Global Medical REIT announced that the Company’s leases with Pipeline Health, the tenant at GMRE‘s White Rock Medical Center in Dallas, Texas, will be assumed by Pipeline as part of its approved bankruptcy reorganization plan. Under its approved plan, Pipeline will assume its leases at White Rock subject to amendments to help facilitate Pipeline’s exit from bankruptcy and its new business plan that reiterates Pipeline’s commitment to the Dallas, Texas market. Jeffrey Busch, Chairman, Chief Executive Officer and President stated, "We are pleased with the outcome of the bankruptcy process and Pipeline’s planned assumption of our leases at White Rock which reaffirms our investment thesis for that property. We believe that Pipeline has restructured itself with a narrower focus that includes the Dallas, Texas market, which should provide them a firmer footing to weather what has been a challenging market for acute-care hospitals. Because we structured the original transaction with significant credit protection, we are able to provide Pipeline some post-bankruptcy operating flexibility without any rent deferrals, which we believe is in the best interest of our stockholders." Pursuant to the proposed amendments there will be no changes to (i) the Company’s prospective cash rents, (ii) the rental rate per square foot, (iii) prospective rent escalations, or (iv) the term of the Company’s lease. The proposed amendments primarily relate to (i) GMRE contingently providing up to $3.8 million of proposed new capital expenditures and (ii) GMRE’s application of a portion of Pipeline’s security deposit to a portion of the rental payments due during the first year after the bankruptcy.
Published first on TheFly
