Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 31, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | UNIVERSAL HEALTH REALTY INCOME TRUST | |
Entity Central Index Key | 0000798783 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 13,823,053 | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity File Number | 1-9321 | |
Entity Tax Identification Number | 23-6858580 | |
Entity Address, Address Line One | UNIVERSAL CORPORATE CENTER | |
Entity Address, Address Line Two | 367 SOUTH GULPH ROAD | |
Entity Address, City or Town | KING OF PRUSSIA | |
Entity Address, State or Province | PA | |
Entity Address, Postal Zip Code | 19406-0958 | |
City Area Code | 610 | |
Local Phone Number | 265-0688 | |
Entity Interactive Data Current | Yes | |
Title of 12(b) Security | Shares of beneficial interest, $0.01 par value | |
Trading Symbol | UHT | |
Security Exchange Name | NYSE | |
Entity Incorporation, State or Country Code | MD | |
Document Quarterly Report | true | |
Document Transition Report | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
Revenues: | |||||
Revenues, Total | $ 24,223 | $ 22,151 | $ 71,255 | $ 66,497 | |
Expenses: | |||||
Depreciation and amortization | 7,012 | 6,658 | 20,479 | 20,046 | |
Other operating expenses | 7,854 | 6,875 | 23,625 | 20,728 | |
Costs and Expenses, Total | 16,198 | 14,830 | 48,061 | 44,561 | |
Income before equity in income of unconsolidated limited liability companies ("LLCs") and interest expense | 8,025 | 7,321 | 23,194 | 21,936 | |
Equity in income of unconsolidated LLCs | 314 | 346 | 953 | 943 | |
Interest expense, net | (4,467) | (2,819) | (12,340) | (7,408) | |
Net income | $ 3,872 | $ 4,848 | $ 11,807 | $ 15,471 | |
Basic earnings per share | $ 0.28 | $ 0.35 | $ 0.86 | $ 1.12 | |
Diluted earnings per share | $ 0.28 | $ 0.35 | $ 0.85 | $ 1.12 | |
Weighted average number of shares outstanding - Basic | 13,790 | 13,776 | 13,784 | 13,769 | |
Weighted average number of shares outstanding - Diluted | 13,822 | 13,801 | 13,811 | 13,792 | |
Management Service | |||||
Expenses: | |||||
Advisory fees to UHS | $ 1,332 | $ 1,297 | $ 3,957 | $ 3,787 | |
UHS Facilities | |||||
Revenues: | |||||
Lease revenue | [1] | 8,274 | 7,471 | 24,297 | 22,291 |
Interest income on financing leases - UHS facilities | 1,365 | 1,368 | 4,096 | 4,107 | |
UHS Facilities | Other | |||||
Revenues: | |||||
Other revenue | 254 | 255 | 730 | 717 | |
Non-Related Parties | |||||
Revenues: | |||||
Lease revenue | 13,926 | 12,836 | 40,955 | 38,664 | |
Non-Related Parties | Other | |||||
Revenues: | |||||
Other revenue | $ 404 | $ 221 | $ 1,177 | $ 718 | |
[1] Includes bonus rental on McAllen Medical Center, a UHS acute care hospital facility of $ 725 and $ 727 for the three-month periods ended September 30, 2023 and 2022, respectively, and $ 2,219 and $ 2,048 for the nine-month periods ended September 30, 2023 and 2022, respectively. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
UHS Hospital Facilities | McAllen Medical Center | ||||
Bonus rental | $ 725 | $ 727 | $ 2,219 | $ 2,048 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Income (Loss) | $ 3,872 | $ 4,848 | $ 11,807 | $ 15,471 |
Other comprehensive (loss)/gain: | ||||
Unrealized derivative (loss)/gain on cash flow hedges | (489) | 3,728 | (1,521) | 11,417 |
Total other comprehensive (loss)/gain: | (489) | 3,728 | (1,521) | 11,417 |
Total comprehensive income | $ 3,383 | $ 8,576 | $ 10,286 | $ 26,888 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Real Estate Investments: | ||
Buildings and improvements and construction in progress | $ 650,670 | $ 641,338 |
Accumulated depreciation | (258,584) | (248,772) |
Real Estate Investment Property, Net, Total | 392,086 | 392,566 |
Land | 57,975 | 56,631 |
Net Real Estate Investments | 450,061 | 449,197 |
Financing receivable from UHS | 83,362 | 83,603 |
Net Real Estate Investments and Financing receivable | 533,423 | 532,800 |
Investments in and advances to limited liability companies ("LLCs") | 9,329 | 9,282 |
Other Assets: | ||
Cash and cash equivalents | 8,359 | 7,614 |
Lease and other receivables from UHS | 6,033 | 5,388 |
Lease receivable - other | 8,541 | 8,445 |
Intangible assets (net of accumulated amortization of $12.6 million and $15.4 million, respectively) | 9,650 | 9,447 |
Right-of-use land assets, net | 10,952 | 11,457 |
Deferred charges and other assets, net | 21,596 | 23,107 |
Total Assets | 607,883 | 607,540 |
Liabilities: | ||
Line of credit borrowings | 321,500 | 298,100 |
Mortgage notes payable, non-recourse to us, net | 39,319 | 44,725 |
Accrued interest | 330 | 373 |
Accrued expenses and other liabilities | 13,808 | 12,873 |
Ground lease liabilities, net | 10,952 | 11,457 |
Tenant reserves, deposits and deferred and prepaid rents | 11,666 | 10,911 |
Total Liabilities | 397,575 | 378,439 |
Equity: | ||
Preferred shares of beneficial interest, $.01 par value; 5,000,000 shares authorized; none issued and outstanding | ||
Common shares, $.01 par value; 95,000,000 shares authorized; issued and outstanding: 2023 - 13,823,046; 2022 - 13,803,335 | 138 | 138 |
Capital in excess of par value | 270,166 | 269,472 |
Cumulative net income | 822,468 | 810,661 |
Cumulative dividends | (892,954) | (863,181) |
Accumulated other comprehensive income | 10,490 | 12,011 |
Total Equity | 210,308 | 229,101 |
Total Liabilities and Equity | $ 607,883 | $ 607,540 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Intangible assets, accumulated amortization | $ 12.6 | $ 15.4 |
Preferred shares of beneficial interest, par value | $ 0.01 | $ 0.01 |
Preferred shares of beneficial interest, shares authorized | 5,000,000 | 5,000,000 |
Preferred shares of beneficial interest, issued | 0 | 0 |
Preferred shares of beneficial interest, outstanding | 0 | 0 |
Common shares, par value | $ 0.01 | $ 0.01 |
Common shares, shares authorized | 95,000,000 | 95,000,000 |
Common shares, issued | 13,823,046 | 13,803,335 |
Common shares, outstanding | 13,823,046 | 13,803,335 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Total | Common stock | Capital in excess of par value | Cumulative net income | Cumulative dividends | Accumulated other comprehensive income/(loss) |
Balance at Dec. 31, 2021 | $ 235,327 | $ 138 | $ 268,515 | $ 789,559 | $ (823,998) | $ 1,113 |
Balance, Shares at Dec. 31, 2021 | 13,785 | |||||
Shares of Beneficial Interest: | ||||||
Issued, net | 135 | 135 | ||||
Issued, net (in shares) | 17 | |||||
Restricted stock-based compensation expense | 591 | 591 | ||||
Dividends | (29,314) | (29,314) | ||||
Comprehensive income: | ||||||
Net income | 15,471 | 15,471 | ||||
Unrealized net gain/(loss) on cash flow hedges | 11,417 | 11,417 | ||||
Subtotal - comprehensive income | 26,888 | 15,471 | 11,417 | |||
Balance at Sep. 30, 2022 | 233,627 | $ 138 | 269,241 | 805,030 | (853,312) | 12,530 |
Balance, Shares at Sep. 30, 2022 | 13,802 | |||||
Balance at Jun. 30, 2022 | 234,646 | $ 138 | 269,039 | 800,182 | (843,515) | 8,802 |
Balance, Shares at Jun. 30, 2022 | 13,801 | |||||
Shares of Beneficial Interest: | ||||||
Issued, net | 42 | 42 | ||||
Issued, net (in shares) | 1 | |||||
Restricted stock-based compensation expense | 160 | 160 | ||||
Dividends | (9,797) | (9,797) | ||||
Comprehensive income: | ||||||
Net income | 4,848 | 4,848 | ||||
Unrealized net gain/(loss) on cash flow hedges | 3,728 | 3,728 | ||||
Subtotal - comprehensive income | 8,576 | 4,848 | 3,728 | |||
Balance at Sep. 30, 2022 | 233,627 | $ 138 | 269,241 | 805,030 | (853,312) | 12,530 |
Balance, Shares at Sep. 30, 2022 | 13,802 | |||||
Balance at Dec. 31, 2022 | 229,101 | $ 138 | 269,472 | 810,661 | (863,181) | 12,011 |
Balance, Shares at Dec. 31, 2022 | 13,803 | |||||
Shares of Beneficial Interest: | ||||||
Issued, net | 117 | 117 | ||||
Issued, net (in shares) | 20 | |||||
Restricted stock-based compensation expense | 577 | 577 | ||||
Dividends | (29,773) | (29,773) | ||||
Comprehensive income: | ||||||
Net income | 11,807 | 11,807 | ||||
Unrealized net gain/(loss) on cash flow hedges | (1,521) | (1,521) | ||||
Subtotal - comprehensive income | 10,286 | 11,807 | (1,521) | |||
Balance at Sep. 30, 2023 | 210,308 | $ 138 | 270,166 | 822,468 | (892,954) | 10,490 |
Balance, Shares at Sep. 30, 2023 | 13,823 | |||||
Balance at Jun. 30, 2023 | 216,635 | $ 138 | 269,923 | 818,596 | (883,001) | 10,979 |
Balance, Shares at Jun. 30, 2023 | 13,822 | |||||
Shares of Beneficial Interest: | ||||||
Issued, net | 42 | 42 | ||||
Issued, net (in shares) | 1 | |||||
Restricted stock-based compensation expense | 201 | 201 | ||||
Dividends | (9,953) | (9,953) | ||||
Comprehensive income: | ||||||
Net income | 3,872 | 3,872 | ||||
Unrealized net gain/(loss) on cash flow hedges | (489) | (489) | ||||
Subtotal - comprehensive income | 3,383 | 3,872 | (489) | |||
Balance at Sep. 30, 2023 | $ 210,308 | $ 138 | $ 270,166 | $ 822,468 | $ (892,954) | $ 10,490 |
Balance, Shares at Sep. 30, 2023 | 13,823 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Changes in Equity (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||||
Dividends Per Share | $ 0.72 | $ 0.71 | $ 2.155 | $ 2.125 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities: | ||
Net income | $ 11,807 | $ 15,471 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 20,479 | 20,046 |
Amortization related to above/below market leases, net | (109) | (108) |
Amortization of debt premium | (36) | (38) |
Amortization of deferred financing costs | 536 | 536 |
Stock-based compensation expense | 577 | 591 |
Changes in assets and liabilities: | ||
Lease receivable | (741) | (1,566) |
Accrued expenses and other liabilities | 859 | 977 |
Tenant reserves, deposits and deferred and prepaid rents | 114 | (417) |
Accrued interest | (43) | |
Leasing costs paid | (1,370) | (1,421) |
Other, net | 411 | 445 |
Net cash provided by operating activities | 32,484 | 34,516 |
Cash flows from investing activities: | ||
Investments in LLCs | (4,058) | (94) |
Cash distributions from LLCs | 531 | 516 |
Advance received from LLC | 3,500 | |
Additions to real estate investments, net | (12,220) | (16,698) |
Cash paid for acquisition of properties | (7,598) | (13,620) |
Net cash paid as part of asset exchange transaction | (1,346) | |
Net cash used in investing activities | (19,845) | (31,242) |
Cash flows from financing activities: | ||
Net borrowings on the line of credit | 23,400 | 18,200 |
Repayments of mortgage notes payable | (5,423) | (6,660) |
Financing costs paid | (222) | (26) |
Dividends paid | (29,767) | (29,326) |
Issuance of shares of beneficial interest, net | 118 | 136 |
Net cash used in financing activities | (11,894) | (17,676) |
Increase/(decrease) in cash and cash equivalents | 745 | (14,402) |
Cash and cash equivalents, beginning of period | 7,614 | 22,504 |
Cash and cash equivalents, end of period | 8,359 | 8,102 |
Supplemental disclosures of cash flow information: | ||
Interest paid | 12,032 | 7,050 |
Invoices accrued for construction and improvements | $ 2,005 | $ 2,334 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) | $ 3,872 | $ 4,848 | $ 11,807 | $ 15,471 |
Insider Trading Arrangements
Insider Trading Arrangements | 9 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
General
General | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General | (1) General This Quarterly Report on Form 10-Q is for the quarter ended September 30, 2023. In this Quarterly Report, “we,” “us,” “our” and the “Trust” refer to Universal Health Realty Income Trust and its subsidiaries. In this Quarterly Report on Form 10-Q, the term “revenues” does not include the revenues of the unconsolidated LLCs in which we have various non-controlling equity interests ranging from 33 % to 95 %. As of September 30, 2023, we had investments in four jointly-owned LLCs/LPs. We currently account for our share of the income/loss from these investments by the equity method (see Note 5 ). The condensed consolidated financial statements included herein have been prepared by us, without audit, pursuant to the rules and regulations of the SEC and reflect all normal and recurring adjustments which, in our opinion, are necessary to fairly present results for the interim periods. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP) have been condensed or omitted pursuant to such rules and regulations, although we believe that the accompanying disclosures are adequate to make the information presented not misleading. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements, the notes thereto and accounting policies included in our Annual Report on Form 10-K for the year ended December 31, 2022. 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. |
Relationship with Universal Hea
Relationship with Universal Health Services, Inc. ("UHS") and Related Party Transactions | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
Relationship with Universal Health Services, Inc. ("UHS") and Related Party Transactions | (2) Relationship wit h Universal Health Services, Inc. (“UHS”) and Related Party Transactions Leases: We commenced operations in 1986 by purchasing certain properties from subsidiaries of UHS and immediately leasing the properties back to the res pective subsidiaries. The base rentals and lease and renewal terms for each of the hospitals leased to subsidiaries of UHS as of September 30, 2023, are provided below. The base rents are paid monthly. 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 hospital leases with subsidiaries of UHS, with the exception of the lease on Clive Behavioral Health Hospital (which is operated by UHS in a joint venture with an unrelated third party), are unconditionally guaranteed by UHS and are cross-defaulted with one another. The lease for the Clive facility is guaranteed on a several basis by UHS ( 52 %) and Catholic Health Initiatives-Iowa ( 48 %). 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 September 30, 2023, accounted fo r approximately 25 % and 27 % of our consolidated revenues for the three months ended September 30, 2023 and 2022, respectively, and approximately 25 % and 27 % of our consolidated revenues for the nine months ended September 30, 2023 and 2022, respectively. In addition to the six UHS hospital facilities, we have twenty-one properties consisting of medical/office buildings, including one newly constructed medical office building ("MOB") that was substantially completed during the first quarter of 2023 and one MOB that was acquired during the third quarter of 2023, and FEDs that are either wholly or jointly-owned by us that include, or will include, tenants which are subsidiaries of UHS. The aggregate revenues generated from UHS-related tenants comprised approximately 41 % of our consolidated revenues during each of the three and nine months ended September 30, 2023 and 2022 . On December 31, 2021, we entered into an asset purchase and sale agreement with UHS and certain of its affiliates, which was amended during the first quarter of 2022, pursuant to the terms of which: • a wholly-owned subsidiary of UHS purchased from us, the real estate assets of the Inland Valley Campus of Southwest Healthcare System located in Wildomar, California, at its fair market value of $ 79.6 million. • two wholly-owned subsidiaries of UHS transferred to us, the real estate assets of the following properties: o Aiken Regional Medical Center, (“Aiken”), located in Aiken, South Carolina (which includes an acute care hospital and a behavioral health pavilion), at its fair-market value of approximately $ 57.7 million, and; o Canyon Creek Behavioral Health (“Canyon Creek”), located in Temple, Texas, at its fair-market value of approximately $ 26.0 million. • in connection with this transaction, since the fair-market value of Aiken and Canyon Creek, which totaled approximately $ 83.7 million in the aggregate, exceeded the $ 79.6 million fair-market value of the Inland Valley Campus of Southwest Healthcare System, we paid approximately $ 4.1 million in cash to UHS. As we no longer have a controlling interest in Inland Valley Campus of Southwest Healthcare System, the transaction generated a gain of approximately $ 68.4 million which was included in our consolidated statement of income for the year ended December 31, 2021. As a result of UHS’ purchase option within the lease agreements of Aiken and Canyon Creek, the transaction is accounted for as a failed sale leaseback in accordance with U.S. GAAP and the properties acquired by us in connection with the asset purchase and sale agreement with UHS, as amended, were accounted for as financing arrangements and our consolidated balance sheets as of September 30, 2023 and December 31, 2022 include financing receivables related to this transaction of $ 83.4 million and $ 83.6 million, respectively. Additionally, we structured the purchase and sale of the above-mentioned properties as a like-kind exchange of p roperty under the provisions of Section 1031 of the Internal Revenue Code of 1986, as amended. Also on December 31, 2021, Aiken and Canyon Creek (as lessees), entered into a master lease and individual property leases as amended, (with us as lessor), for initial lease terms on each property of approximately twelve years , ending on December 31, 2033 . Subject to the terms of the master lease, Aiken and Canyon Creek have the right to renew their leases, at the then current fair market rent (as defined in the master lease), for seven , five-year optional renewal terms. Pursuant to the leases, as amended during the first quarter of 2022, the aggregate annual rental rat e during 2023 on the acquired properties, which is payable to us on a monthly basis, is approximately $ 5.8 million ($ 4.0 million related to Aiken and $ 1.8 million related to Canyon Creek). 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 $ 1.4 million for each of the three months ended September 30, 2023 and 2022, and approximately $ 4.1 million for each of the nine-month periods ended September 30, 2023 and 2022. There is no bonus rental component applicable to either of these leases. 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. UHS also has the right to purchase the respective leased facilities from us at their appraised fair market value upon any of the following: (i) at the end of the lease terms or any renewal terms; (ii) upon one month’s notice should a change of control of the Trust occur, or; (iii) within the time period as specified in the leases in the event that UHS provides notice to us of their intent to offer a substitution property/properties in exchange for one (or more) of the four wholly-owned UHS hospital facilities leased from us, should we be unable to reach an agreement with UHS on the properties to be substituted. Additionally, UHS has rights of first refusal to: (i) purchase the respective leased facilities during and for a specified period after the lease terms at the same price, terms and conditions of any third-party offer, or; (ii) renew the lease on the respective leased facility a t the end of, and for a specified period after, the lease term at the same terms and conditions pursuant to any third-party offer. In addition, a wholly-owned subsidiary of UHS is the managing, majority member in a joint-venture with an unrelated third-party that operates, and leases from us, Clive Behavioral Health. This 100 -bed behavioral health care facility is located in Clive, Iowa and was completed and opened in late December, 2020 and the hospital lease commenced on December 31, 2020. The lease on this facility is triple net and has an initial term of 20 years with five 10 -year renewal options . On each January 1 st through 2040 (and potentially through 2070 if the first three of five, 10-year renewal options are exercised), the annual rental will increase by 2.75 % on a cumulative and compounded basis. The first three of the five 10-year renewal options will provide for annual rental as stipulated in the lease (2041 through 2070) and the two additional 10 -year lease renewal options will be at fair market value lease rates ( 2071 through 2090 ). Pursuant to the lease on this facility, the joint venture has the option to, among other things, renew the lease at the terms specified in the lease agreement by providing notice to us at least 270 days prior to the termination of the then current term. The joint venture also has the right to purchase the leased facility from us at its appraised fair market value upon either of the following: (i) by providing notice at least 270 days prior to the end of the lease terms or any renewal terms, or; (ii) upon 30 days’ notice anytime within 12 months of a change of control of the Trust (UHS also has this right should the joint venture decline to exercise its purchase right). Additionally, the joint venture has rights of first offer to purchase the facility prior to any third-party sale. The table below details the existing lease terms and renewal options for each of the hospital leases that are related to UHS as of September 30, 2023, consisting of three acute care hospitals and three behavioral health hospitals: Hospital Name Annual End of Renewal McAllen Medical Center $ 5,485,000 December, 2026 5 (a) Wellington Regional Medical Center $ 6,477,000 December, 2026 5 (b) Aiken Regional Medical Center/Aurora Pavilion Behavioral Health Services $ 3,982,000 December, 2033 35 (c) Canyon Creek Behavioral Health $ 1,800,000 December, 2033 35 (c) Clive Behavioral Health Hospital $ 2,701,000 December, 2040 50 (d) (a) UHS has one 5-year renewal option at existing lease rates (through 2031 ). (b) UHS has one 5-year renewal option at fair market value lease rates (through 2031 ; see additional disclosure below). 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 ). The annual rental rate will increase by 2.25 % on a cumulative and compounded basis on each January 1 st through 2033. (d) The UHS-related joint venture has five 10-year renewal options; the first three of the five 10-year renewal options will be at computed lease rates as stipulated in the lease ( 2041 through 2070 ) and the last two 10-year renewal options will be at fair market lease rates ( 2071 through 2090 ). On each January 1 st through 2040 (and potentially through 2070 if the first three of five, 10-year renewal options are exercised), the annual rental will increase by 2.75 % on a cumulative and compounded basis. Upon the December 31, 2021 expiration of the lease on Wellington Regional Medical Center located in West Palm Beach, Florida, a wholly-owned subsidiary of UHS exercised its fair market value renewal option and renewed the lease for a 5 -year term scheduled to expire on December 31, 2026. Effective January 1, 2023, the annual lease rate for this hospital, which is payable to us monthly, is $ 6.5 million (there is no bonus rental component of the lease payment). Management cannot predict whether the leases with wholly-owned subsidiaries of UHS, which have renewal options at existing lease rates or fair market value lease rates, or any of our other leases, will be renewed at the end of their lease term. If the leases are not renewed at their current rates or the fair market value lease rates, we would be required to find other operators for those facilities and/or enter into leases on terms potentially less favorable to us than the current leases. In addition, if subsidiaries of UHS exercise their options to purchase the respective leased hospital or FED facilities upon expiration of the lease terms, our future revenues could decrease if we were unable to earn a favorable rate of return on the sale proceeds received, as compared to the rental revenue currently earned pursuant to these leases. During the third quarter of 2023, we acquired the McAllen Doctor's Center, an MOB located in McAllen, Texas for a purchase price of approximately $ 7.5 million. The building has approximately 79,500 rentable square feet and is 100 % master leased to McAllen Hospitals, L.P, a wholly-owned subsidiary of UHS. The triple-net master lease is for twelve year s 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 initial annual base rent is approximately $ 624,000 . This acquisition was completed utilizing a qualified third-party intermediary as part of an anticipated tax-deferred like-kind-exchange transaction pursuant to Section 1031 of the Internal Revenue Code, as amended. During the first quarter of 2023, construction was substantially completed on S ierra 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, 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 . The cost of the MOB is estimated to be approximately $ 35 million, approximately $ 26 million of which was incurred as of September 30, 2023. In connection with this MOB, we entered into a ground lease and master flex-lease agreement with a wholly-owned subsidiary of UHS. 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 at an initial minimum rent of $ 1.3 million annually plus a pro-rata share of the common area maintenance expenses. The master flex-lease is subject to a reduction during the term based upon the execution of third-party leases. The ground lease and the master flex lease each commenced during March, 2023. During the fourth quarter of 2021, we purchased the 5 % minority ownership interest held by a third-party member in Grayson Properties, LP which owns the Texoma Medical Plaza, an MOB located in Denison, Texas for approximately $ 3.1 million. The MOB is located on the campus of Texoma Medical Center, a hospital that is owned and operated by a wholly-owned subsidiary of UHS. A third-party appraisal was completed to determine the fair value of the property. As a result of this minority ownership purchase during the fourth quarter of 2021, we own 100 % of the LP and are therefore consolidating this LP effective with the purchase date. There was no material impact on our net income as a result of the consolidation of this LP subsequent to the transaction. Please see Note 5 for additional disclosure surrounding this transaction. In May, 2021, we acquired the Fire Mesa office building located in Las Vegas, Nevada for a purchase price of approximately $ 12.9 million. The building is 100 % leased under the terms of a triple net lease by a wholly-owned subsidiary of UHS. The initial lease is scheduled to expire on August 31, 2027 and has two five-year renewal options. T he acquisition of this office building was part of a series of planned tax deferred like-kind exchange transactions pursuant to Section 1031 of the Internal Revenue Code, as amended. 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 26 years to approximately 75 years. The annual aggregate lease payments on these properties are approximately $ 571,000 during each of the years ended 2023 through 2027, and an aggregate of $ 31.8 million thereafter. See Note 7 for additional lease accounting disclosure. Officers and Employees: Our officers are all employees of a wholly-owned subsidiary of UHS and although as of September 30, 2023 we had no salaried employees, our officers do typically receive annual stock-based compensation awards in the form of restricted stock. In special circumstances, if warranted and deemed appropriate by the Compensation Committee of the Board of Trustees, our officers may also receive one-time special compensation awards in the form of restricted stock and/or cash bonuses. Advisory Agreement: UHS of Delaware, Inc. (the “Advisor”), a wholly-owned subsidiary of UHS, serves as Advisor to us under an advisory agreement dated December 24, 1986, and as amended and restated as of January 1, 2019 (the “Advisory Agreement”). Pursuant to the Advisory Agreement, the Advisor is obligated to present an investment program to us, to use its best efforts to obtain investments suitable for such program (although it is not obligated to present any particular investment opportunity to us), to provide administrative services to us and to conduct our day-to-day affairs. All transactions between us and UHS must be approved by the Trustees who are unaffiliated with UHS (the “Independent Trustees”). In performing its services under the Advisory Agreement, the Advisor may utilize independent professional services, including accounting, legal, tax and other services, for which the Advisor is reimbursed directly by us. The Advisory Agreement may be terminated for any reason upon sixty days written notice by us or the Advisor. The Advisory Agreement expires on December 31 of each year; however, it is renewable by us, subject to a determination by the Independent Trustees, that the Advisor’s performance has been satisfactory. The Advisory Agreement was renewed for 2023 with the same terms as the Advisory Agreement in place during 2022 and 2021. Our advisory fee for the three and nine months ended September 30, 2023 and 2022, was computed at 0.70 % of our average invested real estate assets, as derived from our condensed consolidated balance sheets. 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 2023, as compared to the last three years. The average real estate assets for advisory fee calculation purposes exclude certain items from our condensed consolidated balance sheet such as, among other things, accumulated depreciation, cash and cash equivalents, lease receivables, deferred charges and oth er assets. The advisory fee is payable quarterly, subject to adjustment at year-end based upon our audited financial statements. Advisory fees incurred and paid (or payable) to UHS amounted to approximately $ 1.3 million for each of the three-month periods ended September 30, 2023 and 2022, and were based upon average invested real estate assets of $ 761 million and $ 741 million, respectively. Advisory fees incurred and paid (or payable) to UHS amounted to approximately $ 4.0 million and $ 3.8 million for the nine-month periods ended September 30, 2023 and 2022, respectively, and were based upon average invested real estate assets of $ 754 million and $ 721 million, respectively. Share Ownership: As of September 30, 2023 and December 31, 2022, 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 SEC and is required to file annual reports containing audited financial information and quarterly reports containing unaudited financial information. Since the aggregate revenues generated from the UHS-related tenant s comprised approximately 41 % of our consolidated revenues during each of the three and nine-month periods ended September 30, 2023 and 2022, and since a subsidiary of UHS is our Advi sor, you are encouraged to obtain the publicly available filings for Universal Health Services, Inc. from the SEC’s website. These filings are the sole responsibility of UHS and are not incorporated by reference herein. |
Dividends
Dividends | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Dividends | (3) Dividends Dividends and dividend equivalents: During the third quarter of 2023, we declared and paid dividends of approximately $ 9.9 million or $ .720 per share. We declared and paid dividends of approximately $ 9.8 million or $ .71 per share, during the third quarter of 2022. During the nine-month period ended September 30, 2023, we declared and paid dividends of approximately $ 29.8 million (including accrued dividends that were paid related to the vesting of restricted stock), or $ 2.155 per share. During the nine-month period e nded September 30, 2022, we declared and paid dividends of approximately $ 29.3 million (including accrued dividends that were paid related to the vesting of restricted stock), or $ 2.125 per share. Dividend equivalents, which are applicable to shares of unvested restricted stock, were accrued during the first nine months of 2023 and 2022 and were or will be paid upon vesting of the restricted stock. |
Acquisitions and Divestitures
Acquisitions and Divestitures | 9 Months Ended |
Sep. 30, 2023 | |
Business Combinations [Abstract] | |
Acquisitions and Divestitures | (4) Acquisitions and Divestitures Nine Months Ended September 30, 2023: New Construction: In January 2022, we entered into a ground lease and master flex-lease agreement with a wholly-owned subsidiary of UHS to develop, construct and own the real property of Sierra Medical Plaza I, an 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, a newly constructed hospital that is owned and operated by a wholly-owned subsidiary of UHS, which was completed and opened during April of 2022. Construction of this MOB, for which we engaged a non-related third party to act as construction manager, commenced in January, 2022, and was substantially completed in March, 2023. The aggregate cost of the MOB is estimated to b e approximately $ 35 million, approximately $ 26 million of which was incurred as of September 30, 2023. The master flex lease agreement in connection with this building, which commenced in March, 2023 and has a ten-year term scheduled to expire on March 31, 2033 , covers approximately 68 % of the rentable square feet of the M OB at an initial minimum rent of $ 1.3 million annually, plus a pro-rata share of the common area maintenance expenses. The master flex lease agreement is subject to reduction based upon the execution of third-party leases. Additionally, the ground lease for this property commenced and a right-of-use asset and lease liability was recorded in connection with this lease during the first quarter of 2023. Acquisitions: During the third quarter of 2023, we acquired the McAllen Doctor's Center, an MOB located in McAllen, Texas, for a purchase price of approximately $ 7.5 million. The building has approximately 79,500 rentable square feet and is 100 % master leased to McAllen Hospitals, L.P, a wholly-owned subsidiary of UHS. The triple-net master lease is for twelve year s 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 initial annual base rent is approximately $ 624,000 . This acquisition was completed utilizing a qualified third-party intermediary as part of an anticipated tax-deferred like-kind-exchange transaction pursuant to Section 1031 of the Internal Revenue Code, as amended. Divestitures: There were no divestitures during the first nine months of 2023. Nine Months Ended September 30, 2022: Acquisitions: During the first quarter of 2022, we completed two transactions, as described below, utilizing qualified third-party intermediaries as part of a series of planned tax-deferred like-kind exchange transactions pursuant to Section 1031 of the Internal Revenue Code, as amended. In March, 2022, we acquired the Beaumont Heart and Vascular Center, a medical office building located in Dearborn, Michigan for a purchase price of approximately $ 5.4 million. The building, which has approximately 17,621 rentable square feet, is 100 % leased to a single tenant under the terms of a triple-net lease that is scheduled to expire on November 30, 2026 and has lease escalations of 2.5 % per year that commenced on December 1, 2022 . In January, 2022, we acquired the 140 Thomas Johnson Drive medical office building located in Frederick, Maryland for a purchase price of approximately $ 8.0 million. The building, which has approximately 20,146 rentable square feet, is 100 % leased to three tenants under the terms of triple-net leases. Approximately 72 % of the rentable square feet of this MOB is leased pursuant to a 15 -year lease, with a remaining lease term of approximately 14 years at the time of purchase, with three , five-year renewal options. Divestitures: There were no divestitures during the first nine months of 2022. |
Summarized Financial Informatio
Summarized Financial Information of Equity Affiliates | 9 Months Ended |
Sep. 30, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Summarized Financial Information of Equity Affiliates | (5) Summarized Financial Information of Equity Affiliates In accordance with U.S. GAAP and guidance relating to accounting for investments and real estate ventures, we account for our unconsolidated investments in LLCs/LPs which we do not control using the equity method of accounting. The third-party members in these investments have equal voting rights with regards to issues such as, but not limited to: (i) divestiture of property; (ii) annual budget approval, and; (iii) financing commitments. These investments, which represen t 33 % to 95 % non-controlling ownership interests, are recorded initially at our cost and subsequently adjusted for our net equity in the net income, cash contributions to, and distributions from, the investments. Pursuant to certain agreements, allocations of sales proceeds and profits and losses of some of the LLC investments may be allocated disproportionately as compared to ownership interests after specified preferred return rate thresholds have been satisfied. Distributions received from equity method investees in the consolidated statements of cash flows are classified based upon the nature of the distribution. Returns on investments are presented net of equity in income from unconsolidated investments as cash flows from operating activities. Returns of investments are classified as cash flows from investing activities. At September 30, 2023, we have non-controlling equity investments o r commitments in four jointly-owned LLCs/LPs which own MOBs. As of September 30, 2023 we accounted for these LLCs/LPs on an unconsolidated basis pursuant to t he equity method since they are not variable interest entities which we are the primary beneficiary nor do we have a controlling voting interest. The majority of these entities are joint-ventures between us and non-related parties that hold minority ownership interests in the entities. Each entity is generally self-sustained from a cash flow perspective and generates sufficient cash flow to meet its operating cash flow requirements and service the third-party debt (if applicable) that is non-recourse to us. Although there is typically no ongoing financial support required from us to these entities since they are cash-flow sufficient, we may, from time to time, provide funding for certain purposes such as, but not limited to, significant capital expenditures, leasehold improvements and debt financing. Although we are not obligated to do so, if approved by us at our sole discretion, additional cash funding is typically advanced as equity or member loans. These entities maintain property insurance on the properties. During the fourth quarter of 2021, we purchased the 5 % minority ownership interest, held by the third-party member in Grayson Properties, LP which owns the Texoma Medical Plaza, in which we previously held a noncontrolling majority ownership interest. As a result of this minority ownership purchase, we own 100 % of the LP and began to account for it on a consolidated basis effective November 1, 2021. Prior to November 1, 2021, the LP was accounted for on an unconsolidated basis pursuant to the equity method. The following property table represents the four LLCs/LPs in which we owned a non-controlling interest and were accounted for under the equity method as of September 30, 2023: Name of LLC/LP Ownership Property Owned by LLC/LP Suburban Properties 33 % St. Matthews Medical Plaza II Brunswick Associates (a.)(b.) 74 % Mid Coast Hospital MOB FTX MOB Phase II (c.) 95 % Forney Medical Plaza II Grayson Properties II (d.)(e.) 95 % Texoma Medical Plaza II (a.) This LLC has a third-party term loan of $ 8.5 million, which is non-recourse to us, outstanding as of September 30, 2023. (b.) We are the lessee with a third party on a ground lease for land. (c.) During the first quarte r of 2021, this LP paid off its $ 4.7 million mortgage loan upon maturity, utilizing pro rata equity contributions from the limited partners as well as a $ 3.5 million member loan from us to the LP which was funded utilizing borrowings from our revolving credit agreement. During the first quarter of 2023, the LP repaid $ 175,000 of the member loan and the remaining $ 3.3 million member loan balance was converted to an equity investment in the LP. (d.) Construction of this MOB was substantially completed in December, 2020. This MOB is located in Denison, Texas on the campus of a hospital owned and operated by a wholly-owned subsidiary of UHS. We have committed to invest up to $ 5.0 million in equity and debt financing, $ 2.2 million of which has been funded as of September 30, 2023. This LP entered into a $ 13.1 million third-party construction loan commitment, which is non-recourse to us, which has an outstanding balance of $ 12.8 million as of September 30, 2023. Monthly principal and interest payments on this loan commenced on January 1, 2023. The LP developed, constructed, owns and op erates the Texoma II Medical Plaza. (e.) We are the lessee with a UHS-related party for the land related to this property. Below are the condensed combined statements of income (unaudited) for the four LLCs/LPs accounted for under the equity method at September 30, 2023 and 2022: Three Months Ended Nine Months Ended 2023 2022 2023 2022 (amounts in thousands) (amounts in thousands) Revenues $ 2,269 $ 2,129 $ 6,538 $ 6,108 Operating expenses 967 826 2,684 2,289 Depreciation and amortization 478 463 1,394 1,386 Interest, net 199 264 638 795 Net income $ 625 $ 576 $ 1,822 $ 1,638 Our share of net income $ 314 $ 346 $ 953 $ 943 Below are the condensed combined balance sheets (unaudited) for the four above-mentioned LLCs/LPs that were accounted for under the equity meth od as of September 30, 2023 and December 31, 2022: September 30, December 31, (amounts in thousands) Net property, including construction in progress $ 28,875 $ 29,573 Other assets (a.) 5,310 4,334 Total assets $ 34,185 $ 33,907 Other liabilities (a.) $ 2,767 $ 2,338 Mortgage notes payable, non-recourse to us 21,357 21,802 Advances payable to us (b.) - 3,500 Equity 10,061 6,267 Total liabilities and equity $ 34,185 $ 33,907 Investments in and advances to LLCs before amounts included in accrued expenses and other liabilities $ 9,329 $ 9,282 Amounts included in accrued expenses and other liabilities ( 1,730 ) ( 1,709 ) Our share of equity in LLCs, net $ 7,599 $ 7,573 (a.) Other assets and other liabilities as of September 30, 2023 and December 31, 2022 include approximately $ 652,000 and $ 654,000 , respectively, of right-of-use land assets and right-of-use land liabilities related to ground leases whereby the LLC/LP is the lessee, with third party lessors, including subsidiaries of UHS. (b.) This 7.25% member loan to FTX MOB Phase II, LP had a maturity date of March 1, 2023 . Upon the maturity date, the LP repaid $ 175,000 of the member loan to us and the remaining balance of $ 3.3 million was converted to an equity contribution by us. As of September 30, 2023, and D ecember 31, 2022, aggregate principal amounts due on mortgage notes payable by unconsolidated LLCs/LPs, which are accounted for under the equity method and are non-recourse to us, are as follows (amounts in thousands): Mortgage Loan Balance (a.) Name of LLC/LP 9/30/2023 12/31/2022 Maturity Date Brunswick Associates (2.80% fixed rate mortgage loan) $ 8,522 $ 8,727 December, 2030 Grayson Properties II (3.70% fixed rate construction loan) (b.) 12,835 13,075 June, 2025 $ 21,357 $ 21,802 (a.) All mortgage loans require monthly principal payments through maturity and include a balloon principal payment upon maturity. (b.) This construction loan required interest on the outstanding principal balance to be paid on a monthly basis through December 1, 2022. On January 1, 2023, monthly principal and interest payments on this loan commenced. Pursuant to the operating and/or partnership agreements of the four LLCs/LPs in which we continue to hold non-controlling ownership interests, the third-party member and the Trust, at any time, potentially subject to certain conditions, have the right to make an offer (“Offering Member”) to the other member(s) (“Non-Offering Member”) in which it either agrees to: (i) sell the entire ownership interest of the Offering Member to the Non-Offering Member (“Offer to Sell”) at a price as determined by the Offering Member (“Transfer Price”), or; (ii) purchase the entire ownership interest of the Non-Offering Member (“Offer to Purchase”) at the equivalent proportionate Transfer Price. The Non-Offering Member has 60 to 90 days to either: (i) purchase the entire ownership interest of the Offering Member at the Transfer Price, or; (ii) sell its entire ownership interest to the Offering Member at the equivalent proportionate Transfer Price. The closing of the transfer must occur within 60 to 90 days of the acceptance by the Non-Offering Member. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | (6) Recent Accounting Pronouncements Reference Rate Reform In March 2020, the FASB issued an accounting standard classified under FASB ASC Topic 848, “Reference Rate Reform.” The amendments in this update contain practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASC 848 is optional and may be elected over time as reference rate reform activities occur. Beginning in the first quarter of 2020, we elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. We will continue to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur. In December 2022, the FASB issued ASU 2022-06, Deferral of the Sunset Date of Topic 848 (“ASU 2022-06”) which was issued to defer the sunset date of Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform to December 31, 2024. ASU 2022-06 is effective immediately for all companies. ASU 2022-06 has no impact on the Company’s condensed consolidated financial statements for the three and nine months ended September 30, 2023. |
Lease Accounting
Lease Accounting | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Lease Accounting | (7) Lease Accounting Our results for reporting periods beginning January 1, 2019 are presented under the ASC 842 lease standard. We adopted ASC 842 effective January 1, 2019 under the modified retrospective approach and elected the optional transition method to apply the provisions of ASC 842 as of the adoption date, rather than the earliest period presented. We elected to apply certain adoption related practical expedients for all leases that commenced prior to the election date. This practical expedient allowed us to not separate expenses reimbursed by our customers (“tenant reimbursements”) from the associated rental revenue if certain criteria were met. As Lessor: We lease most of our operating properties to customers under agreements that are typically classified as operating leases (as noted below, two of our leases are accounted for as financing arrangements effective on December 31, 2021). We recognize the total minimum lease payments provided for under the operating leases on a straight-line basis over the lease term. Generally, under the terms of our leases, the majority of our rental expenses, including common area maintenance, real estate taxes and insurance, are recovered from our customers. We record amounts reimbursed by customers in the period that the applicable expenses are incurred, which is generally ratably throughout the term of the lease. We have elected the package of practical expedients that allows lessors to not separate lease and non-lease components by class of underlying asset. This practical expedient allowed us to not separate expenses reimbursed by our customers (“tenant reimbursements”) from the associated rental revenue if certain criteria were met. We assessed these criteria and concluded that the timing and pattern of transfer for rental revenue and the associated tenant reimbursements are the same, and for the leases that qualify as operating leases, we accounted for and presented rental revenue and tenant reimbursements as a single component under Lease revenue in our consolidated statements of income for the three and nine months ended September 30, 2023 and 2022. On December 31, 2021, as a result of the asset purchase and sale transaction with UHS, as amended during the first quarter of 2022, the real estate assets of two w holly-owned subsidiaries of UHS were transferred to us (Aiken and Canyon Creek). As discussed in Note 2 , these assets are accounted for as financing arrangements and our consolidated balance sheets at September 30, 2023 and December 31, 2022 reflect financing receivables related to this transaction amountin g to $ 83.4 million and $ 83.6 million, respectively. Pursuant to the leases, as amended during the first quarter of 2022, the aggregate annual rental during 2023 on the acquired properties, which is payable to us on a monthly basis, amounts to approximately $ 5.8 million ($ 4.0 million related to Aiken and $ 1.8 mi llion related to Canyon Creek). The portion of these lease payments that will be included in our consolidated statements of income, and reflected as interest income on financing leases, is expected to be approximately $ 5.5 million during the full year of 2023. Lease revenue will not be impacted by the lease payments received related to these two properties. The components of the “Lease reven ue – UHS facilities” and “Lease revenue – Non-related parties” captions for the three and nine month periods ended September 30, 2023 and 2022 are disaggregated below (in thousands). Base rents are primarily stated rent amounts provided for under the leases that are recognized on a straight-line basis over the term of the lease. Bonus rents and tenant reimbursements represent amounts where tenants are contractually obligated to pay an amount that is variable in nature. Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 UHS facilities: Base rents $ 6,620 $ 6,102 $ 19,400 $ 18,303 Bonus rents (a.) 725 727 2,219 2,048 Tenant reimbursements 929 642 2,678 1,940 Lease revenue - UHS facilities $ 8,274 $ 7,471 $ 24,297 $ 22,291 Non-related parties: Base rents 10,542 10,108 31,256 30,352 Tenant reimbursements 3,384 2,728 9,699 8,312 Lease revenue - Non-related parties $ 13,926 $ 12,836 $ 40,955 $ 38,664 (a.) Consists of bonus rental earned in connection with McAllen Medical Center. Disclosures Related to Vacant Facilities: Vacancies – Specialty Hospitals: After evaluation of the most suitable future uses for a vacant specialty hospital located in Chicago, Illinois, as well as an effort to reduce its ongoing operating and maintenance expenses, we decided to raze the building. Demolition of the former specialty hospital located in Chicago has been substantially completed. Demolition costs were approximately $ 1.5 million in the aggregate, nearly all of which was incurred as of June 30, 2023. These demolition costs were included in other operating expenses in our consolidated statements of income during the following periods: $ 332,000 during the fourth quarter of 2022, $ 265,000 during the first quarter of 2023 and $ 862,000 during the second quarter of 2023. Including the above-mentioned demolition costs incurred during the three and nine-months ended September 30, 2023, the operating expenses incurred by us in connection with the property located in Chicago , Illinois, were $ 129,000 and $ 1.5 million during the three and nine-months ended September 30, 2023, respectively, (or $ 129,000 and $ 401,000 during the three and nine-months ended September 30, 2023, respectively, excluding the demolition costs) as compared to $ 240,000 and $ 1.1 million during the three and nine-month periods ended September 30, 2022, respectively. In addition, the aggregate operating expenses for the two vacant specialty facilities located in Evansville, Indiana, and Corpus Christi, Texas, were approximately $ 183,000 and $ 167,000 during the three-month periods ended September 30, 2023 and 2022, respectively, and approximately $ 572,000 and $ 540,000 during the nine-month periods ended September 30, 2023 and 2022, respectively. We continue to market the three above-mentioned properties to third parties. Future operating expenses related to these properties, which are estimated to be approximately $ 1.3 million in the aggregate during the full year of 2023 (excluding the demolition costs incurred in connection with the property in Chicago, Illi nois), will be incurred by us during the time they remain owned and unleased. Should these properties continue to remain owned and unleased for an extended period of time, or should we incur substantial renovation or additional demolition costs to make the properties suitable for other operators/tenants/buyers, our future results of operations could be materially unfavorably impacted. As Lessee: We are the lessee with various third parties, including subsidiaries of UHS, in connection with ground leases for land at fifteen of our consolidated properties. Our right-of-use land assets represent our right to use the land for the lease term and our lease liabilities represent our obligation to make lease payments arising from the leases. Right-of-use assets and lease liabilities were recognized upon adoption of Topic 842 based on the present value of lease payments over the lease term. We utilized our estimated incremental borrowing rate, which was derived from information available as of January 1, 2019, or the commencement date of the ground lease, whichever is later, in determining the present value of lease payments for active leases on that date. A right-of-use asset and lease liability are not recognized for leases with an initial term of 12 months or less, as these short-term leases are accounted for similarly to previous guidance for operating leases. We do not currently have any ground leases with an initial term of 12 months or less. As of September 30, 2023, our condensed consolidated balance sheet includes right-of-use land assets of approximately $ 11.0 million and ground lease liabilities of approximately $ 11.0 million. During the first quarter of 2023, the ground lease for the newly constructed and substantially completed Sierra Medical Plaza I commenced and a right-of-use asset and lease liability was recorded in connection with this lease. |
Debt and Financial Instruments
Debt and Financial Instruments | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt and Financial Instruments | =$ 125,000 $ 200,658 $ 219,654
Total leverage < 60 % 44.5 % 42.9 %
Secured leverage < 30 % 4.9 % 5.6 %
Unencumbered leverage < 60 % 44.2 % 41.8 %
Fixed charge coverage > 1.50 x 3.3 x 4.3 x As indicated on the following table, we have various mortgages, all of which are non-recourse to us, included on our condensed consolidated balance sheet as of September 30, 2023 (amounts in thousands):
Facility Name Outstanding thousands) (a.) Interest Maturity
2704 North Tenaya Way fixed rate mortgage loan (b.) $ 6,121 4.95 % November, 2023
Summerlin Hospital Medical Office Building III fixed 12,345 4.03 % April, 2024
Tuscan Professional Building fixed rate mortgage loan 1,229 5.56 % June, 2025
Phoenix Children’s East Valley Care Center fixed rate 7,999 3.95 % January, 2030
Rosenberg Children's Medical Plaza fixed rate mortgage loan 11,836 4.42 % September, 2033
Total, excluding net debt premium and net financing fees 39,530
Less net financing fees ( 215 )
Plus net debt premium 4
Total mortgages notes payable, non-recourse to us, net $ 39,319 (a.) All mortgage loans require monthly principal payments through maturity and either fully amortize or include a balloon principal payment upon maturity. (b.) Upon the November 1, 2023 maturity date, this loan was fully repaid utilizing borrowings under our Credit Agreement. (c.) This loan is scheduled to mature within the next twelve months at which time we will either refinance pursuant to a new mortgage loan or repay the mortgage balance in full utilizing borrowings under our Credit Agreement. On January 3, 2023, the $ 4.2 million fixed rate mortgage loan on Desert Valley Medical Center was fully repaid utilizing borrowings under our Credit Agreement. At September 30, 2023 and December 31, 2022, we had various mortgages, all of which were non-recourse to us, included in our condensed consolidated balance sheet. The mortgages are secured by the real property of the buildings as well as property leases and rents. The mortgages outstanding as of September 30, 2023, had a combined carrying value of approximately $ 39.5 million and a combined fair value of approximately $ 36.7 million. The mortgages outstanding as of December 31, 2022, had a combined carrying value of approximately $ 45.0 million and a combined fair value of approximately $ 43.2 million. The fair value of our debt wa s computed based upon quotes received from financial institutions. We consider these to be “level 2” in the fair value hierarchy as outlined in the authoritative guidance for disclosure in connection with debt instruments. Changes in market rates on our fixed rate debt impacts the fair value of debt, but it has no impact on interest incurred or cash flow. Financial Instruments: In March 2020, we entered into an interest rate swap agreement on a total notional amount of $ 55 million with a fixed interest rate of 0.565 % that we designated as a cash flow hedge. The interest rate swap became effective on March 25, 2020 and is scheduled to mature on March 25, 2027 . On May 15, 2023, this interest rate swap agreement was modified to replace the benchmark rate from 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. In January 2020, we entered into an interest rate swap agreement on a total notional amount of $ 35 million with a fixed interest rate of 1.4975 % that we designated as a cash flow hedge. The interest rate swap became effective on January 15, 2020 and is scheduled to mature on September 16, 2024 . On May 15, 2023, this interest rate swap agreement was modified to replace the benchmark rate from LIBOR to term SOFR. If the one-month term SOFR is above 1.41 %, the counterparty pays us, and if the one-month term SOFR is less than 1.41 %, we pay the counterparty, the difference between the fixed rate of 1.41 % and one-month term SOFR. During the third quarter of 2019, we entered into an interest rate swap agreement on a total notional amount of $ 50 million with a fixed interest rate of 1.144 % that we designated as a cash flow hedge. The interest rate swap became effective on September 16, 2019 and is scheduled to mature on September 16, 2024 . On May 15, 2023, this interest rate swap agreement was modified to replace the benchmark rate from LIBOR to term SOFR. If one-month term SOFR is above 1.064 %, the counterparty pays us, and if one-month term SOFR is less than 1.064 %, we pay the counterparty, the difference between the fixed rate of 1.064 % and one-month term SOFR. We measure our interest rate swaps at fair value on a recurring basis. The fair value of our interest rate swaps is based on quotes from third parties. We consider those inputs to be “level 2” in the fair value hierarchy as outlined in the authoritative guidance for disclosures in connection with derivative instruments and hedging activities. At September 30, 2023, the fair value of our interest rate swaps was a net asset of $ 10.5 million which is included in deferred charges and other assets on the accompanying condensed consolidated balance sheet. During the third quarter of 2023, we received approximately $ 1.6 million from the counterparty, adjusted for the previous quarter accrual, pursuant to the terms of the swaps. During the first nine months of 2023, we received approximately $ 4.3 million from the counterparty, adjusted for the previous quarter accrual, pursuant to the terms of the swaps. From inception of the swap agreements through September 30, 2023 we paid or accrued approximately $ 2.5 million to the counterparty, offset by approximately $ 5.9 million in receipts from the counterparty, adjusted for accruals, pursuant to the terms of the swap. During the third quarter of 2022, we paid or accrued approximately $ 3,000 to the counterparty, offset by $ 428,000 in receipts from the counterparty, adjusted for the previous quarter accrual, pursuant to the terms of the swaps. During the first nine months of 2022, we paid or accrued approximately $ 414,000 to the counterparty, offset by $ 463,000 in receipts from the counterparty, adjusted for the previous quarter accrual, pursuant to the terms of the swaps. Cash flow hedges are accounted for by recording the fair value of the derivative instrument on the balance sheet as either an asset or a liability, with a corresponding amount recorded in accumulated other comprehensive income (“AOCI”) within shareholders’ equity. Amounts are reclassified from AOCI to the income statement in the period or periods the hedged transaction affects earnings. We do not expect any gains or losses on our interest rate swaps to be reclassified to earnings in the next twelve months. " id="sjs-B4" xml:space="preserve">(8) Debt and Financial Instruments Debt: Management routinely monitors and analyzes the Trust’s capital structure in an effort to maintain the targeted balance among capital resources including the level of borrowings pursuant to our revolving credit facility, the level of borrowings pursuant to non-recourse mortgage debt secured by the real property of our properties and our level of equity including consideration of equity issuances. This ongoing analysis considers factors such as the current debt market and interest rate environment, the current/projected occupancy and financial performance of our properties, the current loan-to-value ratio of our properties, the Trust’s current stock price, the capital resources required for anticipated acquisitions and the expected capital to be generated by anticipated divestitures. This analysis, together with consideration of the Trust’s current balance of revolving credit agreement borrowings, non-recourse mortgage borrowings and equity, assists management in deciding which capital resource to utilize when events such as refinancing of specific debt components occur or additional funds are required to finance the Trust’s growth. On May 15, 2023 we entered into the first amendment to our amended and restated revolving credit agreement ("Credit Agreement") dated as of July 2, 2021 among the Trust as borrower, the lenders party thereto and Wells Fargo Bank, N.A., as administrative agent. The amendment replaced LIBOR rate with term SOFR plus . 10 % ("adjusted term SOFR") as an alternative benchmark rate for purposes under the Credit Agreement for settings of benchmark rates that occur on or after the closing date in accordance with the benchmark replacement provisions set forth in the Credit Agreement. On July 2, 2021, we entered into an amended and restated Credit Agreement to amend and restate the previously existing $ 350 million credit agreement, as amended and dated June 5, 2020. Among other things, under the Credit Agreement, our aggregate revolving credit commitment was increased to $ 375 million from $ 350 million. The Credit Agreement, which is scheduled to mature on July 2, 2025 , provides for a revolving credit facility in an aggregate principal amount of $ 375 million, including a $ 40 million sublimit for letters of credit and a $ 30 million sublimit for swingline/short-term loans. Under the terms of the Credit Agreement, we may request that the revolving line of credit be increased by up to an additional $ 50 million. Borrowings under the new facility are guaranteed by certain subsidiaries of the Trust. In addition, borrowings under the new facility are secured by first priority security interests in and liens on all equity interests in most of the Trust’s wholly-owned subsidiaries. Borrowings under the Credit Agreement will bear interest annually at a rate equal to, at our option, at adjusted term SOFR for either one, three, or six months or the Base Rate, plus in either case, a specified margin depending on our total leverage ratio, as determined by the formula set forth in the Credit Agreement. The applicable margin prior to the first amendment ranges from 1.10 % to 1.35 % for LIBOR loans and 0.10 % to 0.35 % for Base Rate loans. The initial applicable margin after the first amendment is 1.20 % for adjusted term SOFR loans and 0.20 % for Base Rate loans. The Credit Agreement, as amended by the first 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 Trust will also pay a quarterly revolving facility fee ranging from 0.15 % to 0.35 % (depending on the Trust’s total leverage ratio) on the committed amount of the Credit Agreement. The Credit Agreement also provides for options to extend the maturity date and borrowing availability for two additional six-month periods. The margins over adjusted term SOFR, Base Rate and the facility fee are based upon our total leverage ratio. At September 30, 2023, the applicable margin over the adjusted term SOFR rate was 1.20 %, the margin over the Base Rate was 0.20 % and the facility fee was 0.20 %. At September 30, 2023, we had $ 321.5 million of outstanding borrowings and $ 3.1 million of letters of credit outstanding under our Credit Agreement. We had $ 50.4 million of available borrowing capacity, net of the outstanding borrowings and letters of credit outstanding as of September 30, 2023. There are no compensating balance requirements. At December 31, 2022, we had $ 298.1 million of outstanding borrowings, $ 3.1 million of outstanding letters of credit and $ 73.8 million of available borrowing capacity. 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. The Credit Agreement also contains restrictive covenants regarding the Trust’s ratio of total debt to total assets, the fixed charge coverage ratio, the ratio of total secured debt to total asset value, the ratio of total unsecured debt to total unencumbered asset value, and minimum tangible net worth, as well as customary events of default, the occurrence of which may trigger an acceleration of amounts then outstanding under the Credit Agreement. We are in compliance with all of the covenants in the Credit Agreement at September 30, 2023, and were in compliance with all of the covenants of the Credit Agreement at December 31, 2022. 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. The following table includes a summary of the required compliance ratios, giving effect to the covenants contained in the Credit Agreement (dollar amounts in thousands): Covenant September 30, December 31, Tangible net worth > =$ 125,000 $ 200,658 $ 219,654 Total leverage < 60 % 44.5 % 42.9 % Secured leverage < 30 % 4.9 % 5.6 % Unencumbered leverage < 60 % 44.2 % 41.8 % Fixed charge coverage > 1.50 x 3.3 x 4.3 x As indicated on the following table, we have various mortgages, all of which are non-recourse to us, included on our condensed consolidated balance sheet as of September 30, 2023 (amounts in thousands): Facility Name Outstanding thousands) (a.) Interest Maturity 2704 North Tenaya Way fixed rate mortgage loan (b.) $ 6,121 4.95 % November, 2023 Summerlin Hospital Medical Office Building III fixed 12,345 4.03 % April, 2024 Tuscan Professional Building fixed rate mortgage loan 1,229 5.56 % June, 2025 Phoenix Children’s East Valley Care Center fixed rate 7,999 3.95 % January, 2030 Rosenberg Children's Medical Plaza fixed rate mortgage loan 11,836 4.42 % September, 2033 Total, excluding net debt premium and net financing fees 39,530 Less net financing fees ( 215 ) Plus net debt premium 4 Total mortgages notes payable, non-recourse to us, net $ 39,319 (a.) All mortgage loans require monthly principal payments through maturity and either fully amortize or include a balloon principal payment upon maturity. (b.) Upon the November 1, 2023 maturity date, this loan was fully repaid utilizing borrowings under our Credit Agreement. (c.) This loan is scheduled to mature within the next twelve months at which time we will either refinance pursuant to a new mortgage loan or repay the mortgage balance in full utilizing borrowings under our Credit Agreement. On January 3, 2023, the $ 4.2 million fixed rate mortgage loan on Desert Valley Medical Center was fully repaid utilizing borrowings under our Credit Agreement. At September 30, 2023 and December 31, 2022, we had various mortgages, all of which were non-recourse to us, included in our condensed consolidated balance sheet. The mortgages are secured by the real property of the buildings as well as property leases and rents. The mortgages outstanding as of September 30, 2023, had a combined carrying value of approximately $ 39.5 million and a combined fair value of approximately $ 36.7 million. The mortgages outstanding as of December 31, 2022, had a combined carrying value of approximately $ 45.0 million and a combined fair value of approximately $ 43.2 million. The fair value of our debt wa s computed based upon quotes received from financial institutions. We consider these to be “level 2” in the fair value hierarchy as outlined in the authoritative guidance for disclosure in connection with debt instruments. Changes in market rates on our fixed rate debt impacts the fair value of debt, but it has no impact on interest incurred or cash flow. Financial Instruments: In March 2020, we entered into an interest rate swap agreement on a total notional amount of $ 55 million with a fixed interest rate of 0.565 % that we designated as a cash flow hedge. The interest rate swap became effective on March 25, 2020 and is scheduled to mature on March 25, 2027 . On May 15, 2023, this interest rate swap agreement was modified to replace the benchmark rate from 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. In January 2020, we entered into an interest rate swap agreement on a total notional amount of $ 35 million with a fixed interest rate of 1.4975 % that we designated as a cash flow hedge. The interest rate swap became effective on January 15, 2020 and is scheduled to mature on September 16, 2024 . On May 15, 2023, this interest rate swap agreement was modified to replace the benchmark rate from LIBOR to term SOFR. If the one-month term SOFR is above 1.41 %, the counterparty pays us, and if the one-month term SOFR is less than 1.41 %, we pay the counterparty, the difference between the fixed rate of 1.41 % and one-month term SOFR. During the third quarter of 2019, we entered into an interest rate swap agreement on a total notional amount of $ 50 million with a fixed interest rate of 1.144 % that we designated as a cash flow hedge. The interest rate swap became effective on September 16, 2019 and is scheduled to mature on September 16, 2024 . On May 15, 2023, this interest rate swap agreement was modified to replace the benchmark rate from LIBOR to term SOFR. If one-month term SOFR is above 1.064 %, the counterparty pays us, and if one-month term SOFR is less than 1.064 %, we pay the counterparty, the difference between the fixed rate of 1.064 % and one-month term SOFR. We measure our interest rate swaps at fair value on a recurring basis. The fair value of our interest rate swaps is based on quotes from third parties. We consider those inputs to be “level 2” in the fair value hierarchy as outlined in the authoritative guidance for disclosures in connection with derivative instruments and hedging activities. At September 30, 2023, the fair value of our interest rate swaps was a net asset of $ 10.5 million which is included in deferred charges and other assets on the accompanying condensed consolidated balance sheet. During the third quarter of 2023, we received approximately $ 1.6 million from the counterparty, adjusted for the previous quarter accrual, pursuant to the terms of the swaps. During the first nine months of 2023, we received approximately $ 4.3 million from the counterparty, adjusted for the previous quarter accrual, pursuant to the terms of the swaps. From inception of the swap agreements through September 30, 2023 we paid or accrued approximately $ 2.5 million to the counterparty, offset by approximately $ 5.9 million in receipts from the counterparty, adjusted for accruals, pursuant to the terms of the swap. During the third quarter of 2022, we paid or accrued approximately $ 3,000 to the counterparty, offset by $ 428,000 in receipts from the counterparty, adjusted for the previous quarter accrual, pursuant to the terms of the swaps. During the first nine months of 2022, we paid or accrued approximately $ 414,000 to the counterparty, offset by $ 463,000 in receipts from the counterparty, adjusted for the previous quarter accrual, pursuant to the terms of the swaps. Cash flow hedges are accounted for by recording the fair value of the derivative instrument on the balance sheet as either an asset or a liability, with a corresponding amount recorded in accumulated other comprehensive income (“AOCI”) within shareholders’ equity. Amounts are reclassified from AOCI to the income statement in the period or periods the hedged transaction affects earnings. We do not expect any gains or losses on our interest rate swaps to be reclassified to earnings in the next twelve months. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment Reporting | (9) Segment Reporting Our primary business is investing in and leasing healthcare and human service facilities through direct ownership or through joint ventures, which aggregate into a single reportable segment. We actively manage our portfolio of healthcare and human service facilities and may from time to time make decisions to sell lower performing properties not meeting our long-term investment objectives. The proceeds of sales are typically reinvested in new developments or acquisitions, which we believe will meet our planned rate of return. It is our intent that all healthcare and human service facilities will be owned or developed for investment purposes. Our revenue and net income are generated from the operation of our investment portfolio. Our portfolio is located throughout the United States, however, we do not distinguish or group our operations on a geographical basis for purposes of allocating resources or measuring performance. We review operating and financial data for each property on an individual basis; therefore, we define an operating segment as our individual properties. Individual properties have been aggregated into one reportable segment based upon their similarities with regard to both the nature and economics of the facilities, tenants and operational processes, as well as long-term average financial performance. No individual property meets the requirements necessary to be considered its own segme nt. |
Relationship with Universal H_2
Relationship with Universal Health Services, Inc. ("UHS") and Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
Existing Lease Terms and Renewal Options for Each of UHS Hospital Facilities | The table below details the existing lease terms and renewal options for each of the hospital leases that are related to UHS as of September 30, 2023, consisting of three acute care hospitals and three behavioral health hospitals: Hospital Name Annual End of Renewal McAllen Medical Center $ 5,485,000 December, 2026 5 (a) Wellington Regional Medical Center $ 6,477,000 December, 2026 5 (b) Aiken Regional Medical Center/Aurora Pavilion Behavioral Health Services $ 3,982,000 December, 2033 35 (c) Canyon Creek Behavioral Health $ 1,800,000 December, 2033 35 (c) Clive Behavioral Health Hospital $ 2,701,000 December, 2040 50 (d) (a) UHS has one 5-year renewal option at existing lease rates (through 2031 ). (b) UHS has one 5-year renewal option at fair market value lease rates (through 2031 ; see additional disclosure below). 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 ). The annual rental rate will increase by 2.25 % on a cumulative and compounded basis on each January 1 st through 2033. (d) The UHS-related joint venture has five 10-year renewal options; the first three of the five 10-year renewal options will be at computed lease rates as stipulated in the lease ( 2041 through 2070 ) and the last two 10-year renewal options will be at fair market lease rates ( 2071 through 2090 ). On each January 1 st through 2040 (and potentially through 2070 if the first three of five, 10-year renewal options are exercised), the annual rental will increase by 2.75 % on a cumulative and compounded basis. |
Summarized Financial Informat_2
Summarized Financial Information of Equity Affiliates (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Limited Liability Companies Accounted for Under Equity Method | The following property table represents the four LLCs/LPs in which we owned a non-controlling interest and were accounted for under the equity method as of September 30, 2023: Name of LLC/LP Ownership Property Owned by LLC/LP Suburban Properties 33 % St. Matthews Medical Plaza II Brunswick Associates (a.)(b.) 74 % Mid Coast Hospital MOB FTX MOB Phase II (c.) 95 % Forney Medical Plaza II Grayson Properties II (d.)(e.) 95 % Texoma Medical Plaza II (a.) This LLC has a third-party term loan of $ 8.5 million, which is non-recourse to us, outstanding as of September 30, 2023. (b.) We are the lessee with a third party on a ground lease for land. (c.) During the first quarte r of 2021, this LP paid off its $ 4.7 million mortgage loan upon maturity, utilizing pro rata equity contributions from the limited partners as well as a $ 3.5 million member loan from us to the LP which was funded utilizing borrowings from our revolving credit agreement. During the first quarter of 2023, the LP repaid $ 175,000 of the member loan and the remaining $ 3.3 million member loan balance was converted to an equity investment in the LP. (d.) Construction of this MOB was substantially completed in December, 2020. This MOB is located in Denison, Texas on the campus of a hospital owned and operated by a wholly-owned subsidiary of UHS. We have committed to invest up to $ 5.0 million in equity and debt financing, $ 2.2 million of which has been funded as of September 30, 2023. This LP entered into a $ 13.1 million third-party construction loan commitment, which is non-recourse to us, which has an outstanding balance of $ 12.8 million as of September 30, 2023. Monthly principal and interest payments on this loan commenced on January 1, 2023. The LP developed, constructed, owns and op erates the Texoma II Medical Plaza. (e.) We are the lessee with a UHS-related party for the land related to this property. |
Condensed Combined Statements of Income (Unaudited) for LLCs/LPs Accounted Under Equity Method | Below are the condensed combined statements of income (unaudited) for the four LLCs/LPs accounted for under the equity method at September 30, 2023 and 2022: Three Months Ended Nine Months Ended 2023 2022 2023 2022 (amounts in thousands) (amounts in thousands) Revenues $ 2,269 $ 2,129 $ 6,538 $ 6,108 Operating expenses 967 826 2,684 2,289 Depreciation and amortization 478 463 1,394 1,386 Interest, net 199 264 638 795 Net income $ 625 $ 576 $ 1,822 $ 1,638 Our share of net income $ 314 $ 346 $ 953 $ 943 |
Condensed Combined Balance Sheets (Unaudited) for LLCs/LPs Accounted Under Equity Method | Below are the condensed combined balance sheets (unaudited) for the four above-mentioned LLCs/LPs that were accounted for under the equity meth od as of September 30, 2023 and December 31, 2022: September 30, December 31, (amounts in thousands) Net property, including construction in progress $ 28,875 $ 29,573 Other assets (a.) 5,310 4,334 Total assets $ 34,185 $ 33,907 Other liabilities (a.) $ 2,767 $ 2,338 Mortgage notes payable, non-recourse to us 21,357 21,802 Advances payable to us (b.) - 3,500 Equity 10,061 6,267 Total liabilities and equity $ 34,185 $ 33,907 Investments in and advances to LLCs before amounts included in accrued expenses and other liabilities $ 9,329 $ 9,282 Amounts included in accrued expenses and other liabilities ( 1,730 ) ( 1,709 ) Our share of equity in LLCs, net $ 7,599 $ 7,573 (a.) Other assets and other liabilities as of September 30, 2023 and December 31, 2022 include approximately $ 652,000 and $ 654,000 , respectively, of right-of-use land assets and right-of-use land liabilities related to ground leases whereby the LLC/LP is the lessee, with third party lessors, including subsidiaries of UHS. (b.) This 7.25% member loan to FTX MOB Phase II, LP had a maturity date of March 1, 2023 . Upon the maturity date, the LP repaid $ 175,000 of the member loan to us and the remaining balance of $ 3.3 million was converted to an equity contribution by us. |
Aggregate Principal Amounts due on Mortgage and Construction Notes Payable by Unconsolidated LLC's/LPs Accounted Under Equity Method | As of September 30, 2023, and D ecember 31, 2022, aggregate principal amounts due on mortgage notes payable by unconsolidated LLCs/LPs, which are accounted for under the equity method and are non-recourse to us, are as follows (amounts in thousands): Mortgage Loan Balance (a.) Name of LLC/LP 9/30/2023 12/31/2022 Maturity Date Brunswick Associates (2.80% fixed rate mortgage loan) $ 8,522 $ 8,727 December, 2030 Grayson Properties II (3.70% fixed rate construction loan) (b.) 12,835 13,075 June, 2025 $ 21,357 $ 21,802 (a.) All mortgage loans require monthly principal payments through maturity and include a balloon principal payment upon maturity. (b.) This construction loan required interest on the outstanding principal balance to be paid on a monthly basis through December 1, 2022. On January 1, 2023, monthly principal and interest payments on this loan commenced. |
Lease Accounting (Tables)
Lease Accounting (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Components of the "Lease Revenue - UHS facilities" and "Lease Revenue - Non-related Parties" Captions | The components of the “Lease reven ue – UHS facilities” and “Lease revenue – Non-related parties” captions for the three and nine month periods ended September 30, 2023 and 2022 are disaggregated below (in thousands). Base rents are primarily stated rent amounts provided for under the leases that are recognized on a straight-line basis over the term of the lease. Bonus rents and tenant reimbursements represent amounts where tenants are contractually obligated to pay an amount that is variable in nature. Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 UHS facilities: Base rents $ 6,620 $ 6,102 $ 19,400 $ 18,303 Bonus rents (a.) 725 727 2,219 2,048 Tenant reimbursements 929 642 2,678 1,940 Lease revenue - UHS facilities $ 8,274 $ 7,471 $ 24,297 $ 22,291 Non-related parties: Base rents 10,542 10,108 31,256 30,352 Tenant reimbursements 3,384 2,728 9,699 8,312 Lease revenue - Non-related parties $ 13,926 $ 12,836 $ 40,955 $ 38,664 (a.) Consists of bonus rental earned in connection with McAllen Medical Center. |
Debt and Financial Instruments
Debt and Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Summary of Required Compliance Ratios Giving Effect to New Covenants in Credit Agreement | The following table includes a summary of the required compliance ratios, giving effect to the covenants contained in the Credit Agreement (dollar amounts in thousands): Covenant September 30, December 31, Tangible net worth > =$ 125,000 $ 200,658 $ 219,654 Total leverage < 60 % 44.5 % 42.9 % Secured leverage < 30 % 4.9 % 5.6 % Unencumbered leverage < 60 % 44.2 % 41.8 % Fixed charge coverage > 1.50 x 3.3 x 4.3 x |
Outstanding Mortgages, Excluding Net Debt Premium | As indicated on the following table, we have various mortgages, all of which are non-recourse to us, included on our condensed consolidated balance sheet as of September 30, 2023 (amounts in thousands): Facility Name Outstanding thousands) (a.) Interest Maturity 2704 North Tenaya Way fixed rate mortgage loan (b.) $ 6,121 4.95 % November, 2023 Summerlin Hospital Medical Office Building III fixed 12,345 4.03 % April, 2024 Tuscan Professional Building fixed rate mortgage loan 1,229 5.56 % June, 2025 Phoenix Children’s East Valley Care Center fixed rate 7,999 3.95 % January, 2030 Rosenberg Children's Medical Plaza fixed rate mortgage loan 11,836 4.42 % September, 2033 Total, excluding net debt premium and net financing fees 39,530 Less net financing fees ( 215 ) Plus net debt premium 4 Total mortgages notes payable, non-recourse to us, net $ 39,319 (a.) All mortgage loans require monthly principal payments through maturity and either fully amortize or include a balloon principal payment upon maturity. (b.) Upon the November 1, 2023 maturity date, this loan was fully repaid utilizing borrowings under our Credit Agreement. (c.) This loan is scheduled to mature within the next twelve months at which time we will either refinance pursuant to a new mortgage loan or repay the mortgage balance in full utilizing borrowings under our Credit Agreement. |
General - Additional Informatio
General - Additional Information (Detail) | Sep. 30, 2023 Property |
Limited Liability Companies | |
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |
Number of real estate investments | 4 |
4 Unconsolidated Limited Liability Companies / Limited Partner | Minimum | |
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |
Non-controlling equity interest, ownership percentage | 33% |
4 Unconsolidated Limited Liability Companies / Limited Partner | Maximum | |
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |
Non-controlling equity interest, ownership percentage | 95% |
Relationship with Universal H_3
Relationship with Universal Health Services, Inc. ("UHS") and Related Party Transactions - Additional Information (Detail) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Jan. 31, 2022 ft² | May 31, 2021 USD ($) | Sep. 30, 2023 USD ($) ft² Hospital Time | Mar. 31, 2023 USD ($) ft² Lease | Sep. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) Subsidiary | Sep. 30, 2023 USD ($) ft² RenewalOption Hospital Time Bed Property | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) Subsidiary | ||
Related Party Transaction [Line Items] | |||||||||||
Number of bed facility | Bed | 100 | ||||||||||
Annual advisory fee as percentage of average invested real estate assets | 0.70% | 0.70% | |||||||||
Grayson Properties | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Minority ownership interest held by a third-party | 5% | ||||||||||
Ownership percentage upon completion of the minority ownership purchase | 100% | ||||||||||
Minority ownership interest | $ 3,100,000 | ||||||||||
Aiken Regional Medical Center | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Monthly lease rent receivable | $ 4,000,000 | ||||||||||
Canyon Creek Behavioral Health | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Monthly lease rent receivable | 1,800,000 | ||||||||||
Aiken Regional Medical Center and Canyon Creek Behavioral Health | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Fair market value of real estate assets received | $ 83,400,000 | $ 83,600,000 | |||||||||
Lease expiration date | Dec. 31, 2033 | ||||||||||
Lease renewal term | 5 years | 5 years | |||||||||
Monthly lease rent receivable | $ 5,800,000 | ||||||||||
Lease payments expected | $ 1,400,000 | $ 1,400,000 | $ 4,100,000 | $ 4,100,000 | |||||||
Term of lease | 12 years | ||||||||||
Number of term renewal options | Time | 7 | 7 | |||||||||
Aiken Regional Medical Center and Canyon Creek Behavioral Health | Bonus Rents | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Lease revenue | $ 0 | ||||||||||
Universal Health Services, Inc | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Number of acute care hospital leased | Hospital | 3 | 3 | |||||||||
Number of behavioral health care hospital leased | Hospital | 3 | 3 | |||||||||
Number of hospital facilities leased | Hospital | 6 | ||||||||||
Number of medical office buildings and free standing emergency departments | Property | 21 | ||||||||||
Lease revenue | [1] | $ 8,274,000 | 7,471,000 | $ 24,297,000 | 22,291,000 | ||||||
Option to renew lease, notice period prior to termination date of current term | 90 days | ||||||||||
Number of ground leases | Lease | 13 | ||||||||||
Aggregate lease payments for 2027 | 571,000 | $ 571,000 | |||||||||
Aggregate lease payments for thereafter | $ 31,800,000 | 31,800,000 | |||||||||
Average invested real estate assets | $ 754,000,000 | 3,800 | |||||||||
Percentage ownership of outstanding shares | 5.70% | 5.70% | 5.70% | ||||||||
Percentage of lease guaranteed | 52% | ||||||||||
Universal Health Services, Inc | Minimum | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Remaining lease terms on ground leases | 26 years | ||||||||||
Universal Health Services, Inc | Maximum | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Remaining lease terms on ground leases | 75 years | ||||||||||
Universal Health Services, Inc | Bonus Rents | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Lease revenue | [2] | $ 725,000 | 727,000 | $ 2,219,000 | 2,048,000 | ||||||
Universal Health Services, Inc | Acute Care Hospitals | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Number of hospitals operating lease terms of existing and renewal options | Hospital | 3 | ||||||||||
Universal Health Services, Inc | Wellington Regional Medical Center | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Percentage of annual rental increase on cumulative and compound basis | 2.50% | ||||||||||
Universal Health Services, Inc | McAllen Medical Center | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Renewal options term at fair market value lease rates | 5 years | ||||||||||
Renewal options at fair market value lease rates expiration year | 2031 | ||||||||||
Universal Health Services, Inc | Clive, Iowa | Clive Behavioral Health | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Initial lease term on property | 20 years | ||||||||||
Lessee operating lease, existence of option to extend | true | ||||||||||
Percentage of annual rental increase on cumulative and compound basis | 2.75% | ||||||||||
Option to renew lease, notice period prior to termination date of current term | 270 days | ||||||||||
Renewal option term | 10 years | ||||||||||
Operating Lease Additional Number Of Renewal Options At Fair Market Value Lease Rates | RenewalOption | 2 | ||||||||||
Renewal options term at fair market value lease rates | 10 years | ||||||||||
Period to purchase respective leased facilities prior to end of lease term or renewal terms | 270 days | ||||||||||
Number of term renewal options | Time | 5 | 5 | |||||||||
Number of lease renewal option exercised | Time | 3 | ||||||||||
Universal Health Services, Inc | Clive, Iowa | Clive Behavioral Health | Minimum | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Renewal options at fair market value lease rates expiration year | 2071 | ||||||||||
Universal Health Services, Inc | Clive, Iowa | Clive Behavioral Health | Maximum | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Renewal options at fair market value lease rates expiration year | 2090 | ||||||||||
Universal Health Services, Inc | Palm Beach, Florida | Wellington Regional Medical Center | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Monthly lease rent receivable | $ 6,500,000 | $ 6,500,000 | |||||||||
Operating lease renewal term | 5 years | 5 years | |||||||||
Universal Health Services, Inc | TEXAS | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Lease expiration date | Aug. 31, 2035 | ||||||||||
Universal Health Services, Inc | TEXAS | McAllen Medical Center | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Lease expiration date | Aug. 31, 2035 | ||||||||||
Lease renewal term | 12 years | 12 years | |||||||||
Initial rent | $ 624,000 | ||||||||||
Term of lease | 12 years | 12 years | |||||||||
Rentable square feet | ft² | 79,500 | 79,500 | |||||||||
Payment to acquire business | $ 7,500,000 | ||||||||||
Percentage of lease | 100% | ||||||||||
Universal Health Services, Inc | Subsidiary | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Number of wholly-owned subsidiaries | Subsidiary | 2 | ||||||||||
Financing receivable | $ 83,400,000 | $ 83,400,000 | $ 83,600,000 | ||||||||
Universal Health Services, Inc | Asset Purchase and Sale Agreement | Subsidiary | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Cash received for sale of real estate asset | $ 4,100,000 | ||||||||||
Gain on sale of real estate assets | $ 68,400,000 | ||||||||||
Universal Health Services, Inc | Asset Purchase and Sale Agreement | Subsidiary | Inland Valley Campus of Southwest Healthcare System | Wildomar, California | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Fair market value of real estate asset sold | 79,600,000 | ||||||||||
Universal Health Services, Inc | Asset Purchase and Sale Agreement | Subsidiary | Aiken Regional Medical Center | Aiken, South Carolina | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Fair market value of real estate assets received | 57,700,000 | ||||||||||
Universal Health Services, Inc | Asset Purchase and Sale Agreement | Subsidiary | Canyon Creek Behavioral Health | Temple, Texas | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Fair market value of real estate assets received | 26,000,000 | ||||||||||
Universal Health Services, Inc | Asset Purchase and Sale Agreement | Subsidiary | Aiken Regional Medical Center and Canyon Creek Behavioral Health | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Number of wholly-owned subsidiaries | Subsidiary | 2 | ||||||||||
Fair market value of real estate assets received | $ 83,700,000 | ||||||||||
Universal Health Services, Inc | Ground Lease and Master Flex-lease Agreement | Reno, Nevada | Sierra Medical Plaza I | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Cost Of Medical Office Building Incurred | 26,000,000 | ||||||||||
Rentable square feet | ft² | 86,000 | 86,000 | |||||||||
Cost of medical office building | $ 35,000,000 | ||||||||||
Percentage of rentable square feet | 68% | 68% | |||||||||
Universal Health Services, Inc | Ground Lease and Master Flex-lease Agreement | Reno, Nevada | Sierra Medical Plaza I | Minimum | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Initial rent | $ 1,300,000 | ||||||||||
Universal Health Services, Inc | Master flex lease agreement | Reno, Nevada | Sierra Medical Plaza I | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Lease expiration date | Mar. 31, 2033 | ||||||||||
Lease renewal term | 10 years | 10 years | |||||||||
Term of lease | 10 years | 10 years | |||||||||
Fire Mesa Office Building [Member] | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Lease expiration date | Aug. 31, 2027 | ||||||||||
Payment to acquire business | $ 12,900,000 | ||||||||||
Lease percentage | 100% | ||||||||||
Universal Health Services of Delaware Inc | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Advisory fee | $ 1,300,000 | 1,300,000 | |||||||||
Average invested real estate assets | $ 761,000,000 | $ 741,000,000 | $ 4,000,000 | $ 721,000,000 | |||||||
Catholic Health Initiatives Iowa | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Percentage of lease guaranteed | 48% | ||||||||||
Customer Concentration Risk | Revenues | Universal Health Services, Inc | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Percentage of revenues generated from leases and tenants | 25% | 27% | 25% | 27% | |||||||
Customer Concentration Risk | Revenues | Universal Health Services, Inc | Tenants | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Percentage of revenues generated from leases and tenants | 41% | 41% | 41% | 41% | |||||||
[1] Includes bonus rental on McAllen Medical Center, a UHS acute care hospital facility of $ 725 and $ 727 for the three-month periods ended September 30, 2023 and 2022, respectively, and $ 2,219 and $ 2,048 for the nine-month periods ended September 30, 2023 and 2022, respectively. Consists of bonus rental earned in connection with McAllen Medical Center. |
Existing Lease Terms and Renewa
Existing Lease Terms and Renewal Options for Each of UHS Hospital Facilities (Detail) - Universal Health Services, Inc | 9 Months Ended | |
Sep. 30, 2023 USD ($) | ||
McAllen Medical Center | ||
Operating Leased Assets [Line Items] | ||
Annual Minimum Rent | $ 5,485,000 | [1] |
End of Lease Term | 2026-12 | [1] |
Renewal Term (years) | 5 years | [1] |
Wellington Regional Medical Center | ||
Operating Leased Assets [Line Items] | ||
Annual Minimum Rent | $ 6,477,000 | [2] |
End of Lease Term | 2026-12 | [2] |
Renewal Term (years) | 5 years | [2] |
Aiken Regional Medical Center/Aurora Pavilion Behavioral Health Services | ||
Operating Leased Assets [Line Items] | ||
Annual Minimum Rent | $ 3,982,000 | [3] |
End of Lease Term | 2033-12 | [3] |
Renewal Term (years) | 35 years | [3] |
Canyon Creek Behavioral Health | ||
Operating Leased Assets [Line Items] | ||
Annual Minimum Rent | $ 1,800,000 | [3] |
End of Lease Term | 2033-12 | [3] |
Renewal Term (years) | 35 years | [3] |
Clive Behavioral Health Hospital | ||
Operating Leased Assets [Line Items] | ||
Annual Minimum Rent | $ 2,701,000 | [4] |
End of Lease Term | 2040-12 | [4] |
Renewal Term (years) | 50 years | [4] |
[1] UHS has one 5-year renewal option at existing lease rates (through 2031 ). UHS has one 5-year renewal option at fair market value lease rates (through 2031 ; see additional disclosure below). The annual rental will increase by 2.5 % on an annual compounded basis on each January 1 st through 2026. UHS has seven 5-year renewal options at fair market value lease rates ( 2034 through 2068 ). The annual rental rate will increase by 2.25 % on a cumulative and compounded basis on each January 1 st through 2033. The UHS-related joint venture has five 10-year renewal options; the first three of the five 10-year renewal options will be at computed lease rates as stipulated in the lease ( 2041 through 2070 ) and the last two 10-year renewal options will be at fair market lease rates ( 2071 through 2090 ). On each January 1 st through 2040 (and potentially through 2070 if the first three of five, 10-year renewal options are exercised), the annual rental will increase by 2.75 % on a cumulative and compounded basis. |
Existing Lease Terms and Rene_2
Existing Lease Terms and Renewal Options for Each of UHS Hospital Facilities (Parenthetical) (Detail) - Universal Health Services, Inc | 9 Months Ended |
Sep. 30, 2023 Renewaloptions | |
McAllen Medical Center | |
Operating Leased Assets [Line Items] | |
Number of renewal option at existing lease rates | 1 |
Renewal options term at fair market value lease rates | 5 years |
Renewal options at fair market value lease rates expiration year | 2031 |
Wellington Regional Medical Center | |
Operating Leased Assets [Line Items] | |
Number of renewal options at fair market value lease rates | 1 |
Renewal options term at existing lease rates | 5 years |
Renewal option at existing lease rates expiration year | 2031 |
Percentage of annual rental increase | 2.50% |
Aiken Regional Medical Center and Canyon Creek Behavioral Health | |
Operating Leased Assets [Line Items] | |
Number of renewal options at fair market value lease rates | 7 |
Renewal options term at fair market value lease rates | 5 years |
Percentage of annual rental increase on cumulative and compound basis | 2.25% |
Aiken Regional Medical Center and Canyon Creek Behavioral Health | Minimum | |
Operating Leased Assets [Line Items] | |
Renewal options at fair market value lease rates expiration year | 2034 |
Aiken Regional Medical Center and Canyon Creek Behavioral Health | Maximum | |
Operating Leased Assets [Line Items] | |
Renewal options at fair market value lease rates expiration year | 2068 |
Clive Behavioral Health Hospital | |
Operating Leased Assets [Line Items] | |
Number of renewal options at fair market value lease rates | 5 |
Renewal options term at fair market value lease rates | 10 years |
Clive Behavioral Health Hospital | First Three Year Renewal Options | |
Operating Leased Assets [Line Items] | |
Percentage of annual rental increase on cumulative and compound basis | 2.75% |
Clive Behavioral Health Hospital | Minimum | First Three Year Renewal Options | |
Operating Leased Assets [Line Items] | |
Renewal options at lease rate stipulated in lease expiration year | 2041 |
Clive Behavioral Health Hospital | Minimum | Last Two Year Renewal Options | |
Operating Leased Assets [Line Items] | |
Renewal options at fair market value lease rates expiration year | 2071 |
Clive Behavioral Health Hospital | Maximum | First Three Year Renewal Options | |
Operating Leased Assets [Line Items] | |
Renewal options at lease rate stipulated in lease expiration year | 2070 |
Clive Behavioral Health Hospital | Maximum | Last Two Year Renewal Options | |
Operating Leased Assets [Line Items] | |
Renewal options at fair market value lease rates expiration year | 2090 |
Dividends - Additional Informat
Dividends - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Dividends and Equity Issuance [Line Items] | ||||
Dividends declared and paid | $ 9,900 | $ 9,800 | $ 29,767 | $ 29,326 |
Declared and paid dividends, per share | $ 0.72 | $ 0.71 | $ 2.155 | $ 2.125 |
Acquisitions and Divestitures -
Acquisitions and Divestitures - Additional Information (Detail) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Mar. 31, 2022 USD ($) ft² | Jan. 31, 2022 USD ($) ft² Tenant Time | Sep. 30, 2023 USD ($) ft² | Mar. 31, 2023 USD ($) ft² | Sep. 30, 2023 USD ($) ft² Disposition | Sep. 30, 2022 Disposition | ||
Business Acquisitions And Dispositions [Line Items] | |||||||
Number of dispositions | Disposition | 0 | 0 | |||||
TEXAS | Universal Health Services, Inc | |||||||
Business Acquisitions And Dispositions [Line Items] | |||||||
Lease expiration date | Aug. 31, 2035 | ||||||
Beaumont Heart And Vascular Center | Dearborn Michigan | |||||||
Business Acquisitions And Dispositions [Line Items] | |||||||
Lease expiration date | Nov. 30, 2026 | ||||||
Lease commencing date | Dec. 01, 2022 | ||||||
Percentage of lease escalations | 2.5 | ||||||
Payment to acquire business | $ 5,400,000 | ||||||
Percentage of lease | 100% | ||||||
Rentable square feet | ft² | 17,621 | ||||||
140 Thomas Johnson Drive Medical Office Building | Frederick, Maryland | |||||||
Business Acquisitions And Dispositions [Line Items] | |||||||
Payment to acquire business | $ 8,000,000 | ||||||
Percentage of lease | 100% | ||||||
Number of tenants | Tenant | 3 | ||||||
Percentage of rentable square feet | 72% | ||||||
Rentable square feet | ft² | 20,146 | ||||||
Double net lease agreement period | 15 years | ||||||
Initial lease terms | 14 years | ||||||
Number of term renewal options | Time | 3 | ||||||
Renewal Term (years) | 5 years | ||||||
Sierra Medical Plaza I | Reno, Nevada | Ground Lease and Master Flex-lease Agreement | Universal Health Services, Inc | |||||||
Business Acquisitions And Dispositions [Line Items] | |||||||
Percentage of rentable square feet | 68% | 68% | |||||
Rentable square feet | ft² | 86,000 | 86,000 | |||||
Cost of medical office building | $ 35,000,000 | ||||||
Cost Of Medical Office Building Incurred | $ 26,000,000 | ||||||
Sierra Medical Plaza I | Reno, Nevada | Ground Lease and Master Flex-lease Agreement | Universal Health Services, Inc | Minimum [Member] | |||||||
Business Acquisitions And Dispositions [Line Items] | |||||||
Initial rent | $ 1,300,000 | ||||||
Sierra Medical Plaza I | Reno, Nevada | Master flex lease agreement | Universal Health Services, Inc | |||||||
Business Acquisitions And Dispositions [Line Items] | |||||||
Lease expiration date | Mar. 31, 2033 | ||||||
Lease contract term | 10 years | 10 years | |||||
Term of lease | 10 years | 10 years | |||||
McAllen Doctor's Center | Universal Health Services, Inc | |||||||
Business Acquisitions And Dispositions [Line Items] | |||||||
Renewal Term (years) | [1] | 5 years | 5 years | ||||
McAllen Doctor's Center | TEXAS | Universal Health Services, Inc | |||||||
Business Acquisitions And Dispositions [Line Items] | |||||||
Lease expiration date | Aug. 31, 2035 | ||||||
Lease contract term | 12 years | 12 years | |||||
Payment to acquire business | $ 7,500,000 | ||||||
Percentage of lease | 100% | ||||||
Rentable square feet | ft² | 79,500 | 79,500 | |||||
Term of lease | 12 years | 12 years | |||||
Lease option to renew | true | ||||||
Renewal Term (years) | 10 years | 10 years | |||||
Initial rent | $ 624,000 | ||||||
[1] UHS has one 5-year renewal option at existing lease rates (through 2031 ). |
Summarized Financial Informat_3
Summarized Financial Information of Equity Affiliates - Additional Information (Detail) - Property | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2021 | |
Grayson Properties | ||
Schedule Of Equity Method Investments [Line Items] | ||
Minority ownership interest held by a third-party | 5% | |
Ownership percentage upon completion of the minority ownership purchase | 100% | |
Limited Liability Companies | Medical office buildings | ||
Schedule Of Equity Method Investments [Line Items] | ||
Number of real estate investments | 4 | |
Minimum | ||
Schedule Of Equity Method Investments [Line Items] | ||
Number of days for Non-Offering Member either to purchase or sell its entire ownership interest to or from Offering Member | 60 days | |
Maximum | ||
Schedule Of Equity Method Investments [Line Items] | ||
Number of days for Non-Offering Member either to purchase or sell its entire ownership interest to or from Offering Member | 90 days | |
4 Unconsolidated Limited Liability Companies / Limited Partner | Minimum | ||
Schedule Of Equity Method Investments [Line Items] | ||
Non-controlling equity interest, ownership percentage | 33% | |
4 Unconsolidated Limited Liability Companies / Limited Partner | Maximum | ||
Schedule Of Equity Method Investments [Line Items] | ||
Non-controlling equity interest, ownership percentage | 95% |
Limited Liability Companies Acc
Limited Liability Companies Accounted for Under Equity Method (Detail) | 9 Months Ended | |
Sep. 30, 2023 | ||
Suburban Properties | ||
Schedule Of Equity Method Investments [Line Items] | ||
Ownership | 33% | |
Property Owned by LLC/LP | St. Matthews Medical Plaza II | |
Brunswick Associates | ||
Schedule Of Equity Method Investments [Line Items] | ||
Ownership | 74% | [1],[2] |
Property Owned by LLC/LP | Mid Coast Hospital MOB | [1],[2] |
FTX MOB Phase II limited partnership | ||
Schedule Of Equity Method Investments [Line Items] | ||
Ownership | 95% | [3] |
Property Owned by LLC/LP | Forney Medical Plaza II | [3] |
Grayson Properties Two L P | ||
Schedule Of Equity Method Investments [Line Items] | ||
Ownership | 95% | [4],[5] |
Property Owned by LLC/LP | Texoma Medical Plaza II | [4],[5] |
[1] This LLC has a third-party term loan of $ 8.5 million, which is non-recourse to us, outstanding as of September 30, 2023. We are the lessee with a third party on a ground lease for land. During the first quarte r of 2021, this LP paid off its $ 4.7 million mortgage loan upon maturity, utilizing pro rata equity contributions from the limited partners as well as a $ 3.5 million member loan from us to the LP which was funded utilizing borrowings from our revolving credit agreement. During the first quarter of 2023, the LP repaid $ 175,000 of the member loan and the remaining $ 3.3 million member loan balance was converted to an equity investment in the LP. Construction of this MOB was substantially completed in December, 2020. This MOB is located in Denison, Texas on the campus of a hospital owned and operated by a wholly-owned subsidiary of UHS. We have committed to invest up to $ 5.0 million in equity and debt financing, $ 2.2 million of which has been funded as of September 30, 2023. This LP entered into a $ 13.1 million third-party construction loan commitment, which is non-recourse to us, which has an outstanding balance of $ 12.8 million as of September 30, 2023. Monthly principal and interest payments on this loan commenced on January 1, 2023. The LP developed, constructed, owns and op erates the Texoma II Medical Plaza. We are the lessee with a UHS-related party for the land related to this property. |
Limited Liability Companies A_2
Limited Liability Companies Accounted for Under Equity Method (Parenthetical) (Detail) - USD ($) | 3 Months Ended | 9 Months Ended |
Mar. 31, 2021 | Sep. 30, 2023 | |
Brunswick Associates | ||
Schedule Of Equity Method Investments [Line Items] | ||
Third-party term loan | $ 8,500,000 | |
Grayson Properties | Denison Texas | ||
Schedule Of Equity Method Investments [Line Items] | ||
Commitment to investment | 2,200,000 | |
FTX MOB Phase II limited partnership | ||
Schedule Of Equity Method Investments [Line Items] | ||
Member loan used to repay mortgage loan | $ 3,500,000 | |
Repayment of loan | $ 4,700,000 | 175,000 |
Loan balance converted to equity invesment | 3,300,000 | |
Grayson Properties II LP | ||
Schedule Of Equity Method Investments [Line Items] | ||
Construction loan | 13,100,000 | |
Construction loan outstanding balance | 12,800,000 | |
Grayson Properties II LP | Maximum | Denison Texas | ||
Schedule Of Equity Method Investments [Line Items] | ||
Commitment to investment | $ 5,000,000 |
Condensed Combined Statements o
Condensed Combined Statements of Income (Unaudited) for LLCs/LPs Accounted Under Equity Method (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Schedule Of Equity Method Investments [Line Items] | ||||
Revenues | $ 24,223 | $ 22,151 | $ 71,255 | $ 66,497 |
Net income | 11,807 | 15,471 | ||
Our share of net income | 314 | 346 | 953 | 943 |
Equity Method Investment, Nonconsolidated Investee or Group of Investees | ||||
Schedule Of Equity Method Investments [Line Items] | ||||
Revenues | 2,269 | 2,129 | 6,538 | 6,108 |
Operating expenses | 967 | 826 | 2,684 | 2,289 |
Depreciation and amortization | 478 | 463 | 1,394 | 1,386 |
Interest, net | 199 | 264 | 638 | 795 |
Net income | 625 | 576 | 1,822 | 1,638 |
Equity Method Investment, Nonconsolidated Investee or Group of Investees | ||||
Schedule Of Equity Method Investments [Line Items] | ||||
Our share of net income | $ 314 | $ 346 | $ 953 | $ 943 |
Condensed Combined Balance Shee
Condensed Combined Balance Sheets (Unaudited) for LLCs/LPs Accounted Under Equity Method (Detail) - USD ($) $ in Thousands | Sep. 30, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | |
Schedule Of Equity Method Investments [Line Items] | |||||||
Total Assets | $ 607,883 | $ 607,540 | |||||
Equity | 210,308 | $ 216,635 | 229,101 | $ 233,627 | $ 234,646 | $ 235,327 | |
Total Liabilities and Equity | 607,883 | 607,540 | |||||
Investments in and advances to LLCs before amounts included in accrued expenses and other liabilities | 9,329 | 9,282 | |||||
Equity Method Investment, Nonconsolidated Investee or Group of Investees | |||||||
Schedule Of Equity Method Investments [Line Items] | |||||||
Net property, including construction in progress | 28,875 | 29,573 | |||||
Other assets | [1] | 5,310 | 4,334 | ||||
Total Assets | 34,185 | 33,907 | |||||
Other liabilities | [1] | 2,767 | 2,338 | ||||
Mortgage notes payable, non-recourse to us | 21,357 | 21,802 | |||||
Advances payable to us | [2] | 3,500 | |||||
Equity | 10,061 | 6,267 | |||||
Total Liabilities and Equity | 34,185 | 33,907 | |||||
Investments in and advances to LLCs before amounts included in accrued expenses and other liabilities | 9,329 | 9,282 | |||||
Amounts included in accrued expenses and other liabilities | (1,730) | (1,709) | |||||
Equity Method Investment, Nonconsolidated Investee or Group of Investees | |||||||
Schedule Of Equity Method Investments [Line Items] | |||||||
Our share of equity in LLCs, net | $ 7,599 | $ 7,573 | |||||
[1] Other assets and other liabilities as of September 30, 2023 and December 31, 2022 include approximately $ 652,000 and $ 654,000 , respectively, of right-of-use land assets and right-of-use land liabilities related to ground leases whereby the LLC/LP is the lessee, with third party lessors, including subsidiaries of UHS. This 7.25% member loan to FTX MOB Phase II, LP had a maturity date of March 1, 2023 . Upon the maturity date, the LP repaid $ 175,000 of the member loan to us and the remaining balance of $ 3.3 million was converted to an equity contribution by us. |
Condensed Combined Balance Sh_2
Condensed Combined Balance Sheets for LLCs/LPs Accounted Under Equity Method (Parenthetical) (Detail) - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
Schedule Of Equity Method Investments [Line Items] | ||
Right-of-use land assets | $ 10,952,000 | $ 11,457,000 |
Right-of-use land liabilities | 10,952,000 | 11,457,000 |
Limited Liability Companies | ||
Schedule Of Equity Method Investments [Line Items] | ||
Right-of-use land assets | 652,000 | 654,000 |
Right-of-use land liabilities | $ 654,000 | $ 652,000 |
FTX MOB Phase II limited partnership | ||
Schedule Of Equity Method Investments [Line Items] | ||
Maturity date | Mar. 01, 2023 | |
Repayment of loan | $ 175,000 | |
Loan balance converted to equity invesment | $ 3,300,000 |
Aggregate Principal Amounts due
Aggregate Principal Amounts due on Mortgage and Construction Notes Payable by Unconsolidated LLC's/LPs Accounted Under Equity Method (Detail) - Equity Method Investments - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2023 | Dec. 31, 2022 | ||
Schedule Of Equity Method Investments [Line Items] | |||
Mortgage Loan Balance | [1] | $ 21,357 | $ 21,802 |
Grayson Properties II LP | |||
Schedule Of Equity Method Investments [Line Items] | |||
Mortgage Loan Balance | [1],[2] | $ 12,835 | 13,075 |
Maturity Date | [2] | 2025-06 | |
Brunswick Associates | |||
Schedule Of Equity Method Investments [Line Items] | |||
Mortgage Loan Balance | [1] | $ 8,522 | $ 8,727 |
Maturity Date | 2030-12 | ||
[1] All mortgage loans require monthly principal payments through maturity and include a balloon principal payment upon maturity. This construction loan required interest on the outstanding principal balance to be paid on a monthly basis through December 1, 2022. On January 1, 2023, monthly principal and interest payments on this loan commenced. |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements - Additional Information (Details) - ASU 2022-06 | Sep. 30, 2023 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true |
Change in Accounting Principle, Accounting Standards Update, Immaterial Effect [true false] | true |
Lease Accounting - Additional I
Lease Accounting - Additional Information (Detail) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) Subsidiary | Jun. 30, 2023 USD ($) | Sep. 30, 2023 USD ($) Lease Property Land Facility | Sep. 30, 2022 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 Subsidiary | ||
Leases Disclosure [Line Items] | |||||||||||||
Number of properties | Property | 2 | ||||||||||||
Operating expenses excluding depreciation and amortization expense | $ 183,000 | $ 167,000 | $ 572,000 | $ 540,000 | |||||||||
Lessee in connection with ground leases for land | Land | 15 | ||||||||||||
Right-of-use land assets | 10,952,000 | $ 11,457,000 | $ 10,952,000 | $ 11,457,000 | |||||||||
Ground lease liabilities | 10,952,000 | 11,457,000 | 10,952,000 | 11,457,000 | |||||||||
Specialty Hospital In Chicago, Illinois | |||||||||||||
Leases Disclosure [Line Items] | |||||||||||||
Lease Demolition Cost | $ 1,500,000 | ||||||||||||
Other operating expenses demolition costs | $ 862,000 | $ 265,000 | $ 332,000 | ||||||||||
Operating expenses demolition costs | 129,000,000 | 240,000 | 1,500,000 | 1,100,000 | |||||||||
Operating expenses excluding demolition | 129,000,000 | $ 401,000,000 | |||||||||||
Specialty Hospital In Chicago, Illinois | Forecast | |||||||||||||
Leases Disclosure [Line Items] | |||||||||||||
Operating expenses excluding demolition | $ 1,300,000 | ||||||||||||
Evansville Rehabilitation Hospital Evansville, Indiana and Corpus Christi Facility Corpus Christi, Texas | |||||||||||||
Leases Disclosure [Line Items] | |||||||||||||
Number of specialty facilities | Facility | 2 | ||||||||||||
Aiken Regional Medical Center and Canyon Creek Behavioral Health | |||||||||||||
Leases Disclosure [Line Items] | |||||||||||||
Fair market value of real estate assets received | $ 83,400,000 | $ 83,600,000 | |||||||||||
Monthly lease rent receivable | $ 5,800,000 | ||||||||||||
Lease payments expected | 1,400,000 | 1,400,000 | 4,100,000 | 4,100,000 | |||||||||
Lease expiration date | Dec. 31, 2033 | ||||||||||||
Aiken Regional Medical Center and Canyon Creek Behavioral Health | Forecast | |||||||||||||
Leases Disclosure [Line Items] | |||||||||||||
Lease payments expected | $ 5,500,000 | ||||||||||||
Aiken Regional Medical Center | |||||||||||||
Leases Disclosure [Line Items] | |||||||||||||
Monthly lease rent receivable | 4,000,000 | ||||||||||||
Canyon Creek Behavioral Health | |||||||||||||
Leases Disclosure [Line Items] | |||||||||||||
Monthly lease rent receivable | $ 1,800,000 | ||||||||||||
Universal Health Services, Inc | |||||||||||||
Leases Disclosure [Line Items] | |||||||||||||
Lease revenue | [1] | $ 8,274,000 | $ 7,471,000 | $ 24,297,000 | $ 22,291,000 | ||||||||
Universal Health Services, Inc | Subsidiary | |||||||||||||
Leases Disclosure [Line Items] | |||||||||||||
Number of wholly-owned subsidiaries | Subsidiary | 2 | ||||||||||||
Financing Arrangements | |||||||||||||
Leases Disclosure [Line Items] | |||||||||||||
Number of lease property | Lease | 2 | ||||||||||||
Asset Purchase and Sale Agreement | Universal Health Services, Inc | Subsidiary | Aiken Regional Medical Center and Canyon Creek Behavioral Health | |||||||||||||
Leases Disclosure [Line Items] | |||||||||||||
Number of wholly-owned subsidiaries | Subsidiary | 2 | ||||||||||||
Fair market value of real estate assets received | $ 83,700,000 | ||||||||||||
[1] Includes bonus rental on McAllen Medical Center, a UHS acute care hospital facility of $ 725 and $ 727 for the three-month periods ended September 30, 2023 and 2022, respectively, and $ 2,219 and $ 2,048 for the nine-month periods ended September 30, 2023 and 2022, respectively. |
Lease Accounting - Components o
Lease Accounting - Components of the "Lease Revenue - UHS facilities" and "Lease Revenue - Non-related Parties" Captions (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
Universal Health Services, Inc | |||||
Leases Disclosure [Line Items] | |||||
Lease revenue | [1] | $ 8,274 | $ 7,471 | $ 24,297 | $ 22,291 |
Universal Health Services, Inc | Base Rents | |||||
Leases Disclosure [Line Items] | |||||
Lease revenue | 6,620 | 6,102 | 19,400 | 18,303 | |
Universal Health Services, Inc | Bonus Rents | |||||
Leases Disclosure [Line Items] | |||||
Lease revenue | [2] | 725 | 727 | 2,219 | 2,048 |
Universal Health Services, Inc | Tenant Reimbursements | |||||
Leases Disclosure [Line Items] | |||||
Lease revenue | 929 | 642 | 2,678 | 1,940 | |
Non-Related Parties | |||||
Leases Disclosure [Line Items] | |||||
Lease revenue | 13,926 | 12,836 | 40,955 | 38,664 | |
Non-Related Parties | Base Rents | |||||
Leases Disclosure [Line Items] | |||||
Lease revenue | 10,542 | 10,108 | 31,256 | 30,352 | |
Non-Related Parties | Tenant Reimbursements | |||||
Leases Disclosure [Line Items] | |||||
Lease revenue | $ 3,384 | $ 2,728 | $ 9,699 | $ 8,312 | |
[1] Includes bonus rental on McAllen Medical Center, a UHS acute care hospital facility of $ 725 and $ 727 for the three-month periods ended September 30, 2023 and 2022, respectively, and $ 2,219 and $ 2,048 for the nine-month periods ended September 30, 2023 and 2022, respectively. Consists of bonus rental earned in connection with McAllen Medical Center. |
Debt and Financial Instrument_2
Debt and Financial Instruments - Additional Information (Detail) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||
May 15, 2023 | Jan. 03, 2023 USD ($) | Jul. 02, 2021 USD ($) | Mar. 27, 2018 USD ($) Option | Mar. 31, 2020 USD ($) Derivative | Jan. 31, 2020 USD ($) Derivative | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2019 USD ($) Derivative | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Debt Instrument [Line Items] | ||||||||||||
Net borrowings on the line of credit | $ 23,400,000 | $ 18,200,000 | ||||||||||
Outstanding borrowings under revolving credit agreement | $ 321,500,000 | 321,500,000 | $ 298,100,000 | |||||||||
Letters Of Credit Outstanding Amount | 3,100,000 | 3,100,000 | 3,100,000 | |||||||||
Available borrowing capacity | 50,400,000 | 50,400,000 | 73,800,000 | |||||||||
Compensating Balance Amount | 0 | 0 | ||||||||||
Interest Rate Swap | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Derivative interest rate cap, net payment received or accrued from counterparties | $ 3,000,000 | |||||||||||
Derivative interest rate cap, payment received or accrued from counterparties | 4,300,000 | |||||||||||
Derivative interest rate cap, offset due to counterparties | $ 428,000,000 | 5,900,000 | 463,000 | |||||||||
Interest Rate Swap Agreement One | Cash Flow Hedge | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Number of interest rate cap agreements | Derivative | 1 | |||||||||||
Derivative instruments, fixed rate | 0.565% | |||||||||||
Notional amount | $ 55,000,000 | |||||||||||
Expiration date of interest rate | Mar. 25, 2027 | |||||||||||
Interest Rate Swap Agreement Two | Cash Flow Hedge | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Number of interest rate cap agreements | Derivative | 1 | |||||||||||
Derivative instruments, fixed rate | 1.4975% | |||||||||||
Notional amount | $ 35,000,000 | |||||||||||
Expiration date of interest rate | Sep. 16, 2024 | |||||||||||
Interest Rate Swap Agreement Three | Cash Flow Hedge | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Number of interest rate cap agreements | Derivative | 1 | |||||||||||
Derivative instruments, fixed rate | 1.144% | |||||||||||
Notional amount | $ 50,000,000 | |||||||||||
Expiration date of interest rate | Sep. 16, 2024 | |||||||||||
Level 2 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Mortgage loan fair value | 36,700,000 | 36,700,000 | 43,200,000 | |||||||||
Mortgage debt | 39,500,000 | 39,500,000 | $ 45,000,000 | |||||||||
Derivative interest rate cap, net payment received or accrued from counterparties | 2,500,000 | $ 414,000 | ||||||||||
Derivative interest rate cap, payment received or accrued from counterparties | 1,600,000 | |||||||||||
Level 2 | Interest Rate Swap | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Liability derivatives, fair value | $ 10,500,000 | $ 10,500,000 | ||||||||||
Desert Valley Medical Center Fixed Rate Mortgage Loan | Nonrecourse | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Repayment of mortgage loan | $ 4,200,000 | |||||||||||
Base Rate | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Margin points added to the reference rate | 0.20% | |||||||||||
Secured Overnight Financing Rate (SOFR) | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Margin points added to the reference rate | 10% | 1.20% | ||||||||||
Secured Overnight Financing Rate (SOFR) | Interest Rate Swap Agreement One | Cash Flow Hedge | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Derivative instruments, fixed rate | 0.505% | |||||||||||
Secured Overnight Financing Rate (SOFR) | Interest Rate Swap Agreement Two | Cash Flow Hedge | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Derivative instruments, fixed rate | 1.41% | |||||||||||
Secured Overnight Financing Rate (SOFR) | Interest Rate Swap Agreement Three | Cash Flow Hedge | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Derivative instruments, fixed rate | 1.064% | |||||||||||
Credit Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Outstanding borrowing | $ 350,000,000 | $ 375,000,000 | ||||||||||
Net borrowings on the line of credit | 350,000,000 | $ 50,000,000 | ||||||||||
Unsecured revolving amended credit agreement terminated date | Jul. 02, 2025 | |||||||||||
Increase in borrowing capacity | $ 375,000,000 | |||||||||||
Number of additional six month extension options | Option | 2 | |||||||||||
Credit Agreement | Swingline/Short-Term Loans | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Outstanding borrowing | $ 30,000,000 | |||||||||||
Credit Agreement | Letters of Credit | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Outstanding borrowing | $ 40,000,000 | |||||||||||
Revolving A Facility | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit facility, Interest Rate Terms | Borrowings under the Credit Agreement will bear interest annually at a rate equal to, at our option, at adjusted term SOFR for either one, three, or six months or the Base Rate, plus in either case, a specified margin depending on our total leverage ratio, as determined by the formula set forth in the Credit Agreement. The applicable margin prior to the first amendment ranges from 1.10% to 1.35% for LIBOR loans and 0.10% to 0.35% for Base Rate loans. | |||||||||||
Base rate description | 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%. | |||||||||||
Revolving A Facility | Minimum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Facility fee payable on commitment | 0.15% | |||||||||||
Revolving A Facility | Minimum | London Interbank Offered Rate (LIBOR) | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Margin points added to the reference rate | 1.10% | |||||||||||
Revolving A Facility | Minimum | Base Rate | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Margin points added to the reference rate | 0.10% | |||||||||||
Revolving A Facility | Minimum | Federal Funds Effective Rate | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Margin points added to the base rate | 0.50% | |||||||||||
Revolving A Facility | Minimum | Secured Overnight Financing Rate (SOFR) | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Margin points added to the base rate | 1% | |||||||||||
Revolving A Facility | Maximum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Facility fee payable on commitment | 0.35% | |||||||||||
Revolving A Facility | Maximum | London Interbank Offered Rate (LIBOR) | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Margin points added to the reference rate | 1.35% | |||||||||||
Revolving A Facility | Maximum | Base Rate | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Margin points added to the reference rate | 0.35% | |||||||||||
Revolving B Facility | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Facility fee payable on commitment | 0.20% | |||||||||||
Revolving B Facility | Base Rate | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Margin points added to the reference rate | 0.20% | |||||||||||
Revolving B Facility | Secured Overnight Financing Rate (SOFR) | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Margin points added to the reference rate | 1.20% |
Summary of Required Compliance
Summary of Required Compliance Ratios in Connection with Terms of Credit Agreement (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | ||
Covenant, Tangible net worth | $ 125,000 | |
Tangible net worth | $ 200,658 | $ 219,654 |
Total leverage | 44.50% | 42.90% |
Secured leverage | 4.90% | 5.60% |
Unencumbered leverage | 44.20% | 41.80% |
Fixed charge coverage | 3.30% | 4.30% |
Maximum | ||
Debt Instrument [Line Items] | ||
Covenant, Total leverage | 60% | |
Covenant, Secured leverage | 30% | |
Covenant, Unencumbered leverage | 60% | |
Minimum | ||
Debt Instrument [Line Items] | ||
Covenant, Fixed charge coverage | 1.50% |
Summary of Outstanding Mortgage
Summary of Outstanding Mortgages, Excluding Net Debt Premium (Detail) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2023 | Dec. 31, 2022 | ||
Debt Instrument [Line Items] | |||
Total mortgages notes payable, non-recourse to us, net | $ 39,319 | $ 44,725 | |
Nonrecourse | |||
Debt Instrument [Line Items] | |||
Outstanding Balance | [1] | 39,530 | |
Less net financing fees | [1] | (215) | |
Plus net debt premium | [1] | 4 | |
Total mortgages notes payable, non-recourse to us, net | [1] | 39,319 | |
2704 North Tenaya Way Fixed Rate Mortgage Loan | Nonrecourse | |||
Debt Instrument [Line Items] | |||
Outstanding Balance | [1],[2] | $ 6,121 | |
Interest Rate | [2] | 4.95% | |
Maturity Date | [2] | 2023-11 | |
Summerlin Hospital Medical Office Building III Fixed Rate Mortgage Loan | Nonrecourse | |||
Debt Instrument [Line Items] | |||
Outstanding Balance | [1],[3] | $ 12,345 | |
Interest Rate | [3] | 4.03% | |
Maturity Date | [3] | 2024-04 | |
Tuscan Professional Building Fixed Rate Mortgage Loan | Nonrecourse | |||
Debt Instrument [Line Items] | |||
Outstanding Balance | [1] | $ 1,229 | |
Interest Rate | 5.56% | ||
Maturity Date | 2025-06 | ||
Phoenix Children East Valley Care Center Fixed Rate Mortgage Loan | Nonrecourse | |||
Debt Instrument [Line Items] | |||
Outstanding Balance | [1] | $ 7,999 | |
Interest Rate | 3.95% | ||
Maturity Date | 2030-01 | ||
Rosenberg Children's Medical Plaza Fixed Rate Mortgage Loan | Nonrecourse | |||
Debt Instrument [Line Items] | |||
Outstanding Balance | [1] | $ 11,836 | |
Interest Rate | 4.42% | ||
Maturity Date | 2033-09 | ||
[1] All mortgage loans require monthly principal payments through maturity and either fully amortize or include a balloon principal payment upon maturity. Upon the November 1, 2023 maturity date, this loan was fully repaid utilizing borrowings under our Credit Agreement. This loan is scheduled to mature within the next twelve months at which time we will either refinance pursuant to a new mortgage loan or repay the mortgage balance in full utilizing borrowings under our Credit Agreement. |
Segment Reporting - Additional
Segment Reporting - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2023 Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 1 |