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MPW Case Study – Neuropsychiatric Hospitals

MPW has paid over 3x the market value for its Neuropsychiatric Hospital facility in Houston.

Viceroy’s investigations show that combined costs of the development and appraised value of land was ~$9.1m at the date of MPW’s acquisition. Despite  this, MPW claim to have outlaid over $28m on the project, which has been capitalized on its asset base.

The current appraised value of the site is $7.8m.

The tenant is a middleman, Medistar Corporation, who sold the site and plans for development to MPW in 2019 on leaseback terms. Medistar has subsequently sublet the facility to a Neuropsychiatric Hospital affiliate, Medical Behaviour Hospital of Clear Lake (MBH).

MBH incurred a $8.5m operating loss in 2021, and its liabilities exceeded assets by over $2m.