Crozer Health’s landlord, Medical Properties Trust Inc., known as MPT, is converting its lease on Crozer’s hospital buildings into a first-lien mortgage, writes Harold Brubaker for The Philadelphia Inquirer.

“It could conceivably give MPT some protection in the event of a Crozer bankruptcy because MPT would likely have higher seniority to be paid back as a lender than as a landlord if Crozer goes under,” said Eileen O’Grady at the Private Equity Stakeholder Project.

During bankruptcy, a lower interest rate or principle on a mortgage could also be negotiated.

MPT is a large real estate investment firm based in Alabama. It acquired Crozer Health’s real estate in 2019 from Crozer’s parent company Prospect Medical Holdings in a $1.55 billion deal.

That deal required Prospect to rent Crozer’s facilities from MPT.

But Prospect hasn’t been able to pay rent since last year.

It has been trying to sell its East Coast operations, including Crozer Health, since early last year.

Crozer recently applied for nonprofit status which should start at the end of 2023. Prospect would still be obligated to pay hospital rent to MPT.

MPT, meanwhile, has kept Prospect going by lending it $50 million and has agreed to lend up to $75 million more.

Read more about Crozer Health’s landlord Medical Properties Trust in The Philadelphia Inquirer.

This video looks offers a stock analysis of Medical Properties Trust and factors that are affecting its value.