Healthcare property specialist Medical Properties Trust overstated the value of its assets, creating “enormous credit risk,” according to a report released on Thursday by Viceroy Research, which calls itself an investigative financial research group.

The report says that the Alabama-based Medical Properties Trust “engaged in billions of dollars of uncommercial transactions with its tenants and their management teams in order to mask a pervasive revenue round-robin scheme and/or theft.”

Specifically, the report says, MPW acquired equity in distressed operations or issued them loans in order to hide uncollectible rent via “round tripping” revenues and thus avoiding impairment of their assets. It also accuses the company of bailing out distressed tenants, and spending millions of dollars on developments that are nonexistent or haven't broken ground.

The upshot of these maneuvers is that the company will have to significantly cut dividends, Viceroy Research predicts.

The REIT has a history of focusing on distressed assets. In 2020, MPW partnered with Oaktree Capital Management to form a venture with a goal to "buy, save and turn around deeply distressed hospitals in the cities and suburbs of America,” the partners noted.

Medical Properties Trust stock dropped about 0.5% Friday morning. Over the last year, its stock value has declined about 43%.

MPW did not immediately respond to a query from Bisnow asking for comment on Viceroy's report.