REIT Launches Initial Public Offering, Reveals $600 Million Pipeline

A real estate investment trust (REIT) with a large post-acute care portfolio has filed for an Initial Public Offering (IPO). Nashville, Tennessee-based MedEquities Real Trust priced an IPO of up to 19 million shares that could bring up to nearly $321 million, according to public filings with the Securities and Exchange Commission (SEC). Share are set to be priced between $12 and $14.

The announcement comes on the heels of a major change for REITs, which were recently classified as their own sector on the Global Industry Classification Standard (GICS) at the beginning of September.

The REIT, which was created in 2014, invests in a mix of health care facilities and health care-related real estate debt investments, including senior housing. The portfolio includes 24 health care facilities that includes a total of 2,345 licensed beds with aggregate annualized base rent of $46.7 million with a weighted average remaining lease term of 13.3 years. Its current properties are located in Texas, California, Nevada and South Carolina.


The properties, which were acquired for a gross purchase price of $489.9 million, includes 17 skilled nursing facilities, two acute care hospitals, two long-term acute care hospitals, one assisted living facility, one inpatient rehabilitation facility and one medical office building. Though the portfolio remains small for the time being, the REIT is seeking acquisition opportunities and could nearly double its portfolio size.

MedEquities has identified 26 properties in excess of $600 million as potential additional acquisitions, 25% of which are post-acute facilities and 75% of which are acute care facilities. The acquisitions are in 11 new states for the REIT, with 10 new operator/tenant relationships.

The REIT current has an agreement with an affiliate of GruenePointe Holdings to acquire a facility under development in Dallas for $28 million.


MedEquities stated its preferred form of investment is a fee ownership of a facility with a long-term triple net lease with a health care provider or operator, though it may also provide debt financing to health care providers, typically in the form of mortgage or mezzanine loans.

Morrison & Foerster LLP is the law firm representing MedEquities Realty in its IPO.

MedEquities Realty declined to comment for this story, given that it is in an SEC-mandated quiet period.

Written by Amy Baxter

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