Here's Why Medical Properties Trust Stock Slumped 12% in the 1st Half of 2024

Shares of Medical Properties Trust (NYSE: MPW) declined by 12.2% in the first half of 2024, according to data from S&P Global Market Intelligence . Tenant issues and the impacts of higher interest rates continued to plague the real estate investment trust (REIT). On a more positive note, the hospital owner did take several positive steps to address those issues this year.

Here's a look back at all the news of note for the healthcare REIT in the first half of 2024 and whether it can rebound in the back half of the year.

Nursing itself back to health

This year started on a sour note for Medical Properties Trust. The REIT revealed in early January that its top tenant, Steward Health Care, couldn't resume making full rental payments as planned even after selling a noncore business in the fourth quarter. The hospital operator continued to face financial difficulties. As a result, the REIT agreed to defer more rent and planned to work with Steward on a long-term solution.

Steward would file for bankruptcy protection a few months later. Medical Properties Trust agreed to provide its tenant with $75 million of debtor-in-possession financing to help it continue operating. It plans to find new tenants for the hospitals Steward operates. Doing so would enable Medical Properties Trust to resume collecting full rental income from those properties. It can also sell those properties to the new operators or financial investors.

The REIT has had success in re-tenanting and subsequently monetizing Steward facilities. Last year, Steward sold its operations in Utah to CommonSpirit Health, which agreed to lease those properties from Medical Properties Trust. The REIT sold a majority interest in that portfolio to an asset manager earlier this year for $1.1 billion in proceeds.

That joint venture was one of several liquidity transactions Medical Properties Trust completed this year. The REIT initially targeted to raise $2 billion to help address maturing debt. It would secure $2.4 billion by the end of May, including closing an $800 million 10-year loan secured by a U.K. hospital portfolio. These transactions will give it lots of liquidity to operate and address its upcoming debt maturities.

Can Medical Properties Trust rebound in the second half?

Tenant issues and interest-rate headwinds have weighed on Medical Properties Trust for the past few years. However, those issues should finally start fading in the second half of this year. The REIT plans to re-tenant all the hospitals currently leased to Steward by this fall. Meanwhile, it plans to monetize its interest in a managed-care business of another tenant, which will enable it to recover lost rent. Finally, interest rates could start falling later this year. These catalysts could finally lift the weight on the REIT's stock, which could begin recovering in the second half.

Matt DiLallo has positions in Medical Properties Trust. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .