UNIVERSAL HEALTH REALTY INCOME TRUST
For the period ended Jun 30, 2025. Filed Aug 8, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 8, 2025
UHT$39.11+0.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-08.
0000950170-25-067009
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-08.
0001193125-25-177000
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 108 previous paragraphs and 118 current paragraphs.
71 unchanged; 32 reworded; 13 added; 5 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
Legislation adopted on July 4, 2025 (commonly known as the One Big Beautiful Bill Act) attaches work and community service requirements to eligibility for Medicaid benefits that will have the effect of limiting Medicaid enrollment and expenditure. That legislation also places limits on provider fees used to increase federal Medicaid funding to states. The legislation prohibits states not previously having expanded Medicaid eligibility to 138% of federal poverty level from increasing the rate of current provider fees which fund certain state supplemental payments or increasing the base of the fee to a class or items of services that the fee did not previously cover. That current provider fee threshold will remain at 6%. For states having expanded Medicaid eligibility under the ACA, the provider fee threshold will be reduced by 0.5% annually between federal fiscal years 2028 and 2032 with the resulting threshold ultimately becoming 3.5%. The legislation also eliminates certain insurance exchange premium tax credits beyond 2025 and insurance exchange enrollment is expected to be adversely impacted. All of these factors may be expected to reduce the revenues of the operators of our properties, and likely increase the level of uncompensated care provided by the operators of our hospital facilities, including UHS. As a result, our results of operations may be unfavorably impacted.
Current report
There have been numerous political and legal efforts to expand, repeal, replace or modify the ACA since its enactment, some of which have been successful, in part, in modifying the ACA, as well as court challenges to the constitutionality of the ACA. The U.S. Supreme Court held in California v. Texas that the plaintiffs lacked standing to challenge the ACA’s requirement to obtain minimum essential health insurance coverage, or the individual mandate. The Court dismissed the case without specifically ruling on the constitutionality of the ACA. The ACA faced its most recent challenge when the Supreme Court, in the June 2025 Kennedy v. Braidwood Management decision, opined in favor of ACA HIV preventive care coverage. The impacts of this decision cannot be predicted. Any future efforts to challenge, replace or replace the ACA or expand or substantially amend its provision is unknown.
Current report
a decrease of $563,000 resulting from a property tax reduction at our property located in Chicago, Illinois, recorded during the second quarter of 2024;
Current report
a decrease of $137,000 resulting from an increase in interest expense due primarily to an increase in our average borrowings outstanding pursuant to our credit agreement, and;
Current report
During the six-month period ended June 30, 2025, net income was $9.3 million, as compared to $10.6 million during the corresponding six-month period of 2024. The $1.3 million decrease was attributable to:
Current report
a decrease of $563,000 resulting from a property tax reduction at our property located in Chicago, Illinois, recorded during the second quarter of 2024;
Current report
Our FFO decreased $1.1 million to $23.7 million during the first six months of 2025, as compared to $24.8 million during the first six months of 2024. The net decrease was primarily due to the decrease in net income, as discussed above, partially offset by a $233,000 increase in depreciation and amortization expense.
Current report
Interest expense increased by $259,000 during the six-month period ended June 30, 2025, as compared to the comparable period of 2024, due primarily to: (i) a $1.7 million increase due to a net decrease in interest rate swap income due to the interest rate swap agreement transitions mentioned in footnote (a) above; (ii) a $1.3 million decrease in the interest expense pursuant to our credit agreement resulting primarily from a decrease in our average effective cost of borrowings (to 5.93% during the first six months of 2025 as compared to 6.94% during the comparable period of 2024), partially offset by an increase in our average outstanding borrowings (to
Current report
Net cash provided by operating activities was $25.3 million during the six-month period ended June 30, 2025 as compared to $23.9 million during the comparable period of 2024. The $1.4 million net increase was attributable to:
Current report
an unfavorable change of $342,000 in accrued interest;
Current report
a favorable change of $153,000 in lease receivables, and;
Current report
other combined net favorable changes of $337,000.
Current report
In May, 2025, a fixed rate mortgage loan on Tuscan Professional Building, with a remaining balance of $122,000 as of that date, was fully repaid upon its schedule maturity date.
Removed paragraphs (5)
Previous report
Net cash provided by operating activities was $11.6 million during the three-month period ended March 31, 2025 as compared to $11.7 million during the comparable period of 2024. The $127,000 net decrease was attributable to:
Previous report
an unfavorable change of $633,000 in accrued interest;
Previous report
other combined net unfavorable changes of $513,000.
Previous report
(b.)
Previous report
This loan is scheduled to mature within the next three months, at which time we will either refinance pursuant to a new mortgage loan or repay the mortgage balance in full utilizing borrowings under our Credit Agreement.
Reworded paragraphs (32)
Previous wording
A substantial portion of our revenues are dependent upon one operator, UHS, which comprised approximately 40% and 41% of our consolidated revenues for the three-month periods ended March 31, 2025 and 2024, respectively. We cannot assure you that subsidiaries of UHS will renew the leases on the hospital facilities and free-standing emergency departments, upon the scheduled expirations of the existing lease terms. In addition, if subsidiaries of UHS exercise their options to purchase the respective leased hospital facilities and FEDs, and do not enter into a substitution arrangement upon expiration of the lease terms or otherwise, our future revenues and results of operations could decrease if we were unable to earn a favorable rate of return on the sale proceeds received, as compared to the rental revenue currently earned pursuant to these leases.
Current wording
A substantial portion of our revenues are dependent upon one operator, UHS, which comprised approximately 40% of our consolidated revenues during each of the three and six-month periods ended June 30, 2025, and 41% during each of the three and six-month periods ended June 30, 2024. We cannot assure you that subsidiaries of UHS will renew the leases on the hospital facilities and free-standing emergency departments, upon the scheduled expirations of the existing lease terms. In addition, if subsidiaries of UHS exercise their options to purchase the respective leased hospital facilities and FEDs, and do not enter into a substitution arrangement upon expiration of the lease terms or otherwise, our future revenues and results of operations could decrease if we were unable to earn a favorable rate of return on the sale proceeds received, as compared to the rental revenue currently earned pursuant to these leases.
Previous wording
The potential unfavorable impact on our business of the deterioration in national, regional and local economic and business conditions, including a worsening of credit and/or capital market conditions, which may adversely affect our ability to obtain capital which may be required to fund the future growth of our business and refinance existing debt with near term maturities.
Current wording
The potential unfavorable impact on our business of a deterioration in national, regional and local economic and business conditions, including a worsening of credit and/or capital market conditions, which may adversely affect our ability to obtain capital which may be required to fund the future growth of our business and refinance existing debt with near term maturities.
Previous wording
The outcome and effects of known and unknown litigation, government investigations, and liabilities and other claims asserted against us, UHS or the other operators of our facilities. From time to time, UHS and its subsidiaries are subject to legal actions, purported shareholder class actions, shareholder derivative cases, governmental investigations and regulatory actions and the effects of adverse publicity relating to such matters. Since UHS comprised approximately 40% of our consolidated revenues during the three-month period ended March 31, 2025, and since a subsidiary of UHS is our Advisor, you are encouraged to obtain and review the disclosures contained in the Legal Proceedings section of Universal Health Services, Inc.’s Forms 10-Q and 10-K, as publicly filed with the Securities and Exchange Commission. Those filings are the sole responsibility of UHS and are not incorporated by reference herein.
Current wording
The outcome and effects of known and unknown litigation, government investigations, and liabilities and other claims asserted against us, UHS or the other operators of our facilities. From time to time, UHS and its subsidiaries are subject to legal actions, purported shareholder class actions, shareholder derivative cases, governmental investigations and regulatory actions and the effects of adverse publicity relating to such matters. Since UHS comprised approximately 40% of our consolidated revenues during each of the three and six months ended June 30, 2025, and since a subsidiary of UHS is our Advisor, you are encouraged to obtain and review the disclosures contained in the Legal Proceedings section of Universal Health Services, Inc.’s Forms 10-Q and 10-K, as publicly filed with the Securities and Exchange Commission. Those filings are the sole responsibility of UHS and are not incorporated by reference herein.
Previous wording
An increasing number of legislative initiatives have been passed into law that may result in major changes in the health care delivery system on a national or state level. Legislation has already been enacted that has eliminated the penalty for failing to maintain health coverage that was part of the original Patient Protection and Affordable Care Act (the “ACA”). The Biden administration had undertaken executive actions to strengthen the ACA, including issuing executive orders implementing a special enrollment period permitting individuals to enroll in health plans outside of the annual open enrollment period and reexamining policies that may undermine the ACA or the Medicaid program. The American Rescue Plan Act of 2021's expansion of subsidies to purchase coverage through an exchange, which the Inflation Reduction Act of 2022, passed on August 16, 2022, continues through 2025, has increased exchange enrollment. However, the prior President Trump administration had taken various steps having the effect of reducing enrollment through the exchange, so the likelihood of subsidy extension and other exchange-expansion activities is questionable. While attempts to repeal the entirety of the ACA have not been successful to date, a key provision of the ACA was eliminated as part of the Tax Cuts and Jobs Act and on December 14, 2018, a federal U.S. District Court Judge in Texas ruled the entire ACA is unconstitutional. That ruling was ultimately appealed to the United States Supreme Court, which decided in California v. Texas that the plaintiffs in the matter lacked standing to bring their constitutionality claims. On September 7, 2022, the ACA faced its most recent challenge when a Texas Federal District Court judge, in the case of Braidwood Management v. Becerra, ruled that certain provisions violate the Appointments Clause of the U.S. Constitution and the Religious Freedom Restoration Act. The decision was appealed to the U.S. Court of Appeals for the Fifth Circuit, which on June 21, 2024 affirmed the District Court’s ruling regarding preventive services recommended by United States Preventive Services Task Force being unconstitutional. However, the Fifth Circuit overturned the nationwide injunction imposed by the District Court, preserving access to the majority of preventive services in dispute for now. The U.S. Government has appealed to the U.S. Supreme Court and the decision remains pending. Any future efforts to challenge, replace or replace the ACA or expand or substantially amend its provision is unknown.
Current wording
There are additional legislative changes that are likely to result in major changes in the health care delivery system on a national or state level. For example, Congress has reduced to $0 the penalty for failing to maintain health coverage that was part of the original Patient Protection and Affordable Care Act, as amended by the Health and Education Reconciliation Act (collectively, the “ACA") as part of the Tax Cuts and Jobs Act. The Biden administration had issued executive orders implementing a special enrollment period permitting individuals to enroll in health plans outside of the annual open enrollment period and reexamining policies that may undermine the ACA or the Medicaid program. The Inflation Reduction Act of 2022 (“IRA”) was passed on August 16, 2022, which among other things, allows for the Centers for Medicare and Medicaid Services to negotiate prices for certain single-source drugs reimbursed under Medicare Part B and Part D. The American Rescue Plan Act’s expansion of subsidies to purchase coverage through an ACA exchange, which the IRA continued through 2025, has increased insurance exchange enrollment. However, the Trump administration has already taken steps to undo these Biden-era initiatives, including adopting legislation eliminating certain insurance exchange premium tax credits.
Previous wording
During the three-month period ended March 31, 2025, net income was $4.8 million, as compared to $5.3 million during the first quarter of 2024. The $523,000 decrease was attributable to:
Current wording
During the three-month period ended June 30, 2025, net income was $4.5 million, as compared to $5.3 million during the second quarter of 2024. The $784,000 decrease was attributable to:
Previous wording
a decrease of $401,000 resulting from an aggregate net decrease in the income generated at various properties, and;
Current wording
a decrease of $486,000 resulting from an aggregate net decrease in the income generated at various properties, and;
Previous wording
a decrease of $122,000 resulting from an increase in interest expense due primarily to an increase in our average outstanding borrowings as well as an increase in our average effective borrowing rate (which gives effect to various interest rate swap agreements).
Current wording
a decrease of $259,000 resulting from an increase in interest expense due primarily to an increase in our average borrowings outstanding pursuant to our credit agreement.
Previous wording
Revenues decreased $593,000, or 2.4%, to $24.5 million during the three-month period ended March 31, 2025, as compared to $25.1 million during the three-month period ended March 31, 2024. The net decrease in revenues during the first quarter of 2025, as compared to the first quarter of 2024, was due primarily to decreased occupancy rates at several medical office buildings.
Current wording
Revenues increased $134,000, to $24.9 million during the three-month period ended June 30, 2025, as compared to $24.7 million during the three-month period ended June 30, 2024. Revenues decreased $459,000 to $49.4 million during the six-month period ended June 30, 2025, as compared to $49.9 million during the six-month period ended June 30, 2024. The net decrease in revenues during the first six months of 2025, as compared to the first six months of 2024, occurred primarily during the first quarter of 2025 (as compared to the first quarter of 2024) and resulted primarily from decreased occupancy rates at certain MOBs.
Previous wording
Our other operating expenses include expenses related to the consolidated MOBs as well as the vacant land and the vacant specialty facility (as discussed herein). Other operating expenses incurred in connection with these properties totaled $6.4 million during the first quarter of 2025 and $6.7 million during the first quarter of 2024. A large portion of the expenses associated with our medical office buildings are passed on directly to the tenants either directly as tenant reimbursements of common area maintenance expenses or included in base rental amounts. Tenant reimbursements for operating expenses are accrued as revenue in the same period during which the related expenses are incurred and are included as lease revenue in our condensed consolidated statements of income.
Current wording
Our other operating expenses include expenses related to the consolidated MOBs as well as the vacant land and the vacant specialty facility (as discussed herein). Other operating expenses incurred in connection with these properties totaled $6.7 million during the second quarter of 2025 and $6.0 million during the second quarter of 2024. Other operating expenses amounted to $13.1 million and $12.8 million during the six-month periods ended June 30, 2025 and 2024, respectively. Our operating expenses during the three and six-month periods ended June 30, 2024 include a property tax reduction of approximately $563,000, which related primarily to prior periods, recorded in connection with our property located in Chicago, Illinois. A large portion of the expenses associated with our MOBs are passed on directly to the tenants either directly as tenant reimbursements of common area maintenance expenses or included in base rental amounts. Tenant reimbursements for operating expenses are accrued as revenue in the same period during which the related expenses are incurred and are included as lease revenue in our condensed consolidated statements of income.
Previous wording
Below is a reconciliation of our reported net income to FFO for the three-month periods ended March 31, 2025 and 2024 (in thousands):
Current wording
Below is a reconciliation of our reported net income to FFO for the three and six-month periods ended June 30, 2025 and 2024 (in thousands):
Previous wording
Our FFO decreased $483,000 to $11.9 million during the first quarter of 2025, as compared to $12.4 million during the first quarter of 2024. The net decrease was primarily due to the decrease in net income, as discussed above.
Current wording
Our FFO decreased $591,000 to $11.8 million during the second quarter of 2025, as compared to $12.4 million during the second quarter of 2024. The net decrease was primarily due to the decrease in net income, as discussed above, partially offset by a $193,000 increase in depreciation and amortization expense.
Previous wording
As reflected in the schedule below, interest expense was $4.7 million and $4.5 million during the three-month periods ended March 31, 2025 and 2024, respectively (amounts in thousands):
Current wording
As reflected in the schedule below, interest expense was $4.7 million and $4.6 million during the three-month periods ended June 30, 2025 and 2024, respectively, and $9.4 million and $9.1 million during the six-month periods ended June 30, 2025 and 2024, respectively (amounts in thousands):
Previous wording
Please see below in Quantitative and Qualitative Disclosures About Market Risk-Financial Instrumentsfor disclosure regarding our various interest rate swap agreements. Two interest rate swap agreements, with a combined aggregated notional amount of $85 million, expired in September, 2024 (consisting of a $35 million notional amount with a fixed interest rate of 1.4975% and a $50 million notional amount with a fixed interest rate of 1.144%). In October, 2024, those agreements were replaced with an interest rate swap agreement on a total notional amount of $85 million with a fixed interest rate of 3.2725%. During the three-month periods ended March 31, 2025 and 2024, net interest was paid to us from the counterparties pursuant to the interest rate swaps that were active during each period.
Current wording
Please see below in Quantitative and Qualitative Disclosures About Market Risk-Financial Instrumentsfor disclosure regarding our various interest rate swap agreements. Two interest rate swap agreements, with a combined aggregated notional amount of $85 million, expired in September, 2024 (consisting of a $35 million notional amount with a fixed interest rate of 1.4975% and a $50 million notional amount with a fixed interest rate of 1.144%). In October, 2024, those agreements were replaced with an interest rate swap agreement on a total notional amount of $85 million with a fixed interest rate of 3.2725%. During the three and six-month periods ended June 30, 2025 and 2024, net interest was paid to us from the counterparties pursuant to the interest rate swaps that were active during each period.
Previous wording
Interest expense increased by $122,000 during the three-month period ended March 31, 2025, as compared to the comparable period of 2024, due primarily to: (i) an $872,000 increase due to a net decrease in interest rate swap income; (ii) a $4,000 net increase in other combined interest expense, partially offset by; (iii) a $615,000 decrease in the interest expense on our Credit Agreement primarily resulting from a decrease in our average cost of borrowings (average borrowing rates, including commitment fee, of 5.935% average effective rate during the first quarter of 2025, as compared to 6.96% average effective rate during the comparable quarter of 2024) offset by an increase in our average outstanding borrowings ($344.6 million during the three months ended March 31, 2025 as compared to $327.1 million in the comparable quarter of 2024), as well as; (iv) a $139,000 decrease in mortgage interest expense (due primarily to repayment, utilizing borrowings under our Credit Agreement, of a $12.2 million fixed rate mortgage loan that matured during the second quarter of 2024).
Current wording
Interest expense increased by $137,000 during the three-month period ended June 30, 2025, as compared to the comparable period of 2024, due primarily to: (i) an $860,000 increase due to a net decrease in interest rate swap income due to the interest rate swap agreement transitions mentioned in footnote (a) above; (ii) a $707,000 decrease in the interest expense pursuant to our credit agreement resulting primarily from a decrease in our average effective cost of borrowings (to 5.93% during the second quarter of 2025 as compared to 6.92% during the comparable quarter of 2024), partially offset by an increase in our average outstanding borrowings (to $345.3 million during the second quarter of 2025 as compared to $337.9 million during the comparable quarter of 2024), and; (iii) a $16,000 decrease in mortgage interest expense (due primarily to repayment, utilizing borrowings under our credit agreement, of a $12.2 million fixed rate mortgage loan that matured during the second quarter of 2024).
Previous wording
an unfavorable change of $473,000 due to a decrease in net income plus/minus the adjustments to reconcile net income to net cash provided by operating activities (depreciation and amortization, amortization related to above/below market leases, amortization of deferred financing costs and stock-based compensation expense), as discussed above;
Current wording
an unfavorable change of $1.1 million due to a decrease in net income plus/minus the adjustments to reconcile net income to net cash provided by operating activities (depreciation and amortization, amortization related to above/below market leases, amortization of deferred financing costs and stock-based compensation expense), as discussed above;
Previous wording
a favorable change of $1.3 million in accrued expenses and other liabilities;
Current wording
a favorable change of $2.3 million in accrued expenses and other liabilities, due primarily to the timing of accrued expense disbursements;
Previous wording
a favorable change of $366,000 in tenant reserves, deposits and deferred and prepaid rents;
Current wording
a favorable change of $303,000 in tenant reserves, deposits and deferred and prepaid rents;
Previous wording
an unfavorable change of $172,000 in leasing costs paid, and;
Current wording
an unfavorable change of $300,000 in leasing costs paid;
Previous wording
Net cash used in investing activities was $1.9 million during the first three months of 2025 as compared to $8.9 million during the first three months of 2024.
Current wording
Net cash used in investing activities was $10.7 million during the first six months of 2025 as compared to $9.7 million during the first six months of 2024.
Previous wording
During the three-month period ended March 31, 2025 we funded: (i) $328,000 in equity investments in unconsolidated LLCs, and; (ii) $1.6 million in additions to real estate investments, including tenant improvements at various MOBs.
Current wording
During the six-month period ended June 30, 2025 we funded: (i) $6.8 million in equity investments in unconsolidated LLCs (consisting primarily of our $6.5 million pro rata share of a $6.8 million third-party construction loan that was fully repaid in May, 2025); (ii) $3.7 million in additions to real estate investments, including tenant improvements at various MOBs, and; (iii) a $335,000 net advance made to a third-party partner of an unconsolidated LLC that is scheduled to be repaid to us, with interest, during the third quarter of 2025. In addition, during the six months ended June 30, 2025, we received $167,000 of cash in excess of income from LLCs.
Previous wording
During the three-month period ended March 31, 2024 we funded: (i) $5.9 million in equity investments in unconsolidated LLCs; (ii) $3.3 million in additions to real estate investments including construction costs related to the Sierra Medical Plaza I medical office building located in Reno, Nevada, as well as tenant improvements at various MOBs, and; (iii) $128,000 in an advance made to a third-party partner of an unconsolidated LLC. In addition, during the three months ended March 31, 2024, we received $371,000 of cash in excess of income from LLCs.
Current wording
During the six-month period ended June 30, 2024 we funded: (i) $5.9 million in equity investments in unconsolidated LLCs; (ii) $4.3 million in additions to real estate investments including construction costs related to the Sierra Medical Plaza I medical office building located in Reno, Nevada, that was substantially completed during the first quarter of 2023, as well as tenant improvements at various MOBs, and; (iii) $128,000 in an advance made to a third-party partner of an unconsolidated LLC, which was repaid in July, 2024, with interest. In addition, during the six months ended June 30, 2024, we received $688,000 of cash in excess of income from LLCs.
Previous wording
Net cash used in financing activities was $9.8 million during the three months ended March 31, 2025, as compared to $3.3 million during the three months ended March 31, 2024.
Current wording
Net cash used in financing activities was $15.2 million during the six months ended June 30, 2025, as compared to $16.8 million during the six months ended June 30, 2024.
Previous wording
During the three-month period ended March 31, 2025, we paid: (i) $322,000 on mortgage notes payable that are non-recourse to us, and; (ii) $10.2 million of dividends. Additionally, during the three months ended March 31, 2025, we received: (i) $600,000 of net borrowings pursuant to our Credit Agreement, and; (ii) $35,000 of net cash from the issuance of shares of beneficial interest.
Current wording
During the six-month period ended June 30, 2025, we paid: (i) $649,000 on mortgage notes payable that are non-recourse to us, and; (ii) $20.5 million of dividends, including $100,000 of previously accrued dividends. Additionally, during the six months ended June 30, 2025, we received: (i) $5.9 million of net borrowings pursuant to our Credit Agreement, and; (ii) $75,000 of net cash from the issuance of shares of beneficial interest.
Previous wording
During the three-month period ended March 31, 2024, we paid: (i) $372,000 on mortgage notes payable that are non-recourse to us; (ii) $30,000 of financing costs related to the Credit Agreement, and; (iii) $10.0 million of dividends. Additionally, during the three months ended March 31, 2024, we received: (i) $7.1 million of net borrowings on our revolving credit agreement, and; (ii) $44,000 of net cash from the issuance of shares of beneficial interest.
Current wording
During the six-month period ended June 30, 2024, we paid: (i) $12.9 million on mortgage notes payable that are non-recourse to us, including a $12.2 million repayment of a fixed rate mortgage loan that matured during the second quarter of 2024; (ii) $49,000 of financing costs related to the revolving credit agreement; (iii) $20.2 million of dividends, including $78,000 of previously accrued dividends, and; (iv) $10,000, of net cash paid related to the issuance of shares of beneficial interest. Additionally, during the six months ended June 30, 2024, we received $16.3 million of net borrowings on our revolving credit agreement.
Previous wording
Additional cash flow and dividends paid information for the three-month periods ended March 31, 2025 and 2024:
Current wording
Additional cash flow and dividends paid information for the six-month periods ended June 30, 2025 and 2024:
Previous wording
As indicated on our condensed consolidated statement of cash flows, we generated net cash provided by operating activities of $11.6 million and $11.7 million during the three-month periods ended March 31, 2025 and 2024, respectively. As also indicated on our statement of cash flows, non-cash expenses including depreciation and amortization expense, amortization related to above/below market leases, amortization of deferred financing costs and stock-based compensation expense, as well as changes in certain assets and liabilities, are the primary differences between our net income and net cash provided by operating activities during each period.
Current wording
As indicated on our condensed consolidated statement of cash flows, we generated net cash provided by operating activities of $25.3 million and $23.9 million during the six-month periods ended June 30, 2025 and 2024, respectively. As also indicated on our statement of cash flows, non-cash expenses including depreciation and amortization expense, amortization related to above/below market leases, amortization of deferred financing costs and stock-based compensation expense, as well as changes in certain assets and liabilities, are the primary differences between our net income and net cash provided by operating activities during each period.
Previous wording
We declared and paid dividends of $10.2 million and $10.0 million during the three-month periods ended March 31, 2025 and 2024, respectively. During the first three months of 2025, the $11.6 million of net cash provided by operating activities was approximately $1.5 million greater than the $10.2 million of dividends paid during the first three months of 2025. During the first three months of 2024, the $11.7 million of net cash provided by operating activities was approximately $1.7 million greater than the $10.0 million of dividends paid during the first three months of 2024.
Current wording
We declared and paid dividends of $20.5 million and $20.2 million during the six-month periods ended June 30, 2025 and 2024, respectively. During the first six months of 2025, the $25.3 million of net cash provided by operating activities was approximately $4.8 million greater than the $20.5 million of dividends paid during the first six months of 2025. During the first six months of 2024, the $23.9 million of net cash provided by operating activities was approximately $3.7 million greater than the $20.2 million of dividends paid during the first six months of 2024.
Previous wording
As indicated in the cash flows from investing activities and cash flows from financing activities sections of the statements of cash flows, there were various other sources and uses of cash during the three months ended March 31, 2025 and 2024. From time to time, various other sources and uses of cash may include items such as investments and advances made to/from LLCs, additions to real estate investments, acquisitions/divestiture of properties, net borrowings/repayments of debt, and proceeds generated from the issuance of equity. Therefore, in any given period, the funding source for our dividend payments is not wholly dependent on the operating cash flow generated by our properties. Rather, our dividends as well as our capital reinvestments into our existing properties, acquisitions of real property and other investments are funded based upon the aggregate net cash inflows or outflows from all sources and uses of cash from the properties we own either in whole or through LLCs, as outlined above.
Current wording
As indicated in the cash flows from investing activities and cash flows from financing activities sections of the statements of cash flows, there were various other sources and uses of cash during the six months ended June 30, 2025 and 2024. From time to time, various other sources and uses of cash may include items such as investments and advances made to/from LLCs, additions to real estate investments, acquisitions/divestiture of properties, net borrowings/repayments of debt, and proceeds generated from the issuance of equity. Therefore, in any given period, the funding source for our dividend payments is not wholly dependent on the operating cash flow generated by our properties. Rather, our dividends as well as our capital reinvestments into our existing properties, acquisitions of real property and other investments are funded based upon the aggregate net cash inflows or outflows from all sources and uses of cash from the properties we own either in whole or through LLCs, as outlined above.
Previous wording
We expect to finance all capital expenditures and acquisitions and pay dividends utilizing internally generated and additional funds. Additional funds may be obtained through: (i) borrowings under our $425 million Credit Agreement (which had $75.5 million of available borrowing capacity, net of outstanding borrowings as of March 31, 2025); (ii) borrowings under or refinancing of existing third-party debt pursuant to mortgage loan agreements entered into by our consolidated and unconsolidated LLCs/LPs; (iii) the issuance of other long-term debt, and/or; (iv) the issuance of equity. In April, 2024 we filed a shelf registration statement on Form S-3 with the Securities and Exchange Commission pursuant to which we many offer up to $100 million of securities pursuant to supplemental prospectuses which we may file from time to time.
Current wording
We expect to finance all capital expenditures and acquisitions and pay dividends utilizing internally generated and additional funds. Additional funds may be obtained through: (i) borrowings under our $425 million Credit Agreement (which had $70.2 million of available borrowing capacity, net of outstanding borrowings as of June 30, 2025); (ii) borrowings under or refinancing of existing third-party debt pursuant to mortgage loan agreements entered into by our consolidated and unconsolidated LLCs/LPs; (iii) the issuance of other long-term debt, and/or; (iv) the issuance of equity. In April, 2024 we filed a shelf registration statement on Form S-3 with the Securities and Exchange Commission pursuant to which we may offer up to $100 million of securities pursuant to supplemental prospectuses which we may file from time to time.
Previous wording
At March 31, 2025, we had $349.5 million of outstanding borrowings pursuant to the terms of our $425 million Credit Agreement and $75.5 million of available borrowing capacity. At December 31, 2024, we had $348.9 million of outstanding borrowings pursuant to the terms of our Credit Agreement in effect at that time, and $76.1 million of available borrowing capacity. There are no compensating balance requirements.
Current wording
At June 30, 2025, we had $354.8 million of outstanding borrowings pursuant to the terms of our $425 million Credit Agreement and $70.2 million of available borrowing capacity. At December 31, 2024, we had $348.9 million of outstanding borrowings pursuant to the terms of our Credit Agreement in effect at that time, and $76.1 million of available borrowing capacity. There are no compensating balance requirements.
Previous wording
In our consolidated statements of cash flows, we report cash flows pursuant to our Credit Agreement on a net basis. Aggregate borrowings under our Credit Agreement were $13.0 million and $21.9 million during the quarters ended March 31, 2025 and 2024, respectively, and aggregate repayments were $12.4 million and $14.8 million during the quarters ended March 31, 2025 and 2024, respectively.
Current wording
In our consolidated statements of cash flows, we report cash flows pursuant to our Credit Agreement on a net basis. Aggregate borrowings under our Credit Agreement were $19.6 million and $25.2 million during the quarters ended June 30, 2025 and 2024, respectively, and aggregate repayments were $14.3 million and $15.9 million during the quarters ended June 30, 2025 and 2024, respectively. Aggregate borrowings under our Credit Agreement were $32.6 million and $47.0 million during the six-months ended June 30, 2025 and 2024, respectively, and aggregate repayments were $26.7 million and $30.7 million during the six-months ended June 30, 2025 and 2024, respectively.
Previous wording
At March 31, 2025 and December 31, 2024, we had various mortgages, all of which were non-recourse to us, included in our condensed consolidated balance sheet. The mortgages are secured by the real property of the buildings as well as property leases and rents. The mortgages outstanding as of March 31, 2025, had a combined carrying value of approximately $19.2 million and a combined fair value of approximately $17.7 million. The mortgages outstanding as of December 31, 2024, had a combined carrying value of approximately $19.5 million and a combined fair value of approximately $17.7 million. The fair value of our debt was computed based upon quotes received from financial institutions. We consider these to be “level 2” in the fair value hierarchy as outlined in the authoritative guidance for disclosure in connection with debt instruments. Changes in market rates on our fixed rate debt impacts the fair value of debt, but it has no impact on interest incurred or cash flow.
Current wording
At June 30, 2025 and December 31, 2024, we had various mortgages, all of which were non-recourse to us, included in our condensed consolidated balance sheet. The mortgages are secured by the real property of the buildings as well as property leases and rents. The mortgages outstanding as of June 30, 2025, had a combined carrying value of approximately $18.9 million and a combined fair value of approximately $17.4 million. The mortgages outstanding as of December 31, 2024, had a combined carrying value of approximately $19.5 million and a combined fair value of approximately $17.7 million. The fair value of our debt was computed based upon quotes received from financial institutions. We consider these to be “level 2” in the fair value hierarchy as outlined in the authoritative guidance for disclosure in connection with debt instruments. Changes in market rates on our fixed rate debt impacts the fair value of debt, but it has no impact on interest incurred or cash flow.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
a decrease of $84,000 resulting from an aggregate net decrease in the income generated at various properties.
Current report — wording carried from elsewhere
$344.9 million during the first six months of 2025 as compared to $332.5 million during the comparable period of 2024), and; (iii) a $155,000 decrease in mortgage interest expense (due primarily to repayment, utilizing borrowings under our credit agreement, of a $12.2 million fixed rate mortgage loan that matured during the second quarter of 2024).