The loan to Prime Healthcare covered the Victorville, CA-based company's acquisition of three hospital properties from Dallas-based Tenet Healthcare Corp. The SoCal properties are the 151-bed Encino campus of the Encino-Tarzana Medical Center at 16237 Ventura Blvd. in Encino; 167-bed Garden Grove Hospital and Medical Center at 12601 Garden Grove Blvd. in Garden Grove; and 93-bed San Dimas Community Hospital at 1350 W. Covina Blvd. in San Dimas. The financing, which provides for an initial rate of 10.5%, is expected to be converted into a sale-leaseback arrangement within 30 days with an identical initial rate and an initial term of 10 years.

According to MPT chairman, president and CEO Edward K. Aldag Jr., the terms of the Prime Healthcare transactions demonstrate improving acquisition terms, particularly with respect to higher lease rates. "These three properties will further strengthen Prime's position and accordingly our own investment quality in the southern California market," he says in a press release. He adds that the acquisitions put Prime's total concentration in MPT's portfolio at close to 33%. He says the figure is slightly above the company's 30% target level, but he believes the elevation is only temporary.

The acquisitions were part of a previously announced deal with HCP Inc. of Long Beach, CA to acquire 21 hospitals for an estimated $371 million over a period of several months. MPT's $138-million purchase of the first seven properties closed in late March. The new additions are the 96-bed HealthSouth Mountain View Regional Rehabilitation Hospital at 1160 Van Voorhis Rd. in Morgantown, WV and 40-bed HealthSouth Rehabilitation Hospital of Petersburg at 95 Pinehill Blvd. in Petersburg, VA.