MPW – Q4 2022 Analysis

Author: Viceroy Research Published on: March 1, 2023 Published in: Medical Properties Trust NASDAQ:MPW

March 1, 2023 – On February 23, 2023, MPW released their Q4 2022 results and held their earnings call, both of which raised several issues and confirmed Viceroy’s continued belief in the weakness of their tenant base.

By our calculations, Commonspirit’s annual rent on the Utah properties will not exceed Steward’s forecast 2023 rent until 2027.
MPW appear to have hidden past unbilled rent write-offs and impairments through undisclosed sales of equity investments and “other” items. A comparison of their FFO calculations for 2021 as presented in 2022 and 2021 shows that a $2.27m recovery of unbilled rent was a ($7.23m) write-off offset by gain on sale of equity investments.
MPW confirmed that tenant Prospect had not paid all its rent for January and February and has not paid all their rent in January and February. Given management’s guidance assumed collecting no rent whatsoever from Prospect for the year, we believe Prospect has indeed paid no rent this year.

It is becoming clear that MPW and its tenants long-term financial situation is unsustainable. Tenants selling operations result in rent cuts, tenants unable to do so are not paying their rent in full and MPW is having to write off or impair its straight line rent receivables which it had previously assured investors were safe.

Auditors should place greater scrutiny on MPW’s accounting treatment of these assets.

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