HCPI says Tenet, which accounts for approximately 16.2% of the REITs annual revenue, has renewed via new leases that are due to expire on Feb. 19, 2009 at all six of the hospitals. The REIT says rent remains on existing terms, which generally include increases or decreases in rent at 1% to 5% of the change in underlying hospital revenues. Two other hospitals that Tenet leases from HCPI can be renewed before December this year and December 2004, respectively.
Jay Flaherty, president and CEO of HCPI, says the REIT believes that the hospitals leased from the REIT by the hospital chain are some of Tenets strongest assets. Tenet has been troubled by slumping earnings and by regulatory investigations into its billing practices and its recruitment of doctors.
The hospitals leased by Tenet are part of a Health Care Property Investors portfolio that, as of June 30, included 448 properties in 44 states. The portfolio consists of 31 hospitals, 175 long-term care facilities, 126 retirement and assisted living facilities, 85 medical office buildings and 31 other health care properties.
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