(Bloomberg)—MedEquities Realty Trust Inc., a health-care focused real estate investment trust, is considering a sale, according to people with knowledge of the matter.
The company is working with an adviser to help evaluate its options, said the people, who asked not to be identified because they weren’t authorized to speak publicly. No decision has been made and it could remain independent, they said.
MedEquities shares rose 4 percent to $10.42 on Wednesday at 10:39 a.m. in New York, giving the company a market value of $335 million.
Representatives for the Nashville, Tennessee-based company didn’t respond to requests for comment.
Its potential sale comes amid a flurry of mergers and acquisitions involving REITs. GGP Inc., Forest City Realty Trust Inc., Gramercy Property Trust, DCT Industrial Trust Inc., Quality Care Properties Inc. and Education Realty Trust Inc. have all agreed to be acquired this year.
Private equity buyers are driving much of the activity, according to Jeffrey Langbaum, a senior REITS analyst with Bloomberg Intelligence.
"The primary driver of what’s happening is there is a discrepancy between what the private market is valuing real estate assets at versus where the public markets are valuing REIT shares," Langbaum said. "The method of unlocking that value is a sale of a company."
"They’re just playing the arbitrage," he added.
MedEquities was incorporated in 2014 and went public two years later. Its shares have fallen about 13 percent since pricing its public offering in September 2016.
The company owns 33 acute-care hospitals, skilled nursing facilities and other types of health-care facilities in six states including California and Texas, according to its third quarter investor presentation. Its chairman and chief executive officer, John McRoberts, previously co-founded and ran Capstone Capital Corp., another REIT that Healthcare Realty Trust Inc. acquired in 1998.
To contact the reporters on this story: Kiel Porter in New York at [email protected]; Gillian Tan in New York at [email protected] To contact the editors responsible for this story: Elizabeth Fournier at [email protected] Matthew Monks, Dan Wilchins
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