Universal Health Realty Income Trust reported net income of $4.0 million, or $0.29 per diluted share, for the third quarter of 2024, a slight increase from $3.9 million, or $0.28 per diluted share, in the prior-year period. Funds From Operations (FFO) also saw a modest rise to $11.3 million, or $0.82 per diluted share, compared to $11.2 million, or $0.81 per diluted share, in the third quarter of 2023. The increase in net income was primarily driven by a $451,000 net increase in income generated at various properties.
For the nine-month period ended September 30, 2024, net income reached $14.6 million, or $1.05 per diluted share, up from $11.8 million, or $0.85 per diluted share, in the comparable period of 2023. FFO for the nine months increased to $36.1 million, or $2.61 per diluted share, from $33.2 million, or $2.40 per diluted share, in the prior year. This nine-month improvement was supported by a $2.5 million net increase in property income and a $1.9 million reduction in expenses related to the Chicago property.
The Trust announced a significant amendment to its credit agreement on September 30, 2024, increasing its borrowing capacity to $425 million from $375 million and extending the maturity date to September 30, 2028. As of that date, $347.8 million was outstanding under the facility, leaving $77.2 million in available borrowing capacity. This amendment enhances UHT's financial flexibility and liquidity.
In October 2024, UHT entered into an interest rate swap agreement for a notional amount of $85 million, fixing the interest rate at 3.2725% until September 30, 2028. This new swap, effective October 2, 2024, replaced two expiring agreements with a combined notional amount of $85 million. This action aims to hedge a portion of the Trust's variable rate debt and mitigate exposure to interest rate fluctuations.
The Sierra Medical Plaza I, an 86,000 square foot medical office building in Reno, Nevada, saw substantial completion of construction in March 2023. The facility is 68% leased under a ten-year master flex lease agreement that commenced in March 2023, providing an initial minimum annual rent of $1.3 million. The aggregate cost of this development is estimated at $35 million, with approximately $30 million incurred as of September 30, 2024.
UHT also provided updates on its vacant properties, noting that the demolition of the former specialty hospital in Chicago, Illinois, was completed during 2023, incurring approximately $1.5 million in total demolition expenses. The company continues to market vacant properties in Chicago, Illinois, and Evansville, Indiana, while having sold a vacant specialty facility in Corpus Christi, Texas, in December 2023.
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