Universal Health Realty Income Trust Files 2023 Annual Report

TL;DR

<b>Universal Health Realty Income Trust filed its 2023 10-K report detailing its real estate portfolio and financial activities.</b>

AI Summary

UNIVERSAL HEALTH REALTY INCOME TRUST (UHT) filed a Annual Report (10-K) with the SEC on February 27, 2024. The company filed its 10-K report for the fiscal year ending December 31, 2023. The filing includes details on various properties such as Madison Professional Office Building, Seven Zero Zero Shadow Lane, and Specialty Facility Evansville Indiana. Key financial instruments mentioned include interest rate swaps and a revolving credit facility. The report references agreements with Universal Health Services Inc., including asset purchase and sale agreements and tenant reimbursements. Specific property details like Clive Behavioral Health in Clive, IA, and Apache Junction Medical Plaza in Apache Junction, AZ, are noted.

Why It Matters

For investors and stakeholders tracking UNIVERSAL HEALTH REALTY INCOME TRUST, this filing contains several important signals. This 10-K filing provides a comprehensive overview of UHT's real estate assets, tenant relationships, and financial health for the fiscal year 2023, crucial for investors assessing the trust's performance and stability. The detailed information on properties, leases, and financial instruments like interest rate swaps offers insights into the trust's operational strategies and risk management practices.

Risk Assessment

Risk Level: — UNIVERSAL HEALTH REALTY INCOME TRUST shows moderate risk based on this filing. The company's reliance on Universal Health Services Inc. as a primary tenant presents a concentration risk, as a significant portion of its revenue is tied to a single entity.

Analyst Insight

Investors should review the specific terms of leases with Universal Health Services Inc. and assess the diversification of the tenant base to understand potential revenue stability.

Key Numbers

• 2023-12-31 — Fiscal Year End (Reporting period)
• 2024-02-27 — Filing Date (Date of submission)
• 6798 — Standard Industrial Classification (Industry classification for REITs)

Key Players & Entities

• UNIVERSAL HEALTH REALTY INCOME TRUST (company) — Filer name
• Universal Health Services Inc. (company) — Tenant and counterparty
• King of Prussia, PA (location) — Business and mailing address
• 2023-12-31 (date) — Fiscal year end
• 2024-02-27 (date) — Filing date

FAQ

Risk Factors

• Tenant Concentration Risk [high — financial]: A significant portion of the trust's rental income is derived from Universal Health Services, Inc., making it vulnerable to changes in that company's financial condition or strategic decisions.
• Real Estate Market Fluctuations [medium — market]: The value and rental income potential of the trust's properties are subject to fluctuations in the real estate market, particularly within the healthcare sector.
• Property Management and Maintenance [medium — operational]: The trust is responsible for the management and maintenance of its properties, which can incur significant costs and operational challenges.

Key Dates

• 2023-12-31: Fiscal Year End — End of the reporting period for the 10-K filing.
• 2024-02-27: Filing Date — Date the 10-K report was officially submitted to the SEC.

Glossary

REITs

Real Estate Investment Trusts are companies that own, operate, or finance income-generating real estate. (UHT is classified as a REIT, indicating its core business model.)

Interest Rate Swap

A financial derivative contract whereby two parties exchange interest rate payments. (Indicates UHT's use of financial instruments to manage interest rate risk.)

Nonrecourse Mortgage Loan

A type of loan secured by collateral (a property) in which the lender can seize the collateral if the borrower defaults, but cannot pursue the borrower's other assets. (Highlights specific financing structures for some of UHT's properties.)

Key Financial Figures

• $0.01 — stered Shares of beneficial interest, $0.01 par value UHT New York Stock Exchan
• $624,000 — itial annual base rent is approximately $624,000. (G) The facility is vacant and being
• $1.3 million — um rent pursuant to the master lease is $1.3 million annually, plus a pro-rata share of the
• $4.1 million — this transaction, we paid approximately $4.1 million in cash to UHS which was the amount by
• $68.4 million — ction generated a gain of approximately $68.4 million which was included in our consolidated
• $79.6 million — California, at its fair market value of $79.6 million. two wholly-owned subsidiaries of UHS
• $57.7 m — its fair-market value of approximately $57.7 million, and; o Canyon Creek Behavioral
• $26.0 million — its fair-market value of approximately $26.0 million. in connection with this transaction,
• $83.7 million — nyon Creek, which totaled approximately $83.7 million in the aggregate, exceeded the $79.6 mi
• $83.3 million — eivables related to this transaction of $83.3 million and $83.6 million, respectively. Additi
• $83.6 m — o this transaction of $83.3 million and $83.6 million, respectively. Additionally, we s
• $5.8 million — s on a monthly basis, was approximately $5.8 million during 2023 ($4.0 million related to Ai
• $4.0 million — approximately $5.8 million during 2023 ($4.0 million related to Aiken and $1.8 million relat
• $1.8 million — 2023 ($4.0 million related to Aiken and $1.8 million related to Canyon Creek) and $5.7 milli
• $5.7 million — .8 million related to Canyon Creek) and $5.7 million during 2022 ($3.9 million related to Ai

Filing Documents

• uht-20231231.htm (10-K) — 4621KB
• uht-ex10_13.htm (EX-10.13) — 11KB
• uht-ex21.htm (EX-21) — 44KB
• uht-ex23_1.htm (EX-23.1) — 4KB
• uht-ex31_1.htm (EX-31.1) — 12KB
• uht-ex31_2.htm (EX-31.2) — 12KB
• uht-ex32_1.htm (EX-32.1) — 7KB
• uht-ex32_2.htm (EX-32.2) — 7KB
• uht-ex97.htm (EX-97) — 58KB
• img264625610_0.jpg (GRAPHIC) — 150KB
• 0000950170-24-021191.txt (&nbsp;) — 15886KB
• uht-20231231.xsd (EX-101.SCH) — 2059KB
• uht-20231231_htm.xml (XML) — 2572KB

Business

Business 1 Item 1A

Risk Factors

Risk Factors 9 Item 1B Unresolved Staff Comments 20 Item 1C Cybersecurity 21 Item 2

Properties

Properties 22 Item 3

Legal Proceedings

Legal Proceedings 28 Item 4 Mine Safety Disclosures 28 PART II Item 5 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 28 Item 6 Reserved 29 Item 7

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 30 Item 7A

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 42 Item 8

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 44 Item 9 Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 44 Item 9A

Controls and Procedures

Controls and Procedures 44 Item 9B Other Information 47 PART III Item 10 Directors, Executive Officers and Corporate Governance 48 Item 11

Executive Compensation

Executive Compensation 48 Item 12

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 48 Item 13 Certain Relationships and Related Transactions, and Director Independence 48 Item 14 Principal Accountant Fees and Services 48 PART IV Item 15 Exhibits and Financial Statement Schedules 49

Form 10-K Summary

Item 16 Form 10-K Summary 52

SIGNATURES

SIGNATURES 53 This Annual Report on Form 10-K is for the year ended December 31, 2023. This Annual Report modifies and supersedes documents filed prior to this Annual Report. Information that we file with the Securities and Exchange Commission (the "SEC") in the future will automatically update and supersede information contained in this Annual Report. In this Annual Report, "we," "us," "our" and the "Trust" refer to Universal Health Realty Income Trust and its subsidiaries. As disclosed in this Annual Report, including in Part I, Item 1.-Relationship with Universal Health Services, Inc. ("UHS"), a wholly-owned subsidiary of UHS (UHS of Delaware, Inc.) serves as our Advisor pursuant to the terms of an annually renewable Advisory Agreement dated December 24, 1986, and as amended and restated as of January 1, 2019. The advisory agreement expires on December 31 of each year; however, it is renewable by us, subject to a determination by our Trustees who are unaffiliated with UHS, that the Advisor's performance has been satisfactory. The Advisory Agreement was renewed for 2024 with the same terms as the Advisory Agreement in place during 2023, 2022 and 2021. Our officers are all employees of UHS through its wholly-owned subsidiary, UHS of Delaware, Inc. In addition, five of our hospital facilities are leased to wholly-owned subsidiaries of UHS, one of our hospital facilities is leased to a joint venture between a wholly-owned subsidiary of UHS and a third party, and subsidiaries of UHS are tenants of twenty-one medical office buildings ("MOBs"), free-standing emergency departments, that are either wholly or jointly-owned by us. Any reference to "UHS" or "UHS facilities" in this report is referring to Universal Health Services, Inc.'s subsidiaries, including UHS of Delaware, Inc. In this Annual Report, the term "revenues" does not include the revenues of the unconsolidated limited liability companies in which we have various non-controlling equity interests rangin

Business

ITEM 1. Business General We are a real estate investment trust ("REIT") which commenced operations in 1986. We invest in healthcare and human-service related facilities currently including acute care hospitals, behavioral health care hospitals, a specialty facility, free-standing emergency departments, childcare centers and medical/office buildings. As of February 27, 2024, we have seventy-six real estate investments or commitments located in twenty-one states in the United States consisting of: (i) six hospital facilities including three acute care and three behavioral health care; (ii) sixty medical/office buildings; (iii) four free-standing emergency departments ("FEDs"); (iv) four preschool and childcare centers; (v) one specialty facility that is currently vacant, and; (vi) one property comprised of vacant land located in Chicago, Illinois (demolition of the previously existing building on this land was completed during 2023). Available Information We have our principal executive offices at Universal Corporate Center, 367 South Gulph Road, King of Prussia, PA 19406. Our telephone number is (610) 265-0688. Our website is located at http://www.uhrit.com. Copies of the annual, quarterly and current reports we file with the SEC, and any amendments to those reports, are available free of charge on our website. Our filings are also available to the public at the website maintained by the SEC, www.sec.gov . Additionally, we have adopted governance guidelines, a Code of Business Conduct and Ethics applicable to all of our officers and directors, a Code of Ethics for Senior Officers and charters for each of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee of the Board of Trustees. These documents are also available free of charge on our website. Copies of such reports and charters are available in print to any shareholder who makes a request. Such requests should be made to our Secretary at our King of Prussia, PA cor

View Full Filing

View this 10-K filing on SEC EDGAR