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.