Log in
Log in
Or log in with
GoogleGoogle
Twitter Twitter
Facebook Facebook
Apple Apple     
Sign up
Or log in with
GoogleGoogle
Twitter Twitter
Facebook Facebook
Apple Apple     

UNIVERSAL HEALTH REALTY INCOME TRUST

(UHT)
  Report
Delayed Nyse  -  04:00 2022-09-30 pm EDT
43.21 USD   +4.00%
09/16UNIVERSAL HEALTH REALTY INCOME TRUST : Ex-dividend day for
FA
09/07Universal Health Realty Income Trust Keeps Quarterly Dividend at $0.71 a Share, Payable Sept. 30 to Shareholders as of Sept. 19
MT
09/07Universal health realty income trust announces dividend
PR
SummaryQuotesChartsNewsCalendarCompanyFinancialsFunds 
SummaryMost relevantAll NewsOther languagesPress ReleasesOfficial PublicationsSector news

UNIVERSAL HEALTH REALTY INCOME TRUST Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q)

08/08/2022 | 04:19pm EDT

Overview


We are a real estate investment trust ("REIT") that commenced operations in
1986. We invest in healthcare and human service related facilities currently
including acute care hospitals, behavioral health care hospitals, specialty
facilities, free-standing emergency departments, childcare centers and
medical/office buildings. As of August 1, 2022, we have seventy-six real estate
investments or commitments located in twenty-one states consisting of:

• six hospital facilities consisting of three acute care hospitals and three

        behavioral health care hospitals;


  • four free-standing emergency departments ("FEDs");


    •   fifty-nine medical/office buildings, including four owned by

unconsolidated limited liability companies ("LLCs")/limited liability

        partnerships ("LPs");


  • four preschool and childcare centers, and;


  • three specialty facilities that are currently vacant.

Forward Looking Statements and Certain Risk Factors


You should carefully review all of the information contained in this Quarterly
Report, and should particularly consider any risk factors that we set forth in
our Annual Report on Form 10-K for the year ended December 31, 2021, this
Quarterly Report and in other reports or documents that we file from time to
time with the Securities and Exchange Commission (the "SEC"). In this Quarterly
Report, we state our beliefs of future events and of our future financial
performance. This Quarterly Report contains "forward-looking statements" that
reflect our current estimates, expectations and projections about our future
results, performance, prospects and opportunities. Words such as "may," "will,"
"should," "could," "would," "predicts," "potential," "continue," "expects,"
"anticipates," "future," "intends," "plans," "believes," "estimates," "appears,"
"projects" and similar expressions, as well as statements in future tense,
identify forward-looking statements. You should be aware that those statements
are only our predictions. Actual events or results may differ materially. In
evaluating those statements, you should specifically consider various factors,
including the risks described elsewhere herein and in our Annual Report on Form
10-K for the year ended December 31, 2021 in Item 1A Risk Factors and in Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations-Forward Looking Statements and in Item 2. Management's Discussion and
Analysis of Financial Condition and Results of Operations-Forward Looking
Statements and Risk Factors, as included herein. Those factors may cause our
actual results to differ materially from any of our forward-looking statements.

Forward-looking statements should not be read as a guarantee of future
performance or results and will not necessarily be accurate indications of the
times at, or by which, such performance or results will be achieved.
Forward-looking information is based on information available at the time and/or
our good faith belief with respect to future events and is subject to risks and
uncertainties that could cause actual performance or results to differ
materially from those expressed in the statements. Such factors include, among
other things, the following:

• Future operations and financial results of our tenants, and in turn ours,

will likely be materially impacted by numerous factors and future

developments related to COVID-19. Such factors and developments include, but

are not limited to, the length of time and severity of the spread of the

pandemic; the volume of cancelled or rescheduled elective procedures and the

volume of COVID-19 patients treated by the operators of our hospitals and

other healthcare facilities; measures our tenants are taking to respond to

      the COVID-19 pandemic; the impact of government and administrative
      regulation, including travel bans and restrictions, shelter-in-place or
      stay-at-home orders, quarantines, the promotion of social distancing,
      business shutdowns and limitations on business activity; vaccine

requirements; changes in patient volumes at our tenants' hospitals and other

healthcare facilities due to patients' general concerns related to the risk

of contracting COVID-19 from interacting with the healthcare system; changes

in patient volumes and payer mix caused by deteriorating macroeconomic

conditions (including increases in uninsured and underinsured patients as

the result of business closings and layoffs); potential disruptions to

clinical staffing and shortages and disruptions related to supplies required

for our tenants' employees and patients, including equipment,

pharmaceuticals and medical supplies, potential increases to expenses

incurred by our tenants related to staffing, supply chain or other

expenditures; the impact of our indebtedness and the ability to refinance

such indebtedness on acceptable terms; disruptions in the financial markets

and the business of financial institutions as the result of the COVID-19

pandemic which could impact our ability to access capital or increase

associated borrowing costs; and changes in general economic conditions

nationally and regionally in the markets our properties are located

resulting from the COVID-19 pandemic, including higher sustained rates of

unemployment and underemployment levels and reduced consumer spending and

confidence. The nationwide shortage of nurses and other clinical staff and

support personnel has been a significant operating issues facing our

healthcare provider tenants, including UHS. In some areas, the labor

scarcity is putting a strain on the resources of our tenants and their

      staff, which has required them to utilize higher-cost temporary labor and
      pay premiums


                                       21
--------------------------------------------------------------------------------

above standard compensation for essential workers. In addition to

significantly increasing the labor cost of our tenants, the healthcare

staffing shortage could also require the operators of our hospital

facilities to limit the services provided which would have an adverse effect

on their operating revenues. There may be significant declines in future

bonus rental revenue earned on one acute care hospital leased to a

subsidiary of UHS to the extent that the hospital experiences significant

declines in patient volumes and revenues. These factors may result in the

inability or unwillingness on the part of some of our tenants to make timely

payment of their rent to us at current levels or to seek to amend or

terminate their leases which, in turn, would have an adverse effect on our

occupancy levels and our revenue and cash flow and the value of our

properties, and potentially, our ability to maintain our dividend at current

      levels.



   •  Due to COVID-19 restrictions and its impact on the economy, we may

experience a decrease in prospective tenants which could unfavorably impact

the volume of new leases, as well as the renewal rate of existing leases.

The COVID-19 pandemic may delay our construction projects which could result

in increased costs and delay the timing of opening and rental payments from

those projects, although no such delays have yet occurred. The COVID-19

pandemic could also impact our indebtedness and the ability to refinance

such indebtedness on acceptable terms, as well as risks associated with

disruptions in the financial markets and the business of financial

institutions as the result of the COVID-19 pandemic which could impact us

from a financing perspective; and changes in general economic conditions

nationally and regionally in the markets our properties are located

resulting from the COVID-19 pandemic. Although COVID-19 has not previously

had a material adverse impact on our financial results, we are not able to

quantify the impact that these factors could have on our future financial

results and therefore can provide no assurance that developments related to

the COVID-19 pandemic will not have a material adverse impact on our future

financial results.

• The Centers for Medicare and Medicaid Services ("CMS") issued an Interim

Final Rule ("IFR") effective November 5, 2021 mandating COVID-19

vaccinations for all applicable staff at all Medicare and Medicaid certified

facilities. Under the IFR, facilities covered by this regulation must

establish a policy ensuring all eligible staff have received the COVID-19

vaccine prior to providing any care, treatment, or other services by

December 5, 2021. All eligible staff must have received the necessary shots

to be fully vaccinated. The regulation also provides for exemptions based on

recognized medical conditions or religious beliefs, observances, or

practices. Under the IFR, facilities must develop a similar process or plan

for permitting exemptions in alignment with federal law. If facilities fail

to comply with the IFR by the deadlines established, they are subject to

potential termination from the Medicare and Medicaid program for

non-compliance. We cannot predict at this time the potential viability or

impact of any additional vaccine requirements on us or the operators of our

facilities. Implementation of these rules could have an impact on staffing

at the operators of our facilities for those employees that are not

vaccinated in accordance with IFR requirements, and associated loss of

revenues and increased costs resulting from staffing issues could have a

material adverse effect on our financial results or those of the operators.

• Recent legislation, including the Coronavirus Aid, Relief, and Economic

Security Act (the "CARES Act"), the Paycheck Protection Program and Health

Care Enhancement Act ("PPPHCE Act") and the American Rescue Plan Act of 2021

("ARPA"), has provided grant funding to hospitals and other healthcare

providers to assist them during the COVID-19 pandemic. There is a high

degree of uncertainty surrounding the implementation of the CARES Act, the

PPPHCE Act and ARPA, and the federal government may consider additional

stimulus and relief efforts, but we are unable to predict whether additional

stimulus measures will be enacted or their impact. There can be no assurance

as to the total amount of financial and other types of assistance our

tenants will receive under the CARES Act, the PPPHCE Act and the ARPA, and

it is difficult to predict the impact of such legislation on our tenants'

operations or how they will affect operations of our tenants'

competitors. There can be no assurance as to whether our tenants would be

required to repay any previously granted funding, due to noncompliance with

grant terms or otherwise. Moreover, we are unable to assess the extent to

which anticipated negative impacts on our tenants (and, in turn, us) arising

from the COVID-19 pandemic will be offset by amounts or benefits received or

to be received under the CARES Act, the PPPHCE Act and the ARPA.

• A substantial portion of our revenues are dependent upon one operator, UHS,

which comprised approximately 41% and 36% of our consolidated revenues for

the three-month periods ended June 30, 2022 and 2021, respectively, and

approximately 41% and 36% of our consolidated revenues for the six-month

periods ended June 30, 2022 and 2021, respectively. As previously disclosed,

on December 31, 2021, a wholly-owned subsidiary of UHS purchased the real

estate assets of Inland Valley Campus of Southwest Healthcare System from us

and in exchange, transferred the real estate assets of Aiken Regional

Medical Center and Canyon Creek Behavioral Health to us. These transactions

were approved by the Independent Trustees of our Board, as well as the UHS

Board of Directors. The aggregate annual rental revenue during 2022 pursuant

to the leases for the two facilities transferred to us is approximately $5.7

million; there is no bonus rent component applicable to either of these

leases. Pursuant to the terms of the lease on the Inland Valley Campus, we

      earned $4.5 million of lease revenue during year ended December 31, 2021
      ($2.6 million in base rental and $1.9 million in bonus rental).

• We cannot assure you that subsidiaries of UHS will renew the leases on the

hospital facilities and free-standing emergency departments, upon the

scheduled expirations of the existing lease terms. In addition, if

subsidiaries of UHS exercise their options to purchase the respective leased

      hospital facilities and FEDs, and do not enter into a substitution
      arrangement upon


                                       22
--------------------------------------------------------------------------------

expiration of the lease terms or otherwise, our future revenues and results

of operations could decrease if we were unable to earn a favorable rate of

return on the sale proceeds received, as compared to the rental revenue

      currently earned pursuant to these leases.


   •  In certain of our markets, the general real estate market has been

unfavorably impacted by increased competition/capacity and decreases in

occupancy and rental rates which may adversely impact our operating results

and the underlying value of our properties.

• A number of legislative initiatives have recently been passed into law that

may result in major changes in the health care delivery system on a national

or state level to the operators of our facilities, including UHS. No

assurances can be given that the implementation of these new laws will not

have a material adverse effect on the business, financial condition or

results of operations of our operators.

• The potential indirect impact of the Tax Cuts and Jobs Act of 2017, signed

into law on December 22, 2017, which makes significant changes to corporate

and individual tax rates and calculation of taxes, which could potentially

impact our tenants and jurisdictions, both positively and negatively, in

which we do business, as well as the overall investment thesis for REITs.

• A subsidiary of UHS is our Advisor and our officers are all employees of a

wholly-owned subsidiary of UHS, which may create the potential for conflicts

of interest.

• Lost revenues resulting from the exercise of purchase options, lease

expirations and renewals and other transactions (see Note 7 to the condensed

consolidated financial statements - Lease Accounting for additional

disclosure related to lease expirations and subsequent vacancies that

occurred during the second and third quarters of 2019 and the fourth quarter

of 2021 on three specialty hospital facilities).

• Potential unfavorable tax consequences and reduced income resulting from an

inability to complete, within the statutory timeframes, anticipated tax

deferred like-kind exchange transactions pursuant to Section 1031 of the

Internal Revenue Code, if, and as, applicable from time-to-time.

• Our ability to continue to obtain capital on acceptable terms, including

      borrowed funds, to fund future growth of our business.


   •  The outcome and effects of known and unknown litigation, government

investigations, and liabilities and other claims asserted against us, UHS or

the other operators of our facilities. UHS and its subsidiaries are subject

to legal actions, purported shareholder class actions and shareholder

derivative cases, governmental investigations and regulatory actions and the

effects of adverse publicity relating to such matters. Since UHS comprised

approximately 41% of our consolidated revenues during each of the three and

six-month periods ended June 30, 2022, respectively, and since a subsidiary

of UHS is our Advisor, you are encouraged to obtain and review the

disclosures contained in the Legal Proceedings section of Universal Health

Services, Inc.'s Forms 10-Q and 10-K, as publicly filed with the Securities

      and Exchange Commission. Those filings are the sole responsibility of UHS
      and are not incorporated by reference herein.

• Failure of UHS or the other operators of our hospital facilities to comply

with governmental regulations related to the Medicare and Medicaid licensing

and certification requirements could have a material adverse impact on our

future revenues and the underlying value of the property.

• The potential unfavorable impact on our business of the deterioration in

national, regional and local economic and business conditions, including a

worsening of credit and/or capital market conditions, which may adversely

      affect our ability to obtain capital which may be required to fund the
      future growth of our business and refinance existing debt with near term
      maturities.

• A continuation in the deterioration in general economic conditions which has

resulted in increases in the number of people unemployed and/or insured and

likely increase the number of individuals without health insurance. Under

these circumstances, the operators of our facilities may experience declines

      in patient volumes which could result in decreased occupancy rates at our
      medical office buildings.

• A continuation of the worsening of the economic and employment conditions in

the United States would likely materially affect the business of our

operators, including UHS, which would likely unfavorably impact our future

bonus rental revenue (on one UHS hospital facility) and may potentially have

a negative impact on the future lease renewal terms and the underlying value

of the hospital properties.

• Real estate market factors, including without limitation, the supply and

demand of office space and market rental rates, changes in interest rates as

      well as an increase in the development of medical office condominiums in
      certain markets.

• The impact of property values and results of operations of severe weather

conditions, including the effects of hurricanes.

• Government regulations, including changes in the reimbursement levels under

the Medicare and Medicaid programs.

                                       23
--------------------------------------------------------------------------------

• The issues facing the health care industry that affect the operators of our

facilities, including UHS, such as: changes in, or the ability to comply

with, existing laws and government regulations; unfavorable changes in the

levels and terms of reimbursement by third party payors or government

programs, including Medicare (including, but not limited to, the potential

unfavorable impact of future reductions to Medicare reimbursements resulting

from the Budget Control Act of 2011, as discussed in the next bullet point

below) and Medicaid (most states have reported significant budget deficits

that have, in the past, resulted in the reduction of Medicaid funding to the

operators of our facilities, including UHS); demographic changes; the

ability to enter into managed care provider agreements on acceptable terms;

an increase in uninsured and self-pay patients which unfavorably impacts the

collectability of patient accounts; decreasing in-patient admission trends;

technological and pharmaceutical improvements that may increase the cost of

      providing, or reduce the demand for, health care, and; the ability to
      attract and retain qualified medical personnel, including physicians.


   •  The Budget Control Act of 2011 imposed annual spending limits for most
      federal agencies and programs aimed at reducing budget deficits by $917
      billion between 2012 and 2021, according to a report released by the

Congressional Budget Office. Among its other provisions, the law established

a bipartisan Congressional committee, known as the Joint Select Committee on

Deficit Reduction (the "Joint Committee"), which was tasked with making

recommendations aimed at reducing future federal budget deficits by an

additional $1.5 trillion over 10 years. The Joint Committee was unable to

reach an agreement by the November 23, 2011 deadline and, as a result,

across-the-board cuts to discretionary, national defense and Medicare

spending were implemented on March 1, 2013 resulting in Medicare payment

reductions of up to 2% per fiscal year with a uniform percentage reduction

across all Medicare programs. The Bipartisan Budget Act of 2015, enacted on

November 2, 2015, continued the 2% reductions to Medicare reimbursement

imposed under the Budget Control Act of 2011. Recent legislation has

suspended payment reductions through December 31, 2021 in exchange for

extended cuts through 2030. Subsequent legislation extended the payment

reduction suspension through March 31, 2022, with a 1% payment reduction

from then until June 30, 2022 and the full 2% payment reduction

thereafter. We cannot predict whether Congress will restructure the

implemented Medicare payment reductions or what other federal budget deficit

reduction initiatives may be proposed by Congress going forward. We also

cannot predict the effect these enactments will have on the operators of our

properties (including UHS), and thus, our business.

• An increasing number of legislative initiatives have been passed into law

that may result in major changes in the health care delivery system on a

national or state level. Legislation has already been enacted that has

eliminated the penalty for failing to maintain health coverage that was part

of the original Patient Protection and Affordable Care Act (the "ACA").

President Biden is expected to undertake executive actions that will

strengthen the ACA and may reverse the policies of the prior administration.

To date, the Biden administration has issued executive orders implementing a

special enrollment period permitting individuals to enroll in health plans

outside of the annual open enrollment period and reexamining policies that

may undermine the ACA or the Medicaid program. The ARPA's expansion of

subsidies to purchase coverage through an exchange is anticipated to

increase exchange enrollment. The Trump Administration had directed the

issuance of final rules: (i) enabling the formation of association health

plans that would be exempt from certain ACA requirements such as the

provision of essential health benefits; (ii) expanding the availability of

short-term, limited duration health insurance, (iii) eliminating

cost-sharing reduction payments to insurers that would otherwise offset

deductibles and other out-of-pocket expenses for health plan enrollees at or

below 250 percent of the federal poverty level; (iv) relaxing requirements

for state innovation waivers that could reduce enrollment in the individual

and small group markets and lead to additional enrollment in short-term,

limited duration insurance and association health plans; and (v)

incentivizing the use of health reimbursement arrangements by employers to

permit employees to purchase health insurance in the individual market. The

uncertainty resulting from these Executive Branch policies had led to

reduced Exchange enrollment in 2018, 2019 and 2020, and is expected to

further worsen the individual and small group market risk pools in future

      years. It is also anticipated that these policies, to the extent that they
      remain as implemented, may create additional cost and reimbursement
      pressures on hospitals, including ours. In addition, while attempts to
      repeal the entirety of the ACA have not been successful to date, a key

provision of the ACA was eliminated as part of the Tax Cuts and Jobs Act and

on December 14, 2018, a federal U.S. District Court Judge in Texas ruled the

entire ACA is unconstitutional. That ruling was ultimately appealed to the

United States Supreme Court, which decided in California v. Texas that the

plaintiffs in the matter lacked standing to bring their constitutionality

      claims. As a result, the Legislation will continue to remain law, in its
      entirety, likely for the foreseeable future.

• There can be no assurance that if any of the announced or proposed changes

described above are implemented there will not be negative financial impact

on the operators of our hospitals, which material effects may include a

potential decrease in the market for health care services or a decrease in

the ability of the operators of our hospitals to receive reimbursement for

health care services provided which could result in a material adverse

effect on the financial condition or results of operations of the operators

of our properties, and, thus, our business.

• Competition for properties includes, but is not limited to, other REITs,

private investors and firms, banks and other companies, including UHS. In

addition, we may face competition from other REITs for our tenants.

                                       24
--------------------------------------------------------------------------------

   •  The operators of our facilities face competition from other health care
      providers, including physician owned facilities and other competing
      facilities, including certain facilities operated by UHS but the real
      property of which is not owned by us. Such competition is experienced in
      markets including, but not limited to, McAllen, Texas, the site of our
      McAllen Medical Center, a 370-bed acute care hospital.

• Changes in, or inadvertent violations of, tax laws and regulations and other

factors that can affect REITs and our status as a REIT, including possible

future changes to federal tax laws that could materially impact our ability

      to defer gains on divestitures through like-kind property exchanges.

• The individual and collective impact of the changes made by the CARES Act on

REITs and their security holders are uncertain and may not become evident

for some period of time; it is also possible additional legislation could be

enacted in the future as a result of the COVID-19 pandemic which may affect

      the holders of our securities.


   •  Should we be unable to comply with the strict income distribution

requirements applicable to REITs, utilizing only cash generated by operating

activities, we would be required to generate cash from other sources which

could adversely affect our financial condition.

• Our ownership interest in four LLCs/LPs in which we hold non-controlling

equity interests. In addition, pursuant to the operating and/or partnership

agreements of the four LLCs/LPs in which we continue to hold non-controlling

ownership interests, the third-party member and the Trust, at any time,

potentially subject to certain conditions, have the right to make an offer

("Offering Member") to the other member(s) ("Non-Offering Member") in which

it either agrees to: (i) sell the entire ownership interest of the Offering

Member to the Non-Offering Member ("Offer to Sell") at a price as determined

by the Offering Member ("Transfer Price"), or; (ii) purchase the entire

ownership interest of the Non-Offering Member ("Offer to Purchase") at the

equivalent proportionate Transfer Price. The Non-Offering Member has 60 to

90 days to either: (i) purchase the entire ownership interest of the

Offering Member at the Transfer Price, or; (ii) sell its entire ownership

interest to the Offering Member at the equivalent proportionate Transfer

Price. The closing of the transfer must occur within 60 to 90 days of the

acceptance by the Non-Offering Member. Please see Note 5 to the condensed

consolidated financial statements - Summarized Financial Information of

Equity Affiliates for additional disclosure related to a fourth quarter,

2021 transaction between us and the minority partner in Grayson Properties,

      LP.


  • Fluctuations in the value of our common stock.

• Other factors referenced herein or in our other filings with the Securities

and Exchange Commission.



Given these uncertainties, risks and assumptions, you are cautioned not to place
undue reliance on such forward-looking statements. Our actual results and
financial condition, including the operating results of our lessees and the
facilities leased to subsidiaries of UHS, could differ materially from those
expressed in, or implied by, the forward-looking statements.

Forward-looking statements speak only as of the date the statements are made. We
assume no obligation to publicly update any forward-looking statements to
reflect actual results, changes in assumptions or changes in other factors
affecting forward-looking information, except as may be required by law. All
forward-looking statements attributable to us or persons acting on our behalf
are expressly qualified in their entirety by this cautionary statement.

Critical Accounting Policies and Estimates

There have been no significant changes to our critical accounting policies or estimates from those disclosed in our 2021 Annual Report on Form 10-K.

Results of Operations


During the three-month period ended June 30, 2022, net income was $5.2 million,
as compared to $6.6 million during the second quarter of 2021. The $1.4 million
decrease was attributable to:

• a decrease of $1.3 million resulting from the gain recorded during the

          second quarter of 2021 related to the sale of certain real estate
          assets;

• a decrease of $737,000 related to a vacant specialty hospital located in

Chicago, Illinois, on which, as discussed in Note 7 to the consolidated

financial statements, the lease expired on December 31, 2021;



        • a decrease of $184,000 resulting from an increase in interest expense
          primarily due to increased borrowings and an increase in our interest
          rate;


                                       25
--------------------------------------------------------------------------------

• a net increase of $341,000 resulting from the asset purchase and sale

          agreement with UHS that occurred on December 31, 2021;


        • an increase of $335,000 resulting from the impact of the fair market
          value lease renewal on Wellington Regional Medical Center, which became
          effective on January 1, 2022, and;


  • $146,000 of other combined net increases.


During the six-month period ended June 30, 2022, net income was $10.6 million, as compared to $12.2 million during the six-month period ended June 30, 2021. The $1.6 million increase was attributable to:

• a decrease of $1.3 million resulting from the gain recorded during the

          second quarter of 2021 related to the sale of certain real estate
          assets;

• a decrease of $1.6 million related to a vacant specialty hospital

located in Chicago, Illinois, on which the lease expired on December 31,

2021;



        • a decrease of $273,000 resulting from an increase in interest expense
          primarily due to increased borrowings and in increase in our interest
          rate;

• a net increase of $666,000 resulting from the asset purchase and sale

          agreement with UHS that occurred on December 31, 2021;


        • an increase of $670,000 resulting from the impact of the fair market
          value lease renewal on Wellington Regional Medical Center, which became
          effective on January 1, 2022, and;


  • $278,000 of other combined net increases.


Revenues increased $1.3 million to $22.2 million during the three-month period
ended June 30, 2022, as compared to $20.9 million during the three-month period
ended June 30, 2021. The increase during the second quarter of 2022, as compared
to the second quarter of 2021, was due to: (i) a $926,000 increase due to the
recording on a consolidated basis of Grayson Properties, LP (effective as of
November 1, 2021 as discussed in Note 5 to the consolidated financial
statements), resulting from our purchase of the 5% minority ownership interest
in the entity; (ii) a $335,000 increase resulting from the fair market value
lease renewal on Wellington Regional Medical Center, which became effective on
January 1, 2022; (iii) a $270,000 net increase resulting from the December 31,
2021 asset purchase and sale agreement with UHS whereby we divested the real
estate assets of the Inland Valley Campus of Southwest Healthcare System and
acquired the real estate assets of Aiken Regional Medical Center and Canyon
Creek Behavioral Health; (iv) a $154,000 aggregate net increase generated at
various properties, including the impact of acquisitions and divestitures,
partially offset by; (v) a $390,000 decrease resulting from the December 31,
2021 lease expiration on the specialty hospital located in Chicago, Illinois.
Although our revenues and expenses increased during the second quarter of 2022,
as compared to the second quarter of 2021, resulting from the recording of
Grayson Properties, LP on a consolidated basis effective as of November 1, 2021,
there was no significant impact on our net income resulting from the change from
the unconsolidated/equity method basis.

Revenues increased $2.8 million to $44.3 million during the six-month period
ended June 30, 2022, as compared to $41.6 million during the six-month period
ended June 30, 2021. The increase during the first six months of 2022, as
compared to the first six months of 2021, was due to: (i) a $1.8 million
increase due to the recording on a consolidated basis of Grayson Properties, LP
(effective as of November 1, 2021 as discussed above and in Note 5 to the
consolidated financial statements); (ii) a $670,000 increase resulting from the
fair market value lease renewal on Wellington Regional Medical Center, which
became effective on January 1, 2022; (iii) a $523,000 net increase resulting
from the December 31, 2021 asset purchase and sale agreement with UHS whereby we
divested the real estate assets of the Inland Valley Campus of Southwest
Healthcare System and acquired the real estate assets of Aiken Regional Medical
Center and Canyon Creek Behavioral Health; (iv) a $513,000 aggregate net
increase generated at various properties, including the impact of acquisitions
and divestitures, partially offset by; (v) a $780,000 decrease resulting from
the December 31, 2021 lease expiration on the specialty hospital located in
Chicago, Illinois. As mentioned above, although our revenues and expenses
increased during the first six months of 2022, as compared to the first six
months of 2021, resulting from the recording of Grayson Properties, LP on a
consolidated basis, there was no significant impact on our net income resulting
from the change from the unconsolidated/equity method basis.

A large portion of the expenses associated with our consolidated medical office
buildings is passed on directly to the tenants either directly as tenant
reimbursements of common area maintenance expenses or included in base rental
amounts. Tenant reimbursements for operating expenses are accrued as revenue in
the same period the related expenses are incurred and are included as lease
revenue in our condensed consolidated statements of income.

                                       26
--------------------------------------------------------------------------------


Included in our other operating expenses are expenses related to the
consolidated medical office buildings and three vacant specialty facilities.
Other operating expenses totaled $6.0 million and $5.0 million for the
three-month periods ended June 30, 2022 and 2021, respectively. The $1.0 million
increase in our other operating expenses during the second quarter of 2022, as
compared to the second quarter of 2021, was due primarily to: (i) $347,000 of
operating expenses incurred during the second quarter of 2022 at a vacant
specialty facility located in Chicago, Illinois, on which the lease expired on
December 31, 2021 (the operating expenses for this facility were the tenant's
responsibility through the lease expiration date); (ii) $463,000 of other
operating expenses recorded during the second quarter of 2022 in connection with
Grayson Properties, LP, which as discussed above, was recorded on a consolidated
basis effective as of November 1, 2021, and; (iii) $167,000 of other combined
increased expenses.

Other operating expenses related to the consolidated medical office buildings
and three vacant specialty facilities, as applicable, totaled $12.1 million and
$9.8 million for the six-month periods ended June 30, 2022 and 2021,
respectively. The $2.2 million increase in our other operating expenses during
the first six months of 2022, as compared to the first six months of 2021, was
due primarily to: (i) $840,000 of operating expenses incurred during the first
six months of 2022 at the above-mentioned vacant specialty facility located in
Chicago, Illinois, on which the lease expired on December 31, 2021; (ii)
$915,000 of other operating expenses recorded during the first six months of
2022 in connection with Grayson Properties, LP, which as discussed above, was
recorded on a consolidated basis effective as of November 1, 2021, and; (iii)
$484,000 of other combined increased expenses.

                                       27
--------------------------------------------------------------------------------


Funds from operations ("FFO") is a widely recognized measure of performance for
Real Estate Investment Trusts ("REITs"). We believe that FFO and FFO per diluted
share, which are non-GAAP financial measures, are helpful to our investors as
measures of our operating performance. We compute FFO in accordance with
standards established by the National Association of Real Estate Investment
Trusts ("NAREIT"), which may not be comparable to FFO reported by other REITs
that do not compute FFO in accordance with the NAREIT definition, or that
interpret the NAREIT definition differently than we interpret the definition.
FFO adjusts for the effects of certain items, such as gains on transactions that
occurred during the periods presented. To the extent a REIT recognizes a gain or
loss with respect to the sale of incidental assets, the REIT has the option to
exclude or include such gains and losses in the calculation of FFO. We have
opted to exclude gains and losses from sales of incidental assets in our
calculation of FFO. FFO does not represent cash generated from operating
activities in accordance with GAAP and should not be considered to be an
alternative to net income determined in accordance with GAAP. In addition, FFO
should not be used as: (i) an indication of our financial performance determined
in accordance with GAAP; (ii) an alternative to cash flow from operating
activities determined in accordance with GAAP; (iii) a measure of our liquidity,
or; (iv) an indicator of funds available for our cash needs, including our
ability to make cash distributions to shareholders.

Below is a reconciliation of our reported net income to FFO for the three and six-month periods ended June 30, 2022 and 2021 (in thousands):

                                            Three Months Ended           Six Months Ended
                                                 June 30,                    June 30,
                                            2022          2021          2022          2021
Net income                               $    5,218     $   6,621     $  10,623     $  12,207
Depreciation and amortization expense
on consolidated
  investments                                 6,679         6,951        13,388        13,738
Depreciation and amortization expense
on unconsolidated
  affiliates                                    295           374           590           736
Gain on sale of real estate assets                -        (1,304 )           -        (1,304 )
Funds From Operations                    $   12,192     $  12,642     $  24,601     $  25,377
Weighted average number of shares
outstanding - Diluted                        13,789        13,776        13,788        13,773
Funds From Operations per diluted
share                                    $     0.88     $    0.92     $    

1.78 $ 1.84



Our FFO decreased $450,000 during the second quarter of 2022, as compared to the
second quarter of 2021. The net decrease was primarily due to: (i) a net
decrease in net income of $99,000; excluding the $1.3 million gain recorded
during the second quarter of 2021 related to the sale of certain real estate
assets (which we exclude from our calculation of FFO), as discussed above, and;
(ii) a $351,000 decrease in depreciation and amortization expense incurred on
our consolidated and unconsolidated affiliates.

Our FFO decreased $776,000 during the first six months of 2022, as compared to
the first six months of 2021. The net decrease was primarily due to: (i) the net
decrease in net income of $280,000; excluding the $1.3 million gain recorded
during the second quarter of 2021 related to the sale of certain real estate
assets (which we exclude from our calculation of FFO), as discussed above, and;
(ii) a $496,000 decrease in depreciation and amortization expense incurred on
our consolidated and unconsolidated affiliates.

Other Operating Results

Interest Expense:


As reflected in the schedule below, interest expense was $2.4 million and $2.2
million during the three-month periods ended June 30, 2022 and 2021,
respectively, and $4.6 million and $4.3 million during the six-month periods
ended June 30, 2022 and 2021, respectively (amounts in thousands):

                                          Three Months       Three Months        Six Months        Six Months
                                              Ended              Ended             Ended             Ended
                                            June 30,           June 30,           June 30,          June 30,
                                              2022               2021               2022              2021
Revolving credit agreement                $       1,550      $       1,029      $      2,718      $      1,996
Mortgage interest                                   584                629             1,196             1,264
Interest rate swaps expense, net (a.)                87                320               374               629
Amortization of financing fees                      183                216               361               432
Amortization of fair value of debt                  (13 )              (13 )             (26 )             (26 )
Capitalized interest on major projects              (35 )                -               (56 )               -
Other interest                                       11                  2                22                21
Interest expense, net                     $       2,367      $       2,183      $      4,589      $      4,316


                                       28
--------------------------------------------------------------------------------

(a.) Represents interest paid by us to the counterparties pursuant to three

interest rate SWAPs with a combined notional amount of $140 million.



Interest expense increased by $184,000 during the three-month period ended June
30, 2022, as compared to the comparable period of 2021, due primarily to: (i) a
$521,000 increase in the interest expense on our revolving credit agreement
primarily resulting from an increase in our average outstanding borrowings
($272.5 million during the three months ended June 30, 2022 as compared to
$248.2 million in the comparable quarter of 2021) as well as an increase in our
average cost of borrowings (2.28% average effective rate during the second
quarter of 2022, as compared to 1.66% average effective rate during the
comparable quarter of 2021); (ii) $9,000 of other combined net increases in
interest expense, partially offset by; (iii) a $233,000 decrease in interest
rate swap expense; (iv) a $45,000 decrease in mortgage interest expense; (v) a
$35,000 decrease due to an increase in capitalized interest on a major project,
and; (vi) a $33,000 decrease in amortization of financing fees and fair value of
debt.

Interest expense increased by $273,000 during the six-month period ended June
30, 2022, as compared to the comparable period of 2021, due primarily to: (i) a
$722,000 increase in the interest expense on our revolving credit agreement
primarily resulting from an increase in our average outstanding borrowings
($270.8 million during the six months ended June 30, 2022 as compared to $243.7
million in the comparable six-month period of 2021) as well as an increase in
our average cost of borrowings (2.02% average effective rate during the first
six months of 2022, as compared to 1.65% average effective rate during the
comparable six months of 2021); (ii) $1,000 of other combined net increases in
interest expense, partially offset by; (iii) a $255,000 decrease in interest
rate swap expense; (iv) a $68,000 decrease in mortgage interest expense; (v) a
$71,000 decrease in amortization of financing fees and fair value of debt, and;
(vi) a $56,000 decrease due to an increase in capitalized interest on a major
project.


Disclosures Related to Certain Facilities


Please refer to Note 7 to the consolidated financial statements - Lease
Accounting, for additional information regarding certain of our vacant specialty
hospital facilities consisting of Evansville, Indiana; Corpus Christi, Texas,
and; Chicago, Illinois.


Liquidity and Capital Resources

Net cash provided by operating activities


Net cash provided by operating activities was $24.9 million during the six-month
period ended June 30, 2022 as compared to $25.4 million during the comparable
period of 2021. The $456,000 net decrease was attributable to:

• an unfavorable change of $746,000 due to a decrease in net income

plus/minus the adjustments to reconcile net income to net cash provided

by operating activities (depreciation and amortization, amortization

related to above/below market leases, amortization of debt premium,

amortization of deferred financing costs, stock-based compensation and

          gain on sale of real estate assets), as discussed above;


  • an unfavorable change of $112,000 in lease receivable;

       •  an unfavorable change of $602,000 in tenant reserves, deposits and
          deferred and prepaid rents;


  • an unfavorable change of $200,000 in leasing costs paid;

• a favorable change of $343,000 in accrued expenses and other liabilities;

• other combined net favorable change of $861,000, resulting primarily

from the timing of deposits made on acquisitions and prepaid expense

payments.

Net cash used in investing activities

Net cash used in investing activities was $25.8 million during the first six months of 2022 as compared to $23.2 million during the first six months of 2021.


During the six-month period ended June 30, 2022 we funded: (i) $13.6 million,
including transaction costs, on the acquisitions of the Beaumont Heart and
Vascular Center in March, 2022, and; the 140 Thomas Johnson Drive medical office
building in January, 2022, as discussed in Note 4 to the consolidated financial
statements-Acquisitions and Divestitures; (ii) $11.2 million in additions to
real estate investments including construction costs related to the Sierra
Medical Plaza I medical office building located in Reno, Nevada, that is
scheduled to be completed during the first quarter of 2023, as well as tenant
improvements at various MOBs, and; (iii) $1.3 million as part of the asset
purchase and sale agreement with UHS, as discussed in Note 2 to the consolidated
financial statements-Relationship with UHS and Related Party Transactions. In
addition, during the six-months ended June 30, 2022, we received approximately
$391,000 of cash in excess of income from LLCs.

                                       29
--------------------------------------------------------------------------------


During the six-month period ended June 30, 2021 we funded: (i) $13.0 million,
including transaction costs, on the acquisition of the Fire Mesa office building
in May, 2021, as discussed in Note 4 to the consolidated financial
statements-Acquisitions and Dispositions; (ii) $8.4 million in additions to real
estate investments including construction costs related to the 100-bed
behavioral health care hospital located in Clive, Iowa, that was substantially
completed in late December, 2020, as well as tenant improvements at various
MOBs; (iii) a $3.5 million member loan to an unconsolidated LP, and; (iv) $1.5
million in equity investments in unconsolidated LLCs. In addition, during the
six-months ended June 30, 2021, we received approximately $3.2 million of net
cash proceeds from the sale of the Children's Clinic of Springdale as discussed
in Note 4 to the consolidated financial statements-Acquisitions and
Dispositions.

Net cash (used in)/ provided by financing activities


Net cash used in financing activities was $13.2 million during the six months
ended June 30, 2022, as compared to $1.8 million of cash provided by financing
activities during the six months ended June 30, 2021.

During the six-month period ended June 30, 2022, we paid: (i) $6.2 million on
mortgage notes payable that are non-recourse to us, including a $5.1 million
repayment of a fixed rate mortgage loan that matured during the second quarter
of 2022; (ii) $26,000 of financing costs related to the revolving credit
agreement, and; (iii) $19.5 million of dividends, including $60,000 of accrued
dividends. Additionally, during the six months ended June 30, 2022, we received:
(i) $12.4 million of net borrowings on our revolving credit agreement, and; (ii)
$94,000 of net cash from the issuance of shares of beneficial interest.

During the six-month period ended June 30, 2021, we paid: (i) $1.0 million on
mortgage notes payable that are non-recourse to us; (ii) $41,000 of financing
costs related to the revolving credit agreement, and; (iii) $19.2 million of
dividends. Additionally, during the six months ended June 30, 2021, we received:
(i) $22.0 million of net borrowings on our revolving credit agreement, and; (ii)
$105,000 of net cash from the issuance of shares of beneficial interest.

During 2020, we commenced an at-the-market ("ATM") equity issuance program,
pursuant to the terms of which we may sell, from time-to-time, common shares of
our beneficial interest up to an aggregate sales price of $100 million to or
through our agent banks. No shares were issued pursuant to this ATM equity
program during the first six months of 2022 and no shares were issued pursuant
to this ATM equity program during the year ended December 31, 2021.

Additional cash flow and dividends paid information for the six-month periods ended June 30, 2022 and 2021:


As indicated on our condensed consolidated statement of cash flows, we generated
net cash provided by operating activities of $24.9 million and $25.4 million
during the six-month periods ended June 30, 2022 and 2021, respectively. As also
indicated on our statement of cash flows, non-cash expenses including
depreciation and amortization expense, amortization related to above/below
market leases, amortization of debt premium, amortization of deferred financing
costs, stock-based compensation expense and gain on sale of real estate assets
are the primary differences between our net income and net cash provided by
operating activities during each period.

We declared and paid dividends of $19.5 million and $19.2 million during the
six-month periods ended June 30, 2022 and 2021, respectively. During the first
six months of 2022, the $24.9 million of net cash provided by operating
activities was approximately $5.4 million greater than the $19.5 million of
dividends paid during the first six months of 2022. During the first six months
of 2021, the $25.4 million of net cash provided by operating activities was
approximately $6.2 million greater than the $19.2 million of dividends paid
during the first six months of 2021.

As indicated in the cash flows from investing activities and cash flows from
financing activities sections of the statements of cash flows, there were
various other sources and uses of cash during the six months ended June 30, 2022
and 2021. From time to time, various other sources and uses of cash may include
items such as investments and advances made to/from LLCs, additions to real
estate investments, acquisitions/divestiture of properties, net
borrowings/repayments of debt, and proceeds generated from the issuance of
equity. Therefore, in any given period, the funding source for our dividend
payments is not wholly dependent on the operating cash flow generated by our
properties. Rather, our dividends as well as our capital reinvestments into our
existing properties, acquisitions of real property and other investments are
funded based upon the aggregate net cash inflows or outflows from all sources
and uses of cash from the properties we own either in whole or through LLCs, as
outlined above.

In determining and monitoring our dividend level on a quarterly basis, our
management and Board of Trustees consider many factors in determining the amount
of dividends to be paid each period. These considerations primarily include:
(i) the minimum required amount of dividends to be paid in order to maintain our
REIT status; (ii) the current and projected operating results of our properties,
including those owned in LLCs, and; (iii) our future capital commitments and
debt repayments, including those of our LLCs. Based upon the information
discussed above, as well as consideration of projections and forecasts of our
future operating cash flows, management and the Board of Trustees have
determined that our operating cash flows have been sufficient to fund our
dividend

                                       30
--------------------------------------------------------------------------------

payments. Future dividend levels will be determined based upon the factors outlined above with consideration given to our projected future results of operations.


We expect to finance all capital expenditures and acquisitions and pay dividends
utilizing internally generated and additional funds. Additional funds may be
obtained through: (i) borrowings under our $375 million revolving credit
agreement (which had $87.5 million of available borrowing capacity, net of
outstanding borrowings and letters of credit as of June 30, 2022);
(ii) borrowings under or refinancing of existing third-party debt pursuant to
mortgage loan agreements entered into by our consolidated and unconsolidated
LLCs/LPs; (iii) the issuance of equity pursuant to our ATM program, and/or;
(iv) the issuance of other long-term debt.

We believe that our operating cash flows, cash and cash equivalents, available
borrowing capacity under our revolving credit agreement and access to the
capital markets provide us with sufficient capital resources to fund our
operating, investing and financing requirements for the next twelve months,
including providing sufficient capital to allow us to make distributions
necessary to enable us to continue to qualify as a REIT under Sections 856 to
860 of the Internal Revenue Code of 1986. In the event we need to access the
capital markets or other sources of financing, there can be no assurance that we
will be able to obtain financing on acceptable terms or within an acceptable
time. Our inability to obtain financing on terms acceptable to us could have a
material unfavorable impact on our results of operations, financial condition
and liquidity.

Credit facilities and mortgage debt


Management routinely monitors and analyzes the Trust's capital structure in an
effort to maintain the targeted balance among capital resources including the
level of borrowings pursuant to our revolving credit facility, the level of
borrowings pursuant to non-recourse mortgage debt secured by the real property
of our properties and our level of equity including consideration of additional
equity issuances pursuant to our ATM equity issuance program. 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 July 2, 2021, we entered into an amended and restated revolving credit
agreement ("Credit Agreement") to amend and restate the previously existing $350
million credit agreement, as amended and dated June 5, 2020 ("Prior Credit
Agreement"). Among other things, under the Credit Agreement, our aggregate
revolving credit commitment was increased to $375 million from $350 million. The
Credit Agreement, which is scheduled to mature on July 2, 2025, provides for a
revolving credit facility in an aggregate principal amount of $375 million,
including a $40 million sublimit for letters of credit and a $30 million
sublimit for swingline/short-term loans. Under the terms of the Credit
Agreement, we may request that the revolving line of credit be increased by up
to an additional $50 million. Borrowings under the new facility are guaranteed
by certain subsidiaries of the Trust. In addition, borrowings under the new
facility are secured by first priority security interests in and liens on all
equity interests in most of the Trust's wholly-owned subsidiaries.

Borrowings under the Credit Agreement will bear interest annually at a rate
equal to, at our option, at either LIBOR (for one, three, or six months) or the
Base Rate, plus in either case, a specified margin depending on our ratio of
debt to total capital, as determined by the formula set forth in the Credit
Agreement. The applicable margin ranges from 1.10% to 1.35% for LIBOR loans and
0.10% to 0.35% for Base Rate loans. The initial applicable margin is 1.25% for
LIBOR loans and 0.25% for Base Rate loans. The Credit Agreement defines "Base
Rate" as the greatest of (a) the Administrative Agent's prime rate, (b) the
federal funds effective rate plus 1/2 of 1% and (c) one month LIBOR plus 1%. The
Trust will also pay a quarterly revolving facility fee ranging from 0.15% to
0.35% (depending on the Trust's ratio of debt to asset value) on the revolving
committed amount of the Credit Agreement. The Credit Agreement also provides for
options to extend the maturity date and borrowing availability for two
additional six-month periods.

The margins over LIBOR, Base Rate and the facility fee are based upon our total
leverage ratio. At June 30, 2022, 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, 2022, we had $284.3 million of outstanding borrowings and $3.2
million of letters of credit outstanding under our Credit Agreement. We had
$87.5 million of available borrowing capacity, net of the outstanding borrowings
and letters of credit outstanding as of June 30, 2022. There are no compensating
balance requirements. At December 31, 2021, we had $271.9 million of outstanding
borrowings, $3.2 million of outstanding letters of credit and $99.9 million of
available borrowing capacity.

The Credit Agreement contains customary affirmative and negative covenants,
including limitations on certain indebtedness, liens, acquisitions and other
investments, fundamental changes, asset dispositions and dividends and other
distributions. The Credit Agreement also contains restrictive covenants
regarding the Trust's ratio of total debt to total assets, the fixed charge
coverage ratio, the ratio of total secured debt to total asset value, the ratio
of total unsecured debt to total unencumbered asset value, and minimum tangible
net worth, as well as customary events of default, the occurrence of which may
trigger an acceleration of amounts then

                                       31
--------------------------------------------------------------------------------


outstanding under the Credit Agreement. We are in compliance with all of the
covenants in the Credit Agreement at June 30, 2022 and were in compliance with
all of the covenants in the Credit Agreement at December 31, 2021. We also
believe that we would remain in compliance if, based on the assumption that the
majority of the potential new borrowings will be used to fund investments, the
full amount of our commitment was borrowed.

The following table includes a summary of the required compliance ratios, giving
effect to the covenants contained in the Credit Agreement (dollar amounts in
thousands):
                                      June 30,     December 31,
                         Covenant       2022           2021
Tangible net worth      > =$125,000   $ 224,098   $      225,355
Total leverage                < 60%        42.5 %           43.1 %
Secured leverage              < 30%         6.4 %            7.4 %
Unencumbered leverage         < 60%        41.1 %           41.9 %
Fixed charge coverage       > 1.50x        4.8x             4.8x




 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, 2022 (amounts in thousands):

                                                Outstanding
                                                  Balance             Interest          Maturity
Facility Name                               (in thousands) (a.)         Rate              Date
BRB Medical Office Building fixed rate
mortgage loan (b.)                         $               5,163            4.27 %    December, 2022
Desert Valley Medical Center fixed rate
mortgage loan (b.)                                         4,276            3.62 %     January, 2023
2704 North Tenaya Way fixed rate
mortgage loan                                              6,336            4.95 %    November, 2023
Summerlin Hospital Medical Office
Building III fixed
  rate mortgage loan                                      12,683            4.03 %       April, 2024
Tuscan Professional Building fixed rate
mortgage loan                                              2,036            5.56 %        June, 2025
Phoenix Children's East Valley Care
Center fixed rate
  mortgage loan                                            8,336            3.95 %     January, 2030
Rosenberg Children's Medical Plaza fixed
rate mortgage loan                                        12,152            4.42 %   September, 2033
Total, excluding net debt premium and
net financing fees                                        50,982
   Less net financing fees                                  (318 )
   Plus net debt premium                                      65
Total mortgages notes payable,
non-recourse to us, net                    $              50,729



(a.) All mortgage loans require monthly principal payments through maturity and

        either fully amortize or include a balloon principal payment upon
        maturity.

(b.) This loan is scheduled to mature within the next twelve months. We intend

to refinance this loan prior to the maturity date.

On June 1, 2022, the $5.1 million fixed rate mortgage loan on 700 Shadow Lane and Goldring MOBs was fully repaid utilizing borrowings under our Credit Agreement.


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, 2022 had a
combined fair value of approximately $50.1 million. At December 31, 2021, 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 at December 31, 2021 was $57.2 million and had a combined fair
value of approximately $59.4 million.

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.

Off Balance Sheet Arrangements


As of June 30, 2022, we are party to certain off balance sheet arrangements
consisting of standby letters of credit and equity and debt financing
commitments. Our outstanding letters of credit at June 30, 2022 totaled $3.2
million related to Grayson Properties II. As of December 31, 2021 we had off
balance sheet arrangements consisting of standby letters of credit and equity
and debt financing commitments. Our outstanding letters of credit at December
31, 2021 totaled $3.2 million related to Grayson Properties II.

                                       32
--------------------------------------------------------------------------------

Acquisition and Divestiture Activity

Please see Note 4 to the consolidated financial statements for completed transactions.

© Edgar Online, source Glimpses

All news about UNIVERSAL HEALTH REALTY INCOME TRUST
09/16UNIVERSAL HEALTH REALTY INCOME TRUST : Ex-dividend ..
FA
09/07Universal Health Realty Income Trust Keeps Quarterly Dividend at $0.71 a Share, Payable..
MT
09/07Universal health realty income trust announces dividend
PR
09/07Universal Health Realty Income Trust Announces Dividend, Payable on September 30, 2022
CI
08/08UNIVERSAL HEALTH REALTY INCOME TRUST Management's Discussion and Analysis of Financial..
AQ
07/25Universal Health Realty : Q2 Earnings Snapshot
AQ
07/25Universal Health Realty Income Trust : REPORTS 2022 SECOND QUARTER FINANCIAL RESULTS - For..
PU
07/25Earnings Flash (UHT) UNIVERSAL HEALTH REALTY INCOME TRUST Reports Q2 Revenue $22.2M
MT
07/25Earnings Flash (UHT) UNIVERSAL HEALTH REALTY INCOME TRUST Posts Q2 EPS $0.38
MT
07/25Universal health realty income trust reports 2022 second quarter financial results
PR
More news