Universal Health Realty Income Trust Reports Q3 and Year-to-Date Financial Results for 2025

Overview of Financial Results

Universal Health Realty Income Trust (NYSE: UHT) has unveiled its financial results for the three-month period ending September 30, 2025. The trust reported a net income of $4.0 million, equivalent to $0.29 per diluted share, consistent with the net income reported in Q3 of the prior year, 2024. This stable performance underscores the trust's effectiveness in managing its portfolio despite external challenges.

In terms of operations, the third quarter's net income reflects a $275,000 increase due to a unique settlement agreement tied to one of its medical office buildings, even as the overall income slightly decreased due to various factors.

Detailed Financial Analysis

For the first nine months of 2025, Universal Health Realty reported a net income of $13.3 million or $0.96 per diluted share, compared to $14.6 million or $1.05 per diluted share for the same period in 2024. This $1.3 million decline, representing a net reduction of $0.09 per diluted share, was generally influenced by several key aspects:
1. Decrease in Income: There was a drop of $730,000 attributable to lower income generated from various properties.
2. Property Tax Adjustment: A significant decrease in property tax recorded at its Chicago location affected total income negatively by about $563,000.
3. Interest Expense Rise: The increase in average borrowings, impacting costs, also contributed to the decline, with an additional $282,000 in expenses.

These factors necessitated a strategic reevaluation of operations and could oblige the Realty Trust to adapt tactically moving forward.

Funds from Operations (FFO)

In analyzing its Funds from Operations, a critical metric for real estate investment trusts, Universal Health Realty reported an increase of $908,000, equating to $12.2 million or $0.88 per diluted share for Q3 2025. This is a rise from $11.3 million or $0.82 per diluted share from the same quarter last year. However, the nine-month total for FFO slightly declined to $35.9 million, down from $36.1 million the previous year, illustrating the necessity to examine revenue channels amidst rising operational costs.

Dividend Updates

The trust declared a third-quarter dividend of $0.74 per share, amounting to an aggregate of $10.3 million. This amount was paid on September 30, 2025, continuing the trust's history of providing returns to its shareholders.

Upcoming Projects

Looking ahead, Universal Health Realty is set to begin the construction of Palm Beach Gardens Medical Plaza I, a new healthcare facility of 80,000 square feet in Florida. This is part of a collaborative project with a subsidiary of Universal Health Services, reinforcing the trust's commitment to expanding its healthcare property portfolio.
The estimated construction cost of the new facility will be approximately $34 million, with construction slated to start in November 2025. The project is scheduled to be operational by the third quarter of 2026, enhancing the trust's footprint in the healthcare sector.

Conclusion

Universal Health Realty Income Trust continues to navigate the complexities of the healthcare real estate sector while adapting to changing market conditions. The reported financial stability allows it to plan future expansions strategically, such as the development of a significant medical office building. Company leadership remains focused on enhancing shareholder value despite ongoing operational challenges and external economic factors. Stakeholders are encouraged to monitor the trust's upcoming performance as it progresses through its planned developments and seeks to optimize its portfolio.