View:
Mail Stop 3233
August 27, 2018
Via E-mail
R. Steven Hamner
Chief Financial Officer
Medical Properties Trust, Inc.
MPT Operating Partnership, L.P.
1000 Urban Center Drive
Suite 501
Birmingham, AL 35242
Re: Medical Properties Trust, Inc.
MPT Operating Partnership, L.P.
Form 10-K for the Fiscal Year Ended December 31, 2017
Filed March 1, 2018
File No. 001-32559 and 333-177186
Dear Mr. Hamner:
We have reviewed your July 18, 2018 response to our comment letter and
have the
following comments. In our comments, we may ask you to provide us with
information so we
may better understand your disclosure.
Please respond to our comments within ten business days by providing the
requested
information or advise us as soon as possible when you will respond. If you do
not believe our
comments apply to your facts and circumstances, please tell us why in your
response.
After reviewing your response to our comments, we may have additional
comments.
Unless we note otherwise, our reference to a prior comment is to a comment in
our July 3, 2018
letter.
Form 10-K for the fiscal year ended December 31, 2017
Item 1 Business
Significant Tenants, page 11
1. We note your responses to comments 1 and 2. We refer you to your
disclosure on the
bottom of page 11 of your Form 10-K for the year ended December 31,
2017.
Specifically, we note you disclose that the properties leased to Steward
are subject to a
Steven Hamner
Mortgage Properties Trust, Inc. and MPT Operating Partnership, L.P.
August 27, 2018
Page 2
master lease agreement. Additionally, you disclose that the terms and
provisions of your
mortgage loan on six facilities are substantially similar to the master
lease agreement.
Further, we refer you to the Master Lease Agreement and the Real Estate
Loan
Agreement filed as Exhibits 10.33 and 10.34 to your Form 10-K for the
year ended
December 31, 2016. Based on these agreements, it appears that Steward
Health
guarantees the master lease and the loan. In making your determination
that it is
unnecessary to provide audited financial statements of Steward, please
tell us how you
considered the master lease agreement, the loan agreement with
attributes similar to the
master lease agreement, and that Steward Health appears to provide
guarantees for both
agreements.
Item 8. Financial Statements and Supplementary Data, page 71
2. Please tell us how you considered if the loan agreement with Steward is
a loan, an
investment in real estate, or a joint venture. We refer you to the Real
Estate Loan
Agreement filed as Exhibit 10.34 to your Form 10-K for the year ended
December 31,
2016 and the Joinder and Amendment to Real Estate Loan Agreement filed
as Exhibit
10.2 to your Form 10-Q for the quarterly period ended September 30,
2017. Based on
these agreements, it appears that you have the option to purchase the
properties at 110%
of fair market value, which is defined as specific dollar amounts in the
agreement and
equals the amount lent to Steward. Your response should address how you
considered
the terms of the loan, including, but not limited to, the purchase
option. In your response,
please refer to the guidance in ASC 310-10 for Acquisition, Development,
and
Construction Arrangements and SAB 1I.
You may contact Howard Efron, Staff Accountant, at (202) 551-3439 or me
at (202) 551-
3295 if you have questions regarding comments on the financial statements and
related matters.
Sincerely,
/s/ Jennifer Monick
Jennifer Monick
Assistant Chief
Accountant
Office of Real
Estate &
Commodities