medical care.

In 2022, Parkview closed its inpatient psychiatric unit, citing financial burden, according to The Pueblo Chieftain. In the merger notice it provided to the Colorado Attorney General’s Office, UCHealth pledged that Parkview will continue to provide maternity care and comprehensive women’s health care — something that’s significant given that those services are often targets for cash-strapped hospitals.

In talking about the merger, Parkview leaders often spoke of continuity — that Parkview would continue to exist to provide care, that it would continue to be a major employer and contributor to the region’s economy.

“Becoming part of the UCHealth family strengthens the care provided in our community, ensuring the patients and residents in Pueblo and southern Colorado will continue to have access to high-quality care,” Smith said during the merger ceremony.

Why UCHealth Wanted The Merger

In her remarks at the ceremony, UCHealth president and CEO Elizabeth Concordia likewise framed the merger in terms of patient care.

“We are very, very focused on making sure that Parkview thrives and that patients can continue to come here close to home for their care,” Concordia said.

But Baumgarten said the merger also strengthens UCHealth’s hand financially in the state.

“Having that geographic footprint and having that site gives them considerable bargaining strength when they’re negotiating with the major payors in the state,” Baumgarten said.

In other words, UCHealth can now negotiate higher prices with private insurers. This is one of the major concerns surrounding the consolidation trend. Studies have found that hospital consolidation drives up prices and insurance costs.

That’s one explanation for the merger craze in the hospital industry nationwide. By one analysis, there were more than 1,800 hospital mergers in the U.S. between 1998 and 2022, reducing the number of independent hospitals by 2,000. A Kaiser Family Foundation analysis found that, by 2017, two-thirds of hospitals nationally were part of health systems, up from a little over 50% in 2005.

In Colorado, UCHealth scooped up Yampa Valley Medical Center in Steamboat Springs in 2017. CommonSpirit Health acquired St. Elizabeth Hospital in Fort Morgan in 2022, and Colorado-based SCL Health merged with Intermountain Health the same year.

The exterior of the University of Colorado Hospital on the Anschutz Medical Campus in Aurora, photographed on Oct. 18, 2019. The hospital is the flagship of the UCHealth system. (PHOTO CREDIT: John Ingold, The Colorado Sun)

Baumgarten said the Parkview merger has other benefits for UCHealth beyond negotiating leverage. For one, as a system with teaching and research as part of its core mission, it now has access to more patients who can potentially be recruited for clinical trials. The merger also gives UCHealth specialists a larger patient base for referrals.

According to another document filed with the MSRB, Parkview saw roughly 150,000 outpatient visits and more than 68,000 inpatient days last fiscal year.

“Each of those patients has value to the UCHealth system,” Baumgarten said.

Standing outside his hospital last month, Smith, Parkview’s CEO, focused instead on the value the hospital’s new owner will bring to his patients.

“I am filled with hope for what lies ahead,” Smith said. “This partnership between UCHealth and Parkview heralds a new era of progress and innovation for Pueblo and southern Colorado.”

 

Source: Colorado Sun

A Hospital Reborn: South Broward Public Health District Marks Significant Progress In $88M Renovation Of 70-Year-Old Memorial Regional Hospital

Hospital associate administrator Jon Pickett says a birthplace expansion is 60% complete.

Renovations and expansion of the trauma center and emergency room likewise are progressing, he says.

The hospital devoted $68 million to expanding the birthing center, redesigning a full floor to include all private rooms, a family lounge, classrooms for new parent classes and a simulation lab. The hospital says it leads Broward County hospitals in the number of babies born.

The system is spending another $20 million upgrading its Level 1 Trauma Center and emergency room to enhance its ability to deal with critical cases and mass casualty events. The hospital says its 94,000 ER visits in 2022 are the second highest number in Florida.

“This investment reflects the hospital’s commitment to remaining at the forefront of medical advancements and reflects our unwavering dedication to the community we serve,” says Peter Powers, CEO, Memorial Regional Hospital.

Completion of birth center work is scheduled for late 2024. The trauma center work will be completed in early 2025.

Memorial opened with 100 beds in a one-story building in 1953. It’s now among the larger hospitals in the state with 863 beds.

  • Orlando Health is building a $160-million Children’s Pavilion focused on specialized children’s care with an opening planned for 2026. The six-story building will be across from Orlando Health Arnold Palmer Hospital for Children and will bring more than 30 pediatric specialties together, with a goal of streamlining care for kids and their parents.
  • HCA Florida Healthcare opened a freestanding HCA Florida Mount Dora Emergency center in Eustis. The 11,000-sq.-ft. facility features 11 treatment rooms and a suite of on-site diagnostic imaging tools and will operate 24 hours a day.
  • UF Health is converting a former CVS pharmacy at in Eustis into a free-standing 24-hour emergency room with an expected opening in March. The system is also looking to break ground on an emergency room in Clermont, with an opening in late 2024.

 

Source: Florida Trend