Crozer Health in Chester will no longer pay $35 million in annual rent to its landlord for its hospital properties, giving it some financial relief, writes Harold Brubaker for The Philadelphia Inquirer.

The restructuring was announced Tuesday by its landlord, Medical Properties Trust Inc.

The properties are being given back to Crozer Health’s owner, Prospect Medical Holdings, in exchange for a $155 million mortgage, but MPT is deferring payments on the five-year mortgage for two years, Crozer reported.

After that, Crozer will only have to make interest payments.

Crozer has not paid rent to MPT this year.

“These favorable mortgage terms will be important in assisting Crozer Health to stabilize its finances,” Crozer said in an emailed statement.

MPT purchased Crozer’s real estate for $420 million from Prospect in 2019.

But it recorded a $170 million loss on the Crozer properties in February. 

Prospect stopped providing acute inpatient services last year at Delaware County Memorial Hospital and Springfield Hospitals because of financial difficulties it attributed to the pandemic.

Crozer has since filed an application with the IRS to convert back to a not-for-profit system.

Crozer said it plans to start adding inpatient mental health and addiction treatment at Delaware County Memorial Hospital.  

Read more about Medical Properties Trust and Crozer Health taking ownership of its hospital buildings in The Philadelphia Inquirer.