Meditrust Forecasting No Dividend for Common Stockholders

DALLAS-Meditrust Corp. this year isn’t expecting to pay a dividend on common shares, citing the move is in line with a Five Point Plan to sell off health-care assets.

The Dallas-based REIT in recent weeks has stepped up its disposition strategy to dispose of the properties and redirect profits to hotel holdings, specifically La Quinta Inns. To date, $959 million of assets, mostly health-care holdings, have been sold, with the REIT saying it has incurred $244 million on losses. The loss, says company officials, is such that the ordinary taxable income will reflect a loss this year – making the REIT eligible to bypass a dividend yet still maintain REIT status.

The Five Point Plan, announced in January, made it clear only the minimum required dividend to retain REIT status would be distributed this year. The minimum dividend calculation is determined by 95% of the REIT’s ordinary taxable income for the calendar year.

The REIT plans to make a final determination in December after the board of directors wraps up a final analysis. The action will not affect preferred stock dividends, which is 9% payable on a quarterly basis.

The Meditrust Cos. consists of Meditrust Corp., a REIT and Meditrust Operating Co. Meditrust Corp.’s portfolio consists of 300 lodging facilities, 94 long-term care facilities, 94 retirement and assisted living facilities, five medical office buildings and seven other health-care facilities. Meditrust Operating Co. operates all of the lodging facilities under the La Quinta brand name.