Healthcare REIT Initiates $8.5M Sale Of Hurst Hospital Property After Tenant Fails To Pay Rent

March 24, 2022 | Olivia Lueckemeyer | Bisnow

CNL Healthcare Properties, a real estate investment trust with senior housing and healthcare properties across the U.S., is selling an acute care hospital northeast of Fort Worth for $8.5M following a sustained period of unpaid rent by the tenant.

The company acquired the property in Hurst for $29.5M in 2014, according to a 10-K filing with the Securities and Exchange Commission. The 58,400 SF specialty hospital was part of a portfolio of five properties acquired by CNL in the purchase, and, at that time, was leased to Victory Medical Center Mid-Cities. Victory Parent Co., which managed the facility and five other for-profit Victory Healthcare centers in Texas, filed for Chapter 11 bankruptcy in 2015. Since 2016, the property operated as the Physician Synergy Group-owned Saint Camillus Medical Center.

CNL is a nontraded REIT with a $1.8B portfolio of senior housing and healthcare properties across the U.S., including 11 in Texas. 

According to the filing, financial difficulties on the part of the tenant date back to 2020. The trust said it collected $2.2M from the tenant in 2021, which was the majority of what was due under its lease agreement, but it did not receive any rent between January and March. 

CNL moved forward with a sale of the property to an undisclosed third party in March, and it expects to close on the deal by the second quarter of this year, per the filing. The trust did not immediately respond to Bisnow’s request for comment.

CNL has initiated legal action against the tenant, according to the filing. The trust reported that it does not anticipate recording any gain or loss on the sale of the property.