Universal Health Realty Income Trust Q3 Net Income Rises to $4.9 Million

Universal Health Realty Income Trust (UHT ) reported net income of $4.9 million, or $0.35 per diluted share, for the third quarter ended September 30, 2026, in results announced October 27, 2026, up from $4.0 million, or $0.29 per diluted share, in the third quarter of 2025.

The King of Prussia, Pennsylvania-based real estate investment trust said the $913,000 increase, or $0.06 per diluted share, consisted of three components: a net aggregate increase of $901,000, or $0.06 per diluted share, resulting primarily from nonrecurring depreciation expense recorded during the third quarter of 2025; an increase of $287,000, or $0.02 per diluted share, resulting from a decrease in interest expense due to a lower average effective borrowing rate, which gives effect to various interest rate swap agreements, partially offset by an increase in average borrowings outstanding under its credit agreement; and a decrease of $275,000, or $0.02 per diluted share, resulting from a one-time settlement and release agreement executed during the third quarter of 2025 in connection with one of its medical office buildings.

Total revenue was $25.346 million in the quarter, compared with $25.302 million a year earlier, according to the trust’s unaudited consolidated statements of income. Lease revenue from UHS facilities was $8.421 million, lease revenue from non-related parties was $14.897 million, and interest income on financing leases from UHS facilities was $1.335 million. The UHS-facility lease revenue included bonus rental on McAllen Medical Center, a UHS acute care hospital facility, of $1.0 million in the third quarter of 2026 versus $895,000 a year earlier, and $3.0 million versus $2.6 million for the nine-month periods. Depreciation and amortization expense was $7.054 million, down from $7.903 million; advisory fees to UHS were $1.462 million; other operating expenses were $7.869 million versus $7.591 million; net interest expense was $4.529 million versus $4.816 million; and equity in income of unconsolidated limited liability companies was $497,000 versus $438,000.

Funds from operations, which excludes depreciation and amortization expense, increased by $53,000 to $12.3 million, or $0.88 per diluted share, from $12.2 million, or $0.88 per diluted share, in the prior-year quarter, per the trust’s supplemental schedule. The trust said it computes FFO in accordance with standards established by the National Association of Real Estate Investment Trusts, and that its FFO may not be comparable to FFO reported by other REITs. It said FFO does not represent cash generated from operating activities under GAAP and should not be considered an alternative to net income determined under GAAP. The dividend paid per share was $0.750 in the quarter, versus $0.740 in the third quarter of 2025.

Nine-Month Results, Dividend and Capital Resources

For the nine months ended September 30, 2026, net income was $15.9 million, or $1.14 per diluted share, compared with $13.3 million, or $0.96 per diluted share, in the comparable period of 2025. The 2026 nine-month results included a gain on the sale of land of $724,000, recorded during the second quarter of 2026; after adjusting for that gain, adjusted net income was $15.1 million, or $1.09 per diluted share.

The trust said the $1.8 million increase in adjusted net income, or $0.13 per diluted share, consisted of a net aggregate increase of $1.3 million, or $0.09 per diluted share, from increased income generated at various properties, including the approximately $900,000 effect of the nonrecurring depreciation expense recorded in the third quarter of 2025; an increase of $773,000, or $0.06 per diluted share, from lower interest expense; and a decrease of $275,000, or $0.02 per diluted share, from the 2025 settlement and release agreement. Nine-month FFO, which excludes depreciation and amortization expense and the gain on sale of land, increased by approximately $1.1 million, or $0.08 per diluted share, to $37.1 million, or $2.67 per diluted share, from $35.9 million, or $2.59 per diluted share, a year earlier. Dividends paid per share totaled $2.245 for the nine-month period, versus $2.215 in the comparable 2025 period.

The third-quarter dividend of $0.75 per share, or $10.4 million in the aggregate, was declared on September 8, 2026 and paid on September 30, 2026.

As of September 30, 2026, the trust had $97.3 million of available borrowing capacity under its $475 million credit agreement, net of $377.7 million of outstanding borrowings. The credit agreement is scheduled to mature on September 30, 2028, and the trust has the option to extend the maturity date for up to two additional six-month periods. The consolidated balance sheet showed total assets of $573.013 million at September 30, 2026, versus $564.907 million at December 31, 2025, with line-of-credit borrowings of $377.7 million versus $356.2 million and total equity of $139.501 million versus $152.384 million. Common shares issued and outstanding totaled 13,899,682 at September 30, 2026.

Chicago Land Sales and Miller Medical Plaza

In October 2026, the trust sold one of its two remaining parcels of land located in Chicago, Illinois, for cash proceeds of $1.96 million, net of closing and related costs. The parcel represented approximately 42% of the remaining acreage the trust owned as of September 30, 2026, and the trust said it expects its consolidated statements of income for the fourth quarter of 2026 to include a gain of approximately $1.90 million recorded in connection with the transaction. In June 2026, the trust sold a separate Chicago parcel for cash proceeds of $746,000, net of closing and related costs, generating the gain of approximately $724,000 included in its nine-month 2026 results.

The trust also provided an update on Miller Medical Plaza, an 80,000-square-foot medical office building in Palm Beach Gardens, Florida, located on the campus of the Alan B. Miller Medical Center, an acute care hospital owned and operated by a wholly-owned subsidiary of UHS that was completed and opened in May 2026. The trust entered into a ground lease with a wholly-owned UHS subsidiary in October 2025 with the intent to develop, construct and own the property. Construction, for which the trust engaged a wholly-owned UHS subsidiary to act as project manager, commenced in February 2026 and is expected to be completed in December 2026, at an estimated cost of approximately $34 million, according to the trust. A wholly-owned UHS subsidiary has executed a 10-year master flex lease agreement for approximately 75% of the building’s rentable square feet; the lease commences when the building is completed and is subject to reduction based on the execution of third-party leases.

Universal Health Realty Income Trust invests in healthcare and human-service related facilities, including acute care hospitals, behavioral health care hospitals, specialty facilities, medical/office buildings, free-standing emergency departments and childcare centers. The trust has investments or commitments in seventy-seven properties located in twenty-one states.