UNIVERSAL HEALTH REALTY INCOME TRUST
For the period ended Mar 31, 2026. Filed May 7, 2026.
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.
Mar 31, 2026 · Filed May 7, 2026
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 2025-09-30; filed 2025-11-07.
0001193125-25-272382
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-07.
0001193125-26-211984
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 117 previous paragraphs and 109 current paragraphs.
63 unchanged; 37 reworded; 8 added; 16 removed; 1 previous and 1 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 (8)
Current report
one specialty facility located in Evansville, Indiana, that is currently vacant, and;
Current report
an increase of $217,000 resulting from a decrease in interest expense due primarily to a decrease in our average effective borrowing rate (which gives effect to various interest rate swap agreements), and;
Current report
a net aggregate increase of $25,000 resulting from increased income generated at various properties.
Current report
an unfavorable change of $211,000 in accrued interest;
Current report
a favorable change of $183,000 in lease receivables;
Current report
a favorable change of $161,000 in tenant reserves, deposits, and prepaid rents, and;
Current report
On April 21, 2026, we entered into the First Amendment ("First Amendment") to the Second Amended and Restated Credit Agreement, among the Trust as borrower, the lenders party thereto and Wells Fargo Bank, N.A., as administrative agent ("Credit Agreement"). Pursuant to the terms of the First Amendment, among other things, the borrowing capacity was increased to $475 million (from $425 million previously) and the minimum tangible net worth requirement was changed to $100 million (from $125 million previously). The maturity date, which was unchanged, is September 30, 2028, and we have the option to extend the maturity date for two additional six-month periods.
Current report
(a) As discussed above, in April, 2026, the minimum tangible net worth requirement was changed to $100 million pursuant to the terms of the First Amendment.
Removed paragraphs (16)
Previous report
one vacant specialty facility, and;
Previous report
A number of legislative initiatives have recently been passed into law that may result in major changes in the health care delivery system on a national or state level to the operators of our facilities, including UHS. No assurances can be given that the implementation of these new laws will not have a material adverse effect on the business, financial condition or results of operations of our operators.
Previous report
an increase of $275,000 resulting from a one-time settlement and release agreement executed during the third quarter of 2025; and;
Previous report
a decrease of $256,000 resulting from an aggregate net decrease in the income generated at various properties, including approximately $900,000 of nonrecurring depreciation expense recorded during the third quarter of 2025.
Previous report
During the nine-month period ended September 30, 2025, net income was $13.3 million, as compared to $14.6 million during the corresponding nine-month period of 2024. The $1.3 million decrease was attributable to:
Previous report
a decrease of $730,000 resulting from an aggregate net decrease in the income generated at various properties, including the above-mentioned nonrecurring depreciation expense of approximately $900,000 recorded during the third quarter of 2025;
Previous report
a decrease of $563,000 resulting from a property tax reduction at our property located in Chicago, Illinois, recorded during the first nine months of 2024;
Previous report
an increase of $275,000 resulting from the above-mentioned, one-time settlement and release agreement executed during the third quarter of 2025; and;
Previous report
a decrease of $282,000 resulting from an increase in interest expense due primarily to an increase in our average borrowings outstanding pursuant to our credit agreement.
Previous report
Revenues increased $808,000, to $25.3 million during the three-month period ended September 30, 2025, as compared to $24.5 million during the three-month period ended September 30, 2024. The net increase in revenues during the three-month period ended September 30, 2025, as compared to the three-month period ended September 30, 2024, was primarily due to: (i) a net increase of $403,000 in revenues generated at various properties; (ii) a $275,000 increase resulting from a one-time settlement as discussed above, and; (iii) a $130,000 increase in bonus rental revenue.
Previous report
Revenues increased $349,000 to $74.7 million during the nine-month period ended September 30, 2025, as compared to $74.4 million during the nine-month period ended September 30, 2024. The net increase in revenues during the first nine months of 2025, as compared to the first nine months of 2024, was primarily due to: (i) a $268,000 increase in bonus rental revenue; (ii) a $275,000 increase resulting from a one-time settlement discussed above, partially offset by; (iii) a net decrease of $194,000 in revenues generated at various properties.
Previous report
Our FFO decreased by $166,000 to $35.9 million during the first nine months of 2025, as compared to $36.1 million during the first nine months of 2024. The net decrease was primarily due to the $1.3 million decrease in net income, as discussed above, partially offset by a $1.1 million increase in depreciation and amortization expense, which includes the approximately $900,000 of nonrecurring depreciation expense recorded during the third quarter of 2025.
Previous report
Interest expense increased by $282,000 during the nine-month period ended September 30, 2025, as compared to the comparable period of 2024, due primarily to: (i) a $2.5 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 $2.0 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 nine 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 $346.6 million during the first nine months of 2025 as compared to $334.9 million during the comparable period of 2024); (iii) a $169,000 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), and; (iv) an increase of $9,000 in other interest expense.
Previous report
a favorable change of $630,000 in lease receivables;
Previous report
(a.)
Previous report
In April, 2024, a $12.2 million fixed rate mortgage loan previously outstanding on Summerlin Hospital Medical Office Building III was fully repaid utilizing borrowings under our Credit Agreement.
Reworded paragraphs (37)
Previous wording
We are a real estate investment trust (“REIT”) that commenced operations in 1986. We invest in healthcare and human-service related facilities currently including acute care hospitals, behavioral health care hospitals, specialty facilities, free-standing emergency departments, childcare centers and medical/office buildings. As of September 30, 2025, we have seventy-seven real estate investments or commitments located in twenty-one states consisting of:
Current wording
We are a real estate investment trust (“REIT”) that commenced operations in 1986. We invest in healthcare and human-service related facilities currently including acute care hospitals, behavioral health care hospitals, specialty facilities, free-standing emergency departments, childcare centers and medical/office buildings. As of March 31, 2026, we have seventy-seven real estate investments or commitments in twenty-one states consisting of:
Previous wording
sixty-one medical/office buildings, including four owned by unconsolidated limited liability companies (“LLCs”)/limited liability partnerships (“LPs”);
Current wording
sixty-one medical/office buildings (“MOBs”), including four owned by unconsolidated limited liability companies (“LLCs”)/limited liability partnerships (“LPs”);
Previous wording
one vacant parcel of land located in Chicago, Illinois.
Current wording
vacant land located in Chicago, Illinois.
Previous wording
A substantial portion of our revenues are dependent upon one operator, UHS, which comprised approximately 39% and 40% of our consolidated revenues during the three-month periods ended September 30, 2025, and 2024, respectively, and approximately 40% and 41% during the nine-month periods ended September 30, 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 41% and 40% of our consolidated revenues during the three-month periods ended March 31, 2026, and 2025, 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.
Previous wording
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. Extension of the tax credits is currently the subject of United States Congressional debate as part of the federal budget negotiation, and we cannot predict whether these subsidies will ultimately be adopted in federal fiscal year 2026. 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 wording
Legislation adopted on July 4, 2025 (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 legislation, 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 exchange enrollment is expected to be adversely impacted. On January 8, 2026, the U.S. House of Representatives passed H.R.1834 to extend for three years the enhanced premium tax credits ("EPTCs") that expired on December 31, 2025. As of early May 2026, no legislation extending the EPTCs has been enacted, and there can be no assurance regarding the timing or outcome of future legislative action. We cannot predict whether these subsidies will ultimately be adopted in federal fiscal year 2026. 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.
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 39% of our consolidated revenues during the three-month period ended September 30, 2025 and approximately 40% of our consolidated revenues for the nine-month period ended September 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.
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 41% of our consolidated revenues during the three-month period ended March 31, 2026, 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
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, had 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. Extension of tax credits is currently the subject of United States Congressional debate as part of the federal budget negotiation, and we cannot predict whether these subsidies will ultimately be adopted in federal fiscal year 2026.
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, including changes in the structure and administration of, and funding for, federal and state agencies and programs. 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, had increased insurance exchange enrollment. These enhanced subsidies expired on December 31, 2025.
Previous wording
The Full-Year Continuing Appropriations and Extensions Act, 2025 extended fiscal year 2025 appropriations to federal agencies for continuing projects and activities through September 30, 2025. In the past several years political disputes concerning authorization of a federal budget have led to shutdowns of substantial portions of the federal government and other federal budget authorization delays have occurred. Currently, the United States Congress has failed to approve a federal budget for federal fiscal year 2026 and a federal shutdown began on October 1, 2025. Federal budget delays and federal government shutdowns are unpredictable and may occur in the future. We cannot predict whether or not there will be future legislation halting a federal government shutdown, however, the operating results and results of operations of certain of our tenants, and therefore potentially ours, could be materially unfavorably impacted by the federal government shutdown.
Current wording
As of early May 2026, Congress has enacted appropriations legislation funding most federal agencies for fiscal year 2026, following a lapse in appropriations affecting certain Department of Homeland Security operations that began on February 14, 2026 and was resolved on April 30, 2026. Federal budget delays and federal government shutdowns are unpredictable and may occur in the future. We cannot predict whether or not there will be future appropriations legislation avoiding a federal government shutdown, however, the operating results and results of operations of certain of our tenants, and therefore potentially ours, could be materially unfavorably impacted by the federal government shutdown.
Previous wording
During the three-month period ended September 30, 2025, net income was $4.0 million, as compared to $4.0 million during the third quarter of 2024. Our net income during the third quarter of 2025, as compared to the third quarter of 2024, included the following:
Current wording
During the three-month period ended March 31, 2026, net income was $5.0 million, as compared to $4.8 million during the first quarter of 2025. Our net income during the first quarter of 2026, as compared to the first quarter of 2025, included the following:
Previous wording
Other operating expenses amounted to $19.8 million and $19.5 million during the nine-month periods ended September 30, 2025 and 2024, respectively. Our operating expenses during the nine-month periods ended September 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.
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 $6.3 million during the first quarter of 2026 and $6.4 million during the first quarter of 2025. 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 and nine-month periods ended September 30, 2025 and 2024 (in thousands):
Current wording
Below is a reconciliation of our reported net income to FFO for the three-month periods ended March 31, 2026 and 2025 (in thousands):
Previous wording
Our FFO increased by $908,000 to $12.2 million during the third quarter of 2025, as compared to $11.3 million during the third quarter of 2024. The net increase was primarily due to an increase in depreciation and amortization expense during the third quarter of 2025, as compared to the comparable quarter of 2024, consisting primarily of the approximately $900,000 of nonrecurring depreciation expense recorded during the third quarter of 2025, as mentioned above.
Current wording
Our FFO increased by $336,000 to $12.3 million during the first quarter of 2026, as compared to $11.9 million during the first quarter of 2025. The net increase was primarily due to the above-mentioned increase in our net income during the first quarter of 2026, as compared to the first quarter of 2025, as well as an increase in depreciation and amortization expense.
Previous wording
As reflected in the schedule below, interest expense was $4.8 million during each of the three-month periods ended September 30, 2025 and 2024, and $14.2 million and $13.9 million during the nine-month periods ended September 30, 2025 and 2024, respectively (amounts in thousands):
Current wording
As reflected in the schedule below, interest expense was $4.5 million and $4.7 million during the three-month periods ended March 31, 2026 and 2025, 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 and nine-month periods ended September 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.
Current wording
(a) Includes: (i) a $55 million interest rate swap with a fixed interest rate of 0.5050% that is scheduled to mature in March, 2027; (ii) a $25 million interest rate swap with a fixed interest rate of 3.9495% that is scheduled to mature in December, 2027, and; (iii) an $85 million interest rate swap with a fixed interest rate of 3.2725% that is scheduled to mature in September, 2028. During the three-month periods ended March 31, 2026 and 2025, 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 $23,000 during the three-month period ended September 30, 2025, as compared to the comparable period of 2024, due primarily to: (i) a $723,000 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 $691,000 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 third quarter of 2025 as compared to 6.93% during the comparable quarter of 2024), partially offset by an increase in our average outstanding borrowings (to $349.9 million during the third quarter of 2025 as compared to $339.6 million during the comparable quarter of 2024); (iii) a $14,000 decrease in mortgage interest expense, and; (iv) an increase of $5,000 in other interest.
Current wording
Interest expense decreased by $217,000 during the three-month period ended March 31, 2026, as compared to the comparable period of 2025, due primarily to: (i) a $264,000 increase due to a net decrease in interest rate swap income pursuant to our various interest rate swap agreements as discussed in (a) above; (ii) a $444,000 decrease in the interest expense pursuant to our credit agreement resulting primarily from a decrease in our average effective cost of borrowings (to 5.280% during the first quarter of 2026 as compared to 5.935% during the comparable quarter of 2025), partially offset by an increase in our average outstanding borrowings (to $353.3 million during the first quarter of 2026 as compared to $344.6 million during the comparable quarter of 2025); (iii) a $28,000 decrease in amortization of financing fees and other interest, and; (iv) a decrease of $9,000 in mortgage interest expense.
Previous wording
Net cash provided by operating activities was $35.5 million during the nine-month period ended September 30, 2025 as compared to $33.8 million during the comparable period of 2024. The $1.7 million net increase was attributable to:
Current wording
Net cash provided by operating activities was $12.0 million during the three-month period ended March 31, 2026 as compared to $11.6 million during the comparable period of 2025. The $339,000 net increase was attributable to:
Previous wording
a favorable change of $1.2 million in accrued expenses and other liabilities, due primarily to the timing of accrued expense disbursements;
Current wording
an unfavorable change of $896,000 in accrued expenses and other liabilities, due primarily to the timing of accrued expense disbursements;
Previous wording
an unfavorable change of $139,000 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, and;
Current wording
a favorable change of $327,000 due to an increase 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);
Previous wording
an unfavorable change of $279,000 in leasing costs paid;
Current wording
a favorable change of $181,000 in leasing costs paid;
Previous wording
other combined net favorable changes of $374,000.
Current wording
other combined net favorable changes of $594,000.
Previous wording
Net cash used in investing activities was $12.4 million during the first nine months of 2025 as compared to $11.2 million during the first nine months of 2024.
Current wording
Net cash used in investing activities was $4.5 million during the first three months of 2026 as compared to $1.9 million during the first three months of 2025.
Previous wording
During the nine-month period ended September 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) $5.6 million in additions to real estate investments, including tenant improvements at various MOBs, and; (iii) a $327,000 net advance made to a third-party partner of an unconsolidated LLC that is scheduled to be repaid to us, with interest, during the fourth quarter of 2025. In addition, during the nine months ended September 30, 2025, we received $303,000 of cash in excess of income from LLCs.
Current wording
During the three-month period ended March 31, 2026 we funded: (i) $4.3 million in additions to real estate investments, including tenant improvements at various MOBs and the contruction costs related to the Miller Medical Plaza in Palm Beach Gardens, FL, and; (ii) $191,000 in equity investments in unconsolidated LLCs.
Previous wording
During the nine-month period ended September 30, 2024 we funded: (i) $5.9 million in equity investments in unconsolidated LLCs, and; (ii) $6.0 million in additions to real estate investments, including tenant improvements at various MOBs. In addition, during the nine months ended September 30, 2024, we received $765,000 of cash in excess of income from LLCs.
Current 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.
Previous wording
Net cash used in financing activities was $23.2 million during the nine months ended September 30, 2025, as compared to $24.4 million during the nine months ended September 30, 2024.
Current wording
Net cash used in financing activities was $7.1 million during the three months ended March 31, 2026, as compared to $9.8 million during the three months ended March 31, 2025.
Previous wording
During the nine-month period ended September 30, 2025, we paid: (i) $30.7 million of dividends, including $100,000 of dividends previously accrued, and; (ii) $794,000 on mortgage notes payable that are non-recourse to us. Additionally, during the nine months ended September 30, 2025, we received: (i) $8.2 million of net borrowings pursuant to our Credit Agreement, and; (ii) $115,000 of net cash from the issuance of shares of beneficial interest.
Current wording
During the three-month period ended March 31, 2026, we paid: (i) $10.3 million of dividends, and; (ii) $148,000 on mortgage notes payable that are non-recourse to us. Additionally, during the three months ended March 31, 2026, we received: (i) $3.3 million of net borrowings pursuant to our Credit Agreement, and; (ii) $38,000 of net cash from the issuance of shares of beneficial interest.
Previous wording
During the nine-month period ended September 30, 2024, we paid: (i) $13.2 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) $2.1 million of financing costs related to the Credit Agreement, and; (iii) $30.2 million of dividends, including $85,000 of previously accrued dividends. Additionally, during the nine months ended September 30, 2024, we received (i) $21.2 million of net borrowings pursuant to our Credit Agreement, and; (ii) $17,000, of net cash from the issuance of shares of beneficial interest.
Current 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.
Previous wording
Additional cash flow and dividends paid information for the nine-month periods ended September 30, 2025 and 2024:
Current wording
Additional cash flow and dividends paid information for the three-month periods ended March 31, 2026 and 2025:
Previous wording
As indicated on our condensed consolidated statement of cash flows, we generated net cash provided by operating activities of $35.5 million and $33.8 million during the nine-month periods ended September 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.
Current wording
As indicated on our condensed consolidated statement of cash flows, we generated net cash provided by operating activities of $12.0 million and $11.6 million during the three-month periods ended March 31, 2026 and 2025, 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 $30.7 million and $30.2 million during the nine-month periods ended September 30, 2025 and 2024, respectively. During the first nine months of 2025, the $35.5 million of net cash provided by operating activities was approximately $4.8 million greater than the $30.7 million of dividends paid during the first nine months of 2025. During the first nine months of 2024, the $33.8 million of net cash provided by operating activities was approximately $3.5 million greater than the $30.2 million of dividends paid during the first nine months of 2024.
Current wording
We declared and paid dividends of $10.3 million and $10.2 million during the three-month periods ended March 31, 2026 and 2025, respectively. During the first three months of 2026, the $12.0 million of net cash provided by operating activities was approximately $1.6 million greater than the $10.3 million of dividends paid. 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.
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 nine months ended September 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.
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 three months ended March 31, 2026 and 2025. 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 $67.9 million of available borrowing capacity, net of outstanding borrowings as of September 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.
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 Credit Agreement (the borrowings capacity of which was increased to $475 million in April, 2026 (from $425 million previously), and which had $359.5 million of outstanding borrowings as of March 31, 2026); (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
On September 30, 2024, we entered into a second amendment to our credit agreement, dated as of July, 2021, and amended in May, 2023, among the Trust as borrower, the lenders party thereto and Wells Fargo Bank, N.A., as administrative agent (as amended "Credit Agreement"). Among other things, the second amendment provided for the following: (i) extended the maturity date to September 30, 2028 (from July, 2025 previously), and; (ii) increased the aggregate borrowing capacity under the credit facility to $425 million (from $375 million previously) comprised of a $125 million non-amortizing term loan ("Term Loan"), and a $300 million revolving loan commitment which includes a $40 million sublimit for letters of credit, and a $30 million sublimit for swingline/short-term loans. Under the terms of the Credit Agreement, we may request that the revolving line of credit and/or the Term Loan be increased by up to an additional aggregate amount of $50 million, and we have the option to extend the maturity date for up to two additional six-month periods. Borrowings under the new facility are guaranteed by certain subsidiaries of the Trust. In addition, borrowings under the new facility are secured by first priority security interests in and liens on all equity interests in most of the Trust’s wholly-owned subsidiaries.
Current wording
The Credit Agreement, as amended by the First Amendment, is comprised of $175 million of non-amortizing term loans and a $300 million revolving loan commitment which includes a $40 million sublimit for letters of credit, and a $30 million sublimit for swingline/short-term loans. Under the terms of the Credit Agreement, we may request that the revolving line of credit and/or the Term Loan be increased by up to an additional aggregate amount of $50 million. Borrowings under the Credit Agreement are guaranteed by certain subsidiaries of the Trust. In addition, borrowings are secured by first priority security interests in and liens on all equity interests in most of the Trust’s wholly-owned subsidiaries.
Previous wording
Borrowings under the Credit Agreement will bear interest at a rate equal to, at our option, term SOFR plus .10% ("Adjusted Term SOFR") for either one, three, or six months or the Base Rate, plus in either case, a specified margin depending on our total leverage ratio, as determined by the formula set forth in the Credit Agreement. The applicable margin on revolving loans range from 1.10% to 1.35% for Adjusted Term SOFR loans and 0.10% to 0.35% for Base Rate loans. The applicable margin on term loans range from 1.20% to 1.65% for Adjusted Term SOFR loans and 0.20% to 0.65% for Base Rate loans. The Credit Agreement defines “Base Rate” as the greatest of (a) the Administrative Agent’s prime rate, (b) the federal funds effective rate plus 1/2 of 1%, and (c) one month Adjusted Term SOFR plus 1%. The Trust will also pay a quarterly facility fee on the $300 million revolving loan commitment ranging from 0.15% to 0.35% (depending on the Trust’s total leverage ratio).
Current wording
Borrowings under the Credit Agreement will bear interest at a rate equal to, at our option, term SOFR for either one, three, or six months or the Base Rate, plus in either case, a specified margin depending on our total leverage ratio, as determined by the formula set forth in the Credit Agreement. The applicable margin on revolving loans range from 1.10% to 1.35% for Adjusted Term SOFR loans and 0.10% to 0.35% for Base Rate loans. The applicable margin on term loans range from 1.20% to 1.65% for Adjusted Term SOFR loans and 0.20% to 0.65% for Base Rate loans. The Credit Agreement defines “Base Rate” as the greatest of (a) the Administrative Agent’s prime rate, (b) the federal funds effective rate plus 1/2 of 1%, and (c) one month Adjusted Term SOFR plus 1%. The Trust will also pay a quarterly facility fee on the $300 million revolving loan commitment ranging from 0.15% to 0.35% (depending on the Trust’s total leverage ratio).
Previous wording
At September 30, 2025, we had $357.1 million of outstanding borrowings pursuant to the terms of our $425 million Credit Agreement and $67.9 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 March 31, 2026, we had $359.5 million of outstanding borrowings pursuant to the terms of our Credit Agreement. At December 31, 2025, we had $356.2 million of outstanding borrowings pursuant to the terms of our Credit Agreement, and $68.8 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 $14.9 million and $17.2 million during the quarters ended September 30, 2025 and 2024, respectively, and aggregate repayments were $12.7 million and $12.4 million during the quarters ended September 30, 2025 and 2024, respectively. Aggregate borrowings under our Credit Agreement were $47.5 million and $64.2 million during the nine-months ended September 30, 2025 and 2024, respectively, and aggregate repayments were $39.4 million and $43.0 million during the nine-months ended September 30, 2025 and 2024, respectively.
Current wording
The Credit Agreement is structured to allow the Trust to select a one, three or six-month borrowing term for all borrowings on the Term Loan and revolving line of credit, which can be renewed through the commitment period that matures on September 30, 2028. In our consolidated statements of cash flows, we report cash flows pursuant to our Credit Agreement on a net basis, as all borrowings under the Credit Agreement have a term of less than three months as of March 31, 2026 and 2025. Aggregate borrowings under our Credit Agreement were $14.8 million and $13.0 million during the quarters ended March 31, 2026 and 2025, respectively, and aggregate repayments were $11.5 million and $12.4 million during the quarters ended March 31, 2026 and 2025, respectively.
Previous wording
At September 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 September 30, 2025, had a combined carrying value of approximately $18.7 million and a combined fair value of approximately $17.6 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 March 31, 2026 and December 31, 2025, 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, 2026, had a combined carrying value of approximately $18.4 million and a combined fair value of approximately $17.4 million. The mortgages outstanding as of December 31, 2025, had a combined carrying value of approximately $18.6 million and a combined fair value of approximately $17.5 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.
Previous wording
Please see Note 4 to the condensed consolidated financial statements-Acquisitions and Divestitures.
Current wording
Please see Note 4 to the condensed consolidated financial statements- Acquisitions, Divestitures and New Construction.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Revenues decreased slightly amounting to $24.5 million during each of the three-month periods ended March 31, 2026 and 2025.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
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 third quarter of 2025 and $6.8 million during the third quarter of 2024.