Physicians Realty Trust Announces Positive Resolution Related To LifeCare Facilities

Physicians Realty Trust (NYSE:DOC), (the “Company,” the “Trust,” “we,” “our” and “us”), a self-managed healthcare real estate investment trust, is providing this update related to its three Long-Term Acute Care Hospital (“LTACH”) assets previously operated by LifeCare Holdings, LLC (“LifeCare”). As discussed in the Company’s May 30, 2019 press release, LifeCare, along with several related entities, filed for Chapter 11 bankruptcy on May 6, 2019 in order to facilitate a sale process under bankruptcy protection.

On September 30, 2019, LifeCare 2.0, LLC (“LC 2.0”), a newly formed affiliate of LeBlanc Healthcare founded by David LeBlanc, closed its purchase of certain assets from LifeCare used in connection with LifeCare’s operation of certain long-term acute care and behavioral health facilities in Pennsylvania and Texas, including the three facilities owned by the Company in Pittsburgh, Pennsylvania; Fort Worth, Texas; and Plano, Texas. David LeBlanc founded the original LifeCare company in 1992 which he expanded from 22 beds to 900+ beds before selling it to The Carlyle Group in 2005.

The bankruptcy court approved the sale of the LifeCare assets to LC 2.0 on October 2, 2019. As part of its purchase, LC 2.0 assumed the Company’s single master lease for all three facilities without change and has made the current October rent payment. Additionally, LC 2.0 has agreed to pay, in monthly installments over the next 12 months, approximately $1.0 million representing all past due rent, real estate taxes, late charges, and interest under the lease, as well as $125,000 for attorneys’ fees incurred by the Company related to LifeCare’s bankruptcy.

John T. Thomas, the Company’s President and Chief Executive Officer of the Trust commented, “We are pleased that LifeCare 2.0 recognized the profitability of these assets and agreed to honor our leases on the current terms. The bankruptcy process has enhanced the value of these assets by bringing in an experienced operator with a strong track record and a better credit profile than our previous tenant. We look forward to discussing the transition on our upcoming earnings call scheduled for November 6, 2019.” – Business Wire