Financial update spells more uncertainty for Steward's Mass. hospitals

Steward Health Care's landlord, Medical Properties Trust (MPT), said Wednesday it has started a process to sell or find new tenants for facilities including those operated by the financially troubled for-profit hospital chain.

MPT first reported in January that Steward owed it $50 million in back rent. Steward is MPT's largest tenant, although the real estate investment trust owns hundreds of other health care properties, across the country and internationally.

In a statement announcing MPT's fourth-quarter and year-end financial results, CEO Edward Aldag said the company is "encouraged by the interest from other hospital operators" and expects the Steward real estate portfolio "will either resume its contributions to earnings or become additional sources of liquidity as the year progresses."

Alabama-based MPT also said it and other lenders are negotiating a bridge loan deal that could provide millions in additional funding to Steward. MPT said it has already funded $20 million of its contribution.

MPT purchased Steward's Massachusetts real estate in 2016 for $1.25 billion. Steward then began leasing the properties back from MPT. A third company now owns a 50% share in the properties.

Steward currently operates seven acute-care hospitals in Massachusetts. An eighth facility, Norwood Hospital, has been closed since severe flooding in 2020. Steward had been in the process of rebuilding the hospital.

U.S. Congressman Stephen Lynch, speaking outside Norwood Hospital on Wednesday, said that project is on hold after Steward's landlord, MPT, asked contractors to "stand down."

"They've pressed the pause button on this project," Lynch said.

According to Lynch, some contractors were not being paid as of August, and some had pulled workers and equipment off the site. He said MPT began making some payments, but it now remains unclear what will happen to the facility.

"Trying to find someone to come in here and rescue this project, build the hospital, and then run it, is a daunting task," he said.

Lynch also toured Steward's Good Samaritan Medical Center in Brockton. He said he's not aware of any other health care providers who are interested in taking over that facility.

State officials have given Steward a deadline of Friday to provide detailed financial information and have been monitoring Steward hospitals daily to ensure patient safety, as the company looks for ways to stabilize its finances.

Steward — which operates dozens of hospitals nationwide — has indicated it is seeking buyers for its Massachusetts hospitals. Gov. Maura Healey this week called on Steward to transfer its facilities to new operators.

In a letter to the governor on Wednesday, Dr. Michael Callum, a Steward executive vice president, said the company had suggested transitioning its hospitals as far back as October.

"We guarantee that it is our priority to orchestrate a transition that emphasizes the continuity of first-class medical care in the communities we serve," Callum wrote.