Universal Health Realty Income Trust Reports $4.8 Million Net Income in Q1 2025

Universal Health Realty Income Trust (UHRIT) reported a net income of $4.8 million for the first quarter of 2025, a decrease from $5.3 million in the same period of 2024. This decline of approximately 10% was attributed to a reduction in income generated from various properties and an increase in interest expenses, primarily due to higher average outstanding borrowings and effective borrowing rates. Total revenues for the quarter were $24.5 million, down 2.4% from $25.1 million in the prior year, largely due to decreased occupancy rates at several medical office buildings.

In terms of operational metrics, UHRIT's lease revenue from Universal Health Services (UHS) facilities decreased to $8.3 million from $8.7 million year-over-year, while lease revenue from non-related parties also saw a slight decline from $14.5 million to $14.3 million. The Trust's total assets as of March 31, 2025, were reported at $573.5 million, a decrease from $580.9 million at the end of 2024. The Trust's liabilities remained stable at approximately $401.3 million, with total equity decreasing to $172.2 million from $179.5 million.

Strategically, UHRIT continues to maintain a significant relationship with UHS, which accounted for about 40% of its consolidated revenues in both the first quarters of 2025 and 2024. The Trust renewed its advisory agreement with UHS for 2025 under the same terms as previous years, ensuring continuity in its operational management. Additionally, UHRIT has investments in four jointly-owned limited liability companies (LLCs), which are accounted for using the equity method, reflecting a commitment to diversifying its investment portfolio.

The Trust's cash flow from operating activities was $11.6 million for the first quarter of 2025, slightly lower than the $11.7 million reported in the same quarter of 2024. UHRIT declared dividends of $10.2 million, or $0.735 per share, compared to $10.0 million, or $0.725 per share, in the prior year. The Trust's management indicated that they expect to finance future capital expenditures and acquisitions through a combination of operating cash flows, available borrowing capacity under its $425 million credit agreement, and potential equity issuances.

Looking ahead, UHRIT's management remains cautious about the impact of rising interest rates and inflation on its operations and tenant performance. The Trust's ability to maintain its revenue levels will depend significantly on the renewal of leases with UHS and the overall economic environment affecting healthcare services. The management emphasized the importance of monitoring market conditions and tenant performance to navigate potential challenges in the upcoming quarters.