Universal Health Realty Income Trust Reports Decrease in Net Income for Q2 2025

Universal Health Realty Income Trust (UHR) reported its financial results for the quarter ending June 30, 2025, revealing a net income of $4.5 million, a decrease from $5.3 million in the same quarter of 2024. For the first half of 2025, net income totaled $9.3 million, down from $10.6 million year-over-year. The decline in profitability was attributed to a property tax reduction recorded in the previous year, increased interest expenses, and a decrease in income generated from various properties. Total revenues for the second quarter increased slightly to $24.9 million from $24.7 million, while revenues for the first half decreased to $49.4 million from $49.9 million.

In terms of operational metrics, UHR's lease revenue from Universal Health Services (UHS) facilities was $8.4 million for the second quarter, slightly down from $8.5 million in 2024. Lease revenue from non-related parties increased to $14.6 million from $14.4 million. The Trust's total assets as of June 30, 2025, were reported at $573 million, a decrease from $580.9 million at the end of 2024. The decrease in total assets was primarily due to a reduction in net real estate investments and financing receivables.

Strategically, UHR continues to maintain a strong relationship with UHS, which accounted for approximately 40% of its consolidated revenues during the reported periods. The Trust renewed its advisory agreement with UHS for 2025, ensuring continuity in management and operational oversight. UHR also reported that it has investments in four jointly-owned limited liability companies (LLCs), which are accounted for using the equity method. These investments are expected to contribute to future income, although they are not consolidated in UHR's financial statements.

The Trust's financial position remains stable, with $354.8 million in outstanding borrowings under its $425 million credit agreement as of June 30, 2025. The credit facility was amended in September 2024 to extend its maturity to September 2028 and increase borrowing capacity. UHR's liquidity is supported by cash and cash equivalents of $6.6 million and available borrowing capacity of $70.2 million. The Trust declared dividends of $20.5 million for the first half of 2025, slightly higher than the $20.2 million paid in the same period of 2024.

Looking ahead, UHR's management expressed cautious optimism regarding future performance, emphasizing the importance of maintaining strong relationships with tenants and managing operational costs amid rising interest rates and inflationary pressures. The Trust's ability to adapt to changing market conditions and its strategic focus on healthcare-related real estate investments are expected to play a crucial role in its ongoing financial health and growth prospects.