As filed with the Securities and Exchange Commission on October 5, 2011

Registration No. 333-_________

 

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form S-4

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

MPT Operating Partnership, L.P.
MPT Finance Corporation

See Table of Registrant Guarantors for information regarding additional Registrants

Delaware Delaware		6798 6798		20-0242069 45-1537205
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification Number)

1000 Urban Center Drive, Suite 501
Birmingham, Alabama 35242
(205) 969-3755

(Address, including zip code, and telephone number, including area code, of registrants’ principal executive offices)

Edward K. Aldag, Jr.
Chairman, President, Chief Executive Officer
Medical Properties Trust, Inc.
1000 Urban Center Drive, Suite 501
Birmingham, AL 35242
(205) 969-3755

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:
Yoel Kranz, Esq.
James P. Barri, Esq.
Goodwin Procter LLP
Exchange Place
Boston, Massachusetts 02109
(617) 570-1105

     Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

     If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box: o

     If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

     If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ		Accelerated filer o		Non-accelerated filer o		Smaller reporting company o
				(Do not check if a smaller reporting company)

     If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

          Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) o

          Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) o

CALCULATION OF REGISTRATION FEE

Proposed Maximum

Proposed maximum

Title of Each Class of

Amount to be

Offering Price per

Aggregate Offering

Amount of

Securities to be Registered

Registered

Security(1)

Price(1)

Registration Fee

6.875% Senior Notes due 2021(2)

$450,000,000(3)

100%

$450,000,000

$51,570

Guarantees of 6.875% Senior Notes due 2021

—

—

—

(4)

     The Registrants hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrants shall file a further amendment that specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

 

TABLE OF CO-REGISTRANTS

				Primary Standard				I.R.S.
				Industrial				Employer
Exact Name of Registrant Guarantor as		State of Incorporation		Classification Code				Identification
Specified in its Charter (1)		or Organization		Number				Number
Medical Properties Trust, Inc.		Maryland			6798			20-0191742
MPT of Victorville, LLC		Delaware			6798			20-2486521
MPT of Bucks County, LLC		Delaware			6798			20-2486602
MPT of Bloomington, LLC		Delaware			6798			20-2603301
MPT of Covington, LLC		Delaware			6798			20-2953603
MPT of Denham Springs, LLC		Delaware			6798			20-2953661
MPT of Redding, LLC		Delaware			6798			20-3072918
MPT of Chino, LLC		Delaware			6798			20-3363654
MPT of Sherman Oaks, LLC		Delaware			6798			20-3857799
MPT of Dallas LTACH, LLC		Delaware			6798			20-4805632
MPT of Portland, LLC		Delaware			6798			20-5337217
MPT of Warm Springs, LLC		Delaware			6798			20-5714589
MPT of Victoria, LLC		Delaware			6798			20-5714694
MPT of Luling, LLC		Delaware			6798			20-5714787
MPT of Huntington Beach, LLC		Delaware			6798			20-5714848
MPT of West Anaheim, LLC		Delaware			6798			20-5714896
MPT of La Palma, LLC		Delaware			6798			20-5714958
MPT of Paradise Valley, LLC		Delaware			6798			20-8798603
MPT of Southern California, LLC		Delaware			6798			20-8963938
MPT of Twelve Oaks, LLC		Delaware			6798			26-0559922
MPT of Shasta, LLC		Delaware			6798			26-0559841
MPT of Webster, LLC		Delaware			6798			26-2453275
MPT of Tucson, LLC		Delaware			6798			26-2520552
MPT of Bossier City, LLC		Delaware			6798			26-2520505
MPT of West Valley City, LLC		Delaware			6798			26-2512723
MPT of Idaho Falls, LLC		Delaware			6798			26-2518223
MPT of Poplar Bluff, LLC		Delaware			6798			26-2518397
MPT of Bennettsville, LLC		Delaware			6798			26-2518359
MPT of Detroit, LLC		Delaware			6798			26-2496457
MPT of Bristol, LLC		Delaware			6798			26-2394024
MPT of Newington, LLC		Delaware			6798			26-2394093
MPT of Enfield, LLC		Delaware			6798			26-2394158
MPT of Petersburg, LLC		Delaware			6798			26-2518270
MPT of Fayetteville, LLC		Delaware			6798			26-2406076
4499 Acushnet Avenue, LLC		Delaware			6798			20-2066562
8451 Pearl Street, LLC		Delaware			6798			20-2066776
MPT of Garden Grove Hospital, LLC		Delaware			6798			26-3002663
MPT of Garden Grove MOB, LLC		Delaware			6798			26-3002759
MPT of San Dimas Hospital, LLC		Delaware			6798			26-3002414
MPT of San Dimas MOB, LLC		Delaware			6798			26-3002527
MPT of Cheraw, LLC		Delaware			6798			26-2518316
MPT of Ft. Lauderdale, LLC		Delaware			6798			26-2399919
MPT of Providence, LLC		Delaware			6798			26-2825405
MPT of Springfield, LLC		Delaware			6798			26-2825629
MPT of Warwick, LLC		Delaware			6798			26-2825704
MPT of Mountain View, LLC		Delaware			6798			45-3419885
MPT of Richardson, LLC		Delaware			6798			27-2553353
MPT of Round Rock, LLC		Delaware			6798			27-2553469
MPT of Shenandoah, LLC		Delaware			6798			27-2553198
MPT of Hillsboro, LLC		Delaware			6798			27-3001181

				Primary Standard				I.R.S.
				Industrial				Employer
Exact Name of Registrant Guarantor as		State of Incorporation		Classification Code				Identification
Specified in its Charter (1)		or Organization		Number				Number
MPT of Florence, LLC		Delaware			6798			27-3737512
MPT of Clear Lake, LLC		Delaware			6798			27-4433434
MPT of Tomball, LLC		Delaware			6798			27-4242856
MPT of Gilbert, LLC		Delaware			6798			27-4433943
MPT of Corinth, LLC		Delaware			6798			27-3857789
MPT of Bayonne, LLC		Delaware			6798			27-4434500
MPT of Alvarado, LLC		Delaware			6798			45-0639984
MPT of Morgantown, LLC		Delaware			6798			26-2520595
MPT of Bucks County, L.P.		Delaware			6798			20-2486672
MPT of Dallas LTACH, L.P.		Delaware			6798			20-4805835
MPT of Warm Springs, L.P.		Delaware			6798			20-5714648
MPT of Victoria, L.P.		Delaware			6798			20-5714747
MPT of Luling, L.P.		Delaware			6798			20-5714819
MPT of Huntington Beach, L.P.		Delaware			6798			20-5714872
MPT of West Anaheim, L.P.		Delaware			6798			20-5714924
MPT of La Palma, L.P.		Delaware			6798			20-5714994
MPT of Paradise Valley, L.P.		Delaware			6798			20-8798655
MPT of Southern California, L.P.		Delaware			6798			20-8963986
MPT of Twelve Oaks, L.P.		Delaware			6798			26-0560020
MPT of Shasta, L.P.		Delaware			6798			26-0559876
MPT of Webster, L.P.		Delaware			6798			26-2453328
MPT of Garden Grove Hospital, L.P.		Delaware			6798			26-3002710
MPT of Garden Grove MOB, L.P.		Delaware			6798			26-3002799
MPT of San Dimas Hospital, L.P.		Delaware			6798			26-3002474
MPT of San Dimas MOB, L.P.		Delaware			6798			26-3002622
MPT of Richardson, L.P.		Delaware			6798			27-2553826
MPT of Round Rock, L.P.		Delaware			6798			27-2553630
MPT of Shenandoah, L.P.		Delaware			6798			27-2554012
MPT of Hillsboro, L.P.		Delaware			6798			27-3046180
MPT of Clear Lake, L.P.		Delaware			6798			27-4433581
MPT of Tomball, L.P.		Delaware			6798			27-4242973
MPT of Corinth, L.P.		Delaware			6798			27-3857881
MPT of Alvarado, L.P.		Delaware			6798			45-0640615
MPT of Desoto, L.P.		Delaware			6798			45-0617227
MPT of Desoto, LLC		Delaware			6798			45-0616535

c/o Medical Properties Trust, Inc.
1000 Urban Center Drive, Suite 501
Birmingham, AL 35242
(205) 969-3755

SUBJECT TO COMPLETION, DATED OCTOBER 5, 2011

PROSPECTUS

MPT OPERATING PARTNERSHIP, L.P.
MPT FINANCE CORPORATION

Exchange Offer for

up to $450,000,000 Principal Amount Outstanding
of 6.875% Senior Notes due 2021
for a Like Principal Amount of
Registered 6.875% Senior Notes due 2021

     Offer for outstanding 6.875% Senior Notes due 2021 in the aggregate principal amount of $450,000,000 (which we refer to as the “Old Notes”) in exchange for up to $450,000,000 in aggregate principal amount of 6.875% Senior Notes due 2021 that have been registered under the Securities Act of 1933, as amended (the “Securities Act”) (which we refer to as the “Exchange Notes” and, together with the Old Notes, the “notes”).

Terms of the Exchange Offer

	•		Expires 5:00 p.m., New York City time,            , 2011, unless extended.
	•		You may withdraw tendered outstanding Old Notes any time before the expiration or termination of the exchange offer.
	•		The exchange offer is subject to customary conditions that may be waived by us.
	•		We will not receive any proceeds from the exchange offer.
	•		The exchange of Old Notes for the Exchange Notes should not be a taxable exchange for U.S. federal income tax purposes. See “Material United States Federal Income Tax Considerations.”
	•		All Old Notes that are validly tendered and not validly withdrawn prior to the expiration of the exchange offer will be exchanged for the Exchange Notes.

Terms of the Exchange Notes:

•

The Exchange Notes will mature on May 1, 2021. The Exchange Notes will pay interest semi-annually in cash in arrears on May 1 and November 1 of each year, beginning on May 1, 2012.

•

The Exchange Notes will be fully and unconditionally guaranteed, jointly and severally, on an unsecured basis, by our parent company, Medical Properties Trust, Inc., and each of our subsidiaries that guarantees our credit facility, which we amended and restated on April 26, 2011.

•

The Exchange Notes and the related guarantees will rank effectively junior to all secured indebtedness to the extent of the value of the collateral securing such debt, pari passu with all existing and future senior unsecured indebtedness and senior to all existing and future indebtedness that by its terms is expressly subordinated to the Exchange Notes.

•

We may redeem the Exchange Notes in whole or in part from time to time. See “Description of Exchange Notes.”

•

Upon a change of control, we must give holders the opportunity to sell their Exchange Notes to us at 101% of their principal amount plus accrued and unpaid interest, if any.

•

The terms of the Exchange Notes are identical to those of the outstanding Old Notes, except the transfer restrictions, registration rights and additional interest provisions relating to the Old Notes do not apply to the Exchange Notes.

          For a discussion of the specific risks that you should consider before tendering your Old Notes in the exchange offer, see “Risk Factors” beginning on page 8 of this prospectus.

     No public market exists for the outstanding Old Notes. We do not intend to list the Exchange Notes on any securities exchange and, therefore, no active public market is anticipated for the Exchange Notes.

     Each broker-dealer that receives Exchange Notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Notes. A broker-dealer who acquired Old Notes as a result of market making or other trading activities may use this exchange offer prospectus, as supplemented or amended from time to time, in connection with any resales of the Exchange Notes.

     Neither the Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

The date of this prospectus is                 , 2011.

          Each broker-dealer that receives Exchange Notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Notes. By so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act. A broker dealer who acquired Old Notes as a result of market making or other trading activities may use this prospectus, as supplemented or amended from time to time, in connection with any resales of the Exchange Notes. We have agreed that, for a period of up to 180 days after the closing of the exchange offer, we will make this prospectus available for use in connection with any such resale. See “Plan of Distribution.”

          You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with information different from that contained in this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy securities other than those specifically offered hereby or an offer to sell any securities offered hereby in any jurisdiction where, or to any person whom, it is unlawful to make such offer or solicitation. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of the Exchange Notes.

TABLE OF CONTENTS

		Page
SUMMARY			1
RISK FACTORS			8
THE EXCHANGE OFFER			27
USE OF PROCEEDS			35
RATIO OF EARNINGS TO FIXED CHARGES			36
SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA			37
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			40
BUSINESS			57
INVESTMENT POLICIES AND POLICIES WITH RESPECT TO CERTAIN ACTIVITIES			72
MANAGEMENT AND BOARD OF DIRECTORS			76
DIRECTOR COMPENSATION			80
EXECUTIVE COMPENSATION			82
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS			96
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			97
DESCRIPTION OF OTHER MATERIAL INDEBTEDNESS			99
DESCRIPTION OF EXCHANGE NOTES			102
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS			148
PLAN OF DISTRIBUTION			153
LEGAL MATTERS			154
EXPERTS			154
WHERE YOU CAN FIND MORE INFORMATION			154
INCORPORATION BY REFERENCE			154
INDEX TO FINANCIAL STATEMENTS			F-1
EX-3.4
EX-3.5
EX-3.6
EX-3.7
EX-3.8
EX-3.9
EX-3.10
EX-3.11
EX-3.12
EX-3.13
EX-3.14
EX-3.15
EX-3.16
EX-3.17
EX-3.18
EX-3.19
EX-3.20
EX-3.21
EX-3.22
EX-3.23
EX-3.24
EX-3.25
EX-3.26
EX-3.27
EX-3.28
EX-3.29
EX-3.30
EX-3.31
EX-3.32
EX-3.33
EX-3.34
EX-3.35
EX-3.36
EX-3.37
EX-3.38
EX-3.39
EX-3.40
EX-3.41
EX-3.42
EX-3.43
EX-3.44
EX-3.45
EX-3.46
EX-3.47
EX-3.48
EX-3.49
EX-3.50
EX-3.51
EX-3.52
EX-3.53
EX-3.54
EX-3.55
EX-3.56
EX-3.57
EX-3.58
EX-3.59
EX-3.60
EX-3.61
EX-3.62
EX-3.63
EX-3.64
EX-3.65
EX-3.66
EX-3.67
EX-3.68
EX-3.69
EX-3.70
EX-3.71
EX-3.72
EX-3.73
EX-3.74
EX-3.75
EX-3.76
EX-3.77
EX-3.78
EX-3.79
EX-3.80
EX-3.81
EX-3.82
EX-3.83
EX-3.84
EX-3.85
EX-3.86
EX-3.87
EX-3.88
EX-3.89
EX-3.90
EX-3.91
EX-3.92
EX-3.93
EX-3.94
EX-3.95
EX-3.96
EX-3.97
EX-3.98
EX-3.99
EX-3.100
EX-3.101
EX-3.102
EX-3.103
EX-3.104
EX-3.105
EX-3.106
EX-3.107
EX-3.108
EX-3.109
EX-3.110
EX-3.111
EX-3.112
EX-3.113
EX-3.114
EX-3.115
EX-3.116
EX-3.117
EX-3.118
EX-3.119
EX-3.120
EX-3.121
EX-3.122
EX-3.123
EX-3.124
EX-3.125
EX-3.126
EX-3.127
EX-3.128
EX-3.129
EX-3.130
EX-3.131
EX-3.132
EX-3.133
EX-3.134
EX-3.135
EX-3.136
EX-3.137
EX-3.138
EX-3.139
EX-3.140
EX-3.141
EX-3.142
EX-3.143
EX-3.144
EX-3.145
EX-3.146
EX-3.147
EX-3.148
EX-3.149
EX-3.150
EX-3.151
EX-3.152
EX-3.153
EX-3.154
EX-3.155
EX-3.156
EX-3.157
EX-3.158
EX-3.159
EX-3.160
EX-3.161
EX-3.162
EX-3.163
EX-3.164
EX-3.165
EX-3.166
EX-3.167
EX-3.168
EX-3.169
EX-3.170
EX-3.171
EX-3.172
EX-5.1
EX-23.1
EX-23.2
EX-25.1
EX-99.1
EX-99.2
EX-99.3

Unless the context requires or otherwise indicates, references in this prospectus to “we,” “our,” “us” or “our company” refer to MPT Operating Partnership, L.P., a Delaware limited partnership, and its consolidated subsidiaries, including MPT Finance Corporation, a Delaware corporation, together with Medical Properties Trust, LLC, a Delaware limited liability company and MPT Operating Partnership, L.P.’s sole general partner, and Medical Properties Trust, Inc., a Maryland corporation and the sole equity owner of Medical Properties Trust, LLC. References to “Operating Partnership” refer to MPT Operating Partnership, L.P. References to “Medical Properties” refer to Medical Properties Trust, Inc. Medical Properties has a 99.9% equity ownership interest in the Operating Partnership and the Operating Partnership has a 100% equity ownership interest in MPT Finance Corporation.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

          This prospectus contains forward-looking statements and information. Any statements that do not relate to historical or current facts or matters are forward-looking statements.

          These forward-looking statements include information about possible or assumed future results of our business, financial condition, liquidity, results of operations, plans and objectives. Statements regarding the following subjects, among others, are forward-looking by their nature:

	•		our business strategy;
	•		our projected operating results;
	•		our ability to acquire or develop net-leased facilities;
	•		availability of suitable facilities to acquire or develop;
	•		our ability to enter into, and the terms of, our prospective leases and loans;
	•		our ability to raise additional funds through offerings of our debt and equity securities;
	•		our ability to obtain future financing arrangements;
	•		estimates relating to, and our ability to pay, future distributions;
	•		our ability to compete in the marketplace;
	•		lease rates and interest rates;
	•		market trends;
	•		projected capital expenditures, if any; and
	•		the impact of technology on our facilities, operations and business.

          The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account information currently available to us. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity and results of operations may vary materially from those expressed in our forward-looking statements. You should carefully consider these risks before you make an investment decision with respect to the Exchange Notes, along with, among others, the following factors that could cause actual results to vary from our forward-looking statements:

	•		factors referenced herein under the section captioned “Risk Factors”;
	•		national and local economic, business, real estate, and other market conditions;
	•		the competitive environment in which we operate;
	•		the execution of our business plan;
	•		financing risks;
	•		acquisition and development risks;
	•		potential environmental contingencies and other liabilities;

•

other factors affecting the real estate industry generally or the healthcare real estate industry in particular;

	•		Medical Properties Trust, Inc.’s ability to maintain its status as a REIT for federal and state income tax purposes;
	•		our ability to attract and retain qualified personnel;
	•		federal and state healthcare and other regulatory requirements; and

•

the continuing impact of the recent economic recession, which may have a negative effect on the following, among other things:

•

the financial condition of our tenants, our lenders, counterparties to our capped call transactions and institutions that hold our cash balances, which may expose us to increased risks of default by these parties;

•

our ability to obtain debt financing on attractive terms or at all, which may adversely impact our ability to pursue acquisition and development opportunities and refinance existing debt and our future interest expense; and

•

the value of our real estate assets, which may limit our ability to dispose of assets at attractive prices or obtain or maintain debt financing secured by our properties or on an unsecured basis.

          When we use the words “believe,” “expect,” “may,” “potential,” “anticipate,” “estimate,” “plan,” “will,” “could,” “intend” or similar expressions, we are identifying forward-looking statements. You should not place undue reliance on these forward-looking statements. We are not obligated to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Except as required by law, we disclaim any obligation to update such statements or to publicly announce the result of any revisions to any of the forward-looking statements contained in this prospectus to reflect future events or developments.

MARKET AND INDUSTRY DATA

          This prospectus includes information with respect to market share and industry conditions from third-party sources or based upon our estimates using such sources when available. While we believe that such information and estimates are reasonable and reliable, we have not independently verified any of the data from third-party sources. Similarly, our internal research is based upon our understanding of industry conditions, and such information has not been independently verified.

SUMMARY

          This summary highlights information contained in this prospectus. It is not complete and does not contain all of the information that you should consider before participating in the exchange offer. You should read the following summary together with the more detailed information regarding our company, the Exchange Notes and the financial statements and notes thereto appearing elsewhere in this prospectus.

Our Business

          Medical Properties is a self-advised real estate investment trust (“REIT”) that was incorporated under Maryland law on August 27, 2003 primarily for the purpose of investing in and owning net-leased healthcare facilities across the United States. We acquire and develop healthcare facilities and lease the facilities to healthcare operating companies under long-term net leases, which require the tenants to bear most of the costs associated with the properties. We also occasionally make mortgage loans to healthcare operators collateralized by their real estate assets. In addition, we selectively make loans to, and other investments in, certain of our operators through our taxable REIT subsidiaries, the proceeds of which have historically been used for acquisitions and working capital. Finally, from time to time, we acquire a profit or other equity interest in certain of our tenants that gives us a limited right to share in such tenants’ positive cash flow.

          As of June 30, 2011, our portfolio consisted of 58 properties: 54 facilities (of the 56 facilities that we own, of which two are subject to long-term ground leases) are leased to 19 tenants, one is presently not under lease, one is under development, and the remainder are in the form of mortgage loans. Our owned and ground leased facilities consist of 22 general acute care hospitals, 17 long-term acute care hospitals, nine inpatient rehabilitation hospitals, two medical office buildings, and six wellness centers. The non-owned facilities on which we have made mortgage loans consist of general acute care facilities. As of June 30, 2011, our weighted average in-place remaining lease term across our portfolio was approximately 10 years. In addition, our two mortgage loans as of June 30, 2011 mature in 2022.

          Our strategy is to lease our facilities to tenants that are managed by experienced operators pursuant to long-term net leases. Alternatively, we have structured certain of our investments as long-term, interest-only mortgage loans to healthcare operators, and we may make similar investments in the future. In addition, we have and will continue to obtain profits or other equity interests in certain of our tenants’ operations in order to enhance our overall return. The market for healthcare real estate is extensive and includes real estate owned by a variety of healthcare operators and investors. We focus on acquiring and developing those net-leased facilities that are specifically designed to address the evolving needs and delivery processes of the nation’s leading healthcare providers.

          We expect the sources of our revenue for the foreseeable future to be similar to the sources of our 2010 revenue described in the above paragraphs and the tables in this section. Other sources presently include, or may include in the future, rents from medical office building tenants, wellness centers, ambulatory surgery centers, other single discipline licensed hospitals and smaller facilities such as emergency and other clinics.

          Our revenues are derived from rents we earn pursuant to the lease agreements with our tenants, from interest income from loans to our tenants and other facility owners and from profits in certain of our tenants’ operations. Our tenants and borrowers operate in the healthcare industry, generally providing medical, surgical and rehabilitative care to patients. The capacity of our tenants and borrowers to pay our rents and interest is dependent upon their ability to conduct their operations at profitable levels. We believe that the business environment of the industry segments in which our tenants operate is generally positive for efficient operators. However, our tenants’ operations are subject to economic, regulatory and market conditions that may affect their profitability. Accordingly, we monitor certain key factors, which we believe may provide early indications of conditions that may affect the level of risk in our lease and loan portfolio.

Corporate Information

          MPT Operating Partnership, L.P., a Delaware limited partnership, and MPT Finance Corporation, a Delaware corporation, are subsidiaries of Medical Properties Trust, Inc., a Maryland corporation. MPT Finance Corporation is a wholly owned subsidiary of the Operating Partnership formed for the purpose of acting as a co-

issuer of the notes and does not and will not have any substantial operations, assets or revenues. The subsidiary guarantors of the notes are all organized in the State of Delaware.

          The executive offices of MPT Operating Partnership, L.P., MPT Finance Corporation, Medical Properties Trust, Inc. and the subsidiary guarantors are located at 1000 Urban Center Drive, Suite 501, Birmingham, Alabama 35242. Our telephone number is (205) 969-3755.

The Exchange Offer

          On April 26, 2011, the Operating Partnership and MPT Finance Corporation (together, the “Issuers”) sold, through a private placement exempt from the registration requirements of the Securities Act, $450,000,000 principal amount of 6.875% Senior Notes due 2021 (the “Old Notes”), all of which are eligible to be exchanged for notes which have been registered under the Securities Act (the “Exchange Notes”). The Old Notes and the Exchange Notes are referred to together as the “notes.”

          Simultaneously with the private placement, we entered into a registration rights agreement with the initial purchasers of the Old Notes (the “Registration Rights Agreement”). Under the Registration Rights Agreement, we agreed to cause a registration statement relating to substantially identical notes, which will be issued in exchange for the Old Notes, to be filed with the Securities and Exchange Commission (the “SEC”) and to use our commercially reasonable efforts to complete the exchange offer within 270 days following the date on which we issued the Old Notes. You may exchange your Old Notes for Exchange Notes in this exchange offer. You should read the discussion under the headings “—The Exchange Notes,” “The Exchange Offer” and “Description of Exchange Notes” for further information regarding the Exchange Notes.

Securities to be Exchanged		Up to $450,000,000 principal amount of 6.875% Senior Notes due 2021.
The Exchange Offer; Securities Act Registration		We are offering to exchange the Old Notes for an equal principal amount of the Exchange Notes. Old Notes may be exchanged only in denominations of $2,000 of principal amount and any integral multiple of $1,000 in excess thereof.
		The exchange offer is being made pursuant to the Registration Rights Agreement, which grants the initial purchasers and any subsequent holders of the Old Notes certain exchange and registration rights. This exchange offer is intended to satisfy those exchange and registration rights with respect to the Old Notes. After the exchange offer is complete and except for our obligations to file a shelf registration statement under the circumstances described below, you will no longer be entitled to any exchange or registration rights with respect to Old Notes.
		You may tender your outstanding Old Notes for Exchange Notes by following the procedures described under the heading “The Exchange Offer.”
Expiration Date		The exchange offer will expire at 5:00 p.m., New York City time, on                , 2011, or a later date and time to which the Issuers may extend it.
Withdrawal Rights		You may withdraw your tender of the Old Notes at any time prior to the expiration date of the exchange offer. Any Old Notes not accepted by us for exchange for any reason will be returned to you at our expense promptly after the expiration or termination of the exchange offer.
Conditions to the Exchange Offer		The exchange offer is subject to customary conditions, some of which we may waive.
		We intend to conduct the exchange offer in accordance with the provisions of the Registration Rights Agreement and the applicable requirements of the Securities Act, the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations of the SEC.
		For more information, see “The Exchange Offer—Conditions to the Exchange Offer.”
Procedures for Tendering Old Notes		Since the Old Notes are represented by global book-entry notes, the

Through Brokers and Banks		Depositary Trust Company (“DTC”), as depositary, or its nominee is treated as the registered holder of the Old Notes and will be the only entity that can tender your Old Notes for Exchange Notes.
		To tender your outstanding Old Notes, you must instruct the institution where you keep your Old Notes to tender your Old Notes on your behalf so that they are received on or prior to the expiration of this exchange offer. By tendering your Old Notes you will be deemed to have acknowledged and agreed to be bound by the terms set forth under “The Exchange Offer.” Your outstanding Old Notes must be tendered in denominations of $2,000 of principal amount and any integral multiple of $1,000 in excess thereof.
		In order for your tender to be considered valid, the exchange agent must receive a confirmation of book-entry transfer of your outstanding Old Notes into the exchange agent’s account at DTC, under the procedure described in this prospectus under the heading “The Exchange Offer,” on or before 5:00 p.m., New York City time, on the expiration date of the exchange offer.
		See “The Exchange Offer” for more information regarding the procedures for tendering Old Notes.
Effect of Not Tendering Old Notes		If you do not tender your Old Notes or if you do tender them but they are not accepted by us, your Old Notes will continue to be subject to the existing restrictions upon transfer. Except for our obligation to file a shelf registration statement under the circumstances described below, we will have no further obligation to provide for the registration under the Securities Act of Old Notes. If your outstanding Old Notes are not tendered and accepted in the exchange offer, it may become more difficult for you to sell or transfer your outstanding Old Notes.
Resale of the Exchange Notes		Under existing interpretations by the staff of the SEC as set forth in no-action letters issued to unrelated third parties and referenced below, we believe that the Exchange Notes issued in the exchange offer in exchange for Old Notes may be offered for resale, resold and otherwise transferred by you without compliance with the registration and prospectus delivery provisions of the Securities Act, if you:
		•   are not an “affiliate” of ours within the meaning of Rule 405 of the Securities Act;
		•   are acquiring the Exchange Notes in the ordinary course of business; and
		•   have no arrangement or understanding with any person to participate in a distribution of the Exchange Notes.
		In addition, each participating broker-dealer that receives Exchange Notes for its own account pursuant to the exchange offer in exchange for Old Notes that were acquired as a result of market-making or other trading activity must also acknowledge that it will deliver a prospectus in connection with any resale of the Exchange Notes. For more information, see “Plan of Distribution.” Any holder of Old Notes, including any broker-dealer, who:
		•   is our affiliate,
		•   does not acquire the Exchange Notes in the ordinary course of its business, or

		•   tenders in the exchange offer with the intention to participate, or for the purpose of participating, in a distribution of Exchange Notes,
		cannot rely on the position of the staff of the SEC expressed in Exxon Capital Holdings Corporation, Morgan Stanley & Co., Incorporated or similar no-action letters and, in the absence of an applicable exemption, must comply with the registration and prospectus delivery requirements of the Securities Act in connection with the resale of the Exchange Notes or it may incur liability under the Securities Act. We will not be responsible for, or indemnify against, any such liability.
Minimum Condition		The exchange offer is not conditioned on any minimum aggregate principal amount of Old Notes being tendered for exchange.
Appraisal or Dissenters’ Rights		Holders of the Old Notes do not have any appraisal or dissenters’ rights in connection with the exchange offer.
Material United States Federal Income Tax Considerations		Your exchange of Old Notes for Exchange Notes to be issued in the exchange offer will not be a taxable event for U.S. federal income tax purposes. See “Material United States Federal Income Tax Considerations” for a summary of U.S. federal tax consequences associated with the exchange of Old Notes for Exchange Notes and the ownership and disposition of those Exchange Notes.
Use of Proceeds		We will not receive any proceeds from the issuance of Exchange Notes pursuant to the exchange offer.
Exchange Agent		Wilmington Trust Company is serving as the exchange agent in connection with the exchange offer. The address and telephone number of the exchange agent are set forth under the heading “The Exchange Offer—Exchange Agent.”
Shelf Registration Statement		The Registration Rights Agreement requires that we file a shelf registration statement, in addition to or in lieu of conducting the exchange offer, in the event that:
		(a) we are not permitted to file the exchange offer registration statement or to consummate the exchange offer due to a change in law or SEC policy;
		(b) for any reason, we do not consummate the exchange offer within 270 days following the date on which we issued the Old Notes; or
		(c) any of the initial purchasers party to the Registration Rights Agreement notifies us that it holds Old Notes that are or were ineligible to be exchanged in the exchange offer.

The Exchange Notes

     The summary below describes the principal terms of the Exchange Notes. Certain of the terms and conditions described below are subject to important limitations and exceptions. The terms of the Exchange Notes are identical to the terms of the Old Notes, except that the transfer restrictions, registration rights and provisions for additional interest relating to the Old Notes do not apply to the Exchange Notes. The “Description of Exchange Notes” section of this prospectus contains a more detailed description of the terms and conditions of the Exchange Notes. References to “we,” “us” and “our” refer only to MPT Operating Partnership, L.P. and MPT Finance Corporation and not to their subsidiaries or any other entity.

Issuers		MPT Operating Partnership, L.P. and MPT Finance Corporation, as co-issuers.
Securities Offered		$450,000,000 principal amount of 6.875% Senior Notes due 2021.
Maturity		May 1, 2021.
Interest		Interest on the Exchange Notes will accrue from the date of the original issuance of the Old Notes or from the date of the last payment of interest on the Old Notes, whichever is later. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months. We will not pay interest on Old Notes tendered and accepted for exchange.
Interest Rate		Interest will accrue at a rate of 6.875% per annum.
Interest Payment Dates		Each May 1 and November 1, beginning on May 1, 2012.
Ranking		The Exchange Notes will be our and the guarantors’ general senior unsecured obligations, will rank equal in right of payment with all of such entities’ existing and future senior indebtedness, including the Old Notes and borrowings under our credit facility, and will rank senior in right of payment to all of such entities’ existing and future subordinated indebtedness; however, the Exchange Notes will be effectively subordinated to all of our and the guarantors’ secured indebtedness to the extent of the value of the collateral securing such indebtedness. The Exchange Notes will also be structurally subordinated to the indebtedness and other obligations of our subsidiaries that do not guarantee the Exchange Notes with respect to the assets of such entities. As of December 31, 2010 and June 30, 2011, our subsidiaries that do not guarantee the Old Notes and will not guarantee the Exchange Notes had $15.3 million and $59.8 million, respectively, of indebtedness and other liabilities and had assets of $165.8 million and $210.0 million, respectively (or, in each case, less than 13% of our company’s consolidated total assets). For the year ended December 31, 2010 and the six months ended June 30, 2011, our subsidiaries that do not guarantee the Old Notes and will not guarantee the Exchange Notes had revenues of $27.1 million (or 22% of our company’s consolidated revenues) and $11.3 million (or 16% of our company’s consolidated revenues), respectively.
Guarantees		The Exchange Notes will be unconditionally guaranteed, jointly and severally, on a senior unsecured basis by our parent company and by each of our subsidiaries that guarantees our credit facility. The subsidiary guarantees may be released under certain circumstances. See “Description of Exchange Notes—Guarantees.”
Optional Redemption		We may redeem some or all of the notes at any time after May 1, 2016 at the redemption prices set forth in “Description of Exchange Notes—Optional Redemption.” We may also redeem up to 35% of the aggregate principal amount of the notes using the proceeds from certain equity offerings completed before May 1, 2014. In addition, we may redeem some or all the notes on or prior to May 1, 2016 at a redemption price

		equal to 100% of the principal amount thereof plus accrued and unpaid interest up to, but excluding, the applicable redemption date and a make-whole premium. See “Description of Exchange Notes—Optional Redemption.”
Change of Control; Certain Asset Sales		If the Operating Partnership or our parent company, Medical Properties Trust, Inc., experiences a change of control, we will be required to make an offer to purchase the notes at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the purchase date under certain circumstances. See “Description of Exchange Notes—Repurchase of notes upon a change of control.” If the Operating Partnership or any of its restricted subsidiaries sell assets, we will be required to make an offer to purchase the notes at their face amount, plus accrued and unpaid interest to the purchase date under certain circumstances. See “Description of Exchange Notes—Asset Sales.”
Certain Covenants		The indenture governing the notes (including the Exchange Notes) contains covenants that, among other things, limit our ability and the ability of our restricted subsidiaries to, among other things:
		•   incur debt
		•   pay dividends and make distributions;
		•   create liens
		•   enter into transactions with affiliates; and
		•   merge, consolidate or transfer all or substantially all of our assets.
		In addition, we are required to maintain Total Unencumbered Assets (as defined in “Description of Exchange Notes”) of at least 150% of our unsecured indebtedness. These covenants are subject to a number of important limitations and exceptions. See “Description of Exchange Notes—Covenants.”
Absence of a Public Market for the Exchange Notes		The Exchange Notes are a new issue of securities with no established public market. We do not intend to apply for listing of the Exchange Notes on any securities exchange.

You should refer to the section titled “Risk Factors” on page 8 of this prospectus for a description of some of the risks you should consider before tendering your Old Notes for Exchange Notes.

RISK FACTORS

     Before you decide to participate in the exchange offer, you should be aware that an investment in the Exchange Notes involves various risks and uncertainties, including those described below. You should carefully consider the risks and uncertainties described below with all of the other information that is included in this prospectus. If any of these risks actually occur, our business, financial position or results of operations could be materially adversely affected, and you could lose all or part of your investment.

Risks Related to our Business and Growth Strategy

Adverse economic and geopolitical conditions and dislocations in the credit markets could have a material adverse effect on our results of operations and financial condition and the ability of Medical Properties to pay distributions to its stockholders required to maintain its REIT status and our ability to meet our debt service obligations, including payments on the notes.

          Our business may be affected by market and economic challenges experienced by the U.S. economy or real estate industry as a whole or by the local economic conditions in the markets in which our properties are located, including the continuing impact of high unemployment and constrained credit. These conditions, or similar conditions that may exist in the future, may adversely affect our results of operations and financial condition and the ability of Medical Properties to pay distributions to its stockholders required to maintain its REIT status, and could have a material adverse effect on our ability to meet our debt service obligations, including payments on the notes. Among other potential consequences, such conditions may materially adversely affect:

•

our ability to borrow on terms and conditions that we find acceptable, or at all, which could reduce our ability to pursue acquisition and development opportunities and refinance existing debt, reduce our returns from our acquisition and development activities and increase our future interest expense;

•

the financial condition of our borrowers, tenants and operators, which may result in defaults under loans or leases due to bankruptcy, lack of liquidity, operational failures or for other reasons;

•

the values of our properties and our ability to dispose of assets at attractive prices or to obtain debt financing collateralized by our properties; and

•

the value and liquidity of our short-term investments and cash deposits, including as a result of a deterioration of the financial condition of the institutions that hold our cash deposits or the institutions or assets in which we have made short-term investments, the dislocation of the markets for our short-term investments, increased volatility in market rates for such investment or other factors.

Limited access to capital may restrict our growth.

          Our business plan contemplates growth through acquisitions and development of facilities. As a REIT, Medical Properties is required to make cash distributions, which reduce our ability to fund acquisitions and developments with retained earnings. We are dependent on acquisition financing and access to the capital markets for cash to make investments in new facilities. Due to market or other conditions, we may have limited access to capital from the equity and debt markets. We may not be able to obtain additional equity or debt capital or dispose of assets on favorable terms, if at all, at the time we need additional capital to acquire healthcare properties or to meet our obligations, which could have a material adverse effect on our results of operations and financial condition and the ability of Medical Properties to pay distributions to its stockholders required to maintain its REIT status, and our ability to meet our debt service obligations, including payments on the notes.

Our use of debt financing will subject us to significant risks, including refinancing risk and the risk of insufficient cash available for distribution to Medical Properties’ stockholders.

          Most of our current debt is, and we anticipate that much of our future debt will be, non-amortizing and payable in balloon payments. Therefore, we will likely need to refinance at least a portion of that debt as it matures. There is a risk that we may not be able to refinance then-existing debt or that the terms of any refinancing will not be as favorable as the terms of the then-existing debt. If principal payments due at maturity cannot be refinanced, extended or repaid with proceeds from other sources, such as new equity capital or sales of facilities, our cash flow may not be sufficient to repay all maturing debt in years when significant balloon payments come due. Additionally, we may incur significant penalties if we choose to prepay the debt.

Failure to hedge effectively against interest rate changes may adversely affect our results of operations, Medical Properties’ ability to make distributions to its stockholders required to maintain its REIT status and our ability to meet our debt service obligations, including payments on the notes.

          As of December 31, 2010 and June 30, 2011, we had $147.9 million and $39.6 million, respectively, in variable interest rate debt, which constituted 40.0% and 5.5% of our overall indebtedness as of such dates, and subjects us to interest rate volatility. We may seek to manage our exposure to interest rate volatility by using interest rate hedging arrangements, such as the $125 million of interest rate swaps entered into in 2010 on our senior unsecured notes. However, these hedging arrangements involve risk, including the risk that counterparties may fail to honor their obligations under these arrangements, that these arrangements may not be effective in reducing our exposure to interest rate changes and that these arrangements may result in higher interest rates than we would otherwise have. Moreover, no hedging activity can completely insulate us from the risks associated with changes in interest rates. Failure to hedge effectively against interest rate changes may materially adversely affect our results of operations and Medical Properties’ ability to make distributions to its stockholders required to maintain its REIT status and our ability to meet our debt service obligations, including payments on the notes.

Dependence on our tenants for payments of rent and interest may adversely impact Medical Properties’ ability to make distributions to its stockholders required to maintain its REIT status and our ability to meet our debt service obligations, including payments on the notes.

          We expect Medical Properties to continue to qualify as a REIT and, accordingly, as a REIT operating in the healthcare industry, we are severely limited by current tax law with respect to our ability to operate or manage the businesses conducted in our facilities.

          Accordingly, we rely almost exclusively on rent payments from our tenants under leases or interest payments from operators under mortgage or other loans for cash. We have no control over the success or failure of these tenants’ businesses. Significant adverse changes in the operations of our facilities (as was the case with the previous tenant of our River Oaks facility), or the financial condition of our tenants, operators or guarantors, could have a material adverse effect on our ability to collect rent and interest payments and, accordingly, on Medical Properties’ ability to make distributions to its stockholders required to maintain its REIT status and our ability to meet our debt service obligations, including payments on the notes. Facility management by our tenants and their compliance with state and federal healthcare and other laws could have a material impact on our tenants’ operating and financial condition and, in turn, their ability to pay rent and interest to us.

It may be costly to replace defaulting tenants and we may not be able to replace defaulting tenants with suitable replacements on suitable terms.

          Failure on the part of a tenant to comply materially with the terms of a lease could give us the right to terminate our lease with that tenant, repossess the applicable facility, cross default certain other leases and loans with that tenant and enforce the payment obligations under the lease. The process of terminating a lease with a defaulting tenant and repossessing the applicable facility may be costly and require a disproportionate amount of management’s attention. In addition, defaulting tenants or their affiliates may initiate litigation in connection with a lease termination or repossession against us or our subsidiaries. If a tenant-operator defaults and we choose to terminate our lease, we then would be required to find another tenant-operator. The transfer of most types of healthcare facilities is highly regulated, which may result in delays and increased costs in locating a suitable replacement tenant. The sale or lease of these properties to entities other than healthcare operators may be difficult due to the added cost and time of refitting the properties. If we are unable to re-let the properties to healthcare operators, we may be forced to sell the properties at a loss due to the repositioning expenses likely to be incurred by non-healthcare purchasers. Alternatively, we may be required to spend substantial amounts to adapt the facility to other uses. There can be no assurance that we would be able to find another tenant in a timely fashion, or at all, or that, if another tenant were found, we would be able to enter into a new lease on favorable terms. Defaults by our tenants (such as with the former tenant of our River Oaks facility and the costs we have incurred to maintain and re-develop the facility) under our leases may adversely affect our results of operations, financial condition, and Medical Properties’ ability to make distributions to its stockholders required to maintain its REIT status and our ability to meet our debt service obligations, including payments on the notes.

Our revenues are dependent upon our relationship with, and success of, Prime Healthcare Services, Inc., or Prime, and Vibra Healthcare, LLC, or Vibra.

          As of June 30, 2011, our real estate portfolio included 58 healthcare properties in 22 states of which 54 facilities are leased to 19 hospital operating companies; two of the investments are in the form of mortgage loans. Affiliates of Prime leased or mortgaged 13 facilities, representing 30.0% of the original total cost of our operating facilities and mortgage loans as of June 30, 2011, and Vibra leased six of our facilities, representing 9.3% of the original total cost of our operating facilities and loans as of June 30, 2011. Total revenue from Prime and Vibra, including rent, percentage rent and interest, was $22.5 million and $9.1 million, respectively, or 31.2% and 12.6%, respectively, of total revenue from continuing operations for the six months ended June 30, 2011.

          Our relationship with Prime and Vibra, and their respective financial performance and resulting ability to satisfy their lease and loan obligations to us are material to our financial results and our ability to service our debt and make distributions to our stockholders. We are dependent upon the ability of Prime and Vibra to make rent and loan payments to us, and their failure or delay to meet these obligations could have a material adverse effect on our financial condition and results of operations and Medical Properties’ ability to make distributions to its stockholders required to maintain its REIT status and our ability to meet our debt service obligations, including payments on the notes.

The bankruptcy or insolvency of our tenants under our leases could harm our operating results and financial condition.

          Some of our tenants are, and some of our prospective tenants may be, newly organized, have limited or no operating history and may be dependent on loans from us to acquire the facility’s operations and for initial working capital. Any bankruptcy filings by or relating to one of our tenants could bar us from collecting pre-bankruptcy debts from that tenant or their property, unless we receive an order permitting us to do so from the bankruptcy court. A tenant bankruptcy can be expected to delay our efforts to collect past due balances under our leases and loans, and could ultimately preclude collection of these sums. If a lease is assumed by a tenant in bankruptcy, we expect that all pre-bankruptcy balances due under the lease would be paid to us in full. However, if a lease is rejected by a tenant in bankruptcy, we would have only a general unsecured claim for damages. Any secured claims we have against our tenants may only be paid to the extent of the value of the collateral, which may not cover any or all of our losses. Any unsecured claim we hold against a bankrupt entity may be paid only to the extent that funds are available and only in the same percentage as is paid to all other holders of unsecured claims. We may recover none or substantially less than the full value of any unsecured claims, which would harm our financial condition.

Our business is highly competitive and we may be unable to compete successfully.

          We compete for development opportunities and opportunities to purchase healthcare facilities with, among others:

•

private investors;

•

healthcare providers, including physicians;

•

other REITs;

•

real estate developers;

•

financial institutions; and

•

other lenders.

          Many of these competitors may have substantially greater financial and other resources than we have and may have better relationships with lenders and sellers. Competition for healthcare facilities from competitors may adversely affect our ability to acquire or develop healthcare facilities and the prices we pay for those facilities. If we are unable to acquire or develop facilities or if we pay too much for facilities, our revenue and earnings growth and financial return could be materially adversely affected. Certain of our facilities and additional facilities we may acquire or develop will face competition from other nearby facilities that provide services comparable to those offered at our facilities and additional facilities we may acquire or develop. Some of those facilities are owned by governmental agencies and supported by tax revenues, and others are owned by tax-exempt corporations and may be supported to a large extent by endowments and charitable contributions. Those types of support are not available to our facilities and additional facilities we may acquire or develop. In addition, competing healthcare facilities located

in the areas served by our facilities and additional facilities we may acquire or develop may provide healthcare services that are not available at our facilities and additional facilities we may acquire or develop. From time to time, referral sources, including physicians and managed care organizations, may change the healthcare facilities to which they refer patients, which could adversely affect our rental revenues or interest income.

Most of our current tenants have, and prospective tenants may have, an option to purchase the facilities we lease to them which could disrupt our operations.

          Most of our current tenants have, and some prospective tenants will have, the option to purchase the facilities we lease to them. There is no assurance that the formulas we have developed for setting the purchase price will yield a fair market value purchase price.

          In the event our tenants and prospective tenants determine to purchase the facilities they lease either during the lease term or after their expiration, the timing of those purchases will be outside of our control and we may not be able to re-invest the capital on as favorable terms, or at all. Our inability to effectively manage the turnover of our facilities could materially adversely affect our ability to execute our business plan and our results of operations.

          We have 45 leased properties that are subject to purchase options as of June 30, 2011. For 31 of these properties, the purchase option generally allows the lessee to purchase the real estate at the end of the lease term, as long as no default has occurred, at a price equivalent to the greater of (1) fair market value or (2) our purchase price (increased, in some cases, by a certain annual rate of return from lease commencement date). The lease agreements provide for an appraisal process to determine fair market value. For 11 of these properties, the purchase option generally allows the lessee to purchase the real estate at the end of the lease term, as long as no default has occurred, at our purchase price (increased, in some cases, by a certain annual rate of return from lease commencement date). For the remaining three leases, the purchase options approximate fair value. As of June 30, 2011, none of our leases contained any bargain purchase options.

          In certain circumstances, a prospective purchaser of our hospital real estate may be deemed to be subject to the Federal Anti-Kickback Statute, or the Anti-Kickback Statute, and the Federal Physical Self-Referral Statute, or the Stark Law, which are described in “Business—Applicable Laws.” In such event, it may not be practicable for us to sell property to such prospective purchasers at prices other than fair market value.

We may not be able to adapt our management and operational systems to manage the net-leased facilities we have acquired and are developing or those that we may acquire or develop in the future without unanticipated disruption or expense.

     There is no assurance that we will be able to adapt our management, administrative, accounting and operational systems, or hire and retain sufficient operational staff, to manage the facilities we have acquired and those that we may acquire or develop. Our failure to successfully manage our current portfolio of facilities or any future acquisitions or developments could have a material adverse effect on our results of operations and financial condition and Medical Properties’ ability to make distributions to its stockholders required to maintain its REIT status and our ability to meet our debt service obligations, including payments on the notes.

We depend on key personnel, the loss of any one of whom may threaten our ability to operate our business successfully.

We depend on the services of Edward K. Aldag, Jr., R. Steven Hamner, and Emmett E. McLean to carry out our business and investment strategy. If we were to lose any of these executive officers, it may be more difficult for us to locate attractive acquisition targets, complete our acquisitions and manage the facilities that we have acquired or developed. Additionally, as we expand, we will continue to need to attract and retain additional qualified officers and employees. The loss of the services of any of our executive officers, or our inability to recruit and retain qualified personnel in the future, could have a material adverse effect on our business and financial results.

Risks Related to Real Estate Investments

Our real estate and mortgage investments are and will continue to be concentrated in a single industry segment, making us more vulnerable economically than if our investments were more diversified.

          We have acquired and have developed and have made mortgage investments in and expect to continue acquiring and developing and making mortgage investments in healthcare facilities. We are subject to risks inherent in concentrating investments in real estate. The risks resulting from a lack of diversification become even greater as a result of our business strategy to invest solely in healthcare facilities. A downturn in the real estate industry could materially adversely affect the value of our facilities. A downturn in the healthcare industry could negatively affect our tenants’ ability to make lease or loan payments to us and, consequently, Medical Properties’ ability to make distributions to its stockholders required to maintain its REIT status and our ability to meet our debt service obligations, including payments on the notes. These adverse effects could be more pronounced than if we diversified our investments outside of real estate or outside of healthcare facilities.

Our facilities may not have efficient alternative uses, which could impede our ability to find replacement tenants in the event of termination or default under our leases.

          Primarily all of the facilities in our current portfolio are and primarily all of the facilities we expect to acquire or develop in the future will be net-leased healthcare facilities. If we or our tenants terminate the leases for these facilities or if these tenants lose their regulatory authority to operate these facilities, we may not be able to locate suitable replacement tenants to lease the facilities for their specialized uses. Alternatively, we may be required to spend substantial amounts to adapt the facilities to other uses. Any loss of revenues or additional capital expenditures occurring as a result could have a material adverse effect on our financial condition and results of operations and could hinder Medical Properties’ ability to make distributions to its stockholders required to maintain its REIT status and our ability to meet our debt service obligations, including payments on the notes.

Illiquidity of real estate investments could significantly impede our ability to respond to adverse changes in the performance of our facilities and harm our financial condition.

          Real estate investments are relatively illiquid. Additionally, the real estate market is affected by many factors beyond our control, including adverse changes in global, national, and local economic and market conditions and the availability, costs and terms of financing. Our ability to quickly sell or exchange any of our facilities in response to changes in economic and other conditions will be limited. No assurances can be given that we will recognize full value for any facility that we are required to sell for liquidity reasons. Our inability to respond rapidly to changes in the performance of our investments could adversely affect our financial condition and results of operations and Medical Properties’ ability to make distributions to its stockholders required to maintain its REIT status and our ability to meet our debt service obligations, including payments on the notes.

Development and construction risks could adversely affect Medical Properties’ ability to make distributions to its stockholders required to maintain its REIT status and our ability to meet our debt service obligations, including payments on the notes.

We have developed and constructed facilities in the past and are currently developing one facility, while redeveloping another. We will develop additional facilities in the future as opportunities present themselves. Our development and related construction activities may subject us to the following risks:

•

we may have to compete for suitable development sites;

•

our ability to complete construction is dependent on there being no title, environmental or other legal proceedings arising during construction;

•

we may be subject to delays due to weather conditions, strikes and other contingencies beyond our control;

•

we may be unable to obtain, or suffer delays in obtaining, necessary zoning, land use, building, occupancy healthcare regulatory and other required governmental permits and authorizations, which could result in increased costs, delays in construction, or our abandonment of these projects;

•

we may incur construction costs for a facility which exceed our original estimates due to increased costs for materials or labor or other costs that we did not anticipate; and

•

we may not be able to obtain financing on favorable terms, which may render us unable to proceed with our development activities.

          We expect to fund our development projects over time. The time frame required for development and construction of these facilities means that we may have to wait years for a significant cash return. In addition, our tenants may not be able to obtain managed care provider contracts in a timely manner or at all. Finally, there is no assurance that future development projects will occur without delays and cost overruns. Risks associated with our development projects may reduce anticipated rental revenue which could affect the timing of, and Medical Properties’ ability to make, distributions to its stockholders required to maintain its REIT status and our ability to meet our debt service obligations, including payments on the notes.

We may be subject to risks arising from future acquisitions of healthcare properties.

          We may be subject to risks in connection with our acquisition of healthcare properties, including without limitation the following:

•

we may have no previous business experience with the tenants at the facilities acquired, and we may face difficulties in managing them;

•

underperformance of the acquired facilities due to various factors, including unfavorable terms and conditions of the existing lease agreements relating to the facilities, disruptions caused by the management of our tenants or changes in economic conditions;

•

diversion of our management’s attention away from other business concerns;

•

exposure to any undisclosed or unknown potential liabilities relating to the acquired facilities; and

•

potential underinsured losses on the acquired facilities.

          We cannot assure you that we will be able to manage the new properties without encountering difficulties or that any such difficulties will not have a material adverse effect on us.

Our facilities may not achieve expected results or we may be limited in our ability to finance future acquisitions, which may harm our financial condition and operating results, Medical Properties’ ability to make distributions to its stockholders required to maintain its REIT status and our ability to meet our debt service obligations, including payments on the notes.

          Acquisitions and developments entail risks that investments will fail to perform in accordance with expectations and that estimates of the costs of improvements necessary to acquire and develop facilities will prove inaccurate, as well as general investment risks associated with any new real estate investment. Newly developed or newly renovated facilities may not have operating histories that are helpful in making objective pricing decisions. The purchase prices of these facilities will be based in part upon projections by management as to the expected operating results of the facilities, subjecting us to risks that these facilities may not achieve anticipated operating results or may not achieve these results within anticipated time frames.

          We anticipate that future acquisitions and developments will largely be financed through externally generated funds such as borrowings under credit facilities and other secured and unsecured debt financing and from issuances of equity securities. Because we must distribute at least 90% of our REIT taxable income, excluding net

capital gain, each year to maintain Medical Properties’ qualification as a REIT, our ability to rely upon income from operations or cash flow from operations to finance our growth and acquisition activities will be limited.

          If our facilities do not achieve expected results and generate ample cash flows from operations or if we are unable to obtain funds from borrowings or the capital markets to finance our acquisition and development activities, amounts available for distribution to stockholders could be adversely affected and we could be required to reduce distributions, thereby jeopardizing our ability to maintain Medical Properties’ status as a REIT, and adversely affecting our ability to meet our debt service obligations, including payments on the notes.

If we suffer losses that are not covered by insurance or that are in excess of our insurance coverage limits, we could lose investment capital and anticipated profits.

          Our leases generally require our tenants to carry property, general liability, professional liability, loss of earnings, all risk and extended coverage insurance in amounts sufficient to permit the replacement of the facility in the event of a total loss, subject to applicable deductibles. For those properties not currently under lease, we carry such insurance. However, there are certain types of losses, generally of a catastrophic nature, such as earthquakes, floods, hurricanes and acts of terrorism, which may be uninsurable or not insurable at a price we or our tenants can afford. Inflation, changes in building codes and ordinances, environmental considerations and other factors also might make it impracticable to use insurance proceeds to replace a facility after it has been damaged or destroyed. Under such circumstances, the insurance proceeds we receive might not be adequate to restore our economic position with respect to the affected facility. If any of these or similar events occur, it may reduce our return from the facility and the value of our investment.

Our capital expenditures for facility renovation may be greater than anticipated and may adversely impact rent payments by our tenants and Medical Properties’ ability to make distributions to its stockholders required to maintain its REIT status and our ability to meet our debt service obligations, including payments on the notes.

          Facilities, particularly those that consist of older structures, have an ongoing need for renovations and other capital improvements, including periodic replacement of fixtures and fixed equipment. Although our leases require our tenants to be primarily responsible for the cost of such expenditures, renovation of facilities involves certain risks, including the possibility of environmental problems, regulatory requirements, construction cost overruns and delays, uncertainties as to market demand or deterioration in market demand after commencement of renovation and the emergence of unanticipated competition from other facilities. All of these factors could adversely impact rent and loan payments by our tenants, which in turn could have a material adverse effect on our financial condition and results of operations and Medical Properties’ ability to make distributions to its stockholders required to maintain its REIT status and our ability to meet our debt service obligations, including payments on the notes.

All of our healthcare facilities are subject to property taxes that may increase in the future and adversely affect our business.

          Our facilities are subject to real and personal property taxes that may increase as property tax rates change and as the facilities are assessed or reassessed by taxing authorities. Our leases and mortgage loans generally provide that the property taxes are charged to our tenants and borrowers as an expense related to the facilities that they occupy. As the owner of the facilities, however, we are ultimately responsible for payment of the taxes to the government. If property taxes increase, our tenants and borrowers may be unable to make the required tax payments, ultimately requiring us to pay the taxes. If we incur these tax liabilities, our ability to meet our debt service obligations, including payments on the notes, could be adversely affected.

As the owner and lessor of real estate, we are subject to risks under environmental laws, the cost of compliance with which and any violation of which could materially adversely affect us.

          Our operating expenses could be higher than anticipated due to the cost of complying with existing and future laws and regulations. Various environmental laws may impose liability on the current or prior owner or operator of real property for removal or remediation of hazardous or toxic substances. Current or prior owners or operators may also be liable for government fines and damages for injuries to persons, natural resources and

adjacent property. These environmental laws often impose liability whether or not the owner or operator knew of, or was responsible for, the presence or disposal of the hazardous or toxic substances. The cost of complying with environmental laws could materially adversely affect amounts available for distribution to Medical Properties’ stockholders required to maintain its REIT status and our ability to meet our debt service obligations, including payments on the notes, and could exceed the value of all of our facilities. In addition, the presence of hazardous or toxic substances, or the failure of our tenants to properly manage, dispose of or remediate such substances, including medical waste generated by physicians and our other healthcare tenants, may adversely affect our tenants or our ability to use, sell or rent such property or to borrow using such property as collateral which, in turn, could reduce our revenue and our financing ability. We have obtained Phase I environmental assessments on all facilities we have acquired or developed or on which we have made mortgage loans, and intend to obtain them on all future facilities we acquire. However, even if the Phase I environmental assessment reports do not reveal any material environmental contamination, it is possible that material environmental contamination and liabilities may exist of which we are unaware.

          Although the leases for our facilities and our mortgage loans generally require our operators to comply with laws and regulations governing their operations, including the disposal of medical waste, and to indemnify us for certain environmental liabilities, the scope of their obligations may be limited. We cannot assure you that our tenants would be able to fulfill their indemnification obligations and, therefore, any material violation of environmental laws could have a material adverse affect on us. In addition, environmental laws are constantly evolving, and changes in laws, regulations or policies, or changes in interpretations of the foregoing, could create liabilities where none exists today.

Our interests in facilities through ground leases expose us to the loss of the facility upon breach or termination of the ground lease and may limit our use of the facility.

          We have acquired interests in two of our facilities, at least in part, by acquiring leasehold interests in the land on which the facility is located rather than an ownership interest in the property, and we may acquire additional facilities in the future through ground leases. As lessee under ground leases, we are exposed to the possibility of losing the property upon termination, or an earlier breach by us, of the ground lease. Ground leases may also restrict our use of facilities. Our current ground lease for the facility in San Antonio limits use of the property to operation of a comprehensive rehabilitation hospital, medical research and education and other medical uses and uses reasonably incidental thereto. These restrictions and any similar future restrictions in ground leases will limit our flexibility in renting the facility and may impede our ability to sell the property.

Risks Related to the Healthcare Industry

Reductions in reimbursement from third-party payors, including Medicare and Medicaid, could adversely affect the profitability of our tenants and hinder their ability to make rent payments to us.

          Sources of revenue for our tenants and operators may include the Medicare and Medicaid programs, private insurance carriers and health maintenance organizations, among others. Efforts by such payors to reduce healthcare costs will likely continue, which may result in reductions or slower growth in reimbursement for certain services provided by some of our tenants. In addition, the failure of any of our tenants to comply with various laws and regulations could jeopardize their ability to continue participating in Medicare, Medicaid and other government sponsored payment programs.

          For 2010 and the six months ended June 30, 2011, approximately 39% and 34%, respectively, of our revenues were derived from our hospitals located in California, which are leased to Prime and Vibra. The sources of revenue for Prime and Vibra maybe adversely affected by changes in California’s healthcare laws and regulations, which could negatively affect their ability to make lease payments to us and Medical Properties’ ability to make distributions to its stockholders required to maintain its REIT status and our ability to meet our debt service obligations, including payments on the notes.

          The healthcare industry continues to face various challenges, including increased government and private payor pressure on healthcare providers to control or reduce costs. We believe that our tenants will continue to experience a shift in payor mix away from fee-for-service payors, resulting in an increase in the percentage of

revenues attributable to managed care payors, government payors and general industry trends that include pressures to control healthcare costs. Pressures to control healthcare costs and a shift away from traditional health insurance reimbursement have resulted in an increase in the number of patients whose healthcare coverage is provided under managed care plans, such as health maintenance organizations and preferred provider organizations. In addition, due to the aging of the population and the expansion of governmental payor programs, we anticipate that there will be a marked increase in the number of patients relying on healthcare coverage provided by governmental payors. These changes could have a material adverse effect on the financial condition of some or all of our tenants, which could have a material adverse effect on our financial condition and results of operations and could negatively affect Medical Properties’ ability to make distributions to its stockholders required to maintain its REIT status and our ability to meet our debt service obligations, including payments on the notes. In instances where we own a minority interest in our tenants’ operations, in addition to the effect on these tenants’ ability to meet their financial obligations to us, our ownership and investment interests may also be negatively impacted.

          Over the past several years, Centers for Medicare and Medicaid Services, or CMS, has increased its attention on reimbursement for long-term acute care hospitals, or LTACHs, and inpatient rehabilitation facilities, or IRFs, with CMS imposing regulatory restrictions on LTACH and IRF reimbursement. A significant number of our tenants operate LTACHs and IRFs. We expect that CMS will continue to explore implementing other restrictions on LTACH and IRF reimbursement, and possibly develop more restrictive facility and patient level criteria for these types of facilities. These changes could have a material adverse effect on the financial condition of some of our tenants, which could have a material adverse effect on our financial condition and results of operations and could negatively affect Medical Properties’ ability to make distributions to its stockholders required to maintain its REIT status and our ability to meet our debt service obligations, including payments on the notes. In instances where we own a minority interest in our tenants’ operations, in addition to the effect on these tenants’ ability to meet their financial obligations to us, our ownership and investment interests may also be negatively impacted.

The healthcare industry is heavily regulated and loss of licensure or certification or failure to obtain licensure or certification could result in the inability of our tenants to make lease payments to us.

          The healthcare industry is highly regulated by federal, state and local laws, and is directly affected by federal conditions of participation, state licensing requirements, facility inspections, state and federal reimbursement policies, regulations concerning capital and other expenditures, certification requirements and other such laws, regulations and rules.

          Licensed health care facilities must comply with minimum health and safety standards and are subject to survey and inspection by state and federal agencies and their agents or affiliates, including the CMS, the Joint Commission, and state departments of health. CMS develops Conditions of Participation and Conditions for Coverage that health care organizations must meet in order to begin and continue participating in the Medicare and Medicaid programs. These minimum health and safety standards are aimed at improving quality and protecting the health and safety of beneficiaries. There are several common criteria that exist across health entities. Examples of common conditions include: a governing body responsible for effectively governing affairs of the organization, a quality assurance program to evaluate entity-wide patient care, medical record service responsible for medical records, a utilization review that reviews the services furnished by the organization and its staff, a facility constructed, arranged and maintained according to a life safety code that ensures patient safety and the deliverance of services appropriate to the needs of the community.

          For example, the Medicare program contains specific requirements with respect to the maintenance of medical records. Medical records must be maintained for every individual who is evaluated or treated at a hospital. Medical records must be accurately written, promptly completed, properly filed and retained, and accessible. Medicare surveyors may conduct on site visits for a variety of reasons, including to investigate a patient complaint or to survey the hospital for compliance with Medicare requirements. In such instances, Medicare surveyors generally review a large sampling of patient charts. If a pattern of incomplete medical records is identified, the hospital’s Medicare certification could be jeopardized if a plan of correction is not completed. In order for a health care organization to continue receiving payment from the Medicare and Medicaid programs, it must comply with conditions of participation, or standards, as set forth in federal regulations. Further, many hospitals and other institutional providers are accredited by accrediting agencies such as the Joint Commission, a national health care accrediting organization. The Joint Commission was created to accredit healthcare organizations that meet its

minimum health and safety standards. A national accrediting organization, such as the Joint Commission, enforces standards that meet or exceed such requirements.

          Surveyors for the Joint Commission, prior to the opening of a facility and approximately every three years thereafter, conduct on site surveys of facilities for compliance with a multitude of patient safety, treatment, and administrative requirements. Facilities may lose accreditation for failure to meet such requirements, which in turn may result in the loss of license or certification. For example, a facility may lose accreditation for failing to maintain proper medication in the operating room to treat potentially fatal reactions to anesthesia, or for failure to maintain safe and sanitary medical equipment. Finally, health care facility reimbursement practices and quality of care issues may result in loss of license or certification. For instance, the practice of “upcoding,” whereby services are billed for higher procedure codes than were actually performed, may lead to the revocation of a hospital’s license. An event involving poor quality of care, such as that which leads to the serious injury or death of a patient, may also result in loss of license or certification. The Services Employees International Union (“SEIU”) has alleged that our tenant, Prime, may have upcoded for certain procedures and may be providing poor quality of care. Prime has addressed these allegations publicly and has provided clinical and other data to us refuting these allegations. Prime has also informed us that the SEIU is attempting to organize certain Prime employees.

          The failure of any tenant to comply with such laws, requirements, and regulations resulting in a loss of its license would affect its ability to continue its operation of the facility and would adversely effect the tenant’s ability to make lease and principal and interest payments to us. This, in turn, could have a material adverse effect on our financial condition and results of operations and could negatively affect our ability to make distributions to our shareholders. In instances where we own a minority interest in our tenants’ operations, in addition to the effects on these tenants’ ability to meet their financial obligations to us, our ownership and investment interests would also be negatively impacted.

          In addition, establishment of healthcare facilities and transfers of operations of healthcare facilities are subject to regulatory approvals not required for establishment, or transfers, of other types of commercial operations and real estate. Restrictions and delays in transferring the operations of healthcare facilities, in obtaining new third-party payor contracts, including Medicare and Medicaid provider agreements, and in receiving licensure and certification approval from appropriate state and federal agencies by new tenants, may affect our ability to terminate lease agreements, remove tenants that violate lease terms, and replace existing tenants with new tenants. Furthermore, these matters may affect a new tenant’s ability to obtain reimbursement for services rendered, which could adversely affect their ability to pay rent to us and to pay principal and interest on their loans from us. In instances where we own a minority interest in our tenants’ operations, in addition to the effect on these tenants’ ability to meet their financial obligations to us, our ownership and investment interests may also be negatively impacted.

Our tenants and mortgagors are subject to fraud and abuse laws, the violation of which by a tenant or mortgagor may jeopardize the tenant’s or mortgagor’s ability to make lease and loan payments to us.

          As noted earlier, the federal government and numerous state governments have passed laws and regulations that attempt to eliminate healthcare fraud and abuse by prohibiting business arrangements that induce patient referrals or the ordering of specific ancillary services. In addition, federal and state governments have significantly increased investigation and enforcement activity to detect and eliminate fraud and abuse in the Medicare and Medicaid programs. It is anticipated that the trend toward increased investigation and enforcement activity in the areas of fraud and abuse and patient self-referrals, will continue in future years. Violations of these laws may result in the imposition of criminal and civil penalties, including possible exclusion from federal and state healthcare programs. Imposition of any of these penalties upon any of our tenants or mortgagors could jeopardize any tenant’s or mortgagor’s ability to operate a facility or to make lease and loan payments, thereby potentially adversely affecting us. In instances where we own a minority interest in our tenants’ or mortgagors’ operations, in addition to the effect on these tenants’ or mortgagors’ ability to meet their financial obligations to us, our ownership and investment interests may also be negatively impacted.

          Some of our tenants have accepted, and prospective tenants may accept, an assignment of the previous operator’s Medicare provider agreement. Such operators and other new-operator tenants that take assignment of Medicare provider agreements might be subject to federal or state regulatory, civil and criminal investigations of the

previous owner’s operations and claims submissions. While we conduct due diligence in connection with the acquisition of such facilities, these types of issues may not be discovered prior to purchase. Adverse decisions, fines or recoupments might negatively impact our tenants’ or mortgagors’ financial condition, and in turn their ability to make lease and loan payments to us. In instances where we own a minority interest in our tenants’ or mortgagors’ operations, in addition to the effect on these tenants’ or mortgagors’ ability to meet their financial obligations to us, our ownership and investment interests may also be negatively impacted.

Certain of our lease arrangements may be subject to fraud and abuse or physician self-referral laws.

          Although no such investment exists today, local physician investment in our Operating Partnership or our subsidiaries that own our facilities could subject our lease arrangements to scrutiny under fraud and abuse and physician self-referral laws. Under the Stark Law, and its implementing regulations, if our lease arrangements do not satisfy the requirements of an applicable exception, the ability of our tenants to bill for services provided to Medicare beneficiaries pursuant to referrals from physician investors could be adversely impacted and subject us and our tenants to fines, which could impact our tenants’ ability to make lease and loan payments to us. In instances where we own a minority interest in our tenants’ operations, in addition to the effect on these tenants’ ability to meet their financial obligations to us, our ownership and investment interests may also be negatively impacted.

          We intend to use our good faith efforts to structure our lease arrangements to comply with these laws; however, if we are unable to do so, this failure may restrict our ability to permit physician investment or, where such physicians do participate, may restrict the types of lease arrangements into which we may enter, including our ability to enter into percentage rent arrangements.

State certificate of need laws may adversely affect our development of facilities and the operations of our tenants.

          Certain healthcare facilities in which we invest may also be subject to state laws which require regulatory approval in the form of a certificate of need prior to initiation of certain projects, including, but not limited to, the establishment of new or replacement facilities, the addition of beds, the addition or expansion of services and certain capital expenditures. State certificate of need laws are not uniform throughout the United States and are subject to change. We cannot predict the impact of state certificate of need laws on our development of facilities or the operations of our tenants.

          In addition, certificate of need laws often materially impact the ability of competitors to enter into the marketplace of our facilities. Finally, in limited circumstances, loss of state licensure or certification or closure of a facility could ultimately result in loss of authority to operate the facility and require re-licensure or new certificate of need authorization to re-institute operations. As a result, a portion of the value of the facility may be related to the limitation on new competitors. In the event of a change in the certificate of need laws, this value may markedly change.

Tax Risks Associated with Medical Properties’ Status as a REIT

Loss of Medical Properties’ tax status as a REIT would have significant adverse consequences to us and could have significant adverse consequences to the trading price of the notes.

          We believe that Medical Properties qualifies as a REIT for federal income tax purposes and has qualified as a REIT under the federal income tax laws commencing with its taxable year that began on April 6, 2004 and ended on December 31, 2004. The REIT qualification requirements are extremely complex, and interpretations of the federal income tax laws governing qualification as a REIT are limited. Accordingly, there is no assurance that Medical Properties has qualified or will continue to qualify as a REIT. At any time, new laws, regulations, interpretations or court decisions may change the federal tax laws relating to, or the federal income tax consequences of, qualification as a REIT. It is possible that future economic, market, legal, tax or other considerations may cause Medical Properties’ board of directors to revoke the REIT election, which it may do without approval of our stockholders or holders of the notes.

          If Medical Properties loses or revokes its REIT status for any taxable year for which the statue of limitations remains open, we will face serious tax consequences that could substantially reduce the funds available for our debt service obligations, including payments on the notes, because:

•

we would not be allowed a deduction for distributions to our stockholders in computing our taxable income; therefore we would be subject to federal income tax at regular corporate rates and we might need to borrow money or sell assets in order to pay any such tax;

•

we also could be subject to the federal alternative minimum tax and possibly increased state and local taxes; and

•

unless we are entitled to relief under statutory provisions, we also would be disqualified from taxation as a REIT for the four taxable years following the year during which we ceased to qualify.

          As a result of all these factors, a failure to achieve or a loss or revocation of Medical Properties’ REIT status for any taxable year for which the statue of limitations remains open could have a material adverse effect on our financial condition and results of operations and could adversely affect the trading price of the notes.

Failure to make required distributions would subject us to tax.

          In order for Medical Properties to qualify as a REIT, each year it must distribute to its stockholders at least 90% of its REIT taxable income, excluding net capital gain. To the extent that it satisfies the distribution requirement, but distributes less than 100% of its taxable income, Medical Properties will be subject to federal corporate income tax on its undistributed taxable income. In addition, it will incur a 4% nondeductible excise tax on the amount, if any, by which its distributions in any year are less than the sum of (1) 85% of its ordinary income for that year; (2) 95% of its capital gain net income for that year; and (3) 100% of its undistributed taxable income from prior years.

          Medical Properties may be required to make distributions to its stockholders at disadvantageous times or when we do not have funds readily available for distribution. Differences in timing between the recognition of income and the related cash receipts or the effect of required debt amortization payments could require us to borrow money or sell assets to pay out enough of our taxable income to satisfy the distribution requirement and to avoid corporate income tax and the 4% excise tax in a particular year. In the future, we may borrow to pay distributions to Medical Properties stockholders required to maintain its REIT status and the limited partners of the Operating Partnership. Any funds that we borrow would subject us to interest rate and other market risks.

Complying with REIT requirements may cause us to forego otherwise attractive opportunities.

          For Medical Properties to qualify as a REIT for federal income tax purposes, it must continually satisfy tests concerning, among other things, the sources of our income, the nature and diversification of our assets, the amounts we distribute to Medical Properties’ stockholders and the ownership of its stock. In order to meet these tests, we may be required to forego attractive business or investment opportunities. Overall, no more than 25% of the value of our assets may consist of securities of one or more taxable REIT subsidiaries and no more than 25% of the value of our assets may consist of securities that are not qualifying assets under the test requiring that 75% of a REIT’s assets consist of real estate and other related assets. Further, a taxable REIT subsidiary may not directly or indirectly operate or manage a healthcare facility. For purposes of this definition a “healthcare facility” means a hospital, nursing facility, assisted living facility, congregate care facility, qualified continuing care facility, or other licensed facility which extends medical or nursing or ancillary services to patients and which is operated by a service provider that is eligible for participation in the Medicare program under Title XVIII of the Social Security Act with respect to the facility. Thus, compliance with the REIT requirements may limit our flexibility in executing our business plan.

Loans to our tenants could be recharacterized as equity, in which case our interest income from that tenant might not be qualifying income under the REIT rules and Medical Properties could lose its REIT status.

          In connection with the acquisition in 2004 of certain Vibra facilities, one of our taxable REIT subsidiaries made a loan to Vibra in an aggregate amount of $41.4 million to acquire the operations at those Vibra facilities. As

of June 30, 2011, that loan had been reduced to $19.1 million. The acquisition loan bears interest at an annual rate of 10.25%. The Operating Partnership loaned the funds to our taxable REIT subsidiary to make these loans. The loan from the Operating Partnership to our taxable REIT subsidiary bears interest at an annual rate of 9.25%.

          Our taxable REIT subsidiaries have made and will make loans to tenants to acquire operations or for other purposes. The Internal Revenue Service, or IRS, may take the position that certain loans to tenants should be treated as equity interests rather than debt. If the IRS were to successfully treat a loan to a particular tenant as equity interests, the tenant would be a “related party tenant” with respect to our company and the interest that we receive from the tenant would not be qualifying income for purposes of the REIT gross income tests. As a result, Medical Properties could lose its REIT status. In addition, if the IRS were to successfully treat a particular loan as interests held by the Operating Partnership rather than by our taxable REIT subsidiaries, we could fail the 5% asset test, and if the IRS further successfully treated the loan as other than straight debt, we could fail the 10% asset test with respect to such interest. As a result of the failure of either test, Medical Properties could lose its REIT status for any taxable year for which the statute of limitations remains open, which would subject it to corporate level income tax and adversely affect its ability to meet our debt service obligations, including payments on the notes.

Risks Relating to the Exchange Offer

You may not be able to sell your Old Notes if you do not exchange them for Exchange Notes in the exchange offer.

          If you do not exchange your Old Notes for Exchange Notes in the exchange offer, your Old Notes will continue to be subject to restrictions on transfer. In general, you may not offer, sell or otherwise transfer the Old Notes in the United States unless they are:

•

registered under the Securities Act;

•

offered or sold pursuant to an exemption from the Securities Act and applicable state securities laws; or

•

offered or sold in a transaction not subject to the Securities Act and applicable state securities laws.

          The Issuers and the guarantors do not currently anticipate that they will register the Old Notes under the Securities Act and, except for limited instances, they will not be under any obligation to do so under the Registration Rights Agreement or otherwise.

Your ability to sell your Old Notes may be significantly more limited and the price at which you may be able to sell your Old Notes may be significantly lower if you do not exchange them for Exchange Notes in the exchange offer.

          To the extent that the Old Notes are tendered and accepted for exchange in the exchange offer, the trading market for the Old Notes that remain outstanding may be significantly more limited. As a result, the liquidity of the Old Notes not tendered and accepted for exchange could be adversely affected. The extent of the market for Old Notes and the availability of price quotations would depend on a number of factors, including the number of holders of Old Notes remaining outstanding and the interest of securities firms in maintaining a market in the Old Notes. An issue of securities with a similar outstanding market value available for trading, which is called the “float,” may command a lower price than would be comparable to an issue of securities with a greater float. As a result, the market price for the Old Notes that are not exchanged in the exchange offer may be affected adversely to the extent that the Old Notes exchanged in the exchange offer reduce the float. The reduced float also may make the trading price of the Old Notes that are not exchanged more volatile.

You must comply with the exchange offer procedures in order to receive new, freely tradable Exchange Notes.

          Delivery of Exchange Notes in exchange for Old Notes tendered and accepted for exchange pursuant to the exchange offer will be made only after timely receipt by the exchange agent of book-entry transfer of Old Notes into the exchange agent’s account at DTC, as depositary, including an Agent’s Message (as defined in “The Exchange Offer—Procedures for Tendering Old Notes Through Brokers and Banks”). We are not required to notify you of defects or irregularities in tenders of Old Notes for exchange. Old Notes that are not tendered or that are tendered but we do not accept for exchange will, following consummation of the exchange offer, continue to be subject to the

existing transfer restrictions under the Securities Act and, upon consummation of the exchange offer, certain registration and other rights under the Registration Rights Agreement will terminate. See “The Exchange Offer—Procedures for Tendering Old Notes Through Brokers and Banks” and “The Exchange Offer—Consequences of Failure to Exchange.”

Some holders who exchange their Old Notes may be deemed to be underwriters, and these holders will be required to comply with the registration and prospectus delivery requirements in connection with any resale transaction.

          If you exchange your Old Notes in the exchange offer for the purpose of participating in a distribution of the Exchange Notes, you may be deemed to have received restricted securities and, if so, will be required to comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction.

Risks Relating to the Exchange Notes

Our indebtedness may affect our ability to operate our business, and may have a material adverse effect on our financial condition and results of operations. We and our subsidiaries may incur additional indebtedness, including secured indebtedness.

          As of June 30, 2011 we and the guarantors had $664.2 million of indebtedness (none of which was secured indebtedness), and our subsidiaries that do not guarantee the Old Notes and will not guarantee the Exchange Notes had $54.1 million of indebtedness and other liabilities of $5.7 million, all of which was structurally senior to the notes. In addition, $220.3 million was available for us (net of $8.9 million of letters of credit outstanding) to borrow under our credit facility. For the year ended December 31, 2010 and the six months ended June 30, 2011, our subsidiaries that do not guarantee the Old Notes and will not guarantee the Exchange Notes had revenues of $27.1 million (or 22% of consolidated revenues) and $11.3 million (or 16% of consolidated revenues), respectively.

          Our indebtedness could have significant adverse consequences to us and the holders of the notes, such as:

•

limiting our ability to obtain additional financing to fund our working capital needs, acquisitions, capital expenditures or other debt service requirements or for other purposes;

•

limiting our ability to use operating cash flow in other areas of our business because we must dedicate a substantial portion of these funds to service debt;

•

limiting our ability to compete with other companies who are not as highly leveraged, as we may be less capable of responding to adverse economic and industry conditions;

•

restricting us from making strategic acquisitions, developing properties or exploiting business opportunities;

•

restricting the way in which we conduct our business because of financial and operating covenants in the agreements governing our and our subsidiaries’ existing and future indebtedness, including, in the case of certain indebtedness of subsidiaries, certain covenants that restrict the ability of subsidiaries to pay dividends or make other distributions to us;

•

exposing us to potential events of default (if not cured or waived) under financial and operating covenants contained in our or our subsidiaries’ debt instruments that could have a material adverse effect on our business, financial condition and operating results;

•

increasing our vulnerability to a downturn in general economic conditions; and

•

limiting our ability to react to changing market conditions in our industry and in our tenants’ and borrowers’ industries.

          Furthermore, as of June 30, 2011 we had $39.6 million of indebtedness that bore interest at variable rates.

In addition, our future borrowings may bear interest at variable rates. If interest rates increase significantly, our ability to borrow additional funds may be reduced and the risk related to our indebtedness would intensify.

          In addition to our debt service obligations, our operations may require substantial investments on a continuing basis. Our ability to make scheduled debt payments, to refinance our obligations with respect to our indebtedness and to fund capital and non-capital expenditures necessary to maintain the condition of our operating assets and properties, as well as to provide capacity for the growth of our business, depends on our financial and operating performance, which, in turn, is subject to prevailing economic conditions and financial, business, competitive, legal and other factors.

          Subject to the restrictions contained in the credit agreement governing our credit facility and the indenture governing the notes, we and our subsidiaries may incur significant additional indebtedness, including additional secured indebtedness. Although the terms of the credit agreement and indenture contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and additional indebtedness incurred in compliance with these restrictions could be significant. If new debt is added to our and our subsidiaries’ current debt levels, the risks described above could increase.

We may not be able to generate sufficient cash to service all of our indebtedness, including the notes, and may be forced to take other actions to satisfy our obligations under our indebtedness that may not be successful.

          Our ability to satisfy our debt obligations will depend upon, among other things:

•

our future financial and operating performance, which will be affected by prevailing economic conditions and financial, business, regulatory and other factors, many of which are beyond our control; and

•

our future ability to borrow under our credit facility, the availability of which depends on, among other things, our complying with the covenants in the indenture that governs the notes.

          We cannot assure you that our business will generate sufficient cash flow from operations, or that we will be able to draw under our credit facility or otherwise, in an amount sufficient to fund our liquidity needs.

          If our cash flows and capital resources are insufficient to service our indebtedness, we may be forced to reduce or delay capital expenditures, sell assets, seek additional capital or restructure or refinance our indebtedness, including the notes. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations. Our ability to restructure or refinance our debt will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations. In addition, the terms of existing or future debt agreements may restrict us from adopting some of these alternatives. In the absence of such operating results and resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations, sell equity, and/or negotiate with our lenders to restructure the applicable debt, in order to meet our debt service and other obligations. We may not be able to consummate those dispositions for fair market value or at all. Our credit facility and the indenture governing the notes may restrict, or market or business conditions may limit, our ability to avail ourselves to some or all of these options. Furthermore, any proceeds that we could realize from any such dispositions may not be adequate to meet our debt service obligations then due.

Our debt agreements contain restrictions that will limit our flexibility in operating our business.

          Our credit facility and the indenture governing the notes contain, and any instruments governing future indebtedness of ours may contain, a number of covenants that will impose significant operating and financial restrictions on us, including restrictions on our ability to, among other things:

•

incur additional debt or issue certain preferred shares;

•

pay dividends on or make distributions in respect of Medical Properties’ capital stock or make other restricted payments;

•

make certain payments on debt that is subordinated to the notes;

•

make certain investments;

•

sell or transfer assets;

•

create liens on certain assets;

•

consolidate, merge, sell or otherwise dispose of all or substantially all of our assets;

•

enter into certain transactions with our affiliates; and

•

designate our subsidiaries as unrestricted subsidiaries.

          Any of these restrictions could limit our ability to plan for or react to market conditions and could otherwise restrict corporate activities. Any failure to comply with these covenants could result in a default under our credit facility and the indenture governing the notes. Upon a default, unless waived, the lenders under our credit facility could elect to terminate their commitments, cease making further loans and force us into bankruptcy or liquidation. Holders of the notes would also have the ability ultimately to force us into bankruptcy or liquidation, subject to the indenture governing the notes. In addition, a default (or an event of default) under either the credit agreement governing our credit facility or the indenture governing the notes may trigger a cross default under our other agreements and could trigger a cross-default or cross-acceleration under the agreements governing our future indebtedness. Our operating results may not be sufficient to service our indebtedness or to fund our other expenditures and we may not be able to obtain financing to meet these requirements. See “Description of Other Material Indebtedness” and “Description of Exchange Notes.”

We will depend on dividends and distributions from our direct and indirect subsidiaries to fulfill our obligations under the notes. The creditors of these subsidiaries are entitled to amounts payable to them by the subsidiaries before the subsidiaries may pay any dividends or distributions to us.

          Substantially all of our assets are held through our subsidiaries. We depend on these subsidiaries for substantially all of our cash flow. The creditors of each of our direct and indirect subsidiaries are entitled to payment of that subsidiary’s obligations to them, when due and payable, before distributions may be made by that subsidiary to us. Thus, our ability to service our debt obligations, including our ability to pay the interest on and principal of the notes when due, depends on our subsidiaries’ ability first to satisfy their obligations to their creditors and then to make distributions to us. Our subsidiaries are separate and distinct legal entities and have no obligations, other than under the guarantee of the notes for the majority of our subsidiaries, to make any funds available to us.

If we default on our obligations to pay our other indebtedness, we may not be able to make payments on the notes.

          Any default under the agreements governing our indebtedness, including a default under our credit facility, that is not waived by the required holders of such indebtedness, could leave us unable to pay principal, premium, if any, or interest on the notes and could substantially decrease the market value of the notes. If we are unable to generate sufficient cash flow and are otherwise unable to obtain funds necessary to meet required payments of principal, premium, if any, or interest on such indebtedness, or if we otherwise fail to comply with the various covenants, including financial and operating covenants, in the instruments governing our indebtedness, including our credit facility, we could be in default under the terms of the agreements governing such indebtedness. In the event of such default, the holders of such indebtedness could elect to declare all the funds borrowed thereunder to be due and payable, together with any accrued and unpaid interest, the lenders under our credit facility could elect to terminate their commitments, cease making further loans and we could be forced into bankruptcy or liquidation. If our operating performance declines, we may in the future need to seek waivers from the required lenders under our credit facility to avoid being in default. If we breach our covenants under our credit facility and seek waivers, we may not be able to obtain waivers from the required lenders thereunder.

Your right to receive payments on the notes is effectively subordinated to the right of lenders who have a security interest in our assets to the extent of the value of those assets.

          Our obligations under the credit agreement governing our credit facility and the notes and the guarantors’ obligations under their guarantees of borrowings under our credit facility and the notes will be unsecured, but our obligations under certain other financing arrangements with lenders are secured by mortgages and security interests in certain of our properties and the ownership interests of certain of our subsidiaries. If we are declared bankrupt or insolvent, or if we default under our secured financing arrangements, the funds borrowed thereunder, together with accrued interest, could become immediately due and payable. If we were unable to repay such indebtedness, the lenders could foreclose on the pledged assets to the exclusion of holders of the notes, even if an event of default exists under the indenture governing the notes at such time. In any such event, because the notes are not secured by any of such assets, it is possible that there would not be sufficient assets from which your claims could be satisfied.

Claims of noteholders will be structurally subordinated to claims of creditors of any of our subsidiaries that do not guarantee the notes.

          We conduct all of our operations through our subsidiaries. Subject to certain limitations, the indenture governing the notes permits us to form or acquire subsidiaries that are not guarantors of the notes and permits such non-guarantor subsidiaries to acquire assets and incur indebtedness, and, as a result, noteholders would not have any claim as a creditor against any such subsidiaries. The claims of the creditors of those subsidiaries, including their trade creditors, banks and other lenders, would have priority over any of our claims or those of our other subsidiaries as equity holders of the non-guarantor subsidiaries. Consequently, in any insolvency, liquidation, reorganization, dissolution or other winding-up of any of the non-guarantor subsidiaries, creditors of those subsidiaries would be paid before any amounts would be distributed to us or to any of our other subsidiaries as equity holders, and thus be available to satisfy our and the guarantors’ obligations under the notes and guarantees of the notes.

          As of December 31, 2010 and June 30, 2011, our subsidiaries that do not guarantee the Old Notes and will not guarantee the Exchange Notes had $15.3 million and $59.8 million, respectively, of indebtedness and other liabilities and had assets of $165.8 million and $210.0 million, respectively (or, in each case, less than 13% of our company’s consolidated total assets). For the year ended December 31, 2010 and the six months ended June 30, 2011, our subsidiaries that do not guarantee the Old Notes and will not guarantee the Exchange Notes had revenues of $27.1 million (or 22% of our company’s consolidated revenues) and $11.3 million (or 16% of our company’s consolidated revenues), respectively.

We may not be able to satisfy our obligations to holders of the notes upon a change of control.

          Upon the occurrence of a “change of control,” as defined in the indenture, with certain exceptions, each holder of the notes will have the right to require us to purchase the notes at a price equal to 101% of the principal amount thereof. Our failure to purchase, or to give notice of purchase of, the notes would be a default under the indenture and any such default could result in a default under certain of our other indebtedness, including our credit facility. In addition, a change of control may constitute an event of default under our credit facility.

U.S. federal and state statutes allow courts, under specific circumstances, to avoid the guarantees, subordinate claims in respect of the guarantees and require note holders to return payments received from the guarantors.

          Medical Properties and certain of the Operating Partnership’s subsidiaries guarantee the obligations under the notes. The issuance of the guarantees by the guarantors may be subject to review under federal and state laws if a bankruptcy, liquidation or reorganization case or a lawsuit, including in circumstances in which bankruptcy is not involved, were commenced at some future date by, or on behalf of, the unpaid creditors of a guarantor. Under the federal bankruptcy laws and comparable provisions of state fraudulent transfer, insolvency, fictitious indebtedness and similar laws, a court may avoid or otherwise decline to enforce a guarantor’s guarantee or may subordinate the notes or such guarantee to the applicable guarantor’s existing and future indebtedness. While the relevant laws may vary from state to state, a court might do so if it found that when the applicable guarantor entered into its guarantee, or, in some states, when payments became due under such guarantee, the applicable guarantor received less than reasonably equivalent value or fair consideration in exchange for its issuance of the guarantee and:

•

was insolvent or rendered insolvent by reason of such incurrence;

•

was engaged in a business or transaction, or was about to engage in a business or transaction, for which its remaining assets constituted unreasonably small capital; or

•

intended to incur, or believed that it would incur, debts beyond its ability to pay such debts as they matured.

          Under the fictitious indebtedness laws of some states, the presence of the above-listed factors is not required for a guarantee to be invalidated. A court would likely find that a guarantor did not receive reasonably equivalent value or fair consideration in exchange for such guarantee if such guarantor did not substantially benefit directly or indirectly from the issuance of such guarantee. The measures of insolvency for purposes of these fraudulent transfer, insolvency and similar laws vary depending upon the law applied in any proceeding to determine whether a fraudulent transfer has occurred. Generally, however, a guarantor, as applicable, would be considered insolvent if:

•

the sum of its debts, including contingent and unliquidated liabilities, was greater than the fair saleable value of its assets;

•

the present fair saleable value of its assets was less than the amount that would be required to pay its probable liability on its existing debts, including contingent and unliquidated liabilities, as they become absolute and mature; or

•

it could not pay its debts as they become due.

          A court might also avoid a guarantee, without regard to the above factors, if the court found that the applicable guarantor entered into its guarantee with the actual intent to hinder, delay or defraud its creditors. In addition, any payment by a guarantor pursuant to its guarantee could be avoided and required to be returned to such guarantor or to a fund for the benefit of such guarantor’s overall creditor body, and accordingly the court might direct you to repay any amounts that you had already received from such guarantor.

          To the extent a court avoids any of the guarantees as fraudulent transfers or holds any of the guarantees unenforceable or avoidable for any other reason, holders of notes would cease to have any direct claim against the applicable guarantor. If a court were to take this action, the applicable guarantor’s assets would be applied first to satisfy the applicable guarantor’s direct liabilities, if any, and might not be applied to the payment of the guarantee. Sufficient funds to repay the notes may not be available from other sources, including the remaining guarantors, if any.

          Each guarantee will contain a provision intended to limit the guarantor’s liability to the maximum amount that it could incur without causing the incurrence of obligations under its guarantee to be a fraudulent transfer. This provision may not be effective to protect the guarantees from being avoided under applicable fraudulent transfer laws or may reduce the guarantor’s obligation to an amount that effectively makes the guarantee worthless. In a recent Florida bankruptcy case, such a provision was found to be ineffective to protect the guarantee.

MPT Finance Corporation has no material assets or operations and provides no credit support for the notes.

          MPT Finance Corporation is a wholly owned subsidiary of the Operating Partnership and was formed for the sole purpose of being a co-issuer of some of the Operating Partnerships’ indebtedness. It has no material assets or operations. You should not rely upon MPT Finance Corporation to make payments on the notes.

An active trading market may not develop for the notes, which may hinder your ability to liquidate your investment.

          The Exchange Notes are a new issue of securities and there is no established trading market for them, or for the Old Notes. We do not intend to apply for listing of the notes on any national securities exchange or seek the admission of the notes for quotation through any automated inter-dealer quotation system. As a result, an active

trading market for the notes may not develop or be sustained. If an active trading market for the notes fails to develop or be sustained, the trading price of the notes could be adversely affected.

          We also cannot assure you that you will be able to sell your notes at a particular time or at all, or that the prices that you receive when you sell them will be favorable. If no active trading market develops, you may not be able to resell your notes at their fair market value, or at all. The liquidity of, and trading market for, the notes may also be adversely affected by, among other things:

•

prevailing interest rates;

•

our operating performance and financial condition;

•

the interest of securities dealers in making a market;

•

the market for similar securities.

          Historically, the market of non-investment grade debt like the notes has been subject to disruptions that have caused substantial market price fluctuations in the price of securities that are similar to the notes. Therefore, even if a trading market for the notes develops, it may be subject to disruptions and price volatility.

THE EXCHANGE OFFER

Purpose of the Exchange Offer

          The Old Notes were originally issued and sold on April 26, 2011. In connection with the original issuance and sale of the Old Notes, we entered into the Registration Rights Agreement pursuant to which we agreed, for the benefit of the holders of the Old Notes, at our cost, to use our commercially reasonable efforts:

•

to file with the SEC an exchange offer registration statement pursuant to which we and the guarantors will offer, in exchange for the Old Notes, new notes identical in all material respects to, and evidencing the same indebtedness as, the Old Notes (but will not contain terms with respect to transfer restrictions or provide for the additional interest described below); and

•

to cause the exchange offer registration statement to be declared effective under the Securities Act and exchange offer to be consummated by the 270th day following the date on which we issued the Old Notes (the “Consummation Deadline”).

          Under existing interpretations by the staff of the SEC as set forth in no-action letters issued to unrelated third parties and referenced below, we believe that the Exchange Notes issued in the exchange offer in exchange for the Old Notes may be offered for resale, resold and otherwise transferred by any exchange noteholder without compliance with the registration and prospectus delivery provisions of the Securities Act, if:

•

such holder is not an “affiliate” of ours within the meaning of Rule 405 of the Securities Act;

•

such Exchange Notes are acquired in the ordinary course of the holder’s business; and

•

such holder has no arrangement or understanding with any person to participate in a distribution (within the meaning of the Securities Act) of the Exchange Notes.

          Any holder who tenders in the exchange offer with the intention of participating in any manner in a distribution of the Exchange Notes:

•

cannot rely on the position of the staff of the SEC set forth in Exxon Capital Holdings Corporation, Morgan Stanley & Co., Incorporated or similar no-action letters; and

•

in the absence of an applicable exemption, must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a resale of the Exchange Notes or it may incur liability under the Securities Act. We will not be responsible for, or indemnify against, any such liability.

          If, as stated above, a holder cannot rely on the position of the staff of the SEC set forth in Exxon Capital Holdings Corporation, Morgan Stanley & Co., Incorporated or similar no-action letters, any effective registration statement used in connection with a secondary resale transaction must contain the selling security holder information required by Item 507 of Regulation S-K under the Securities Act.

          We do not intend to seek our own interpretation regarding the exchange offer, and we cannot assure you that the staff of the SEC would make a similar determination with respect to the Exchange Notes as it has in other interpretations to third parties.

          This prospectus may be used for an offer to resell, for the resale or for other retransfer of Exchange Notes only as specifically set forth in this prospectus. With regard to broker-dealers, only broker-dealers that acquired the Old Notes for its own account as a result of market-making activities or other trading activities may participate in the exchange offer. Each broker-dealer that receives Exchange Notes for its own account in exchange for Old Notes, where such Old Notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of the Exchange Notes. Please read the section entitled “Plan of Distribution” for more details regarding these procedures for the transfer of Exchange Notes. We have agreed, for a period of 180 days after the registration statement (of which this prospectus

is a part) is declared effective, to make this prospectus available to any broker-dealer for use in connection with any resale of the Exchange Notes.

          In order to participate in the exchange offer, each holder of Old Notes that wishes to exchange Old Notes for Exchange Notes in the exchange offer will be required to make the representations described below under “Representations.”

Shelf Registration Statement

          In the event that:

•

we determine that consummation of the exchange offer would violate any applicable law or applicable interpretations of the SEC; or

•

for any reason, we do not consummate the exchange offer by the Consummation Deadline; or

•

we received a written request (a “Shelf Request”) from any “initial purchaser” of the Old Notes representing that it holds Old Notes that are or were ineligible to be exchanged in the exchange offer,

          then we will use our commercially reasonable efforts to cause to be filed as promptly as practicable after such determination, date or Shelf Request, as the case may be, a shelf registration statement providing for the sale of all Old Notes by the holders thereof and to have such shelf registration statement become effective. We have agreed to use our commercially reasonable efforts to keep any such shelf registration statement continuously effective until the securities cease to be Registrable Securities (as defined in the Registration Rights Agreement).

Additional Interest

          If (1) the exchange offer is not completed on or prior to the Consummation Deadline, (2) the shelf registration statement, if required, has not become effective on or prior to the dates specified in the Registration Rights Agreement, or (3) the Shelf Registration Statement, if required, has become effective but thereafter, subject to certain exceptions, ceases to be effective or usable in connection with resales of any notes registered under the shelf registration statement during the periods specified in the Registration Rights Agreement, then we will be in default under the Registration Rights Agreement (a “Registration Default”). If a Registration Default occurs, the interest rate on the Registrable Securities will be increased by (1) 0.25% per annum for the first 90-day period beginning on the day immediately following such Registration Default and (2) an additional 0.25% per annum with respect to each subsequent 90-day period, in each case until and including the date such Registration Default ends, up to a maximum increase of 1.00% per annum. If at any time more than one Registration Default has occurred and is continuing, then, until the next date that there is no Registration Default, the increase in interest rate will apply as if there occurred a single Registration Default that begins on the date that the earliest such Registration Default occurred and ends on such next date that there is no Registration Default. When we have cured all of the Registration Defaults, the interest rate on the Registrable Securities will revert immediately to the original level.

          The exchange offer is intended to satisfy our exchange offer obligations under the Registration Rights Agreement. The notes will not have rights to additional interest as set forth above upon the consummation of the exchange offer.

Terms of the Exchange Offer

          We are offering to exchange up to $450 million aggregate principal amount of the Exchange Notes, the issuance of which has been registered under the Securities Act, for an equal principal amount of the Old Notes. Upon the terms and subject to the conditions set forth in this prospectus, we will accept any and all Old Notes validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on the expiration date of the exchange offer. We will issue $1,000 principal amount of Exchange Notes in exchange for each $1,000 principal amount of Exchange Notes accepted in the exchange offer. Holders may tender some or all of their Old Notes pursuant to the exchange offer. However, Old Notes may be tendered only in denominations of $2,000 of principal amount and any integral multiple of $1,000 in excess thereof.

          The form and terms of the Exchange Notes are the same as the form and terms of the Old Notes except that the Old Notes have been registered under the Securities Act and will not have transfer restrictions or contain the

additional interest provisions of the Old Notes. The Exchange Notes will evidence the same debt as the Old Notes and will be issued under and entitled to the benefits of the indenture. Consequently, the Old Notes and the Exchange Notes will be treated as a single class of debt securities under the indenture.

          As of the date of this prospectus, Old Notes representing $450 million in aggregate principal amount were outstanding, and there was one registered holder, CEDE & Co., as nominee of DTC. This prospectus is being sent to all registered holders of the Old Notes.

          The exchange offer is not conditioned on any minimum aggregate principal amount of Old Notes being tendered for exchange.

          We intend to conduct the exchange offer in accordance with the applicable requirements of the Exchange Act and the rules and regulations of the SEC. We will be deemed to have accepted for exchange properly tendered Old Notes when we have given oral or written notice of the acceptance to the exchange agent. The exchange agent will act as agent for the tendering holders for the purposes of receiving the Exchange Notes from us and delivering the Exchange Notes to such holders.

          Old Notes that are not tendered for exchange in the exchange offer or that are tendered but we do not accept for exchange will remain outstanding and continue to accrue interest and will continue to be entitled to the rights and benefits such holders have under the indenture relating to the Old Notes. The Old Notes that are not exchanged will continue to be subject to the existing transfer restrictions under the Securities Act and, upon consummation of the exchange offer, certain registration and other rights under the Registration Rights Agreement will terminate. Holders of the Old Notes do not have any appraisal or dissenters’ rights in connection with the exchange offer.

          Holders who tender Old Notes in the exchange offer will not be required to pay brokerage commissions or fees or transfer taxes with respect to the exchange of Old Notes pursuant to the exchange offer. We will pay all charges and expenses, other than transfer taxes in certain circumstances, in connection with the exchange offer. See “—Fees and Expenses” and “—Transfer Taxes” below.

Expiration Date; Extensions; Amendments

          The exchange offer will remain open for at least 20 business days. The term “expiration date” will mean 5:00 p.m., New York City time, on      , 2011, unless we, in our sole discretion, extend the exchange offer, in which case the term “expiration date” will mean the latest date and time to which the exchange offer is extended.

          In order to extend the exchange offer, we will notify the exchange agent orally or in writing of any extension. We will notify in writing by press release or other public announcement the registered holders of Old Notes of the extension no later than 9:00 a.m., New York City time, on the business day after the previously scheduled expiration date.

          We reserve the right, in our sole discretion:

•

to delay accepting any Old Notes, to extend the exchange offer or, if any of the conditions to the exchange offer set forth below under “—Conditions to the Exchange Offer” have not been satisfied, to terminate the exchange offer, by giving oral or written notice of such delay, extension or termination to the exchange agent; or

•

to amend the terms of the exchange offer in any manner.

          Any delay in acceptance, extension, termination or amendment will be followed as promptly as practicable by written notice to the registered holders by a press release or other public announcement. If we amend the exchange offer in a manner that we determine to constitute a material change in the exchange offer, we will promptly disclose such amendment in a manner reasonably calculated to inform the holders of Old Notes of such amendment, and we will extend the exchange offer period, if necessary, so that at least five business days remain in the exchange offer following notice of the material change. If we terminate an exchange offer as provided in this prospectus before accepting any Old Notes for exchange or if we amend the terms of the exchange offer in a manner

that constitutes a fundamental change in the information set forth in the registration statement of which this prospectus forms a part, we will promptly file a post-effective amendment to the registration statement of which this prospectus forms a part. In addition, we will in all event comply with our obligation to exchange promptly all Old Notes properly tendered and accepted for exchange in the exchange offer.

Procedures for Tendering Old Notes Through Brokers and Banks

          Since the Old Notes are represented by global book-entry notes, DTC, as depositary, or its nominee is treated as the registered holder of the Old Notes and will be the only entity that can tender your Old Notes for Exchange Notes. Therefore, to tender Old Notes subject to this exchange offer and to obtain Exchange Notes, you must instruct the institution where you keep your Old Notes to tender your Old Notes on your behalf so that they are received on or prior to the expiration of this exchange offer.

          To tender your Old Notes in the exchange offer, you must:

•

comply with DTC’s Automated Tender Offer Program (“ATOP”) procedures described below; and

•

the exchange agent must receive a timely confirmation of a book-entry transfer of the Old Notes into its account at DTC through ATOP pursuant to the procedure for book-entry transfer described below, along with a properly transmitted Agent’s Message (defined below), before the expiration date.

          IF YOU WISH TO ACCEPT THIS EXCHANGE OFFER, PLEASE INSTRUCT YOUR BROKER OR ACCOUNT REPRESENTATIVE IN TIME FOR YOUR OLD NOTES TO BE TENDERED BEFORE THE 5:00 P.M. (NEW YORK CITY TIME) DEADLINE ON            , 2011.

          In order to accept this exchange offer on behalf of a holder of Old Notes you must submit or cause your DTC participant to submit an Agent’s Message as described below.

          The exchange agent, on our behalf, will seek to establish an ATOP account with respect to the outstanding Old Notes at DTC promptly after the delivery of this prospectus. Any financial institution that is a DTC participant, including your broker or bank, may make book-entry tender of outstanding Old Notes by causing the book-entry transfer of such Old Notes into our ATOP account in accordance with DTC’s procedures for such transfers. Concurrently with the delivery of Old Notes, an Agent’s Message in connection with such book-entry transfer must be transmitted by DTC to, and received by, the exchange agent on or prior to 5:00 p.m., New York City Time on the expiration date. The confirmation of a book entry transfer into the ATOP account as described above is referred to herein as a “Book-Entry Confirmation.”

          The term “Agent’s Message” means a message transmitted by the DTC participants to DTC, and thereafter transmitted by DTC to the exchange agent, forming a part of the Book-Entry Confirmation which states that DTC has received an express acknowledgment from the participant in DTC described in such Agent’s Message stating that such participant and beneficial holder agree to be bound by the terms of this exchange offer, including the letter of transmittal, and that the agreement may be enforced against such participant.

          Each Agent’s Message must include the following information:

•

Name of the beneficial owner tendering such Old Notes;

•

Account number of the beneficial owner tendering such Old Notes;

•

Principal amount of Old Notes tendered by such beneficial owner; and

•

A confirmation that the beneficial holder of the Old Notes tendered has made the representations for our benefit set forth under “— Representations” below.

          BY SENDING AN AGENT’S MESSAGE THE DTC PARTICIPANT IS DEEMED TO HAVE CERTIFIED THAT THE BENEFICIAL HOLDER FOR WHOM NOTES ARE BEING TENDERED HAS BEEN PROVIDED WITH A COPY OF THIS PROSPECTUS AND AGREES TO BE BOUND BY THE TERMS OF THIS EXCHANGE OFFER, INCLUDING THE LETTER OF TRANSMITTAL.

              The delivery of Old Notes through DTC, and any transmission of an Agent’s Message through ATOP, is at the election and risk of the person tendering Old Notes. We will ask the exchange agent to instruct DTC to promptly return those Old Notes, if any, that were tendered through ATOP but were not accepted by us, to the DTC participant that tendered such Old Notes on behalf of holders of the Old Notes.

            When you tender your outstanding Old Notes and we accept them, the tender will be a binding agreement between you and us as described in this prospectus. By using the ATOP procedures to exchange Old Notes, you will not be required to deliver a letter of transmittal to the exchange agent. However, you will be bound by its terms, and you will be deemed to have made the acknowledgements and the representations and warranties it contains, just as if you had signed it.

            We will decide all questions about the validity, form, eligibility, time of receipt, acceptance and withdrawal of tendered Old Notes, and our reasonable determination will be final and binding on you. We reserve the absolute right to: (1) reject any and all tenders of any particular Old Note not properly tendered; (2) refuse to accept any Old Note if, in our reasonable judgment or the judgment of our counsel, the acceptance would be unlawful; and (3) waive any defects or irregularities or conditions of the exchange offer as to any particular Old Notes before the expiration of the offer. Our interpretation of the terms and conditions of the exchange offer will be final and binding on all parties. You must cure any defects or irregularities in connection with tenders of Old Notes as we will reasonably determine. Neither us, the exchange agent nor any other person will incur any liability for failure to notify you of any defect or irregularity with respect to your tender of Old Notes. If we waive any terms or conditions pursuant to (3) above with respect to a noteholder, we will extend the same waiver to all noteholders with respect to that term or condition being waived.

Representations

            To participate in the exchange offer, each holder of Old Notes that wishes to exchange Old Notes for Exchange Notes in the exchange offer will be required to make the following representations:

	•		it has full corporate (or similar) power and authority to tender, exchange, assign and transfer the Old Notes and to acquire the Exchange Notes;
	•		when the Old Notes are accepted for exchange, the Issuers will acquire good and unencumbered title to the tendered Old Notes, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim; and
	•		if such holder is a broker dealer that will receive Exchange Notes for its own account in exchange for Old Notes that were acquired as a result of market-making or other trading activities, then such holder will comply with the applicable provisions of the Securities Act with respect to any resale of the Exchange Notes. See “Plan of Distribution.”

            Broker-dealers who cannot make the representations in item (3) of the paragraph above cannot use this exchange offer prospectus in connection with resales of the Exchange Notes issued in the exchange offer.

            Each holder of Old Notes that wishes to exchange Old Notes for Exchange Notes in the exchange offer and any beneficial owner of those Old Notes also will be required to make the following representations:

	•		neither the holder nor any beneficial owner of the Old Notes is an “affiliate” (as defined in Rule 405 under the Securities Act) of the Issuers;
	•		neither the holder nor any beneficial owner of the Old Notes is engaged in or intends to engage in, and has no arrangement or understanding with any person to participate in, a distribution (within the meaning of the Securities Act) of the Exchange Notes;
	•		any Exchange Notes to be acquired by the holder and any beneficial owner of the Old Notes pursuant to the exchange offer will be acquired in the ordinary course of business of the person receiving such Exchange Notes; and
	•		the holder is not acting on behalf of any person who could not truthfully make the foregoing representations.

            BY TENDERING YOUR OLD NOTES YOU ARE DEEMED TO HAVE MADE THESE REPRESENTATIONS.

            If you are our “affiliate,” as defined under Rule 405 of the Securities Act, if you are a broker-dealer who acquired your Old Notes in the initial offering and not as a result of market-making or trading activities, or if you are engaged in or intend to engage in or have an arrangement or understanding with any person to participate in a distribution of Exchange Notes acquired in the exchange offer, you or that person:

	•		cannot rely on the position of the staff of the SEC set forth in Exxon Capital Holdings Corporation, Morgan Stanley & Co., Incorporated or similar no-action letters; and
	•		in the absence of an applicable exemption, must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a resale of the Exchange Notes.

Acceptance of Outstanding Old Notes for Exchange; Delivery of Exchange Notes

            We will accept validly tendered Old Notes when the conditions to the exchange offer have been satisfied or we have waived them. We will have accepted your validly tendered Old Notes when we have given oral or written notice to the exchange agent. The exchange agent will act as agent for the tendering holders for the purpose of receiving the Exchange Notes from us. If we do not accept any tendered Old Notes for exchange by book-entry transfer because of an invalid tender or other valid reason, we will credit the Old Notes to an account maintained with DTC promptly after the exchange offer terminates or expires.

            THE AGENT’S MESSAGE MUST BE TRANSMITTED TO THE EXCHANGE AGENT ON OR BEFORE 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.

No Guaranteed Delivery

            There are no guaranteed delivery procedures provided for by us in conjunction with the exchange offer. Holders of Old Notes must timely tender their Old Notes in accordance with the procedures set forth herein.

Withdrawal Rights

            You may withdraw your tender of outstanding notes at any time before 5:00 p.m., New York City time, on the expiration date.

            For a withdrawal to be effective, you should contact your bank or broker where your Old Notes are held and have them send an ATOP notice of withdrawal so that it is received by the exchange agent before 5:00 p.m., New York City time, on the expiration date. Such notice of withdrawal must:

	•		specify the name of the person that tendered the Old Notes to be withdrawn;
	•		identify the Old Notes to be withdrawn, including the CUSIP number and principal amount at maturity of the Old Notes; specify the name and number of an account at the DTC to which your withdrawn Old Notes can be credited.

            We will decide all questions as to the validity, form and eligibility of the notices and our determination will be final and binding on all parties. Any tendered Old Notes that you withdraw will not be considered to have been validly tendered. We will promptly return any outstanding Old Notes that have been tendered but not exchanged, or credit them to the DTC account. You may re-tender properly withdrawn Old Notes by following one of the procedures described above before the expiration date.

Conditions to the Exchange Offer

            Notwithstanding any other provision of the exchange offer, we are not required to accept for exchange, or to issue Exchange Notes in exchange for, any Old Notes and may terminate or amend the exchange offer if, at any time before the acceptance of Old Notes for exchange, (1) we determine that the exchange offer violates applicable law, any applicable interpretation of the staff of the SEC or any order of any governmental agency or court of competent jurisdiction, (2) any action or proceeding has been instituted or threatened in any court or before any

governmental agency with respect to the exchange offer which, in our judgment, might impair our ability to proceed with the exchange offer or have a material adverse effect on us, or (3) we determine that there has been a material change in our business or financial affairs which, in our judgment, would materially impair our ability to consummate the exchange offer.

            The foregoing conditions are for our sole benefit and may be asserted by us regardless of the circumstances giving rise to any such condition or may be waived by us in whole or in part at any time and from time to time in our sole discretion. Our failure to exercise any of the foregoing rights at any time will not be deemed a waiver of any such right and each such right will be deemed an ongoing right which may be asserted at any time and from time to time.

            In addition, we will not accept for exchange any Old Notes tendered, and no Exchange Notes will be issued in exchange for any Old Notes, if at such time any stop order will be threatened or in effect with respect to the registration statement of which this prospectus constitutes a part or the qualification of the indenture governing the notes under the Trust Indenture Act of 1939, as amended. In any such event we are required to use our commercially reasonable efforts to promptly obtain the withdrawal of any stop order.

Exchange Agent

            We have appointed Wilmington Trust Company as the exchange agent for the exchange offer. You should direct questions, requests for assistance, and requests for additional copies of this prospectus and the letter of transmittal to the exchange agent addressed as follows:

		Wilmington Trust Company
		By Regular, Registered or Certified Mail, By Overnight Courier or By Hand:
By Facsimile:		Corporate Capital Markets		Confirm by Telephone:
(302) 636-4139 Attention: Sam Hamed		Rodney Square North 1100 North Market Street Wilmington, Delaware 19890-1626 Attention: Sam Hamed		(302) 636-6181

Delivery to an address other than set forth above will not constitute a valid delivery.

Fees and Expenses

            The principal solicitation is being made through DTC by Wilmington Trust Company, as exchange agent. We will pay the exchange agent customary fees for its services, reimburse the exchange agent for its reasonable out-of-pocket expenses incurred in connection with the provisions of these services and pay other registration expenses, including registration and filing fees and expenses, fees and expenses of compliance with federal securities and state securities or blue sky securities laws, printing expenses, messenger and delivery services and telephone, fees and disbursements to our counsel, application and filing fees and any fees and disbursements to our independent certified public accountants. We will not make any payment to brokers, dealers, or others soliciting acceptances of the exchange offer except for reimbursement of mailing expenses.

            Additional solicitations may be made by telephone, facsimile or in person by our and our affiliates’ officers employees and by persons so engaged by the exchange agent.

Accounting Treatment

            The Exchange Notes will be recorded at the same carrying value as the existing Old Notes, as reflected in our accounting records on the date of exchange. Accordingly, we will recognize no gain or loss for accounting purposes. The expenses of the exchange offer will be capitalized and expensed over the term of the Exchange Notes.

Transfer Taxes

            If you tender outstanding Old Notes for exchange you will not be obligated to pay any transfer taxes. However, if you instruct us to register Exchange Notes in the name of, or request that your Old Notes not tendered or not accepted in the exchange offer be returned to, a person other than the registered tendering holder, you will be responsible for paying any transfer tax owed.

Consequences of Failure to Exchange

            If you do not tender your outstanding Old Notes, you will not have any further registration rights, except for the rights described in the Registration Rights Agreement and described above, and your Old Notes will continue to be subject to the provisions of the indenture governing the notes regarding transfer and exchange of the Old Notes and the restrictions on transfer of the Old Notes imposed by the Securities Act and states securities law when we complete the exchange offer. These transfer restrictions are required because the Old Notes were issued under an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. Accordingly, if you do not tender your Old Notes in the exchange offer, your ability to sell your Old Notes could be adversely affected. Once we have completed the exchange offer, holders who have not tendered notes will not continue to be entitled to any additional interest that the indenture governing the notes provides for if we do not complete the exchange offer.

Other

            Participation in the exchange offer is voluntary, and you should carefully consider whether to accept. You are urged to consult your financial, tax, legal and other advisors in making your own decision on what action to take.

            We may in the future seek to acquire untendered Old Notes in the open market or in privately negotiated transactions, through subsequent exchange offers or otherwise. We have no present plans to acquire any Old Notes that are not tendered in the exchange offer or to file a shelf registration statement to permit resales of any untendered Old Notes.

USE OF PROCEEDS

            This exchange offer is intended to satisfy our obligations under the Registration Rights Agreement. We will not receive any proceeds from the issuance of the Exchange Notes. In consideration for issuing the Exchange Notes, we will receive, in exchange, an equal number of Old Notes in like principal amount. The form and terms of the Exchange Notes are identical to the form and terms of the Old Notes, except as otherwise described under the heading “The Exchange Offer—Terms of the Exchange Offer.” The Old Notes properly tendered and exchanged for Exchange Notes will be retired and cancelled. Accordingly, issuance of the Exchange Notes will not result in any change in our capitalization. We have agreed to bear the expense of the exchange offer.

RATIO OF EARNINGS TO FIXED CHARGES

     The following table sets forth the ratio of earnings to fixed charges of MPT Operating Partnership, L.P. for each of the periods indicated as follows:

		Year Ended December 31,																				Six Months Ended June 30,
		2010				2009				2008				2007				2006				2011				2010
Ratio of Earnings to Fixed Charges(1)			1.34x				1.91x				1.44x				1.72x				1.97x				1.54x				0.87x

SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA

            The following tables set forth selected consolidated financial and operating data for Medical Properties Trust, Inc. and MPT Operating Partnership, L.P. and their respective subsidiaries (including MPT Finance Corporation, which has no separate operating or financial activity). You should read the following selected financial data in conjunction with the consolidated historical financial statements and notes thereto of each of Medical Properties Trust, Inc. and MPT Operating Partnership, L.P. and their respective subsidiaries and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included elsewhere in this prospectus.

MPT Operating Partnership, L.P.

            The consolidated balance sheet data presented below as of December 31, 2009 and 2010 and the consolidated operating and other data presented below for each of the years in the three-year period ended December 31, 2010 have been derived from the Operating Partnership’s audited consolidated financial statements and accompanying notes included elsewhere in this prospectus. The consolidated balance sheet data presented below as of December 31, 2006, 2007 and 2008 and the consolidated operating and other data presented below for each of the years ended in the two-year period ended December 31, 2007 have been derived from the Operating Partnership’s consolidated financial statements and related notes, which have not been audited and are not included in this prospectus. The consolidated balance sheet data presented below as of June 30, 2011 and the consolidated operating and other data presented below for the six month periods ended June 30, 2010 and 2011 have been derived from the Operating Partnership’s unaudited financial statements and accompanying notes included elsewhere in this prospectus. The Operating Partnership’s results for the six month period ended June 30, 2011 are not necessarily indicative of Operating Partnership’s results to be expected for the full fiscal year.

            During the periods presented below, for those properties that have been sold, the Operating Partnership reclassified the properties as held for sale and reported revenue and expenses from these properties as discontinued operations for each period presented. This reclassification had no effect on the Operating Partnership’s reported net income.

		December 31,																				June 30,
		2006(1)				2007(1)				2008(1)				2009(1)				2010(1)				2010(1)				2011(1)
		(in thousands)
Operating Data
Total revenue		$	35,521			$	77,887			$	107,070			$	118,809			$	121,847			$	61,451			$	72,147
Depreciation and amortization			(4,226	)			(9,314	)			(22,385	)			(22,628	)			(24,486	)			(11,891	)			(16,248	)
Property-related and general and administrative expenses			(10,079	)			(15,678	)			(23,757	)			(24,835	)			(32,867	)			(17,005	)			(17,622	)
Impairment charge			—				—				—				—				(12,000	)			(12,000	)			(564	)
Interest and other income			515				364				86				43				1,518				13				6
Debt refinancing costs			—				—				—				—				(6,716	)			(6,214	)			(3,789	)
Interest expense			(4,580	)			(29,527	)			(42,424	)			(37,656	)			(33,993	)			(18,014	)			(20,526	)
Income from continuing operations			17,151				23,732				18,590				33,733				13,303				(3,660	)			13,404
Income from discontinued operations			12,983				16,518				14,143				2,697				9,784				7,162				147
Net income			30,134				40,250				32,733				36,430				23,087				3,502				13,551
Net income attributable to non-controlling interests			(136	)			(304	)			(33	)			(37	)			(99	)			(17	)			(88	)
Net income attributable to MPT Operating Partnership, L.P. partners		$	29,998			$	39,946			$	32,700			$	36,393			$	22,988			$	3,485			$	13,463
Other Data
Total distributions paid		$	36,106			$	53,079			$	65,098			$	61,649			$	77,087			$	32,435			$	44,784

		As of December 31,																				As of June 30,
		2006(1)				2007(1)				2008(1)				2009(1)				2010(1)				2011(1)
		(in thousands)
Balance Sheet Data
Real estate assets — at cost		$	557,913			$	648,723			$	992,549			$	976,271			$	1,032,369			$	1,227,251
Other loans and investments			150,173				265,758				293,523				311,006				215,985				219,978
Cash and equivalents			4,077				94,189				11,743				15,307				98,408				227,906
Total assets			744,721				1,051,627				1,310,991				1,309,898				1,348,814				1,678,639
Debt, net			297,530				474,388				630,557				576,678				369,970				718,309
Other liabilities			95,022				57,677				53,856				61,348				78,895				91,211
Total partners capital			351,117				519,485				626,335				671,742				899,835				869,014
Non-controlling interests			1,052				77				243				130				114				105
Total capital			352,169				519,562				626,578				671,872				899,949				869,119
Total liabilities and capital		$	744,721			$	1,051,627			$	1,310,991			$	1,309,898			$	1,348,814			$	1,678,639

Medical Properties Trust, Inc.

            The consolidated balance sheet data presented below as of December 31, 2009 and 2010 and the consolidated operating and other data presented below for each of the years in the three-year period ended December 31, 2010 have been derived from Medical Properties’ audited consolidated financial statements and accompanying notes incorporated by reference into this prospectus. The consolidated balance sheet data presented below as of December 31, 2006, 2007 and 2008 and the consolidated operating and other data presented below for each of the years ended in the two-year period ended December 31, 2007 have been derived from Medical Properties’ audited consolidated financial statements and related notes, which are not included or incorporated by reference herein. The consolidated balance sheet data presented below as of June 30, 2011 and the consolidated operating and other data presented below for the six month periods ended June 30, 2010 and 2011 have been derived from Medical Properties’ unaudited interim financial statements and accompanying notes included elsewhere in this prospectus. Medical Properties’ results for the six month period ended June 30, 2011 are not necessarily indicative of Medical Properties’ results to be expected for the full fiscal year. As of June 30, 2011, Medical Properties had a 99.9% equity ownership interest in the Operating Partnership. Medical Properties has no significant operations other than as the sole member of its wholly owned subsidiary, Medical Properties Trust, LLC, which is the sole general partner of the Operating Partnership, and no material assets, other than its direct and indirect investment in the Operating Partnership.

            During the periods presented below, for those properties that have been sold, Medical Properties reclassified the properties as held for sale and reported revenue and expenses from these properties as discontinued operations for each period presented. This reclassification had no effect on Medical Properties’ reported net income.

		December 31,																				June 30,
		2006(1)				2007(1)				2008(1)				2009(1)				2010(1)				2010(1)				2011(1)
		(in thousands)
Operating Data
Total revenue		$	35,521			$	77,887			$	107,070			$	118,809			$	121,847			$	61,451			$	72,147
Depreciation and amortization			(4,226	)			(9,314	)			(22,385	)			(22,628	)			(24,486	)			(11,891	)			(16,248	)
Property-related and general and administrative expenses			(10,079	)			(15,678	)			(23,757	)			(24,898	)			(32,942	)			(17,089	)			(17,666	)
Impairment charge			—				—				—				—				(12,000	)			(12,000	)			(564	)
Interest and other income			515				364				86				43				1,518				13				6
Debt refinancing costs			—				—				—				—				(6,716	)			(6,214	)			(3,789	)
Interest expense			(4,580	)			(29,527	)			(42,424	)			(37,656	)			(33,993	)			(18,014	)			(20,526	)
Income from continuing operations			17,151				23,732				18,590				33,670				13,228				(3,744	)			13,360
Income from discontinued operations			12,983				16,518				14,143				2,697				9,784				7,162				147
Net income			30,134				40,250				32,733				36,367				23,012				3,418				13,507
Net income attributable to non-controlling interests			(136	)			(304	)			(33	)			(37	)			(99	)			(17	)			(88	)
Net income attributable to Medical Properties common stockholders		$	29,998			$	39,946			$	32,700			$	36,330			$	22,913			$	3,401			$	13,419
Other Data
Total dividends paid		$	36,106			$	53,079			$	65,098			$	61,649			$	77,087			$	32,435			$	44,784

		As of December 31,																				As of June 30,
		2006(1)				2007(1)				2008(1)				2009(1)				2010(1)				2011(1)
		(in thousands)
Balance Sheet Data
Real estate assets — at cost		$	557,913			$	648,723			$	992,549			$	976,271			$	1,032,369			$	1,227,251
Other loans and investments			150,173				265,758				293,523				311,006				215,985				219,978
Cash and equivalents			4,103				94,215				11,748				15,307				98,408				227,906
Total assets			744,747				1,051,652				1,311,373				1,309,898				1,348,814				1,678,720
Debt, net			297,530				474,388				630,557				576,678				369,970				718,309
Other liabilities			95,022				57,937				54,473				61,645				79,268				91,709
Total Medical Properties stockholders’ equity			351,144				519,250				626,100				671,445				899,462				868,597
Non-controlling interests			1,052				77				243				130				114				105
Total equity			352,196				519,327				626,343				671,575				899,576				868,702
Total liabilities and equity		$	744,747			$	1,051,652			$	1,311,373			$	1,309,898			$	1,348,814			$	1,678,720

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     Unless otherwise indicated, references to “our,” “we” and “us” in this management’s discussion and analysis of financial condition and results of operations refer to Medical Properties Trust, Inc. and its consolidated subsidiaries, including MPT Operating Partnership, L.P.

Overview

            Medical Properties is a self-advised real estate investment trust (“REIT”) that was incorporated under Maryland law on August 27, 2003 primarily for the purpose of investing in and owning net-leased healthcare facilities across the United States. We acquire and develop healthcare facilities and lease the facilities to healthcare operating companies under long-term net leases, which require the tenants to bear most of the costs associated with the properties. We also occasionally make mortgage loans to healthcare operators collateralized by their real estate assets. In addition, we selectively make loans to, and other investments in, certain of our operators through our taxable REIT subsidiaries, the proceeds of which have historically been used for acquisitions and working capital. Finally, from time to time, we acquire a profit or other equity interest in certain of our tenants that gives us a limited right to share in such tenants’ positive cash flow.

            We selectively make loans to certain of our operators through our taxable REIT subsidiaries, which they use for acquisitions and working capital. We consider our lending business an important element of our overall business strategy for two primary reasons: (1) it provides opportunities to make income-earning investments that yield attractive risk-adjusted returns in an industry in which our management has expertise, and (2) by making debt capital available to certain qualified operators, we believe we create for our company a competitive advantage over other buyers of, and financing sources for, healthcare facilities.

            At June 30, 2011, our portfolio consisted of 58 properties: 54 facilities (of the 56 facilities that we own, of which two are subject to long-term ground leases) are leased to 19 tenants, one is presently not under lease as it is under re-development, one is under development, and the remaining assets are in the form of first mortgage loans to a single operator. Two of the leased properties are month-to-month as the fixed terms of their leases have expired. Our owned and ground leased facilities consisted of 22 general acute care hospitals, 17 long-term acute care hospitals, nine inpatient rehabilitation hospitals, two medical office buildings, and six wellness centers. The following is a discussion of our highlights for the years ended December 31, 2010, 2009 and 2008 and the six months ended June 30, 2011 and 2010, which should be read in conjunction with the audited and unaudited financial statements appearing elsewhere in this prospectus.

2010 Highlights

            In 2010, our primary business goals were to recapitalize our balance sheet with longer term debt and lower leverage, increase our access to liquidity and accelerate our acquisitions of healthcare real estate. We took the following actions to achieve these goals among others:

	•		Replaced old $220 million credit facility with a new $480 million credit facility and completed a $279 million stock offering, establishing a low leverage platform with more than $500 million of available capital for acquisition growth;
	•		Purchased $128.8 million of our 6.125% Senior Notes, leaving only $9.2 million of the 2006 Exchangeable Notes remaining to be paid by November 2011; paid $30 million term loan maturing in 2010; completely paid down $40 million revolver;
	•		Committed to more than $200 million in healthcare real estate investments:

	•		Acquired three inpatient rehabilitation hospitals in Texas with a new tenant for $74 million;
	•		Commenced $17 million redevelopment of the River Oaks hospital in Houston;

	•		Entered into $30 million agreement to develop Phoenix area general acute care hospital;
	•		Acquired two free standing long term acute care hospitals in 2010 and a third property in the second quarter 2011, all leased to and operated by Kindred for $83.4 million.

	•		Sold our Inglewood property for $75 million in cash realizing a $6.2 million gain, received $40 million in early payment of loans, and received $12 million in early receipt of rent related to transactions with Prime, lowering Prime concentration to 26.7% of our total assets;
	•		Sold our Montclair Hospital for $20 million in cash realizing a gain of $2.2 million;
	•		Sold our Sharpstown facility in Houston, Texas for $3 million in cash realizing a $0.7 million gain;
	•		Received prepayment of our Marina mortgage loan of $43 million;
	•		Entered into interest rate swaps to fix $60 million of our senior notes starting October 30, 2011 (date on which the interest rate is scheduled to turn variable) through the maturity date at a rate of 5.675% and to fix $65 million of our senior notes, starting July 30, 2011 (date on which the interest rate is scheduled to turn variable) through maturity date, at a rate of 5.507%, which will result in a $2.5 million annual savings on interest expense based on current fixed rate; and
	•		Recorded a $12 million charge to recognize the estimated impairment of our Monroe working capital loan.

2009 Highlights

            In 2009, our primary business goal was to preserve capital during the economic and credit crisis. Below are actions taken to achieve that goal along with other highlights for the year:

	•		Issued 13.3 million shares of common stock resulting in net proceeds of $67.8 million;
	•		Sold an acute care facility to Prime for $15.0 million, realizing a gain of $0.3 million;
	•		Executed a $20 million mortgage loan, of which we advanced $15.0 million by end of year. Loan is collateralized by Prime’s Desert Valley facility. The purpose of the mortgage loan is to help fund a $35 million expansion and renovation project;
	•		Re-leased our Bucks County facility within six months of terminating the previous lease on the facility due to tenant defaults;
	•		Terminated leases on two of our Louisiana (Covington and Denham Springs) facilities but subsequently re-leased the Denham Springs facility with a new operator at similar terms within two months of the prior lease termination;
	•		Entered into an at-the-market offering, which will allow us to sell up to $50 million in stock and will be used for general corporate purposes, which may from time to time include reduction of our debt balances and investments in healthcare real estate and other assets; and
	•		Settled the Stealth litigation.

2008 Highlights

            In 2008, our primary business goal was to grow and diversify our tenant and geographical concentration. See below for actions taken to reach this goal along with other highlights for the year:

	•		Completed the acquisition of 20 properties leased to 7 unrelated operators for $357.2 million. Four of the 7 operators (HealthSouth Corporation, Community Health Systems, Inc., IASIS Healthcare LLC and Health Management Associates, Inc.) are publicly reporting companies. This acquisition significantly improved both our tenant and geographical concentrations;
	•		Acquired a long term acute care hospital in Detroit, Michigan for $10.8 million and entered into an operating lease with Vibra;
	•		Acquired three Southern California hospital facilities, along with two medical office buildings for approximately $60 million and leased these facilities to Prime under long-term net leases;
	•		Completed the sale of three rehabilitation facilities to Vibra realizing proceeds of $105.0 million;
	•		Issued exchangeable notes realizing net proceeds of $72.8 million and issued 12.7 million shares of stock, realizing net proceeds of $128.3 million. These proceeds along with proceeds from our credit facility and the sale of the three rehabilitation facilities were used to fund the 2008 acquisitions noted above;
	•		Terminated leases on two general acute care hospitals in Houston, Texas, and one hospital in Redding, California due to tenant (affiliates Hospital Partners of America, Inc., a multi-hospital operating company) defaults. Within a few months of lease termination, we released the Redding facility to a Prime affiliate. The new operator agreed to increase the lease base from $60.0 million to $63.0 million and to pay additional rent and profit participation based on the expected future profitability of the new lessee’s operations.

Critical Accounting Policies

            In order to prepare financial statements in conformity with accounting principles generally accepted in the United States, we must make estimates about certain types of transactions and account balances. We believe that our estimates of the amount and timing of our revenues, credit losses, fair values (either as part of a purchase price allocation or impairment analysis) and periodic depreciation of our real estate assets, and stock compensation expense, along with our assessment as to whether an entity that we do business with should be consolidated with our results, have significant effects on our financial statements. Each of these items involves estimates that require us to make subjective judgments. We rely on our experience, collect historical and current market data, and develop relevant assumptions to arrive at what we believe to be reasonable estimates. Under different conditions or assumptions, materially different amounts could be reported related to the accounting policies described below. In addition, application of these accounting policies involves the exercise of judgment on the use of assumptions as to future uncertainties and, as a result, actual results could materially differ from these estimates. Our accounting estimates include the following:

            Revenue Recognition: We receive income from operating leases based on the fixed, minimum required rents (base rents) per the lease agreements. Rent revenue from base rents is recorded on the straight-line method over the terms of the related lease agreements for new leases and the remaining terms of existing leases for acquired properties. The straight-line method records the periodic average amount of base rent earned over the term of a lease, taking into account contractual rent increases over the lease term. The straight-line method typically has the effect of recording more rent revenue from a lease than a tenant is required to pay early in the term of the lease. During the later parts of a lease term, this effect reverses with less rent revenue recorded than a tenant is required to pay. Rent revenue as recorded on the straight-line method in the consolidated statements of income is presented as two amounts: billed rent revenue and straight-line revenue. Billed rent revenue is the amount of base rent actually billed to the customer each period as required by the lease. Straight-line rent revenue is the difference between rent revenue earned based on the straight-line method and the amount recorded as billed rent revenue. We record the

difference between base rent revenues earned and amounts due per the respective lease agreements, as applicable, as an increase or decrease to straight-line rent receivable.

            Certain leases provide for additional rents contingent upon a percentage of the tenant revenue in excess of specified base amounts/thresholds (percentage rents). Percentage rents are recognized in the period in which revenue thresholds are met. Rental payments received prior to their recognition as income are classified as deferred revenue. We may also receive additional rent (contingent rent) under some leases when the U.S. Department of Labor consumer price index exceeds the annual minimum percentage increase in the lease. Contingent rents are recorded as billed rent revenue in the period earned.

            In instances where we have a profits or other equity interest in our tenant’s operations, we record revenue equal to our percentage interest of the tenant’s profits, as defined in the lease or tenant’s operating agreements, once annual thresholds, if any, are met.

            We begin recording base rent income from our development projects when the lessee takes physical possession of the facility, which may be different from the stated start date of the lease. Also, during construction of our development projects, we are generally entitled to accrue rent based on the cost paid during the construction period (construction period rent). We accrue construction period rent as a receivable and deferred revenue during the construction period. When the lessee takes physical possession of the facility, we begin recognizing the accrued construction period rent on the straight-line method over the remaining term of the lease.

            We receive interest income from our tenants/borrowers on mortgage loans, working capital loans, and other long-term loans. Interest income from these loans is recognized as earned based upon the principal outstanding and terms of the loans.

            Commitment fees received from development and leasing services for lessees are initially recorded as deferred revenue and recognized as income over the initial term of an operating lease to produce a constant effective yield on the lease (interest method). Commitment and origination fees from lending services are recorded as deferred revenue and recognized as income over the life of the loan using the interest method.

            Investments in Real Estate. We record investments in real estate at cost, and we capitalize improvements and replacements when they extend the useful life or improve the efficiency of the asset. While our tenants are generally responsible for all operating costs at a facility, to the extent that we incur costs of repairs and maintenance, we expense those costs as incurred. We compute depreciation using the straight-line method over the weighted-average useful life of 37.2 years for buildings and improvements.

            When circumstances indicate a possible impairment of the value of our real estate investments, we review the recoverability of the facility’s carrying value. The review of the recoverability is generally based on our estimate of the future undiscounted cash flows, excluding interest charges, from the facility’s use and eventual disposition. Our forecast of these cash flows considers factors such as expected future operating income, market and other applicable trends, and residual value, as well as the effects of leasing demand, competition and other factors. If impairment exists due to inability to recover the carrying value of a facility, an impairment loss is recorded to the extent that the carrying value exceeds the estimated fair value of the facility. We do not believe that the value of any of our facilities was impaired at December 31, 2010 or 2009 or at June 30, 2011, except for the Denham Springs facility which we recorded a $0.6 million charge in June 2011; however, given the highly specialized aspects of our properties no assurance can be given that future impairment charges will not be taken.

            Acquired Real Estate Purchase Price Allocation. We allocate the purchase price of acquired properties to net tangible and identified intangible assets acquired based on their fair values. In making estimates of fair values for purposes of allocating purchase prices of acquired real estate, we utilize a number of sources, including internal and external market data and independent appraisals that may be obtained in connection with the acquisition or financing of the respective property. We also consider information obtained about each property as a result of our preacquisition due diligence, marketing and leasing activities in estimating the fair value of the tangible and intangible assets acquired.

            We record above market and below market in-place lease values, if any, for the facilities we own which are based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (1) the contractual amounts to be paid pursuant to the in-place leases and (2) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining noncancelable term of the lease. We amortize any resulting capitalized above market lease values as a reduction of rental income over the remaining non-cancelable terms of the respective leases. We amortize any resulting capitalized below market lease values as an increase to rental income over the initial term and any fixed-rate renewal periods in the respective leases. Because our strategy to a large degree involves the origination and acquisition of long term lease arrangements at market rates relative to our acquisition costs, we do not expect the above market and below market in-place lease values to be significant for many of our anticipated transactions.

            We measure the aggregate value of other lease intangible assets to be acquired based on the difference between (1) the property valued with existing leases adjusted to market rental rates and (2) the property valued as if vacant when acquired. Management’s estimates of value are made using methods similar to those used by independent appraisers (e.g., discounted cash flow analysis). Factors considered by management in our analysis include an estimate of carrying costs during hypothetical expected lease-up periods considering current market conditions, and costs to execute similar leases. We also consider information obtained about each targeted facility as a result of our pre-acquisition due diligence, marketing, and leasing activities in estimating the fair value of the tangible and intangible assets acquired. In estimating carrying costs, management includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods, which we expect to be about six months depending on specific local market conditions. Management also estimates costs to execute similar leases including leasing commissions, legal costs, and other related expenses to the extent that such costs are not already incurred in connection with a new lease origination as part of the transaction.

            Other intangible assets acquired may include customer relationship intangible values, which are based on management’s evaluation of the specific characteristics of each prospective tenant’s lease and our overall relationship with that tenant. Characteristics to be considered by management in allocating these values include the nature and extent of our existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality, and expectations of lease renewals, including those existing under the terms of the lease agreement, among other factors.

            We amortize the value of in-place leases to expense over the initial term of the respective leases, which have a weighted average useful life of 14.0 years at June 30, 2011. The value of customer relationship intangibles, if any, is amortized to expense over the initial term and any renewal periods in the respective leases, but in no event will the amortization period for intangible assets exceed the remaining depreciable life of the building. If a lease is terminated, the unamortized portion of the in-place lease value and customer relationship intangibles is charged to expense. At June 30, 2011, we have assigned no value to customer relationship intangibles.

            Loans: Loans consist of mortgage loans, working capital loans and other long-term loans. Mortgage loans are collateralized by interests in real property. Working capital and other long-term loans are generally collateralized by interests in receivables and corporate and individual guarantees. We record loans at cost. We evaluate the collectability of both interest and principal for each of our loans to determine whether they are impaired. A loan is considered impaired when, based on current information and events, it is probable that we will be unable to collect all amounts due according to the existing contractual terms. When a loan is considered to be impaired, the amount of the allowance is calculated by comparing the recorded investment to either the value determined by discounting the expected future cash flows using the loans effective interest rate or to the fair value of the collateral if the loan is collateral dependent.

            Losses from Rent Receivables: A provision for losses on rent receivables (including straight-line rent receivables) is recorded when it becomes probable that the receivable will not be collected in full. The provision is an amount which reduces the receivable to its estimated net realizable value based on a determination of the eventual amounts to be collected either from the debtor or from the collateral, if any.

            Stock-Based Compensation. During the years ended December 31, 2010, 2009, and 2008 we recorded $6.6 million, $5.5 million, and $6.4 million, respectively, of expense for share-based compensation related to grants of

restricted common stock, deferred stock units and other stock-based awards. For the six months ended June 30, 2011 and 2010, we recorded $3.7 million and $3.9 million, respectively, of expenses for share-based compensation related to grants of restricted common stock. In 2011, 2010 and 2006, we granted performance-based restricted share awards that vest based on the achievement of certain market conditions as defined by the accounting rules. Market conditions are vesting conditions which are based on our stock price levels or our total shareholder return (stock price and dividends) compared to an index of other REIT stocks. Because these awards vest based on the achievement of these market conditions, we must initially evaluate and estimate the probability of achieving those market conditions in order to determine the fair value of the award and over what period we should recognize stock compensation expense.

            In 2007, the Compensation Committee made awards which are earned only if we achieve certain stock price levels, total shareholder return or other market conditions. The 2007 awards were made pursuant to our 2007 Multi-Year Incentive Plan (MIP) adopted by the Compensation Committee and consisted of three components: service-based awards, core performance awards (CPRE), and superior performance awards (SPRE). The service-based awards vest annually and ratably over a seven year period. We recognize expense over the vesting period on the straight-line method for service based awards. The CPRE and SPRE awards vest based on the achievement of certain market conditions. Only one third of the SPRE awards were earned as of December 31, 2010 (with the remainder being forfeited); however, these awards require additional service after being earned in order to vest. For the CPRE awards, the period over which the awards are earned is not fixed because the awards provide for cumulative measures over multiple years. The accounting rules require that we estimate the period over which the awards will likely be earned, regardless of the period over which the award allows as the maximum period over which it can be earned. Also, because some awards have multiple periods over which they can be earned, we must segregate individual awards into “tranches,” based on their vesting or estimated earning periods. These complexities required us to use an independent consultant to assist us in modeling both the value of the award and the various periods over which each tranche of an award will be earned. We used what is termed a Monte Carlo simulation model which determines a value and earnings periods based on multiple outcomes and their probabilities. Beginning in 2007, we recorded expense over the expected or derived vesting periods using the calculated value of the awards. We recorded expense over these vesting periods even though the awards have not yet been earned and, in fact, may never be earned.

            Through June 2011 and for the full year of 2010, 229,938 and 182,600 of performance-based awards, respectively, were awarded to our management team and certain employees. These awards vest ratably over a three-year period based on the achievement of certain performance measures, with a carry-back and carryforward provision through December 31, 2014 (for the 2010 awards) and December 31, 2015 (for the 2011 awards). In addition, we awarded 500,000 shares of multi-year performance-based awards to management. These shares are subject to three-year cumulative performance hurdles based on total shareholder return. At the end of the three-year performance period, any earned shares will be subject to an additional two years of ratable time-based vesting on an annual basis. Dividends are paid on these performance awards only upon achievement of the performance hurdles.

            Principles of Consolidation: Property holding entities and other subsidiaries of which we own 100% of the equity or have a controlling financial interest evidenced by ownership of a majority voting interest are consolidated. All intercompany balances and transactions are eliminated. For entities in which we own less than 100% of the equity interest, we consolidate the property if we have the direct or indirect ability to control the entities’ activities based upon the terms of the respective entities’ ownership agreements. For these entities, we record a non-controlling interest representing equity held by non-controlling interests.

            We continually evaluate all of our transactions and investments to determine if they represent variable interests in a variable interest entity. If we determine that we have a variable interest in a variable interest entity, we then evaluate if we are the primary beneficiary of the variable interest entity. The evaluation is a qualitative assessment as to whether we have the ability to direct the activities of a variable interest entity that most significantly impact the entity’s economic performance. We consolidate each variable interest entity in which we, by virtue of or transactions with our investments in the entity, are considered to be the primary beneficiary. At December 31, 2010 and 2009 and June 30, 2011, we determined that we were not the primary beneficiary of any of our variable interest entities because we do not control the activities that most significantly impact the economic performance of these entities.

Disclosure of Contractual Obligations

            The following table summarizes known material contractual obligations as of June 30, 2011 (amounts in thousands), adjusted for our tender offer of our 2008 Exchangeable Notes (as defined below) consummated in July 2011:

Contractual Obligations		Less Than 1 Year				1-3 Years				3-5 Years				After 5 Years				Total
Senior unsecured notes (1)		$	4,429			$	13,969			$	13,969			$	131,063			$	163,430
Old Notes			15,813				61,875				61,875				620,156				759,719
Exchangeable senior notes			10,034				13,935				—				—				23,969
Revolving credit facilities (2)			1,166				43,230				3,025				—				47,421
Term loans			567				2,270				2,269				15,119				20,225
Operating lease commitments (3)			1,313				4,505				3,665				44,516				53,999
Purchase obligations (4)			31,687				10,980				—				—				42,667
Totals		$	65,009			$	150,764			$	84,803			$	810,854			$	1,111,430

Liquidity and Capital Resources of the Parent Company

            In this “Liquidity and Capital Resources of the Parent Company” section and in the “Liquidity and Capital Resources of the Operating Partnership” section below, the term, “Parent Company”, refers to Medical Properties Trust, Inc. on an unconsolidated basis, excluding its direct and indirect subsidiaries, including the Operating Partnership.

            Our Parent Company’s business is operated primarily through our Operating Partnership of which it is the sole equity owner of the general partner and which it consolidates for financial reporting purposes. Because our Parent Company operates on a consolidated basis with the Operating Partnership, the section entitled “Liquidity and Capital Resources of the Operating Partnership” should be read in conjunction with this section to understand the liquidity and capital resources of our Parent Company on a consolidated basis and how our company is operated as a whole.

            Our Parent Company issues public equity from time to time, including pursuant to its at the market offering, but does not otherwise generate any capital itself or conduct any business itself, other than incurring certain expenses in operating as a public company which are fully reimbursed by the Operating Partnership. Our Parent Company itself does not hold any indebtedness other than guarantees of indebtedness of our Operating Partnership, and its only material asset is its ownership of partnership interests of our Operating Partnership and the membership

interests of the sole general partner of our Operating Partnership. Therefore, the assets and liabilities and the revenues and expenses of our Parent Company and our Operating Partnership are the same on their respective financial statements, except for immaterial differences related to cash, other assets and accrued liabilities that arise from public company expenses paid by our Parent Company. However, all debt is held directly or indirectly at the Operating Partnership level. Our Parent Company’s principal funding requirement is the payment of dividends on its common stock. Our Parent Company’s principal source of funding for its dividend payments is distributions it receives from our Operating Partnership.

            As the sole equity owner of the general partner of our Operating Partnership, our Parent Company has the full, exclusive and complete responsibility for our Operating Partnership’s day-to-day management and control. Our Parent Company causes our Operating Partnership to distribute such portion of its available cash as our Parent Company may in its discretion determine, in the manner provided in our Operating Partnership’s limited partnership agreement. Our Parent Company receives proceeds from its equity issuances from time to time, but is required by our Operating Partnership’s limited partnership agreement to contribute the proceeds from its equity issuances to our Operating Partnership in exchange for partnership units of our Operating Partnership.

            The liquidity of our Parent Company is dependent on our Operating Partnership’s ability to make sufficient distributions to our Parent Company. The primary cash requirement of our Parent Company is its payment of dividends to its stockholders. Our Parent Company also guarantees some of our Operating Partnership’s debt. If our Operating Partnership fails to fulfill its debt requirements, which trigger Parent Company guarantee obligations, then our Parent Company will be required to fulfill its cash payment commitments under such guarantees. However, our Parent Company’s only significant asset is its investment in our Operating Partnership and its ownership of the membership interests of our Operating Partnership’s sold general partner.

            We believe our Operating Partnership’s sources of working capital, specifically its cash flow from operations, and borrowings available under its revolving credit facility, are adequate for it to make its distribution payments to our Parent Company and, in turn, for our Parent Company to make its dividend payments to its stockholders. However, we cannot assure you that our Operating Partnership’s sources of capital will continue to be available at all or in amounts sufficient to meet its needs, including its ability to make distribution payments to our Parent Company. The unavailability of capital could adversely affect our Operating Partnership’s ability to pay its distributions to our Parent Company, which would in turn, adversely affect our Parent Company’s ability to pay cash dividends to its stockholders.

            In order to fund dividend requirements or fund activities of our Operating Partnership, our Parent Company will from time to time raise equity. For instance, in April 2010, our Parent Company completed a public offering (the “Equity Offering”) of 26 million shares of common stock at $9.75 per share. Including the underwriters’ purchase of 3.9 million additional shares to cover over-allotments, net proceeds from this Equity Offering, after underwriters’ discounts and commissions, were $279.1 million. The Operating Partnership used the net proceeds from the Equity Offering to pay off our $30 million term loan that was due in 2010, to fund our purchase of 93% of the outstanding 6.125% exchangeable senior notes due 2011 at a price of 103% of the principal amount plus accrued and unpaid interest (or $136.3 million) pursuant to a cash tender offer, and for other general corporate purposes.

Liquidity and Capital Resources of the Operating Partnership

            In this “Liquidity and Capital Resources of the Operating Partnership” section, the terms “we”, “our” and “us” refer to our Operating Partnership or our Operating Partnership and our Parent Company together, as the text requires.

            Our Parent Company is our sole general partner and consolidates our results of operations for financial reporting purposes. Because we operate on a consolidated basis with our Parent Company, the section entitled “Liquidity and Capital Resources of the Parent Company” should be read in conjunction with this section to understand our liquidity and capital resources on a consolidated basis.

            During the first half of 2011, operating cash flows, which primarily consisted of rent and interest from mortgage and working capital loans, approximated $39.7 million, which, along with cash on-hand and draws on our revolvers, were principally used to fund our dividends of $44.8 million and investing activities of $186.7 million. As

of June 30, 2011, we had approximately $220.3 million of available borrowing capacity under our credit facility (net of $8.9 million of letters and credit outstanding) and cash of $227.9 million.

            In April 2011, our Operating Partnership and a wholly owned subsidiary of our Operating Partnership (together, the “Issuers”) issued $450 million of the Old Notes. Contemporaneously with the closing of the Old Notes, we repaid and terminated our $150 million term loan facility and our $9 million collateralized term loan facility. In connection with the notes offering, we amended our existing credit agreement, which now provides for a $330 million unsecured revolving credit facility that matures in October 2015. We paid down in full this revolving credit facility’s outstanding balance with the proceeds from the offering of the Old Notes. We used the remaining proceeds from the offering (approximately $210 million) for general business purposes, which includes investment opportunities and debt reduction (such as the cash tender offer on 85% of the 2008 Exchangeable Notes made in July 2011 and the repurchase of an additional 1% of the 2008 Exchangeable Notes made in August 2011).

            We generated cash of $60.6 million from operating activities during 2010, which primarily consists of rent and interest from mortgage and working capital loans, which, along with cash on-hand, proceeds from the sale of our Parent Company’s stock and our Inglewood and Montclair properties and early loan prepayments by Prime and Marina, were principally used to fund our dividends of $77.1 million, real estate acquisitions of $138 million and our debt refinancing activities. As of December 31, 2010, we had approximately $363 million available borrowing capacity under our credit facilities and cash of $98.4 million.

            In April 2010, our Parent Company completed the Equity Offering of 26 million shares of common stock at $9.75 per share. Including the underwriters’ purchase of 3.9 million additional shares to cover over-allotments, net proceeds from this Equity Offering, after underwriters’ discounts and commissions, were $279.1 million. We have used the net proceeds from the Equity Offering to pay off our $30 million term loan that was due in 2010 and to fund our purchase of 84% of the outstanding 6.125% exchangeable senior notes due 2011 at a price of 103% of the principal amount plus accrued and unpaid interest (or $123.2 million) pursuant to a cash tender offer.

            In May 2010, our Operating Partnership entered into our credit facility with a syndicate of banks and others, the proceeds of which, along with the Equity Offering proceeds, were used to repay in full all outstanding obligations under our former $220 million credit facility. This newer credit facility included a $300 million three year term revolving facility (which was increased to $330 million in September 2010) and a term loan. The new credit facility included an accordion feature that pursuant to which the revolving credit facility could be increased up to $375 million through November 2011.

            During the second quarter 2010, we entered into an interest rate swap to fix $65 million of $125 million of our notes due 2016, starting July 31, 2011 (date on which the interest rate is scheduled to turn variable) through maturity date (or July 2016), at a rate of 5.507%. We also entered into an interest rate swap to fix the remaining $60 million of our notes due 2016 starting October 31, 2011 (date on which the related interest rate is scheduled to turn variable) through the maturity date at a rate of 5.675%. Prior to July 31, 2011, we were paying a weighted average rate of 7.70% on these notes, so we expect to save $2.5 million annually on interest expense once the swaps become effective in July and October 2011. In 2010, we sold the real estate of our Inglewood Hospital and Montclair Hospital to Prime for $75 million and $20 million, respectively, and received prepayment of our Marina mortgage loan of $43 million. Separately, Prime also repaid $40 million in outstanding loans plus accrued interest in April 2010. In addition, Prime paid us $12 million in additional rent related to our Shasta property.

            We generated cash of $62.8 million from operating activities during 2009, which, along with borrowings from our credit facility, were used to fund our distributions to our Parent Company of $61.6 million and investing activities of $12.1 million. In January 2009, we completed a public offering of 12.0 million shares of our common stock at $5.40 per share. Including the underwriters’ purchase of 1.3 million additional shares to cover over allotments, net proceeds from this offering, after underwriting discount and commission and fees, were approximately $68 million.

            Our revolving credit facility, the indenture governing the Old Notes and the Exchange Notes and other debt instruments impose certain restrictions on us, including restrictions on our ability to: incur additional debt; grant liens; provide guarantees in respect of obligations of any other entity; make redemptions and repurchases of our capital stock; prepay, redeem or repurchase debt; engage in mergers or consolidations; enter into affiliated transactions; dispose of real estate; and change our business. In addition, these agreements limit the amount of dividends we can pay.

            In addition to these restrictions, the indenture governing the Old Notes and the New Notes includes a covenant that requires us to maintain Total Unencumbered Assets (as defined in the indenture) of not less than 150% of our aggregate outstanding principal amount of Unsecured Indebtedness (as defined in the indenture) at all times and our credit facility contains customary financial and operating covenants, including covenants relating to total leverage ratio, fixed charge coverage ratio, mortgage secured leverage ratio, recourse mortgage secured indebtedness, consolidated adjusted net worth, unsecured leverage ratio, unsecured interest coverage ratio and covenants restricting the incurrence of debt, imposition of liens, the payment of dividends, and entering into affiliate transactions. This facility also contains customary events of default, including among others, nonpayment of principal or interest, material inaccuracy of representations and failure to comply with our covenants. If an event of default occurs and is continuing under the facility, the entire outstanding balance may become immediately due and payable. The indenture governing the Old Notes and Exchange Notes contains customary operating covenants and events of default, including, but not limited to, the failure to make payments of interest or premium, if any, on, or principal of, the notes, the failure to comply with certain covenants and agreements specified in the indenture for a period of time after notice has been provided, the acceleration of other indebtedness resulting from the failure to pay principal on such other indebtedness prior to its maturity, and certain events of insolvency. At June 30, 2011 and April 26, 2011, we were in compliance with all such financial and operating covenants. See “Description of Other Material Indebtedness—Credit Facility” for a more detailed description of the terms of our revolving credit facility.

            In order for our Parent Company to continue to qualify as a REIT we are required to distribute annual dividends equal to a minimum of 90% of our REIT taxable income, computed without regard to the dividends paid deduction and our net capital gains. See “—Distribution Policy” for further information on our dividend policy along with the historical dividends paid on a per share basis.

            Short-term Liquidity Requirements: As of September 16, 2011, our availability under our amended revolving credit facility plus cash on-hand approximated $350 million. We have only nominal principal payments due and no remaining significant maturities in 2011. We believe that the liquidity available to us, along with our current monthly cash receipts from rent and loan interest, is sufficient to provide the resources necessary for operations, debt and interest obligations (including the repurchase of 86% of our 2008 Exchangeable Notes in July and August 2011), our firm commitments (including capital expenditures, if any), dividends in order for our Parent Company to comply with REIT requirements during 2011 and to fund our current investment strategies for the next 12 months. In addition, our Parent Company has an at-the-market offering in place under which we may sell up to $50 million in shares (of which $10 million has been sold to-date) which may be used for general corporate purposes as needed.

            Long-term Liquidity Requirements: With the proceeds from the offering of the Old Notes and the availability from our revolving credit facility discussed above along with our current monthly cash receipts from rent and loan interest and availability under our at-the-market offering, we believe we have the liquidity available to us to fund our operations, debt and interest obligations, dividends in order for our Parent Company to comply with REIT requirements, firm commitments (including capital expenditures, if any) and investment strategies for the foreseeable future. As of June 30, 2011, adjusted for the tender offer on our 2008 Exchangeable Notes completed in July, principal payments due for our debt (which exclude the effects of any discounts recorded) are as follows (in thousands):

2011		$	9,285
2012			39,832
2013			12,749
2014			266
2015			283
Thereafter			588,400
Total		$	650,815

Results of Operations

            We began operations during the second quarter of 2004. Since then, we have substantially increased our income earning investments each year (see “—Overview” for more details), and we expect to continue to add to our investment portfolio, subject to the capital markets and other conditions described in this offering memorandum. Accordingly, we expect that future results of operations will vary from our historical results.

Six Months Ended June 30, 2011 Compared to June 30, 2010

            Net income for the six months ended June 30, 2011, was $13.4 million compared to net income of $3.4 million for the six months ended June 30, 2010. Funds from operations (“FFO”), after adjusting for certain items (as more fully described in Reconciliation of Non-GAAP Financial Measures), was $37.9 million, or $0.34 per diluted share for the first six months in 2011 as compared to $31.5 million, or $0.35 per diluted share for 2010.

            A comparison of revenues for the six month periods ended June 30, 2011 and 2010, is as follows:

																		Year over
						% of								% of				Year
		2011				Total				2010				Total				Change
Base rents		$	56,113				77.8	%		$	43,946				71.5	%			27.7	%
Straight-line rents			3,805				5.2	%			1,593				2.6	%			138.8	%
Percentage rents			1,668				2.3	%			1,614				2.6	%			3.3	%
Fee income			111				0.2	%			237				0.4	%			-53.2	%
Interest from loans			10,450				14.5	%			14,061				22.9	%			-25.7	%
Total revenue		$	72,147				100.0	%		$	61,451				100.0	%			17.4	%