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What changed in UNIVERSAL HEALTH REALTY INCOME TRUST's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of UNIVERSAL HEALTH REALTY INCOME TRUST's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+303 added−271 removedSource: 10-K (2026-02-25) vs 10-K (2025-02-26)

Top changes in UNIVERSAL HEALTH REALTY INCOME TRUST's 2025 10-K

303 paragraphs added · 271 removed · 224 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

55 edited+49 added−10 removed76 unchanged
Biggest changeBell (E) Phoenix, AZ MOB 100% -- Lake Pointe Medical Arts Building (E) Rowlett, TX MOB 100% -- Forney Medical Plaza (E) Forney, TX MOB 100% -- Tuscan Professional Building (E) Irving, TX MOB 100% -- Emory at Dunwoody Building (E) Atlanta, GA MOB 100% -- PeaceHealth Medical Clinic (E) Bellingham, WA MOB 100% -- Forney Medical Plaza II (C) Forney, TX MOB 95% -- Northwest Texas Professional Office Tower (E) Amarillo, TX MOB 100% -- 5004 Poole Road MOB (A) Denison, TX MOB 100% -- Ward Eagle Office Village (E) Farmington Hills, MI MOB 100% -- The Northwest Medical Center at Sugar Creek (E) Bentonville, AR MOB 100% -- Hanover Emergency Center (E) Mechanicsville, VA FED 100% Henrico Doctors' Hospital South Texas ER at Weslaco (A) (L) Weslaco, TX FED 100% -- South Texas ER at Mission (A) (L) Mission, TX FED 100% -- Haas Medical Office Park (E) Ottumwa, IA MOB 100% Regional Hospital Partners Piedmont - Roswell Physician Center (E) Sandy Springs, GA MOB 100% -- Piedmont - Vinings Physician Center (E) Vinings, GA MOB 100% -- Madison Professional Office Building (E) Madison, AL MOB 100% -- Chandler Corporate Center III (E) Chandler, AZ MOB 100% -- Frederick Crestwood MOB (E) Frederick, MD MOB 100% -- 2704 North Tenaya Way (E) Las Vegas, NV MOB 100% -- Henderson Medical Plaza (D) Henderson, NV MOB 100% -- Health Center at Hamburg (E) Hamburg, PA MOB 100% -- Las Palmas Del Sol Emergency Center-West (E) El Paso, TX FED 100% -- Beaumont Medical Sleep Center Building (E) Southfield, MI MOB 100% -- Bellin Health Family Medicine Center (E) Escanaba, MI MOB 100% -- Texoma Medical Plaza II (H) Denison, TX MOB 95% -- Sand Point Medical Properties (E) Escanaba, MI MOB 100% Fresenius Medical Care Holdings, Inc.
Biggest changeCenter at Sugar Creek (E) Bentonville, AR MOB 100% -- Hanover Emergency Center (E) Mechanicsville, VA FED 100% Henrico Doctors' Hospital South Texas ER at Weslaco (A) Weslaco, TX FED 100% -- South Texas ER at Mission (A) Mission, TX FED 100% -- Haas Medical Office Park (E) Ottumwa, IA MOB 100% Regional Hospital Partners Piedmont - Roswell Physician Center (E) Sandy Springs, GA MOB 100% -- Piedmont - Vinings Physician Center (E) Vinings, GA MOB 100% -- Madison Professional Office Building (E) Madison, AL MOB 100% -- Chandler Corporate Center III (E) Chandler, AZ MOB 100% -- Frederick Crestwood MOB (E) Frederick, MD MOB 100% -- 2704 North Tenaya Way (E) Las Vegas, NV MOB 100% -- Henderson Medical Plaza (D) Henderson, NV MOB 100% -- Health Center at Hamburg (E) Hamburg, PA MOB 100% -- Las Palmas Del Sol Emergency Center-West (E) El Paso, TX FED 100% -- Beaumont Medical Sleep Center Building (E) Southfield, MI MOB 100% -- 2 Bellin Health Family Medicine Center (E) Escanaba, MI MOB 100% -- Texoma Medical Plaza II (H) Denison, TX MOB 95% -- Sand Point Medical Properties (E) Escanaba, MI MOB 100% Fresenius Medical Care Holdings, Inc.
Pursuant to the terms of the master leases by and among us and certain subsidiaries of UHS, dated December 24, 1986 and December 31, 2021 (the “Master Leases”), which govern the leases of McAllen Medical Center, Wellington Regional Medical Center (governed by the Master Lease dated December 24, 1986), Aiken Regional Medical Center and Canyon Creek Behavioral Health (governed by the Master Lease dated December 31, 2021, as amended), all of which are hospital properties that are wholly-owned subsidiaries of UHS, UHS has the option, among other things, to renew the leases at the lease terms described below by providing notice 3 to us at least 90 days prior to the termination of the then current term.
Pursuant to the terms of the master leases by and among us and certain subsidiaries of UHS, dated December 24, 1986 and December 31, 2021 (the “Master Leases”), which govern the leases of McAllen Medical Center, Wellington Regional Medical Center (governed by the Master Lease dated December 24, 1986), Aiken Regional Medical Center and Canyon Creek Behavioral Health (governed by the Master Lease dated December 31, 2021, as amended), all of which are hospital properties that are wholly-owned subsidiaries of UHS, UHS has the option, among other things, to renew the leases at the lease terms described below by providing notice to us at least 90 days prior to the termination of the then current term.
Please see the heading “ If we fail to maintain our REIT status, we will become subject to federal income tax on our taxable income at regular corporate rates” under “Risk Factors” for more information. 5 Competition We compete for the acquisition, leasing and financing of health care related facilities.
Please see the heading “ If we fail to maintain our REIT status, we will become subject to federal income tax on our taxable income at regular corporate rates” under “Risk Factors” for more information. Competition We compete for the acquisition, leasing and financing of health care related facilities.
We can provide no assurance that reductions to Medicaid revenues earned by operators of certain of our facilities, particularly our hospital operators in the 7 above-mentioned states, will not have a material adverse effect on the future operating results of those operators which, in turn, could have a material adverse effect on us.
We can provide no assurance that reductions to Medicaid revenues earned by operators of certain of our facilities, particularly our hospital operators in the above-mentioned states, will not have a material adverse effect on the future operating results of those operators which, in turn, could have a material adverse effect on us.
These developments could result in fewer investment opportunities for us and lower spreads over the cost of our capital, which would hurt our growth. In most geographical areas in which our facilities operate, there are other facilities that provide services comparable to those offered by our facilities.
These developments could result in fewer investment opportunities for us and lower spreads over the cost of our capital, which would hurt our growth. 6 In most geographical areas in which our facilities operate, there are other facilities that provide services comparable to those offered by our facilities.
Under the statutory framework of the Medicare and Medicaid programs, many of the general acute care operations are subject to administrative rulings, interpretations and discretion that may affect payments made under either or both of such programs as well as by other third party payers.
Under the statutory framework of the Medicare and Medicaid programs, many of the general acute care operations are subject to administrative rulings, interpretations and discretion 8 that may affect payments made under either or both of such programs as well as by other third party payers.
The master flex lease agreement has a ten-year term scheduled to expire on March 31, 2033. The MOB is 68% leased including the ten-year master flex lease for 34% of the rentable square feet. The master flex-lease agreement is subject to a reduction based upon the execution of third-party leases.
The master flex lease agreement has a ten-year term scheduled to expire on March 31, 2033. The MOB is 68% leased including the ten-year master flex lease for 34% of the rentable square feet. The master flex-lease 5 agreement is subject to a reduction based upon the execution of third-party leases.
Matthews Medical Plaza II (C) Louisville, KY MOB 33% -- Desert Valley Medical Center (E) Phoenix, AZ MOB 100% -- Cypresswood Professional Center (B) 8101 Spring, TX MOB 100% -- 8111 Spring, TX MOB 100% -- Desert Springs Medical Plaza (D) Las Vegas, NV MOB 100% -- 701 South Tonopah Bldg.
Matthews Medical Plaza II (C) Louisville, KY MOB 33% -- Desert Valley Medical Center (E) Phoenix, AZ MOB 100% -- Cypresswood Professional Center (B) 8101 Spring, TX MOB 100% -- 8111 Spring, TX MOB 100% -- Desert Springs Medical Plaza (E) Las Vegas, NV MOB 100% -- 701 South Tonopah Bldg.
The lease on McAllen Medical Center also provides for bonus rent which is paid quarterly based upon a computation that compares the hospital’s current quarter revenue to a corresponding quarter in the base year.
The lease on McAllen Medical Center also provides for bonus rent which is paid quarterly based upon a computation that compares the hospital’s current quarter revenue to a 3 corresponding quarter in the base year.
In accordance with Section 303A.12(a) of The New York Stock Exchange Listed Company Manual, we submitted our CEO’s Certification to the New York Stock Exchange in 2024. Additionally, contained in Exhibits 31.1 and 31.2 of this Annual Report are our CEO’s and CFO’s certifications regarding the quality of our public disclosure under Section 302 of the Sarbanes-Oxley Act of 2002.
In accordance with Section 303A.12(a) of The New York Stock Exchange Listed Company Manual, we submitted our CEO’s Certification to the New York Stock Exchange in 2025. Additionally, contained in Exhibits 31.1 and 31.2 of this Annual Report are our CEO’s and CFO’s certifications regarding the quality of our public disclosure under Section 302 of the Sarbanes-Oxley Act of 2002.
(“UHS”) Leases: We commenced operations in 1986 by purchasing certain properties from subsidiaries of UHS and immediately leasing the properties back to the respective subsidiaries. The base rentals and lease and renewal terms for each of the hospitals leased to subsidiaries of UHS as of January 1, 2025, are provided below. The base rents are paid monthly.
(“UHS”) Leases: We commenced operations in 1986 by purchasing certain properties from subsidiaries of UHS and immediately leasing the properties back to the respective subsidiaries. The base rentals and lease and renewal terms for each of the hospitals leased to subsidiaries of UHS as of January 1, 2026, are provided below. The base rents are paid monthly.
Share Ownership: As of December 31, 2024 and 2023, UHS owned 5.7% of our outstanding shares of beneficial interest. SEC reporting requirements of UHS: UHS is subject to the reporting requirements of the Securities and Exchange Commission (“SEC”) and is required to file annual reports containing audited financial information and quarterly reports containing unaudited financial information.
Share Ownership: As of December 31, 2025 and 2024, UHS owned 5.7% of our outstanding shares of beneficial interest. SEC reporting requirements of UHS: UHS is subject to the reporting requirements of the Securities and Exchange Commission (“SEC”) and is required to file annual reports containing audited financial information and quarterly reports containing unaudited financial information.
Fire Mesa (A) Las Vegas, NV Office Building 100% Universal Health Services, Inc. 140 Thomas Johnson Drive (B) Frederick, MD MOB 100% -- Beaumont Heart and Vascular Center (B) Dearborn, MI MOB 100% -- Sierra Medical Plaza I (I) Reno, NV MOB 100% -- McAllen Doctor's Center (A)(F) McAllen, TX MOB 100% Universal Health Services, Inc.
Fire Mesa (A) Las Vegas, NV Office Building 100% Universal Health Services, Inc. 140 Thomas Johnson Drive (B) Frederick, MD MOB 100% -- Beaumont Heart and Vascular Center (B) Dearborn, MI MOB 100% -- Sierra Medical Plaza I (D) Reno, NV MOB 100% -- McAllen Doctor's Center (A) McAllen, TX MOB 100% Universal Health Services, Inc.
Officers and Employees: Our officers are all employees of a wholly-owned subsidiary of UHS and although as of December 31, 2024 we had no salaried employees, our officers do typically receive annual stock-based compensation awards in the form of restricted stock or restricted stock units.
Officers and Employees: Our officers are all employees of a wholly-owned subsidiary of UHS and although as of December 31, 2025 we had no salaried employees, our officers do typically receive annual stock-based compensation awards in the form of restricted stock or restricted stock units.
The Advisory Agreement was renewed for 2025 with the same terms as the Advisory Agreement in place during 2024, 2023 and 2022. Our advisory fee for 2024, 2023 and 2022 was computed at 0.70% of our average invested real estate assets, as derived from our consolidated balance sheet.
The Advisory Agreement was renewed for 2026 with the same terms as the Advisory Agreement in place during 2025, 2024 and 2023. Our advisory fee for 2025, 2024 and 2023 was computed at 0.70% of our average invested real estate assets, as derived from our consolidated balance sheet.
As of January 1, 2025, leases 2 on the six acute and behavioral health care hospitals have fixed terms with an average of 7.6 years remaining and include renewal options ranging from one to seven, five or ten-year terms. The remaining lease terms for each hospital, which vary by hospital, are included herein in Item 2. Properties .
As of January 1, 2026, leases on the six acute and behavioral health care hospitals have fixed terms with an average of 6.6 years remaining and include renewal options ranging from one to seven, five or ten-year terms. The remaining lease terms for each hospital, which vary by hospital, are included herein in Item 2. Properties .
Clive Behavioral Health (J) Clive, IA Behavioral Health 100% Universal Health Services, Inc. and Catholic Health Initiatives-Iowa, Corp. 4058 W. Melrose Land (K) Chicago, IL Vacant Land 100% -- Evansville Facility (G) Evansville, IN Specialty 100% -- Family Doctor’s Medical Office Bldg.
Clive Behavioral Health (I) Clive, IA Behavioral Health 100% Universal Health Services, Inc. and Catholic Health Initiatives-Iowa, Corp. 4058 W. Melrose Land (J) Chicago, IL Vacant Land 100% -- Evansville Facility (G) Evansville, IN Specialty 100% -- Family Doctor’s Medical Office Bldg.
Since the aggregate revenues generated from UHS-related tenants comprised approximately 38% of our consolidated revenue for the five years ended December 31, 2024 (approximately 40%, 41% and 40% for the years ended December 31, 2024, 2023 and 2022, respectively), and since a subsidiary of UHS is our Advisor, you are encouraged to obtain the publicly available filings for Universal Health Services, Inc. from the SEC’s website.
Since the aggregate revenues generated from UHS-related tenants comprised approximately 40% of our consolidated revenue for the five years ended December 31, 2025 (approximately 40%, 40% and 41% for the years ended December 31, 2025, 2024 and 2023, respectively), and since a subsidiary of UHS is our Advisor, you are encouraged to obtain the publicly available filings for Universal Health Services, Inc. from the SEC’s website.
The aggregate revenues generated from UHS-related tenants comprised approximately 38% of our consolidated revenue for the five years ended December 31, 2024 (approximately 40%, 41% and 40% for the years ended December 31, 2024, 2023 and 2022, respectively). In December, 2021, we entered into an asset purchase and sale agreement, as amended, with UHS and certain of its affiliates.
The aggregate revenues generated from UHS-related tenants comprised approximately 40% of our consolidated revenue for the five years ended December 31, 2025 (approximately 40%, 40% and 41% for the years ended December 31, 2025, 2024 and 2023, respectively). In December, 2021, we entered into an asset purchase and sale agreement, as amended, with UHS and certain of its affiliates.
Based upon a review of our advisory fee and other general and administrative expenses, as compared to an industry peer group, the advisory fee computation remained unchanged for 2024, as compared to 2023 and 2022.
Based upon a review of our advisory fee and other general and administrative expenses, as compared to an industry peer group, the advisory fee computation remained unchanged for 2025, as compared to 2024 and 2023.
ITEM 1. Business General We are a real estate investment trust (“REIT”) which commenced operations in 1986. We invest in healthcare and human-service related facilities currently including acute care hospitals, behavioral health care hospitals, a specialty facility, free-standing emergency departments, childcare centers and medical/office buildings.
ITEM 1. Business General 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.
The combined revenues generated from the leases on the three acute care and three behavioral health care hospital facilities leased to subsidiaries of UHS at December 31, 2024, 2023 and 2022, accounted for approximately 24%, 25% and 26% of our consolidated revenues for the years ended December 31, 2024, 2023 and 2022, respectively.
The combined revenues generated from the leases on the three acute care and three behavioral health care hospital facilities leased to subsidiaries of UHS at December 31, 2025, 2024 and 2023, accounted for approximately 24%, 24% and 25% of our consolidated revenues for the years ended December 31, 2025, 2024 and 2023, respectively.
(b) UHS has one 5-year renewal option at fair market value lease rates (through 2031). The annual rental will increase by 2.5% on an annual compounded basis on each January 1 st through 2026. (c) UHS has seven 5-year renewal options at fair market value lease rates (2034 through 2068).
(b) UHS has one 5-year renewal option at fair market value lease rates (through 2031). The annual rental has increased by 2.5% on an annual compounded basis on each January 1 st through 2026. (c) UHS has seven 5-year renewal options at fair market value lease rates (2034 through 2068).
Regulation and Other Factors During each of the years of 2024, 2023 and 2022, approximately 27%, 27% and 29%, respectively, of our revenues were earned pursuant to leases with operators of acute care hospitals, behavioral health care hospitals and free-standing emergency departments (“FEDs”), the substantial majority of which are subsidiaries of UHS.
Regulation and Other Factors During each of the years of 2025, 2024 and 2023, approximately 27% of our revenues were earned pursuant to leases with operators of acute care hospitals, behavioral health care hospitals and free-standing emergency departments (“FEDs”), the substantial majority of which are subsidiaries of UHS.
The portion of the lease payments that is included in our consolidated statements of income, and reflected as interest income on financing leases, was approximately $5.4 million for the year ended December 31, 2024 and $5.5 million for each of the years ended December 31, 2023 and 2022.
The portion of the lease payments that is included in our consolidated statements of income, and reflected as interest income on financing leases, was approximately $5.4 million for the year ended December 31, 2025, $5.4 million for the year ended December 31, 2024 and $5.5 million for the year ended December 31, 2023.
The cost of the MOB is estimated to be approximately $35 million, approximately $30 million of which was incurred as of December 31, 2024. In connection with this MOB, we entered into a ground lease and master flex-lease agreement with a wholly-owned subsidiary of UHS both of which commenced during March, 2023.
The aggregate cost of the MOB is expected to be approximately $35 million, approximately $30 million of which was incurred as of December 31, 2025. In connection with this MOB, we entered into a ground lease and master flex-lease agreement with a wholly-owned subsidiary of UHS both of which commenced during March, 2023.
(B) Shreveport, LA MOB 100% Christus Health Northern Louisiana Professional Buildings at Kings Crossing Building A (B) Kingwood, TX MOB 100% -- Building B (B) Kingwood, TX MOB 100% -- Chesterbrook Academy (B) Audubon, PA Preschool & Childcare 100% SEG, Incorporated Chesterbrook Academy (B) New Britain, PA Preschool & Childcare 100% SEG, Incorporated Chesterbrook Academy (B) Newtown, PA Preschool & Childcare 100% SEG, Incorporated Chesterbrook Academy (B) Uwchlan, PA Preschool & Childcare 100% SEG, Incorporated Southern Crescent Center I (B) Riverdale, GA MOB 100% -- Southern Crescent Center, II (D) Riverdale, GA MOB 100% -- St.
(B) Shreveport, LA MOB 100% Christus Health Northern Louisiana Professional Buildings at Kings Crossing Building A (B) Kingwood, TX MOB 100% -- Building B (B) Kingwood, TX MOB 100% -- Chesterbrook Academy (B) Audubon, PA Preschool & Childcare 100% SEG, Incorporated Chesterbrook Academy (B) New Britain, PA Preschool & Childcare 100% SEG, Incorporated Chesterbrook Academy (B) Newtown, PA Preschool & Childcare 100% SEG, Incorporated 101 Tanner Drive (G) Uwchlan, PA Preschool & Childcare 100% -- Southern Crescent Center I (B) Riverdale, GA MOB 100% -- Southern Crescent Center, II (B) Riverdale, GA MOB 100% -- St.
(A) Las Vegas, NV MOB 100% -- Santa Fe Professional Plaza (E) Scottsdale, AZ MOB 100% -- Summerlin Hospital MOB I (D) Las Vegas, NV MOB 100% -- Summerlin Hospital MOB II (D) Las Vegas, NV MOB 100% -- Danbury Medical Plaza (B) Danbury, CT MOB 100% -- Mid Coast Hospital MOB (C) Brunswick, ME MOB 74% -- Rosenberg Children’s Medical Plaza (E) Phoenix, AZ MOB 100% -- Gold Shadow (D) 1 Facility Name Location Type of Facility Ownership Guarantor 700 Shadow Lane MOB Las Vegas, NV MOB 100% -- 2010 & 2020 Goldring MOBs Las Vegas, NV MOB 100% -- Apache Junction Medical Plaza (E) Apache Junction, AZ MOB 100% -- Spring Valley Medical Office Building (D) Las Vegas, NV MOB 100% -- Spring Valley Hospital Medical Office Building II (D) Las Vegas, NV MOB 100% -- Sierra San Antonio Medical Plaza (E) Fontana, CA MOB 100% -- Phoenix Children’s East Valley Care Center (E) Phoenix, AZ MOB 100% -- Centennial Hills Medical Office Building (D) Las Vegas, NV MOB 100% -- Palmdale Medical Plaza (D) Palmdale, CA MOB 100% -- Summerlin Hospital Medical Office Building III (D) Las Vegas, NV MOB 100% -- Vista Medical Terrace (D) Sparks, NV MOB 100% -- The Sparks Medical Building (D) Sparks, NV MOB 100% -- Texoma Medical Plaza (D) (O) Denison, TX MOB 100% -- BRB Medical Office Building (E) Kingwood, TX MOB 100% -- 3811 E.
(A) Las Vegas, NV MOB 100% -- Santa Fe Professional Plaza (E) Scottsdale, AZ MOB 100% -- Summerlin Hospital MOB I (D) Las Vegas, NV MOB 100% -- Summerlin Hospital MOB II (D) Las Vegas, NV MOB 100% -- Danbury Medical Plaza (B) Danbury, CT MOB 100% -- Mid Coast Hospital MOB (C) Brunswick, ME MOB 74% -- Rosenberg Children’s Medical Plaza (E) Phoenix, AZ MOB 100% -- Gold Shadow (D) 700 Shadow Lane MOB Las Vegas, NV MOB 100% -- 2010 & 2020 Goldring MOBs Las Vegas, NV MOB 100% -- Apache Junction Medical Plaza (E) Apache Junction, AZ MOB 100% -- Spring Valley Medical Office Building (D) Las Vegas, NV MOB 100% -- Spring Valley Medical Office Building II (D) Las Vegas, NV MOB 100% -- Sierra San Antonio Medical Plaza (E) Fontana, CA MOB 100% -- Phoenix Children’s East Valley Care Center (E) Phoenix, AZ MOB 100% -- Centennial Hills Medical Office Building (D) Las Vegas, NV MOB 100% -- Palmdale Medical Plaza (D) Palmdale, CA MOB 100% -- Summerlin Hospital MOB III (D) Las Vegas, NV MOB 100% -- Vista Medical Terrace (D) Sparks, NV MOB 100% -- The Sparks Medical Building (D) Sparks, NV MOB 100% -- Texoma Medical Plaza (D) Denison, TX MOB 100% -- BRB Medical Office Building (E) Kingwood, TX MOB 100% -- 3811 E.
The aggregate annual lease rates on the renewed leases, which are scheduled to increased 2% per year, for the period of February 1, 2025 through January 31, 2026 is approximately $1.1 million.
The aggregate annual lease rates on the renewed leases, which are scheduled to increase 2% per year, for the period of February 1, 2026 through January 31, 2027 is approximately $1.1 million.
Aiken Regional Medical Center (A) Aiken, SC Acute Care 100% Universal Health Services, Inc. Aurora Pavilion Behavioral Health Services (A) Aiken, SC Behavioral Health 100% Universal Health Services, Inc. Canyon Creek Behavioral Health (A) Temple, TX Behavioral Health 100% Universal Health Services, Inc.
Palm Beach, FL Acute Care 100% Universal Health Services, Inc. Aiken Regional Medical Center (A) Aiken, SC Acute Care 100% Universal Health Services, Inc. Aurora Pavilion Behavioral Health (A) Aiken, SC Behavioral Health 100% Universal Health Services, Inc. Canyon Creek Behavioral Health (A) Temple, TX Behavioral Health 100% Universal Health Services, Inc.
Executive Officers of the Registrant Name Age Position Alan B. Miller 87 Chairman of the Board, Chief Executive Officer and President Charles F. Boyle 65 Senior Vice President and Chief Financial Officer Cheryl K. Ramagano 62 Senior Vice President - Operations, Treasurer and Secretary Karla J. Peterson 65 Vice President, Acquisitions and Development Mr. Alan B.
Executive Officers of the Registrant Name Age Position Alan B. Miller 88 Chairman of the Board, Chief Executive Officer and President Charles F. Boyle 66 Senior Vice President and Chief Financial Officer Cheryl K. Ramagano 63 Senior Vice President - Operations, Treasurer and Secretary Karla J. Peterson 66 Vice President, Acquisitions and Development Mr. Alan B.
Pursuant to the leases, the aggregate annual rental rate on the acquired properties, which is payable to us on a monthly basis, was $5.9 million during 2024, $5.8 million during 2023 and $5.7 million during 2022.
Pursuant to the leases, the aggregate annual rental rate on the acquired properties, which is payable to us on a monthly basis, was $6.0 million during 2025, $5.9 million during 2024 and $5.8 million during 2023.
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 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 combined weighted average Coverage Ratio for the six hospitals owned by us, all of which were leased to subsidiaries of UHS, was approximately 8.3 during 2024 (ranging from 0.02 to 13.5) and approximately 5.5 during 2023 (ranging from -0.4 to 10.0).
The combined weighted average Coverage Ratio for the six hospitals owned by us, all of which were leased to subsidiaries of UHS, was approximately 8.6 during 2025 (ranging from 0.08 to 15.3) and approximately 8.3 during 2024 (ranging from 0.02 to 13.5).
Advisory fees incurred and paid (or payable) to UHS amounted to $5.5 million during 2024, $5.3 million during 2023 and $5.1 million during 2022, and were based upon average invested real estate assets of $783 million, $757 million and $728 million during 2024, 2023 and 2022, respectively.
Advisory fees incurred and paid (or payable) to UHS amounted to $5.6 million during 2025, $5.5 million during 2024 and $5.3 million during 2023, and were based upon average invested real estate assets of $799 million, $783 million and $757 million during 2025, 2024 and 2023, respectively.
Our consolidated balance sheets as of December 31, 2024 and 2023 include financing receivables related to this transaction of $82.8 million and $83.3 million, respectively.
Our consolidated balance sheets as of December 31, 2025 and 2024 include financing receivables related to this transaction of $82.1 million and $82.8 million, respectively.
The triple-net master lease is for twelve years scheduled to expire on August 31, 2035. McAllen Hospitals, L.P. has the option to renew the lease term for three consecutive ten-year terms.
The triple-net master lease is for twelve years scheduled to expire on August 31, 2035. McAllen Hospitals, L.P. has the option to renew the lease term for three consecutive ten-year terms. The current annual base rent is approximately $669,000.
Overview of Facilities As of February 26, 2025, we have investments in seventy-six facilities located in twenty-one states and consisting of the following: Facility Name Location Type of Facility Ownership Guarantor McAllen Medical Center (A) McAllen, TX Acute Care 100% Universal Health Services, Inc. Wellington Regional Medical Center (A) W. Palm Beach, FL Acute Care 100% Universal Health Services, Inc.
Overview of Facilities As of February 25, 2026, we have investments in seventy-seven facilities located in twenty-one states and consisting of the following: 1 Facility Name Location Type of Facility Ownership Guarantor McAllen Medical Center (A) McAllen, TX Acute Care 100% Universal Health Services, Inc. Wellington Regional Medical Center (A) W.
The annual aggregate lease payments on these properties were approximately $571,000 for the year ended 2024 and expected to be $571,000 for each of the years ended 2025 through 2028, and an aggregate of $31.3 million thereafter. See Note 4 to the consolidated financial statements-Lease Accounting for further disclosure around our lease accounting.
The annual aggregate lease payments on these properties were approximately $571,000 for the year ended 2025 and expected to be $585,000 for 2026, $603,000 for each of the years ended 2027 through 2030, and an aggregate of $32.8 million thereafter. See Note 4 to the consolidated financial statements-Lease Accounting for further disclosure around our lease accounting.
The table below details the existing lease terms and renewal options for each of the hospital leases that are related to UHS as of January 1, 2025, consisting of three acute care hospitals and three behavioral health hospitals: Hospital Name Annual Minimum Rent End of Lease Term Renewal Term (years) McAllen Medical Center $ 5,485,000 December, 2026 5 (a) Wellington Regional Medical Center $ 6,805,000 December, 2026 5 (b) Aiken Regional Medical Center/Aurora Pavilion Behavioral Health Services $ 4,164,000 December, 2033 35 (c) Canyon Creek Behavioral Health $ 1,882,000 December, 2033 35 (c) Clive Behavioral Health $ 2,851,000 December, 2040 50 (d) (a) UHS has one 5-year renewal option at existing lease rates (through 2031).
Additionally, the joint venture has rights of first offer to purchase the facility prior to any third-party sale. 4 The table below details the existing lease terms and renewal options for each of the hospital leases that are related to UHS as of January 1, 2026, consisting of three acute care hospitals and three behavioral health hospitals: Hospital Name Annual Minimum Rent End of Lease Term Renewal Term (years) McAllen Medical Center $ 5,485,000 December, 2026 5 (a) Wellington Regional Medical Center $ 6,975,000 December, 2026 5 (b) Aiken Regional Medical Center/Aurora Pavilion Behavioral Health Services $ 4,257,000 December, 2033 35 (c) Canyon Creek Behavioral Health $ 1,925,000 December, 2033 35 (c) Clive Behavioral Health $ 2,930,000 December, 2040 50 (d) (a) UHS has one 5-year renewal option at existing lease rates (through 2031).
In addition to the six UHS hospital facilities, we have twenty properties consisting of medical/office buildings and FEDs that are either wholly or jointly-owned by us that include tenants that are subsidiaries of UHS.
In addition to the six UHS hospital facilities, we have nineteen properties consisting of medical/office buildings and FEDs that are either wholly or jointly-owned by us that include tenants that are subsidiaries of UHS (excluding Palm Beach Gardens Medical Plaza I which is under construction).
(A) Real estate assets owned by us and leased to subsidiaries of Universal Health Services, Inc. (“UHS”). (B) Real estate assets owned by us and leased to an unaffiliated third-party or parties.
Palm Beach Gardens Medical Plaza I (L) Palm Beach Gardens, FL MOB 100% -- (A) Real estate assets owned by us and leased to subsidiaries of Universal Health Services, Inc. (“UHS”). (B) Real estate assets owned by us and leased to an unaffiliated third-party or parties.
As of February 26, 2025, we have seventy-six real estate investments or commitments located in twenty-one states in the United States consisting of: (i) six hospital facilities including three acute care and three behavioral health care; (ii) sixty medical/office buildings; (iii) four free-standing emergency departments (“FEDs”); (iv) four preschool and childcare centers; (v) one specialty facility located in Evansville, Indiana, that is currently vacant, and; (vi) one property comprised of vacant land located in Chicago, Illinois.
As of February 25, 2026, we have seventy-seven real estate investments or commitments in twenty-one states consisting of: • six hospital facilities consisting of three acute care hospitals and three behavioral health care hospitals; • four free-standing emergency departments (“FEDs”); • sixty-one medical/office buildings (“MOBs”), including four owned by unconsolidated limited liability companies (“LLCs”)/limited liability partnerships (“LPs”); • four preschool and childcare centers; • one specialty facility located in Evansville, Indiana, that is currently vacant, and; • vacant land located in Chicago, Illinois.
The operators of our facilities also compete with other health care providers in recruiting and retaining qualified hospital management, nurses and other medical personnel.
In addition, the number and quality of the physicians on a hospital’s staff are important factors in determining a hospital’s success and competitive advantage. The operators of our facilities also compete with other health care providers in recruiting and retaining qualified hospital management, nurses and other medical personnel.
This MOB is located on the campus of the Northern Nevada Sierra Medical Center, a newly constructed acute care hospital that is owned and operated by a wholly-owned subsidiary of UHS, which was completed and opened during April of 2022.
Construction was substantially completed during 2023 on Sierra Medical Plaza I, a multi-tenant MOB located in Reno, Nevada, consisting of approximately 86,000 rentable square feet. This MOB is located on the campus of the Northern Nevada Sierra Medical Center, an acute care hospital that was newly constructed and owned and operated by a wholly-owned subsidiary of UHS.
The ground lease has a 75-year term scheduled to expire on March 2, 2098. We are the lessee on thirteen ground leases with subsidiaries of UHS (for consolidated and unconsolidated investments), including one that commenced in March, 2023. The remaining lease terms on the ground leases with subsidiaries of UHS range from approximately 25 years to approximately 74 years.
The ground lease has a 75-year term scheduled to expire on March 2, 2098. We are the lessee on fourteen ground leases with subsidiaries of UHS (for consolidated and unconsolidated investments), including one that commenced in October, 2025 for a building which we are constructing on the campus of the Alan B. Miller Medical Center in Palm Beach Gardens, Florida.
(L) During 2024, the tenant exercised their 5-year lease renewal option covering the period on February, 2025, to January, 2030. Other Information Included in our portfolio at December 31, 2024, are six hospital facilities leased to subsidiaries of UHS comprised of three acute care hospitals and three behavioral health care hospitals.
Other Information Included in our portfolio at December 31, 2025, are six hospital facilities leased to subsidiaries of UHS comprised of three acute care hospitals and three behavioral health care hospitals. The combined revenues generated from the leases on these hospitals comprised approximately 24%, 24% and 25% of our consolidated revenues during 2025, 2024 and 2023, respectively.
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”).
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 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.
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.
(E) Real estate assets owned by us or an LLC in which we hold 100% ownership interests and include tenants who are unaffiliated third parties. (F) This property was acquired during the third quarter of 2023 and is 100% master leased to McAllen Hospitals, L.P, a wholly-owned subsidiary of UHS.
(H) Real estate assets owned by an LLC or an LP in which we have a noncontrolling ownership interest and include tenants who are subsidiaries of UHS. (I) This property is leased to a joint venture between a wholly-owned subsidiary of UHS and Catholic Health Initiatives-Iowa, Corp. (J) Demolition of this facility was completed during 2023.
The triple-net master lease is for twelve years and is scheduled to expire on August 31, 2035. (G) The facility is vacant and being marketed. (H) Real estate assets owned by an LLC or an LP in which we have a noncontrolling ownership interest and include tenants who are subsidiaries of UHS.
(E) Real estate assets owned by us or an LLC in which we hold 100% ownership interests and include tenants who are unaffiliated third parties. (F) The building has been vacant since October 31, 2025 upon the expiration of the previous tenant's lease term and is being marketed. (G) The facility is vacant and being marketed.
(J) This property is leased to a joint venture between a wholly-owned subsidiary of UHS and Catholic Health Initiatives-Iowa, Corp. (K) Demolition of this facility was completed during 2023. We continue to market this vacant land. Please see Note 4 to the consolidated financial statements for further details surrounding this property.
We continue to market this vacant land. Please see Note 4 to the consolidated financial statements for further details surrounding this property. (K) The building has been vacant since May 31, 2025 upon the expiration of the previous tenant's lease term.
The master flex-lease agreement has a ten-year term scheduled to expire on March 31, 2033 and covers approximately 68% of the rentable square feet of the MOB, subject to reduction based upon the execution of third-party leases. The initial minimum rent pursuant to the master lease was $1.3 million annually, plus a pro-rata share of the common area maintenance expenses.
A wholly-owned subsidiary of UHS has executed a 10-year master flex lease agreement, which is subject to reduction based on the execution of third-party leases, for approximately 75% of the rentable square feet of the MOB.
In addition, possible repeal or replacement of the Legislation may have significant impact on the reimbursement for healthcare services. 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.
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.
(I) The MOB is located on the campus of the Northern Nevada Sierra Medical Center, an acute care hospital that is owned and operated by a wholly-owned subsidiary of UHS. In connection with this MOB, we entered into a ground lease and master flex-lease agreements with a wholly-owned subsidiary of UHS.
In October 2025, we entered into a ground lease with a wholly-owned subsidiary of UHS with the intent to develop, construct and own the real property of Palm Beach Gardens Medical Plaza I, an 80,000 square foot MOB located in Palm Beach Gardens, Florida.
Removed
The combined revenues generated from the leases on these hospitals comprised approximately 24%, 25% and 26% of our consolidated revenues during 2024, 2023 and 2022, respectively.
Added
Bell (E) Phoenix, AZ MOB 100% -- Lake Pointe Medical Arts Building (E) Rowlett, TX MOB 100% -- Forney Medical Plaza (E) Forney, TX MOB 100% -- Tuscan Professional Building (E) Irving, TX MOB 100% -- Dunwoody Building (K) Atlanta, GA MOB 100% -- PeaceHealth Medical Clinic (E) Bellingham, WA MOB 100% -- Forney Medical Plaza II (C) Forney, TX MOB 95% -- Northwest Texas Professional Office Tower (F) Amarillo, TX MOB 100% -- 5004 Poole Road MOB (A) Denison, TX MOB 100% -- Ward Eagle Office Village (E) Farmington Hills, MI MOB 100% -- The Northwest Med.
Removed
Additionally, the joint venture has rights of first offer to purchase the facility prior to any third-party sale.
Added
In November 2025, a new tenant executed a 15.3 year lease for the building which is scheduled to commence on August 1, 2026 (with expiration on December 1, 2041), pending completion of tenant improvements and issuance of certificate of occupancy.
Removed
The initial annual base rent is approximately $624,000. 4 During the first quarter of 2023, construction was substantially completed on Sierra Medical Plaza I, a multi-tenant MOB located in Reno, Nevada, consisting of approximately 86,000 rentable square feet.
Added
(L) In October 2025, we entered into a ground lease with a wholly-owned subsidiary of UHS with the intent to develop, construct and own Palm Beach Gardens Medical Plaza I, an 80,000 square foot MOB located in Palm Beach Gardens, Florida. Construction commenced in February, 2026, and is expected to be completed during the fourth quarter of 2026.
Removed
In addition, the number and quality of the physicians on a hospital’s staff are important factors in determining a hospital’s success and competitive advantage. Typically, physicians are responsible for making hospital admission decisions and for directing the course of patient treatment.
Added
The cost of the MOB is estimated to be approximately $34 million. A wholly-owned subsidiary of UHS has executed a 10-year master flex lease agreement, which is subject to reduction based on the execution of third-party leases, for approximately 75% of the rentable square feet of the MOB.
Removed
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.
Added
Construction of this MOB, for which we have engaged a wholly-owned subsidiary of UHS to act as project manager, commenced in February, 2026, and is scheduled to be completed during the fourth quarter of 2026. The cost of the MOB is estimated to be approximately $34 million. This MOB will be located on the campus of the Alan B.
Removed
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.
Added
Miller Medical Center, a newly constructed acute care hospital owned and operated by a wholly-owned subsidiary of UHS, which is scheduled to be completed and opened during the second quarter of 2026.
Removed
District Court Judge in Texas ruled the entire ACA is unconstitutional. 6 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.
Added
The remaining lease terms on the ground leases with subsidiaries of UHS range from approximately 24 years to approximately 76 years.
Removed
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.
Added
In addition, possible repeal or replacement of the Legislation may have significant impact on the reimbursement for healthcare services. 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.
Removed
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.
Added
That legislation also places limits on provider fees used to increase federal Medicaid funding to states.
Removed
Government appealed and on January 10, 2025, the U.S. Supreme Court agreed to hear the matter. Any future efforts to challenge, replace or replace the ACA or expand or substantially amend its provision is unknown.
Added
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%.
Added
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.
Added
House of Representatives passed H.R.1834 to extend for three years the enhanced premium tax credits ("EPTCs") that expired on December 31, 2025, which is currently undergoing review in the Senate. We cannot predict whether these subsidies will ultimately be adopted in federal fiscal year 2026.
Added
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.
Added
The Budget Control Act of 2011 imposed annual spending limits for most federal agencies and programs aimed at reducing budget deficits including Medicare payment reductions of up to 2% per fiscal year. Current legislation extended those cuts through 2032.
Added
We cannot predict whether Congress will restructure the implemented Medicare payment reductions or what other federal budget deficit 7 reduction initiatives may be proposed by Congress going forward. We also cannot predict the effect these enactments will have on the operators of our properties (including UHS), and thus, our business.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe impact of the Legislation on hospitals may vary. Initiatives to repeal the Legislation, in whole or in part, to delay elements of implementation or funding, and to offer amendments or supplements to modify its provisions have been persistent. The ultimate outcomes of legislative attempts to repeal or amend the Legislation and legal challenges to the Legislation are unknown.
Biggest changeInitiatives to repeal or modify the Legislation, in whole or in part, have been persistent. While President Trump did not campaign on repeal of the Legislation, executive and legislative efforts to eliminate or reduce the effect of certain Legislation provisions may yet occur.
Our IT systems, and the networks and information systems of third parties that we rely on, are subject to damage or interruption from power outages, facility damage, computer and telecommunications failures, computer viruses, security breaches including credit card or personally identifiable information breaches, vandalism, theft, natural disasters, catastrophic events, human error and potential cyber threats, including malicious codes, worms, phishing attacks, denial of service attacks, ransomware and other sophisticated cyber-attacks, and our disaster recovery planning cannot account for all eventualities.
Our IT systems, 19 and the networks and information systems of third parties that we rely on, are subject to damage or interruption from power outages, facility damage, computer and telecommunications failures, computer viruses, security breaches including credit card or personally identifiable information breaches, vandalism, theft, natural disasters, catastrophic events, human error and potential cyber threats, including malicious codes, worms, phishing attacks, denial of service attacks, ransomware and other sophisticated cyber-attacks, and our disaster recovery planning cannot account for all eventualities.
While Congress had previously revised the intent requirement of the Anti-Kickback Statute to provide that a person is not required to “have actual knowledge or specific intent to commit a violation of” the Anti-Kickback Statute in order to be found in violation of such law, the Legislation also provides that any claims for items or services that violate the Anti-Kickback Statute are also considered false claims for purposes of the federal civil False Claims 9 Act.
While Congress had previously revised the intent requirement of the Anti-Kickback Statute to provide that a person is not required to “have actual knowledge or specific intent to commit a violation of” the Anti-Kickback Statute in order to be found in violation of such law, the Legislation also provides that any claims for items or services that violate the Anti-Kickback Statute are also considered false claims for purposes of the federal civil False Claims Act.
If any of the lenders were unable to fulfill their future commitments, our liquidity could be impacted, which could have a material unfavorable impact on our results of operations and financial condition. The increase in interest rates has substantially increased our borrowing costs and reduced our ability to access the capital markets on favorable terms.
If any of the lenders were unable to fulfill their future 20 commitments, our liquidity could be impacted, which could have a material unfavorable impact on our results of operations and financial condition. The increase in interest rates has substantially increased our borrowing costs and reduced our ability to access the capital markets on favorable terms.
Additional risks and uncertainties that we are not aware of, or that we currently deem to be immaterial, could also impact our business and results of operations. The revenues and results of operations of the operators of our hospital facilities, including UHS, and our medical office buildings, are significantly affected by payments received from the government and other third-party payers.
Additional risks and uncertainties that we are not aware of, or that we currently deem to be immaterial, could also impact our business and results of operations. 11 The revenues and results of operations of the operators of our hospital facilities, including UHS, and our medical office buildings, are significantly affected by payments received from the government and other third-party payers.
On April 26, 2023, CMS announced updated enforcement processes that requires a shortened timeline for coming into compliance when a violation has been identified and the automatic imposition of a civil monetary penalties in certain circumstances of noncompliance. Failure to comply with these requirements may result in daily monetary penalties.
On April 26, 2023, CMS announced updated enforcement processes that requires a shortened timeline for coming into compliance when a violation has 13 been identified and the automatic imposition of a civil monetary penalties in certain circumstances of noncompliance. Failure to comply with these requirements may result in daily monetary penalties.
These filings are the sole responsibility of UHS and are not incorporated by reference herein. 11 Defending itself against the allegations in the lawsuits and governmental investigations, or similar matters and any related publicity, could potentially entail significant costs and could require significant attention from UHS management and UHS’ reputation could suffer significantly.
These filings are the sole responsibility of UHS and are not incorporated by reference herein. Defending itself against the allegations in the lawsuits and governmental investigations, or similar matters and any related publicity, could potentially entail significant costs and could require significant attention from UHS management and UHS’ reputation could suffer significantly.
Although we believe we have been qualified as a REIT since our inception, there can be no assurance that we have been so qualified or 14 will remain qualified in the future. Failure to qualify as a REIT may subject us to income tax liabilities, including federal income tax at regular corporate rates.
Although we believe we have been qualified as a REIT since our inception, there can be no assurance that we have been so qualified or will remain qualified in the future. Failure to qualify as a REIT may subject us to income tax liabilities, including federal income tax at regular corporate rates.
In order to protect us against the risk of losing our REIT status for federal income tax purposes, our declaration of trust permits our Trustees to redeem shares acquired or held in excess of 9.8% of the issued and outstanding shares of our voting stock and, which in the opinion of the Trustees, would jeopardize our REIT status.
In order to protect us against the risk of losing our REIT status for federal income tax purposes, our declaration of trust permits our Trustees to redeem shares acquired or held in excess of 9.8% of the issued and outstanding shares of our voting stock and, which in 21 the opinion of the Trustees, would jeopardize our REIT status.
Disputes may arise between us and UHS that we are unable to resolve or the resolution of these disputes may not be as favorable to us as a resolution we might achieve with a third party. We hold non-controlling equity ownership interests in various joint-ventures.
Disputes may arise between us and UHS that we are unable to resolve or the resolution of these disputes may not be as favorable to us as a resolution we might achieve with a third party. 16 We hold non-controlling equity ownership interests in various joint-ventures.
The loss of the services of one or more of our senior executives or of a significant portion of our 15 operators’ local hospital management personnel could significantly undermine our management expertise and our operators’ ability to provide efficient, quality health care services at our facilities, which could harm their business, and in turn, harm our business.
The loss of the services of one or more of our senior executives or of a significant portion of our operators’ local hospital management personnel could significantly undermine our management expertise and our operators’ ability to provide efficient, quality health care services at our facilities, which could harm their business, and in turn, harm our business.
There is a trend among private payers toward value-based purchasing of healthcare services, as well. Many large commercial payers require hospitals to report quality data, and several of these payers will not reimburse hospitals for certain preventable adverse 10 events.
There is a trend among private payers toward value-based purchasing of healthcare services, as well. Many large commercial payers require hospitals to report quality data, and several of these payers will not reimburse hospitals for certain preventable adverse events.
Our 8 hospital operators expect continued third-party efforts to aggressively manage reimbursement levels and cost controls. Reductions in reimbursement amounts received from third party payers could have a material adverse effect on the financial position and results of operations of our hospital operators.
Our hospital operators expect continued third-party efforts to aggressively manage reimbursement levels and cost controls. Reductions in reimbursement amounts received from third party payers could have a material adverse effect on the financial position and results of operations of our hospital operators.
Securing funds through these other non-operating means could adversely affect our financial condition and future results of operations. Complying with REIT requirements may cause us to forego otherwise attractive opportunities.
Securing funds through these other non-operating means could adversely affect our financial condition and future results of operations. 18 Complying with REIT requirements may cause us to forego otherwise attractive opportunities.
Pursuant to that decision, the federal government may not penalize states that choose not to participate in the Medicaid expansion program by reducing their existing Medicaid funding. Therefore, states can choose to accept or not to participate without risking the loss of federal Medicaid funding.
Pursuant to that decision, the federal government may not penalize states that choose not to participate in the 12 Medicaid expansion program by reducing their existing Medicaid funding. Therefore, states can choose to accept or not to participate without risking the loss of federal Medicaid funding.
Since UHS comprised approximately 40%, 41% and 40% of our consolidated revenues for the years ended December 31, 2024, 2023 and 2022, respectively, 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-K and 10-Q, as publicly filed with the Securities and Exchange Commission.
Since UHS comprised approximately 40%, 40% and 41% of our consolidated revenues for the years ended December 31, 2025, 2024 and 2023, respectively, 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-K and 10-Q, as publicly filed with the Securities and Exchange Commission.
If we were to sell our interests 13 or underlying property, we may not be able to redeploy the proceeds into assets at the same or greater return as we currently receive.
If we were to sell our interests or underlying property, we may not be able to redeploy the proceeds into assets at the same or greater return as we currently receive.
The Legislation provides that a healthcare provider that retains an overpayment in excess of 60 days is subject to the federal civil False Claims Act. The Legislation also expands the Recovery Audit Contractor program to Medicaid. These amendments also make it easier for severe fines and penalties to be imposed on healthcare providers that violate applicable laws and regulations.
The Legislation provides that a healthcare provider that retains an overpayment in excess of 60 days is subject to the federal civil False Claims Act. The Legislation also expanded the Recovery Audit Contractor program to Medicaid. These amendments also make it easier for severe fines and penalties to be imposed on healthcare providers that violate applicable laws and regulations.
In addition, as of December 31, 2024, subsidiaries of UHS leased six hospital facilities owned by us with current lease terms expiring at various times from 2026 to 2040. We cannot assure you that UHS will continue to satisfy its obligations to us or renew existing leases upon their scheduled maturity.
In addition, as of December 31, 2025, subsidiaries of UHS leased six hospital facilities owned by us with current lease terms expiring at various times from 2026 to 2040. We cannot assure you that UHS will continue to satisfy its obligations to us or renew existing leases upon their scheduled maturity.
Because many of these laws and regulations are relatively new, in many cases, our operators don’t have the benefit of regulatory or judicial interpretation.
Because many of these laws and regulations are relatively new, in 14 many cases, our operators don’t have the benefit of regulatory or judicial interpretation.
For the year ended December 31, 2024, 8% of our consolidated and unconsolidated revenues were generated by four jointly-owned LLCs/LPs in which we hold non-controlling equity ownership interests ranging from 33% to 95%. Our level of investment and lack of control exposes us to potential losses of our investments and revenues.
For the year ended December 31, 2025, 8% of our consolidated and unconsolidated revenues were generated by four jointly-owned LLCs/LPs in which we hold non-controlling equity ownership interests ranging from 33% to 95%. Our level of investment and lack of control exposes us to potential losses of our investments and revenues.
In contrast, since we are a REIT, our distributions to individual U.S. shareholders are not eligible for the reduced rates which apply to distributions from regular corporations, and thus may be subject to Federal income tax at a rate as high as 37% for 2024 (subject to certain additional taxes for certain taxpayers).
In contrast, since we are a REIT, our distributions to individual U.S. shareholders are not eligible for the reduced rates which apply to distributions from regular corporations, and thus may be subject to Federal income tax at a rate as high as 37% for 2025 (subject to certain additional taxes for certain taxpayers).
If UHS experiences financial difficulties, or otherwise fails to make payments to us, or elects not to renew the leases on our three acute care hospitals, our revenues could be materially reduced. For the year ended December 31, 2024, lease payments from UHS comprised approximately 40% of our consolidated revenues.
If UHS experiences financial difficulties, or otherwise fails to make payments to us, or elects not to renew the leases on our three acute care hospitals, our revenues could be materially reduced. For the year ended December 31, 2025, lease payments from UHS comprised approximately 40% of our consolidated revenues.
In general, dividends (qualified) paid by a U.S. corporation to individual U.S. shareholders are subject to Federal income tax at a maximum rate of 20% for 2024 (subject to certain additional taxes for certain taxpayers).
In general, dividends (qualified) paid by a U.S. corporation to individual U.S. shareholders are subject to Federal income tax at a maximum rate of 20% for 2025 (subject to certain additional taxes for certain taxpayers).
As part of the CAA, Congress passed legislation aimed at preventing or limiting patient balance billing in certain circumstances. The CAA addresses surprise medical bills stemming from emergency services, out-of-network ancillary providers at in-network facilities, and air ambulance carriers.
As part of the Consolidated Appropriations Act, 2021 (“CAA”), Congress passed legislation aimed at preventing or limiting patient balance billing in certain circumstances. The CAA addresses surprise medical bills stemming from emergency services, out-of-network ancillary providers at in-network facilities, and air ambulance carriers.
In February 2025, the U.S. government imposed or threatened to impose new tariffs on imported products from Mexico, Canada and China.
Beginning in February 2025, the U.S. government has imposed or has threatened to impose new tariffs on imported products from the European Union, Mexico, Canada and China.
Despite recent trade negotiations between the U.S. and the Mexican, Canadian and Chinese governments, given the uncertainty regarding the scope and duration of any new tariffs, as well as the potential for additional tariffs or trade barriers by the U.S., Mexico, Canada, China or other countries, we can provide no assurance that any strategies we implement to mitigate the impact of such tariffs or other trade actions will be successful.
Given the uncertainty regarding the scope and duration of any new tariffs, as well as the potential for additional tariffs or trade barriers by the U.S., the European Union, Mexico, Canada, China or other countries, we can provide no assurance that any strategies we implement to mitigate the impact of such tariffs or other trade actions will be successful.
As a result, many states, including Texas, have not expanded their Medicaid programs without the threat of loss of federal funding. The Centers for Medicare and Medicaid Services (“CMS”) had granted section 1115 demonstration waivers providing for work and community engagement requirements for certain Medicaid eligible individuals.
As a result, many states, including Texas, have not expanded their Medicaid programs without the threat of loss of federal funding. In the past, CMS has granted section 1115 demonstration waivers providing for work and community engagement requirements for certain Medicaid eligible individuals.
The Legislation also contained provisions aimed at reducing fraud and abuse in healthcare. The Legislation amended several existing laws, including the federal Anti-Kickback Statute and the False Claims Act, making it easier for government agencies and private plaintiffs to prevail in lawsuits brought against healthcare providers.
The Legislation amended several existing laws, including the federal Anti-Kickback Statute and the False Claims Act, making it easier for government agencies and private plaintiffs to prevail in lawsuits brought against healthcare providers.
Further, the purchase options and rights of first refusal granted to the respective lessees to purchase or lease the respective leased hospitals, after the expiration of the lease term, may adversely affect our ability to sell or lease a hospital, and may present a potential conflict of interest between us and UHS since the price and terms offered by a third-party are likely to be dependent, in part, upon the financial performance of the facility during the final years of the lease term.
Further, the purchase options and rights of first refusal granted to the respective lessees to purchase or lease the respective leased hospitals, after the expiration of the lease term, may adversely affect our ability to sell or lease a hospital, and may present a potential conflict of interest between us and UHS since the price and terms offered by a third-party are likely to be dependent, in part, upon the financial performance of the facility during the final years of the lease term. 17 Changes to U.S. and other countries’ trade policies and other factors beyond our control may adversely impact our business and operating results.
Such exemptions and support are not available to certain operators of our facilities, including UHS. In some markets, certain competing facilities may have greater financial resources, be better equipped and offer a broader range of services than those available at our facilities.
In some markets, certain competing facilities may have greater financial resources, be better equipped and offer a broader range of services than those available at our facilities.
The increase in outpatient treatment and diagnostic facilities, outpatient surgical centers and freestanding ambulatory surgical centers also increases competition for our operators. 12 In addition, the operators of our facilities face competition from other health care providers, including physician owned facilities and other competing facilities, including certain facilities operated by UHS but the real property of which is not owned by us.
In addition, the operators of our facilities face competition from other health care providers, including physician owned facilities and other competing facilities, including certain facilities operated by UHS but the real property of which is not owned by us.
Certain hospitals that are located in the areas served by our facilities are specialty hospitals that provide medical, surgical and behavioral health services that may not be provided by the operators of our hospitals.
Certain hospitals that are located in the areas served by our facilities are specialty hospitals that provide medical, surgical and behavioral health services that may not be provided by the operators of our hospitals. The increase in outpatient treatment and diagnostic facilities, outpatient surgical centers and freestanding ambulatory surgical centers also increases competition for our operators.
Risks Related to Business Operations Increased competition in the health care industry has resulted in lower revenues and higher costs for our operators, including UHS, and may affect our revenues, property values and lease renewal terms. The healthcare industry is highly competitive and competition among hospitals and other health care providers for patients and physicians has intensified in recent years.
Risks Related to Business Operations 15 Increased competition in the health care industry has resulted in lower revenues and higher costs for our operators, including UHS, and may affect our revenues, property values and lease renewal terms.
While to date no incident had a material impact on our operations or financial results, we cannot guarantee that material incidents will not occur in the future. 16 Risks Related to the Market Conditions and Liquidity Continuing inflationary pressures and a worsening of the economic and employment conditions in the United States could materially affect our business and future results of operations of the operators of our facilities which could, in turn, materially reduce our revenues and net income.
Risks Related to the Market Conditions and Liquidity Continuing inflationary pressures and a worsening of the economic and employment conditions in the United States could materially affect our business and future results of operations of the operators of our facilities which could, in turn, materially reduce our revenues and net income.
Conversely, certain facilities receive reduced reimbursement for failing to meet quality parameters; such hospitals will include those with excessive readmission or hospital-acquired condition rates. A 2012 U.S.
Conversely, certain facilities receive reduced reimbursement for failing to meet quality parameters; such hospitals will include those with excessive readmission or hospital-acquired condition rates. As a result of the 2024 federal elections and the Braidwood Management v. Becerra litigation currently before the U.S.
We could experience losses to the extent 17 that such damages exceed insurance coverage, cause an increase in insurance premiums, and/or a decrease in demand for properties located in such areas.
We could experience losses to the extent that such damages exceed insurance coverage, cause an increase in insurance premiums, and/or a decrease in demand for properties located in such areas. In the event that climate change causes such catastrophic weather or other natural events to increase broadly or in localized areas, such costs and damages could increase above historic expectations.
Although we continue to regularly review and enhance our IT systems and cybersecurity controls, we, UHS and our and their third-party provider have experienced, or may experience in the future, cybersecurity incidents.
Although we continue to regularly review and enhance our IT systems and cybersecurity controls, we, UHS and our and their third-party provider have experienced, or may experience in the future, cybersecurity incidents. While to date no incident had a material impact on our operations or financial results, we cannot guarantee that material incidents will not occur in the future.
The uncertainties of health care reform could materially affect the business and future results of operations of the operators of our facilities, including UHS, which could, in turn, materially reduce our revenues and net income. On March 23, 2010 President Obama signed the Legislation into law.
We cannot predict the effect these payment policies will have on our operators (including UHS), and, thus, our business. The uncertainties of health care reform could materially affect the business and future results of operations of the operators of our facilities, including UHS, which could, in turn, materially reduce our revenues and net income.
Legislation has already been enacted that has eliminated the penalty for failing to maintain health coverage that was part of the original Legislation.
The ultimate outcomes of legislative attempts to repeal or amend the Legislation and legal challenges to the Legislation are unknown. Legislation has already been enacted that has eliminated the penalty for failing to maintain health coverage that was an integral part of the original Legislation.
In most geographical areas in which our facilities are operated, there are other facilities that provide services comparable to those offered by our facilities. In addition, some competing facilities are owned by tax-supported governmental agencies or by nonprofit corporations and may be supported by endowments and charitable contributions and exempt from property, sales and income taxes.
In addition, some competing facilities are owned by tax-supported governmental agencies or by nonprofit corporations and may be supported by endowments and charitable contributions and exempt from property, sales and income taxes. Such exemptions and support are not available to certain operators of our facilities, including UHS.
Any significant reduction in federal Medicaid funding to states would likely result in reduced Medicaid payments to the operators of our facilities located in the impacted states, which in turn could have a material adverse effect on us. We cannot predict the effect these payment policies will have on our operators (including UHS), and, thus, our business.
There have been proposals to substantially decrease federal funding for state Medicaid Programs in Fiscal Year commencing October 2026. Any significant reduction in federal Medicaid funding to states would likely result in reduced Medicaid payments to the operators of our facilities located in the impacted states, which in turn could have a material adverse effect on us.
While the Biden Administration had generally expressed disfavor with Medicaid program work requirements, the previous Trump Administration’s section 1115 waiver policy emphasized work requirements, eligibility restrictions on Medicaid, and capped financing and the second Trump administration may, again, take a similar approach.
The previous Trump administration's section 1115 waiver policy emphasized work requirements, eligibility restrictions on Medicaid, and capped funding. The second Trump administration may, again, take a similar approach. The Legislation also contained provisions aimed at reducing fraud and abuse in healthcare.
The Healthcare and Education Reconciliation Act of 2010 (the “Reconciliation Act”), which contains a number of amendments to the Legislation, was signed into law on March 30, 2010. Two primary goals of the Legislation, combined with the Reconciliation Act (collectively referred to as the “Legislation”), are to provide for increased access to coverage for healthcare and to reduce healthcare-related expenses.
On March 23, 2010 President Obama signed the Legislation into law. Two primary goals of the Legislation are to provide for increased access to coverage for healthcare and to reduce healthcare-related expenses.
Beginning in April 2025 and continuing through 2027, the Medicaid disproportionate share hospital (“DSH”) allotment to the states from federal funds will be reduced. Such reductions have been delayed several times, most recently under the American Relief Act, 2025. During the reduction period, state Medicaid DSH allotments from federal funds will be reduced by $8 billion annually.
Beginning in federal fiscal year 2028, the Medicaid disproportionate share hospital (“DSH”) allotment to the states from federal funds will be reduced. During the reduction period, state Medicaid DSH allotments from federal funds will be reduced by $8 billion. Reductions are imposed on states based on percentage of uninsured individuals, Medicaid utilization and uncompensated care.
The legislation prohibits surprise billing when out-of-network emergency services or out-of-network services at an in-network facility are provided, unless informed consent is received. In these circumstances providers are prohibited from billing the patient for any amounts that exceed in-network cost-sharing requirements.
The legislation prohibits surprise billing when out-of-network emergency services or out-of-network services at an in-network facility are provided, unless informed consent is received. The law provides for a 30-day negotiation period for providers and payers to settle out-of-network claims. If no agreement is reached after this period, either party may opt for a binding independent dispute resolution (“IDR”) process.
Removed
Reductions are imposed on states based on percentage of uninsured individuals, Medicaid utilization and uncompensated care. There have been proposals to substantially decrease federal funding for state Medicaid Programs in Fiscal Year commencing October 2026.
Added
Supreme Court, it remains unclear what portions of that legislation may remain, or what any replacement or alternative programs may be created by future legislation. A 2012 U.S.
Removed
The various provisions in the Legislation that directly or indirectly affect Medicare and Medicaid reimbursement are scheduled to take effect over a number of years. The impact of the Legislation on healthcare providers will be subject to implementing regulations, interpretive guidance and possible future legislation or legal challenges.
Added
It remains unclear what portions of the Legislation may remain, or whether any replacement or alternative programs may be created by any future legislation. Any such future repeal or replacement may have significant impact on the reimbursement for healthcare services generally, and may create reimbursement for services competing with the services offered by the operators of our hospitals.
Removed
Certain Legislation provisions, such as that creating the Medicare Shared Savings Program create uncertainty in how healthcare may be reimbursed by federal programs in the future.
Added
Accordingly, there can be no assurance that the adoption of any future federal or state healthcare reform legislation will not have a negative financial impact on the operators of our hospitals, including their ability to compete with alternative healthcare services funded by such potential legislation, or for the operators of our hospitals to receive payment for services.
Removed
Thus, at this time, we cannot predict the impact of the Legislation on the future reimbursement of our hospital operators and we can provide no assurance that the Legislation will not have a material adverse effect on the future results of operations of the tenants/operators of our properties and, thus, our business.
Added
The Legislation and its implementation have been, and remain, politically controversial.
Removed
In addition, Congress has considered legislation that would, if enacted, in material part (i) eliminate the large employer mandates to obtain or provide health insurance coverage, respectively; (ii) permit insurers to impose a surcharge up to 30 percent on individuals who go uninsured for more than two months and then purchase coverage; (iii) provide tax credits towards the purchase of health insurance, with a phase-out of tax credits according to income level; (iv) expand health savings accounts; (v) impose a per capita cap on federal funding of state Medicaid programs, or, if elected by a state, transition federal funding to block grants, and; (vi) permit states to seek a waiver of certain federal requirements that would allow such state to define essential health benefits differently from federal standards and that would allow certain commercial health plans to take health status, including pre-existing conditions, into account in setting premiums.
Added
While attempts to repeal the entirety of the Legislation have not been successful to date, a key provision of the Legislation was repealed as part of the Tax Cuts and Jobs Act and on December 14, 2018, a Texas Federal District Court Judge declared the Legislation unconstitutional, reasoning that the individual mandate tax penalty was essential to and not severable from the remainder of the Legislation.
Removed
On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 (“ARPA”) into law. The ARPA extends eligibility for Legislation health insurance subsidies to people buying their own health coverage on the Marketplace who have household incomes above 400% of the federal poverty level.
Added
The case was appealed to the U.S. Supreme Court which ultimately held in California v. Texas that the plaintiffs lacked standing to challenge the Legislation’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 Legislation.
Removed
ARPA also increased the amount of financial assistance for people at lower incomes who were already eligible under the Legislation.
Added
On September 7, 2022, the same Texas Federal District Court judge, in the case of Braidwood Management v. Becerra , ruled that the requirement that certain health plans cover services with an “A” or “B” recommendation from the U.S. Preventive Services Task Force without cost sharing violates the Appointments Clause of the U.S.
Removed
The IRA also continued the expanded subsidies for individuals to obtain private health insurance under the Legislation through 2025. The effect of IRA on hospitals and the healthcare industry in general is not yet known.
Added
Constitution and that the coverage of certain HIV prevention medication violates the Religious Freedom Restoration Act. The matter was ultimately appealed before the U.S. Supreme Court, which in its June 2025 Kennedy v. Braidwood Management decision, opined in favor of HIV preventive care coverage. The impact of this decision on our operators and/ or us cannot be predicted.
Removed
HHS, the Department of Labor and the Department of the Treasury issued interim final rules, that begin to implement this legislation. The rule would limit health care providers' ability to receive payment for services at usually higher out-of-network rates in certain circumstances and prohibit out-of-network payments in other circumstances.
Added
The IRA also continued certain subsidies for individuals to obtain private health insurance under the Legislation through 2025. These enhanced subsidies expired on December 31, 2025. The Trump administration has already taken steps to undo certain Biden-era executive orders, including those intended to lower drug costs for beneficiaries, and to freeze funding for federal programs.
Removed
The trend toward value-based purchasing may negatively impact the revenues of our hospital operators.
Added
While the administration’s initial freeze has since been rescinded, the administration is likely to make other attempts to reduce federal program expenditures and can generally be expected to oppose increases in ACA and Medicaid enrollment.
Removed
Our business is subject to evolving corporate governance and public disclosure regulations and expectations, including with respect to environmental, social and governance (“ESG”) matters, that could expose us to numerous risks.
Added
CMS regulations and guidance implementing the IDR process has been subject to a significant amount of provider-initiated litigation. As a result, portions of those regulations and guidance materials have been vacated by a federal district court, causing CMS to, on several occasions, pause and resume IDR process operations, causing significant delay in the processing of claims.
Removed
Recently, there has been growing concern from advocacy groups, government agencies and the general public on ESG matters and increasingly regulators, customers, investors, employees and other stakeholders are focusing on ESG matters and related disclosures.
Added
Additionally, arguments made by the plaintiffs in such litigation have included allegations that CMS’s regulations and guidance materials are favorable to payers. For these reasons, there can be no assurances that we will receive timely payments in connection with this process. The trend toward value-based purchasing may negatively impact the revenues of our hospital operators.
Removed
Such governmental, investor and societal attention to ESG matters, including expanding mandatory and voluntary reporting, diligence, and disclosure on topics such as climate change, human capital, labor and risk oversight, could expand the nature, scope, and complexity of matters that we are required to manage, assess and report. We also face climate-and ESG-related business trends.
Added
The healthcare industry is highly competitive and competition among hospitals and other health care providers for patients and physicians has intensified in recent years. In most geographical areas in which our facilities are operated, there are other facilities that provide services comparable to those offered by our facilities.
Removed
Investors are increasingly taking into account ESG factors, including climate risks, diversity, equity and inclusion policies, and corporate governance in determining whether to invest in companies.
Removed
Additionally, our reputation and investor relationships could be damaged as a result of our involvement with certain industries or assets associated with activities perceived to be causing or exacerbating climate change, or other ESG-related issues, as well as any decisions we make to continue to conduct or change our activities in response to considerations relating to climate change or other ESG-related issues.
Removed
Conversely, if we avoid involvement with such industries or activities, we may limit our capital deployment opportunities to an extent that adversely affects our business.
Removed
Changes to U.S. and other countries’ trade policies and other factors beyond our control may adversely impact our business and operating results.
Removed
In the event that climate change causes such catastrophic weather or other natural events to increase broadly or in localized areas, such costs and damages could increase above historic expectations.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

11 edited+2 added−0 removed10 unchanged
Biggest changeRegularly, UHS conducts tabletop exercises to simulate responses to an incident and implement any insight gained from those exercises to improve recovery practices. As part of these processes, UHS regularly engages with assessors, consultants, auditors, and other third parties to review UHS’ cybersecurity program to help identify areas for continued focus, improvement, and compliance.
Biggest changeAs part of these processes, UHS regularly engages with assessors, consultants, auditors, and other third parties to review UHS' cybersecurity program to help identify areas for continued focus, improvement, and compliance. UHS maintains a cybersecurity insurance policy that provides coverage for losses sustained from cybersecurity incidents.
Based on the information available as of the date of this Form 10-K, during our fiscal year 2024 and through the date of this filing, we did not identify any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us , including our business strategy, results of operations or financial condition.
Based on the information available as of the date of this Form 10-K, during our fiscal year 2025 and through the date of this filing, we did not identify any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us , including our business strategy, results of operations or financial condition.
Such risks include operational, intellectual property theft, fraud, risks that have potential unfavorable impacts on our employees and/or patients, and violation of data privacy or security laws. To address cybersecurity risks facing UHS, and in turn us, to the degree applicable, UHS has adopted a “continuous risk assessment” process.
Such risks include operational, intellectual property theft, fraud, risks that have potential unfavorable impacts on employees and/or patients, and violation of data privacy or security laws. To address cybersecurity risks facing UHS, and in turn us, to the degree applicable, UHS has adopted a risk-informed and continuously evolving assessment process.
UHS also has a mature incident response process in place in the event a cybersecurity incident occurs. This process defines roles, responsibilities and action plans designed to contain and eradicate the issue, and then restore systems in the event of a major disruption.
UHS has a mature incident response and recovery program in place in the event a cybersecurity incident occurs. This program defines roles, responsibilities and action plans designed to contain and eradicate the issue and then restore systems, in the event of a major disruption, in a timely manner.
Given the critical nature of this information, certain cybersecurity risk management programs were implemented to assess, identify, and manage risks associated with cybersecurity threats as identified in Item 106(a) of Regulation S-K. UHS has a multi-tier risk management structure that includes regular reviews of laws, policies, vulnerabilities, and resource levels to address risks facing our organization.
Given the critical nature of this information, certain cybersecurity risk management programs were implemented to assess, identify, and manage risks associated with cybersecurity threats as identified in Item 106(a) of Regulation S-K. UHS has a multi-tier risk management structure that includes ongoing evaluation of applicable laws and regulations, internal policies and standards, technical vulnerabilities, threat intelligence, and resource adequacy.
UHS maintains a cybersecurity insurance policy that provides coverage in connection with cybersecurity incidents. However, costs and damages associated with cybersecurity incidents may not be fully insured under our insurance policy, and (to the extent otherwise covered) are subject to applicable deductibles.
However, costs and damages associated with cybersecurity incidents may not be fully insured under the commercial policy, and (to the extent otherwise covered) are subject to applicable deductibles and limitations.
Likewise, annual penetration tests occur to review the efficacy of technical controls, results which are reviewed by management of UHS and resolved in a timely manner. Other factors that feed into UHS' risk management practices are also operational events and incidents, which can lead to controls being reviewed and enhanced.
Likewise, annual penetration tests occur to review the efficacy of technical controls, results which are reviewed by management of UHS and resolved in a timely manner.
These individuals monitor the prevention, 19 mitigation, detection and remediation of cybersecurity incidents through their management of, and participation in, the cybersecurity risk management and strategy processes described above, including the operation of our incident response plan. 20
They are responsible for monitoring the prevention, detection, mitigation, and remediation of cybersecurity risks and incidents through their management of, and participation in, the cybersecurity risk management and strategy processes described above, including oversight of our incident response and recovery capabilities. 23
Risk Factors.” Governance of Cybersecurity The Audit Committee of our Board of Trustees is responsible for the oversight of risks from cybersecurity threats. Members of the Audit Committee receive updates, as warranted, regarding matters of cybersecurity, including review of significant issues encountered by us, UHS or our third-party managers.
Risk Factors.” Governance of Cybersecurity The Audit Committee of our Board of Trustees is responsible for the oversight of risks from cybersecurity threats. Members of the Audit Committee receive annual updates, and if and as warranted otherwise, regarding cybersecurity matters such as the evolving threat landscape, significant risks, incidents, control maturity, and progress against key cybersecurity initiatives.
UHS, through a third party, conducts a bi-annual National Institute of Technology-Cyber Security Framework assessment to determine the maturity of its program and related controls. The results of that assessment are shared with management of UHS, which drives prioritization and investment in resources to address those risks.
UHS engages a third party to conduct a bi-annual National Institute of Technology-Cyber Security Framework assessment to determine the effectiveness of their program and related controls. The results of that assessment are reviewed by UHS' management and used to formulate prioritization of remediation efforts, strategic initiatives, and cybersecurity investments.
UHS' cybersecurity risk management and strategy processes are overseen by leaders from their Information Security, Compliance, Legal and Internal Auditing teams. Such individuals have an average of over 20 years of prior work experience in various roles involving information technology, including security, auditing, compliance, systems and programming.
UHS' cybersecurity risk management and strategy processes are overseen by its Chief Information Security Officer along with leaders from our information security, compliance, legal and internal auditing teams . These leaders collectively possess substantial experience across information security, healthcare compliance, risk management, audit, and technology operations.
Added
Other factors that feed into UHS' risk management practices are also operational events and incidents, which can lead to controls being reviewed and enhanced. 22 UHS' risk management practices also incorporate lessons learned from operational events, cybersecurity incidents, near misses, and changes in the external threat landscape, including emerging risks associated with ransomware, supply-chain dependencies, and the increasing use of artificial intelligence by threat actors.
Added
UHS' response planning emphasizes resilience and the ability to maintain critical operations, including clinical and patient-facing services, during and following a cybersecurity event. UHS regularly conduct tabletop exercises to simulate responses to an incident and implement any insight gained from those exercises to improve recovery practices.

Item 2. Properties

Properties — owned and leased real estate

32 edited+2 added−8 removed15 unchanged
Biggest changeTenaya Way 44,894 0 % 0 % 0 % 0 % 0 % 100 % 0 % 2700 Fire Mesa 44,424 0 % 0 % 0 % 100 % 0 % 0 % 0 % Southern Crescent Center I (a.) 41,897 49 % 30 % 16 % 0 % 5 % 0 % 0 % BRB Medical Office Building 40,733 27 % 3 % 35 % 0 % 17 % 18 % 0 % Cypresswood Professional Center - 8101 10,200 0 % 0 % 0 % 0 % 0 % 0 % 100 % Cypresswood Professional Center - 8111 29,882 51 % 6 % 43 % 0 % 0 % 0 % 0 % Danbury Medical Plaza 36,141 40 % 0 % 54 % 0 % 0 % 6 % 0 % The Sparks Medical Building (c.) 35,127 0 % 21 % 13 % 36 % 11 % 0 % 19 % Phoenix Children’s East Valley Care Center 30,960 0 % 0 % 0 % 0 % 0 % 0 % 100 % Forney Medical Plaza II 30,507 18 % 9 % 17 % 25 % 31 % 0 % 0 % Madison Station MOB (a.) 30,096 7 % 34 % 0 % 33 % 26 % 0 % 0 % Apache Junction Medical Plaza (c.) 26,901 9 % 13 % 35 % 0 % 0 % 0 % 43 % Santa Fe Professional Plaza (b.) 24,832 7 % 28 % 20 % 14 % 31 % 0 % 0 % Professional Bldg at King's Crossing - Bldg A 11,528 100 % 0 % 0 % 0 % 0 % 0 % 0 % Professional Bldg at King's Crossing - Bldg B (a.) 12,790 11 % 30 % 0 % 0 % 18 % 21 % 20 % 140 Thomas Johnson Drive 20,465 0 % 0 % 0 % 0 % 15 % 0 % 85 % Emory at Dunwoody Building (e.) 20,366 0 % 100 % 0 % 0 % 0 % 0 % 0 % Piedmont - Roswell Physicians Center 19,927 0 % 0 % 0 % 0 % 0 % 0 % 100 % Bellin Health Family Medical Center 18,600 0 % 0 % 100 % 0 % 0 % 0 % 0 % 24 Beaumont Heart & Vascular 17,621 0 % 0 % 100 % 0 % 0 % 0 % 0 % Piedmont - Vinings Physicians Center 16,790 0 % 0 % 0 % 0 % 0 % 0 % 100 % Ward Eagle Office Village 16,282 0 % 7 % 0 % 0 % 93 % 0 % 0 % Haas Medical Office Park (d.) 15,850 0 % 100 % 0 % 0 % 0 % 0 % 0 % Health Center at Hamburg (a.) 15,400 0 % 100 % 0 % 0 % 0 % 0 % 0 % Northwest Medical Center at Sugar Creek 13,696 0 % 0 % 0 % 0 % 38 % 62 % 0 % Family Doctor's MOB 12,050 0 % 0 % 100 % 0 % 0 % 0 % 0 % Beaumont Sleep Center 11,556 0 % 0 % 0 % 100 % 0 % 0 % 0 % 701 South Tonopah Building 10,747 0 % 0 % 0 % 100 % 0 % 0 % 0 % Sand Point MOB 9,128 0 % 0 % 0 % 0 % 0 % 0 % 100 % 5004 Pool Road MOB 4,400 0 % 0 % 0 % 100 % 0 % 0 % 0 % Preschool and Childcare Centers: Chesterbrook Academy - New Britain 8,402 0 % 0 % 0 % 0 % 0 % 0 % 100 % Chesterbrook Academy - Audubon 8,300 0 % 0 % 0 % 0 % 0 % 0 % 100 % Chesterbrook Academy - Newtown 8,163 0 % 0 % 0 % 0 % 0 % 0 % 100 % Chesterbrook Academy - Uwchlan (g.) 8,163 0 % 100 % 0 % 0 % 0 % 0 % 0 % Ambulatory Care Centers: Hanover Emergency Center 22,000 0 % 0 % 0 % 0 % 0 % 100 % 0 % South Texas ER at Mission 13,578 0 % 0 % 0 % 0 % 0 % 0 % 100 % South Texas ER at Weslaco 13,578 0 % 0 % 0 % 0 % 0 % 0 % 100 % Las Palmas Del Sol Emergency Center-West 9,395 0 % 0 % 100 % 0 % 0 % 0 % 0 % Sub-total Other Investments 2,963,245 16 % 13 % 13 % 14 % 6 % 11 % 27 % Total 4,155,288 13 % 9 % 24 % 10 % 4 % 8 % 32 % (a) The estimated market rates related to the 2025 expiring RSF are greater than the lease rates on the expiring leases by approximately 0% to 4%.
Biggest changeTenaya Way 44,894 0 % 0 % 0 % 0 % 100 % 0 % 0 % 2700 Fire Mesa 44,424 0 % 0 % 100 % 0 % 0 % 0 % 0 % Southern Crescent Center I (a.) 41,897 37 % 16 % 21 % 5 % 0 % 0 % 21 % BRB Medical Office Building (a.) 40,733 30 % 35 % 0 % 19 % 16 % 0 % 0 % Cypresswood Professional Center - 8101 10,200 0 % 0 % 0 % 0 % 0 % 0 % 100 % Cypresswood Professional Center - 8111 (a.) 29,882 51 % 44 % 0 % 0 % 0 % 0 % 5 % Danbury Medical Plaza 36,141 30 % 0 % 54 % 0 % 7 % 0 % 9 % The Sparks Medical Building (a.) 35,127 0 % 17 % 36 % 11 % 0 % 36 % 0 % Phoenix Children’s East Valley Care Center 30,960 0 % 0 % 0 % 0 % 0 % 0 % 100 % Forney Medical Plaza II (a.) 30,507 12 % 17 % 25 % 19 % 0 % 9 % 18 % Madison Station MOB 30,096 18 % 0 % 33 % 49 % 0 % 0 % 0 % Apache Junction Medical Plaza (a.) 26,901 18 % 13 % 0 % 4 % 0 % 9 % 56 % Santa Fe Professional Plaza (b.) 24,832 18 % 20 % 14 % 48 % 0 % 0 % 0 % Professional Bldg at King's Crossing - Bldg A 11,528 70 % 0 % 0 % 0 % 0 % 0 % 30 % Professional Bldg at King's Crossing - Bldg B (a.) 12,790 11 % 11 % 0 % 18 % 21 % 0 % 39 % 140 Thomas Johnson Drive 20,465 0 % 0 % 0 % 15 % 0 % 13 % 72 % Dunwoody Building 20,366 0 % 0 % 0 % 0 % 0 % 0 % 100 % Piedmont - Roswell Physicians Center 19,927 0 % 0 % 0 % 0 % 0 % 100 % 0 % Bellin Health Family Medical Center (b.) 18,600 0 % 100 % 0 % 0 % 0 % 0 % 0 % 28 Beaumont Heart & Vascular (a.) 17,621 0 % 100 % 0 % 0 % 0 % 0 % 0 % Piedmont - Vinings Physicians Center 16,790 0 % 0 % 0 % 0 % 0 % 100 % 0 % Ward Eagle Office Village 16,282 0 % 0 % 0 % 93 % 0 % 0 % 7 % Haas Medical Office Park 15,850 0 % 0 % 0 % 0 % 0 % 100 % 0 % Health Center at Hamburg 15,400 0 % 0 % 0 % 0 % 0 % 100 % 0 % Northwest Medical Center at Sugar Creek 13,696 0 % 0 % 0 % 38 % 62 % 0 % 0 % Family Doctor's MOB (a.) 12,050 0 % 100 % 0 % 0 % 0 % 0 % 0 % Beaumont Sleep Center 11,556 0 % 0 % 100 % 0 % 0 % 0 % 0 % 701 South Tonopah Building 10,747 0 % 0 % 100 % 0 % 0 % 0 % 0 % Sand Point MOB 9,128 0 % 0 % 0 % 0 % 0 % 0 % 100 % 5004 Pool Road MOB 4,400 0 % 0 % 100 % 0 % 0 % 0 % 0 % Preschool and Childcare Centers: Chesterbrook Academy - New Britain 8,402 0 % 0 % 0 % 0 % 0 % 0 % 100 % Chesterbrook Academy - Audubon 8,300 0 % 0 % 0 % 0 % 0 % 100 % 0 % Chesterbrook Academy - Newtown 8,163 0 % 0 % 0 % 0 % 0 % 0 % 100 % 101 Tanner Drive 8,163 100 % 0 % 0 % 0 % 0 % 0 % 0 % Ambulatory Care Centers: Hanover Emergency Center 22,000 0 % 0 % 0 % 0 % 100 % 0 % 0 % South Texas ER at Mission 13,578 0 % 0 % 0 % 0 % 0 % 100 % 0 % South Texas ER at Weslaco 13,578 0 % 0 % 0 % 0 % 0 % 100 % 0 % Las Palmas Del Sol Emergency Center-West 9,395 0 % 100 % 0 % 0 % 0 % 0 % 0 % Sub-total Other Investments 2,963,124 20 % 12 % 15 % 7 % 11 % 12 % 23 % Total 4,155,167 16 % 24 % 10 % 5 % 8 % 9 % 28 % (a) The estimated market rates related to the 2026 expiring RSF are greater than the lease rates on the expiring leases by approximately 0% to 4%.
However, since we did not acquire the property associated with the additional 80-beds, the hospital’s base rental remained unchanged and the additional beds are not included in the number of available beds reflected above.
Since we did not acquire the property associated with the additional 80-beds, the hospital’s base rental remained unchanged and the additional beds are not included in the number of available beds reflected above.
The real property of these two FEDs was purchased by us and leased back to STHS. As of December 31, 2024, UHS owns and operates several other FEDs that operate under the STHS license, the real property of which is not owned by us.
The real property of these two FEDs was purchased by us and leased back to STHS. As of December 31, 2025, UHS owns and operates several other FEDs that operate under the STHS license, the real property of which is not owned by us.
Set forth below is information detailing the rentable square feet (“RSF”) associated with each of our properties as of December 31, 2024 and the percentage of RSF on which leases expire during the next five years and thereafter.
Set forth below is information detailing the rentable square feet (“RSF”) associated with each of our properties as of December 31, 2025 and the percentage of RSF on which leases expire during the next five years and thereafter.
These amounts include the data related to the unconsolidated LLCs/LPs in which we hold various non-controlling ownership interests at December 31, 2024 and also include the bonus rentals earned on the UHS hospital facilities.
These amounts include the data related to the unconsolidated LLCs/LPs in which we hold various non-controlling ownership interests at December 31, 2025 and also include the bonus rentals earned on the UHS hospital facilities.
(1) Average occupancy rate for the hospital facilities is based on the average number of available beds occupied during each of the five years ended December 31, 2024. Average available beds is the number of beds which are actually in service at any given time for immediate patient use with the necessary equipment and staff available for patient care.
(1) Average occupancy rate for the hospital facilities is based on the average number of available beds occupied during each of the five years ended December 31, 2025. Average available beds is the number of beds which are actually in service at any given time for immediate 25 patient use with the necessary equipment and staff available for patient care.
During 2024, none of the properties generated revenues that were equal to or greater than 10% of our consolidated revenues. Additionally, none of the properties had net book values greater than 10% of our consolidated assets as of December 31, 2024.
During 2025, none of the properties generated revenues that were equal to or greater than 10% of our consolidated revenues. Additionally, none of the properties had net book values greater than 10% of our consolidated assets as of December 31, 2025.
(2) The percentages of annual rentals reflected above were calculated based upon the annual rentals of the applicable expiring leases (as reflected above) divided by the total annual rentals of all expiring leases in the next ten years and thereafter (as reflected above). 26
(2) The percentages of annual rentals reflected above were calculated based upon the annual rentals of the applicable expiring leases (as reflected above) divided by the total annual rentals of all expiring leases in the next ten years and thereafter (as reflected above). 30
(b) The estimated market rates related to the 2025 expiring RSF are greater than the lease rates on the expiring leases by approximately 5% to 12%. (c) The estimated market rates related to the 2025 expiring RSF are less than the lease rates on the expiring leases by approximately 1% to 5%.
(b) The estimated market rates related to the 2026 expiring RSF are greater than the lease rates on the expiring leases by approximately 5% to 12%. (c) The estimated market rates related to the 2026 expiring RSF are less than the lease rates on the expiring leases by approximately 1% to 5%.
None of our unconsolidated LLCs had revenues (including 100% of the revenues generated at the properties owned by our unconsolidated LLCs) greater than 10% of the combined consolidated and unconsolidated revenues during 2024.
None of our unconsolidated LLCs had revenues (including 100% of the revenues generated at the properties owned by our unconsolidated LLCs) greater than 10% of the combined consolidated and unconsolidated revenues during 2025.
The estimated average occupied square footage for 2024 was calculated by averaging the unavailable rentable square footage on January 1, 2024 and January 1, 2025. The estimated average occupied square footage for 2023 was calculated by averaging the unavailable rentable square footage on January 1, 2023 and January 1, 2024.
The estimated average occupied square footage for 2025 was calculated by averaging the unavailable rentable square footage on January 1, 2025 and January 1, 2026. The estimated average occupied square footage for 2024 was calculated by averaging the unavailable rentable square footage on January 1, 2024 and January 1, 2025.
Leasing Trends at Our Significant Medical Office Buildings During 2024, we had a total of 58 new or renewed leases related to the medical office buildings indicated above, in which we have significant investments, some of which are accounted for by the equity method.
Leasing Trends at Our Significant Medical Office Buildings During 2025, we had a total of 62 new or renewed leases related to the medical office buildings indicated above, in which we have significant investments, some of which are accounted for by the equity method.
In connection with lease renewals executed during 2024, the weighted-average rental rates, as compared to rental rates on the expired leases, increased by approximately 3% during 2024. The weighted-average tenant improvement costs associated with these new or renewed leases was approximately $7 per square foot during 2024.
In connection with lease renewals executed during 2025, the weighted-average rental rates, as compared to rental rates on the expired leases, increased by approximately 3% during 2025. The weighted-average tenant improvement costs associated with these new or renewed leases was approximately $16 per square foot during 2025.
None of the properties had book values (including 100% of the book values of the properties owned by our unconsolidated LLCs) greater than 10% of the consolidated and unconsolidated assets. 25 The following table sets forth lease expirations for each of the next ten years for our properties as of December 31, 2024.
None of the properties had book values (including 100% of the book values of the properties owned by our unconsolidated LLCs) greater than 10% of the consolidated and unconsolidated assets. 29 The following table sets forth lease expirations for each of the next ten years for our properties as of December 31, 2025.
On a combined basis, based upon the aggregate revenues and square footage for the occupied hospital facilities owned as of December 31, 2024 and 2023, the average effective annual rental per square foot was $21.55 and $21.43, respectively.
On a combined basis, based upon the aggregate revenues and square footage for the occupied hospital facilities owned as of December 31, 2025 and 2024, the average effective annual rental per square foot was $21.91 and $21.55, respectively.
The average aggregate value of the tenant concessions, generally consisting of rent abatements, provided in connection with new and renewed leases commencing during 2024 was approximately 0.3% of the future aggregate base rental revenue over the lease terms.
The average aggregate value of the tenant concessions, generally consisting of rent abatements, provided in connection with new and renewed leases commencing during 2025 was approximately 0.4% of the future aggregate base rental revenue over the lease terms.
On a combined basis, based upon the aggregate consolidated and unconsolidated revenues and estimated average occupied square footage for all of our occupied properties owned as of December 31, 2024 and 2023, the average effective annual rental per square foot was $30.03 and $29.21, respectively.
On a combined basis, based upon the aggregate consolidated and unconsolidated revenues and estimated average occupied square footage for all of our occupied properties owned as of December 31, 2025 and 2024, the average effective annual rental per square foot was $30.61 and $30.03, respectively.
The weighted-average leasing commissions on the new and renewed leases commencing during 2024 was approximately 3% of base rental revenue over the term of the leases.
The weighted-average leasing commissions on the new and renewed leases commencing during 2025 was approximately 3% of base rental revenue 26 over the term of the leases.
Bell 80,200 40 % 8 % 5 % 21 % 4 % 0 % 22 % Henderson Union Village MOB 79,599 27 % 0 % 3 % 34 % 3 % 0 % 33 % McAllen Doctor's Center 79,497 0 % 0 % 0 % 0 % 0 % 0 % 100 % Summerlin Hospital Medical Office Building III 77,713 24 % 0 % 2 % 34 % 18 % 7 % 15 % Texoma Medical Plaza II 74,921 39 % 0 % 0 % 0 % 0 % 0 % 61 % Mid Coast Hospital MOB 74,629 0 % 0 % 100 % 0 % 0 % 0 % 0 % North West Texas Professional Office Tower (f.) 72,351 0 % 100 % 0 % 0 % 0 % 0 % 0 % Rosenberg Children's Medical Plaza 66,231 0 % 0 % 6 % 0 % 24 % 0 % 70 % Frederick Crestwood MOB 62,297 0 % 0 % 42 % 0 % 0 % 0 % 58 % Palmdale Medical Plaza 59,405 39 % 5 % 8 % 10 % 9 % 9 % 20 % Sierra San Antonio Medical Plaza 59,160 9 % 5 % 6 % 2 % 0 % 7 % 71 % Spring Valley Medical Office Building (a.) 57,828 16 % 20 % 16 % 25 % 5 % 13 % 5 % Spring Valley Medical Office Building II 57,364 5 % 0 % 17 % 22 % 20 % 7 % 29 % Southern Crescent Center II (a.) 53,680 46 % 39 % 0 % 0 % 0 % 0 % 15 % Desert Valley Medical Center (b.) 53,625 10 % 25 % 0 % 5 % 13 % 5 % 42 % Tuscan Professional Building 53,231 56 % 7 % 0 % 20 % 0 % 0 % 17 % Lake Pointe Medical Arts Building (a.) 50,974 8 % 35 % 18 % 10 % 0 % 6 % 23 % Forney Medical Plaza 50,947 10 % 5 % 21 % 5 % 24 % 31 % 4 % Vista Medical Terrace 50,921 65 % 4 % 0 % 14 % 9 % 0 % 8 % 2704 N.
Bell 80,200 45 % 7 % 23 % 4 % 0 % 10 % 11 % Henderson Union Village MOB 79,599 27 % 3 % 34 % 3 % 0 % 17 % 16 % McAllen Doctor's Center 79,497 0 % 0 % 0 % 0 % 0 % 0 % 100 % Summerlin Hospital Medical Office Building III 77,713 18 % 0 % 34 % 18 % 7 % 0 % 23 % Texoma Medical Plaza II 74,921 39 % 0 % 0 % 0 % 0 % 8 % 53 % Mid Coast Hospital MOB (a.) 74,629 0 % 100 % 0 % 0 % 0 % 0 % 0 % North West Texas Professional Office Tower 72,351 100 % 0 % 0 % 0 % 0 % 0 % 0 % Rosenberg Children's Medical Plaza 66,231 0 % 6 % 0 % 24 % 0 % 0 % 70 % Frederick Crestwood MOB (a.) 62,297 0 % 42 % 0 % 0 % 0 % 58 % 0 % Palmdale Medical Plaza (b.) 59,405 27 % 12 % 10 % 9 % 9 % 8 % 25 % Sierra San Antonio Medical Plaza (b.) 59,160 5 % 11 % 2 % 0 % 7 % 5 % 70 % Spring Valley Medical Office Building (a.) 57,828 23 % 11 % 25 % 5 % 13 % 4 % 19 % Spring Valley Medical Office Building II (c.) 57,364 5 % 17 % 22 % 20 % 7 % 19 % 10 % Southern Crescent Center II 53,680 85 % 0 % 0 % 0 % 0 % 15 % 0 % Desert Valley Medical Center 53,625 18 % 3 % 1 % 16 % 0 % 48 % 14 % Tuscan Professional Building 53,231 61 % 0 % 20 % 2 % 0 % 10 % 7 % Lake Pointe Medical Arts Building (a.) 50,974 12 % 12 % 10 % 25 % 6 % 12 % 23 % Forney Medical Plaza 50,947 4 % 0 % 5 % 24 % 31 % 1 % 35 % Vista Medical Terrace 50,921 65 % 4 % 14 % 9 % 0 % 8 % 0 % 2704 N.
On a combined basis, based upon the aggregate consolidated and unconsolidated revenues and the estimated average occupied square footage for our MOBs, FEDs and childcare centers owned as of December 31, 2024 and 2023, the average effective annual rental per square foot was $33.73 and $32.59, respectively.
On a combined basis, based upon the aggregate consolidated and unconsolidated revenues and the estimated average occupied square footage for our MOBs, FEDs and childcare centers owned as of December 31, 2025 and 2024, the average effective annual rental per square foot was $34.51 and $33.73, respectively.
For the MOBs that have scheduled lease expirations during 2025 of 10% or greater (of RSF), if any, we have included information regarding estimated market rates relative to lease rates on the expiring leases. 23 Percentage of RSF with lease expirations Total RSF Available for Lease Jan. 1, 2025 2025 2026 2027 2028 2029 2030 and Later Hospital Investments: McAllen Medical Center 422,276 0 % 0 % 100 % 0 % 0 % 0 % 0 % Aiken Regional Medical Center/Aurora Pavilion Behavioral Health Services 346,000 0 % 0 % 0 % 0 % 0 % 0 % 100 % Wellington Regional Medical Center 196,489 0 % 0 % 100 % 0 % 0 % 0 % 0 % Clive Behavioral Health 82,138 0 % 0 % 0 % 0 % 0 % 0 % 100 % Canyon Creek Behavioral Health 67,700 0 % 0 % 0 % 0 % 0 % 0 % 100 % Sub-total Hospitals 1,114,603 0 % 0 % 56 % 0 % 0 % 0 % 44 % Specialty Facility: Evansville Facility 77,440 100 % 0 % 0 % 0 % 0 % 0 % 0 % Medical Office Buildings: Goldshadow - 2010 - 2020 Goldring MOB's (a.) 74,868 2 % 10 % 16 % 23 % 0 % 3 % 46 % Goldshadow - 700 Shadow Lane MOB (a.) 42,060 28 % 34 % 18 % 20 % 0 % 0 % 0 % Texoma Medical Plaza 115,284 3 % 8 % 3 % 11 % 9 % 14 % 52 % St.
For the MOBs that have scheduled lease expirations during 2026 of 10% or greater (of RSF), if any, we have included information regarding estimated market rates relative to lease rates on the expiring leases. 27 Percentage of RSF with lease expirations Total RSF Available for Lease Jan. 1, 2026 2026 2027 2028 2029 2030 2031 and Later Hospital Investments: McAllen Medical Center 422,276 0 % 100 % 0 % 0 % 0 % 0 % 0 % Aiken Regional Medical Center/Aurora Pavilion Behavioral Health Services 346,000 0 % 0 % 0 % 0 % 0 % 0 % 100 % Wellington Regional Medical Center 196,489 0 % 100 % 0 % 0 % 0 % 0 % 0 % Clive Behavioral Health 82,138 0 % 0 % 0 % 0 % 0 % 0 % 100 % Canyon Creek Behavioral Health 67,700 0 % 0 % 0 % 0 % 0 % 0 % 100 % Sub-total Hospitals 1,114,603 0 % 56 % 0 % 0 % 0 % 0 % 44 % Specialty Facility: Evansville Facility 77,440 100 % 0 % 0 % 0 % 0 % 0 % 0 % Medical Office Buildings: Goldshadow - 2010 - 2020 Goldring MOB's (a.) 74,868 0 % 14 % 26 % 6 % 3 % 14 % 37 % Goldshadow - 700 Shadow Lane MOB 42,060 47 % 0 % 19 % 0 % 18 % 16 % 0 % Texoma Medical Plaza 115,284 8 % 4 % 6 % 12 % 14 % 45 % 11 % St.
These leases comprised approximately 13% of the aggregate rentable square feet of these properties (10% related to renewed leases and 3% related to new leases).
These leases comprised approximately 11% of the aggregate rentable square feet of these properties (8% related to renewed leases and 3% related to new leases).
Lease Term Number End of % of RSF of initial under available Average Occupancy(1) Minimum or Renewal lease with Range of Type of beds @ lease renewed term guaranteed guaranteed Hospital Facility Name and Location facility 12/31/2024 2024 2023 2022 2021 2020 revenue (6) term (years) escalators escalation Aiken Regional Medical Center / Aurora Pavilion (2)(5)(7) Aiken, South Carolina Acute Care / Behavioral Health 273 59% 60% 55% N/A N/A 4,164,000 2033 35 100% 2.25% McAllen Medical Center(3)(5)(7) McAllen, Texas Acute Care 370 53% 56% 49% 51% 50% 5,485,000 2026 5 0% — Wellington Regional Medical Center(4)(5)(7) West Palm Beach, Florida Acute Care 155 74% 73% 73% 75% 62% 6,643,000 2026 5 100% 2.50% Canyon Creek Behavioral Health(2)(5)(7) Temple, Texas Behavioral Health Care 102 48% 52% 45% N/A N/A 1,885,000 2033 35 100% 2.25% Clive Behavioral Health(5)(7)(9) Clive, Iowa Behavioral Health Care 100 51% 48% 36% 16% N/A 3,348,000 2040 50 100% 2.75% Specialty Facility Name and Location Evansville Facility(8) Evansville, Indiana Specialty 0 — — — — — — — — 0% — 21 Lease Term End of % of RSF initial under Type Average Occupancy(1) Minimum or Renewal lease with Range of of lease renewed term guaranteed guaranteed Facility Name and Location facility 2024 2023 2022 2021 2020 revenue (6) term (years) escalators escalation Spring Valley MOB I (5) Las Vegas, Nevada MOB 87% 88% 83% 86% 94% $1,131,000 2025-2032 Various 100% 2%-5% Spring Valley MOB II (5) Las Vegas, Nevada MOB 95% 90% 95% 95% 71% 1,357,000 2025-2033 Various 100% 2%-3% Summerlin Hospital MOB I (5) Las Vegas, Nevada MOB 80% 79% 78% 79% 83% 1,583,000 2025-2033 Various 100% 2%-5% Summerlin Hospital MOB II (5) Las Vegas, Nevada MOB 91% 88% 74% 73% 77% 2,211,000 2025-2030 Various 100% 2%-5% Summerlin Hospital MOB III (5) Las Vegas, Nevada MOB 82% 89% 86% 88% 84% 1,760,000 2025-2034 Various 100% 2%-5% Rosenberg Children’s Medical Plaza Phoenix, Arizona MOB 100% 100% 100% 100% 100% 2,491,000 2026-2033 Various 100% 2%-3% Centennial Hills MOB (5) Las Vegas, Nevada MOB 80% 79% 79% 79% 81% 1,985,000 2025-2035 Various 100% 2%-5% PeaceHealth Medical Clinic Bellingham, Washington MOB 100% 100% 100% 100% 100% 2,937,000 2029 10 100% 3% Lake Pointe Medical Arts Building Rowlett, Texas MOB 87% 88% 82% 84% 96% 1,162,000 2025-2034 Various 100% 3% Chandler Corporate Center III Chandler, Arizona MOB 100% 92% 92% 92% 92% 1,459,000 2027 Various 100% 3% Frederick Crestwood MOB Frederick, Maryland MOB 100% 100% 100% 100% 100% 1,694,000 2026-2030 Various 100% 2%-3% Henderson Union Village MOB (5) Henderson, Nevada MOB 73% 72% 68% 61% 52% 1,681,000 2026-2033 Various 100% 2%-3% Midcoast Hospital MOB Brunswick, Maine MOB 100% 100% 100% 100% 100% 1,485,000 2026 Various 100% 2% Texoma Medical Plaza (5) Denison, Texas MOB 92% 91% 93% 96% 100% 2,406,000 2025-2034 Various 100% 3% Forney Medical Plaza Forney, Texas MOB 90% 90% 86% 82% 81% 1,106,000 2025-2033 Various 99% 3% Northwest Texas Prof.
Lease Term Number End of % of RSF of initial under available Average Occupancy(1) Minimum or Renewal lease with Range of Type of beds @ lease renewed term guaranteed guaranteed Hospital Facility Name and Location facility 12/31/2025 2025 2024 2023 2022 2021 revenue (6) term (years) escalators escalation Aiken Regional Medical Center / Aurora Pavilion (2)(5)(7) Aiken, South Carolina Acute Care / Behavioral Health 273 57% 59% 60% 55% N/A $3,683,000 2033 35 100% 2.25% McAllen Medical Center(3)(5)(7) McAllen, Texas Acute Care 370 55% 53% 56% 49% 51% 5,485,000 2026 5 0% — Wellington Regional Medical Center(4)(5)(7) West Palm Beach, Florida Acute Care 155 77% 74% 73% 73% 75% 6,643,000 2026 5 100% 2.50% Canyon Creek Behavioral Health(2)(5)(7) Temple, Texas Behavioral Health Care 102 52% 48% 52% 45% N/A 1,665,000 2033 35 100% 2.25% Clive Behavioral Health(5)(7)(9) Clive, Iowa Behavioral Health Care 100 63% 51% 48% 36% 16% 3,348,000 2040 50 100% 2.75% Specialty Facility Name and Location Evansville Facility(8) Evansville, Indiana Specialty 0 — — — — — — — — 0% — 24 Lease Term End of % of RSF initial under Type Average Occupancy(1) Minimum or Renewal lease with Range of of lease renewed term guaranteed guaranteed Facility Name and Location facility 2025 2024 2023 2022 2021 revenue (6) term (years) escalators escalation Spring Valley MOB I (5) Las Vegas, Nevada MOB 80% 87% 88% 83% 86% $1,130,000 2026-2032 Various 100% 2%-3% Spring Valley MOB II (5) Las Vegas, Nevada MOB 95% 95% 90% 95% 95% 1,347,000 2026-2033 Various 100% 2%-3% Summerlin Hospital MOB I (5) Las Vegas, Nevada MOB 73% 80% 79% 78% 79% 1,414,000 2026-2031 Various 100% 2%-5% Summerlin Hospital MOB II (5) Las Vegas, Nevada MOB 91% 91% 88% 74% 73% 2,210,000 2026-2033 Various 100% 2%-5% Summerlin Hospital MOB III (5) Las Vegas, Nevada MOB 76% 82% 89% 86% 88% 1,914,000 2026-2034 Various 100% 2%-3% Rosenberg Children’s Medical Plaza Phoenix, Arizona MOB 100% 100% 100% 100% 100% 2,559,000 2026-2033 Various 100% 2%-3% Centennial Hills MOB (5) Las Vegas, Nevada MOB 81% 80% 79% 79% 79% 1,940,000 2026-2035 Various 100% 2%-5% PeaceHealth Medical Clinic Bellingham, Washington MOB 100% 100% 100% 100% 100% 2,937,000 2029 7 100% 3% Lake Pointe Medical Arts Building Rowlett, Texas MOB 92% 87% 88% 82% 84% 1,328,000 2026-2034 Various 100% 3%-4% Chandler Corporate Center III Chandler, Arizona MOB 100% 100% 92% 92% 92% 1,424,000 2027 Various 100% 3% Frederick Crestwood MOB Frederick, Maryland MOB 100% 100% 100% 100% 100% 1,551,000 2026-2030 Various 100% 2%-4% Henderson Union Village MOB (5) Henderson, Nevada MOB 73% 73% 72% 68% 61% 1,715,000 2026-2033 Various 100% 2%-3% Midcoast Hospital MOB Brunswick, Maine MOB 100% 100% 100% 100% 100% 1,778,000 2026 Various 100% 2% Texoma Medical Plaza (5) Denison, Texas MOB 96% 92% 91% 93% 96% 2,455,000 2026-2035 Various 100% 3% Forney Medical Plaza Forney, Texas MOB 90% 90% 90% 86% 82% 1,292,000 2026-2035 Various 100% 3%-4% Northwest Texas Prof.
We believe the respective fair values for each of these hospitals equals or exceeds the respective net book values or net financing receivables as of December 31, 2024 amounting to: $12.5 million for McAllen Medical Center, $8.1 million for Wellington Regional Medical Center, $29.6 million for Clive Behavioral Health, $57.0 million for Aiken Regional Medical Center (in terms of financing receivable), and; $25.8 for Canyon Creek Behavioral Health (in terms of financing receivable).
We believe the respective fair values for each of these hospitals equals or exceeds the respective net book values or net financing receivables as of December 31, 2025 amounting to: $11.6 million for McAllen Medical Center, $7.3 million for Wellington Regional Medical Center, $28.2 million for Clive Behavioral Health, $56.6 million for Aiken Regional Medical Center (in terms of financing receivable), and; $25.6 for Canyon Creek Behavioral Health (in terms of financing receivable).
(5) The real estate assets of this facility are or were owned by us (either directly or through an LLC in which we hold 100% of the ownership interest) and include tenants who are subsidiaries of UHS or jointly owned by a subsidiary of UHS. (6) Minimum lease payment amounts contain impact of straight-line rent adjustments, if applicable.
(5) The real estate assets of this facility are or were owned by us (either directly or through an LLC in which we hold 100% of the ownership interest) and include tenants who are subsidiaries of UHS or jointly owned by a subsidiary of UHS.
Office Tower Amarillo, Texas MOB 100% 100% 100% 100% 100% 1,086,000 2025 Various 100% 3%-5% Desert Valley Medical Center Phoenix, Arizona MOB 86% 89% 94% 98% 100% 1,209,000 2025-2032 Various 100% 3% Gold Shadow - 700 Shadow (5) Las Vegas, Nevada MOB 72% 72% 67% 53% 61% 662,000 2025-2027 Various 100% 2%-3% Gold Shadow - 2010 & 2020 Goldring MOB's (5) Las Vegas, Nevada MOB 97% 96% 91% 85% 81% 2,174,000 2025-2032 Various 100% 2%-3% Madison Professional Office Building Madison, Alabama MOB 93% 87% 90% 100% 100% 654,000 2025-2028 Various 100% 3% Sierra Medical Plaza I Reno, Nevada (5) MOB 67% 44% — — — 1,898,000 2033-2039 Various 100% 3% St.
Office Tower Amarillo, Texas (8) MOB 83% 100% 100% 100% 100% 276,000 2026 Various 100% 3% Desert Valley Medical Center Phoenix, Arizona MOB 86% 86% 89% 94% 98% 1,255,000 2026-2032 Various 100% 3% Gold Shadow - 700 Shadow (5) Las Vegas, Nevada MOB 56% 72% 72% 67% 53% 570,000 2026-2030 Various 100% 3% Gold Shadow - 2010 & 2020 Goldring MOB's (5) Las Vegas, Nevada MOB 100% 97% 96% 91% 85% 2,117,000 2026-2032 Various 100% 2%-3% Madison Professional Office Building Madison, Alabama MOB 89% 93% 87% 90% 100% 840,000 2027-2028 Various 100% 3% Sierra Medical Plaza I Reno, Nevada (5) MOB 68% 67% — — — 1,801,000 2033-2039 Various 100% 3% St.
Matthews Medical Plaza II (a.) 103,011 0 % 36 % 0 % 1 % 6 % 18 % 39 % Desert Springs Medical Plaza 103,000 49 % 8 % 7 % 7 % 2 % 27 % 0 % Peace Health Medical Clinic 98,886 0 % 0 % 0 % 0 % 0 % 100 % 0 % Centennial Hills Medical Office Building 96,573 20 % 3 % 23 % 13 % 9 % 10 % 22 % Summerlin Hospital Medical Office Building II 92,313 9 % 8 % 18 % 17 % 7 % 23 % 18 % Summerlin Hospital Medical Office Building I (a.) 89,636 23 % 31 % 21 % 6 % 4 % 0 % 15 % Sierra Medical Plaza I 85,902 32 % 0 % 0 % 0 % 0 % 0 % 68 % Chandler Corporate Center III 81,770 0 % 0 % 0 % 100 % 0 % 0 % 0 % 3811 E.
Matthews Medical Plaza II (b.) 103,011 0 % 25 % 1 % 6 % 18 % 0 % 50 % Desert Springs Medical Plaza (b.) 103,000 50 % 12 % 10 % 2 % 26 % 0 % 0 % Peace Health Medical Clinic 98,886 0 % 0 % 0 % 0 % 100 % 0 % 0 % Centennial Hills Medical Office Building (a.) 96,573 18 % 15 % 13 % 11 % 10 % 9 % 24 % Summerlin Hospital Medical Office Building II (a.) 92,313 8 % 10 % 17 % 9 % 23 % 25 % 8 % Summerlin Hospital Medical Office Building I (a.) 89,636 31 % 25 % 9 % 5 % 0 % 14 % 16 % Sierra Medical Plaza I 85,781 32 % 0 % 0 % 0 % 0 % 0 % 68 % Chandler Corporate Center III 81,770 0 % 0 % 100 % 0 % 0 % 0 % 0 % 3811 E.
The transferred properties are Aiken Regional Medical Center, (“Aiken”) which includes an acute care hospital and a behavioral health pavilion, and Canyon Creek Behavioral Health (“Canyon Creek”).
The transferred properties are Aiken Regional Medical Center, (“Aiken”) which includes an acute care hospital and a behavioral health pavilion, and Canyon Creek Behavioral Health (“Canyon Creek”). The occupancy details for Aiken and Canyon Creek from 2019 through 2021 are not relevant since we acquired them on December 31, 2021.
Upon acquisition by UHS, the Heart Hospital began operating under the same license as McAllen Medical Center (which has 370 available beds as of December 31, 2024). The net revenues of the combined operations included revenues generated by the Heart Hospital, the real property of which is not owned by us.
(3) During the first quarter of 2001, UHS purchased the assets and operations of the 60-bed McAllen Heart Hospital located in McAllen, Texas. Upon acquisition by UHS, the Heart Hospital began operating under the same license as McAllen Medical Center (which has 370 available beds as of December 31, 2025).
(7) See above in Item 1-Relationship with Universal Health Services, Inc. regarding, among other things, UHS’ purchase option as discussed herein.
(6) Minimum lease payment amounts reflect estimated 2026 revenue and contain the impact of straight-line rent adjustments, if applicable. Minimum lease payment amounts also include interest income recorded pursuant to financing leases. (7) See above in Item 1-Relationship with Universal Health Services, Inc. regarding, among other things, UHS’ purchase option as discussed herein.
Matthews Medical Plaza II Louisville, Kentucky MOB 100% 100% 100% 100% 100% 2,818,000 2025-2032 Various 75% 3% 2704 North Tenaya Way Las Vegas, Nevada MOB 100% 100% 100% 100% 100% 1,230,000 2029 12 100% 2% Phoenix Children’s East Valley Care Center Phoenix, Arizona MOB 100% 100% 100% 100% 100% 1,205,000 2032 20 — — N/A – Not applicable.
Matthews Medical Plaza II Louisville, Kentucky MOB 100% 100% 100% 100% 100% 2,754,000 2027-2035 Various 75% 3% 2704 North Tenaya Way Las Vegas, Nevada MOB 100% 100% 100% 100% 100% 1,230,000 2029 12 100% 2% Phoenix Children’s East Valley Care Center Phoenix, Arizona MOB 100% 100% 100% 100% 100% 1,267,000 2032 20 — — Sierra San Antonio Medical Plaza Fontana, California MOB 89% 78% 72% 73% 73% 1,472,000 2026-2036 Various 100% 2%-4% The Sparks Medical Building Sparks, Nevada MOB 100% 100% 100% 100% 100% 951,000 2026-2030 Various 96% 2%-3% Vista Medical Terrace Sparks, Nevada MOB 35% 37% 37% 38% 40% 499,000 2026-2030 Various 100% 2%-5% Ambulatory Care Facility Name & Location Hanover Emergency Center Mechanicsville, Virginia Ambulatory Care 100% 100% 100% 100% 100% 698,000 2029 5 100% 2% South Texas ER at Mission Mission, Texas Ambulatory Care 100% 100% 100% 100% 100% 546,000 2030 5 100% 2% South Texas ER at Weslaco Weslaco, Texas Ambulatory Care 100% 100% 100% 100% 100% 590,000 2030 5 100% 2% N/A – Not applicable.
Expiring Square Feet Number of Tenants Annual Rentals of Expiring Leases(1) Percentage of Annual Rentals(2) Hospital properties 2025 0 0 $ 0 0 % 2026 618,765 2 15,235,518 14 % 2027 0 0 0 0 % 2028 0 0 0 0 % 2029 0 0 0 0 % 2030 0 0 0 0 % 2031 0 0 0 0 % 2032 0 0 0 0 % 2033 413,700 2 5,432,207 5 % 2034 0 0 0 0 % Thereafter 82,138 1 3,347,556 3 % Subtotal-hospital facilities 1,114,603 5 $ 24,015,281 22 % Other consolidated properties 2025 342,427 82 $ 10,657,323 10 % 2026 304,232 69 10,916,853 10 % 2027 391,757 59 13,125,596 12 % 2028 164,198 37 6,189,677 6 % 2029 311,366 35 10,801,361 10 % 2030 276,795 33 9,172,325 8 % 2031 34,817 6 1,286,143 1 % 2032 100,189 9 3,473,507 3 % 2033 130,853 14 5,101,168 5 % 2034 37,946 7 1,511,257 1 % Thereafter 147,894 7 3,083,700 3 % Subtotal-other consolidated properties 2,242,474 358 $ 75,318,910 70 % Other unconsolidated properties (MOBs) 2025 40,354 4 $ 1,417,832 1 % 2026 79,944 11 2,789,451 3 % 2027 8,525 2 353,637 0 % 2028 14,941 3 586,541 1 % 2029 18,318 2 633,506 1 % 2030 5,840 1 194,546 0 % 2031 51,318 4 1,724,442 2 % 2032 18,670 1 645,679 1 % 2033 0 0 0 0 % 2034 0 0 0 0 % Thereafter 10,110 2 349,642 0 % Subtotal-other unconsolidated properties 248,020 30 $ 8,695,276 8 % Total all properties at December 31, 2024 3,605,097 393 $ 108,029,467 100 % (1) The annual rentals of expiring leases reflected above were calculated based upon each property’s 2024 average rental rate per occupied square foot applied to each property’s scheduled lease expirations (on a square foot basis).
Expiring Square Feet Number of Tenants Annual Rentals of Expiring Leases(1) Percentage of Annual Rentals(2) Hospital properties 2026 618,765 2 $ 15,597,256 15 % 2027 0 - 0 % 2028 0 0 0 % 2029 0 0 0 % 2030 0 0 0 % 2031 0 0 0 % 2032 0 0 0 % 2033 413,700 2 5,395,753 5 % 2034 0 - 0 % 2035 0 0 0 % Thereafter 82,138 1 3,347,556 3 % Subtotal-hospital facilities 1,114,603 5 $ 24,340,565 23 % Other consolidated properties 2026 259,848 70 $ 9,199,942 9 % 2027 423,275 67 14,161,891 13 % 2028 206,405 54 7,913,945 7 % 2029 316,230 36 11,052,249 10 % 2030 360,610 50 12,111,676 11 % 2031 76,013 15 2,858,823 3 % 2032 110,711 11 3,796,749 4 % 2033 138,672 15 5,557,983 5 % 2034 30,236 6 1,318,612 1 % 2035 146,037 14 2,986,738 3 % Thereafter 58,755 5 1,926,699 2 % Subtotal-other consolidated properties 2,126,792 343 $ 72,885,307 69 % Other unconsolidated properties (MOBs) 2026 105,285 12 $ 3,627,603 3 % 2027 8,525 2 378,645 0 % 2028 11,651 2 473,169 0 % 2029 18,318 2 657,340 1 % 2030 8,733 2 329,545 0 % 2031 51,318 4 1,764,675 2 % 2032 18,670 1 669,972 1 % 2033 0 - 0 % 2034 5,228 2 237,301 0 % 2035 22,230 4 797,722 1 % Thereafter 0 - 0 % Subtotal-other unconsolidated properties 249,958 31 $ 8,935,972 8 % Total all properties at December 31, 2025 3,491,353 379 $ 106,161,844 100 % (1) The annual rentals of expiring leases reflected above were calculated based upon each property’s 2025 average rental rate per occupied square foot applied to each property’s scheduled lease expirations (on a square foot basis).
Removed
The occupancy details for Aiken and Canyon Creek from 2019 through 2021 are not relevant since we acquired them on December 31, 2021. 22 (3) During the first quarter of 2001, UHS purchased the assets and operations of the 60-bed McAllen Heart Hospital located in McAllen, Texas.
Added
The net revenues of the combined operations included revenues generated by the Heart Hospital, the real property of which is not owned by us.
Removed
Pursuant to terms of the Wellington Regional Medical Center lease in effect during 2021, we were entitled to bonus rental on the net revenues generated from the 80-bed expansion.
Added
(8) Vacant property which is being actively marketed for sale or lease. (9) Facility leased to a joint venture between UHS and an unrelated party.
Removed
Upon the December 31, 2021 expiration of the lease, Wellington Regional Medical Center exercised its fair market value renewal option and renewed the lease for a 5-year term.
Removed
(8) The lease on this facility expired in 2019 and the property remains vacant. We are marketing the property. (9) The lease on this facility, which was executed with a joint venture between UHS and an unrelated party, is triple net and has an initial term of 20 years with five, 10-year renewal options.
Removed
(d) The estimated market rates related to the 2025 expiring RSF are less than the lease rates on the expiring leases by approximately 11% (e) Lease expires on May 31, 2025 and we have been notified by the tenant that they do not intend to renew. The property is being marketed.
Removed
The estimated market rates related to the 2025 expiring RSF are less than the lease rates on the expiring leases by approximately 11%. (f) We believe it is likely that the tenants may not renew their leases upon the October 31, 2025 scheduled expirations. The property is being marketed.
Removed
The estimated market rates related to the 2025 expiring RSF are greater than the lease rates on the expiring leases by approximately 0% to 4%. (g) We believe it is likely that the tenant may not renew their lease upon the June 30, 2025 scheduled expiration.
Removed
The estimated market rate related to the 2025 expiring RSF is greater than the lease rate on the expiring lease by approximately 5%.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+0 added−0 removed3 unchanged
Biggest changeBase INDEXED RETURNS Period Years Ending Company Name / Index Dec 19 Dec 20 Dec 21 Dec 22 Dec 23 Dec 24 Universal Health Realty Income Trust $ 100 $ 56.76 $ 54.86 $ 46.49 $ 44.80 $ 41.47 S&P 500 Index $ 100 $ 118.40 $ 152.39 $ 124.79 $ 157.59 $ 197.02 Peer Group $ 100 $ 87.83 $ 106.56 $ 85.04 $ 101.53 $ 135.55
Biggest changeBase INDEXED RETURNS Period Years Ending Company Name / Index Dec 20 Dec 21 Dec 22 Dec 23 Dec 24 Dec 25 Universal Health Realty Income Trust $ 100 $ 96.65 $ 81.91 $ 78.93 $ 73.06 $ 82.76 S&P 500 Index $ 100 $ 128.71 $ 105.40 $ 133.10 $ 166.40 $ 196.16 Peer Group $ 100 $ 121.33 $ 96.83 $ 115.59 $ 154.33 $ 209.49
Equity Compensation Refer to Item 12- Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters , of this report for information regarding securities authorized for issuance under our equity compensation plan. 27 Stock Price Performance Graph The following graph compares our performance with that of the S&P 500 and a group of peer companies, where performance has been weighted based on market capitalization.
Equity Compensation Refer to Item 12- Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters , of this report for information regarding securities authorized for issuance under our equity compensation plan. 31 Stock Price Performance Graph The following graph compares our performance with that of the S&P 500 and a group of peer companies, where performance has been weighted based on market capitalization.
The total cumulative return on investment (change in the year-end stock price plus reinvested dividends) for each of the periods for us, the peer group and the S&P 500 composite is based on the stock price or composite index at the end of fiscal 2019.
The total cumulative return on investment (change in the year-end stock price plus reinvested dividends) for each of the periods for us, the peer group and the S&P 500 composite is based on the stock price or composite index at the end of fiscal 2020.
ITEM 5. Market for Registrant’s Common Equity, Related Sto ckholder Matters and Issuer Purchases of Equity Securities Market Information Our shares of beneficial interest are listed on the New York Stock Exchange under the symbol UHT. Holders As of January 31, 2025, there were approximately 234 shareholders of record of our shares of beneficial interest.
ITEM 5. Market for Registrant’s Common Equity, Related Sto ckholder Matters and Issuer Purchases of Equity Securities Market Information Our shares of beneficial interest are listed on the New York Stock Exchange under the symbol UHT. Holders As of January 31, 2026, there were approximately 217 shareholders of record of our shares of beneficial interest.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

68 edited+13 added−10 removed87 unchanged
Biggest changeNet cash used in investing activities Net cash used in investing activities was $13.9 million during 2024 as compared to $19.1 million during 2023. 2024: During 2024, $13.9 million of net cash was used in investing activities as follows: • spent $9.1 million for additions to real estate investments, including tenant improvements at various MOBs; • spent $5.9 million in equity investments in unconsolidated LLCs, and; • received $1.1 million of cash in excess of income from LLCs. 2023: During 2023, $19.1 million of net cash was used in investing activities as follows: • spent $15.6 million for additions to real estate investments, including construction costs related to the Sierra Medical Plaza I MOB located in Reno, Nevada, that was substantially completed in March, 2023, as well as tenant improvements at various MOBs; • spent $7.6 million, including transaction costs, on the August, 2023 acquisition of the McAllen Doctor's Center medical office building, as discussed in Note 3 to the consolidated financial statements; • spent $4.1 million in equity investments in unconsolidated LLCs; • received $3.9 million of net cash proceeds resulting from the divestiture of a property, as discussed in Note 3 to the consolidated financial statements; • received $757,000 of cash in excess of income from LLCs, and; • received $3.5 million of repayments of an advance we had provided to an unconsolidated LLC during 2021. 36 Net cash used in financing activities Net cash used in financing activities was $34.2 million during 2024 as compared to $23.2 million during 2023. 2024: The $34.2 million of cash used in financing activities during 2024 consisted of: • paid $40.4 million of dividends, including $87,000 of previously accrued dividends; • received $22.3 million of net borrowings on our revolving credit agreement; • paid $13.6 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; • paid $2.4 million of financing costs, primarily related to the second amendment to our revolving credit agreement, as discussed herein, and; • paid $131,000, net of cash received for the issuance of shares of beneficial interest, in fees related to our ATM Program. 2023: The $23.2 million of cash used in financing activities during 2023 consisted of: • paid $39.8 million of dividends, including $58,000 of previously accrued dividends; • received $28.5 million of net borrowings on our revolving credit agreement; • paid $11.9 million on mortgage notes payable that are non-recourse to us, including a $6.1 million repayment of a fixed rate mortgage loan that matured during the fourth quarter of 2023 and a $4.2 million repayment of a fixed rate mortgage loan that matured during the first quarter of 2023; • paid $222,000 of financing costs related to the amendment of our revolving credit agreement, and; • received $147,000 of net cash from the issuance of shares of beneficial interest.
Biggest changeNet cash used in investing activities Net cash used in investing activities was $15.0 million during 2025 as compared to $13.9 million during 2024. 2025: During 2025, $15.0 million of net cash was used in investing activities as follows: • spent $8.8 million for additions to real estate investments, including tenant improvements at various MOBs; • spent $6.8 million in equity investments in unconsolidated LLCs, and; • received $683,000 of cash in excess of income from LLCs. 2024: During 2024, $13.9 million of net cash was used in investing activities as follows: • spent $9.1 million for additions to real estate investments, including tenant improvements at various MOBs; • spent $5.9 million in equity investments in unconsolidated LLCs, and; • received $1.1 million of cash in excess of income from LLCs. 40 Net cash used in financing activities Net cash used in financing activities was $34.5 million during 2025 as compared to $34.2 million during 2024. 2025: The $34.5 million of cash used in financing activities during 2025 consisted of: • paid $41.0 million of dividends, including $127,000 of previously accrued dividends; • received $7.3 million of net borrowings on our revolving credit agreement; • paid $940,000 on mortgage notes payable that are non-recourse to us, and; • received $156,000 of net cash from the issuance of shares of beneficial interest. 2024: The $34.2 million of cash used in financing activities during 2024 consisted of: • paid $40.4 million of dividends, including $87,000 of previously accrued dividends; • received $22.3 million of net borrowings on our revolving credit agreement; • paid $13.6 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; • paid $2.4 million of financing costs, primarily related to the second amendment to our revolving credit agreement, as discussed herein, and; • paid $131,000, net of cash received for the issuance of shares of beneficial interest, in fees related to our ATM Program.
There can be no assurance that we, our third-party property managers, our tenants or our or their service providers, if applicable, will not suffer losses relating to cyber-attacks or other information security breaches in the future or that insurance coverage (if applicable) will be adequate to cover all the costs resulting from such events. 30 • 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.
There can be no assurance that we, our third-party property managers, our tenants or our or their service providers, if applicable, will not suffer losses relating to cyber-attacks or other information security breaches in the future or that insurance coverage (if applicable) will be adequate to cover all the costs resulting from such events. • 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.
We generally estimate the fair value of rental properties utilizing a discounted cash flow analysis that includes projections of future revenues, expenses and capital improvement costs that a market participant would use based on the highest and best use of the asset, which is similar to the income approach that is commonly utilized by appraisers.
We generally estimate the fair value of rental properties utilizing a discounted cash flow analysis that includes projections of future revenues, expenses and capital improvement costs that a market participant would use based on the highest and best use of the 37 asset, which is similar to the income approach that is commonly utilized by appraisers.
Borrowings under the Credit Agreement will bear interest at a rate equal to, at our option, the 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.
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.
If successful, future cyberattacks could have a material adverse effect on our business. Any costs that we, or our third-party property managers, incur as a result of a data security incident or breach, including costs to update security protocols to mitigate such an incident or breach, could be significant.
If successful, future cyberattacks could have a material adverse effect on our business. Any costs that we, or our third-party property managers, incur as a result of a data security incident or breach, including costs to update security protocols to mitigate 34 such an incident or breach, could be significant.
In the past, staffing shortages have, at times, required our tenants to hire expensive temporary personnel and/or enhance wages and benefits to recruit and retain nurses and other clinical staff and support personnel. Our tenants have also experienced general inflationary cost increases related to certain other operating expenses.
In the past, staffing shortages 39 have, at times, required our tenants to hire expensive temporary personnel and/or enhance wages and benefits to recruit and retain nurses and other clinical staff and support personnel. Our tenants have also experienced general inflationary cost increases related to certain other operating expenses.
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.
In April, 2024 we filed a shelf registration statement on Form 41 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.
We were in compliance with all of the covenants in the Credit Agreement at each of December 31, 2024 and 2023. We also believe that we would remain in compliance if, based on the assumption that the majority of the potential new borrowings will be used to fund investments, the full amount of our commitment was borrowed.
We were in compliance with all of the covenants in the Credit Agreement at each of December 31, 2025 and 2024. We also believe that we would remain in compliance if, based on the assumption that the majority of the potential new borrowings will be used to fund investments, the full amount of our commitment was borrowed.
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 2024 and 2023, net interest was paid to us from the counterparties pursuant to our interest rate swaps that were active during each period.
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 2025 and 2024, net interest was paid to us from the counterparties pursuant to our interest rate swaps that were active during each period.
(d) Assumes that all debt outstanding as of December 31, 2024, including borrowings under the Credit Agreement, and the loans which are non-recourse to us, remain outstanding until the stated maturity date of the debt agreements at the same interest rates which were in effect as of December 31, 2024.
(d) Assumes that all debt outstanding as of December 31, 2025, including borrowings under the Credit Agreement, and the loans which are non-recourse to us, remain outstanding until the stated maturity date of the debt agreements at the same interest rates which were in effect as of December 31, 2025.
Such factors include, among other things, the following: • A substantial portion of our revenues are dependent upon one operator, UHS, which comprised approximately 40%, 41% and 40% of our consolidated revenues for the years ended December 31, 2024, 2023 and 2022, respectively.
Such factors include, among other things, the following: • A substantial portion of our revenues are dependent upon one operator, UHS, which comprised approximately 40%, 40% and 41% of our consolidated revenues for the years ended December 31, 2025, 2024 and 2023, respectively.
In addition, the United States has recently enacted and proposed to enact significant new tariffs, which could adversely impact our and our tenants’ business, financial condition and results of operations as a result of the increased costs on our and their operations and supply chains due to tariffs. • The issues facing the health care industry that affect the operators of our facilities, including UHS, such as: changes in, or the ability to comply with, existing laws and government regulations; unfavorable changes in the levels and terms of reimbursement by third party payers or government programs, including Medicare (including, but not limited to, the potential unfavorable impact of future reductions to Medicare reimbursements resulting from the Budget Control Act of 2011, as discussed in the next bullet point below) and Medicaid (most states have reported significant budget deficits that have, in the past, resulted in the reduction of Medicaid funding to the operators of our facilities, including UHS); demographic changes; the ability to enter into managed care provider agreements on acceptable terms; an increase in uninsured and self-pay patients which unfavorably impacts the collectability of patient accounts; decreasing in-patient admission trends; technological and pharmaceutical improvements that may increase the cost of providing, or reduce the demand for, health care, and; the ability to attract and retain qualified medical personnel, including physicians. • The Budget Control Act of 2011 imposed annual spending limits for most federal agencies and programs aimed at reducing budget deficits including Medicare payment reductions of up to 2% per fiscal year.
Any reduction to the overall funding levels for the Medicare and Medicaid programs may negatively impact our tenants’ ability and willingness to make rental payments to us. • The United States has recently enacted and proposed to enact significant new tariffs, which could adversely impact our tenants’ business, financial condition and results of operations as a result of the increased costs on our and their operations and supply chains due to tariffs. • The issues facing the health care industry that affect the operators of our facilities, including UHS, such as: changes in, or the ability to comply with, existing laws and government regulations; unfavorable changes in the levels and terms of reimbursement by third party payers or government programs, including Medicare (including, but not limited to, the potential unfavorable impact of future reductions to Medicare reimbursements resulting from the Budget Control Act of 2011, as discussed in the next bullet point below) and Medicaid (most states have reported significant budget deficits that have, in the past, resulted in the reduction of Medicaid funding to the operators of our facilities, including UHS); demographic changes; the ability to enter into managed care provider agreements on acceptable terms; an increase in uninsured and self-pay patients which unfavorably impacts the collectability of patient accounts; decreasing in-patient admission trends; technological and pharmaceutical improvements that may increase the cost of providing, or reduce the demand for, health care, and; the ability to attract and retain qualified medical personnel, including physicians. • The Budget Control Act of 2011 imposed annual spending limits for most federal agencies and programs aimed at reducing budget deficits including Medicare payment reductions of up to 2% per fiscal year.
Since UHS comprised approximately 40% of our consolidated revenues during the year ended December 31, 2024, 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.
Since UHS comprised approximately 40% of our consolidated revenues during the year ended December, 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.
For discussion of our result of operations and changes in our financial condition for the year ended December 31, 2023, as compared to the year ended December 31, 2022, please refer to Part II, Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the Securities and Exchange Commission on February 27, 2024, which section is incorporated by reference herein.
For discussion of our result of operations and changes in our financial condition for the year ended December 31, 2024, as compared to the year ended December 31, 2023, please refer to Part II, Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the Securities and Exchange Commission on February 26, 2025, which section is incorporated by reference herein.
The weighted-average leasing commissions on the new and renewed leases commencing during each year was approximately 3% of base rental revenue over the term of the leases during each of 2024 and 2023.
The weighted-average leasing commissions on the new and renewed leases commencing during each year was approximately 3% of base rental revenue over the term of the leases during each of 2025 and 2024.
The increased interest 29 rates on our borrowings and/or the increased costs related to new construction could also affect our ability to make additional attractive investments.
The increased interest 33 rates on our borrowings and/or the increased costs related to new construction could also affect our ability to make additional attractive investments.
Property-specific debt is detailed above. (b) Consists of non-recourse debt with an aggregate fair value of approximately $17.7 million as of December 31, 2024. 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.
Property-specific debt is detailed above. (b) Consists of non-recourse debt with an aggregate fair value of approximately $17.5 million as of December 31, 2025. 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.
As of February 26, 2025, we have seventy-six real estate investments or commitments in twenty-one states consisting of: • six hospital facilities consisting of three acute care hospitals and three behavioral health care hospitals; • four free-standing emergency departments (“FEDs”); • sixty medical/office buildings (“MOBs”), including four owned by unconsolidated limited liability companies (“LLCs”)/limited liability partnerships (“LPs”); • four preschool and childcare centers; • one specialty facility located in Evansville, Indiana, that is currently vacant, and; • one vacant land investment located in Chicago, Illinois.
As of February 25, 2026, we have seventy-seven real estate investments or commitments in twenty-one states consisting of: • six hospital facilities consisting of three acute care hospitals and three behavioral health care hospitals; • four free-standing emergency departments (“FEDs”); • sixty-one medical/office buildings (“MOBs”), including four owned by unconsolidated limited liability companies (“LLCs”)/limited liability partnerships (“LPs”); • four preschool and childcare centers; • one specialty facility located in Evansville, Indiana, that is currently vacant, and; • vacant land located in Chicago, Illinois.
In connection with lease renewals executed during each year, the weighted-average rental rates, as compared to rental rates on the expired leases, increased by approximately 3% and 4% during 2024 and 2023, respectively. The weighted-average tenant improvement costs associated with new or renewed leases was approximately $7 per square foot during each of 2024 and 2023.
In connection with lease renewals executed during each year, the weighted-average rental rates, as compared to rental rates on the expired leases, increased by approximately 3% during each of 2025 and 2024. The weighted-average tenant improvement costs associated with new or renewed leases was approximately $16 and $7 per square foot during 2025 and 2024, respectively.
This section generally discusses our results of operations for the year ended December 31, 2024 as compared to the year ended December 31, 2023.
This section generally discusses our results of operations for the year ended December 31, 2025 as compared to the year ended December 31, 2024.
The average aggregate value of the tenant concessions, generally consisting of rent abatements, provided in connection with new and renewed leases commencing during each year was approximately 0.3% of the future aggregate base rental revenue over the lease terms during each of 2024 and 2023.
The average aggregate value of the tenant concessions, generally consisting of rent abatements, provided in connection with new and renewed leases commencing during each year was approximately 0.4% and 0.3% of the future aggregate base rental revenue over the lease terms during 2025 and 2024, respectively.
These leases comprised approximately 13% of the aggregate rentable square feet of these properties (10% related to renewed leases and 3% related to new leases). During 34 2023, we had a total of 73 new or renewed leases related to the medical office buildings in which we have significant investments, some of which are accounted for by the equity method.
During 2024, we had a total of 58 new or renewed leases related to the medical office buildings in which we have significant investments, some of which are accounted for by the equity method. These leases comprised approximately 13% of the aggregate rentable square feet of these properties (10% related to renewed leases and 3% related to new leases).
At December 31, 2024, the applicable margin over the Adjusted Term SOFR rate for revolving loans was 1.20%, the margin over the Base Rate was 0.20% and the facility fee was 0.20%. At December 31, 2024, the applicable margin over the Adjusted Term SOFR rate for term loans was 1.35% and the margin over the Base Rate was .35%.
At each of December 31, 2025 and 2024, the applicable margin over the Adjusted Term SOFR rate for term loans was 1.35%, the Adjusted Term SOFR rate for revolving loans was 1.20%, the margin over the Base Rate for revolving loans was 0.20%, and the facility fee was 0.20%.
Additional funds may be obtained through: (i) borrowings under our $425 million revolving credit agreement (which had $76.1 37 million of available borrowing capacity, net of outstanding borrowings as of December 31, 2024); (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.
Additional funds may be obtained through: (i) borrowings under our $425 million revolving credit agreement (which had $68.8 million of available borrowing capacity, net of outstanding borrowings as of December 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.
(e) Reflects our future minimum operating lease payment obligations outstanding as of December 31, 2024, as discussed in Note 4 to the consolidated financial statements - Lease Accounting, in connection with ground leases at fourteen of our consolidated properties.
(e) Reflects our future minimum operating lease payment obligations outstanding as of December 31, 2025, as discussed in Note 4 to the consolidated financial statements - Lease Accounting, in connection with ground leases at fifteen of our consolidated properties.
The Credit Agreement, as amended by the second amendment, 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 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%.
Excludes $15.0 million of combined third-party debt outstanding as of December 31, 2024, that is non-recourse to us, at the unconsolidated LLCs in which we hold various non-controlling ownership interests (see Note 8 to the consolidated financial statements).
Excludes $7.9 million of combined third-party debt outstanding as of December 31, 2025, that is non-recourse to us, at the unconsolidated LLCs in which we hold various non-controlling ownership interests (see Note 8 to the consolidated financial statements).
Additional cash flow and dividends paid information for 2024 and 2023: As indicated on our consolidated statements of cash flows, we generated net cash provided by operating activities of $46.9 million during 2024 and $42.9 million during 2023.
Additional cash flow and dividends paid information for 2025 and 2024: As indicated on our consolidated statements of cash flows, we generated net cash provided by operating activities of $49.1 million during 2025 and $46.9 million during 2024.
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 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.
To the extent impairment has occurred, the excess carrying value of the asset over its estimated fair value is charged to income. 33 Results of Operations Year ended December 31, 2024 as compared to the year ended December 31, 2023 For the year ended December 31, 2024, net income was $19.2 million as compared to $15.4 million during 2023.
To the extent impairment has occurred, the excess carrying value of the asset over its estimated fair value is charged to income. Results of Operations Year ended December 31, 2025 as compared to the year ended December 31, 2024 For the year ended December 31, 2025, net income was $17.6 million as compared to $19.2 million during 2024.
Liquidity and Capital Resources Year ended December 31, 2024 as compared to December 31, 2023: Net cash provided by operating activities Net cash provided by operating activities was $46.9 million during 2024 as compared to $42.9 million during 2023.
Liquidity and Capital Resources Year ended December 31, 2025 as compared to December 31, 2024: Net cash provided by operating activities Net cash provided by operating activities was $49.1 million during 2025 as compared to $46.9 million during 2024.
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 $25.8 million (net of a $610,000 prior period property tax reduction) and $27.8 million (including $1.1 million of demolition expenses) during 2024 and 2023, respectively.
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 $26.2 million during 2025 and $25.8 million during 2024 (net of a $610,000 prior period property tax reduction).
(c) Consists of $348.9 million of borrowings outstanding as of December 31, 2024 under the terms of our $425 million Credit Agreement which matures on September 30, 2028. The amount outstanding approximates fair value as of December 31, 2024.
(c) Consists of $356.2 million of borrowings outstanding as of December 31, 2025 under the terms of our $425 million Credit Agreement which matures on September 30, 2028. The amount outstanding approximates fair value as of December 31, 2025.
The following table includes a summary of the required compliance ratios at December 31, 2024 and 2023, giving effect to the covenants contained in the Credit Agreements in effect on the respective dates (dollar amounts in thousands): Covenant December 31, 2024 December 31, 2023 Tangible net worth $ 125,000 $ 172,216 $ 191,824 Total leverage % 44.4 % 44.5 % Secured leverage % 2.4 % 4.1 % Unencumbered leverage % 45.9 % 44.2 % Fixed charge coverage > 1.50x 3.2x 3.1x As indicated on the following table, we have various mortgages, all of which are non-recourse to us and are not cross-collateralized, included on our consolidated balance sheet as of December 31, 2024 and 2023 (amounts in thousands): As of 12/31/2024 As of 12/31/2023 Facility Name Interest Rate Maturity Date Outstanding Balance (in thousands)(a.) Outstanding Balance (in thousands) Summerlin Hospital Medical Office Building III fixed rate mortgage loan (b.) 4.03 % April, 2024 $ - $ 12,301 Tuscan Professional Building fixed rate mortgage loan (c.) 5.56 % June, 2025 363 1,060 Phoenix Children’s East Valley Care Center fixed rate mortgage loan 3.95 % January, 2030 7,646 7,930 Rosenberg Children's Medical Plaza fixed rate mortgage loan 4.42 % September, 2033 11,503 11,771 Total, excluding net debt premium and net financing fees 19,512 33,062 Less net financing fees (163 ) (199 ) Total mortgage notes payable, non-recourse to us, net $ 19,349 $ 32,863 (a.) All mortgage loans require monthly principal payments through maturity and either fully amortize or include a balloon principal payment upon maturity.
The following table includes a summary of the required compliance ratios at December 31, 2025 and 2024, giving effect to the covenants contained in the Credit Agreements in effect on the respective dates (dollar amounts in thousands): December 31, 2025 December 31, 2024 Tangible net worth >= $125,000 $ 146,744 172,216 Total leverage 43.6 % 44.4 % Secured leverage 2.3 % 2.4 % Unencumbered leverage 45.4 % 45.9 % Fixed charge coverage >=1.50x 3.3x 3.2x As indicated on the following table, we have various mortgages, all of which are non-recourse to us and are not cross-collateralized, included on our consolidated balance sheet as of December 31, 2025 and 2024 (amounts in thousands): As of 12/31/2025 As of 12/31/2024 Facility Name Interest Rate Maturity Date Outstanding Balance (in thousands)(a.) Outstanding Balance (in thousands) Tuscan Professional Building fixed rate mortgage loan (b.) 5.56 % June, 2025 $ - $ 363 Phoenix Children’s East Valley Care Center fixed rate mortgage loan 3.95 % January, 2030 7,350 7,646 Rosenberg Children's Medical Plaza fixed rate mortgage loan 4.42 % September, 2033 11,222 11,503 Total, excluding net debt premium and net financing fees 18,572 19,512 Less net financing fees (137 ) (163 ) Total mortgage notes payable, non-recourse to us, net $ 18,435 $ 19,349 (a.) All mortgage loans require monthly principal payments through maturity and either fully amortize or include a balloon principal payment upon maturity.
Other Operating Results Interest Expense: Reflected below are the components of our interest expense during the years ended December 31, 2024 and December 31, 2023 (amounts in thousands): 2024 2023 Revolving credit agreement $ 22,848 $ 20,504 Mortgage interest 984 1,674 Interest rate swaps income, net (a.) (5,747 ) (5,796 ) Amortization of financing fees 766 732 Amortization of fair value of debt and other interest (10 ) (41 ) Capitalized interest on major projects — (149 ) Interest expense, net $ 18,841 $ 16,924 (a.) Please see below in Quantitative and Qualitative Disclosures About Market Risk-Market Risks Associated with Financial Instruments , for disclosure regarding our various interest rate swap agreements.
Other Operating Results Interest Expense: Reflected below are the components of our interest expense during the years ended December 31, 2025 and December 31, 2024 (amounts in thousands): 2025 2024 Revolving credit agreement $ 20,323 $ 22,848 Mortgage interest 803 984 Interest rate swaps income, net (a.) (3,001 ) (5,747 ) Amortization of financing fees 761 766 Amortization of fair value of debt and other interest (22 ) (10 ) Capitalized interest on major projects (14 ) — Interest expense, net $ 18,850 $ 18,841 (a.) Please see below in Quantitative and Qualitative Disclosures About Market Risk-Market Risks Associated with Financial Instruments , for disclosure regarding our various interest rate swap agreements.
The applicable margin after the second amendment ranges from 1.10% to 1.35% for SOFR revolving loans and 0.10% to 0.35% for Base Rate revolving loans. The applicable margin ranges from 1.20% to 1.65% for Adjusted Term SOFR loans and 0.20% to 0.65% for Base Rate term loans.
The applicable margin on revolving loans ranges from 1.10% to 1.35% for Adjusted Term SOFR loans and 0.10% to 0.35% for Base Rate loans. T he applicable margin on term loans ranges from 1.20% to 1.65% for Adjusted Term SOFR loans and 0.20% to 0.65% for Base Rate loans.
At December 31, 2024, we had $348.9 million of outstanding borrowings pursuant to the terms of our $425 million Credit Agreement and $76.1 million of available borrowing capacity. The carrying amount and fair value of borrowings outstanding pursuant to the Credit Agreement was $348.9 million at December 31, 2024. There are no compensating balance requirements.
At December 31, 2025, we had $356.2 million of outstanding borrowings pursuant to the terms of our $425 million Credit Agreement and $68.8 million of available borrowing capacity. The carrying amount and fair value of borrowings outstanding pursuant to the Credit Agreement was $356.2 million at December 31, 2025. There are no compensating balance requirements.
We declared and paid dividends of $40.4 million during 2024 and $39.8 million during 2023. During 2024, the $46.9 million of cash provided by operating activities was approximately $6.5 million greater than the $40.4 million of dividends paid during 2024.
During 2024, the $46.9 million of net cash provided by operating activities was approximately $6.5 million greater than the $40.4 million of dividends paid during 2024.
At December 31, 2023, the mortgages outstanding had a combined carrying value of approximately $33.1 million and a combined fair value of approximately $31.2 million. The fair value of our debt was computed based upon quotes received from financial institutions.
At December 31, 2024, the mortgages outstanding 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.
Many of these factors, which had a material unfavorable impact on the operating results of certain of our tenants during 2022, moderated to a certain degree during 2023 and 2024. 35 Most of our leases contain provisions designed to mitigate the adverse impact of inflation.
Many of these factors, which had a material unfavorable impact on the operating results of certain of our tenants in the past, moderated to a certain degree more recently. Most of our leases contain provisions designed to mitigate the adverse impact of inflation.
The impact of inflation and/or staffing shortages, which had a material unfavorable impact on the operating results of certain of our tenants during 2022, moderated to a certain degree during 2023 and 2024.
The impact of inflation and/or staffing shortages, which had a material unfavorable impact on the operating results of certain of our tenants in the past, have moderated to a certain degree more recently.
The $4.0 million net increase was attributable to: • a favorable change of $3.4 million 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 debt premium, amortization of deferred financing costs, stock-based compensation expense and loss on divestiture of real estate assets), as discussed above; • a favorable change of $500,000 in leasing costs paid; • a favorable change of $496,000 in tenant reserves, deposits and deferred and prepaid rents; • an unfavorable change of $247,000 in lease receivables, and; • other combined net unfavorable changes of $155, 000.
The $2.2 million net increase was attributable to: • a favorable change of $2.4 million in accrued expenses and other liabilities due primarily to the timing of accrued expense disbursements; • a favorable change of $799,000 in tenant reserves, deposits and deferred and prepaid rents; • an unfavorable change of $619,000 in leasing costs paid; • a favorable change of $302,000 in lease receivables; • an unfavorable change of $100,000 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 debt premium, amortization of deferred financing costs and stock-based compensation expense), as discussed above, and; • other combined net unfavorable changes of $607, 000.
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. • A subsidiary of UHS is our Advisor and our officers are all employees of a wholly-owned subsidiary of UHS, which may create the potential for conflicts of interest. • Potential unfavorable tax consequences and reduced income resulting from an inability to complete, within the statutory timeframes, anticipated tax deferred like-kind exchange transactions pursuant to Section 1031 of the Internal Revenue Code, if, and as, applicable from time-to-time. • 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. • A deterioration in general economic conditions which may result in increases in the number of people unemployed and/or insured and likely increase the number of individuals without health insurance.
This may impact their ability and willingness to make rental payments. • In certain of our markets, the general real estate market has been unfavorably impacted by increased competition/capacity and decreases in occupancy and rental rates which may adversely impact our operating results and the underlying value of our properties. • A subsidiary of UHS is our Advisor and our officers are all employees of a wholly-owned subsidiary of UHS, which may create the potential for conflicts of interest. • Potential unfavorable tax consequences and reduced income resulting from an inability to complete, within the statutory timeframes, anticipated tax deferred like-kind exchange transactions pursuant to Section 1031 of the Internal Revenue Code, if, and as, applicable from time-to-time. • 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. • A deterioration in general economic conditions which may result in increases in the number of people unemployed and/or insured and likely increase the number of individuals without health insurance.
Acquisition and Divestiture Activity Please see Note 3 to the consolidated financial statements for completed transactions.
We are required to build these facilities pursuant to agreements. Acquisition and Divestiture Activity Please see Note 3 to the consolidated financial statements for completed transactions.
The average amount outstanding under our Credit Agreement during the years ended December 31, 2024, 2023 and 2022 was $336.9 million, $309.3 million and $277.9 million, respectively, with corresponding effective interest rates of 5.1%, 4.8% and 2.9%, respectively, including commitment fees and interest rate swaps. 38 In our consolidated statements of cash flows, we report cash flows pursuant to our Credit Agreement on a net basis.
The average amount outstanding under our Credit Agreement during the years ended December 31, 2025, 2024 and 2023 was $347.6 million, $336.9 million and $309.3 million, respectively, with corresponding effective interest rates of 5.0%, 5.1% and 4.8%, respectively, including commitment fees and interest rate swaps.
Any future efforts to challenge, replace or replace the ACA or expand or substantially amend its provision is unknown. 31 • There can be no assurance that if any of the announced or proposed changes described above are implemented there will not be negative financial impact on the operators of our hospitals, which material effects may include a potential decrease in the market for health care services or a decrease in the ability of the operators of our hospitals to receive reimbursement for health care services provided which could result in a material adverse effect on the financial condition or results of operations of the operators of our properties, and, thus, our business. • Competition for properties include, but are not limited to, other REITs, private investors and firms, banks and other companies, including UHS.
Any future efforts to challenge, replace or replace the ACA or expand or substantially amend its provision is unknown. • There can be no assurance that if any of the announced or proposed changes described above are implemented there will not be negative financial impact on the operators of our hospitals, which material effects may include a potential decrease in the market for health care services or a decrease in the ability of the operators of our hospitals to receive reimbursement for health care services provided which could result in a material adverse effect on the financial condition or results of operations of the operators of our properties, and, thus, our business. • Congress has passed and the President has signed a consolidated appropriations package providing fiscal year 2026 funding for the majority of federal agencies, while lawmakers continue to negotiate and consider outstanding appropriations legislation for the Department of Homeland Security.
(f) Consists of the remaining estimated construction costs related to an MOB located in Denison, Texas, which was substantially completed in late 2020 as well as remaining estimated construction costs related to an MOB located in Reno, Nevada which was substantially completed in March, 2023. We are required to build these facilities pursuant to agreements.
(f) Consists of the remaining estimated construction costs related to an MOB located in Denison, Texas, which was substantially completed in late 2020, the remaining estimated construction costs related to an MOB located in Reno, Nevada which was substantially completed in March, 2023, as well as the estimated costs related to a new MOB located in Palm Beach Gardens, FL currently under construction.
Critical Accounting Policies and Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes.
All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by this cautionary statement. 36 Critical Accounting Policies and Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes.
We also cannot predict the effect these enactments will have on the operators of our properties (including UHS), and thus, our business. • 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.
We also cannot predict the effect these enactments will have on the operators of our properties (including UHS), and thus, our business. • 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.
The mortgages are secured by the real property of the buildings as well as property leases and rents. 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.
(b.) This fixed rate mortgage loan was fully repaid on May 20, 2025. The mortgages are secured by the real property of the buildings as well as property leases and rents. 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.
At December 31, 2023, we had $326.6 million of outstanding borrowings pursuant to the terms of our Credit Agreement in effect at that time, $3.1 million of outstanding letters of credit and $45.3 million of available borrowing capacity.
At December 31, 2024, we had $348.9 million of outstanding borrowings pursuant to the terms of our $425 million Credit Agreement and $76.1 million of available borrowing capacity.
Loan premiums, in the case of above market rate assumed loans, or loan discounts, in the case of below market assumed loans, are recorded based on the fair value of any loans assumed in connection with acquiring the real estate. 32 The fair values of the tangible assets of an acquired property are determined based on comparable land sales for land and replacement costs adjusted for physical and market obsolescence for the improvements.
Loan premiums, in the case of above market rate assumed loans, or loan discounts, in the case of below market assumed loans, are recorded based on the fair value of any loans assumed in connection with acquiring the real estate.
The effects of increased interest rates on our borrowings, including the unfavorable impact on the terms of recent and future interest rate swap and/or cap agreements, could unfavorably impact our future rental revenue and expenses, including interest expense, and may potentially have a material unfavorable impact on our future net income, cash provided by operating activities, funds from operations, lease renewal terms, the underlying value of our properties, our ability to grow our portfolio, and the value of our common shares. • During the past few years, our tenants have experienced inflationary pressures, primarily in personnel and certain other costs.
The effects of increased interest rates on our borrowings, including the unfavorable impact on the terms of recent and future interest rate swap and/or cap agreements, could unfavorably impact our future rental revenue and expenses, including interest expense, and may potentially have a material unfavorable impact on our future net income, cash provided by operating activities, funds from operations, lease renewal terms, the underlying value of our properties, our ability to grow our portfolio, and the value of our common shares. • 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.
The closing of the transfer must occur within 60 to 90 days of the acceptance by the Non-Offering Member. • Fluctuations in the value of our common stock, which, among other things could be affected by the current increasing interest rate environment. • Our business, results of operations, financial condition, or stock price may be adversely affected if we are not able to achieve our environmental, social and governance (“ESG”) goals or comply with emerging ESG regulations, or otherwise meet the expectations of our stakeholders with respect to ESG matters. • Other factors referenced herein or in our other filings with the Securities and Exchange Commission.
The closing of the transfer must occur within 60 to 90 days of the acceptance by the Non-Offering Member. • Fluctuations in the value of our common stock, which, among other things could be affected by changes in the interest rate environment. • Other factors referenced herein or in our other filings with the Securities and Exchange Commission.
Below is a reconciliation of our reported net income to FFO for 2024 and 2023 (in thousands): 2024 2023 Net income $ 19,234 $ 15,400 Depreciation and amortization expense on consolidated investments 27,421 27,733 Depreciation and amortization expense on unconsolidated affiliates 1,218 1,205 Loss on divestiture of real estate assets — 232 Funds From Operations $ 47,873 $ 44,570 Weighted average number of shares outstanding - Diluted 13,839 13,814 Funds From Operations per diluted share $ 3.46 $ 3.23 Our FFO increased by $3.3 million during 2024, as compared to 2023, due to: (i) an increase of $3.8 million in net income, as discussed above, partially offset by; (ii) a $232,000 decrease resulting from the loss on divestiture of real estate assets recorded during 2023, and; (iii) a $299,000 decrease resulting from a decrease in depreciation and amortization expense incurred by consolidated and unconsolidated affiliates.
Below is a reconciliation of our reported net income to FFO for 2025 and 2024 (in thousands): 2025 2024 Net income $ 17,609 $ 19,234 Depreciation and amortization expense on consolidated investments 28,859 27,421 Depreciation and amortization expense on unconsolidated affiliates 1,221 1,218 Funds From Operations $ 47,689 $ 47,873 Weighted average number of shares outstanding - Diluted 13,864 13,839 Funds From Operations per diluted share $ 3.44 $ 3.46 38 Our FFO decreased by $184,000 to $47.7 million during 2025, as compared to $47.9 million during 2024.
As of December 31, 2023, we were party to an off balance sheet arrangement consisting of a $3.1 million standby letter of credit related to Grayson Properties II. 39 The following table summarizes the schedule of maturities of our outstanding borrowing under our revolving credit facility (“Credit Agreement”), the outstanding mortgages applicable to our properties recorded on a consolidated basis and our other contractual obligations as of December 31, 2024 (amounts in thousands): Payments Due by Period (dollars in thousands) Debt and Contractual Obligation Total Less than 1 Year 2-3 years 4-5 years After 5 years Long-term non-recourse debt-fixed (a) (b) $ 19,512 $ 939 $ 1,227 $ 1,333 $ 16,013 Long-term debt-variable (c) 348,900 — — 348,900 — Estimated future interest payments on debt outstanding as of December 31, 2024 (d) 80,720 20,894 41,700 16,595 1,531 Operating leases (e) 38,842 704 1,408 1,408 35,322 Construction commitments (f) 8,661 8,661 — — — Total contractual obligations $ 496,635 $ 31,198 $ 44,335 $ 368,236 $ 52,866 (a) The mortgages are secured by the real property of the buildings as well as property leases and rents.
Contractual Obligations and Off Balance Sheet Arrangements We had no off balance sheet arrangements at each of December 31, 2025 and 2024. 43 The following table summarizes the schedule of maturities of our outstanding borrowing under our revolving credit facility (“Credit Agreement”), the outstanding mortgages applicable to our properties recorded on a consolidated basis and our other contractual obligations as of December 31, 2025 (amounts in thousands): Payments Due by Period (dollars in thousands) Debt and Contractual Obligation Total Less than 1 Year 2-3 years 4-5 years After 5 years Long-term non-recourse debt-fixed (a) (b) $ 18,572 $ 600 $ 1,279 $ 7,073 $ 9,620 Long-term debt-variable (c) 356,200 — 356,200 — — Estimated future interest payments on debt outstanding as of December 31, 2025 (d) 54,684 18,997 33,462 1,148 1,077 Operating leases (e) 40,887 718 1,473 1,473 37,223 Construction commitments (f) 41,810 41,810 — — — Total contractual obligations $ 512,153 $ 62,125 $ 392,414 $ 9,694 $ 47,920 (a) The mortgages are secured by the real property of the buildings as well as property leases and rents.
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”).
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.
Revenues increased by $3.4 million, or 3.6%, during 2024, as compared to 2023.
Revenues increased by $179,000, or 0.2%, to $99.2 million during 2025, as compared to $99.0 million during 2024.
These leases comprised approximately 22% of the aggregate rentable square feet of these properties (19% related to renewed leases and 3% related to new leases).
Properties , in which we have significant investments, some of which are accounted for by the equity method. These leases comprised approximately 11% of the aggregate rentable square feet of these properties (8% related to renewed leases and 3% related to new leases).
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.
The American Rescue Plan Act’s expansion of subsidies to 35 purchase coverage through an ACA exchange, which the IRA continued through 2025, had increased insurance exchange enrollment.
Aggregate borrowings under our Credit Agreement were $78.3 million, $78.4 million and $67.0 million during the years ended December 31, 2024, 2023 and 2022, respectively, and aggregate repayments were $56.0 million, $49.9 million and $40.8 million during the years ended December 31, 2024, 2023 and 2022, respectively.
Aggregate borrowings under our Credit Agreement were $60.0 million, $78.3 million and $78.4 million during the years ended December 31, 2025, 2024 and 2023, respectively, and aggregate repayments were $52.7 million, $56.0 million and $49.9 million during the years ended December 31, 2025, 2024 and 2023, respectively. 42 The Credit Agreement contains customary affirmative and negative covenants, including limitations on certain indebtedness, liens, acquisitions and other investments, fundamental changes, asset dispositions and dividends and other distributions.
During 2023, the $42.9 million of net cash provided by operating activities was approximately $3.2 million greater than the $39.8 million of dividends paid during 2023.
We declared and paid dividends of $41.0 million during 2025 and $40.4 million during 2024. During 2025, the $49.1 million of cash provided by operating activities was approximately $8.1 million greater than the $41.0 million of dividends paid during 2025.
Interest expense increased by $1.9 million during 2024, as compared to 2023, due to: (i) a $2.3 million increase in interest expense on our revolving credit agreement primarily resulting from increases in our average cost of borrowings (average borrowing rates, including commitment fee, of 6.78% during 2024 as compared to 6.64% during 2023), and in our average outstanding borrowings ($336.9 million during 2024 as compared to $309.3 million during 2023); (ii) a $149,000 increase due to a decrease in capitalized interest on a major project that was substantially completed during the first quarter of 2023; (iii) a $65,000 increase in amortization of financing fees and fair value of debt; (iv) a $49,000 increase due to a decrease in interest rate swap income, partially offset by; (v) a $690,000 decrease in mortgage interest expense due primarily to repayments of various fixed rate mortgages upon maturity during 2024 and 2023 utilizing borrowings under our revolving credit agreement.
Aggregate net interest expense increased slightly during 2025, as compared to 2024, and included the following: (i) a $2.7 million increase due to a net decrease in interest rate swap income due to the interest rate swap agreement transactions mentioned above in footnote (a.), substantially all of which was offset by; (ii) a $2.5 million decrease in interest expense on our revolving credit agreement primarily resulting from a decrease in our average cost of borrowings (to 5.85% during 2025 as compared to 6.78% during 2024, excluding the effect of interest rate swaps), partially offset by an increase in our average outstanding borrowings (to $347.6 million during 2025 as compared to $336.9 million during 2024), and; (iii) a $181,000 decrease in mortgage interest expense, and; (iv) a decrease of $26,000 in other interest expense.
The increase during 2024, as compared to 2023, was due primarily to an aggregate net increase generated at various properties, including revenues generated at a newly constructed MOB located in Reno Nevada, that opened during the first quarter of 2023, and the revenues generated at an MOB located in McAllen, Texas, that was acquired during the third quarter of 2023.
The net increase in revenues during 2025, as compared to 2024, was primarily due to: (i) a $362,000 increase in bonus rental revenue, and; (ii) a net decrease of $183,000 in revenues generated at various properties, including a $545,000 reduction at an MOB located in Amarillo, Texas, which was vacated during the fourth quarter of 2025 upon lease expirations of the two former tenants.
We cannot predict whether or not there will be future legislation averting 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 a federal government shutdown. • In certain of our markets, the general real estate market has been unfavorably impacted by increased competition/capacity and decreases in occupancy and rental rates which may adversely impact our operating results and the underlying value of our properties. • 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.
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. • Competition for properties include, but are not limited to, other REITs, private investors and firms, banks and other companies, including UHS.
During 2024, we had a total of 58 new or renewed leases related to the medical office buildings as indicated in Item 2. Properties , in which we have significant investments, some of which are accounted for by the equity method.
The $1.6 million decrease in net income during 2025, as compared to 2024 (as discussed above), was substantially offset by a $1.4 million increase in depreciation and amortization expense incurred on our consolidated investments and unconsolidated affiliates. During 2025, we had a total of 62 new or renewed leases related to the medical office buildings as indicated in Item 2.
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.
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.
The $3.8 million increase was primarily attributable to: • an increase of $3.5 million resulting from an aggregate net increase in the income generated at various properties; • an increase of $2.0 million resulting from a reduction in the expenses related to our property located in Chicago, Illinois, including $1.1 million from demolition expenses incurred during 2023, and $610,000 related to a property tax reduction recorded during 2024 which related primarily to prior periods; • an increase of $232,000 resulting from a loss on divestiture of real estate assets recorded during the fourth quarter of 2023 in connection with the sale of a specialty facility located in Corpus Christ, Texas (see Note 3 to the consolidated financial statements-Purchase and Sale Transaction, Acquisitions, Divestitures and New Construction), and; • a decrease of $1.9 million resulting from an increase in interest expense due primarily to increases in our average borrowing rate (which gives effect to various interest rate swap agreements) and our average outstanding borrowings pursuant to the terms of our revolving credit agreement.
The $1.6 million decrease was primarily attributable to: • a decrease of approximately $1.0 million resulting from an aggregate net decrease in the income generated at various properties, including nonrecurring depreciation expense of approximately $900,000 recorded during the third quarter of 2025, and; • an decrease of $610,000 related to a property tax reduction recorded during 2024 which related primarily to prior periods.
Removed
This may impact their ability and willingness to make rental payments. • President Biden signed into law fiscal year 2025 appropriations to federal agencies for continuing projects and activities through March 14, 2025.
Added
That legislation also places limits on provider fees used to increase federal Medicaid funding to states.
Removed
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.
Added
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%.
Removed
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.
Added
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.
Removed
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.
Added
House of Representatives passed H.R.1834 to extend for three years the enhanced premium tax credits ("EPTCs") that expired on December 31, 2025, which is currently undergoing review in the Senate. We cannot predict whether these subsidies will ultimately be adopted in federal fiscal year 2026.
Removed
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 appealed and on January 10, 2025, the U.S. Supreme Court agreed to hear the matter.
Added
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.
Removed
All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by this cautionary statement.
Added
As a result, our results of operations may be unfavorably impacted. • During the past few years, our tenants have experienced inflationary pressures, primarily in personnel and certain other costs.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

8 edited+0 added−1 removed12 unchanged
Biggest changeMaturity Date, Year Ending December 31 (Dollars in thousands) 2025 2026 2027 2028 2029 Thereafter Total Long-term debt: Fixed rate: Debt (a) $ 939 $ 601 $ 626 $ 653 $ 680 $ 16,013 $ 19,512 Average interest rates 4.3 % 4.2 % 4.2 % 4.3 % 4.3 % 4.4 % 4.3 % Variable rate: Debt (b) $ — $ — $ — $ 348,900 $ — $ — $ 348,900 Average interest rates — — — 6.6 % — — 6.6 % Interest rate swaps: Notional amount (c) $ — $ — $ 80,000 $ 85,000 $ — $ — $ 165,000 Interest rates — — 1.581 % 3.273 % — — 2.453 % (a) Consists of non-recourse mortgage notes payable.
Biggest changeMaturity Date, Year Ending December 31 (Dollars in thousands) 2026 2027 2028 2029 2030 Thereafter Total Long-term debt: Fixed rate: Debt (a) $ 600 $ 626 $ 653 $ 680 $ 6,393 $ 9,620 $ 18,572 Average interest rates 4.2 % 4.2 % 4.3 % 4.3 % 4.4 % 4.4 % 4.3 % Variable rate: Debt (b) $ — $ — $ 356,200 $ — $ — $ — $ 356,200 Average interest rates — — 5.7 % — — — 5.7 % Interest rate swaps: Notional amount (c) $ — $ 80,000 $ 85,000 $ — $ — $ — $ 165,000 Interest rates — 1.58 % 3.27 % — — — 2.45 % (a) Consists of non-recourse mortgage notes payable.
(c) 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) a $85 million interest rate swap with a fixed interest rate of 3.2725% that is scheduled to mature in September, 2028.
(c) 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.
On May 15, 2023, this interest rate swap agreement was modified to replace the benchmark rate from 40 LIBOR to term SOFR. If one-month term SOFR is above 0.505%, the counterparty pays us, and if one-month term SOFR is less than 0.505%, we pay the counterparty, the difference between the fixed rate of 0.505% and one-month term SOFR.
On May 15, 2023, this interest rate swap agreement was modified to replace the benchmark rate from 44 LIBOR to term SOFR. If one-month term SOFR is above 0.505%, the counterparty pays us, and if one-month term SOFR is less than 0.505%, we pay the counterparty, the difference between the fixed rate of 0.505% and one-month term SOFR.
For debt obligations, the amounts of which are as of December 31, 2024, the table presents principal cash flows and related weighted average interest rates by contractual maturity dates.
For debt obligations, the amounts of which are as of December 31, 2025, the table presents principal cash flows and related weighted average interest rates by contractual maturity dates.
As calculated based upon our variable rate debt outstanding as of December 31, 2024 that is subject to interest rate fluctuations, and giving effect to the above-mentioned interest rate swap, each 1% change in interest rates would impact our net income by approximately $1.8 million.
As calculated based upon our variable rate debt outstanding as of December 31, 2025 that is subject to interest rate fluctuations, and giving effect to the above-mentioned interest rate swap, each 1% change in interest rates would impact our net income by approximately $1.9 million.
At December 31, 2024, the fair value of our interest rate swaps was a net asset of $6.4 million which is included in deferred charges and other assets on the accompanying consolidated balance sheet.
At December 31, 2025, the fair value of our interest rate swaps was a net asset of $1.6 million which is included in deferred charges and other assets on the accompanying consolidated balance sheet.
As of December 31, 2024, the fair value and carrying-value of our debt is approximately $366.6 million and $368.4 million, respectively. As of that date, the carrying value exceeds the fair value by approximately $1.8 million. The table below presents information about our financial instruments that are sensitive to changes in interest rates.
As of December 31, 2025, the fair value and carrying-value of our debt is approximately $373.7 million and $374.8 million, respectively. As of that date, the carrying value exceeds the fair value by approximately $1.1 million. The table below presents information about our financial instruments that are sensitive to changes in interest rates.
During the twelve months of 2023, we received approximately $5.8 million from the counterparties (approximately $3.3 million of which relates to the two swaps that expired on September 16, 2024), adjusted for the previous quarter's accrual, pursuant to the terms of the swaps.
During the twelve months of 2025, we received approximately $3.0 million from the counterparties, adjusted for the previous quarter's accrual, pursuant to the terms of the swaps.
Removed
The interest rate swaps include the $55 million swap agreement entered into in March, 2020 and the $25 million swap agreement entered into in December, 2023 and the $85 million swap agreement entered into in October, 2024.

Other UHT 10-K year-over-year comparisons