Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 31, 2019 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
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 | 13,756,539 | |
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 | |
City Area Code | 610 | |
Local Phone Number | 265-0688 | |
Entity Interactive Data Current | Yes | |
Title of 12(b) Security | Shares of beneficial interest, $0.01 par value | |
Trading Symbol | UHT | |
Security Exchange Name | NYSE | |
Entity Incorporation, State or Country Code | MD | |
Document Quarterly Report | true | |
Document Transition Report | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | ||
Revenues: | |||||
Revenues, Total | $ 19,326 | $ 20,111 | $ 38,438 | $ 38,650 | |
Expenses: | |||||
Depreciation and amortization | 6,426 | 6,111 | 13,134 | 12,398 | |
Other operating expenses | 5,330 | 5,445 | 10,540 | 10,653 | |
Costs and Expenses, Total | 12,738 | 12,504 | 25,626 | 24,903 | |
Income before equity in income of unconsolidated limited liability companies ("LLCs"), interest expense, hurricane insurance recovery proceeds and gain | 6,588 | 7,607 | 12,812 | 13,747 | |
Equity in income of unconsolidated LLCs | 454 | 425 | 884 | 854 | |
Hurricane insurance recovery proceeds in excess of damaged property write-downs | 4,535 | ||||
Hurricane business interruption insurance recovery proceeds | 194 | 1,162 | |||
Gain on sale of land | 250 | ||||
Interest expense, net | (2,781) | (2,421) | (5,473) | (4,889) | |
Net income | $ 4,261 | $ 5,805 | $ 8,473 | $ 15,409 | |
Basic and diluted earnings per share | $ 0.31 | $ 0.42 | $ 0.62 | $ 1.12 | |
Weighted average number of shares outstanding - Basic | 13,730 | 13,720 | 13,729 | 13,719 | |
Weighted average number of shares outstanding - Diluted | 13,749 | 13,720 | 13,748 | 13,719 | |
Non-Related Parties | |||||
Revenues: | |||||
Lease revenue | $ 13,178 | $ 12,392 | $ 25,909 | $ 24,899 | |
Other | |||||
Revenues: | |||||
Other revenue | 288 | 2,025 | 663 | 2,260 | |
Management Service | |||||
Expenses: | |||||
Advisory fees to UHS | 982 | 948 | 1,952 | 1,852 | |
UHS Facilities | |||||
Revenues: | |||||
Lease revenue | [1] | 5,651 | 5,619 | 11,444 | 11,354 |
UHS Facilities | Other | |||||
Revenues: | |||||
Other revenue | $ 209 | $ 75 | $ 422 | $ 137 | |
[1] | Includes bonus rental on UHS hospital facilities of $1,352 and $1,204 for the three-month periods ended June 30, 2019 and 2018, respectively, and $2,746 and $2,530 for the six-month periods ended June 30, 2019 and 2018, respectively |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
UHS Hospital Facilities | ||||
Bonus rental | $ 1,352 | $ 1,204 | $ 2,746 | $ 2,530 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net income | $ 4,261 | $ 5,805 | $ 8,473 | $ 15,409 |
Other comprehensive (loss)/income: | ||||
Unrealized derivative (loss)/gain on interest rate caps | 6 | (132) | 154 | |
Total other comprehensive (loss)/income: | 6 | (132) | 154 | |
Total comprehensive income | $ 4,261 | $ 5,811 | $ 8,341 | $ 15,563 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | |
Real Estate Investments: | |||
Buildings and improvements and construction in progress | $ 560,089 | $ 557,650 | |
Accumulated depreciation | (183,857) | (173,316) | |
Real Estate Investment Property, Net, Total | 376,232 | 384,334 | |
Land | 53,396 | 53,396 | |
Net Real Estate Investments | 429,628 | 437,730 | |
Investments in limited liability companies ("LLCs") | 4,962 | 5,019 | |
Other Assets: | |||
Cash and cash equivalents | 6,072 | 5,036 | |
Lease and other receivables from UHS | 2,806 | 2,739 | |
Lease receivable - other | 7,070 | 7,469 | |
Intangible assets (net of accumulated amortization of $24.7 million and $27.6 million, respectively) | 15,754 | 17,407 | |
Right-of-use land assets, net | 8,862 | ||
Deferred charges and other assets, net | 7,597 | 8,356 | |
Total Assets | 482,751 | 483,756 | |
Liabilities: | |||
Line of credit borrowings | 191,550 | 196,400 | |
Mortgage notes payable, non-recourse to us, net | 61,562 | [1] | 64,881 |
Accrued interest | 422 | 450 | |
Accrued expenses and other liabilities | 11,139 | 11,765 | |
Dividends payable | 9,354 | ||
Ground lease liabilities, net | 8,862 | ||
Tenant reserves, deposits and deferred and prepaid rents | 11,322 | 11,650 | |
Total Liabilities | 294,211 | 285,146 | |
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: 2019 - 13,756,531; 2018 - 13,746,803 | 138 | 137 | |
Capital in excess of par value | 266,252 | 266,031 | |
Cumulative net income | 650,789 | 642,316 | |
Cumulative dividends | (728,639) | (710,006) | |
Accumulated other comprehensive income | 132 | ||
Total Equity | 188,540 | 198,610 | |
Total Liabilities and Equity | $ 482,751 | $ 483,756 | |
[1] | All mortgage loans require monthly principal payments through maturity and either fully amortize or include a balloon principal payment upon maturity. |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Statement Of Financial Position [Abstract] | ||
Intangible assets, accumulated amortization | $ 24.7 | $ 27.6 |
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 | 13,756,531 | 13,746,803 |
Common shares, outstanding | 13,756,531 | 13,746,803 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Changes in Equity - USD ($) shares in Thousands, $ 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, 2017 | $ 210,561 | $ 137 | $ 265,335 | $ 618,120 | $ (673,175) | $ 144 |
Balance, Shares at Dec. 31, 2017 | 13,735 | |||||
Shares of Beneficial Interest: | ||||||
Issued, net | (45) | (45) | ||||
Issued, net (in shares) | 9 | |||||
Restricted stock-based compensation expense | 254 | 254 | ||||
Dividends ($1.355/share) for six months ended June 30, 2019, ($.68/share) for three months ended June 30, 2019, ($1.335/share) for six months ended June 30, 2018 and ($.67/share) for three months ended June 30, 2018 | (18,343) | (18,343) | ||||
Comprehensive income: | ||||||
Net income | 15,409 | 15,409 | ||||
Unrealized loss on interest rate cap | 154 | 154 | ||||
Subtotal - comprehensive income | 15,563 | 15,409 | 154 | |||
Balance at Jun. 30, 2018 | 207,990 | $ 137 | 265,544 | 633,529 | (691,518) | 298 |
Balance, Shares at Jun. 30, 2018 | 13,744 | |||||
Balance at Mar. 31, 2018 | 211,356 | $ 137 | 265,511 | 627,724 | (682,309) | 293 |
Balance, Shares at Mar. 31, 2018 | 13,736 | |||||
Shares of Beneficial Interest: | ||||||
Issued, net | (102) | (102) | ||||
Issued, net (in shares) | 8 | |||||
Restricted stock-based compensation expense | 135 | 135 | ||||
Dividends ($1.355/share) for six months ended June 30, 2019, ($.68/share) for three months ended June 30, 2019, ($1.335/share) for six months ended June 30, 2018 and ($.67/share) for three months ended June 30, 2018 | (9,209) | (9,209) | ||||
Comprehensive income: | ||||||
Net income | 5,805 | 5,805 | ||||
Unrealized loss on interest rate cap | 5 | 5 | ||||
Subtotal - comprehensive income | 5,810 | 5,805 | 5 | |||
Balance at Jun. 30, 2018 | 207,990 | $ 137 | 265,544 | 633,529 | (691,518) | 298 |
Balance, Shares at Jun. 30, 2018 | 13,744 | |||||
Balance at Dec. 31, 2018 | 198,610 | $ 137 | 266,031 | 642,316 | (710,006) | 132 |
Balance, Shares at Dec. 31, 2018 | 13,747 | |||||
Shares of Beneficial Interest: | ||||||
Issued, net | (109) | $ 1 | (110) | |||
Issued, net (in shares) | 10 | |||||
Restricted stock-based compensation expense | 331 | 331 | ||||
Dividends ($1.355/share) for six months ended June 30, 2019, ($.68/share) for three months ended June 30, 2019, ($1.335/share) for six months ended June 30, 2018 and ($.67/share) for three months ended June 30, 2018 | (18,633) | (18,633) | ||||
Comprehensive income: | ||||||
Net income | 8,473 | 8,473 | ||||
Unrealized loss on interest rate cap | (132) | (132) | ||||
Subtotal - comprehensive income | 8,341 | 8,473 | $ (132) | |||
Balance at Jun. 30, 2019 | 188,540 | $ 138 | 266,252 | 650,789 | (728,639) | |
Balance, Shares at Jun. 30, 2019 | 13,757 | |||||
Balance at Mar. 31, 2019 | 193,627 | $ 137 | 266,247 | 646,528 | (719,285) | |
Balance, Shares at Mar. 31, 2019 | 13,748 | |||||
Shares of Beneficial Interest: | ||||||
Issued, net | (166) | $ 1 | (167) | |||
Issued, net (in shares) | 9 | |||||
Restricted stock-based compensation expense | 172 | 172 | ||||
Dividends ($1.355/share) for six months ended June 30, 2019, ($.68/share) for three months ended June 30, 2019, ($1.335/share) for six months ended June 30, 2018 and ($.67/share) for three months ended June 30, 2018 | (9,354) | (9,354) | ||||
Comprehensive income: | ||||||
Net income | 4,261 | 4,261 | ||||
Subtotal - comprehensive income | 4,261 | 4,261 | ||||
Balance at Jun. 30, 2019 | $ 188,540 | $ 138 | $ 266,252 | $ 650,789 | $ (728,639) | |
Balance, Shares at Jun. 30, 2019 | 13,757 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Changes in Equity (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement Of Stockholders Equity [Abstract] | ||||
Dividend, per share | $ 0.68 | $ 0.67 | $ 1.355 | $ 1.335 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 8,473 | $ 15,409 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 13,032 | 12,288 |
Amortization of debt premium | (27) | (23) |
Stock-based compensation expense | 331 | 254 |
Hurricane insurance recovery proceeds in excess of damaged property write-downs | (4,535) | |
Gain on sale of land | (250) | |
Changes in assets and liabilities: | ||
Lease receivable | 332 | (337) |
Accrued expenses and other liabilities | (420) | (445) |
Tenant reserves, deposits and deferred and prepaid rents | (382) | 713 |
Accrued interest | (28) | (36) |
Leasing costs paid | (591) | (597) |
Other, net | 981 | 517 |
Net cash provided by operating activities | 21,451 | 23,208 |
Cash flows from investing activities: | ||
Investments in LLCs | (598) | (369) |
Cash distributions in excess of income from LLCs | 348 | 501 |
Additions to real estate investments, net | (2,956) | (4,246) |
Cash proceeds received from divestiture of property, net | 245 | |
Hurricane insurance recovery proceeds in excess of damaged property write-downs | 4,535 | |
Hurricane remediation payments | (192) | |
Net cash paid for acquisition of property | (4,053) | |
Net cash used in investing activities | (2,961) | (3,824) |
Cash flows from financing activities: | ||
Net (repayments)/borrowings on line of credit | (4,850) | 16,200 |
Repayments of mortgage notes payable | (3,351) | (22,585) |
Financing costs paid | (35) | (1,527) |
Dividends paid | (9,279) | (9,187) |
Issuance of shares of beneficial interest, net | 61 | 60 |
Net cash used in financing activities | (17,454) | (17,039) |
Increase in cash and cash equivalents | 1,036 | 2,345 |
Cash and cash equivalents, beginning of period | 5,036 | 3,387 |
Cash and cash equivalents, end of period | 6,072 | 5,732 |
Supplemental disclosures of cash flow information: | ||
Interest paid | 5,204 | 4,711 |
Invoices accrued for construction and improvements | 1,025 | $ 668 |
Right-of-use assets obtained in exchange for lease obligations | $ 8,875 |
General
General | 6 Months Ended |
Jun. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
General | (1) General This Quarterly Report on Form 10-Q is for the quarter ended June 30, 2019. 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 June 30, 2019, we had investments in four jointly-owned LLCs/LPs which own medical office buildings, all of which are accounted for by the equity method (see Note 5). These LLCs are included in our consolidated financial statements for all periods presented on an unconsolidated basis since they are not variable interest entities for which we are the primary beneficiary, nor do we hold a controlling voting interest. 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 condensed consolidated financial statements, the notes thereto and accounting policies included in our Annual Report on Form 10-K for the year ended December 31, 2018. 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 | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Relationship with Universal Health Services, Inc. ("UHS") and Related Party Transactions | (2) Relationship with Universal Health Services, Inc. (“UHS”) and Related Party Transactions Leases: We commenced operations in 1986 by purchasing properties from certain subsidiaries of UHS and immediately leasing the properties back to the respective subsidiaries. Most of the leases were entered into at the time we commenced operations and provided for initial terms of 13 to 15 years with up to six additional 5-year renewal terms. The current base rentals and lease and renewal terms for each of the three hospital facilities leased to subsidiaries of UHS are provided below. The base rents are paid monthly and each lease also provides for additional or bonus rents which are computed and paid on a quarterly basis based upon a computation that compares current quarter revenue to a corresponding quarter in the base year. The three hospital leases with subsidiaries of UHS are unconditionally guaranteed by UHS and are cross-defaulted with one another. The combined revenues generated from the leases on the UHS hospital facilities accounted for approximately 21% and 20% of our consolidated revenues for the three months ended June 30, 2019 and 2018, respectively, and approximately 22% and 21% of our consolidated revenues for the six months ended June 30, 2019 and 2018, respectively. In addition, we have seventeen medical office buildings (“MOBs”), or free-standing emergency departments (“FEDs”), that are either wholly or jointly-owned by us, that include tenants which are subsidiaries of UHS. The aggregate revenues generated from UHS-related tenants comprised approximately 30% and 28% of our consolidated revenues during the three-month periods ended June 30, 2019 and 2018, respectively, and approximately 31% and 30% of our consolidated revenues during the six-month periods ended June 30, 2019 and 2018, respectively. Pursuant to the Master Lease Document by and among us and certain subsidiaries of UHS, dated December 24, 1986 (the “Master Lease”), which governs the leases of all hospital properties with subsidiaries of UHS, UHS has the option 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 at the end of the lease terms or any renewal terms at the appraised fair market value. In addition, the Master Lease, as amended during 2006, includes a change of control provision whereby UHS has the right, upon one month’s notice should a change of control of the Trust occur, to purchase any or all of the three leased hospital properties listed below at their appraised fair market value. Additionally, UHS has rights of first refusal to: (i) purchase the respective leased facilities during and for 180 days 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 at the end of, and for 180 days after, the lease term at the same terms and conditions pursuant to any third-party offer. The table below details the existing lease terms and renewal options for our three acute care hospitals operated by wholly-owned subsidiaries of UHS: Hospital Name Annual Minimum Rent End of Lease Term Renewal Term (years) McAllen Medical Center $ 5,485,000 December, 2026 5 (a) Wellington Regional Medical Center $ 3,030,000 December, 2021 10 (b) Southwest Healthcare System, Inland Valley Campus $ 2,648,000 December, 2021 10 (b) (a) UHS has one 5-year renewal option at the existing lease rate (through 2031). (b) UHS has two 5-year renewal options at fair market value lease rates (2022 through 2031). Management cannot predict whether the leases with 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 lease revenue currently earned pursuant to the these leases. We are the lessee on nine ground leases with subsidiaries of UHS. The remaining lease terms on the ground leases with subsidiaries of UHS range from approximately 30 years to approximately 79 years. Our annual aggregate lease payments on these properties are approximately $290,000 for each of the years ended 2019, 2020, 2021, 2022 and 2023, and an aggregate of $16.4 million thereafter. See Note 7 for further disclosure around our adoption of the new lease standard. In August, 2019, Des Moines Medical Properties, LLC, a wholly-owned subsidiary of UHT, entered into an agreement with Clive Behavioral Health, LLC, a joint venture between UHS and Catholic Health Initiatives - Iowa, Corp. (d/b/a Mercy One Des Moines Medical Center), to construct a behavioral health care hospital in Clive, Iowa. The hospital is 100% preleased to Clive Behavioral Health, LLC under a 20-year, triple net lease with five, 10-year renewal options. Construction of the hospital, for which we have engaged a wholly-owned subsidiary of UHS to act as project manager for an aggregate fee of approximately $750,000, is expected to be completed in the fall of 2020 and the lease will commence upon issuance of the certificate of occupancy. The approximate cost of the project is estimated at $37.5 million and the initial annual rent is estimated at approximately $2.7 million. Officers and Employees: Our officers are all employees of a wholly-owned subsidiary of UHS and although as of June 30, 2019 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. Pursuant to the terms of the original advisory agreement, which was in effect from inception through December 31, 2018, in addition to the advisory fee as discussed below, the Advisor was entitled to an annual incentive fee equal to 20% of the amount by which cash available for distribution to shareholders for each year, as defined in the agreement, exceeded 15% of our equity as shown on our condensed consolidated balance sheet, determined in accordance with generally accepted accounting principles without reduction for return of capital dividends. Cash available for distribution to shareholders was defined as net cash flow from operations less deductions for, among other things, amounts required to discharge our debt and liabilities and reserves for replacement and capital improvements to our properties and investments. Since the incentive fee requirements were not achieved at any time from our inception through December 31, 2018, no incentive fees were paid during that time. Given that the incentive fee requirements had never been achieved, and were deemed unlikely to be achieved in the future, the amended and restated advisory agreement that became effective on January 1, 2019, among other things, eliminated the incentive fee provision. Our advisory fee for the three and six months ended June 30, 2019 and 2018, 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 2019, 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 other 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 $982,000 and $948,000 for the three months ended June 30, 2019 and 2018, respectively and were based upon average invested real estate assets of $561 million and $542 million, respectively. Advisory fees incurred and paid (or payable) to UHS amounted to $2.0 million and $1.9 million for the six months ended June 30, 2019 and 2018, respectively, and were based upon average invested real estate assets of $558 million and $529 million for the six-month periods ended June 30, 2019 and 2018, respectively. Share Ownership: At each of June 30, 2019 and December 31, 2018, 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 tenants comprised 30% and 28% of our consolidated revenues during of the three-month periods ended June 30, 2019 and 2018, respectively, and 31% and 30% of our consolidated revenues during the six-month periods ended June 30, 2019 and 2018, respectively, and since a subsidiary of UHS is our Advisor, you are encouraged to obtain the publicly available filings for Universal Health Services, Inc. from the SEC’s website. These filings are the sole responsibility of UHS and are not incorporated by reference herein |
Dividends
Dividends | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Dividends | (3) Dividends Dividends: During the second quarter of 2019, we declared dividends of $9.4 million, or $.68 per share, which were paid on July 2, 2019. We declared dividends of $9.2 million, or $.67 per share, during the second quarter of 2018, which were paid on July 3, 2018. During the six-month period ended June 30, 2019, we declared dividends of $18.6 million, or $1.355 per share, $9.4 million of which was paid on July 2, 2019. During the six-month period ended June 30, 2018, we declared dividends of $18.3 million, or $1.335 per share, $9.2 million of which was paid on July 3, 2018. |
Acquisitions and Dispositions
Acquisitions and Dispositions | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
Acquisitions and Dispositions | (4) Acquisitions and Dispositions Six Months Ended June 30, 2019: Acquisitions: There were no acquisitions during the first six months of 2019. Dispositions: There were no dispositions during the first six months of 2019. Six Months Ended June 30, 2018: Acquisitions: In June, 2018, we acquired the Beaumont Medical Sleep Center Building located in Southfield, Michigan for a purchase price of approximately $4.0 million. The building is 100% leased under the terms of a triple net lease and had a remaining initial lease term of approximately 9.5 years at the time of purchase, with two, five year renewal options. Dispositions: There were no dispositions during the first six months of 2018. |
Summarized Financial Informatio
Summarized Financial Information of Equity Affiliates | 6 Months Ended |
Jun. 30, 2019 | |
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 represent 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 are classified based upon the nature of the distribution. In the condensed consolidated statements of cash flows, distributions and equity in net income are presented net as cash flows from operating activities. Cash distributions received exceeding equity in earnings represent returns of investments and are classified as cash flows from investing activities in the condensed consolidated statements of cash flows. At June 30, 2019, we have non-controlling equity investments or commitments in four jointly-owned LLCs/LPs which own MOBs. As of June 30, 2019, we accounted for these LLCs/LPs on an unconsolidated basis pursuant to the 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 fundings are typically advanced as equity or member loans. These entities maintain property insurance on the properties. The following property table represents the four LLCs in which we own a noncontrolling interest and were accounted for under the equity method as of June 30, 2019: Name of LLC/LP Ownership Property Owned by LLC/LP Suburban Properties 33 % St. Matthews Medical Plaza II Brunswick Associates (a.) 74 % Mid Coast Hospital MOB Grayson Properties (b.) 95 % Texoma Medical Plaza FTX MOB Phase II (c.) 95 % Forney Medical Plaza II (a.) This LLC has a third-party term loan, which is non-recourse to us, of $8.2 million outstanding as of June 30, 2019. (b.) This building is on the campus of a UHS hospital and has tenants that include subsidiaries of UHS. This LP has a third-party term loan, which is non-recourse to us, of $13.8 million outstanding as of June 30, 2019. (c.) We have committed to invest up to $2.5 million in equity and debt financing, of which $2.1 million has been funded as of June 30, 2019. This LP has a third-party term loan, which is non-recourse to us, of $5.0 million outstanding as of June 30, 2019. Below are the condensed combined statements of income (unaudited) for the LLCs/LPs accounted for under the equity method during the three and six months ended June 30, 2019 and 2018. Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 (amounts in thousands) (amounts in thousands) Revenues $ 2,531 $ 2,451 $ 4,991 $ 4,913 Operating expenses 994 977 2,006 1,935 Depreciation and amortization 485 438 883 895 Interest, net 322 328 644 656 Net income $ 730 $ 708 $ 1,458 $ 1,427 Our share of net income $ 454 $ 425 $ 884 $ 854 Below are the condensed combined balance sheets (unaudited) for the four above-mentioned LLCs that were accounted for under the equity method as of June 30, 2019 and December 31, 2018: June 30, 2019 December 31, 2018 (amounts in thousands) Net property, including construction in progress $ 31,154 $ 31,818 Other assets 6,911 3,251 Total assets $ 38,065 $ 35,069 Other liabilities $ 5,947 $ 2,717 Mortgage notes payable, non-recourse to us 26,951 27,256 Equity 5,167 5,096 Total liabilities and equity $ 38,065 $ 35,069 Investments in LLCs before amounts included in accrued expenses and other liabilities $ 4,962 $ 5,019 Amounts included in accrued expenses and other liabilities (1,950 ) (2,258 ) Our share of equity in LLCs, net $ 3,012 $ 2,761 As of June 30, 2019, and December 31, 2018, aggregate principal amounts due on mortgage notes payable by unconsolidated LLCs, 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 6/30/2019 12/31/2018 Maturity Date FTX MOB Phase II (5.00% fixed rate mortgage loan) $ 4,996 $ 5,067 October, 2020 Grayson Properties (5.034% fixed rate mortgage loan) 13,792 13,929 September, 2021 Brunswick Associates (3.64% fixed rate mortgage loan) 8,163 8,260 December, 2024 $ 26,951 $ 27,256 (a.) All mortgage loans require monthly principal payments through maturity and include a balloon principal payment upon maturity. 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/or 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 | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | (6) Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02 - Leases (Topic 842), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The guidance amended the existing accounting standards, including the requirement that lessees recognize right-of-use assets and lease liabilities for leases with terms greater than twelve months on their condensed consolidated balance sheet. It also requires disclosures designed to give financial statement users information regarding amount, timing, and uncertainty of cash flows arising from leases. The FASB issued ASU 2018-11, "Leases (Topic 842) Targeted Improvements" in July 2018, which provides lessors with a practical expedient, by class of underlying assets, to not separate non-lease components from the related lease components, and, instead, to account for those components as a single lease component, if certain criteria are met. We adopted Topic 842 on January 1, 2019, the date it became effective for public companies, and applied the new leasing standard to leases in place as of the effective date using the modified retrospective transition method. W e applied Topic 842 to all leases as of January 1, 2019 with comparative periods continuing to be reported under Topic 840. and were not required to reassess the following upon adoption: (i) whether an expired or existing contract met the definition of a lease; (ii) the lease classification at January 1, 2019 for existing leases; and (iii) whether leasing costs previously capitalized as initial direct costs would continue to be amortized. This allowed us to continue to account for our existing ground and office space leases as operating leases. Upon adoption, we did not have an adjustment to the opening balance of retained earnings due to the election of these practical expedients. The package of practical expedients provided to lessors allowed us not to separate expenses reimbursed by our customers (“rental recoveries”) 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 rental recoveries are the same and , as our leases qualify as operating leases, we accounted for and presented rental revenue and rental recoveries (UHS facilities and Non-related parties) as a single component under Lease revenue in our condensed consolidated statements of income for the three and six months ended June 30, 2019 and 2018. Upon adoption, we recognized right-of-use assets and lease liabilities for ground leases in which we are the lessee with various third parties, including subsidiaries of UHS, at fourteen of our consolidated properties on the condensed consolidated balance sheet. See Note 7 for further disclosure around our adoption of the new lease standard. |
Lease Accounting
Lease Accounting | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Lease Accounting | (7) Lease Accounting As Lessor: We lease our operating properties to customers under agreements that are classified as operating leases. We recognize the total minimum lease payments provided for under the 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 as our leases qualify as operating leases, we accounted for and presented rental revenue and tenant reimbursements as a single component under Lease revenue in our condensed consolidated statements of income for the three and six months ended June 30, 2019. As a result of our adoption of this practical expedient, we presented $4.2 million of base rental revenue for UHS facilities, $1.2 million of bonus rental revenue for UHS facilities and $228,000 of tenant reimbursement revenue for UHS facilities as a single component (“Lease revenue – UHS facilities”) in the condensed consolidated statements of income for the three months ended June 30, 2018, and $8.4 million of base rental revenue for UHS facilities, $2.5 million of bonus rental revenue for UHS facilities and $461,000 of tenant reimbursement revenue for UHS facilities as a single component (“Lease revenue – UHS facilities”) in the condensed consolidated statements of income for the six months ended June 30, 2018 to conform to the 2019 new presentation. Additionally, we presented $10.2 million of base rental revenues from non-related parties and $2.2 million of tenant reimbursements from non-related parties as a single component (“Lease revenue – Non-related parties”) in the condensed consolidated statements of income for the three months ended June 30, 2018, and $20.5 million of base rental revenues from non-related parties and $4.4 million of tenant reimbursements from non-related parties as a single component (“Lease revenue – Non-related parties”) in the condensed consolidated statements of income for the six months ended June 30, 2018 to conform to the 2019 new presentation. Minimum future lease revenue from base rents from non-cancelable leases related to properties included in our financial statements on a consolidated basis, excluding increases from changes in the consumer price index, bonus rents and the impact of straight line rent adjustments, are as follows (amounts in thousands): June 30, 2019 December 31, 2018 Year ending, 2019 $ 29,055 (a.) $ 56,494 2020 53,229 50,291 2021 47,842 45,357 2022 32,459 30,089 2023 26,691 24,972 Thereafter 71,569 67,288 Total minimum base rents $ 260,845 $ 274,491 (a.) Represents the remaining six months of 2019. ASU 2016-02 requires that lessors expense certain initial direct costs, which were capitalizable under the previous leasing standard, as incurred. Upon adoption, only the incremental costs of signing a lease will be capitalizable, which was consistent to our historical practice. As Lessee: We are the lessee with various third parties, including subsidiaries of UHS, in connection with ground leases for land at fourteen 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, in determining the present value of lease payments. As of June 30, 2019, our condensed consolidated balance sheet includes right-of-use land assets of approximately $8.9 million and ground lease liabilities of approximately $8.9 million. The components of lease expense payments were as follows (in thousands): Three months ended June 30, Six months ended June 30, 2019 2019 Operating lease cost $ 120 $ 238 Total lease cost $ 120 $ 238 During the three months ended June 30, 2019, the cash paid for amounts included in the measurement of lease liabilities related to our operating leases was approximately $120,000, which is included in other operating expenses within the condensed consolidated statements of income. During the six months ended June 30, 2019, the cash paid for amounts included in the measurement of lease liabilities related to our operating leases was approximately $238,000, which is included as an operating cash outflow within the condensed consolidated statement of cash flows and included in other operating expenses within the condensed consolidated statements of income. As of and during the six months ended June 30, 2019, we did not enter into any lease agreements set to commence in the future and there were no newly leased assets for which a right-of-use asset was recorded in exchange for a new lease liability. Supplemental balance sheet information related to leases was as follows (in thousands): June 30, 2019 Operating Leases Right-of-use land assets-operating leases $ 8,862 Total lease liabilities $ 8,862 Weighted Average remaining lease term, years Operating leases 58.8 Weighted Average discount rate Operating leases 5.07 % The following table summarizes the fixed, future minimum rental payments, excluding variable costs, which are discounted by our incremental borrowing rate to calculate the lease liabilities for our operating leases in which we are the lessee. We do not include renewal options in the lease term for calculating the lease liability unless we are reasonably certain we will exercise the option. Maturities of lease liabilities were as follows (in thousands): June 30, 2019 December 31, 2018 Year ending, 2019 $ 238 (a.) $ 474 2020 475 474 2021 475 474 2022 475 474 2023 475 474 Later years 25,640 25,582 Total undiscounted lease payments $ 27,778 $ 27,952 Less imputed interest 18,916 Total $ 8,862 (a.) Represents the remaining six months of 2019. |
Debt and Financial Instruments
Debt and Financial Instruments | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt and Financial Instruments | (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 $300 million revolving credit agreement, 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 additional 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 March 27, 2018, we entered into a revolving credit agreement (“Credit Agreement”) which, among other things, increased our borrowing capacity by $50 million to $300 million and extended the maturity date from our previously existing facility. The replacement Credit Agreement, which is scheduled to mature in March 2022, includes a $40 million sublimit for letters of credit and a $30 million sublimit for swingline/short-term loans. The Credit Agreement also provides for options to extend the maturity date for two additional six month periods. Additionally, the Credit Agreement includes an option to increase the total facility borrowing capacity up to an additional $50 million, subject to lender agreement. Borrowings under the Credit Agreement are guaranteed by certain subsidiaries of the Trust. In addition, borrowings under the Credit Agreement are secured by first priority security interests in and liens on all equity interests in certain of the Trust’s wholly-owned subsidiaries. Borrowings made pursuant to the Credit Agreement will bear interest, at our option, at one, two, three, or six month LIBOR plus an applicable margin ranging from 1.10% to 1.35% or at the Base Rate plus an applicable margin ranging from 0.10% to 0.35%. The Credit Agreement defines “Base Rate” as the greater of: (a) the administrative agent’s prime rate; (b) the federal funds effective rate plus 1/2 of 1%, and; (c) one month LIBOR plus 1%. A facility fee of 0.15% to 0.35% will be charged on the total commitment of the Credit Agreement. The margins over LIBOR, Base Rate and the facility fee are based upon our total leverage ratio. At June 30, 2019, the applicable margin over the LIBOR rate was 1.20%, the margin over the Base Rate was 0.20%, and the facility fee was 0.20%. At June 30, 2019, we had $191.6 million of outstanding borrowings under our Credit Agreement and $108.4 million of available borrowing capacity. At December 31, 2018, we had $196.4 million of outstanding borrowings outstanding against our revolving credit agreement and $103.6 million of available borrowing capacity. There are no compensating balance requirements. 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 outstanding under the Credit Agreement. We are in compliance with all of the covenants at June 30, 2019 and December 31, 2018. We also believe that we would remain in compliance if 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 June 30, 2019 December 31, 2018 Tangible net worth > =$125,000 $ 172,786 $ 181,203 Total leverage < 60% 40.3 % 41.3 % Secured leverage < 30% 9.4 % 9.8 % Unencumbered leverage < 60% 36.2 % 37.6 % Fixed charge coverage > 1.50x 4.0x 4.3x 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 June 30, 2019 (amounts in thousands): Facility Name Outstanding Balance (in Interest Rate Maturity Date 700 Shadow Lane and Goldring MOBs fixed rate mortgage loan $ 5,759 4.54 % June, 2022 BRB Medical Office Building fixed rate mortgage loan 5,825 4.27 % December, 2022 Desert Valley Medical Center fixed rate mortgage loan 4,734 3.62 % January, 2023 2704 North Tenaya Way fixed rate mortgage loan 6,800 4.95 % November, 2023 Summerlin Hospital Medical Office Building III fixed rate mortgage loan 13,197 4.03 % April, 2024 Tuscan Professional Building fixed rate mortgage loan 3,759 5.56 % June, 2025 Phoenix Children’s East Valley Care Center fixed rate mortgage loan 9,079 3.95 % January, 2030 Rosenberg Children's Medical Plaza fixed rate mortgage loan 12,841 4.42 % September, 2033 Total, excluding net debt premium and net financing fees 61,994 Less net financing fees (652 ) Plus net debt premium 220 Total mortgages notes payable, non-recourse to us, net $ 61,562 (a.) All mortgage loans require monthly principal payments through maturity and either fully amortize or include a balloon principal payment upon maturity. On April 2, 2019, a $2.5 million fixed rate mortgage loan on Vibra Hospital – Corpus Christi was fully repaid utilizing borrowings under our Credit Agreement. The lease on this hospital facility expired on June 1, 2019 and we are currently in the process of marking the property for lease to a new tenant. The mortgages are secured by the real property of the buildings as well as property leases and rents. The mortgages outstanding as of June 30, 2019 had a combined fair value of approximately $64.1 million. At December 31, 2018, we had various mortgages, all of which were non-recourse to us, included in our condensed consolidated balance sheet. The combined outstanding balance of these various mortgages was $65.3 million and had a combined fair value of approximately $64.9 million. The fair value of our debt was computed based upon quotes received from financial institutions. We consider these to be “level 2” in the fair value hierarchy as outlined in the authoritative guidance for disclosure in connection with debt instruments. Changes in market rates on our fixed rate debt impacts the fair value of debt, but it has no impact on interest incurred or cash flow. Financial Instruments: During the second quarter of 2016, we entered into an interest rate cap on the total notional amount of $30 million whereby we paid a premium of $115,000. In exchange for the premium payment, the counterparties agreed to pay us the difference between 1.50% and one-month LIBOR if one-month LIBOR rises above 1.50% during the term of the cap. This interest rate cap became effective in January, 2017 and expired in March 2019. From inception through the March, 2019 expiration, we received or accrued approximately $ 205,000 in payments made to us by the counterparties ($ 61,000 of which was received during the first three months of 2019 and $144,000 of which was received during 2018) pursuant to the terms of this cap. During the third quarter of 2016, we entered into an additional interest rate cap agreement on a total notional amount of $30 million whereby we paid a premium of $55,000. In exchange for the premium payment, the counterparties agreed to pay us the difference between 1.5% and one-month LIBOR if one-month LIBOR rises above 1.5% during the term of the cap. This interest rate cap became effective in October, 2016 and expired in March, 2019. From inception through the March, 2019 expiration, we received or accrued approximately $205,000 in payments made to us by the counterparties ($61,000 of which was received during the first three months of 2019 and $144,000 of which was received during 2018) pursuant to the terms of this cap. Although we can provide no assurance that we will ultimately do so, we are currently monitoring the interest rate environment and evaluating the terms of potential replacement interest rate cap and/or swap agreements that we may enter into for a large portion, or potentially all, of the $60 million total notional amount of interest rate caps that expired in March, 2019. |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jun. 30, 2019 | |
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 segment. |
Impact of Hurricane Harvey
Impact of Hurricane Harvey | 6 Months Ended |
Jun. 30, 2019 | |
Extraordinary And Unusual Items [Abstract] | |
Impact of Hurricane Harvey | (10) Impact of Hurricane Harvey In late August 2017, five of our medical office buildings located in the Houston, Texas area incurred extensive water damage as a result of Hurricane Harvey. Until various times during the second quarter of 2018, these properties were temporarily closed and non-operational as we continued to reconstruct and restore them to operational condition. As of June 30, 2018, reconstruction on all of the occupied space in these properties had been completed and operations resumed. During 2018, pursuant to the terms of a global settlement with our commercial property insurance carrier, we received $5.5 million of additional insurance recovery proceeds bringing the aggregate hurricane-related insurance recoveries to $12.5 million. The aggregate insurance recovery proceeds, which are net of applicable deductibles, covered substantially all of the costs incurred related to the remediation, repair and reconstruction of each of these properties, as well as business interruption recoveries for the lost income related to each of these properties during the period they were non-operational. Included in our financial results for the three months ended June 30, 2018 are approximately $194,000 of business interruption insurance recovery proceeds. Included in our financial results for the six months ended June 30, 2018 are approximately $1.2 million of business interruption insurance recovery proceeds, covering the period of late August, 2017 through June, 2018, approximately $500,000 of which related to 2017. These business interruption insurance recovery proceeds are included in net cash provided by operating activities in our condensed consolidated statement of cash flows for the six-month period ended June 30, 2018. Additionally, the six months ended June 30, 2018 included approximately $4.5 million of hurricane insurance recoveries in excess of damaged property write-downs, which are included in net cash provided by investing activities in our condensed consolidated statement of cash flows for the six-month period ended June 30, 2018. |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | In February 2016, the FASB issued ASU No. 2016-02 - Leases (Topic 842), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The guidance amended the existing accounting standards, including the requirement that lessees recognize right-of-use assets and lease liabilities for leases with terms greater than twelve months on their condensed consolidated balance sheet. It also requires disclosures designed to give financial statement users information regarding amount, timing, and uncertainty of cash flows arising from leases. The FASB issued ASU 2018-11, "Leases (Topic 842) Targeted Improvements" in July 2018, which provides lessors with a practical expedient, by class of underlying assets, to not separate non-lease components from the related lease components, and, instead, to account for those components as a single lease component, if certain criteria are met. We adopted Topic 842 on January 1, 2019, the date it became effective for public companies, and applied the new leasing standard to leases in place as of the effective date using the modified retrospective transition method. W e applied Topic 842 to all leases as of January 1, 2019 with comparative periods continuing to be reported under Topic 840. and were not required to reassess the following upon adoption: (i) whether an expired or existing contract met the definition of a lease; (ii) the lease classification at January 1, 2019 for existing leases; and (iii) whether leasing costs previously capitalized as initial direct costs would continue to be amortized. This allowed us to continue to account for our existing ground and office space leases as operating leases. Upon adoption, we did not have an adjustment to the opening balance of retained earnings due to the election of these practical expedients. The package of practical expedients provided to lessors allowed us not to separate expenses reimbursed by our customers (“rental recoveries”) 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 rental recoveries are the same and , as our leases qualify as operating leases, we accounted for and presented rental revenue and rental recoveries (UHS facilities and Non-related parties) as a single component under Lease revenue in our condensed consolidated statements of income for the three and six months ended June 30, 2019 and 2018. Upon adoption, we recognized right-of-use assets and lease liabilities for ground leases in which we are the lessee with various third parties, including subsidiaries of UHS, at fourteen of our consolidated properties on the condensed consolidated balance sheet. See Note 7 for further disclosure around our adoption of the new lease standard. |
Relationship with Universal H_2
Relationship with Universal Health Services, Inc. ("UHS") and Related Party Transactions (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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 our three acute care hospitals operated by wholly-owned subsidiaries of UHS: Hospital Name Annual Minimum Rent End of Lease Term Renewal Term (years) McAllen Medical Center $ 5,485,000 December, 2026 5 (a) Wellington Regional Medical Center $ 3,030,000 December, 2021 10 (b) Southwest Healthcare System, Inland Valley Campus $ 2,648,000 December, 2021 10 (b) (a) UHS has one 5-year renewal option at the existing lease rate (through 2031). (b) UHS has two 5-year renewal options at fair market value lease rates (2022 through 2031). |
Summarized Financial Informat_2
Summarized Financial Information of Equity Affiliates (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Equity Method Investments And Joint Ventures [Abstract] | |
Limited Liability Companies Accounted for Under Equity Method | The following property table represents the four LLCs in which we own a noncontrolling interest and were accounted for under the equity method as of June 30, 2019: Name of LLC/LP Ownership Property Owned by LLC/LP Suburban Properties 33 % St. Matthews Medical Plaza II Brunswick Associates (a.) 74 % Mid Coast Hospital MOB Grayson Properties (b.) 95 % Texoma Medical Plaza FTX MOB Phase II (c.) 95 % Forney Medical Plaza II (a.) This LLC has a third-party term loan, which is non-recourse to us, of $8.2 million outstanding as of June 30, 2019. (b.) This building is on the campus of a UHS hospital and has tenants that include subsidiaries of UHS. This LP has a third-party term loan, which is non-recourse to us, of $13.8 million outstanding as of June 30, 2019. (c.) We have committed to invest up to $2.5 million in equity and debt financing, of which $2.1 million has been funded as of June 30, 2019. This LP has a third-party term loan, which is non-recourse to us, of $5.0 million outstanding as of June 30, 2019. |
Condensed Combined Statements of Income (Unaudited) for LLCs/LPs Accounted Under Equity Method | Below are the condensed combined statements of income (unaudited) for the LLCs/LPs accounted for under the equity method during the three and six months ended June 30, 2019 and 2018. Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 (amounts in thousands) (amounts in thousands) Revenues $ 2,531 $ 2,451 $ 4,991 $ 4,913 Operating expenses 994 977 2,006 1,935 Depreciation and amortization 485 438 883 895 Interest, net 322 328 644 656 Net income $ 730 $ 708 $ 1,458 $ 1,427 Our share of net income $ 454 $ 425 $ 884 $ 854 |
Condensed Combined Balance Sheets (Unaudited) for LLCs Accounted Under Equity Method | Below are the condensed combined balance sheets (unaudited) for the four above-mentioned LLCs that were accounted for under the equity method as of June 30, 2019 and December 31, 2018: June 30, 2019 December 31, 2018 (amounts in thousands) Net property, including construction in progress $ 31,154 $ 31,818 Other assets 6,911 3,251 Total assets $ 38,065 $ 35,069 Other liabilities $ 5,947 $ 2,717 Mortgage notes payable, non-recourse to us 26,951 27,256 Equity 5,167 5,096 Total liabilities and equity $ 38,065 $ 35,069 Investments in LLCs before amounts included in accrued expenses and other liabilities $ 4,962 $ 5,019 Amounts included in accrued expenses and other liabilities (1,950 ) (2,258 ) Our share of equity in LLCs, net $ 3,012 $ 2,761 |
Aggregate Principal Amounts due on Mortgage and Construction Notes Payable by Unconsolidated LLC's Accounted Under Equity Method | As of June 30, 2019, and December 31, 2018, aggregate principal amounts due on mortgage notes payable by unconsolidated LLCs, 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 6/30/2019 12/31/2018 Maturity Date FTX MOB Phase II (5.00% fixed rate mortgage loan) $ 4,996 $ 5,067 October, 2020 Grayson Properties (5.034% fixed rate mortgage loan) 13,792 13,929 September, 2021 Brunswick Associates (3.64% fixed rate mortgage loan) 8,163 8,260 December, 2024 $ 26,951 $ 27,256 (a.) All mortgage loans require monthly principal payments through maturity and include a balloon principal payment upon maturity. |
Lease Accounting (Tables)
Lease Accounting (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Schedule of Minimum Future Base Rents from Non-Cancelable Leases | Minimum future lease revenue from base rents from non-cancelable leases related to properties included in our financial statements on a consolidated basis, excluding increases from changes in the consumer price index, bonus rents and the impact of straight line rent adjustments, are as follows (amounts in thousands): June 30, 2019 December 31, 2018 Year ending, 2019 $ 29,055 (a.) $ 56,494 2020 53,229 50,291 2021 47,842 45,357 2022 32,459 30,089 2023 26,691 24,972 Thereafter 71,569 67,288 Total minimum base rents $ 260,845 $ 274,491 |
Components of Lease Expense Payments | The components of lease expense payments were as follows (in thousands): Three months ended June 30, Six months ended June 30, 2019 2019 Operating lease cost $ 120 $ 238 Total lease cost $ 120 $ 238 |
Schedule of Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases was as follows (in thousands): June 30, 2019 Operating Leases Right-of-use land assets-operating leases $ 8,862 Total lease liabilities $ 8,862 Weighted Average remaining lease term, years Operating leases 58.8 Weighted Average discount rate Operating leases 5.07 % |
Schedule of Maturities of lease liabilities | Maturities of lease liabilities were as follows (in thousands): June 30, 2019 December 31, 2018 Year ending, 2019 $ 238 (a.) $ 474 2020 475 474 2021 475 474 2022 475 474 2023 475 474 Later years 25,640 25,582 Total undiscounted lease payments $ 27,778 $ 27,952 Less imputed interest 18,916 Total $ 8,862 (a.) Represents the remaining six months of 2019. |
Debt and Financial Instruments
Debt and Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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 June 30, 2019 December 31, 2018 Tangible net worth > =$125,000 $ 172,786 $ 181,203 Total leverage < 60% 40.3 % 41.3 % Secured leverage < 30% 9.4 % 9.8 % Unencumbered leverage < 60% 36.2 % 37.6 % Fixed charge coverage > 1.50x 4.0x 4.3x |
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 June 30, 2019 (amounts in thousands): Facility Name Outstanding Balance (in Interest Rate Maturity Date 700 Shadow Lane and Goldring MOBs fixed rate mortgage loan $ 5,759 4.54 % June, 2022 BRB Medical Office Building fixed rate mortgage loan 5,825 4.27 % December, 2022 Desert Valley Medical Center fixed rate mortgage loan 4,734 3.62 % January, 2023 2704 North Tenaya Way fixed rate mortgage loan 6,800 4.95 % November, 2023 Summerlin Hospital Medical Office Building III fixed rate mortgage loan 13,197 4.03 % April, 2024 Tuscan Professional Building fixed rate mortgage loan 3,759 5.56 % June, 2025 Phoenix Children’s East Valley Care Center fixed rate mortgage loan 9,079 3.95 % January, 2030 Rosenberg Children's Medical Plaza fixed rate mortgage loan 12,841 4.42 % September, 2033 Total, excluding net debt premium and net financing fees 61,994 Less net financing fees (652 ) Plus net debt premium 220 Total mortgages notes payable, non-recourse to us, net $ 61,562 (a.) All mortgage loans require monthly principal payments through maturity and either fully amortize or include a balloon principal payment upon maturity. |
General - Additional Informatio
General - Additional Information (Detail) | Jun. 30, 2019Property |
4 Unconsolidated Limited Liability Companies / Limited Partner | Minimum | |
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |
Non-controlling equity interest, ownership percentage | 33.00% |
4 Unconsolidated Limited Liability Companies / Limited Partner | Maximum | |
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |
Non-controlling equity interest, ownership percentage | 95.00% |
Medical office buildings | Limited Liability Companies | |
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |
Number of real estate investments | 4 |
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 | 6 Months Ended | 12 Months Ended | |||
Aug. 31, 2019USD ($)Time | Jun. 30, 2019USD ($)PropertyTimeLease | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)PropertyTimeLease | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($) | ||
Related Party Transaction [Line Items] | |||||||
Remaining lease terms on ground leases | 58 years 9 months 18 days | 58 years 9 months 18 days | |||||
Aggregate lease payments for 2019 | [1] | $ 238,000 | $ 238,000 | ||||
Aggregate lease payments for 2020 | 475,000 | 475,000 | $ 474,000 | ||||
Aggregate lease payments for 2021 | 475,000 | 475,000 | 474,000 | ||||
Aggregate lease payments for 2022 | 475,000 | 475,000 | 474,000 | ||||
Aggregate lease payments for 2023 | 475,000 | 475,000 | 474,000 | ||||
Aggregate lease payments for thereafter | $ 25,640,000 | $ 25,640,000 | $ 25,582,000 | ||||
Annual advisory fee as percentage of average invested real estate assets | 0.70% | 0.70% | 0.70% | 0.70% | |||
Universal Health Services, Inc | |||||||
Related Party Transaction [Line Items] | |||||||
Number of term renewal options | Time | 6 | 6 | |||||
Additional renewal terms | 5 years | ||||||
Number of medical office buildings and free standing emergency departments | Property | 17 | ||||||
Option to renew lease, notice period prior to termination date of current term | 90 days | ||||||
Period to purchase respective leased facilities at same price after lease terms | 180 days | ||||||
Renewal period of respective leased facilities at same price after lease terms | 180 days | ||||||
Number of renewal options at existing lease rates | Time | 3 | ||||||
Number of ground leases | Lease | 9 | 9 | |||||
Aggregate lease payments for 2019 | $ 290,000 | $ 290,000 | |||||
Aggregate lease payments for 2020 | 290,000 | 290,000 | |||||
Aggregate lease payments for 2021 | 290,000 | 290,000 | |||||
Aggregate lease payments for 2022 | 290,000 | 290,000 | |||||
Aggregate lease payments for 2023 | 290,000 | 290,000 | |||||
Aggregate lease payments for thereafter | $ 16,400,000 | $ 16,400,000 | |||||
Percentage ownership of outstanding shares | 5.70% | 5.70% | 5.70% | ||||
Universal Health Services, Inc | Customer Concentration Risk | Revenues | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage of revenues generated from leases and tenants | 21.00% | 20.00% | 22.00% | 21.00% | |||
Universal Health Services, Inc | Customer Concentration Risk | Revenues | Tenants | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage of revenues generated from leases and tenants | 30.00% | 28.00% | 31.00% | 30.00% | |||
Universal Health Services, Inc | Hospital Facilities Leased | |||||||
Related Party Transaction [Line Items] | |||||||
Number of hospital facilities leased | Property | 3 | 3 | |||||
Universal Health Services, Inc | Minimum | |||||||
Related Party Transaction [Line Items] | |||||||
Initial lease terms | 13 years | ||||||
Remaining lease terms on ground leases | 30 years | 30 years | |||||
Universal Health Services, Inc | Maximum | |||||||
Related Party Transaction [Line Items] | |||||||
Initial lease terms | 15 years | ||||||
Remaining lease terms on ground leases | 79 years | 79 years | |||||
Universal Health Services, Inc and Catholic Health Initiatives | Scenario Forecast | |||||||
Related Party Transaction [Line Items] | |||||||
Number of term renewal options | Time | 5 | ||||||
Percentage of hospital preleased | 100.00% | ||||||
Triple net lease agreement period | 20 years | ||||||
Renewal option term | 10 years | ||||||
Project manager's aggregate fee | $ 750,000 | ||||||
Estimated approximate project cost | 37,500,000 | ||||||
Estimated initial annual rent | $ 2,700,000 | ||||||
Universal Health Services of Delaware Inc | |||||||
Related Party Transaction [Line Items] | |||||||
Annual incentive fee to Advisor as percentage of cash available for distribution | 20.00% | ||||||
Incentive fees | $ 0 | ||||||
Advisory fee | $ 982,000 | $ 948,000 | $ 2,000,000 | $ 1,900,000 | |||
Type of Cost, Good or Service [Extensible List] | us-gaap:ManagementServiceMember | us-gaap:ManagementServiceMember | us-gaap:ManagementServiceMember | us-gaap:ManagementServiceMember | |||
Average invested real estate assets | $ 561,000,000 | $ 542,000,000 | $ 558,000,000 | $ 529,000,000 | |||
Universal Health Services of Delaware Inc | Minimum | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage of equity to be exceeded for incentive distribution | 15.00% | ||||||
[1] | Represents the remaining six months of 2019. |
Existing Lease Terms and Renewa
Existing Lease Terms and Renewal Options for Each of UHS Hospital Facilities (Detail) - Universal Health Services, Inc | 6 Months Ended | |
Jun. 30, 2019USD ($) | ||
McAllen Medical Center | ||
Operating Leased Assets [Line Items] | ||
Annual Minimum Rent | $ 5,485,000 | |
End of Lease Term | 2026-12 | |
Renewal Term (years) | 5 years | [1] |
Wellington Regional Medical Center | ||
Operating Leased Assets [Line Items] | ||
Annual Minimum Rent | $ 3,030,000 | |
End of Lease Term | 2021-12 | |
Renewal Term (years) | 10 years | [2] |
Southwest Healthcare System, Inland Valley Campus | ||
Operating Leased Assets [Line Items] | ||
Annual Minimum Rent | $ 2,648,000 | |
End of Lease Term | 2021-12 | |
Renewal Term (years) | 10 years | [2] |
[1] | UHS has one 5-year renewal option at the existing lease rate (through 2031). | |
[2] | UHS has two 5-year renewal options at fair market value lease rates (2022 through 2031). |
Existing Lease Terms and Rene_2
Existing Lease Terms and Renewal Options for Each of UHS Hospital Facilities (Parenthetical) (Detail) - Universal Health Services, Inc | 6 Months Ended |
Jun. 30, 2019TimeRenewalOption | |
Operating Leased Assets [Line Items] | |
Number of renewal option at existing lease rates | 3 |
McAllen Medical Center | |
Operating Leased Assets [Line Items] | |
Number of renewal option at existing lease rates | 1 |
Renewal option term at existing lease rates | 5 years |
Renewal option at existing lease rates expiration year | 2031 |
Wellington Regional Medical Center And Southwest Healthcare System | |
Operating Leased Assets [Line Items] | |
Number of renewal options at fair market value lease rates | RenewalOption | 2 |
Renewal options term at fair market value lease rates | 5 years |
Wellington Regional Medical Center And Southwest Healthcare System | Maximum | |
Operating Leased Assets [Line Items] | |
Renewal option at fair market value lease rates expiration year | 2031 |
Wellington Regional Medical Center And Southwest Healthcare System | Minimum | |
Operating Leased Assets [Line Items] | |
Renewal option at fair market value lease rates expiration year | 2022 |
Dividends - Additional Informat
Dividends - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Jul. 02, 2019 | Jul. 03, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 |
Dividends and Equity Issuance [Line Items] | ||||||
Dividends declared | $ 9,354 | $ 9,209 | $ 18,633 | $ 18,343 | ||
Declared dividends, per share | $ 0.68 | $ 0.67 | $ 1.355 | $ 1.335 | ||
Dividends declared and paid | $ 9,200 | $ 9,279 | $ 9,187 | |||
Dividends payable, date to be paid | Jul. 2, 2019 | Jul. 3, 2018 | Jul. 2, 2019 | Jul. 3, 2018 | ||
Subsequent Event | ||||||
Dividends and Equity Issuance [Line Items] | ||||||
Dividends declared and paid | $ 9,400 |
Acquisitions and Dispositions -
Acquisitions and Dispositions - Additional Information (Detail) $ in Millions | 1 Months Ended | 6 Months Ended | |
Jun. 30, 2018USD ($)Time | Jun. 30, 2019AcquisitionDisposition | Jun. 30, 2018TimeDisposition | |
Business Acquisitions And Dispositions [Line Items] | |||
Number of acquisitions | Acquisition | 0 | ||
Number of dispositions | Disposition | 0 | 0 | |
Beaumont Medical Sleep Center Building | |||
Business Acquisitions And Dispositions [Line Items] | |||
Total purchase price | $ | $ 4 | ||
Percentage of building area leased | 100.00% | ||
Initial lease terms | 9 years 6 months | ||
Number of term renewal options | Time | 2 | 2 | |
Additional renewal terms | 5 years |
Summarized Financial Informat_3
Summarized Financial Information of Equity Affiliates - Additional Information (Detail) | 6 Months Ended |
Jun. 30, 2019Property | |
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 | 33.00% |
4 Unconsolidated Limited Liability Companies / Limited Partner | Maximum | |
Schedule Of Equity Method Investments [Line Items] | |
Non-controlling equity interest, ownership percentage | 95.00% |
Limited Liability Companies Acc
Limited Liability Companies Accounted for Under Equity Method (Detail) - Equity Method Investments | 6 Months Ended | |
Jun. 30, 2019 | ||
Suburban Properties | ||
Schedule Of Equity Method Investments [Line Items] | ||
Ownership | 33.00% | |
Property Owned by LLC | St. Matthews Medical Plaza II | |
Brunswick Associates | ||
Schedule Of Equity Method Investments [Line Items] | ||
Ownership | 74.00% | [1] |
Property Owned by LLC | Mid Coast Hospital MOB | [1] |
Grayson Properties | ||
Schedule Of Equity Method Investments [Line Items] | ||
Ownership | 95.00% | [2] |
Property Owned by LLC | Texoma Medical Plaza | [2] |
FTX MOB Phase II limited partnership | ||
Schedule Of Equity Method Investments [Line Items] | ||
Ownership | 95.00% | [3] |
Property Owned by LLC | Forney Medical Plaza II | [3] |
[1] | This LLC has a third-party term loan, which is non-recourse to us, of $8.2 million outstanding as of June 30, 2019. | |
[2] | This building is on the campus of a UHS hospital and has tenants that include subsidiaries of UHS. This LP has a third-party term loan, which is non-recourse to us, of $13.8 million outstanding as of June 30, 2019. | |
[3] | We have committed to invest up to $2.5 million in equity and debt financing, of which $2.1 million has been funded as of June 30, 2019. This LP has a third-party term loan, which is non-recourse to us, of $5.0 million outstanding as of June 30, 2019. |
Limited Liability Companies A_2
Limited Liability Companies Accounted for Under Equity Method (Parenthetical) (Detail) $ in Millions | Jun. 30, 2019USD ($) |
Brunswick Associates | |
Schedule Of Equity Method Investments [Line Items] | |
Third-party term loan | $ 8.2 |
Grayson Properties | |
Schedule Of Equity Method Investments [Line Items] | |
Third-party term loan | 13.8 |
FTX MOB Phase II limited partnership | |
Schedule Of Equity Method Investments [Line Items] | |
Third-party term loan | 5 |
Committed investment in equity and debt financing, funded | 2.5 |
Commitment to investment | $ 2.1 |
Condensed Combined Statement of
Condensed Combined Statement of Income for LLCs/LPs Accounted Under Equity Method (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Equity Method Investments And Joint Ventures [Abstract] | ||||
Revenues | $ 2,531 | $ 2,451 | $ 4,991 | $ 4,913 |
Operating expenses | 994 | 977 | 2,006 | 1,935 |
Depreciation and amortization | 485 | 438 | 883 | 895 |
Interest, net | 322 | 328 | 644 | 656 |
Net income | 730 | 708 | 1,458 | 1,427 |
Our share of net income | $ 454 | $ 425 | $ 884 | $ 854 |
Condensed Combined Balance Shee
Condensed Combined Balance Sheets for LLCs Accounted Under Equity Method (Detail) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Equity Method Investments And Joint Ventures [Abstract] | ||
Net property, including construction in progress | $ 31,154 | $ 31,818 |
Other assets | 6,911 | 3,251 |
Total assets | 38,065 | 35,069 |
Other liabilities | 5,947 | 2,717 |
Mortgage notes payable, non-recourse to us | 26,951 | 27,256 |
Equity | 5,167 | 5,096 |
Total liabilities and equity | 38,065 | 35,069 |
Investments in LLCs before amounts included in accrued expenses and other liabilities | 4,962 | 5,019 |
Amounts included in accrued expenses and other liabilities | (1,950) | (2,258) |
Our share of equity in LLCs, net | $ 3,012 | $ 2,761 |
Aggregate Principal Amounts Due
Aggregate Principal Amounts Due on Mortgage Notes Payable by Unconsolidated LLCs, Accounted Under Equity Method (Detail) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2019 | Dec. 31, 2018 | ||
Schedule Of Equity Method Investments [Line Items] | |||
Mortgage Loan Balance | $ 26,951 | $ 27,256 | |
Equity Method Investments | |||
Schedule Of Equity Method Investments [Line Items] | |||
Mortgage Loan Balance | [1] | 26,951 | 27,256 |
Equity Method Investments | FTX MOB Phase II | |||
Schedule Of Equity Method Investments [Line Items] | |||
Mortgage Loan Balance | [1] | $ 4,996 | 5,067 |
Maturity Date | 2020-10 | ||
Equity Method Investments | Grayson Properties | |||
Schedule Of Equity Method Investments [Line Items] | |||
Mortgage Loan Balance | [1] | $ 13,792 | 13,929 |
Maturity Date | 2021-09 | ||
Equity Method Investments | Brunswick Associates | |||
Schedule Of Equity Method Investments [Line Items] | |||
Mortgage Loan Balance | [1] | $ 8,163 | $ 8,260 |
Maturity Date | 2024-12 | ||
[1] | All mortgage loans require monthly principal payments through maturity and include a balloon principal payment upon maturity |
Aggregate Principal Amounts D_2
Aggregate Principal Amounts Due on Mortgage Notes Payable by Unconsolidated LLCs, Accounted Under Equity Method (Parenthetical) (Detail) | Jun. 30, 2019 |
5.00% Fixed Rate Mortgage Loan | FTX MOB Phase II | |
Schedule Of Equity Method Investments [Line Items] | |
Loan interest rate fixed percentage | 5.00% |
5.034% Fixed Rate Mortgage Loan | Grayson Properties | |
Schedule Of Equity Method Investments [Line Items] | |
Loan interest rate fixed percentage | 5.034% |
3.64% Fixed Rate Mortgage Loan | Brunswick Associates | |
Schedule Of Equity Method Investments [Line Items] | |
Loan interest rate fixed percentage | 3.64% |
Recent Accounting Pronounceme_3
Recent Accounting Pronouncements - Additional Information (Detail) | Jun. 30, 2019Property |
Accounting Policies [Abstract] | |
Number of properties subject to ground leases | 14 |
Lease Accounting - Additional I
Lease Accounting - Additional Information (Detail) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)Land | Jun. 30, 2018USD ($) | |
Leases Disclosure [Line Items] | ||||
Tenant reimbursement revenue | $ 2,200,000 | $ 4,400,000 | ||
Base rental revenue from non-related parties | 10,200,000 | 20,500,000 | ||
Lessee in connection with ground leases for land | Land | 14 | |||
Right-of-use land assets | $ 8,862,000 | $ 8,862,000 | ||
Ground lease liabilities | 8,862,000 | 8,862,000 | ||
Measurement of lease liabilities related to operating leases | 120,000 | 238,000 | ||
Topic 842 | ||||
Leases Disclosure [Line Items] | ||||
Right-of-use land assets | 8,900,000 | 8,900,000 | ||
Ground lease liabilities | $ 8,900,000 | $ 8,900,000 | ||
Universal Health Services, Inc | ||||
Leases Disclosure [Line Items] | ||||
Base rental revenue | 4,200,000 | 8,400,000 | ||
Bonus rental revenue | 1,200,000 | 2,500,000 | ||
Tenant reimbursement revenue | $ 228,000 | $ 461,000 |
Schedule of Minimum Future Base
Schedule of Minimum Future Base Rents from Non-cancelable Leases (Detail) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | |
Leases [Abstract] | |||
2019 | [1] | $ 29,055 | |
2019 | $ 56,494 | ||
2020 | 53,229 | 50,291 | |
2021 | 47,842 | 45,357 | |
2022 | 32,459 | 30,089 | |
2023 | 26,691 | 24,972 | |
Thereafter | 71,569 | 67,288 | |
Total minimum base rents | $ 260,845 | $ 274,491 | |
[1] | Represents the remaining six months of 2019. |
Components of Lease Expense Pay
Components of Lease Expense Payments (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Leases [Abstract] | ||
Operating lease cost | $ 120 | $ 238 |
Total lease cost | $ 120 | $ 238 |
Schedule of Supplemental Balanc
Schedule of Supplemental Balance Sheet Information Related to Leases (Detail) $ in Thousands | Jun. 30, 2019USD ($) |
Operating Leases | |
Right-of-use land assets, net | $ 8,862 |
Ground lease liabilities, net | $ 8,862 |
Weighted Average remaining lease term, years | |
Operating leases | 58 years 9 months 18 days |
Weighted Average discount rate | |
Operating leases | 5.07% |
Schedule of Maturities of lease
Schedule of Maturities of lease liabilities (Detail) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | |
Leases [Abstract] | |||
2019 | [1] | $ 238 | |
2019 | $ 474 | ||
2020 | 475 | 474 | |
2021 | 475 | 474 | |
2022 | 475 | 474 | |
2023 | 475 | 474 | |
Later years | 25,640 | 25,582 | |
Total undiscounted lease payments | 27,778 | $ 27,952 | |
Less imputed interest | 18,916 | ||
Ground lease liabilities, net | $ 8,862 | ||
[1] | Represents the remaining six months of 2019. |
Debt and Financial Instrument_2
Debt and Financial Instruments - Additional Information (Detail) | Apr. 02, 2019USD ($) | Mar. 27, 2018USD ($)Option | Mar. 31, 2019USD ($) | Sep. 30, 2016USD ($)Derivative | Jun. 30, 2016USD ($)Derivative | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($) | Mar. 31, 2019USD ($) | Mar. 31, 2019USD ($) |
Debt Instrument [Line Items] | ||||||||||
Outstanding borrowings under revolving credit agreement | $ 191,550,000 | $ 196,400,000 | ||||||||
Available borrowing capacity | 108,400,000 | 103,600,000 | ||||||||
Repayments of mortgage loan | 3,351,000 | $ 22,585,000 | ||||||||
Interest Rate Cap | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Number of interest rate cap agreements | Derivative | 1 | 1 | ||||||||
Notional amount | $ 30,000,000 | $ 30,000,000 | $ 60,000,000 | |||||||
Premium paid | $ 55,000 | $ 115,000 | ||||||||
Expiration date of interest rate cap | Mar. 31, 2019 | Mar. 31, 2019 | Mar. 31, 2019 | |||||||
Derivative interest rate cap, payment received or accrued from counterparties | $ 61,000 | 144,000 | $ 205,000 | $ 205,000 | ||||||
Level 2 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Mortgage loan fair value | $ 64,100,000 | 64,900,000 | ||||||||
Mortgage debt | $ 65,300,000 | |||||||||
Vibra Hospital-Corpus Christi Fixed Rate Mortgage Loan | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Repayments of mortgage loan | $ 2,500,000 | |||||||||
Lease expiration date | Jun. 1, 2019 | |||||||||
LIBOR | Interest Rate Cap | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Derivative instruments, LIBOR rate | 1.50% | 1.50% | ||||||||
Credit Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Outstanding borrowing | $ 300,000,000 | $ 300,000,000 | ||||||||
Increase in borrowing capacity | $ 50,000,000 | |||||||||
Unsecured revolving amended credit agreement terminated date | 2022-03 | |||||||||
Number of additional six month extension options | Option | 2 | |||||||||
Proceeds from Lines of Credit | $ 50,000,000 | |||||||||
Credit facility, Interest Rate Terms | one, two, three, or six month LIBOR plus an applicable margin ranging from 1.10% to 1.35% or at the Base Rate plus an applicable margin ranging from 0.10% to 0.35%. | |||||||||
Base rate description | the greater of: (a) the administrative agent’s prime rate; (b) the federal funds effective rate plus 1/2 of 1%, and; (c) one month LIBOR plus 1%. | |||||||||
Facility fee payable on commitment | 0.20% | |||||||||
Credit Agreement | LIBOR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Margin points added to the reference rate | 1.20% | |||||||||
Credit Agreement | Base Rate | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Margin points added to the reference rate | 0.20% | |||||||||
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 | |||||||||
Credit Agreement | Minimum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Facility fee payable on commitment | 0.15% | |||||||||
Credit Agreement | Minimum | LIBOR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Margin points added to the reference rate | 1.10% | |||||||||
Margin points added to the base rate | 1.00% | |||||||||
Credit Agreement | Minimum | Base Rate | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Margin points added to the reference rate | 0.10% | |||||||||
Credit Agreement | Minimum | Federal Funds Effective Rate | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Margin points added to the base rate | 0.50% | |||||||||
Credit Agreement | Maximum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Facility fee payable on commitment | 0.35% | |||||||||
Credit Agreement | Maximum | LIBOR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Margin points added to the reference rate | 1.35% | |||||||||
Credit Agreement | Maximum | Base Rate | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Margin points added to the reference rate | 0.35% |
Summary of Required Compliance
Summary of Required Compliance Ratios in Connection with Terms of Credit Agreement (Detail) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | ||
Covenant, Tangible net worth | $ 125,000 | |
Tangible net worth | $ 172,786 | $ 181,203 |
Total leverage | 40.30% | 41.30% |
Secured leverage | 9.40% | 9.80% |
Unencumbered leverage | 36.20% | 37.60% |
Fixed charge coverage | 4.00% | 4.30% |
Maximum | ||
Debt Instrument [Line Items] | ||
Covenant, Total leverage | 60.00% | |
Covenant, Secured leverage | 30.00% | |
Covenant, Unencumbered leverage | 60.00% | |
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 | 6 Months Ended | |||
Jun. 30, 2019 | Dec. 31, 2018 | |||
Debt Instrument [Line Items] | ||||
Outstanding Balance | [1] | $ 61,994 | ||
Less net financing fees | [1] | (652) | ||
Plus net debt premium | [1] | 220 | ||
Total mortgages notes payable, non-recourse to us, net | 61,562 | [1] | $ 64,881 | |
700 Shadow Lane and Goldring MOBs Fixed Rate Mortgage Loan | ||||
Debt Instrument [Line Items] | ||||
Outstanding Balance | [1] | $ 5,759 | ||
Debt Instrument Interest Rate Stated Percentage | 4.54% | |||
Maturity Date | 2022-06 | |||
BRB Medical Office Building Fixed Rate Mortgage Loan | ||||
Debt Instrument [Line Items] | ||||
Outstanding Balance | [1] | $ 5,825 | ||
Debt Instrument Interest Rate Stated Percentage | 4.27% | |||
Maturity Date | 2022-12 | |||
Desert Valley Medical Center Fixed Rate Mortgage Loan | ||||
Debt Instrument [Line Items] | ||||
Outstanding Balance | [1] | $ 4,734 | ||
Debt Instrument Interest Rate Stated Percentage | 3.62% | |||
Maturity Date | 2023-01 | |||
2704 North Tenaya Way Fixed Rate Mortgage Loan | ||||
Debt Instrument [Line Items] | ||||
Outstanding Balance | [1] | $ 6,800 | ||
Debt Instrument Interest Rate Stated Percentage | 4.95% | |||
Maturity Date | 2023-11 | |||
Summerlin Hospital Medical Office Building III Fixed Rate Mortgage Loan | ||||
Debt Instrument [Line Items] | ||||
Outstanding Balance | [1] | $ 13,197 | ||
Debt Instrument Interest Rate Stated Percentage | 4.03% | |||
Maturity Date | 2024-04 | |||
Tuscan Professional Building Fixed Rate Mortgage Loan | ||||
Debt Instrument [Line Items] | ||||
Outstanding Balance | [1] | $ 3,759 | ||
Debt Instrument Interest Rate Stated Percentage | 5.56% | |||
Maturity Date | 2025-06 | |||
Phoenix Children’s East Valley Care Center Fixed Rate Mortgage Loan | ||||
Debt Instrument [Line Items] | ||||
Outstanding Balance | [1] | $ 9,079 | ||
Debt Instrument Interest Rate Stated Percentage | 3.95% | |||
Maturity Date | 2030-01 | |||
Rosenberg Children's Medical Plaza Fixed Rate Mortgage Loan | ||||
Debt Instrument [Line Items] | ||||
Outstanding Balance | [1] | $ 12,841 | ||
Debt Instrument Interest Rate Stated Percentage | 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. |
Segment Reporting - Additional
Segment Reporting - Additional Information (Detail) | 6 Months Ended |
Jun. 30, 2019Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 1 |
Impact of Hurricane Harvey - Ad
Impact of Hurricane Harvey - Additional Information (Detail) | 3 Months Ended | 4 Months Ended | 6 Months Ended | 10 Months Ended | 12 Months Ended | |
Jun. 30, 2018USD ($) | Dec. 31, 2017USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($) | Aug. 31, 2017Building | |
Unusual Or Infrequent Item [Line Items] | ||||||
Hurricane related insurance recoveries | $ 194,000 | $ 1,162,000 | ||||
Hurricane insurance recoveries in excess of damaged property write-downs | 4,535,000 | |||||
Hurricane Harvey, Extensive Water Damage | Houston, Texas | ||||||
Unusual Or Infrequent Item [Line Items] | ||||||
Number of medical office buildings | Building | 5 | |||||
Hurricane Harvey | ||||||
Unusual Or Infrequent Item [Line Items] | ||||||
Additional insurance recovery proceeds | $ 5,500,000 | |||||
Hurricane related insurance recoveries | $ 12,500,000 | |||||
Hurricane insurance recoveries in excess of damaged property write-downs | $ 4,500,000 | |||||
Hurricane Harvey | Business Interruption | ||||||
Unusual Or Infrequent Item [Line Items] | ||||||
Hurricane related insurance recoveries | $ 194,000 | $ 1,200,000 | ||||
Hurricane Harvey | 2017 business interruption | ||||||
Unusual Or Infrequent Item [Line Items] | ||||||
Hurricane related insurance recoveries | $ 500,000 |