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Meditrust Forecasting No Dividend for Common Stockholders

DALLAS-Meditrust Corp. this year isn't expecting to pay a dividend on common shares, citing the move is in line with its restructuring Five Point Plan. The REIT says it has incurred $244 million in losses with the $959 million selloff of mostly health-care assets, enabling a no-dividend year while still maintaining REIT status.

By Connie Gore | Updated on September 11, 2000

DALLAS-Meditrust Corp. this year isn’t expecting to pay a dividend on common shares, citing the move is in line with a Five Point Plan to sell off health-care assets.

The Dallas-based REIT in recent weeks has stepped up its disposition strategy to dispose of the properties and redirect profits to hotel holdings, specifically La Quinta Inns. To date, $959 million of assets, mostly health-care holdings, have been sold, with the REIT saying it has incurred $244 million on losses. The loss, says company officials, is such that the ordinary taxable income will reflect a loss this year – making the REIT eligible to bypass a dividend yet still maintain REIT status.

The Five Point Plan, announced in January, made it clear only the minimum required dividend to retain REIT status would be distributed this year. The minimum dividend calculation is determined by 95% of the REIT’s ordinary taxable income for the calendar year.

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