Terms of the transaction, which is expected to close by March 30, are undisclosed. A Tenet spokesman tells GlobeSt.com, "the price is reached through negotiations in a methodical process that covers many elements, including the buyer's proposal for the future of the facility," and will be disclosed once the agreement is complete.
According to public records, the market value of the Graduate property is $15.8 million. When Tenet first announced its plan to sell 11 hospitals, including three here, Trevor Fetter, president and CEO, said the company anticipated aggregate proceeds of between $250 million and $275 million.
UPHS has formed a joint venture, Good Shepherd Penn Partners, with Allentown-based Good Shepherd Rehabilitation Network. The JV will convert Graduate into a long-term and acute care rehabilitation facility. It will consist of a new 58-bed inpatient facility, named Penn Institute for Rehabilitation Medicine, and a new 38-bed acute care hospital named Good Shepherd Specialty Hospital-Philadelphia. Both will be located in the current, six-story Graduate Hospital building. According to published reports, the conversion cost is estimated at $30 million.
Construction will begin when the sales transaction closes, and the new facility is expected to open in summer 2008. While UPHS is the buyer of the building, Good Shepherd has a majority interest in the JV. Both organizations will also collaborate on rehabilitation research.
The Tenet spokesman confirms that Tenet will continue to own and operate Hahnemann University Hospital and St. Christopher's Hospital for Children, both located here. It acquired seven area hospitals from Allegheny Health System, which went bankrupt in 1998, and has since closed two. In the summer of 2006, Tenet settled a four-year dispute with the US government, which involved, among other things, "outlier revenues," which apply to costly Medicare reimbursements.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
