Universal Health Realty Income Trust Reports $19.2 Million Net Income for Fiscal Year 2024

Universal Health Realty Income Trust (UHT) reported a net income of $19.2 million for the fiscal year ending December 31, 2024, an increase from $15.4 million in 2023. This $3.8 million rise was primarily driven by a $3.5 million increase in income generated from various properties, alongside a reduction in expenses related to a property in Chicago, which saw a $610,000 property tax reduction. However, the Trust also faced a $1.9 million increase in interest expenses due to rising borrowing rates. Total revenues for 2024 increased by 3.6% to $97.5 million, attributed to new revenue streams from a recently constructed medical office building (MOB) in Reno, Nevada, and the acquisition of the McAllen Doctor's Center in Texas.

In terms of operational developments, UHT maintained a diverse portfolio of 76 real estate investments across 21 states, including six hospital facilities, 60 medical office buildings, and four free-standing emergency departments. The Trust's relationship with Universal Health Services, Inc. (UHS) remains significant, with UHS accounting for approximately 40% of UHT's consolidated revenues over the past three years. The average occupancy rate for the hospital facilities was reported at 56%, with the average effective annual rental per square foot for occupied properties increasing from $29.21 in 2023 to $30.03 in 2024.

Strategically, UHT continued to expand its footprint in the healthcare sector, completing the acquisition of the McAllen Doctor's Center for approximately $7.6 million in 2023. Additionally, the Trust completed construction on the Sierra Medical Plaza I, a multi-tenant MOB in Reno, which is expected to enhance its revenue-generating capacity. The Trust also renewed its advisory agreement with UHS for 2025, ensuring continuity in management and operational oversight.

Looking ahead, UHT's management expressed cautious optimism regarding future performance, emphasizing the importance of maintaining its REIT status and the potential impacts of rising interest rates and inflation on operational costs. The Trust's ability to generate sufficient cash flow to meet dividend obligations and fund future investments remains a priority. UHT's financial strategy includes leveraging its revolving credit facility, which has a borrowing capacity of $425 million, to support ongoing capital needs and acquisitions.

Overall, UHT's financial performance in 2024 reflects a combination of strategic acquisitions, operational efficiencies, and a strong reliance on its relationship with UHS, while also navigating challenges posed by market conditions and rising costs.